Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 03, 2014 | |
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-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 36,220,616 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $94,577 | $71,932 |
Funds held for payroll customers | 122,311 | 127,375 |
Receivables, net | 220,936 | 200,040 |
Investments | 4,110 | 4,101 |
Inventory | 11,445 | 11,087 |
Prepaid expenses | 19,451 | 15,284 |
Income Taxes Receivable, Current | 5,139 | 10,426 |
Current deferred tax assets, net | 7,725 | 9,548 |
Total current assets | 485,694 | 449,793 |
Capitalized customer acquisition costs, net | 68,967 | 61,027 |
Property and equipment, net | 162,707 | 147,388 |
Goodwill | 424,270 | 190,978 |
Intangible assets, net | 193,790 | 49,857 |
Deposits and other assets, net | 1,336 | 1,262 |
Total assets | 1,336,764 | 900,305 |
Current liabilities: | ' | ' |
Settlement Liabilities, Current | 41,183 | 19,109 |
Accounts payable | 60,729 | 70,814 |
Payables to Customers | 122,311 | 127,375 |
Processing liabilities and loss reserves | 104,856 | 130,871 |
Current portion of accrued buyout liability | 14,457 | 13,943 |
Secured Debt, Current | 18,750 | 0 |
Deferred Revenue, Current | 40,551 | 18,172 |
Accrued expenses and other liabilities | 25,928 | 31,689 |
Total current liabilities | 428,765 | 411,973 |
Deferred tax liabilities, net | 45,039 | 40,600 |
Reserve for unrecognized tax benefits | 6,769 | 5,633 |
Long-term portion of borrowings | 553,750 | 150,000 |
Long-term portion of accrued buyout liability | 30,500 | 25,436 |
Deferred Revenue, Noncurrent | 2,104 | 0 |
Total liabilities | 1,066,927 | 633,642 |
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 | 36 | 37 |
Additional paid-in capital | 252,127 | 245,055 |
Accumulated other comprehensive income | -112 | -88 |
Retained earnings | 17,786 | 35,960 |
Treasury stock, at cost (2,453,312 and 778,889 shares at September 30, 2012 and December 31, 2011) | 0 | -20,489 |
Total stockholders’ equity | 269,837 | 260,475 |
Noncontrolling interests | 0 | 6,188 |
Total equity | 269,837 | 266,663 |
Total liabilities and equity | $1,336,764 | $900,305 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets Parentheticals (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Equity | ' | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000,000 | 100,000,000 |
Common stock, shares issued | 36,179,147,000 | 37,485,486 |
Common stock, shares outstanding | 36,179,147,000 | 36,950,886 |
Treasury Stock, shares | 0 | 534,600 |
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, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Total revenues | $600,626 | $557,129 | $1,706,768 | $1,604,992 |
Costs of services: | ' | ' | ' | ' |
Interchange | 373,372 | 350,734 | 1,059,241 | 1,003,039 |
Dues, Assessments And Fees | 57,864 | 53,165 | 163,218 | 152,146 |
Information Technology and Data Processing | 69,328 | 60,195 | 204,985 | 177,968 |
Customer acquisition costs | 12,289 | 10,838 | 34,907 | 31,554 |
Depreciation, Nonproduction | 7,981 | 5,454 | 20,472 | 14,066 |
Total costs of services | 520,834 | 480,386 | 1,482,823 | 1,378,773 |
General and administrative | 49,381 | 41,871 | 137,241 | 131,242 |
Total expenses | 570,215 | 522,257 | 1,620,064 | 1,510,015 |
Income from operations | 30,411 | 34,872 | 86,704 | 94,977 |
Other income (expense): | ' | ' | ' | ' |
Interest income | 33 | 29 | 95 | 95 |
Interest expense | -2,142 | -1,243 | -4,450 | -3,746 |
Other, net | 3,581 | 90 | 3,869 | -70 |
Total other income (expense) | 1,472 | -1,124 | -486 | -3,721 |
Income before income taxes | 31,883 | 33,748 | 86,218 | 91,256 |
Provision for income taxes | 11,727 | 11,857 | 34,579 | 34,039 |
Net income from continuing operations | 20,156 | 21,891 | 51,639 | 57,217 |
Income from discontinued operations, net of income tax of $68 | 0 | 0 | 0 | 3,970 |
Net income | 20,156 | 21,891 | 51,639 | 61,187 |
Income (Loss) from Continuing Operations Attributable to Noncontrolling Interest | -302 | -90 | 2,011 | -90 |
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Noncontrolling Interest | 0 | 0 | 0 | 56 |
Net income from continuing operations | 20,458 | 21,981 | 53,650 | 57,307 |
Income from discontinued operations, net of income tax and noncontrolling interests | 0 | 0 | 0 | 3,914 |
Net income attributable to Heartland | 20,458 | 21,981 | 53,650 | 61,221 |
Basic earnings per share: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.57 | $0.60 | $1.47 | $1.56 |
Income from discontinued operations (in dollars per share) | $0 | $0 | $0 | $0.11 |
Basic earnings per share (in dollars per share) | $0.57 | $0.60 | $1.47 | $1.67 |
Diluted earnings per share: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.56 | $0.58 | $1.44 | $1.50 |
Income from discontinued operations (in dollars per share) | $0 | $0 | $0 | $0.10 |
Diluted earnings per share (in dollars per share) | $0.56 | $0.58 | $1.44 | $1.60 |
Weighted average number of common shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 36,069 | 36,857 | 36,388 | 36,752 |
Diluted (in shares) | 36,850 | 38,020 | 37,249 | 38,079 |
Dividends declared per share | $0.09 | $0.07 | $0.26 | $0.21 |
CPOS [Member] | ' | ' | ' | ' |
Other income (expense): | ' | ' | ' | ' |
Income from discontinued operations, net of income tax of $68 | 0 | 0 | ' | 184 |
Income from discontinued operations, net of income tax and noncontrolling interests | $0 | $0 | $0 | $3,914 |
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, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income From Discontinued Operations [Member] | ' | ' | ' | ' |
Income from discontinued operations, tax | $0 | $0 | $0 | $2,135 |
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, 2012 | ' | ' | ' | ' | ' | ' | ' |
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 loss | 265 | ' | ' | 281 | ' | ' | -16 |
Reserves Attributable to Consolidated Subsidiary with Significant Noncontrolling Interest | '6798 | ' | ' | ' | ' | ' | '6798 |
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 | ' | 36,853,000 | ' | ' | ' | ' | ' |
Stockholders' equity, begining balance at Dec. 31, 2013 | 266,663 | 37 | 245,055 | -88 | 35,960 | -20,489 | 6,188 |
Common stock, shares outstanding at Dec. 31, 2013 | 36,950,886 | 36,951,000 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' |
Issuance of Common Stock - options exercised, shares | ' | 346,000 | ' | ' | ' | ' | ' |
Issuance of Common Stock - options exercised, amount | 4,482 | 0 | 4,482 | ' | ' | ' | ' |
Issuance of Common Stock - RSU's Vested, shares | ' | 230,000 | ' | ' | ' | ' | ' |
Adjustment to Additional Paid-in-capital, Value, Restricted Stock Units Vested | -5,225 | ' | -5,225 | ' | ' | ' | ' |
Excess tax benefit on stock options exercised | 5,670 | ' | 5,670 | ' | ' | ' | ' |
Repurchase of common stock, shares | ' | -1,348,000 | ' | ' | ' | ' | ' |
Repurchase of common stock, amount | -54,455 | ' | ' | ' | ' | -54,455 | ' |
Retirement of treasury stock | 0 | -1 | -12,368 | ' | -62,575 | 74,944 | ' |
Stock-based compensation | 10,936 | ' | 10,936 | ' | ' | ' | ' |
Adjustments to Additional Paid in Capital, Other | ' | ' | 3,577 | ' | ' | ' | ' |
Net income from discontinued operations attributable to noncontrolling interests | -600 | ' | ' | ' | ' | ' | -4,177 |
Other comprehensive loss | -24 | ' | ' | -24 | ' | ' | ' |
Dividends on common stock | -9,249 | ' | ' | ' | -9,249 | ' | ' |
Net income for the period | 51,639 | ' | ' | ' | 53,650 | ' | -2,011 |
Stockholders' equity, ending balance at Sep. 30, 2014 | $269,837 | $36 | $252,127 | ($112) | $17,786 | $0 | $0 |
Common stock, shares outstanding at Sep. 30, 2014 | 36,179,147,000 | 36,179,000 | ' | ' | ' | ' | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Equity Statement of Equity Parenthetical (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Statement of Stockholders' Equity Parenthetical [Abstract] | ' | ' | ' | ' |
Dividends declared per share | $0.09 | $0.07 | $0.26 | $0.21 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flow (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash flows from operating activities | ' | ' |
Net income | $51,639 | $61,187 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Amortization of capitalized customer acquisition costs | 38,056 | 33,936 |
Depreciation, Depletion and Amortization | 33,516 | 26,070 |
Addition to loss reserves | 3,000 | 2,510 |
Provision for doubtful receivables | 3,010 | -1 |
Stock-based compensation | 10,936 | 9,763 |
Deferred taxes | 8,361 | 5,632 |
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | -258 | -3,786 |
Other | -3,057 | 386 |
Changes in operating assets and liabilities: | ' | ' |
Increase in receivables | -11,339 | -15,135 |
Decrease in inventory | -287 | -524 |
Payment of signing bonuses, net | -27,647 | -19,546 |
Increase in capitalized customer acquisition costs | -18,349 | -15,676 |
Decrease (increase) in prepaid expenses | 132 | -2,361 |
(Increase) decrease in current tax asset | -2,957 | -1,515 |
Increase in deposits and other assets | -103 | -296 |
Excess tax benefits on employee share-based compensation | -5,670 | -8,382 |
Increase in reserve for unrecognized tax benefits | 1,136 | 1,198 |
(Decrease) increase in due to sponsor bank | 22,074 | 5,048 |
Increase in accounts payable | -12,509 | -1,830 |
Increase (Decrease) in Deferred Revenue | -2,414 | 3,820 |
(Decrease) increase in accrued expenses and other liabilities | -12,304 | -4,856 |
Increase in processing liabilities and loss reserves | -29,016 | 10,310 |
Payouts Of Accrued Buyout Liability | ' | -11,842 |
Payments to Decrease Buyout Liability | 9,621 | 11,842 |
Increase in accrued buyout liability | ' | 13,294 |
Accrued Buyout Liability, Increase in Settlement Obligations | 15,199 | 13,294 |
Net cash provided by operating activities | 51,528 | 87,404 |
Cash flows from investing activities | ' | ' |
Payments to Acquire Investments | 31,017 | 5,241 |
Proceeds from Sale and Maturity of Other Investments | 17,215 | 0 |
Maturities of investments held to maturity | 0 | 1,430 |
(Increase) decrease in funds held for payroll customers | 18,849 | 19,519 |
Increase (decrease) in deposits held for payroll customers | -5,064 | -19,510 |
Proceeds from Divestiture of Businesses, Net of Cash Divested | 0 | 19,343 |
Acquisition of business, net of cash acquired | -355,066 | -15,182 |
Purchases of property and equipment | -39,140 | -36,929 |
Net cash used in investing activities | -394,223 | -36,570 |
Cash flows from financing activities | ' | ' |
Proceeds from borrowings | 436,392 | 9,000 |
Principal payments on borrowings | -17,500 | -15,000 |
Proceeds from exercise of stock options | 4,482 | 10,725 |
Excess tax benefits on employee share-based compensation | 5,670 | 8,382 |
Repurchases of common stock | -54,455 | -39,632 |
Dividends paid on common stock | -9,249 | -7,735 |
Net cash used in financing activities | 365,340 | -34,260 |
Net (decrease) increase in cash | 22,645 | 16,574 |
Effect of exchange rates on cash | 0 | 1 |
Cash at beginning of year | 71,932 | ' |
Cash at end of period | 94,577 | 67,156 |
Supplemental cash flow information: | ' | ' |
Interest | 3,559 | 3,173 |
Income taxes | $28,038 | $28,917 |
Statements_of_Comprehensive_In
Statements of Comprehensive Income Statement (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Net income | $20,156 | $21,891 | $51,639 | $61,187 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | -6 | 0 | -170 | 0 |
Unrealized (losses) gains on investments, net of income tax of $5, $—, $5 and $4 | -8 | 0 | 6 | 4 |
Unrealized gains on derivative financial instruments, net of income tax of $28, $25, $83 and $121 | 45 | 152 | 140 | 315 |
Foreign currency translation adjustment | 0 | 0 | 0 | -54 |
Comprehensive income | 20,187 | 22,043 | 51,615 | 61,452 |
Less: Comprehensive loss attributable to noncontrolling interests | -302 | -90 | -2,011 | -50 |
Comprehensive income attributable to Heartland | $20,489 | $22,133 | $53,626 | $61,502 |
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, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | $5 | $0 | $108 | $0 |
Organization_and_Operations
Organization and Operations | 9 Months Ended | |
Sep. 30, 2014 | ||
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 Ovation Payroll, Inc. (“Ovation”), Heartland Payment Solutions, Heartland Acquisition LLC (“Network Services”), TouchNet Information Systems, Inc. (“TouchNet”) as of September 4, 2014, Leaf Acquisition, LLC ("Leaf") as of September 11, 2013, and until January 31, 2013, 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. | ||
On August 6, 2014, the Company entered into a Stock Purchase Agreement with the noncontrolling shareholders of Leaf under which it acquired all shares of Leaf common stock held by the noncontrolling shareholders. Prior to August 6, 2014, the Company owned 66.67% of the outstanding capital stock of Leaf. As a result of this transaction, Leaf became a wholly-owned subsidiary of the Company. Also as a result of this transaction, the Company was released from any liabilities to the noncontrolling shareholders including a contingent earn-out liability that was provided to those noncontrolling shareholders under the original partial acquisition. See Note 2, Summary of Significant Accounting Policies, Other Income (Expense) for more detail. | ||
On July 29, 2014, the Company and TouchNet, entered into an Agreement and Plan of Merger (the “Agreement”), under which the Company would acquire all of the shares of common stock of TouchNet (the "Acquisition”) for a cash payment of $375 million plus or minus the net working capital of TouchNet on the closing date. The Acquisition closed as of September 4, 2014. TouchNet is an integrated commerce solutions provider to higher-education institutions. TouchNet became a part of the Company's Campus Solutions business segment. See Note 3, Acquisitions for further detail on this acquisition. | ||
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, 2014, and its results of operations, changes in equity and cash flows for the nine months ended September 30, 2014 and 2013. Results of operations reported for interim periods are not necessarily indicative of the results to be expected for the year ending December 31, 2014. 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, 2013. The December 31, 2013 Condensed Consolidated Balance Sheet was derived from the audited 2013 consolidated financial statements. | ||
Out of Period Adjustments—In the second quarter of 2014, the Company recorded out-of-period adjustments decreasing its revenue and increasing bad debt expense (included in Processing and Servicing in its Condensed Consolidated Statements of Income) by $1.4 million and $0.9 million, respectively. These adjustments related to immaterial errors that originated in the prior year in our Heartland School Solutions business. These adjustments included revenue which was incorrectly recorded in prior periods and a reassessment of the collectability of certain customer accounts receivable. These out-of-period adjustments reduced earnings before income taxes and net income in the nine months ended September 30, 2014 by $2.3 million and $1.4 million, respectively, and reduced diluted earnings per share by $0.04. The Company considered existing guidance in evaluating whether a restatement of prior financial statements was required as a result of these misstatements. The guidance requires corrections of errors to be recorded by restatement of prior periods, if material. The Company has quantitatively and qualitatively assessed the materiality of the errors and concluded that the errors were not material to its earnings for the year ended December 31, 2013 and to its forecast of earnings for the year ending December 31, 2014, and accordingly, no restatement of prior period financial statements was warranted. | ||
Business Description—The Company’s primary business is to provide card payment processing services to merchants throughout the United States, and until January 31, 2013 in Canada (See Note 15, Discontinued Operations for more detail). This involves providing end-to-end electronic payment processing services to merchants by facilitating the exchange of information and funds between them and cardholders' financial institutions. To accomplish this, the Company undertakes merchant set-up and training, transaction authorization and electronic draft capture, clearing and settlement, merchant accounting, merchant assistance and support, and risk management. Card payment processing services also includes selling and renting point-of-sale devices. The Company also provides additional services, including those provided through subsidiaries, such as: | ||
• | School nutrition, point-of-sale solutions, and associated payment solutions, including online prepayment solutions to kindergarten through 12th grade ("K to 12") schools throughout the United States provided by Heartland School Solutions, | |
• | Full-service payroll processing and related tax filing services throughout the United States provided by Heartland Ovation Payroll, | |
• | Payment processing, integrated commerce solutions, higher education loan services and open- and closed-loop payment solutions to colleges and universities throughout the United States and Canada provided by Campus Solutions, and | |
• | Prepaid Card and Other including stored-value card solutions throughout the United States and Canada provided by Micropayments, and marketing solutions including loyalty and gift cards throughout the United States, provided through Heartland Marketing Solutions. | |
Over 74% of the Company's revenue is derived from processing and settling bankcard transactions, primarily related to the Visa and MasterCard networks, 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 with a member bank 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 sponsor banks require a cash balance in a deposit account. If the Company were to breach a sponsorship agreement and under certain other 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, 2014, the Company has not been notified of any such issues by its sponsor banks, Visa or MasterCard. | ||
At September 30, 2014, the Company is party to three 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 ("TBB") to sponsor processing for the Company's Network Services merchants. The agreement with TBB 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. As of September 30, 2014, neither party has provided written notice of non-renewal of the sponsorship agreement. | |
On October 1, 2013, the Company transferred sponsorship and processing for a portfolio of SME merchants from Heartland Bank to TBB. The Company was party to a prior 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 TBB under the terms of the November 2009 sponsorship agreement. | ||
• | 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 party. | |
The following is a breakout of the Company’s total Visa and MasterCard settled card processing volume for the month ending September 30, 2014 by percentage processed under its individual bank sponsorship agreements: | ||
Sponsor Bank | % of September 2014 | |
Bankcard Processing | ||
Volume | ||
Wells Fargo Bank, N.A. | 64% | |
The Bancorp Bank | 24% | |
Barclays Bank Delaware | 12% | |
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 prior sales and servicing program agreement with American Express Travel Related Services Company, Inc. | ||
("American Express") the Company: (a) provided solicitation services by signing new-to-American Express merchants directly | ||
with American Express; (b) provided transactional support services on behalf of American Express to the Company's American | ||
Express accepting merchants; and (c) provided processing, settlement, customer support and reporting to merchants, similar to | ||
the services provided for the merchants' Visa, MasterCard and Discover transactions. In May 2014, the Company began offering a new American Express Card Acceptance Program (referred to as "OptBlue") to new merchants and existing merchants who previously were not American Express accepting merchants. The Company converted a majority of its existing merchants who were processing under the prior sales and servicing agreement with American Express to OptBlue during the third quarter of 2014. As a participant in OptBlue the Company will acquire, contract, and establish pricing, as well as provide customer service to merchants, similar to the transaction processing services the Company provides through Discover, Visa and MasterCard. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
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 condensed 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, 2014, cash included approximately $16.3 million of processing-related cash in transit and collateral, compared to approximately $32.1 million of processing-related cash in transit and collateral at December 31, 2013. Processing-related cash in transit and collateral includes funds in transit associated with timing differences arising between the amounts the Company's sponsor banks receive from the bankcard networks and the amounts funded by the Company’s merchants. Processing-related cash in transit and collateral also includes merchant deposits, collateral deposits, and funds in transit relating to timing differences for the Company's non-card payment processing businesses. | ||||||||||||||||
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. | ||||||||||||||||
The timing for presentment of transaction funding files to the bankcard networks results in the Company's sponsor banks receiving settlement cash one day before payment is made to merchants, thereby increasing funding obligations to its SME merchants, which are carried in processing liabilities. The Company funds interchange advances/receivables to SME merchants first from this settlement cash received from bankcard networks, then from the Company's available cash or by incurring a liability to its sponsor banks. The Company did not fund any merchant advances from available cash at September 30, 2014 and December 31, 2013. The amount due to sponsor banks for funding merchant advances was $36.8 million at September 30, 2014 and $17.8 million at December 31, 2013. The Company pays its sponsor banks the prime rate on these payables. The liability 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 due from Discover and American Express for merchant bankcard transactions. 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 Campus Solutions, Heartland School Solutions and Prepaid Card and Other. These receivables are mostly invoiced on terms of 30 days net from date of invoicing. | ||||||||||||||||
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 and customer receivables. | ||||||||||||||||
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, bond funds, tax-exempt bonds 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, 2014, funds held for customers included cash and cash equivalents of $100.9 million and investments available for sale of $21.4 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 residual 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 three-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, payroll and loyalty marketing merchant processing, consistent with the build-up in the accrued buyout liability, as described below. | ||||||||||||||||
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, 2014. | ||||||||||||||||
