Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 02, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | HEARTLAND PAYMENT SYSTEMS INC | |
Entity Central Index Key | 1,144,354 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 36,755,918 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 43,148 | $ 70,793 |
Funds held for customers | 180,458 | 176,492 |
Receivables, net | 258,378 | 234,104 |
Investments | 107 | 106 |
Inventory | 10,279 | 12,048 |
Prepaid expenses | 21,625 | 22,658 |
Current tax assets | 749 | 15,082 |
Current deferred tax assets, net | 12,311 | 9,308 |
Total current assets | 527,055 | 540,591 |
Capitalized customer acquisition costs, net | 83,192 | 73,107 |
Property and equipment, net | 168,244 | 154,303 |
Goodwill | 475,317 | 425,712 |
Intangible assets, net | 197,254 | 192,553 |
Deposits and other assets, net | 1,677 | 1,507 |
Total assets | 1,452,739 | 1,387,773 |
Current liabilities: | ||
Due to sponsor banks | 49,266 | 31,165 |
Accounts payable | 58,576 | 58,460 |
Customer fund deposits | 180,458 | 176,492 |
Processing liabilities | 119,884 | 119,398 |
Current portion of accrued buyout liability | 17,471 | 15,023 |
Current portion of borrowings | 48,793 | 36,792 |
Current portion of unearned revenue | 53,150 | 46,601 |
Accrued expenses and other liabilities | 49,050 | 41,517 |
Total current liabilities | 576,648 | 525,448 |
Deferred tax liabilities, net | 59,057 | 45,804 |
Reserve for unrecognized tax benefits | 8,630 | 7,315 |
Long-term borrowings | 450,041 | 523,122 |
Long-term portion of accrued buyout liability | 38,175 | 32,970 |
Long-term portion of unearned revenue | 3,025 | 2,354 |
Total liabilities | 1,135,576 | 1,137,013 |
Commitments and contingencies | 0 | 0 |
Equity | ||
Common stock, $0.001 par value, 100,000,000 shares authorized, 36,752,588 and 36,344,921 shares issued and outstanding at September 30, 2015 and December 31, 2014 | 37 | 36 |
Additional paid-in capital | 271,171 | 255,921 |
Accumulated other comprehensive loss | (8) | (130) |
Retained earnings (accumulated deficit) | 45,963 | (5,067) |
Total equity | 317,163 | 250,760 |
Total liabilities and equity | $ 1,452,739 | $ 1,387,773 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets Parentheticals (Unaudited) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Equity | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 36,752,588 | 36,344,921 |
Common stock, shares outstanding | 36,752,588 | 36,344,921 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Total revenues | $ 705,667 | $ 600,626 | $ 1,983,818 | $ 1,706,768 |
Costs of services: | ||||
Interchange | 425,572 | 373,372 | 1,194,461 | 1,059,241 |
Dues, assessments and fees | 65,506 | 57,864 | 180,548 | 163,218 |
Processing and servicing | 85,817 | 69,328 | 246,227 | 204,985 |
Customer acquisition costs | 15,501 | 12,289 | 44,284 | 34,907 |
Depreciation and amortization | 11,541 | 7,981 | 33,382 | 20,472 |
Total costs of services | 603,937 | 520,834 | 1,698,902 | 1,482,823 |
General and administrative | 59,216 | 49,381 | 174,212 | 137,241 |
Total expenses | 663,153 | 570,215 | 1,873,114 | 1,620,064 |
Income from operations | 42,514 | 30,411 | 110,704 | 86,704 |
Other income (expense): | ||||
Interest income | 29 | 33 | 82 | 95 |
Interest expense | (3,647) | (2,142) | (11,178) | (4,450) |
Other, net | (9) | 3,581 | (309) | 3,869 |
Total other (expense) income | (3,627) | 1,472 | (11,405) | (486) |
Income before income taxes | 38,887 | 31,883 | 99,299 | 86,218 |
Provision for income taxes | 15,006 | 11,727 | 37,274 | 34,579 |
Net income | 23,881 | 20,156 | 62,025 | 51,639 |
Less: Net loss attributable to noncontrolling interests | 0 | (302) | 0 | (2,011) |
Net income attributable to Heartland | $ 23,881 | $ 20,458 | $ 62,025 | $ 53,650 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 0.65 | $ 0.57 | $ 1.69 | $ 1.47 |
Diluted (in dollars per share) | $ 0.64 | $ 0.56 | $ 1.67 | $ 1.44 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 36,744 | 36,069 | 36,600 | 36,388 |
Diluted (in shares) | 37,281 | 36,850 | 37,186 | 37,249 |
Dividends declared per share (in dollars per share) | $ 0.10 | $ 0.085 | $ 0.30 | $ 0.255 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 23,881 | $ 20,156 | $ 62,025 | $ 51,639 |
Other comprehensive income (loss): | ||||
Reclassification of losses (gains) on investments, net of income tax of $(7), $5, $(7) and $108 | 12 | (6) | 12 | (170) |
Unrealized gains (losses) on investments, net of income tax of $11, $(5), $16 and $5 | 28 | (8) | 43 | 6 |
Unrealized gains on derivative financial instruments, net of income tax of $17, $28, $50 and $83 | 11 | 45 | 67 | 140 |
Comprehensive income | 23,932 | 20,187 | 62,147 | 51,615 |
Less: Comprehensive loss attributable to noncontrolling interests | 0 | (302) | 0 | (2,011) |
Comprehensive income attributable to Heartland | $ 23,932 | $ 20,489 | $ 62,147 | $ 53,626 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Parentheticals) (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Reclassification of gains on investments, tax | $ (7) | $ 5 | $ (7) | $ 108 |
Unrealized gains (losses) on investments, tax | 11 | (5) | 16 | 5 |
Unrealized losses on derivative financial instruments, tax | $ 17 | $ 28 | $ 50 | $ 83 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Equity (unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Noncontrolling Interests |
Common stock, shares outstanding, beginning balance at Dec. 31, 2013 | 36,951,000 | ||||||
Stockholders' equity, beginning balance at Dec. 31, 2013 | $ 266,663 | $ 37 | $ 245,055 | $ (88) | $ 35,960 | $ (20,489) | $ 6,188 |
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 | ||||||
Issuance of common stock- RSU's vested, amount | (5,225) | $ 0 | (5,225) | ||||
Excess tax benefit on employee share-based compensation | 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 | ||
Share-based compensation | 10,936 | 10,936 | |||||
Acquisition of noncontrolling interest | (600) | 3,577 | (4,177) | ||||
Other comprehensive loss | (24) | (24) | |||||
Dividends on common stock | (9,249) | (9,249) | |||||
Net income (loss) for the period | 51,639 | 53,650 | (2,011) | ||||
Common stock, shares outstanding, ending balance at Sep. 30, 2014 | 36,179,000 | ||||||
Stockholders' equity, ending balance at Sep. 30, 2014 | 269,837 | $ 36 | 252