Unearned revenue— Unearned revenue of $42.7 million and $18.2 million at September 30, 2014 and December 31, 2013, respectively, is primarily related to the Company's Heartland School Solutions and Campus Solutions businesses for both periods, and its Payroll business for December 31, 2013. Included in the Campus Solutions business is unearned revenue from TouchNet, which the Company acquired on September 4, 2014. The Company added $26.1 million of unearned revenue as part of that acquisition. Unearned revenue is derived primarily from the sale and subscription of e-commerce solutions and integration to host computer systems as well as from support and maintenance contracts and professional services. Unearned revenue represents contractual obligations of the Company to provide software, services and support to customers in the future. | ||||||||||||||||
Accrued Expenses and Other Liabilities— Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets include the allocation of purchase price to an unfavorable contract of $2.0 million and $3.4 million at September 30, 2014 and December 31, 2013, respectively, associated with the September 30, 2011 acquisition of School-Link Technologies, Inc in the Company's Heartland School Solutions business. During the nine months ended September 30, 2014 and 2013, the Company amortized $1.4 million and $1.5 million, respectively, of this accrued liability against the cash processing costs paid under that contract. During the nine months ended September 30, 2013, the Company 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 for the nine months ended September 30, 2014 and 2013 and adjustment to the carrying 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. Processing liabilities primarily reflect funds in transit associated with differences arising between the amounts the Company's 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. The amounts are generally collected or paid the following business day. | ||||||||||||||||
Chargebacks 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 or contraction and changes in gross margin are included in the same income statement caption as customer acquisition costs expense. | ||||||||||||||||
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 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— The Company classifies its revenues into five categories: (i) Card Payment Processing, (ii) Heartland School Solutions, (iii) Heartland Ovation Payroll, (iv) Campus Solutions and (v) Prepaid Card and Other. The Company recognizes revenue when (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been performed; (3) the price is fixed or determinable; and (4) collectability is reasonably assured. The Company also evaluates its contractual arrangements for indications that multiple element arrangements may exist including instances where more-than-incidental software deliverables are included. The following revenue recognition policies define the manner in which the Company accounts for sales transactions by revenue category. | ||||||||||||||||
Card Payment Processing revenue primarily consists of discount, per-transaction and periodic (primarily monthly) fees from the processing of Visa, MasterCard, American Express and Discover transactions for SME merchants and per-transaction fees for the authorization and settlement of transactions for Network Services merchants. Also included in this category are American Express servicing fees, merchant service fees, fees for processing chargebacks, termination fees on terminated contracts and fees from selling, renting and deploying point-of-sale devices. Interchange fees, which are the Company’s most significant expense, are set by the card networks and paid to the card issuing banks. For the majority of SME card processing revenue, the Company does not offset processing revenues and interchange fees because its business practice is to advance the interchange fees to most SME merchants when settling their daily transactions (thus paying the full amount of the transaction to the merchant), and then to collect the full discount fees from merchants on the first business day of the next month. The Company has merchant portability, credit risk, and the ultimate responsibility to the merchant and, as such, revenue is reported at the time of settlement on a gross basis. Payment processing services are transaction based and priced either as a fixed fee per transaction or as a percentage of the transaction value. The fees are charged for the processing services provided and do not include the gross sales price paid by the ultimate buyer to the merchant. For SME merchants to whom the Company does not advance interchange, it records card processing revenues net of interchange fees. As Network Services does not advance interchange fees to its merchants, the Company records its card processing revenues net of interchange fees. The company records Card Payment Processing revenue at the time services are provided and at the time of shipment as it relates to deployment of point-of-sale devices. | ||||||||||||||||
Heartland Ovation Payroll revenue includes fees charged for payroll processing services, including check printing, direct deposit, related federal, state and local tax deposits and providing accounting documentation and interest income earned on funds held for customers. Revenues are recorded at the time service is provided. | ||||||||||||||||
Heartland School Solutions’ revenues include fees from sales and maintenance of cafeteria point-of-sale solutions and associated payment solutions, including online prepayment solutions, back office management and hardware and technical support. | ||||||||||||||||
Campus Solutions revenue includes fees associated with providing integrated commerce solutions to support administrative services for higher education, as well as, student loan payment processing, delinquency and default services, refund management, tuition payment plans, electronic billing and payment, tax document services and business outsourcing. Campus Solutions revenue also includes fees from the sale and maintenance of open- and closed-loop payment hardware and software solutions for college or university campuses to process small value electronic transactions. | ||||||||||||||||
Both Campus Solutions and Heartland School Solutions have arrangements that contain multiple elements, such as hardware, software products, including perpetual licenses and Software-as-a-Service (“SaaS”) services, maintenance, and professional installation and training services. The Company allocates revenue to each element based on the selling price hierarchy. The selling price for a deliverable is based on vendor specific objective evidence (“VSOE”) of selling price, if available, or estimated selling price (“ESP”) if VSOE of selling price is not available. The Company establishes ESP, based on management judgment, considering internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life cycle. In arrangements with multiple elements, the Company determines allocation of the transaction price at inception of the arrangement based on the relative selling price of each unit of accounting. | ||||||||||||||||
In multiple element arrangements where more-than-incidental software deliverables are included, the Company has applied the residual method to determine the amount of software license revenues to be recognized pursuant to ASC 985-605. Under the residual method, if fair value exists for undelivered elements in a multiple-element arrangement, such fair value of the undelivered elements is deferred with the remaining portion of the arrangement consideration recognized upon delivery of the software license or services arrangement. The Company allocates the fair value of each element of a software related multiple-element arrangement based upon its fair value as determined by VSOE, with any remaining amount allocated to the software license. If evidence of the fair value cannot be established for the undelivered elements of a software arrangement then the entire amount of revenue under the arrangement is deferred until these elements have been delivered or objective evidence can be established. The Company recognizes software revenue over the subscription or contract term and maintenance revenue over the maintenance period. | ||||||||||||||||
Prepaid Card and Other revenues include Micropayments’ fees from selling hardware and software for unattended online wireless credit card based payment systems, and unattended value top up systems for off-line closed-loop smart (chip) card based payment systems. Also included in this category are Heartland Marketing Solutions fees from selling mobile and card-based marketing services, gift cards and rewards services. Revenues are recorded at the time of shipment or at the time services are provided. | ||||||||||||||||
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 cost on the Company's borrowings, the gains or losses on the disposal of assets and other non-operating income or expense items. | ||||||||||||||||
As a result of the Stock Purchase Agreement that the Company entered into on August 6, 2014 with the noncontrolling shareholders of Leaf, the Company was released from a contingent earn-out liability to those noncontrolling shareholders and recognized a pre- and after-tax gain of $3.6 million in the three and nine months ended September 30, 2014. The non-cash impact of the gain associated with the release of the contingent earn-out liability is recorded in "Other, net" in the condensed consolidated statements of income and "Write-off of fixed assets and other" in the condensed consolidated statement of cash flows. | ||||||||||||||||
Other income (expense) also includes the pretax charges or recoveries related to the provision for Processing System Intrusion costs. See Note 11, Commitments and Contingencies for information on the Processing System Intrusion. | ||||||||||||||||
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'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 Company's estimated tax rate changes, it makes a cumulative adjustment in that period. | ||||||||||||||||
The provision for income taxes for the three and nine months ended September 30, 2014 and 2013 and the resulting effective tax rates were as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||||
Provision for income taxes | $ | 11,727 | $ | 11,857 | $ | 34,579 | $ | 34,039 | ||||||||
Effective tax rate | 36.8 | % | 35.1 | % | 40.1 | % | 37.3 | % | ||||||||
The effective tax rate for the three months ended September 30, 2013 benefited from 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 Company recognized the effects of the research and development credits in the three months ended September 30, 2013 in conjunction with filing our 2012 tax return. | ||||||||||||||||
The increase in the Company's effective tax rate for the nine months ended September 30, 2014, as compared to the nine months ended September 30, 2013, reflects the impact of providing a valuation allowance against deferred tax assets resulting from operating losses recorded by Leaf during our 66.67% ownership period from January 1 to August 5, 2014. On August 6, 2014, the Company acquired all shares of Leaf common stock held by noncontrolling shareholders. As a result of this acquisition, the Company will utilize the losses generated by Leaf against consolidated taxable income for periods after August 5, 2014. See “Note 3, Acquisitions" for further details on our investments in Leaf. Additionally, the effective tax rate for the nine months ended September 30, 2014 benefited from the permanent non-taxable status of the gain recognized on the release of a contingent earn-out liability to the former noncontrolling shareholders of Leaf. | ||||||||||||||||
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, 2014, the reserve for unrecognized tax benefits related to uncertain tax positions was $6.8 million, of which $4.4 million would, if recognized, impact the effective tax rate. At December 31, 2013, the reserve for unrecognized tax benefits related to uncertain tax positions was $5.6 million, of which $3.8 million would, if recognized, impact the effective tax rate. | ||||||||||||||||
Share–Based Compensation— In the fourth quarters of 2012 and 2013, 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 2012 | 4th Quarter 2013 | |||||||||||||||
RSU's Granted | 60,507 | 115,223 | ||||||||||||||
Vesting during 2014 | — | — | ||||||||||||||
Vesting during 2015 | 50% | — | ||||||||||||||
Vesting during 2016 | 50% | — | ||||||||||||||
Vesting during 2017 | — | 50% | ||||||||||||||
Vesting during 2018 | — | 50% | ||||||||||||||
Grant Performance Target | (a) | (b) | ||||||||||||||
(a) | These Restricted Share Units would vest only if the Company achieves a Pro Forma diluted earnings per share compound annual growth rate ("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 records expense on these Restricted Share Units based on achieving the 15% target. | |||||||||||||||
(b) | These Restricted Share Units will vest only if the Company achieves a pro forma diluted earnings per share growth rate of forty percent (40%) over the three-year period ending December 31, 2016. For each 1% that the growth rate actually achieved for the three-year period ending on December 31, 2016 is above the 40% target, the number of shares underlying the Restricted Share Units awarded would be increased by 1.20%; provided, however, that the maximum increase in the number of shares that may be awarded is 150%. Likewise, for each 1% that the growth rate actually achieved for the three-year period ending on December 31, 2016 is below the 40% target, the number of shares underlying the Restricted Share Units awarded would be decreased by 1.50%. If the target growth rate is missed by 50% or more, then the number of shares awarded is zero. The Company has recorded expense on these Restricted Share Units based on achieving the 40% target. | |||||||||||||||
Pro Forma diluted earnings per share for (a) and (b) 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 Company's Board of Directors approved target grants of 60,793 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 peers. 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. | ||||||||||||||||
In the fourth quarter of 2013, the Company's Compensation Committee approved target grants of 57,598 Relative TSRs. These Relative 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 the Company's common stock as compared to the total shareholder return of 91 peer companies. The payout schedule can produce vesting percentages ranging from 0% to 200%. Total shareholder return will be calculated based upon the average closing price for the 30 calendar day period ending December 6, 2016, divided by the closing price on December 6, 2013. 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 Relative TSRs. | ||||||||||||||||
In the fourth quarter of 2013, the Compensation Committee approved target grants of 59,533 Absolute Total | ||||||||||||||||
Shareholder Return Restricted Share Units (referred to as “Absolute TSRs”). These Absolute TSRs are nonvested share awards | ||||||||||||||||
for which vesting percentages and ultimate number of units vesting will be calculated based on the Company's three or four | ||||||||||||||||
year total shareholder return of our common stock. The payout schedule can produce vesting percentages ranging from 0% to | ||||||||||||||||
200%. Total shareholder return will be calculated based upon the average closing price for the 30 calendar day period ending December 6, 2016 or December 6, 2017, divided by the closing price on December 6, 2013. The target number of units is based on achieving a total shareholder return of 33% over three years or 46% over four years. The Company recorded expense on these Absolute TSRs based on achieving the target. A lattice valuation model was applied to measure the grant date fair value of these Absolute TSRs. | ||||||||||||||||
Earnings per Share— Basic earnings per share was computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share was 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 November 2, 2012, the Company's Board of Directors authorized the repurchase of up to $50 million of the Company's outstanding common stock. These repurchases were completed during the second quarter of 2013. On May 8, 2013, the Company's Board of Directors authorized the repurchase of up to $75 million of the Company's outstanding common stock. These repurchases were completed during the second quarter of 2014. On May 8, 2014, the Company's Board of Directors authorized the repurchase of up to $75 million of the Company's outstanding common stock. As of September 30, 2014, the Company has not repurchased any shares under the May 8, 2014 authorization. Repurchases under these programs were made through the open market in accordance with applicable laws and regulations. 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 2014 Revolving Credit Facility (as defined in Note 10 herein). 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 corporation liquidity requirements. The repurchase program may be modified or discontinued at any time. | ||||||||||||||||
Nov-12 | May-13 | May-14 | Total | |||||||||||||
Activity For the Nine Months Ended September 30, 2014 | ||||||||||||||||
Shares repurchased | — | 1,347,817 | — | 1,347,817 | ||||||||||||
Cost of shares repurchased (in thousands) | — | $54,455 | — | $54,455 | ||||||||||||
Average cost per share | — | $40.40 | — | $40.40 | ||||||||||||
Remaining authorization (in thousands) | — | — | $75,000 | $75,000 | ||||||||||||
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 | ||||||||||||
Activity For the Year Ended December 31, 2013 | ||||||||||||||||
Shares repurchased | 952,183 | 534,600 | — | 1,486,783 | ||||||||||||
Cost of shares repurchased (in thousands) | $29,813 | $20,488 | — | $50,301 | ||||||||||||
Average cost per share | $31.31 | $38.32 | — | $33.83 | ||||||||||||
The Company's Board of Directors previously resolved to retire all common shares repurchased and include the retired shares in the authorized and unissued shares of the Company. At the time of share retirement, the excess of the purchase price of the treasury stock over the stated value is allocated between additional paid-in-capital and retained earnings. It is expected that future retirements of common shares repurchased will be recorded as repurchase authorizations are completed. | ||||||||||||||||
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. | ||||||||||||||||
The Company has entered into fixed-pay amortizing interest rate swaps as a hedge of future cash flows on certain variable rate debt outstanding under its credit facility. 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, 2014 | 31-Dec-13 | |||||||||||||||
(In thousands) | ||||||||||||||||
Notional value | $ | 17,500 | $ | 25,000 | ||||||||||||
Fair value (a) | (187 | ) | (411 | ) | ||||||||||||
Deferred tax benefit | 76 | 153 | ||||||||||||||
(a) Recorded as a liability in accrued expenses and other liabilities | ||||||||||||||||
Noncontrolling Interests— Noncontrolling interests represent noncontrolling shareholders' share of the equity and after-tax net loss of Leaf until the Company's August 6, 2014 acquisition of Leaf noncontrolling interests, and the after-tax net income of CPOS until it was sold in a transaction settled on January 31, 2013. See Note 15, Discontinued Operations for more detail on CPOS. | ||||||||||||||||
Noncontrolling shareholders' share of after-tax net loss of Leaf is included in Net income (loss) attributable to noncontrolling interests from continuing operations in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2014. On August 6, 2014, the Company entered into a Stock Purchase Agreement with the noncontrolling shareholders of Leaf under which it acquired all shares of Leaf common stock held by the noncontrolling shareholders. Prior to August 6, 2014, the Company owned 66.67% of the outstanding capital stock of Leaf. As a result of this transaction, Leaf became a wholly-owned subsidiary of the Company and there is no noncontrolling interest on the Consolidated Balance Sheet as of September 30, 2014. The minority stockholders’ interests included in noncontrolling interests in the December 31, 2013 Consolidated Balance Sheet was $6.2 million. This amount reflected the original investments by these minority stockholders' in Leaf, along with their proportionate share of Leaf's losses. Noncontrolling shareholders' share of after-tax net income of CPOS is included in Net income (loss) attributable to noncontrolling interests from discontinued operations in the Condensed Consolidated Statements of Income for the nine months ended September 30, 2013. | ||||||||||||||||
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, 2014. | ||||||||||||||||
On October 31, 2014, the Company acquired the net assets of Xpient Solutions, LLC (“Xpient”) for a cash payment of $30.0 million plus net working capital. The purchase price was funded from a combination of operating cash and financing under the 2014 Revolving Credit Facility. Xpient provides Point-of-Sale software solutions to customers primarily in the food service industry. | ||||||||||||||||
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 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 did not have a material effect on the Company's condensed 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 carryforwards, 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 did not have a material effect on the Company's condensed consolidated financial statements. | ||||||||||||||||
In April 2014, the FASB issued updated guidance on reporting discontinued operations. Under this updated guidance, a discontinued operation will include a disposal of a major part of an entity’s operations and financial results such as a separate major line of business or a separate major geographical area of operations. The guidance raises the threshold to be a major operation but no longer precludes discontinued operations presentation where there is significant continuing involvement or cash flows with a disposed component of an entity. The guidance expands disclosures to include cash flows where there is significant continuing involvement with a discontinued operation and the pre-tax profit or loss of disposal transactions not reported as discontinued operations. The updated guidance is effective prospectively for interim and annual reporting periods beginning on or after December 15, 2014, with early application permitted. The effect on the Company’s condensed consolidated financial statements is still being evaluated and will depend on the nature of future disposal transactions, if any. | ||||||||||||||||
In May 2014, the FASB issued guidance on revenue from contracts with customers, which requires an entity to recognize revenue from the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance addresses in particular contracts with more than one performance obligation as well as the accounting for some costs to obtain or fulfill a contract with a customer and provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. With respect to public entities, this update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and early adoption is not permitted. The effect on the Company’s condensed consolidated financial statements is still being evaluated. | ||||||||||||||||
In August 2014, the FASB issued guidance on presentation of going concern financial statements which provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The amendments in this guidance are expected to reduce diversity in the timing and content of footnote disclosures. The amendments in this guidance are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The effect on the Company’s condensed consolidated financial statements is still being evaluated. |
Acquisitions
Acquisitions | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Business Combinations [Abstract] | ' | |||||||||||||||
Acquisitions | ' | |||||||||||||||
Acquisitions | ||||||||||||||||
2014 Acquisitions: | ||||||||||||||||
TouchNet Information Systems, Inc. | ||||||||||||||||
On September 4, 2014, the Company completed the acquisition of TouchNet, for a cash payment of $375 million, less a net working capital deficit, for all outstanding common shares. The purchase was funded primarily through a new five-year $375 million term loan. See Note 10, Credit Facilities for further details. | ||||||||||||||||
The transaction was accounted for under the purchase method of accounting. Beginning September 4, 2014, TouchNet's results of operations are included in the Company's results of operations. The fair values of the TouchNet assets acquired and liabilities assumed were estimated as of their acquisition date. The excess of the purchase price over the net assets and liabilities, approximately $222.1 million, was recorded as goodwill, which is expected to be deductible for income tax reporting. The fair values are preliminary, based on estimates, and may be adjusted as the Company analyzes what was known and knowable at the acquisition, including the finalization of valuations. During the nine months ended September 30, 2014, acquisition-related costs of approximately $2.0 million for advisory, legal and regulatory costs incurred in connection with the TouchNet acquisition have been expensed in general and administrative expenses. For the quarter ended September 30, 2014 the Company recognized $4.3 million of revenue related to TouchNet operations since the September 4, 2014 acquisition. | ||||||||||||||||
The following table summarizes the preliminary purchase price allocation (in thousands): | ||||||||||||||||
Cash and cash equivalents | $ | 38,342 | ||||||||||||||
Receivables, net | 12,243 | |||||||||||||||
Inventory | 66 | |||||||||||||||
Prepaid expenses | 601 | |||||||||||||||
Property and equipment, net | 3,360 | |||||||||||||||
Intangible assets, net | 144,400 | |||||||||||||||
Goodwill | 222,076 | |||||||||||||||
Total assets acquired | 421,088 | |||||||||||||||
Accounts payable | 6,002 | |||||||||||||||
Accrued expenses and other liabilities | 2,871 | |||||||||||||||
Current portion of unearned revenue | 24,014 | |||||||||||||||
Current tax liability | 13,914 | |||||||||||||||
Long-term portion of unearned revenue | 2,037 | |||||||||||||||
Net assets acquired | $ | 372,250 | ||||||||||||||
The weighted average amortization life for the 2014 acquired finite lived intangible assets related to acquisition of TouchNet are as follows: | ||||||||||||||||
Weighted average amortization life | ||||||||||||||||
(In years) | ||||||||||||||||
Customer relationships | 20 | |||||||||||||||
Trademark | 5 | |||||||||||||||
Software | 15 | |||||||||||||||
Non-compete agreements | 5 | |||||||||||||||
Overall | 18.1 | |||||||||||||||
The following pro forma information shows the results of our operations for the three and nine months ended September 30, 2014 and 2013 as if the TouchNet acquisition had occurred on January 1, 2013. The pro forma information is presented for information purposes only and is not necessarily indicative of what would have occurred if the acquisition had been made as of that date. The pro forma information is also not intended to be a projection of future results due to the integration of the acquired business. | ||||||||||||||||
Three Months Ended | Nine Months Ended September 30, | |||||||||||||||
September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||||
Total revenues | $ | 619,861 | $ | 574,540 | $ | 1,760,516 | $ | 1,646,605 | ||||||||
Net income attributable to Heartland | 19,205 | 21,754 | 55,538 | 59,524 | ||||||||||||
Basic earnings per share | $ | 0.53 | $ | 0.59 | $ | 1.53 | $ | 1.62 | ||||||||
Diluted earnings per share | $ | 0.52 | $ | 0.57 | $ | 1.49 | $ | 1.56 | ||||||||
MCS Software | ||||||||||||||||
On April 1, 2014, the Company purchased the net assets of MCS Software for a $17.3 million cash payment. The cash purchase price was financed under the Company's Credit Facility and from operating cash flows. The acquisition further expands the Company's Heartland School Solutions business. | ||||||||||||||||
The transaction was accounted for under the purchase method of accounting. Beginning April 1, 2014, MCS Software's results of operations are included in the Company's results of operations. The allocation of the total purchase price was as follows: $11.1 million to goodwill, $6.4 million to intangible assets and $0.2 million to net tangible liabilities. The fair values of the MCS Software's assets acquired and liabilities assumed were estimated as of their acquisition date. The fair values are preliminary, based on estimates, and may be adjusted as the Company analyzes what was known and knowable at the acquisition, including the finalization of valuations. Pro forma results of operations have not been presented because the effect of this acquisition was not material. Goodwill is expected to be deductible for income tax reporting. | ||||||||||||||||
The weighted average amortization life for the 2014 acquired finite lived intangible assets related to acquisition of MCS Software are as follows: | ||||||||||||||||
Weighted average amortization life | ||||||||||||||||
(In years) | ||||||||||||||||
Customer relationships | 14 | |||||||||||||||
Software | 4.6 | |||||||||||||||
Non-compete agreements | 5 | |||||||||||||||
Overall | 10.9 | |||||||||||||||
Liquor Point of Sale | ||||||||||||||||
On February 14, 2014, the Company purchased the assets of Merchant Software Corporation (referred to as | ||||||||||||||||
"Liquor POS") for a $3.3 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 February 15, 2014, Liquor POS results of operations are included in the Company's results of operations. The allocation of the total purchase price was as follows: $2.2 million to goodwill, $1.2 million to intangible assets, and $0.1 million to net tangible liabilities. Pro forma results of operations have not been presented because the effect of this acquisition was not material. Goodwill is expected to be deductible for income tax reporting. | ||||||||||||||||
The weighted average amortization life for the 2014 acquired finite lived intangible assets related to the acquisition of Liquor POS are as follows: | ||||||||||||||||
Weighted average amortization life | ||||||||||||||||
(In years) | ||||||||||||||||
Customer relationships | 10 | |||||||||||||||
Software | 7 | |||||||||||||||
Non-compete agreements | 5 | |||||||||||||||
Patents | 5 | |||||||||||||||
Overall | 8.9 | |||||||||||||||
2013 Acquisition: | ||||||||||||||||
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: $18.5 million to goodwill, $6.9 million to intangible assets, $4.1 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. | ||||||||||||||||
On August 6, 2014, the Company entered into a Stock Purchase Agreement with the noncontrolling shareholders of Leaf under which it acquired all shares of Leaf common stock held by the noncontrolling shareholders. As a result of this transaction, Leaf became a wholly-owned subsidiary of the Company. The Company accounted for this transaction as additional paid-in capital on the Condensed Consolidated Balance Sheet as of September 30, 2014. | ||||||||||||||||
The weighted average amortization life for the 2013 acquired finite lived intangible assets related to the acquisition of Leaf is as follows: | ||||||||||||||||
Weighted average amortization life | ||||||||||||||||
(In years) | ||||||||||||||||
Software | 7 | |||||||||||||||
Patents | 5 | |||||||||||||||
Overall | 6.9 |
Receivables
Receivables | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Receivables [Abstract] | ' | |||||||||||||||
Receivables | ' | |||||||||||||||
Receivables | ||||||||||||||||
A summary of receivables by major class was as follows at September 30, 2014 and December 31, 2013: | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
(In thousands) | ||||||||||||||||
Accounts receivable from merchants and customers | $ | 191,798 | $ | 172,147 | ||||||||||||
Accounts receivable from bankcard networks | 27,570 | 26,842 | ||||||||||||||
Accounts receivable from others | 3,121 | 2,083 | ||||||||||||||
222,489 | 201,072 | |||||||||||||||
Less allowance for doubtful accounts | (1,553 | ) | (1,032 | ) | ||||||||||||
Total receivables, net | $ | 220,936 | $ | 200,040 | ||||||||||||
Included in accounts receivable from others are amounts due from employees (predominantly salespersons) which were $1.8 million and $1.1 million at September 30, 2014 and December 31, 2013, respectively. Accounts receivable related to bankcard networks are primarily amounts due from Discover and American Express for merchant bankcard transactions. | ||||||||||||||||
A summary of the activity in the allowance for doubtful accounts for the three and nine months ended September 30, 2014 and 2013 was as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended September 30, | |||||||||||||||
September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||||
Beginning balance | $ | 1,780 | $ | 915 | $ | 1,032 | $ | 1,438 | ||||||||
Out-of-Period adjustment (a) | — | — | 875 | — | ||||||||||||
Additions (reductions) to allowance | 1,007 | 186 | 2,135 | (16 | ) | |||||||||||
Charges against allowance | (1,234 | ) | (134 | ) | (2,489 | ) | (455 | ) | ||||||||
Ending balance | $ | 1,553 | $ | 967 | $ | 1,553 | $ | 967 | ||||||||
(a) See Note 1, Organization and Operations for a discussion of an Out-of-Period Adjustment. |
Funds_Held_for_Payroll_Custome
Funds Held for Payroll Customers and Investments | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
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 amortized cost, gross unrealized gains (losses) and estimated fair value for investments held to maturity and investments available-for-sale by major security type and class of security were as follows at September 30, 2014 and December 31, 2013: | ||||||||||||||||
Cost | Gross | Gross | Estimated | |||||||||||||
Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In thousands) | ||||||||||||||||
September 30, 2014 | ||||||||||||||||
Funds Held for Customers | ||||||||||||||||
Conservative income bond fund - available for sale | $ | 13,012 | $ | — | $ | (3 | ) | $ | 13,009 | |||||||
Fixed income bonds - available for sale | 8,442 | 1 | — | 8,443 | ||||||||||||
Cash held for payroll customers | 58,358 | — | — | 58,358 | ||||||||||||
Cash held for Campus Solutions customers | 42,501 | — | — | 42,501 | ||||||||||||
Total funds held for customers | $ | 122,313 | $ | 1 | $ | (3 | ) | $ | 122,311 | |||||||
Investments: | ||||||||||||||||
Investments held to maturity - Certificates of deposit (a) | $ | 33 | $ | — | $ | — | $ | 33 | ||||||||
Total investments | $ | 33 | $ | — | $ | — | $ | 33 | ||||||||
(a) Certificate of deposit has a remaining term of 23 months. | ||||||||||||||||
Cost | Gross | Gross | Estimated | |||||||||||||
Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In thousands) | ||||||||||||||||
December 31, 2013 | ||||||||||||||||
Funds Held for Customers | ||||||||||||||||
Conservative income bond fund - available for sale | $ | 12,000 | $ | 10 | $ | — | $ | 12,010 | ||||||||
Fixed income bond fund - available for sale | 968 | 254 | — | 1,222 | ||||||||||||
Cash held for payroll customers | 88,376 | — | — | 88,376 | ||||||||||||
Cash held for Campus Solutions customers | 25,767 | — | — | 25,767 | ||||||||||||
Total funds held for customers | $ | 127,111 | $ | 264 | $ | — | $ | 127,375 | ||||||||
Investments: | ||||||||||||||||
Investments held to maturity - Certificates of deposit | $ | 33 | $ | — | $ | — | $ | 33 | ||||||||
Total investments | $ | 33 | $ | — | $ | — | $ | 33 | ||||||||
Expected maturities of the Fixed income bond at September 30, 2014 are as follows: | ||||||||||||||||
Total | Less Than 1 Year | 1 To 5 Years | 5 To 10 Years | |||||||||||||
(In thousands) | ||||||||||||||||
30-Sep-14 | ||||||||||||||||
Funds Held for Customers | ||||||||||||||||
Fixed income bond - available for sale cost | $ | 8,442 | $ | 936 | $ | 5,352 | $ | 2,154 | ||||||||
Fixed income bond - available for sale estimated fair value | $ | 8,443 | $ | 936 | $ | 5,351 | $ | 2,156 | ||||||||
Also included in Investments on the Consolidated Balance Sheet are other investments, at cost. As of September 30, 2014 and December 31, 2013, other investments, at cost, include a $4.0 million investment in the equity of ATX Innovation, Inc. ("Tabbedout"). | ||||||||||||||||
During the nine months ended September 30, 2014 and during the twelve months ended December 31, 2013, the Company did not experience any other-than-temporary losses on its investments. | ||||||||||||||||
During the nine months ended September 30, 2014, the Company sold available for sale securities for $17.2 million and realized a gain on this sale of $0.3 million which was recognized in the Condensed Consolidated Statements of Income for the nine months ended September 30, 2014. |
Capitalized_Customer_Acquisiti
Capitalized Customer Acquisition Costs, Net | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
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, 2014 and December 31, 2013 was as follows: | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
(In thousands) | ||||||||||||||||
Capitalized signing bonuses | $ | 94,971 | $ | 86,886 | ||||||||||||
Less accumulated amortization | (46,569 | ) | (43,775 | ) | ||||||||||||
48,402 | 43,111 | |||||||||||||||
Capitalized customer deferred acquisition costs | 52,321 | 45,241 | ||||||||||||||
Less accumulated amortization | (31,756 | ) | (27,325 | ) | ||||||||||||
20,565 | 17,916 | |||||||||||||||
Capitalized customer acquisition costs, net | $ | 68,967 | $ | 61,027 | ||||||||||||
A summary of the activity in capitalized customer acquisition costs, net for the three and nine month periods ended September 30, 2014 and 2013 was as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||||
Balance at beginning of period | $ | 66,433 | $ | 56,148 | $ | 61,027 | $ | 56,425 | ||||||||
Plus additions to: | ||||||||||||||||
Capitalized signing bonuses, net | 9,468 | 7,466 | 27,647 | 19,546 | ||||||||||||
Capitalized customer deferred acquisition costs | 6,192 | 5,555 | 18,349 | 15,676 | ||||||||||||
15,660 | 13,021 | 45,996 | 35,222 | |||||||||||||
Less amortization expense on: | ||||||||||||||||
Capitalized signing bonuses, net | (7,703 | ) | (6,852 | ) | (22,357 | ) | (20,747 | ) | ||||||||
Capitalized customer deferred acquisition costs | (5,423 | ) | (4,606 | ) | (15,699 | ) | (13,189 | ) | ||||||||
(13,126 | ) | (11,458 | ) | (38,056 | ) | (33,936 | ) | |||||||||
Balance at end of period | $ | 68,967 | $ | 57,711 | $ | 68,967 | $ | 57,711 | ||||||||
Net signing bonus adjustments from estimated amounts to actual were $(0.7) million and $(1.0) million, respectively, for the three months ended September 30, 2014 and 2013, and $(2.8) million and $(2.9) million, respectively, for the nine months ended September 30, 2014 and 2013. 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 $6.9 million and $6.4 million were written off during the three month periods ended September 30, 2014 and 2013, respectively, and $19.4 million and $19.1 million respectively, were written off during the nine month periods ended September 30, 2014 and 2013. In addition, fully amortized customer deferred acquisition costs of $3.9 million and $3.3 million, respectively, were written off during the three months ended September 30, 2014 and 2013, and $11.3 million and $9.9 million, respectively, were written off during the nine months ended September 30, 2014 and 2013. | ||||||||||||||||
The Company believes that no impairment of capitalized customer acquisition costs has occurred as of September 30, 2014 and December 31, 2013. |
Intangible_Assets_and_Goodwill
Intangible Assets and Goodwill | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
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, 2014 and December 31, 2013: | |||||||||||||||||||||||||
September 30, 2014 | Amortization Life and Method | ||||||||||||||||||||||||
Gross | Accumulated | Net Assets | |||||||||||||||||||||||
Assets | Amortization | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Finite Lived Assets: | |||||||||||||||||||||||||
Customer relationships | $ | 155,925 | $ | 19,041 | $ | 136,884 | 6 to 20 years—proportional cash flow | ||||||||||||||||||
Merchant portfolio | 4,214 | 3,053 | 1,161 | 7 years—proportional cash flow | |||||||||||||||||||||
Software | 60,376 | 13,087 | 47,289 | 1 to 15 years—straight line | |||||||||||||||||||||
Non-compete agreements | 5,806 | 2,558 | 3,248 | 5 years—straight line | |||||||||||||||||||||
Other | 5,401 | 193 | 5,208 | 5 to 7 years—straight line | |||||||||||||||||||||
$ | 231,722 | $ | 37,932 | $ | 193,790 | ||||||||||||||||||||
December 31, 2013 | Amortization Life and Method | ||||||||||||||||||||||||
Gross | Accumulated | Net Assets | |||||||||||||||||||||||
Assets | Amortization | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Finite Lived Assets: | |||||||||||||||||||||||||
Customer relationships | $ | 49,814 | $ | 14,107 | $ | 35,707 | 3 to 18 years—proportional cash flow | ||||||||||||||||||
Merchant portfolio | 4,095 | 2,703 | 1,392 | 7 years—proportional cash flow | |||||||||||||||||||||
Software | 20,750 | 10,934 | 9,816 | 2 to 5 years—straight line | |||||||||||||||||||||
Non-compete agreements | 4,489 | 1,880 | 2,609 | 3 to 5 years—straight line | |||||||||||||||||||||
Other | 385 | 52 | 333 | 2 to 9 years—straight line | |||||||||||||||||||||
$ | 79,533 | $ | 29,676 | $ | 49,857 | ||||||||||||||||||||
Amortization expense related to the intangible assets was $3.4 million and $2.2 million, respectively, for the three months ended September 30, 2014 and 2013 and $8.3 million and $6.7 million for the nine months ended September 30, 2014 and 2013, 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) | |||||||||||||||||||||||||
2015 | $ | 18,498 | |||||||||||||||||||||||
2016 | 17,218 | ||||||||||||||||||||||||
2017 | 15,949 | ||||||||||||||||||||||||
2018 | 13,875 | ||||||||||||||||||||||||
2019 | 12,790 | ||||||||||||||||||||||||
Thereafter | 115,460 | ||||||||||||||||||||||||
$ | 193,790 | ||||||||||||||||||||||||
Goodwill — The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2014 and 2013 were as follows: | |||||||||||||||||||||||||
Card | Heartland Ovation Payroll | Heartland School Solutions | Campus Solutions | Other | Total | ||||||||||||||||||||
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 | |||||||||||||||||||
Balance at January 1, 2014 | 64,320 | 31,018 | 53,350 | 35,789 | 6,501 | 190,978 | |||||||||||||||||||
Goodwill acquired during the period | 2,247 | — | 13,592 | 222,076 | — | 237,915 | |||||||||||||||||||
Other (a) | (2,130 | ) | — | (2,493 | ) | — | — | (4,623 | ) | ||||||||||||||||
Balance at September 30, 2014 | $ | 64,437 | $ | 31,018 | $ | 64,449 | $ | 257,865 | $ | 6,501 | $ | 424,270 | |||||||||||||
(a) Reflects adjustments to allocations of purchase price. | |||||||||||||||||||||||||
Percentage of total reportable segments' assets that were goodwill as of September 30, 2014 and 2013 is as follows: | |||||||||||||||||||||||||
Percent of Goodwill to Reportable Segments' Total Assets | |||||||||||||||||||||||||
30-Sep-14 | 30-Sep-13 | ||||||||||||||||||||||||
Card | 10.90% | 11.90% | |||||||||||||||||||||||
Heartland Ovation Payroll | 23.30% | 21.00% | |||||||||||||||||||||||
Heartland School Solutions | 70.30% | 65.40% | |||||||||||||||||||||||
Campus Solutions | 51.40% | 49.40% | |||||||||||||||||||||||
Other | 32.20% | 39.70% |
Processing_Liabilities_and_Los
Processing Liabilities and Loss Reserves | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
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 arising from merchant chargebacks. A summary of processing liabilities and loss reserves was as follows at September 30, 2014 and December 31, 2013: | ||||||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||||
(In thousands) | ||||||||||||||||
Merchant bankcard processing | $ | 97,094 | $ | 121,143 | ||||||||||||
Merchant deposits | 6,130 | 8,223 | ||||||||||||||
Loss reserves | 1,632 | 1,505 | ||||||||||||||
$ | 104,856 | $ | 130,871 | |||||||||||||
In addition to the merchant deposits listed above, the Company held letters of credit related to merchant card payment processing totaling $250,000 at September 30, 2014 and $260,000 at December 31, 2013. | ||||||||||||||||
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 Company typically receives chargebacks from the card networks within 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 $28.5 billion and $24.4 billion for the four months ended September 30, 2014 and December 31, 2013, respectively. However, for the four months ended September 30, 2014 and December 31, 2013, the Company was presented with $13.7 million and $11.7 million, respectively, in chargebacks by issuing banks. In the nine months ended September 30, 2014 and 2013, the Company incurred merchant credit losses of $2.5 million and $2.4 million, respectively, on total SME card processing volumes processed of $60.1 billion and $56.2 billion, respectively. These credit losses are included in processing and servicing costs in the Company's Condensed Consolidated Statements of Income and 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 $1.6 million at September 30, 2014 and $1.5 million at December 31, 2013. 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, 2014 and 2013 was as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||||
Beginning balance | $ | 1,762 | $ | 1,955 | $ | 1,505 | $ | 1,955 | ||||||||
Additions to reserve | 943 | 1,228 | 3,000 | 2,461 | ||||||||||||
Charges against reserve (a) | (1,073 | ) | (1,228 | ) | (2,873 | ) | (2,461 | ) | ||||||||
Ending balance | $ | 1,632 | $ | 1,955 | $ | 1,632 | $ | 1,955 | ||||||||
(a) Included in these amounts are Heartland Ovation Payroll segment losses of $179,000 and $13,000, respectively, for the three months ended September 30, 2014 and 2013, and $376,000 and $88,000, respectively, for the nine months ended September 30, 2014 and 2013. |
Accrued_Buyout_Liability
Accrued Buyout Liability | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Accrued Buyout Liability [Abstract] | ' | |||||||||||||||
Accrued Buyout Liability | ' | |||||||||||||||
Accrued Buyout Liability | ||||||||||||||||
A summary of the accrued buyout liability was as follows as of September 30, 2014 and December 31, 2013: | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
(In thousands) | ||||||||||||||||
Vested Relationship Managers and sales managers | $ | 43,178 | $ | 38,082 | ||||||||||||
Unvested Relationship Managers and sales managers | 1,779 | 1,297 | ||||||||||||||
44,957 | 39,379 | |||||||||||||||
Less current portion | (14,457 | ) | (13,943 | ) | ||||||||||||
Long-term portion of accrued buyout liability | $ | 30,500 | $ | 25,436 | ||||||||||||
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 $0.2 million and $0.1 million at September 30, 2014 and December 31, 2013, respectively. | ||||||||||||||||
A summary of the activity in the accrued buyout liability for the three and nine months ended September 30, 2014 and 2013 was as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||||
Beginning balance | $ | 41,268 | $ | 33,319 | $ | 39,379 | $ | 35,410 | ||||||||
Increase in settlement obligation, net | 5,354 | 4,935 | 15,199 | 13,294 | ||||||||||||
Buyouts | (1,665 | ) | (1,392 | ) | (9,621 | ) | (11,842 | ) | ||||||||
Ending balance | $ | 44,957 | $ | 36,862 | $ | 44,957 | $ | 36,862 | ||||||||
Credit_Facilities
Credit Facilities | 9 Months Ended |
Sep. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
Credit Facilities | ' |
Credit Facilities | |
On September 4, 2014, the Company entered into an amended and restated senior secured credit facility (the "2014 Credit Agreement") with Bank of America, N.A., as administrative agent, and certain lenders who are a party to the 2014 Credit Agreement. This 2014 Credit Agreement replaces the Company's October 2013 Credit Agreement (the "2013 Credit Agreement”). Credit extended under the 2014 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 2014 Credit Agreement provides for a revolving credit facility in the aggregate amount of up to $400 million (the “2014 Revolving Credit Facility”) and a term loan in an aggregate principal amount of $375 million (the “2014 Term Credit Facility”). The 2014 Revolving Credit Facility includes up to $35 million that may be used for the issuance of letters of credit and up to $35 million that is available for swing line loans. All principal and interest not previously paid on the 2014 Revolving Credit Facility will mature and be due and payable on September 4, 2019. The 2014 Term Credit Facility amortizes on a quarterly basis as follows, with the remaining principal balance due on September 4, 2019: (i) 5% of the initial 2014 Term Credit Facility to be payable in each of the first three years, (ii) 7.5% of the initial 2014 Term Credit Facility to be payable in the fourth year and (iii) 10% of the initial 2014 Term Credit Facility to be payable in the fifth year. The 2014 Term Credit Facility is also subject to mandatory prepayment from the net cash proceeds of certain asset dispositions, casualty or condemnation events, issuance of indebtedness and extraordinary receipts. Subject to the terms and conditions of the 2014 Credit Agreement, without the consent of the then existing lenders (but subject to the receipt of commitments), the 2014 Revolving Credit Facility may be increased and new incremental term loans may be issued in an aggregate principal amount of up to $150 million for all such increases under the 2014 Revolving Credit Facility and new term loans, subject to certain minimum threshold amounts. | |
On September 4, 2014, the Company borrowed $375 million under the 2014 Term Credit Facility and used that amount to fund the TouchNet Acquisition (See Note 3, Acquisitions). At September 30, 2014, the Company had $375 million outstanding under the 2014 Term Credit Facility. | |
The 2014 Credit Agreement contains covenants which include: maintenance of certain leverage and fixed charge coverage ratios; limitations on the Company's indebtedness, liens on the Company's properties and assets, investments in, and loans to other business units, the Company's ability to enter into business combinations and asset sales; and certain other financial and non-financial covenants. These covenants also apply to certain Company subsidiaries. The Company was in compliance with these covenants as of September 30, 2014 and December 31, 2013. | |
On October 23, 2013, the date the Company closed the 2013 Credit Agreement, it drew down $150.0 million on its revolving credit facility under the 2013 Credit Agreement and used those proceeds to repay borrowings then outstanding; $55.0 million outstanding under a term loan and $91.0 million outstanding under a revolving credit facility. At September 30, 2014 the Company had $197.5 million outstanding under its 2014 Revolving Credit Facility and at December 31, 2013, the Company had $150.0 million outstanding under the 2013 Credit Agreement revolving credit facility. | |
Under the terms of the 2014 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, 2014 was 2.2%. Total fees and direct costs paid for the Company's credit facilities as of September 30, 2014 were $6.2 million, including $3.5 million paid on September 4, 2014. These costs are being amortized to interest expense over the life of the Credit Agreement. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
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. The Company does not consider it a reasonable possibility that losses exceeding the amounts previously recognized on the matters subject to Processing System Intrusion settlement agreements entered into to date will be incurred. With regard to unsettled claims related to the Processing System Intrusion, the Company determined material losses in addition to those previously accrued are not considered reasonably possible on any such claim disclosed. The Company is prepared to vigorously defend itself against any unsettled claims relating to the Processing System Intrusion that have been asserted against it and feels it has strong defenses to all claims that have been asserted against it relating to the Processing System Intrusion. | |||||||||||||||||||||
Leases—The Company leases various office spaces and certain equipment under operating leases with remaining terms ranging up to 13 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, 2014 were as follows: | |||||||||||||||||||||
For the Twelve Months Ending September 30, | Operating Leases (a) | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
2015 | $ | 14,007 | |||||||||||||||||||
2016 | 12,865 | ||||||||||||||||||||
2017 | 7,754 | ||||||||||||||||||||
2018 | 7,156 | ||||||||||||||||||||
2019 | 6,126 | ||||||||||||||||||||
Thereafter | 26,015 | ||||||||||||||||||||
Total future minimum lease payments | $ | 73,923 | |||||||||||||||||||
(a) There were no material capital leases at September 30, 2014 | |||||||||||||||||||||
Rent expense for leased facilities and equipment was $2.9 million and $2.7 million, respectively, for the three months ended September 30, 2014 and 2013, and $8.7 million and $7.5 million, respectively, for the nine months ended September 30, 2014 and 2013. | |||||||||||||||||||||
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 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. The Company paid $0.6 million under one of these agreements in the nine months ended September 30, 2014. | |||||||||||||||||||||
The following table reflects the Company’s other significant contractual obligations, including leases from above, as of September 30, 2014: | |||||||||||||||||||||
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) | $ | 6,465 | $ | 5,465 | $ | 1,000 | $ | — | $ | — | |||||||||||
Telecommunications providers (b) | 10,029 | 3,522 | 6,008 | 499 | — | ||||||||||||||||
Facility and equipment leases | 73,923 | 14,007 | 20,619 | 13,282 | 26,015 | ||||||||||||||||
2014 Term Credit Facility | 375,000 | 18,750 | 39,844 | 316,406 | — | ||||||||||||||||
2014 Revolving Credit Facility (c) | 197,500 | — | — | 197,500 | — | ||||||||||||||||
$ | 662,917 | $ | 41,744 | $ | 67,471 | $ | 527,687 | $ | 26,015 | ||||||||||||
(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) | The Company has agreements in place with several large telecommunications companies that provide data center services, wide area network connectivity, and voice services that are used by both the Company call center and card payment processing platforms. These providers require both dollar and term commitments for the services they provide. If the Company does not meet the minimum terms, then there is a requirement to pay the remaining commitments. | ||||||||||||||||||||
(c) | Interest rates on the 2014 Revolving Credit Facility are variable in nature; however, the Company is party to fixed-pay amortizing interest rate swaps having a remaining notional amount of $17.5 million. If interest rates were to remain at the September 30, 2014 level, the Company would make interest payments of $0.4 million in the next 1 year and $0.1 million in the next 1 to 3 years or a total of $0.5 million including net settlements on the fixed-pay amortizing interest rate swaps. The 2014 Revolving Credit Facility is available on a revolving basis until September 4, 2019. |
Segments
Segments | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
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 Payment Processing, which provides card payment processing and related services to our SME merchants and Network Services Merchants, (2) Heartland School Solutions, which provides school nutrition and point-of-sale solutions and associated payment solutions, (3) Heartland Ovation Payroll, which provides payroll processing and related tax filing services, (4) Campus Solutions, which provides payment processing, integrated commerce solutions, higher education loan services and open- and closed-loop payment solutions, and (5) Prepaid Card and Other. The Prepaid Card and 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 Prepaid Card and Other segment do not meet the defined thresholds for being an individually reportable segment under applicable accounting guidance. | |||||||||||||||||
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. Campus Solutions includes TouchNet and ECSI for financial reporting purposes because they provide similar commerce solutions, exhibit similar economic characteristics, and provide services to a similar college and university customer base, including some overlap. | |||||||||||||||||
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, 2014 and 2013, 60% and 64%, respectively, of the Heartland Ovation Payroll's segment's total assets were funds that the Company holds as a fiduciary in its payroll processing services activities for payment to taxing authorities. At September 30, 2014 and 2013, 8% and 23%, respectively, of the Campus Solutions segment's total assets represent funds held for the Company's 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, 2014 and 2013 was as follows: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Revenues | (In thousands) | ||||||||||||||||
Card Payment Processing | $ | 551,901 | $ | 519,783 | $ | 1,569,431 | $ | 1,489,804 | |||||||||
Heartland School Solutions (a) | 15,061 | 12,150 | 42,685 | 36,628 | |||||||||||||
Heartland Ovation Payroll | 12,170 | 10,578 | 37,978 | 33,648 | |||||||||||||
Campus Solutions | 14,400 | 8,556 | 36,883 | 27,853 | |||||||||||||
Prepaid Card and Other | 7,094 | 6,062 | 19,791 | 17,059 | |||||||||||||
Total revenues | $ | 600,626 | $ | 557,129 | $ | 1,706,768 | $ | 1,604,992 | |||||||||
Depreciation and amortization | |||||||||||||||||
Card Payment Processing | $ | 8,628 | $ | 6,918 | $ | 24,240 | $ | 20,015 | |||||||||
Heartland School Solutions | 1,282 | 785 | 2,665 | 1,854 | |||||||||||||
Heartland Ovation Payroll | 727 | 959 | 2,416 | 2,634 | |||||||||||||
Campus Solutions | 1,473 | 674 | 2,756 | 1,696 | |||||||||||||
Prepaid Card and Other | 388 | 433 | 1,157 | 1,259 | |||||||||||||
Unallocated Corporate Administration Amounts | 165 | 35 | 282 | (1,421 | ) | ||||||||||||
Total depreciation and amortization | $ | 12,663 | $ | 9,804 | $ | 33,516 | $ | 26,037 | |||||||||
Interest Income | |||||||||||||||||
Card Payment Processing | $ | 33 | $ | 28 | $ | 95 | $ | 92 | |||||||||
Campus Solutions | — | 1 | — | 3 | |||||||||||||
Total interest income | $ | 33 | $ | 29 | $ | 95 | $ | 95 | |||||||||
Interest Expense | |||||||||||||||||
Card Payment Processing | $ | 1,453 | $ | 1,242 | $ | 3,761 | $ | 3,744 | |||||||||
Campus Solutions | 689 | — | 689 | — | |||||||||||||
Prepaid Card and Other | — | 1 | — | 5 | |||||||||||||
Reconciling | — | — | — | (3 | ) | ||||||||||||
Total interest expense | $ | 2,142 | $ | 1,243 | $ | 4,450 | $ | 3,746 | |||||||||
Net income (loss) from continuing operations | |||||||||||||||||
Card Payment Processing | $ | 20,330 | $ | 23,926 | $ | 51,807 | $ | 59,289 | |||||||||
Heartland School Solutions (a) | 1,712 | 1,775 | 3,149 | 6,650 | |||||||||||||
Heartland Ovation Payroll | 1,032 | 357 | 4,490 | 1,904 | |||||||||||||
Campus Solutions | 2,019 | 544 | 4,918 | 2,069 | |||||||||||||
Prepaid Card and Other | 812 | 200 | 1,875 | (45 | ) | ||||||||||||
Unallocated Corporate Administration Amounts | (5,749 | ) | (4,911 | ) | (14,600 | ) | (12,650 | ) | |||||||||
Total net income from continuing operations | $ | 20,156 | $ | 21,891 | $ | 51,639 | $ | 57,217 | |||||||||
Assets | 30-Sep-14 | September 30, 2013 | |||||||||||||||
Card Payment Processing | $ | 589,657 | $ | 540,098 | |||||||||||||
Heartland School Solutions | 91,703 | 81,547 | |||||||||||||||
Heartland Ovation Payroll | 133,204 | 149,008 | |||||||||||||||
Campus Solutions | 501,982 | 72,197 | |||||||||||||||
Prepaid Card and Other | 20,218 | 16,363 | |||||||||||||||
Total assets | $ | 1,336,764 | $ | 859,213 | |||||||||||||
(a) See Note 1 Organization and Operations for a discussion of an Out-of-Period Adjustment recorded in the nine months ended September 30, 2014. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
Earnings per Share— Basic earnings per share was computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share was 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. | |||||||||||||||||
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 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, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands, except per share) | |||||||||||||||||
Numerator: | |||||||||||||||||
Income from continuing operations attributable to Heartland | $ | 20,458 | $ | 21,981 | $ | 53,650 | $ | 57,307 | |||||||||
Income from discontinued operations attributable to Heartland | — | — | — | 3,914 | |||||||||||||
Net income attributable to Heartland | $ | 20,458 | $ | 21,981 | $ | 53,650 | $ | 61,221 | |||||||||
Denominator: | |||||||||||||||||
Basic weighted average shares outstanding | 36,069 | 36,857 | 36,388 | 36,752 | |||||||||||||
Effect of dilutive instruments: | |||||||||||||||||
Stock options and restricted stock units | 781 | 1,163 | 861 | 1,327 | |||||||||||||
Diluted weighted average shares outstanding | 36,850 | 38,020 | 37,249 | 38,079 | |||||||||||||
Basic earnings per share: | |||||||||||||||||
Income from continuing operations | $ | 0.57 | $ | 0.6 | $ | 1.47 | $ | 1.56 | |||||||||
Income from discontinued operations | — | — | — | 0.11 | |||||||||||||
Basic earnings per share | $ | 0.57 | $ | 0.6 | $ | 1.47 | $ | 1.67 | |||||||||
Diluted earnings per share: | |||||||||||||||||
Income from continuing operations | $ | 0.56 | $ | 0.58 | $ | 1.44 | $ | 1.5 | |||||||||
Income from discontinued operations | — | — | — | 0.1 | |||||||||||||
Diluted earnings per share | $ | 0.56 | $ | 0.58 | $ | 1.44 | $ | 1.6 | |||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
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, 2014, there have been no transfers between Level 1 and Level 2 categories. The following tables provide the assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2014 and at December 31, 2013: | ||||||||||||||||
September 30, 2014 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments available for sale: | ||||||||||||||||
Conservative income bond fund (a) | $ | 13,009 | $ | 13,009 | $ | — | $ | — | ||||||||
Fixed income bond (a) | 8,443 | 8,443 | — | — | ||||||||||||
Total assets | $ | 21,452 | $ | 21,452 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Interest rate swaps | $ | 187 | $ | — | $ | 187 | $ | — | ||||||||
Total liabilities | $ | 187 | $ | — | $ | 187 | $ | — | ||||||||
December 31, 2013 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments available for sale: | ||||||||||||||||
Conservative income bond fund (a) | $ | 12,010 | $ | 12,010 | $ | — | $ | — | ||||||||
Fixed income bond fund (a) | 1,222 | 1,222 | — | — | ||||||||||||
Total assets | $ | 13,232 | $ | 13,232 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Interest rate swaps | $ | 411 | $ | — | $ | 411 | $ | — | ||||||||
Total liabilities | $ | 411 | $ | — | $ | 411 | $ | — | ||||||||
(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, 2014 and December 31, 2013: | ||||||||||||||||
September 30, 2014 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments held to maturity: | ||||||||||||||||
Certificates of deposit | $ | 33 | $ | — | $ | 33 | $ | — | ||||||||
Total assets | $ | 33 | $ | — | $ | 33 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
2014 Term Credit Facility | $ | 375,000 | $ | — | $ | 375,000 | $ | — | ||||||||
2014 Prior Revolving Credit Facility | 197,500 | — | 197,500 | — | ||||||||||||
Total liabilities | $ | 572,500 | $ | — | $ | 572,500 | $ | — | ||||||||
December 31, 2013 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments held to maturity: | ||||||||||||||||
Certificates of deposit | $ | 33 | $ | — | $ | 33 | $ | — | ||||||||
Total assets | $ | 33 | $ | — | $ | 33 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Revolving Credit Facility | $ | 150,000 | $ | — | $ | 150,000 | $ | — | ||||||||
Total liabilities | $ | 150,000 | $ | — | $ | 150,000 | $ | — | ||||||||
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 as of September 30, 2014 and December 31, 2013 also include borrowings under its credit facilities 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, 2014 and December 31, 2013, because they bear interest at market rates and have maturities of less than 90 days at the time of purchase. |
Discontinued_Operations_Notes
Discontinued Operations (Notes) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
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 Collective Point of Sale Solutions, Ltd. ("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, 2014 and 2013 which are included in the earnings from discontinued operations: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands) | |||||||||||||||||
Revenues | $ | — | $ | — | $ | — | $ | 1,117 | |||||||||
Expenses | — | — | — | 870 | |||||||||||||
Income from operations | — | — | — | 247 | |||||||||||||
Income from discontinued operations, net of income tax of $68 | — | — | — | 184 | |||||||||||||
Gain on sale of discontinued operations, net of income tax of $2,067 | — | — | — | 3,786 | |||||||||||||
Net income from discontinued operations attributable to noncontrolling interests | — | — | — | 56 | |||||||||||||
Net income from discontinued operations attributable to Heartland | — | — | — | 3,914 | |||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
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 condensed 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 | ' | ||||||||||||||||
Cash and Cash Equivalents— At September 30, 2014, cash included approximately $16.3 million of processing-related cash in transit and collateral, compared to approximately $32.1 million of processing-related cash in transit and collateral at December 31, 2013. Processing-related cash in transit and collateral includes funds in transit associated with timing differences arising between the amounts the Company's sponsor banks receive from the bankcard networks and the amounts funded by the Company’s merchants. Processing-related cash in transit and collateral also includes merchant deposits, collateral deposits, and funds in transit relating to timing differences for the Company's non-card payment processing businesses. | |||||||||||||||||
Receivables | ' | ||||||||||||||||
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. | |||||||||||||||||
The timing for presentment of transaction funding files to the bankcard networks results in the Company's sponsor banks receiving settlement cash one day before payment is made to merchants, thereby increasing funding obligations to its SME merchants, which are carried in processing liabilities. The Company funds interchange advances/receivables to SME merchants first from this settlement cash received from bankcard networks, then from the Company's available cash or by incurring a liability to its sponsor banks. The Company did not fund any merchant advances from available cash at September 30, 2014 and December 31, 2013. The amount due to sponsor banks for funding merchant advances was $36.8 million at September 30, 2014 and $17.8 million at December 31, 2013. The Company pays its sponsor banks the prime rate on these payables. The liability 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 due from Discover and American Express for merchant bankcard transactions. 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 Campus Solutions, Heartland School Solutions and Prepaid Card and Other. These receivables are mostly invoiced on terms of 30 days net from date of invoicing. | |||||||||||||||||
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 and customer receivables. | |||||||||||||||||
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, bond funds, tax-exempt bonds 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, 2014, funds held for customers included cash and cash equivalents of $100.9 million and investments available for sale of $21.4 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, 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 residual 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 three-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, payroll and loyalty marketing merchant processing, consistent with the build-up in the accrued buyout liability, as described below. | |||||||||||||||||
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, 2014. | |||||||||||||||||
Unearned Revenue | ' | ||||||||||||||||
Unearned revenue— Unearned revenue of $42.7 million and $18.2 million at September 30, 2014 and December 31, 2013, respectively, is primarily related to the Company's Heartland School Solutions and Campus Solutions businesses for both periods, and its Payroll business for December 31, 2013. Included in the Campus Solutions business is unearned revenue from TouchNet, which the Company acquired on September 4, 2014. The Company added $26.1 million of unearned revenue as part of that acquisition. Unearned revenue is derived primarily from the sale and subscription of e-commerce solutions and integration to host computer systems as well as from support and maintenance contracts and professional services. Unearned revenue represents contractual obligations of the Company to provide software, services and support to customers in the future. | |||||||||||||||||
Accrued Expenses and Other Liabilities | ' | ||||||||||||||||
Accrued Expenses and Other Liabilities— Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheets include the allocation of purchase price to an unfavorable contract of $2.0 million and $3.4 million at September 30, 2014 and December 31, 2013, respectively, associated with the September 30, 2011 acquisition of School-Link Technologies, Inc in the Company's Heartland School Solutions business. During the nine months ended September 30, 2014 and 2013, the Company amortized $1.4 million and $1.5 million, respectively, of this accrued liability against the cash processing costs paid under that contract. During the nine months ended September 30, 2013, the Company 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 for the nine months ended September 30, 2014 and 2013 and adjustment to the carrying value were included in cost of services in our Condensed Consolidated Statements of Income. | |||||||||||||||||
Processing Liabilities And Loss Reserves | ' | ||||||||||||||||
Processing Liabilities— Processing liabilities result primarily from the Company's card processing activities. Processing liabilities primarily reflect funds in transit associated with differences arising between the amounts the Company's 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. The amounts are generally collected or paid the following business day. | |||||||||||||||||
Chargebacks 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 | ' | ||||||||||||||||
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 or contraction and changes in gross margin are included in the same income statement caption as customer acquisition costs expense. | |||||||||||||||||
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 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— | |||||||||||||||||
Loss Contingencies and Legal Expenses | ' | ||||||||||||||||
oss 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) | ' | ||||||||||||||||
ther Income (Expense)— Other income (expense) consists of interest income on cash and investments, the interest cost on the Company's borrowings, the gains or losses on the disposal of assets and other non-operating income or expense items. | |||||||||||||||||
As a result of the Stock Purchase Agreement that the Company entered into on August 6, 2014 with the noncontrolling shareholders of Leaf, the Company was released from a contingent earn-out liability to those noncontrolling shareholders and recognized a pre- and after-tax gain of $3.6 million in the three and nine months ended September 30, 2014. The non-cash impact of the gain associated with the release of the contingent earn-out liability is recorded in "Other, net" in the condensed consolidated statements of income and "Write-off of fixed assets and other" in the condensed consolidated statement of cash flows. | |||||||||||||||||
Other income (expense) also includes the pretax charges or recoveries related to the provision for Processing System Intrusion costs. See Note 11, Commitments and Contingencies for information on the Processing System Intrusion. | |||||||||||||||||
Income Taxes | ' | ||||||||||||||||
ncome 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'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 Company's estimated tax rate changes, it makes a cumulative adjustment in that period. | |||||||||||||||||
The provision for income taxes for the three and nine months ended September 30, 2014 and 2013 and the resulting effective tax rates were as follows: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands) | |||||||||||||||||
Provision for income taxes | $ | 11,727 | $ | 11,857 | $ | 34,579 | $ | 34,039 | |||||||||
Effective tax rate | 36.8 | % | 35.1 | % | 40.1 | % | 37.3 | % | |||||||||
The effective tax rate for the three months ended September 30, 2013 benefited from 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 Company recognized the effects of the research and development credits in the three months ended September 30, 2013 in conjunction with filing our 2012 tax return. | |||||||||||||||||
The increase in the Company's effective tax rate for the nine months ended September 30, 2014, as compared to the nine months ended September 30, 2013, reflects the impact of providing a valuation allowance against deferred tax assets resulting from operating losses recorded by Leaf during our 66.67% ownership period from January 1 to August 5, 2014. On August 6, 2014, the Company acquired all shares of Leaf common stock held by noncontrolling shareholders. As a result of this acquisition, the Company will utilize the losses generated by Leaf against consolidated taxable income for periods after August 5, 2014. See “Note 3, Acquisitions" for further details on our investments in Leaf. Additionally, the effective tax rate for the nine months ended September 30, 2014 benefited from the permanent non-taxable status of the gain recognized on the release of a contingent earn-out liability to the former noncontrolling shareholders of Leaf. | |||||||||||||||||
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, 2014, the reserve for unrecognized tax benefits related to uncertain tax positions was $6.8 million, of which $4.4 million would, if recognized, impact the effective tax rate. At December 31, 2013, the reserve for unrecognized tax benefits related to uncertain tax positions was $5.6 million, of which $3.8 million would, if recognized, impact the effective tax rate. | |||||||||||||||||
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. | |||||||||||||||||
Share-based Compensation | ' | ||||||||||||||||
hare–Based Compensation— In the fourth quarters of 2012 and 2013, 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 2012 | 4th Quarter 2013 | ||||||||||||||||
RSU's Granted | 60,507 | 115,223 | |||||||||||||||
Vesting during 2014 | — | — | |||||||||||||||
Vesting during 2015 | 50% | — | |||||||||||||||
Vesting during 2016 | 50% | — | |||||||||||||||
Vesting during 2017 | — | 50% | |||||||||||||||
Vesting during 2018 | — | 50% | |||||||||||||||
Grant Performance Target | (a) | (b) | |||||||||||||||
(a) | These Restricted Share Units would vest only if the Company achieves a Pro Forma diluted earnings per share compound annual growth rate ("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 records expense on these Restricted Share Units based on achieving the 15% target. | ||||||||||||||||
(b) | These Restricted Share Units will vest only if the Company achieves a pro forma diluted earnings per share growth rate of forty percent (40%) over the three-year period ending December 31, 2016. For each 1% that the growth rate actually achieved for the three-year period ending on December 31, 2016 is above the 40% target, the number of shares underlying the Restricted Share Units awarded would be increased by 1.20%; provided, however, that the maximum increase in the number of shares that may be awarded is 150%. Likewise, for each 1% that the growth rate actually achieved for the three-year period ending on December 31, 2016 is below the 40% target, the number of shares underlying the Restricted Share Units awarded would be decreased by 1.50%. If the target growth rate is missed by 50% or more, then the number of shares awarded is zero. The Company has recorded expense on these Restricted Share Units based on achieving the 40% target. | ||||||||||||||||
Pro Forma diluted earnings per share for (a) and (b) 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 Company's Board of Directors approved target grants of 60,793 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 peers. 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. | |||||||||||||||||
In the fourth quarter of 2013, the Company's Compensation Committee approved target grants of 57,598 Relative TSRs. These Relative 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 the Company's common stock as compared to the total shareholder return of 91 peer companies. The payout schedule can produce vesting percentages ranging from 0% to 200%. Total shareholder return will be calculated based upon the average closing price for the 30 calendar day period ending December 6, 2016, divided by the closing price on December 6, 2013. 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 Relative TSRs. | |||||||||||||||||
In the fourth quarter of 2013, the Compensation Committee approved target grants of 59,533 Absolute Total | |||||||||||||||||
Shareholder Return Restricted Share Units (referred to as “Absolute TSRs”). These Absolute TSRs are nonvested share awards | |||||||||||||||||
for which vesting percentages and ultimate number of units vesting will be calculated based on the Company's three or four | |||||||||||||||||
year total shareholder return of our common stock. The payout schedule can produce vesting percentages ranging from 0% to | |||||||||||||||||
200%. Total shareholder return will be calculated based upon the average closing price for the 30 calendar day period ending December 6, 2016 or December 6, 2017, divided by the closing price on December 6, 2013. The target number of units is based on achieving a total shareholder return of 33% over three years or 46% over four years. The Company recorded expense on these Absolute TSRs based on achieving the target. A lattice valuation model was applied to measure the grant date fair value of these Absolute TSRs. | |||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
Earnings per Share— Basic earnings per share was computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share was 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. | |||||||||||||||||
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 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, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands, except per share) | |||||||||||||||||
Numerator: | |||||||||||||||||
Income from continuing operations attributable to Heartland | $ | 20,458 | $ | 21,981 | $ | 53,650 | $ | 57,307 | |||||||||
Income from discontinued operations attributable to Heartland | — | — | — | 3,914 | |||||||||||||
Net income attributable to Heartland | $ | 20,458 | $ | 21,981 | $ | 53,650 | $ | 61,221 | |||||||||
Denominator: | |||||||||||||||||
Basic weighted average shares outstanding | 36,069 | 36,857 | 36,388 | 36,752 | |||||||||||||
Effect of dilutive instruments: | |||||||||||||||||
Stock options and restricted stock units | 781 | 1,163 | 861 | 1,327 | |||||||||||||
Diluted weighted average shares outstanding | 36,850 | 38,020 | 37,249 | 38,079 | |||||||||||||
Basic earnings per share: | |||||||||||||||||
Income from continuing operations | $ | 0.57 | $ | 0.6 | $ | 1.47 | $ | 1.56 | |||||||||
Income from discontinued operations | — | — | — | 0.11 | |||||||||||||
Basic earnings per share | $ | 0.57 | $ | 0.6 | $ | 1.47 | $ | 1.67 | |||||||||
Diluted earnings per share: | |||||||||||||||||
Income from continuing operations | $ | 0.56 | $ | 0.58 | $ | 1.44 | $ | 1.5 | |||||||||
Income from discontinued operations | — | — | — | 0.1 | |||||||||||||
Diluted earnings per share | $ | 0.56 | $ | 0.58 | $ | 1.44 | $ | 1.6 | |||||||||
Common Stock Repurchases | ' | ||||||||||||||||
ommon Stock Repurchases— On November 2, 2012, the Company's Board of Directors authorized the repurchase of up to $50 million of the Company's outstanding common stock. These repurchases were completed during the second quarter of 2013. On May 8, 2013, the Company's Board of Directors authorized the repurchase of up to $75 million of the Company's outstanding common stock. These repurchases were completed during the second quarter of 2014. On May 8, 2014, the Company's Board of Directors authorized the repurchase of up to $75 million of the Company's outstanding common stock. As of September 30, 2014, the Company has not repurchased any shares under the May 8, 2014 authorization. Repurchases under these programs were made through the open market in accordance with applicable laws and regulations. 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 2014 Revolving Credit Facility (as defined in Note 10 herein). 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 corporation liquidity requirements. The repurchase program may be modified or discontinued at any time. | |||||||||||||||||
Nov-12 | May-13 | May-14 | Total | ||||||||||||||
Activity For the Nine Months Ended September 30, 2014 | |||||||||||||||||
Shares repurchased | — | 1,347,817 | — | 1,347,817 | |||||||||||||
Cost of shares repurchased (in thousands) | — | $54,455 | — | $54,455 | |||||||||||||
Average cost per share | — | $40.40 | — | $40.40 | |||||||||||||
Remaining authorization (in thousands) | — | — | $75,000 | $75,000 | |||||||||||||
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 | |||||||||||||
Activity For the Year Ended December 31, 2013 | |||||||||||||||||
Shares repurchased | 952,183 | 534,600 | — | 1,486,783 | |||||||||||||
Cost of shares repurchased (in thousands) | $29,813 | $20,488 | — | $50,301 | |||||||||||||
Average cost per share | $31.31 | $38.32 | — | $33.83 | |||||||||||||
The Company's Board of Directors previously resolved to retire all common shares repurchased and include the retired shares in the authorized and unissued shares of the Company. At the time of share retirement, the excess of the purchase price of the treasury stock over the stated value is allocated between additional paid-in-capital and retained earnings. It is expected that future retirements of common shares repurchased will be recorded as repurchase authorizations are completed. | |||||||||||||||||
Derivative Financial Instruments | ' | ||||||||||||||||
erivative 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. | |||||||||||||||||
The Company has entered into fixed-pay amortizing interest rate swaps as a hedge of future cash flows on certain variable rate debt outstanding under its credit facility. 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, 2014 | 31-Dec-13 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Notional value | $ | 17,500 | $ | 25,000 | |||||||||||||
Fair value (a) | (187 | ) | (411 | ) | |||||||||||||
Deferred tax benefit | 76 | 153 | |||||||||||||||
(a) Recorded as a liability in accrued expenses and other liabilities | |||||||||||||||||
Noncontrolling Interests | ' | ||||||||||||||||
oncontrolling Interests— Noncontrolling interests represent noncontrolling shareholders' share of the equity and after-tax net loss of Leaf until the Company's August 6, 2014 acquisition of Leaf noncontrolling interests, and the after-tax net income of CPOS until it was sold in a transaction settled on January 31, 2013. See Note 15, Discontinued Operations for more detail on CPOS. | |||||||||||||||||
Noncontrolling shareholders' share of after-tax net loss of Leaf is included in Net income (loss) attributable to noncontrolling interests from continuing operations in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2014. On August 6, 2014, the Company entered into a Stock Purchase Agreement with the noncontrolling shareholders of Leaf under which it acquired all shares of Leaf common stock held by the noncontrolling shareholders. Prior to August 6, 2014, the Company owned 66.67% of the outstanding capital stock of Leaf. As a result of this transaction, Leaf became a wholly-owned subsidiary of the Company and there is no noncontrolling interest on the Consolidated Balance Sheet as of September 30, 2014. The minority stockholders’ interests included in noncontrolling interests in the December 31, 2013 Consolidated Balance Sheet was $6.2 million. This amount reflected the original investments by these minority stockholders' in Leaf, along with their proportionate share of Leaf's losses. Noncontrolling shareholders' share of after-tax net income of CPOS is included in Net income (loss) attributable to noncontrolling interests from discontinued operations in the Condensed Consolidated Statements of Income for the nine months ended September 30, 2013. | |||||||||||||||||
Subsequent Events | ' | ||||||||||||||||
ubsequent Events—The Company evaluated subsequent events with respect to the condensed consolidated financial statements as of and for the nine months ended September 30, 2014. | |||||||||||||||||
On October 31, 2014, the Company acquired the net assets of Xpient Solutions, LLC (“Xpient”) for a cash payment of $30.0 million plus net working capital. T | |||||||||||||||||
New Accounting Pronouncements | ' | ||||||||||||||||
ew 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 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 did not have a material effect on the Company's condensed 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 carryforwards, 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 did not have a material effect on the Company's condensed consolidated financial statements. | |||||||||||||||||
In April 2014, the FASB issued updated guidance on reporting discontinued operations. Under this updated guidance, a discontinued operation will include a disposal of a major part of an entity’s operations and financial results such as a separate major line of business or a separate major geographical area of operations. The guidance raises the threshold to be a major operation but no longer precludes discontinued operations presentation where there is significant continuing involvement or cash flows with a disposed component of an entity. The guidance expands disclosures to include cash flows where there is significant continuing involvement with a discontinued operation and the pre-tax profit or loss of disposal transactions not reported as discontinued operations. The updated guidance is effective prospectively for interim and annual reporting periods beginning on or after December 15, 2014, with early application permitted. The effect on the Company’s condensed consolidated financial statements is still being evaluated and will depend on the nature of future disposal transactions, if any. | |||||||||||||||||
In May 2014, the FASB issued guidance on revenue from contracts with customers, which requires an entity to recognize revenue from the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance addresses in particular contracts with more than one performance obligation as well as the accounting for some costs to obtain or fulfill a contract with a customer and provides for additional disclosures with respect to revenues and cash flows arising from contracts with customers. With respect to public entities, this update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and early adoption is not permitted. The effect on the Company’s condensed consolidated financial statements is still being evaluated. | |||||||||||||||||
In August 2014, the FASB issued guidance on presentation of going concern financial statements which provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The amendments in this guidance are expected to reduce diversity in the timing and content of footnote disclosures. The amendments in this guidance are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The effect on the Company’s condensed consolidated financial statements is still being evaluated. |
Organization_and_Operations_Ta
Organization and Operations (Tables) (USD $) | 9 Months Ended | 0 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 11, 2013 | |
Visa And MasterCard [Member] | Leaf Acquisition, LLC [Member] | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ' | |
Payments to Acquire Businesses, Gross | ' | $14.50 | |
Bankcard Processing Volume [Line Items] | ' | ' | |
Bankcard Processing Volume | ' | ' | |
ollowing is a breakout of the Company’s total Visa and MasterCard settled card processing volume for the month ending September 30, 2014 by percentage processed under its individual bank sponsorship agreements: | |||
Sponsor Bank | % of September 2014 | ||
Bankcard Processing | |||
Volume | |||
Wells Fargo Bank, N.A. | 64% | ||
The Bancorp Bank | 24% | ||
Barclays Bank Delaware | 12% |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||||
Schedule of Effective Income Tax Rate | ' | |||||||||||||||
he provision for income taxes for the three and nine months ended September 30, 2014 and 2013 and the resulting effective tax rates were as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||||
Provision for income taxes | $ | 11,727 | $ | 11,857 | $ | 34,579 | $ | 34,039 | ||||||||
Effective tax rate | 36.8 | % | 35.1 | % | 40.1 | % | 37.3 | % | ||||||||
Stock Repurchase Program | ' | |||||||||||||||
Acquisitions_Acquisitions_Tabl
Acquisitions Acquisitions (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
TouchNet Solutions, Inc [Member] | ' | |||||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | |||||||||||||||
Business Combination, Purchase Price Allocation | ' | |||||||||||||||
The following table summarizes the preliminary purchase price allocation (in thousands): | ||||||||||||||||
Cash and cash equivalents | $ | 38,342 | ||||||||||||||
Receivables, net | 12,243 | |||||||||||||||
Inventory | 66 | |||||||||||||||
Prepaid expenses | 601 | |||||||||||||||
Property and equipment, net | 3,360 | |||||||||||||||
Intangible assets, net | 144,400 | |||||||||||||||
Goodwill | 222,076 | |||||||||||||||
Total assets acquired | 421,088 | |||||||||||||||
Accounts payable | 6,002 | |||||||||||||||
Accrued expenses and other liabilities | 2,871 | |||||||||||||||
Current portion of unearned revenue | 24,014 | |||||||||||||||
Current tax liability | 13,914 | |||||||||||||||
Long-term portion of unearned revenue | 2,037 | |||||||||||||||
Net assets acquired | $ | 372,250 | ||||||||||||||
Schedule of Finite-Lived Intangible Assets, Weighted Average Amortization Life | ' | |||||||||||||||
The weighted average amortization life for the 2014 acquired finite lived intangible assets related to acquisition of TouchNet are as follows: | ||||||||||||||||
Weighted average amortization life | ||||||||||||||||
(In years) | ||||||||||||||||
Customer relationships | 20 | |||||||||||||||
Trademark | 5 | |||||||||||||||
Software | 15 | |||||||||||||||
Non-compete agreements | 5 | |||||||||||||||
Overall | 18.1 | |||||||||||||||
Business Acquisition, Pro Forma Information | ' | |||||||||||||||
The following pro forma information shows the results of our operations for the three and nine months ended September 30, 2014 and 2013 as if the TouchNet acquisition had occurred on January 1, 2013. The pro forma information is presented for information purposes only and is not necessarily indicative of what would have occurred if the acquisition had been made as of that date. The pro forma information is also not intended to be a projection of future results due to the integration of the acquired business. | ||||||||||||||||
Three Months Ended | Nine Months Ended September 30, | |||||||||||||||
September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||||
Total revenues | $ | 619,861 | $ | 574,540 | $ | 1,760,516 | $ | 1,646,605 | ||||||||
Net income attributable to Heartland | 19,205 | 21,754 | 55,538 | 59,524 | ||||||||||||
Basic earnings per share | $ | 0.53 | $ | 0.59 | $ | 1.53 | $ | 1.62 | ||||||||
Diluted earnings per share | $ | 0.52 | $ | 0.57 | $ | 1.49 | $ | 1.56 | ||||||||
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 the acquisition of Leaf is as follows: | ||||||||||||||||
Weighted average amortization life | ||||||||||||||||
(In years) | ||||||||||||||||
Software | 7 | |||||||||||||||
Patents | 5 | |||||||||||||||
Overall | 6.9 | |||||||||||||||
Liquor Point of Sale [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 2014 acquired finite lived intangible assets related to the acquisition of Liquor POS are as follows: | ||||||||||||||||
Weighted average amortization life | ||||||||||||||||
(In years) | ||||||||||||||||
Customer relationships | 10 | |||||||||||||||
Software | 7 | |||||||||||||||
Non-compete agreements | 5 | |||||||||||||||
Patents | 5 | |||||||||||||||
Overall | 8.9 | |||||||||||||||
MCS Software [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 2014 acquired finite lived intangible assets related to acquisition of MCS Software are as follows: | ||||||||||||||||
Weighted average amortization life | ||||||||||||||||
(In years) | ||||||||||||||||
Customer relationships | 14 | |||||||||||||||
Software | 4.6 | |||||||||||||||
Non-compete agreements | 5 | |||||||||||||||
Overall | 10.9 |
Receivables_Tables
Receivables (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Receivables [Abstract] | ' | |||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | ' | |||||||||||||||
A summary of receivables by major class was as follows at September 30, 2014 and December 31, 2013: | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
(In thousands) | ||||||||||||||||
Accounts receivable from merchants and customers | $ | 191,798 | $ | 172,147 | ||||||||||||
Accounts receivable from bankcard networks | 27,570 | 26,842 | ||||||||||||||
Accounts receivable from others | 3,121 | 2,083 | ||||||||||||||
222,489 | 201,072 | |||||||||||||||
Less allowance for doubtful accounts | (1,553 | ) | (1,032 | ) | ||||||||||||
Total receivables, net | $ | 220,936 | $ | 200,040 | ||||||||||||
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, 2014 and 2013 was as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended September 30, | |||||||||||||||
September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||||
Beginning balance | $ | 1,780 | $ | 915 | $ | 1,032 | $ | 1,438 | ||||||||
Out-of-Period adjustment (a) | — | — | 875 | — | ||||||||||||
Additions (reductions) to allowance | 1,007 | 186 | 2,135 | (16 | ) | |||||||||||
Charges against allowance | (1,234 | ) | (134 | ) | (2,489 | ) | (455 | ) | ||||||||
Ending balance | $ | 1,553 | $ | 967 | $ | 1,553 | $ | 967 | ||||||||
Funds_Held_for_Payroll_Custome1
Funds Held for Payroll Customers and Investments (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
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 amortized cost, gross unrealized gains (losses) and estimated fair value for investments held to maturity and investments available-for-sale by major security type and class of security were as follows at September 30, 2014 and December 31, 2013: | ||||||||||||||||
Cost | Gross | Gross | Estimated | |||||||||||||
Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
(In thousands) | ||||||||||||||||
September 30, 2014 | ||||||||||||||||
Funds Held for Customers | ||||||||||||||||
Conservative income bond fund - available for sale | $ | 13,012 | $ | — | $ | (3 | ) | $ | 13,009 | |||||||
Fixed income bonds - available for sale | 8,442 | 1 | — | 8,443 | ||||||||||||
Cash held for payroll customers | 58,358 | — | — | 58,358 | ||||||||||||
Cash held for Campus Solutions customers | 42,501 | — | — | 42,501 | ||||||||||||
Total funds held for customers | $ | 122,313 | $ | 1 | $ | (3 | ) | $ | 122,311 | |||||||
Investments: | ||||||||||||||||
Investments held to maturity - Certificates of deposit (a) | $ | 33 | $ | — | $ | — | $ | 33 | ||||||||
Total investments | $ | 33 | $ | — | $ | — | $ | 33 | ||||||||
(a) Certificate of deposit has a remaining term of 23 months. |
Capitalized_Customer_Acquisiti1
Capitalized Customer Acquisition Costs, Net (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Capitalized Customer Acquisition Costs, Net [Abstract] | ' | |||||||||||||||
Capitalized Customer Acquisition Costs Net | ' | |||||||||||||||
A summary of net capitalized customer acquisition costs as of September 30, 2014 and December 31, 2013 was as follows: | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
(In thousands) | ||||||||||||||||
Capitalized signing bonuses | $ | 94,971 | $ | 86,886 | ||||||||||||
Less accumulated amortization | (46,569 | ) | (43,775 | ) | ||||||||||||
48,402 | 43,111 | |||||||||||||||
Capitalized customer deferred acquisition costs | 52,321 | 45,241 | ||||||||||||||
Less accumulated amortization | (31,756 | ) | (27,325 | ) | ||||||||||||
20,565 | 17,916 | |||||||||||||||
Capitalized customer acquisition costs, net | $ | 68,967 | $ | 61,027 | ||||||||||||
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, 2014 and 2013 was as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||||
Balance at beginning of period | $ | 66,433 | $ | 56,148 | $ | 61,027 | $ | 56,425 | ||||||||
Plus additions to: | ||||||||||||||||
Capitalized signing bonuses, net | 9,468 | 7,466 | 27,647 | 19,546 | ||||||||||||
Capitalized customer deferred acquisition costs | 6,192 | 5,555 | 18,349 | 15,676 | ||||||||||||
15,660 | 13,021 | 45,996 | 35,222 | |||||||||||||
Less amortization expense on: | ||||||||||||||||
Capitalized signing bonuses, net | (7,703 | ) | (6,852 | ) | (22,357 | ) | (20,747 | ) | ||||||||
Capitalized customer deferred acquisition costs | (5,423 | ) | (4,606 | ) | (15,699 | ) | (13,189 | ) | ||||||||
(13,126 | ) | (11,458 | ) | (38,056 | ) | (33,936 | ) | |||||||||
Balance at end of period | $ | 68,967 | $ | 57,711 | $ | 68,967 | $ | 57,711 | ||||||||
Intangible_Assets_and_Goodwill1
Intangible Assets and Goodwill (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
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, 2014 and December 31, 2013: | |||||||||||||||||||||||||
September 30, 2014 | Amortization Life and Method | ||||||||||||||||||||||||
Gross | Accumulated | Net Assets | |||||||||||||||||||||||
Assets | Amortization | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Finite Lived Assets: | |||||||||||||||||||||||||
Customer relationships | $ | 155,925 | $ | 19,041 | $ | 136,884 | 6 to 20 years—proportional cash flow | ||||||||||||||||||
Merchant portfolio | 4,214 | 3,053 | 1,161 | 7 years—proportional cash flow | |||||||||||||||||||||
Software | 60,376 | 13,087 | 47,289 | 1 to 15 years—straight line | |||||||||||||||||||||
Non-compete agreements | 5,806 | 2,558 | 3,248 | 5 years—straight line | |||||||||||||||||||||
Other | 5,401 | 193 | 5,208 | 5 to 7 years—straight line | |||||||||||||||||||||
$ | 231,722 | $ | 37,932 | $ | 193,790 | ||||||||||||||||||||
December 31, 2013 | Amortization Life and Method | ||||||||||||||||||||||||
Gross | Accumulated | Net Assets | |||||||||||||||||||||||
Assets | Amortization | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Finite Lived Assets: | |||||||||||||||||||||||||
Customer relationships | $ | 49,814 | $ | 14,107 | $ | 35,707 | 3 to 18 years—proportional cash flow | ||||||||||||||||||
Merchant portfolio | 4,095 | 2,703 | 1,392 | 7 years—proportional cash flow | |||||||||||||||||||||
Software | 20,750 | 10,934 | 9,816 | 2 to 5 years—straight line | |||||||||||||||||||||
Non-compete agreements | 4,489 | 1,880 | 2,609 | 3 to 5 years—straight line | |||||||||||||||||||||
Other | 385 | 52 | 333 | 2 to 9 years—straight line | |||||||||||||||||||||
$ | 79,533 | $ | 29,676 | $ | 49,857 | ||||||||||||||||||||
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) | |||||||||||||||||||||||||
2015 | $ | 18,498 | |||||||||||||||||||||||
2016 | 17,218 | ||||||||||||||||||||||||
2017 | 15,949 | ||||||||||||||||||||||||
2018 | 13,875 | ||||||||||||||||||||||||
2019 | 12,790 | ||||||||||||||||||||||||
Thereafter | 115,460 | ||||||||||||||||||||||||
$ | 193,790 | ||||||||||||||||||||||||
Schedule of Goodwill | ' | ||||||||||||||||||||||||
Percentage of total reportable segments' assets that were goodwill as of September 30, 2014 and 2013 is as follows: | |||||||||||||||||||||||||
Percent of Goodwill to Reportable Segments' Total Assets | |||||||||||||||||||||||||
30-Sep-14 | 30-Sep-13 | ||||||||||||||||||||||||
Card | 10.90% | 11.90% | |||||||||||||||||||||||
Heartland Ovation Payroll | 23.30% | 21.00% | |||||||||||||||||||||||
Heartland School Solutions | 70.30% | 65.40% | |||||||||||||||||||||||
Campus Solutions | 51.40% | 49.40% | |||||||||||||||||||||||
Other | 32.20% | 39.70% | |||||||||||||||||||||||
Goodwill — The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2014 and 2013 were as follows: | |||||||||||||||||||||||||
Card | Heartland Ovation Payroll | Heartland School Solutions | Campus Solutions | Other | Total | ||||||||||||||||||||
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 | |||||||||||||||||||
Balance at January 1, 2014 | 64,320 | 31,018 | 53,350 | 35,789 | 6,501 | 190,978 | |||||||||||||||||||
Goodwill acquired during the period | 2,247 | — | 13,592 | 222,076 | — | 237,915 | |||||||||||||||||||
Other (a) | (2,130 | ) | — | (2,493 | ) | — | — | (4,623 | ) | ||||||||||||||||
Balance at September 30, 2014 | $ | 64,437 | $ | 31,018 | $ | 64,449 | $ | 257,865 | $ | 6,501 | $ | 424,270 | |||||||||||||
(a) Reflects adjustments to allocations of purchase price. |
Processing_Liabilities_and_Los1
Processing Liabilities and Loss Reserves (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
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, 2014 and December 31, 2013: | ||||||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||||
(In thousands) | ||||||||||||||||
Merchant bankcard processing | $ | 97,094 | $ | 121,143 | ||||||||||||
Merchant deposits | 6,130 | 8,223 | ||||||||||||||
Loss reserves | 1,632 | 1,505 | ||||||||||||||
$ | 104,856 | $ | 130,871 | |||||||||||||
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, 2014 and 2013 was as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||||
Beginning balance | $ | 1,762 | $ | 1,955 | $ | 1,505 | $ | 1,955 | ||||||||
Additions to reserve | 943 | 1,228 | 3,000 | 2,461 | ||||||||||||
Charges against reserve (a) | (1,073 | ) | (1,228 | ) | (2,873 | ) | (2,461 | ) | ||||||||
Ending balance | $ | 1,632 | $ | 1,955 | $ | 1,632 | $ | 1,955 | ||||||||
(a) Included in these amounts are Heartland Ovation Payroll segment losses of $179,000 and $13,000, respectively, for the three months ended September 30, 2014 and 2013, and $376,000 and $88,000, respectively, for the nine months ended September 30, 2014 and 2013. |
Accrued_Buyout_Liability_Table
Accrued Buyout Liability (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Accrued Buyout Liability [Abstract] | ' | |||||||||||||||
Summary of Accrued Buyout Liability | ' | |||||||||||||||
A summary of the accrued buyout liability was as follows as of September 30, 2014 and December 31, 2013: | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
(In thousands) | ||||||||||||||||
Vested Relationship Managers and sales managers | $ | 43,178 | $ | 38,082 | ||||||||||||
Unvested Relationship Managers and sales managers | 1,779 | 1,297 | ||||||||||||||
44,957 | 39,379 | |||||||||||||||
Less current portion | (14,457 | ) | (13,943 | ) | ||||||||||||
Long-term portion of accrued buyout liability | $ | 30,500 | $ | 25,436 | ||||||||||||
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, 2014 and 2013 was as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(In thousands) | ||||||||||||||||
Beginning balance | $ | 41,268 | $ | 33,319 | $ | 39,379 | $ | 35,410 | ||||||||
Increase in settlement obligation, net | 5,354 | 4,935 | 15,199 | 13,294 | ||||||||||||
Buyouts | (1,665 | ) | (1,392 | ) | (9,621 | ) | (11,842 | ) | ||||||||
Ending balance | $ | 44,957 | $ | 36,862 | $ | 44,957 | $ | 36,862 | ||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
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, 2014 were as follows: | |||||||||||||||||||||
For the Twelve Months Ending September 30, | Operating Leases (a) | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
2015 | $ | 14,007 | |||||||||||||||||||
2016 | 12,865 | ||||||||||||||||||||
2017 | 7,754 | ||||||||||||||||||||
2018 | 7,156 | ||||||||||||||||||||
2019 | 6,126 | ||||||||||||||||||||
Thereafter | 26,015 | ||||||||||||||||||||
Total future minimum lease payments | $ | 73,923 | |||||||||||||||||||
(a) There were no material capital leases at September 30, 2014 | |||||||||||||||||||||
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, 2014: | |||||||||||||||||||||
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) | $ | 6,465 | $ | 5,465 | $ | 1,000 | $ | — | $ | — | |||||||||||
Telecommunications providers (b) | 10,029 | 3,522 | 6,008 | 499 | — | ||||||||||||||||
Facility and equipment leases | 73,923 | 14,007 | 20,619 | 13,282 | 26,015 | ||||||||||||||||
2014 Term Credit Facility | 375,000 | 18,750 | 39,844 | 316,406 | — | ||||||||||||||||
2014 Revolving Credit Facility (c) | 197,500 | — | — | 197,500 | — | ||||||||||||||||
$ | 662,917 | $ | 41,744 | $ | 67,471 | $ | 527,687 | $ | 26,015 | ||||||||||||
(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) | The Company has agreements in place with several large telecommunications companies that provide data center services, wide area network connectivity, and voice services that are used by both the Company call center and card payment processing platforms. These providers require both dollar and term commitments for the services they provide. If the Company does not meet the minimum terms, then there is a requirement to pay the remaining commitments. | ||||||||||||||||||||
(c) | Interest rates on the 2014 Revolving Credit Facility are variable in nature; however, the Company is party to fixed-pay amortizing interest rate swaps having a remaining notional amount of $17.5 million. If interest rates were to remain at the September 30, 2014 level, the Company would make interest payments of $0.4 million in the next 1 year and $0.1 million in the next 1 to 3 years or a total of $0.5 million including net settlements on the fixed-pay amortizing interest rate swaps. The 2014 Revolving Credit Facility is available on a revolving basis until September 4, 2019. | ||||||||||||||||||||
Unrecognized Tax Benefits. At September 30, 2014, the Company had gross tax-effected unrecognized tax benefits of approximately $6.8 million. As of September 30, 2014 the Company is unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authority, hence the unrecognized tax benefits have been excluded from the above commitment and contractual obligations table. |
Segments_Tables
Segments (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
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, 2014 and 2013 was as follows: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Revenues | (In thousands) | ||||||||||||||||
Card Payment Processing | $ | 551,901 | $ | 519,783 | $ | 1,569,431 | $ | 1,489,804 | |||||||||
Heartland School Solutions (a) | 15,061 | 12,150 | 42,685 | 36,628 | |||||||||||||
Heartland Ovation Payroll | 12,170 | 10,578 | 37,978 | 33,648 | |||||||||||||
Campus Solutions | 14,400 | 8,556 | 36,883 | 27,853 | |||||||||||||
Prepaid Card and Other | 7,094 | 6,062 | 19,791 | 17,059 | |||||||||||||
Total revenues | $ | 600,626 | $ | 557,129 | $ | 1,706,768 | $ | 1,604,992 | |||||||||
Depreciation and amortization | |||||||||||||||||
Card Payment Processing | $ | 8,628 | $ | 6,918 | $ | 24,240 | $ | 20,015 | |||||||||
Heartland School Solutions | 1,282 | 785 | 2,665 | 1,854 | |||||||||||||
Heartland Ovation Payroll | 727 | 959 | 2,416 | 2,634 | |||||||||||||
Campus Solutions | 1,473 | 674 | 2,756 | 1,696 | |||||||||||||
Prepaid Card and Other | 388 | 433 | 1,157 | 1,259 | |||||||||||||
Unallocated Corporate Administration Amounts | 165 | 35 | 282 | (1,421 | ) | ||||||||||||
Total depreciation and amortization | $ | 12,663 | $ | 9,804 | $ | 33,516 | $ | 26,037 | |||||||||
Interest Income | |||||||||||||||||
Card Payment Processing | $ | 33 | $ | 28 | $ | 95 | $ | 92 | |||||||||
Campus Solutions | — | 1 | — | 3 | |||||||||||||
Total interest income | $ | 33 | $ | 29 | $ | 95 | $ | 95 | |||||||||
Interest Expense | |||||||||||||||||
Card Payment Processing | $ | 1,453 | $ | 1,242 | $ | 3,761 | $ | 3,744 | |||||||||
Campus Solutions | 689 | — | 689 | — | |||||||||||||
Prepaid Card and Other | — | 1 | — | 5 | |||||||||||||
Reconciling | — | — | — | (3 | ) | ||||||||||||
Total interest expense | $ | 2,142 | $ | 1,243 | $ | 4,450 | $ | 3,746 | |||||||||
Net income (loss) from continuing operations | |||||||||||||||||
Card Payment Processing | $ | 20,330 | $ | 23,926 | $ | 51,807 | $ | 59,289 | |||||||||
Heartland School Solutions (a) | 1,712 | 1,775 | 3,149 | 6,650 | |||||||||||||
Heartland Ovation Payroll | 1,032 | 357 | 4,490 | 1,904 | |||||||||||||
Campus Solutions | 2,019 | 544 | 4,918 | 2,069 | |||||||||||||
Prepaid Card and Other | 812 | 200 | 1,875 | (45 | ) | ||||||||||||
Unallocated Corporate Administration Amounts | (5,749 | ) | (4,911 | ) | (14,600 | ) | (12,650 | ) | |||||||||
Total net income from continuing operations | $ | 20,156 | $ | 21,891 | $ | 51,639 | $ | 57,217 | |||||||||
Assets | 30-Sep-14 | September 30, 2013 | |||||||||||||||
Card Payment Processing | $ | 589,657 | $ | 540,098 | |||||||||||||
Heartland School Solutions | 91,703 | 81,547 | |||||||||||||||
Heartland Ovation Payroll | 133,204 | 149,008 | |||||||||||||||
Campus Solutions | 501,982 | 72,197 | |||||||||||||||
Prepaid Card and Other | 20,218 | 16,363 | |||||||||||||||
Total assets | $ | 1,336,764 | $ | 859,213 | |||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
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, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands, except per share) | |||||||||||||||||
Numerator: | |||||||||||||||||
Income from continuing operations attributable to Heartland | $ | 20,458 | $ | 21,981 | $ | 53,650 | $ | 57,307 | |||||||||
Income from discontinued operations attributable to Heartland | — | — | — | 3,914 | |||||||||||||
Net income attributable to Heartland | $ | 20,458 | $ | 21,981 | $ | 53,650 | $ | 61,221 | |||||||||
Denominator: | |||||||||||||||||
Basic weighted average shares outstanding | 36,069 | 36,857 | 36,388 | 36,752 | |||||||||||||
Effect of dilutive instruments: | |||||||||||||||||
Stock options and restricted stock units | 781 | 1,163 | 861 | 1,327 | |||||||||||||
Diluted weighted average shares outstanding | 36,850 | 38,020 | 37,249 | 38,079 | |||||||||||||
Basic earnings per share: | |||||||||||||||||
Income from continuing operations | $ | 0.57 | $ | 0.6 | $ | 1.47 | $ | 1.56 | |||||||||
Income from discontinued operations | — | — | — | 0.11 | |||||||||||||
Basic earnings per share | $ | 0.57 | $ | 0.6 | $ | 1.47 | $ | 1.67 | |||||||||
Diluted earnings per share: | |||||||||||||||||
Income from continuing operations | $ | 0.56 | $ | 0.58 | $ | 1.44 | $ | 1.5 | |||||||||
Income from discontinued operations | — | — | — | 0.1 | |||||||||||||
Diluted earnings per share | $ | 0.56 | $ | 0.58 | $ | 1.44 | $ | 1.6 | |||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
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, 2014 and at December 31, 2013: | ||||||||||||||||
September 30, 2014 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments available for sale: | ||||||||||||||||
Conservative income bond fund (a) | $ | 13,009 | $ | 13,009 | $ | — | $ | — | ||||||||
Fixed income bond (a) | 8,443 | 8,443 | — | — | ||||||||||||
Total assets | $ | 21,452 | $ | 21,452 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Interest rate swaps | $ | 187 | $ | — | $ | 187 | $ | — | ||||||||
Total liabilities | $ | 187 | $ | — | $ | 187 | $ | — | ||||||||
December 31, 2013 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments available for sale: | ||||||||||||||||
Conservative income bond fund (a) | $ | 12,010 | $ | 12,010 | $ | — | $ | — | ||||||||
Fixed income bond fund (a) | 1,222 | 1,222 | — | — | ||||||||||||
Total assets | $ | 13,232 | $ | 13,232 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Interest rate swaps | $ | 411 | $ | — | $ | 411 | $ | — | ||||||||
Total liabilities | $ | 411 | $ | — | $ | 411 | $ | — | ||||||||
(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, 2014 and December 31, 2013: | ||||||||||||||||
September 30, 2014 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments held to maturity: | ||||||||||||||||
Certificates of deposit | $ | 33 | $ | — | $ | 33 | $ | — | ||||||||
Total assets | $ | 33 | $ | — | $ | 33 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
2014 Term Credit Facility | $ | 375,000 | $ | — | $ | 375,000 | $ | — | ||||||||
2014 Prior Revolving Credit Facility | 197,500 | — | 197,500 | — | ||||||||||||
Total liabilities | $ | 572,500 | $ | — | $ | 572,500 | $ | — | ||||||||
December 31, 2013 | Fair Value Measurement Category | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | (In thousands) | |||||||||||||||
Investments held to maturity: | ||||||||||||||||
Certificates of deposit | $ | 33 | $ | — | $ | 33 | $ | — | ||||||||
Total assets | $ | 33 | $ | — | $ | 33 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Revolving Credit Facility | $ | 150,000 | $ | — | $ | 150,000 | $ | — | ||||||||
Total liabilities | $ | 150,000 | $ | — | $ | 150,000 | $ | — | ||||||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
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, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands) | |||||||||||||||||
Revenues | $ | — | $ | — | $ | — | $ | 1,117 | |||||||||
Expenses | — | — | — | 870 | |||||||||||||
Income from operations | — | — | — | 247 | |||||||||||||
Income from discontinued operations, net of income tax of $68 | — | — | — | 184 | |||||||||||||
Gain on sale of discontinued operations, net of income tax of $2,067 | — | — | — | 3,786 | |||||||||||||
Net income from discontinued operations attributable to noncontrolling interests | — | — | — | 56 | |||||||||||||
Net income from discontinued operations attributable to Heartland | — | — | — | 3,914 | |||||||||||||
Organization_and_Operations_Ba
Organization and Operations (Bankcard Processing Volume) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | |||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jan. 31, 2013 | Sep. 11, 2013 | Sep. 04, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | |
Bank_Sponsorship_Agreements | 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] | Merchant Bankcard Processing [Member] | CPOS [Member] | Leaf Acquisition, LLC [Member] | TouchNet Solutions, Inc [Member] | Heartland School Solutions [Member] | Heartland School Solutions [Member] | Heartland School Solutions [Member] | Heartland School Solutions [Member] | Restatement Adjustment [Member] | |||
Wells Fargo Bank [Member] | The Bancorp Bank [Member] | Barclays Bank Delaware [Member] | Visa And MasterCard [Member] | Heartland School Solutions [Member] | |||||||||||||||
Bankcard Processing Volume [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue, net | $600,626,000 | $557,129,000 | $1,706,768,000 | $1,604,992,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $15,061,000 | $12,150,000 | $42,685,000 | $36,628,000 | $1,400,000 |
Payments for Repurchase of Common Stock | ' | ' | 54,455,000 | 39,632,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Parent's ownership percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 70.00% | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 66.67% | ' | ' | ' | ' | ' | ' |
Payments to Acquire Businesses, Gross | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,500,000 | 375,000,000 | ' | ' | ' | ' | ' |
Sales revenue, minimum percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 74.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for Doubtful Accounts Receivable, Write-offs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 900,000 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest | 31,883,000 | 33,748,000 | 86,218,000 | 91,256,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,300,000 |
Net income | $20,156,000 | $21,891,000 | $51,639,000 | $61,187,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,400,000 |
Earnings Per Share, Diluted | $0.56 | $0.58 | $1.44 | $1.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.04 |
Days to Identify Alternative Bank Sponsor Following Terminated Agreement | ' | ' | '180 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of bank sponsorship agreements | 3 | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
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% | 24.00% | 12.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | ||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 04, 2014 | Sep. 04, 2014 | Sep. 11, 2013 | Sep. 30, 2014 | Sep. 04, 2014 | Dec. 31, 2013 | ||||||||
Funding advances [Member] | Funding advances [Member] | Absolute Relative Total Shareholder Return Restricted Share Units (ATSRs) [Member] | Cash held for payroll customers [Member] | Cash held for payroll customers [Member] | Fixed Income Funds [Member] | Fixed Income Funds [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] | Other Liabilities [Member] | Other Liabilities [Member] | 4th Quarter 2012 [Member] | 4th Quarter 2012 [Member] | 4th Quarter 2012 [Member] | 4th Quarter 2012 [Member] | 4th Quarter 2013 [Member] | 4th Quarter 2013 [Member] | 4th Quarter 2013 [Member] | 4th Quarter 2013 [Member] | 4th Quarter 2013 [Member] | TouchNet Solutions, Inc [Member] | TouchNet Solutions, Inc [Member] | Leaf Acquisition, LLC [Member] | Leaf Acquisition, LLC [Member] | Xpient [Member] | Four year period ending December 31, 2017 [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] | Vesting period 2014 [Member] | Vesting period 2015 [Member] | Vesting period 2016 [Member] | Restricted Stock Units Performance Based [Member] | Vesting period 2014 [Member] | Vesting period 2015 [Member] | Vesting period 2017 [Member] | Vesting period 2018 [Member] | Other Liabilities [Member] | Absolute Relative Total Shareholder Return Restricted Share Units (ATSRs) [Member] | ||||||||||||||||||||||||||||
Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Inputs, Level 2 [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] | Restricted Stock Units Performance Based [Member] | ||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Total Shareholder Return, Term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years | |||||||
Payments to Acquire Businesses, Gross | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $375,000,000 | ' | $14,500,000 | ' | $30,000,000 | ' | |||||||
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 66.67% | ' | ' | ' | |||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,600,000 | ' | ' | |||||||
Unfavorable Processing Contract | 2,000,000 | 3,400,000 | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Processing-related cash in transit and collateral | 16,300,000 | 32,100,000 | ' | ' | 16,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Due to sponsor banks | ' | ' | ' | ' | ' | ' | 36,800,000 | 17,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Funds held for payroll customers | 122,311,000 | 127,375,000 | ' | ' | 122,311,000 | ' | ' | ' | ' | 100,900,000 | ' | ' | ' | 21,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Estimated vesting percentage, Relationship Managers and sales managers | 31.00% | ' | ' | ' | 31.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Other income (expense) | 3,581,000 | ' | 90,000 | ' | 3,869,000 | -70,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Reserve for unrecognized tax benefits | 6,769,000 | 5,633,000 | ' | ' | 6,769,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Unrecognized tax benefits that would impact effective tax rate | 4,400,000 | 3,800,000 | ' | ' | 4,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Number of performance-based Restricted Share Units authorized | ' | ' | ' | ' | ' | ' | ' | ' | 59,533 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,507 | ' | ' | ' | 115,223 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Restricted share units, vesting percent rate in 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' | ' | ' | 0.00% | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Restricted share units, vesting percent rate in 2014 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | [2] | 50.00% | [2] | ' | ' | 0.00% | [1] | 50.00% | [2] | 50.00% | [2] | ' | ' | ' | ' | ' | ' | ||
Compound annual growth rate, diluted earnings per share, target | ' | ' | ' | 15.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
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 | ' | 150.00% | ' | 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% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Stock repurchase program, remaining authorized repurchase amount | 0 | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Stockholders' equity attributable to noncontrolling interest | 0 | 6,188,000 | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Invoicing terms | ' | ' | ' | ' | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Amortization of capitalized customer acquisition costs, period | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Deferred Revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 42,700,000 | 18,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 26,100,000 | ' | ' | ' | ' | |||||||
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 | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Other investments, at cost | 122,311,000 | 127,375,000 | ' | ' | 122,311,000 | ' | ' | ' | ' | 58,358,000 | 88,376,000 | 8,443,000 | 1,222,000 | ' | 8,443,000 | 1,222,000 | 8,443,000 | 1,222,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Amortization of Unfavorable Contract Intangible | ' | ' | ' | ' | 1,400,000 | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Unfavorable Processing Contract, Fair Value Adjustment | ' | ' | ' | ' | ' | $1,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Classification of Current Accrued Buyout Liability, Period | ' | ' | ' | ' | '12 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
[1] | b)These Restricted Share Units will vest only if the Company achieves a pro forma diluted earnings per share growth rate of forty percent (40%) over the three-year period ending December 31, 2016. For each 1% that the growth rate actually achieved for the three-year period ending on December 31, 2016 is above the 40% target, the number of shares underlying the Restricted Share Units awarded would be increased by 1.20%; provided, however, that the maximum increase in the number of shares that may be awarded is 150%. Likewise, for each 1% that the growth rate actually achieved for the three-year period ending on December 31, 2016 is below the 40% target, the number of shares underlying the Restricted Share Units awarded would be decreased by 1.50%. If the target growth rate is missed by 50% or more, then the number of shares awarded is zero. The Company has recorded expense on these Restricted Share Units based on achieving the 40% target. | ||||||||||||||||||||||||||||||||||||||||||
[2] | (a) These Restricted Share Units would vest only if the Company achieves a Pro Forma diluted earnings per share compound annual growth rate ("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 records expense on these Restricted Share Units based on achieving the 15% target. |
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, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Accounting Policies [Abstract] | ' | ' | ' | ' |
Provision for income taxes | $11,727 | $11,857 | $34,579 | $34,039 |
Effective tax rate | 36.80% | 35.10% | 40.10% | 37.30% |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Diluted Earnings Per Share) (Details) (USD $) | 3 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 |
Goodwill [Line Items] | ' | ' | ' |
Stockholders' equity attributable to noncontrolling interest | $6,188 | ' | $0 |
Compound annual growth rate, diluted earnings per share, target | ' | 15.00% | ' |
Growth rate Diluted Earnings per share | 40.00% | ' | ' |
Restricted Share Units, Increase for Achieving Target | 1.20% | ' | ' |
Diluted earnings per share compound annual growth rate, period | '3 years | ' | ' |
Growth rate Achieved Diluted Earnings per share | 1.00% | ' | ' |
Compound annual growth rate, increase over target | ' | 1.00% | ' |
Diluted Earnings Per Share Growth Rate, Two Year Period | ' | 'P2Y | ' |
Restricted share units, increase for exceeding CAGR target | ' | 2.08% | ' |
Restricted share units, maximum number of shares authorized to award | 150.00% | 125.00% | ' |
Diluted Earnings Per Share Growth Rate, Decrease Below Target | 1.00% | ' | ' |
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% | ' |
Restricted Share Units, Awards if CAGR Target Missed by 67% or More | ' | 0 | ' |
Restricted Share Units, Decrease for Falling Below Target | 1.50% | ' | ' |
Growth Rate, Percentage of Target Required to Award Shares | 50.00% | ' | ' |
Restricted Share Units, Awards if CAGR Target Missed by 50% or More | 0 | ' | ' |
Absolute Relative Total Shareholder Return Restricted Share Units (ATSRs) [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 59,533 | ' | ' |
Common Stock, Average Closing Price, Term | '30 days | ' | ' |
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 | 57,598 | ' | ' |
Number of Peers | 91 | ' | ' |
Three year period ending December 31, 2016 [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Diluted earnings per share compound annual growth rate, period | '3 years | ' | ' |
Three year period ending December 31, 2016 [Member] | Absolute Relative Total Shareholder Return Restricted Share Units (ATSRs) [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Total Shareholder Return, Percentage | 33.00% | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Total Shareholder Return, Term | '3 years | ' | ' |
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 | ' | 60,793 | ' |
Number of Peers | ' | 86 | ' |
Common Stock, Average Closing Price, Term | '30 days | '30 days | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Shareholder Return, Peer Group Percentile | 65 | 65 | ' |
Four year period ending December 31, 2017 [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Diluted Earnings Per Share Growth Rate, Four Year Period | 'four | ' | ' |
Four year period ending December 31, 2017 [Member] | Absolute Relative Total Shareholder Return Restricted Share Units (ATSRs) [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Total Shareholder Return, Percentage | 46.00% | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Total Shareholder Return, Term | '4 years | ' | ' |
Minimum [Member] | Absolute Relative Total Shareholder Return Restricted Share Units (ATSRs) [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Percentage | 0.00% | ' | ' |
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% | ' | ' |
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] | Absolute Relative Total Shareholder Return Restricted Share Units (ATSRs) [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Percentage | 200.00% | ' | ' |
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 | 200.00% | ' | ' |
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 | 9 Months Ended | 12 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Nov. 02, 2012 | 8-May-13 | 8-May-14 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
November 2, 2012 Program [Member] | May 8, 2013 Program [Member] | May 8, 2014 Program [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | |||
November 2, 2012 Program [Member] | May 8, 2013 Program [Member] | May 8, 2013 Program [Member] | May 8, 2013 Program [Member] | |||||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock repurchased during period, shares | ' | ' | ' | ' | ' | 1,347,817 | 1,250,083 | 1,486,783 | 952,183 | 1,347,817 | 297,900 | 534,600 |
Payments for Repurchase of Common Stock | $54,455,000 | $39,632,000 | ' | ' | ' | $54,455,000 | $40,220,000 | $50,301,000 | $29,813,000 | $54,455,000 | $10,407,000 | $20,488,000 |
Stock repurchase program, authorized purchase amount | ' | ' | 50,000,000 | 75,000,000 | 75,000,000 | ' | ' | ' | ' | ' | ' | ' |
Treasury stock acquired, average cost per share | ' | ' | ' | ' | ' | $40.40 | $32.17 | $33.83 | $31.31 | $40.40 | $34.93 | $38.32 |
Stock repurchase program, remaining authorized repurchase amount | $0 | ' | ' | ' | ' | $75,000,000 | ' | ' | ' | ' | ' | ' |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Derivative Instruments (Details) (Interest Rate Swap [Member], USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Derivative [Line Items] | ' | ' |
Deferred Tax Assets, Derivative Instruments | $76 | $153 |
Fair Value, Measurements, Recurring [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | 187 | 411 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Derivative Financial Instruments, Liabilities, Fair Value Disclosure | 187 | 411 |
Interest rate swap liabilities, at fair value | $187 | $411 |
Acquisitions_Narrative_Details
Acquisitions (Narrative) (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | ||||||||||||
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 04, 2014 | Sep. 30, 2014 | Sep. 04, 2014 | Sep. 11, 2013 | Feb. 14, 2014 | Apr. 02, 2014 | Apr. 01, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
TouchNet Solutions, Inc [Member] | TouchNet Solutions, Inc [Member] | TouchNet Solutions, Inc [Member] | Leaf Acquisition, LLC [Member] | Liquor Point of Sale [Member] | MCS Software [Member] | MCS Software [Member] | Campus Solutions Segment [Member] | Campus Solutions Segment [Member] | Campus Solutions Segment [Member] | Campus Solutions Segment [Member] | ||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue, net | ' | $619,861,000 | $574,540,000 | $1,760,516,000 | $1,646,605,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash | 94,577,000 | 94,577,000 | ' | 94,577,000 | ' | 71,932,000 | ' | ' | ' | 38,342,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Receivables, net | 220,936,000 | 220,936,000 | ' | 220,936,000 | ' | 200,040,000 | ' | ' | ' | 12,243,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Inventory | 11,445,000 | 11,445,000 | ' | 11,445,000 | ' | 11,087,000 | ' | ' | ' | 66,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Prepaid expenses | 19,451,000 | 19,451,000 | ' | 19,451,000 | ' | 15,284,000 | ' | ' | ' | 601,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, net | 162,707,000 | 162,707,000 | ' | 162,707,000 | ' | 147,388,000 | ' | ' | ' | 3,360,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible assets, net | 193,790,000 | 193,790,000 | ' | 193,790,000 | ' | 49,857,000 | ' | ' | ' | 144,400,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of acquired entity, cash payment | ' | ' | ' | ' | ' | ' | ' | 375,000,000 | ' | ' | 14,500,000 | 3,300,000 | 17,300,000 | ' | ' | ' | ' | ' |
Goodwill | 424,270,000 | 424,270,000 | 191,172,000 | 424,270,000 | 191,172,000 | 190,978,000 | 168,062,000 | ' | ' | 222,076,000 | 18,500,000 | 2,200,000 | ' | 11,100,000 | 257,865,000 | 35,789,000 | 35,646,000 | 33,679,000 |
Business Acquisition, Transaction Costs | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,900,000 | 1,200,000 | ' | 6,400,000 | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | ' | ' | ' | ' | ' | ' | ' | ' | ' | 372,250,000 | 4,100,000 | -100,000 | ' | -200,000 | ' | ' | ' | ' |
Noncontrolling interest resulting from acquisiiton of less than 100 percent of enetity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,800,000 | ' | ' | ' | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | 421,088,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable | 60,729,000 | 60,729,000 | ' | 60,729,000 | ' | 70,814,000 | ' | ' | ' | 6,002,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued expenses and other liabilities | 25,928,000 | 25,928,000 | ' | 25,928,000 | ' | 31,689,000 | ' | ' | ' | 2,871,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred Revenue, Current | 40,551,000 | 40,551,000 | ' | 40,551,000 | ' | 18,172,000 | ' | ' | ' | 24,014,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Taxes Payable, Current | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,914,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred Revenue, Noncurrent | 2,104,000 | 2,104,000 | ' | 2,104,000 | ' | 0 | ' | ' | ' | 2,037,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Net income attributable to Heartland | ' | 19,205,000 | 21,754,000 | 55,538,000 | 59,524,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Earnings Per Share, Basic | ' | $0.53 | $0.59 | $1.53 | $1.62 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Earnings Per Share, Diluted | ' | $0.52 | $0.57 | $1.49 | $1.56 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | $4,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisitions_Acquisitions_Weig
Acquisitions Acquisitions (Weighted Average Amortization Lives) (Details) | 9 Months Ended | 0 Months Ended | ||||||||||||||||
Sep. 30, 2014 | Sep. 05, 2014 | Sep. 05, 2014 | Sep. 05, 2014 | Sep. 05, 2014 | Sep. 05, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Feb. 14, 2014 | Apr. 02, 2014 | Apr. 02, 2014 | Apr. 02, 2014 | Apr. 02, 2014 | Sep. 11, 2013 | Sep. 11, 2013 | Sep. 11, 2013 | |
Non-compete agreements | TouchNet Solutions, Inc [Member] | TouchNet Solutions, Inc [Member] | TouchNet Solutions, Inc [Member] | TouchNet Solutions, Inc [Member] | TouchNet Solutions, Inc [Member] | Liquor Point of Sale [Member] | Liquor Point of Sale [Member] | Liquor Point of Sale [Member] | Liquor Point of Sale [Member] | Liquor Point of Sale [Member] | MCS Software [Member] | MCS Software [Member] | MCS Software [Member] | MCS Software [Member] | Leaf Acquisition, LLC [Member] | Leaf Acquisition, LLC [Member] | Leaf Acquisition, LLC [Member] | |
Customer relationships | Software | Patents | Non-compete agreements | Customer relationships | Software | Patents | Non-compete agreements | Customer relationships | Software | Non-compete agreements | Software | Patents | ||||||
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-lived intangible assets, weighted-average useful life | '5 years | '18 years 1 month 6 days | '20 years | '15 years | '5 years | '5 years | '8 years 10 months 24 days | '10 years | '7 years | '5 years | '5 years | '10 years 10 months 25 days | '14 years | '4 years 7 months 4 days | '5 years | '6 years 10 months 24 days | '7 years | '5 years |
Receivables_Schedule_of_Accoun
Receivables (Schedule of Accounts, Notes, Loans and Financing Receivable) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total receivables, gross | $222,489,000 | $201,072,000 |
Less allowance for doubtful accounts | -1,553,000 | -1,032,000 |
Total receivables, net | 220,936,000 | 200,040,000 |
Due from employees | 1,800,000 | 1,100,000 |
Accounts receivable from merchants [Member] | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total receivables, gross | 191,798,000 | 172,147,000 |
Receivables from bankcard networks [Member] | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total receivables, gross | 27,570,000 | 26,842,000 |
Accounts receivable from others [Member] | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total receivables, gross | $3,121,000 | $2,083,000 |
Receivables_Summary_of_Allowan
Receivables (Summary of Allowance for Doubtful Accounts Receivables) (Details) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | |
Allowance for Doubtful Accounts [Member] | Allowance for Doubtful Accounts [Member] | Allowance for Doubtful Accounts [Member] | Allowance for Doubtful Accounts [Member] | Restatement Adjustment [Member] | |||
Heartland School Solutions [Member] | |||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Beginning balance | ' | ' | $1,780,000 | $915,000 | $1,032,000 | $1,438,000 | ' |
Out-of-Period adjustment | ' | ' | ' | ' | 900,000 | ' | 900,000 |
Additions to allowance | 3,010,000 | -1,000 | 1,007,000 | 186,000 | 2,135,000 | -16,000 | ' |
Charges against allowance | ' | ' | -1,234,000 | -134,000 | -2,489,000 | -455,000 | ' |
Ending balance | ' | ' | $1,553,000 | $967,000 | $1,553,000 | $967,000 | ' |
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, 2014 | Dec. 31, 2013 |
Investment Holdings [Line Items] | ' | ' |
Certificates of deposit, term | '23 months | ' |
Funds Held for Payroll Customers: | ' | ' |
Cost | $122,313 | $127,111 |
Gross Unrealized Gains | 1 | 264 |
Gross Unrealized Losses | -3 | 0 |
Estimated Fair Value | 122,311 | 127,375 |
Investments: | ' | ' |
Cost | 33 | 33 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 33 | 33 |
Conservative income bond fund [Member] | ' | ' |
Funds Held for Payroll Customers: | ' | ' |
Cost | 13,012 | 12,000 |
Gross Unrealized Gains | 0 | 10 |
Gross Unrealized Losses | -3 | 0 |
Estimated Fair Value | 13,009 | 12,010 |
Fixed income bonds [Member] | ' | ' |
Funds Held for Payroll Customers: | ' | ' |
Cost | 8,442 | 968 |
Gross Unrealized Gains | 1 | 254 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 8,443 | 1,222 |
Cash held for payroll customers [Member] | ' | ' |
Funds Held for Payroll Customers: | ' | ' |
Cost | 58,358 | 88,376 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 58,358 | 88,376 |
Cash held for Campus Solutions customers [Member] | ' | ' |
Funds Held for Payroll Customers: | ' | ' |
Cost | 42,501 | 25,767 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 42,501 | 25,767 |
Certificates of deposit [Member] | ' | ' |
Investments: | ' | ' |
Cost | 33 | 33 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $33 | $33 |
Funds_Held_for_Payroll_Custome3
Funds Held for Payroll Customers and Investments (Investment Maturities) (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Equity securities [Member] | ' |
Investment Holdings [Line Items] | ' |
Available-for-sale securities, current | $4,000,000 |
Fixed income bonds [Member] | ' |
Investment Holdings [Line Items] | ' |
Fixed income bond - available for sale cost, Total | 8,442,000 |
Fixed income bond - available for sale cost, Less Than 1 Year | 936,000 |
Fixed income bond - available for sale cost, 1 to 5 Years | 5,352,000 |
Fixed income bond - available for sale cost, 5 to 10 Years | 2,154,000 |
Fixed income bond - available for sale estimated fair value, Total | 8,443,000 |
Fixed income bond - available for sale estimated fair value, Less Than 1 Year | 936,000 |
Fixed income bond - available for sale estimated fair value, 1 to 5 Years | 5,351,000 |
Fixed income bond - available for sale estimated fair value, 5 to 10 Years | 2,156,000 |
Fixed income bonds [Member] | Available-for-sale securities [Member] | ' |
Investment Holdings [Line Items] | ' |
Proceeds from sale of available for sale securities | 17,200,000 |
Gain on sale of available for sale securities | $300,000 |
Capitalized_Customer_Acquisiti2
Capitalized Customer Acquisition Costs, Net (Capitalized Customer Acquisition Costs Net) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | |
Capitalized Customer Acquisition Costs, Net [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' |
Signing bonus adjustments from estimated amounts to actual | ($700,000) | ($1,000,000) | ($2,800,000) | ($2,900,000) | ' | ' | ' | ' |
Capitalized signing bonuses | 94,971,000 | ' | 94,971,000 | ' | ' | 86,886,000 | ' | ' |
Less accumulated amortization | -46,569,000 | ' | -46,569,000 | ' | ' | -43,775,000 | ' | ' |
Capitalized signing bonuses, net | 48,402,000 | ' | 48,402,000 | ' | ' | 43,111,000 | ' | ' |
Capitalized customer deferred acquisition costs | 52,321,000 | ' | 52,321,000 | ' | ' | 45,241,000 | ' | ' |
Less accumulated amortization | -31,756,000 | ' | -31,756,000 | ' | ' | -27,325,000 | ' | ' |
Capitalized customer deferred acquisition costs, net | 20,565,000 | ' | 20,565,000 | ' | ' | 17,916,000 | ' | ' |
Capitalized customer acquisition costs, net | $68,967,000 | $57,711,000 | $68,967,000 | $57,711,000 | $66,433,000 | $61,027,000 | $56,148,000 | $56,425,000 |
Capitalized_Customer_Acquisiti3
Capitalized Customer Acquisition Costs, Net (Capitalized Customer Acquisition Activity) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Capitalized Customer Acquisition Costs, Net [Roll Forward] | ' | ' | ' | ' |
Balance at beginning of period | $66,433,000 | $56,148,000 | $61,027,000 | $56,425,000 |
Capitalized signing bonuses, net | 9,468,000 | 7,466,000 | 27,647,000 | 19,546,000 |
Capitalized customer deferred acquisition costs | 6,192,000 | 5,555,000 | 18,349,000 | 15,676,000 |
Capitalized customer acquisition costs, additions | 15,660,000 | 13,021,000 | 45,996,000 | 35,222,000 |
Capitalized signing bonuses, net | -7,703,000 | -6,852,000 | -22,357,000 | -20,747,000 |
Capitalized customer deferred acquisition costs | -5,423,000 | -4,606,000 | -15,699,000 | -13,189,000 |
Capitalized customer acquisition costs, amortization expense | -13,126,000 | -11,458,000 | -38,056,000 | -33,936,000 |
Balance at end of period | 68,967,000 | 57,711,000 | 68,967,000 | 57,711,000 |
Signing bonus adjustments from estimated amounts to actual | -700,000 | -1,000,000 | -2,800,000 | -2,900,000 |
Write-off of fully amortized signing bonuses | 6,900,000 | 6,400,000 | 19,400,000 | 19,100,000 |
Write-off of fully amortized customer deferred acquisition costs | $3,900,000 | $3,300,000 | $11,268,000 | $9,900,000 |
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 | 9 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, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | |
Customer relationships | Customer relationships | Merchant portfolio | Merchant portfolio | Software | Software | Non-compete agreements | Non-compete agreements | Other | Other | 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] | ||||||
Customer relationships | Customer relationships | Software | Software | Non-compete agreements | Other | Other | Customer relationships | Customer relationships | Software | Software | Non-compete agreements | Other | Other | ||||||||||||||||
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross Assets | $231,722,000 | ' | $231,722,000 | ' | $79,533,000 | $155,925,000 | $49,814,000 | $4,214,000 | $4,095,000 | $60,376,000 | $20,750,000 | $5,806,000 | $4,489,000 | $5,401,000 | $385,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated Amortization | 37,932,000 | ' | 37,932,000 | ' | 29,676,000 | 19,041,000 | 14,107,000 | 3,053,000 | 2,703,000 | 13,087,000 | 10,934,000 | 2,558,000 | 1,880,000 | 193,000 | 52,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | 193,790,000 | ' | 193,790,000 | ' | 49,857,000 | 136,884,000 | 35,707,000 | 1,161,000 | 1,392,000 | 47,289,000 | 9,816,000 | 3,248,000 | 2,609,000 | 5,208,000 | 333,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization life and method, useful life, minimum (in years) | ' | ' | ' | ' | ' | ' | ' | '7 years | '7 years | ' | ' | '5 years | ' | ' | ' | '6 years | '3 years | '1 year | '2 years | '3 years | '5 years | '2 years | '20 years | '18 years | '15 years | '5 years | '5 years | '7 years | '9 years |
Finite-Lived intangible assets, amortization expense | $3,400,000 | $2,200,000 | $8,300,000 | $6,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible_Assets_and_Goodwill3
Intangible Assets and Goodwill (Schedule of Finite-Lived Intangible Assets, Future Amortization Expense) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | ' | ' |
2013 | $18,498 | ' |
2014 | 17,218 | ' |
2015 | 15,949 | ' |
2016 | 13,875 | ' |
2017 | 12,790 | ' |
Thereafter | 115,460 | ' |
Total | $193,790 | $49,857 |
Intangible_Assets_and_Goodwill4
Intangible Assets and Goodwill (Schedule of Goodwill) (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | $190,978 | $168,062 |
Goodwill acquired during the period | 237,915 | 20,619 |
Other | -4,623 | 2,491 |
Ending balance | 424,270 | 191,172 |
Card Segment [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Percentage of Goodwill, by Reportable Segment | 10.90% | 11.90% |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | 64,320 | 43,701 |
Goodwill acquired during the period | 2,247 | 20,619 |
Other | -2,130 | 0 |
Ending balance | 64,437 | 64,320 |
Payroll Segment [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Percentage of Goodwill, by Reportable Segment | 23.30% | 21.00% |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | 31,018 | 30,831 |
Goodwill acquired during the period | 0 | 0 |
Other | 0 | 524 |
Ending balance | 31,018 | 31,355 |
Heartland School Solutions [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Percentage of Goodwill, by Reportable Segment | 70.30% | 65.40% |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | 53,350 | 53,350 |
Goodwill acquired during the period | 13,592 | 0 |
Other | -2,493 | 0 |
Ending balance | 64,449 | 53,350 |
Campus Solutions Segment [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Percentage of Goodwill, by Reportable Segment | 51.40% | 49.40% |
Goodwill [Roll Forward] | ' | ' |
Beginning balance | 35,789 | 33,679 |
Goodwill acquired during the period | 222,076 | 0 |
Other | 0 | 1,967 |
Ending balance | 257,865 | 35,646 |
All Other Segments [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Percentage of Goodwill, by Reportable Segment | 32.20% | 39.70% |
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, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Processing Liabilities and Loss Reserves [Line Items] | ' | ' | ' | ' |
Processing liabilities and loss reserves | $104,856,000 | $130,871,000 | $104,856,000 | ' |
Chargebacks, card brand networks, period | '4 months | ' | ' | ' |
Merchant bankcard processing portfolio | ' | ' | ' | ' |
Processing Liabilities and Loss Reserves [Line Items] | ' | ' | ' | ' |
Letter of Credit Held to Offset Potential Processing Liabilities | 250,000 | 260,000 | 250,000 | ' |
Processing liabilities and loss reserves | 97,094,000 | 121,143,000 | 97,094,000 | ' |
Merchant deposits | ' | ' | ' | ' |
Processing Liabilities and Loss Reserves [Line Items] | ' | ' | ' | ' |
Processing liabilities and loss reserves | 6,130,000 | 8,223,000 | 6,130,000 | ' |
Loss reserves | ' | ' | ' | ' |
Processing Liabilities and Loss Reserves [Line Items] | ' | ' | ' | ' |
Processing liabilities and loss reserves | 1,632,000 | 1,505,000 | 1,632,000 | ' |
SME [Member] | ' | ' | ' | ' |
Processing Liabilities and Loss Reserves [Line Items] | ' | ' | ' | ' |
Processing volume | 28,500,000,000 | 24,400,000,000 | 60,100,000,000 | 56,200,000,000 |
Bank chargebacks | 13,700,000 | 11,700,000 | ' | ' |
Merchant credit losses | ' | ' | $2,500,000 | $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 | |||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' | ' | ' | ' | ||
Accrued Buyout Liability, Increase in Settlement Obligations | $5,354,000 | $4,935,000 | $15,199,000 | $13,294,000 | ' | ||
Payouts Of Accrued Buyout Liability | 1,665,000 | 1,392,000 | 9,621,000 | 11,842,000 | ' | ||
Estimated Increase to Accrued Buyout Liability | 200,000 | ' | 200,000 | ' | 100,000 | ||
Loss reserves | ' | ' | ' | ' | ' | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' | ' | ' | ||
Beginning balance | 1,762,000 | 1,955,000 | 1,505,000 | 1,955,000 | ' | ||
Additions to reserve | 943,000 | 1,228,000 | 3,000,000 | 2,461,000 | ' | ||
Charges against reserve | -1,073,000 | [1] | -1,228,000 | [1] | -2,873,000 | 2,461,000 | ' |
Ending balance | 1,632,000 | 1,955,000 | 1,632,000 | 1,955,000 | ' | ||
Payroll [Member] | Loss reserves | ' | ' | ' | ' | ' | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' | ' | ' | ||
Charges against reserve | ($179,000) | ($13,000) | ($376,000) | ($88,000) | ' | ||
[1] | Included in these amounts are Heartland Ovation Payroll segment losses of $179,000 and $13,000, respectively, for the three months ended September 30, 2014 and 2013, and $376,000 and $88,000, respectively, for the nine months ended September 30, 2014 and 2013. |
Accrued_Buyout_Liability_Summa
Accrued Buyout Liability (Summary of Accrued Buyout Liability) (Details) (USD $) | 9 Months Ended | |||||
Sep. 30, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | |
Accrued Buyout Liability [Line Items] | ' | ' | ' | ' | ' | ' |
Payouts Of Accrued Buyout Liability | $11,842,000 | ' | ' | ' | ' | ' |
Increase in accrued buyout liability | 13,294,000 | ' | ' | ' | ' | ' |
Accrued Buyout Liability Total | 36,862,000 | 44,957,000 | 41,268,000 | 39,379,000 | 33,319,000 | 35,410,000 |
Less current portion | ' | -14,457,000 | ' | -13,943,000 | ' | ' |
Long-term portion of accrued buyout liability | ' | 30,500,000 | ' | 25,436,000 | ' | ' |
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 | ' | 200,000 | ' | 100,000 | ' | ' |
Accrued Buyout Liability [Member] | ' | ' | ' | ' | ' | ' |
Accrued Buyout Liability [Line Items] | ' | ' | ' | ' | ' | ' |
Accrued Buyout Liability Total | ' | 44,957,000 | ' | ' | ' | ' |
Accrued Buyout Liability [Member] | Vested Relationship Managers and sales managers [Member] | ' | ' | ' | ' | ' | ' |
Accrued Buyout Liability [Line Items] | ' | ' | ' | ' | ' | ' |
Accrued Buyout Liability Total | ' | 43,178,000 | ' | 38,082,000 | ' | ' |
Accrued Buyout Liability [Member] | Unvested Relationship Managers and sales managers [Member] | ' | ' | ' | ' | ' | ' |
Accrued Buyout Liability [Line Items] | ' | ' | ' | ' | ' | ' |
Accrued Buyout Liability Total | ' | $1,779,000 | ' | $1,297,000 | ' | ' |
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, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Accrued Buyout Liability [Abstract] | ' | ' | ' | ' |
Beginning balance | $41,268 | $33,319 | $39,379 | $35,410 |
Increase in settlement obligations, net | 5,354 | 4,935 | 15,199 | 13,294 |
Buyouts | -1,665 | -1,392 | -9,621 | -11,842 |
Ending balance | $44,957 | $36,862 | $44,957 | $36,862 |
Credit_Facilities_Schedule_of_
Credit Facilities (Schedule of Maturities of Long-term Debt) (Details) (USD $) | 0 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||||
Sep. 05, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Oct. 23, 2013 | Sep. 30, 2014 | Sep. 04, 2014 | Dec. 31, 2013 | Sep. 04, 2014 | Sep. 04, 2014 | Oct. 23, 2013 | Sep. 04, 2014 | Sep. 04, 2014 | Sep. 04, 2014 | Sep. 04, 2014 | |
Debt Issuance [Member] | 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] | Revolving Credit Facility [Member] | Term Credit Facility [Member] | Repayment period 1, first 3 years [Member] | Repayment period 1, first 3 years [Member] | Repayment period 2, fourth year [Member] | Repayment period 3, fifth year [Member] | ||||
Letter of Credit [Member] | Swing Line Loans [Member] | Term Credit Facility [Member] | Term Credit Facility [Member] | Term Credit Facility [Member] | Term Credit Facility [Member] | ||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | $375,000,000 | ' | ' | $150,000,000 | $400,000,000 | ' | $35,000,000 | $35,000,000 | ' | ' | ' | ' | ' |
Percentage of outstanding principal to repay (percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | 7.50% | 10.00% |
Term credit facility, period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' |
Credit agreement, amount outstanding | ' | ' | ' | ' | ' | ' | ' | 150,000,000 | ' | ' | ' | 197,500,000 | ' | ' | ' | ' | ' | ' | ' |
Repayment of term loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 55,000,000 | ' | ' | ' | ' |
Repayment of revolving credit facility | ' | ' | ' | ' | ' | ' | ' | ' | 91,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
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% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fees and direct costs | ' | 19,451,000 | 15,284,000 | 6,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issuance costs | $3,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
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, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ' | ' | ' | ' | ||
2013 | $14,007,000 | ' | $14,007,000 | ' | ||
2014 | 12,865,000 | ' | 12,865,000 | ' | ||
2015 | 7,754,000 | ' | 7,754,000 | ' | ||
2016 | 7,156,000 | ' | 7,156,000 | ' | ||
2017 | 6,126,000 | ' | 6,126,000 | ' | ||
Thereafter | 26,015,000 | ' | 26,015,000 | ' | ||
Total future minimum lease payments | 73,923,000 | [1] | ' | 73,923,000 | [1] | ' |
Leases, Operating [Abstract] | ' | ' | ' | ' | ||
Rent expense, leased facilities and equipment | $2,900,000 | $2,700,000 | $8,700,000 | $7,500,000 | ||
Maximum [Member] | ' | ' | ' | ' | ||
Long-term Purchase Commitment [Line Items] | ' | ' | ' | ' | ||
Operating Lease, Term of Lease Agreement | ' | ' | '13 years | ' | ||
[1] | (a) There were no material capital leases at September 30, 2014Rent expens |
Commitments_and_Contingencies_2
Commitments and Contingencies (Schedule of Contractual Obligations) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |||
Contractual Obligation Commitments [Line Items] | ' | ' | ' | ' | ' | ||
Rent expense, leased facilities and equipment | $2,900,000 | $2,700,000 | $8,700,000 | $7,500,000 | ' | ||
Other significant contractual obligations: | ' | ' | ' | ' | ' | ||
Total | 662,917,000 | ' | 662,917,000 | ' | ' | ||
Less than 1 year | 41,744,000 | ' | 41,744,000 | ' | ' | ||
1 to 3 years | 67,471,000 | ' | 67,471,000 | ' | ' | ||
3 to 5 years | 527,687,000 | ' | 527,687,000 | ' | ' | ||
More than 5 years | 26,015,000 | ' | 26,015,000 | ' | ' | ||
Reserve for unrecognized tax benefits | 6,769,000 | ' | 6,769,000 | ' | 5,633,000 | ||
Processing providers [Member] | ' | ' | ' | ' | ' | ||
Other significant contractual obligations: | ' | ' | ' | ' | ' | ||
Total | 6,465,000 | ' | 6,465,000 | ' | ' | ||
Less than 1 year | 5,465,000 | ' | 5,465,000 | ' | ' | ||
1 to 3 years | 1,000,000 | ' | 1,000,000 | ' | ' | ||
3 to 5 years | 0 | ' | 0 | ' | ' | ||
More than 5 years | 0 | [1] | ' | 0 | [1] | ' | ' |
Telecommunications providers [Member] | ' | ' | ' | ' | ' | ||
Other significant contractual obligations: | ' | ' | ' | ' | ' | ||
Total | 10,029,000 | ' | 10,029,000 | ' | ' | ||
Less than 1 year | 3,522,000 | ' | 3,522,000 | ' | ' | ||
1 to 3 years | 6,008,000 | ' | 6,008,000 | ' | ' | ||
3 to 5 years | 499,000 | ' | 499,000 | ' | ' | ||
More than 5 years | 0 | ' | 0 | ' | ' | ||
Office and equipment leases [Member] | ' | ' | ' | ' | ' | ||
Other significant contractual obligations: | ' | ' | ' | ' | ' | ||
Total | 73,923,000 | ' | 73,923,000 | ' | ' | ||
Less than 1 year | 14,007,000 | ' | 14,007,000 | ' | ' | ||
1 to 3 years | 20,619,000 | ' | 20,619,000 | ' | ' | ||
3 to 5 years | 13,282,000 | ' | 13,282,000 | ' | ' | ||
More than 5 years | 26,015,000 | ' | 26,015,000 | ' | ' | ||
Term Credit Facility [Member] | ' | ' | ' | ' | ' | ||
Other significant contractual obligations: | ' | ' | ' | ' | ' | ||
Total | 375,000,000 | ' | 375,000,000 | ' | ' | ||
Less than 1 year | 18,750,000 | ' | 18,750,000 | ' | ' | ||
1 to 3 years | 39,844,000 | ' | 39,844,000 | ' | ' | ||
3 to 5 years | 316,406,000 | [2] | ' | 316,406,000 | [2] | ' | ' |
More than 5 years | 0 | [2] | ' | 0 | [2] | ' | ' |
Revolving Credit Facility [Member] | ' | ' | ' | ' | ' | ||
Other significant contractual obligations: | ' | ' | ' | ' | ' | ||
Total | 197,500,000 | ' | 197,500,000 | ' | ' | ||
Less than 1 year | 0 | ' | 0 | ' | ' | ||
1 to 3 years | 0 | ' | 0 | ' | ' | ||
3 to 5 years | 197,500,000 | [2] | ' | 197,500,000 | [2] | ' | ' |
More than 5 years | 0 | [2] | ' | 0 | [2] | ' | ' |
Interest Payments Including Net Settlements On Interest Rate Swaps [Member] | Revolving Credit Facility [Member] | ' | ' | ' | ' | ' | ||
Other significant contractual obligations: | ' | ' | ' | ' | ' | ||
Total | 500,000 | ' | 500,000 | ' | ' | ||
Less than 1 year | 400,000 | ' | 400,000 | ' | ' | ||
1 to 3 years | 100,000 | ' | 100,000 | ' | ' | ||
Interest Rate Swap [Member] | ' | ' | ' | ' | ' | ||
Other significant contractual obligations: | ' | ' | ' | ' | ' | ||
Derivative, notional amount | $17,500,000 | ' | $17,500,000 | ' | $25,000,000 | ||
[1] | (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. | ||||||
[2] | (b)The Company has agreements in place with several large telecommunications companies that provide data center services, wide area network connectivity, and voice services that are used by both the Company call center and card payment processing platforms. These providers require both dollar and term commitments for the services they provide. If the Company does not meet the minimum terms, then there is a requirement to pay the remaining commitments. |
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, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Segment | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | $20,156 | $21,891 | $51,639 | $57,217 | ' |
Number of Reportable Segments | ' | ' | 5 | ' | ' |
Total revenues | 600,626 | 557,129 | 1,706,768 | 1,604,992 | ' |
Depreciation and amortization | 12,663 | 9,804 | 33,516 | 26,037 | ' |
Interest income | 33 | 29 | 95 | 95 | ' |
Interest expense | 2,142 | 1,243 | 4,450 | 3,746 | ' |
Net income (loss) attributable to Heartland | 20,458 | 21,981 | 53,650 | 61,221 | ' |
Total assets | 1,336,764 | 859,213 | 1,336,764 | 859,213 | 900,305 |
Card Segment [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | 20,330 | 23,926 | 51,807 | 59,289 | ' |
Depreciation and amortization | 8,628 | 6,918 | 24,240 | 20,015 | ' |
Interest income | 33 | 28 | 95 | 92 | ' |
Interest expense | 1,453 | 1,242 | 3,761 | 3,744 | ' |
Total assets | 589,657 | 540,098 | 589,657 | 540,098 | ' |
Heartland School Solutions [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | 1,712 | 1,775 | 3,149 | 6,650 | ' |
Total revenues | 15,061 | 12,150 | 42,685 | 36,628 | ' |
Depreciation and amortization | 1,282 | 785 | 2,665 | 1,854 | ' |
Total assets | 91,703 | 81,547 | 91,703 | 81,547 | ' |
Heartland Ovation Payroll [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | 1,032 | 357 | 4,490 | 1,904 | ' |
Depreciation and amortization | 727 | 959 | 2,416 | 2,634 | ' |
Total assets | 133,204 | 149,008 | 133,204 | 149,008 | ' |
Restricted Cash and Cash Equivalents, Percent of Assets | 60.00% | 64.00% | 60.00% | 64.00% | ' |
Campus Solutions Segment [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | 2,019 | 544 | 4,918 | 2,069 | ' |
Depreciation and amortization | 1,473 | 674 | 2,756 | 1,696 | ' |
Interest income | 0 | 1 | 0 | 3 | ' |
Interest expense | 689 | 0 | 689 | 0 | ' |
Total assets | 501,982 | 72,197 | 501,982 | 72,197 | ' |
Restricted Cash and Cash Equivalents, Percent of Assets | 8.00% | 23.00% | 8.00% | 23.00% | ' |
Reconciling Items [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Interest expense | 0 | 0 | 0 | -3 | ' |
Other Segment [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | 812 | 200 | 1,875 | -45 | ' |
Depreciation and amortization | 388 | 433 | 1,157 | 1,259 | ' |
Interest expense | 0 | 1 | 0 | 5 | ' |
Total assets | 20,218 | 16,363 | 20,218 | 16,363 | ' |
Unallocated Corporate Administration Amounts [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net income from continuing operations | -5,749 | -4,911 | -14,600 | -12,650 | ' |
Depreciation and amortization | $165 | $35 | $282 | ($1,421) | ' |
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, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Income from continuing operations attributable to Heartland | $20,458 | $21,981 | $53,650 | $57,307 |
Income from discontinued operations attributable to Heartland | 0 | 0 | 0 | 3,914 |
Net income attributable to Heartland | $20,458 | $21,981 | $53,650 | $61,221 |
Denominator: | ' | ' | ' | ' |
Basic weighted average shares outstanding | 36,069 | 36,857 | 36,388 | 36,752 |
Stock options and restricted share units | 781 | 1,163 | 861 | 1,327 |
Diluted weighted average shares outstanding | 36,850 | 38,020 | 37,249 | 38,079 |
Basic earnings per share: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.57 | $0.60 | $1.47 | $1.56 |
Income from discontinued operations (in dollars per share) | $0 | $0 | $0 | $0.11 |
Basic earnings per share (in dollars per share) | $0.57 | $0.60 | $1.47 | $1.67 |
Diluted earnings per share: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.56 | $0.58 | $1.44 | $1.50 |
Income from discontinued operations (in dollars per share) | $0 | $0 | $0 | $0.10 |
Diluted earnings per share (in dollars per share) | $0.56 | $0.58 | $1.44 | $1.60 |
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, 2014 | Dec. 31, 2013 | |
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: | ' | ' |
Fixed income bond fund | 122,311,000 | 127,375,000 |
Fair Value, Measurements, Recurring [Member] | ' | ' |
Assets: | ' | ' |
Total Assets | 21,452,000 | 13,232,000 |
Liabilities: | ' | ' |
Total Liabilities | 187,000 | 411,000 |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ' | ' |
Assets: | ' | ' |
Total Assets | 21,452,000 | 13,232,000 |
Liabilities: | ' | ' |
Total Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ' | ' |
Assets: | ' | ' |
Total Assets | 0 | 0 |
Liabilities: | ' | ' |
Total Liabilities | 187,000 | 411,000 |
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' |
Assets: | ' | ' |
Fixed income bond fund | 13,009,000 | 12,010,000 |
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ' | ' |
Assets: | ' | ' |
Fixed income bond fund | 13,009,000 | 12,010,000 |
Fixed Income Funds [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' |
Assets: | ' | ' |
Fixed income bond fund | 8,443,000 | 1,222,000 |
Fixed Income Funds [Member] | Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ' | ' |
Assets: | ' | ' |
Fixed income bond fund | 8,443,000 | ' |
Fixed Income Funds [Member] | Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ' | ' |
Assets: | ' | ' |
Fixed income bond fund | ' | 0 |
Corporate Bond Securities [Member] | ' | ' |
Assets: | ' | ' |
Fixed income bond fund | 13,009,000 | 12,010,000 |
Fixed Income Funds [Member] | ' | ' |
Assets: | ' | ' |
Fixed income bond fund | 8,443,000 | 1,222,000 |
Fixed Income Funds [Member] | Fixed Income Funds [Member] | Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ' | ' |
Assets: | ' | ' |
Fixed income bond fund | ' | 1,222,000 |
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' |
Liabilities: | ' | ' |
Interest rate swaps | 187,000 | 411,000 |
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ' | ' |
Liabilities: | ' | ' |
Interest rate swaps | ' | 0 |
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ' | ' |
Liabilities: | ' | ' |
Interest rate swaps | $187,000 | $411,000 |
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, 2014 | Dec. 31, 2013 |
Assets: | ' | ' |
Fixed income bond fund | $122,311,000 | $127,375,000 |
Term Credit Facility [Member] | ' | ' |
Liabilities: | ' | ' |
Maximum borrowing capacity | 375,000,000 | ' |
Revolving Credit Facility [Member] | ' | ' |
Liabilities: | ' | ' |
Credit facility | ' | 150,000,000 |
Fair Value, Measurements, Nonrecurring [Member] | ' | ' |
Assets: | ' | ' |
Total Assets | 33,000 | 33,000 |
Liabilities: | ' | ' |
Total Liabilities | 572,500,000 | 150,000,000 |
Fair Value, Measurements, Nonrecurring [Member] | Certificates of deposit [Member] | ' | ' |
Assets: | ' | ' |
Certificates of deposit | 33,000 | 33,000 |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Assets: | ' | ' |
Total Assets | 0 | 0 |
Liabilities: | ' | ' |
Total Liabilities | 0 | 0 |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Assets: | ' | ' |
Total Assets | 33,000 | 33,000 |
Liabilities: | ' | ' |
Total Liabilities | 572,500,000 | 150,000,000 |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' |
Assets: | ' | ' |
Total Assets | 0 | ' |
Fair Value, Measurements, Nonrecurring [Member] | Term Credit Facility [Member] | ' | ' |
Liabilities: | ' | ' |
Credit facility | 375,000,000 | ' |
Fair Value, Measurements, Nonrecurring [Member] | Revolving Credit Facility [Member] | ' | ' |
Liabilities: | ' | ' |
Credit facility | 197,500,000 | 150,000,000 |
Fair Value, Measurements, Nonrecurring [Member] | Revolving Credit Facility [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Liabilities: | ' | ' |
Credit facility | $197,500,000 | ' |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Jan. 31, 2013 | Dec. 31, 2012 | |
Results of Discontinued Operations: | ' | ' | ' | ' | ' | ' | ' |
Income from discontinued operations, net of income tax of $68 | $0 | $0 | $0 | $3,970,000 | ' | ' | ' |
Gain on sale of discontinued operations, net of income tax of $2,067 | ' | ' | 258,000 | 3,786,000 | ' | ' | ' |
Net income from discontinued operations attributable to noncontrolling interests | ' | ' | 600,000 | ' | ' | ' | ' |
Net income from discontinued operations attributable to Heartland | 0 | 0 | 0 | 3,914,000 | ' | ' | ' |
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% | ' |
Income from discontinued operations, tax | ' | ' | 68,000 | ' | ' | ' | ' |
Gain on sale of discontinued operations, tax | ' | ' | 2,067,000 | 2,067,000 | ' | ' | ' |
Results of Discontinued Operations: | ' | ' | ' | ' | ' | ' | ' |
Revenues | 0 | 0 | 0 | 1,117,000 | ' | ' | ' |
Expenses | 0 | 0 | 0 | 870,000 | ' | ' | ' |
Income from operations | 0 | 0 | 0 | 247,000 | ' | ' | ' |
Income from discontinued operations, net of income tax of $68 | 0 | 0 | ' | 184,000 | 0 | ' | ' |
Gain on sale of discontinued operations, net of income tax of $2,067 | 0 | 0 | 0 | 3,786,000 | ' | ' | ' |
Net income from discontinued operations attributable to noncontrolling interests | 0 | 0 | 0 | 56,000 | ' | ' | ' |
Net income from discontinued operations attributable to Heartland | $0 | $0 | $0 | $3,914,000 | ' | ' | ' |
Basis_of_financial_statement_p
Basis of financial statement presentation (Details) (Leaf Acquisition, LLC [Member]) | Sep. 11, 2013 |
Leaf Acquisition, LLC [Member] | ' |
organization and operations [Line Items] | ' |
Business Acquisition, Percentage of Voting Interests Acquired | 66.67% |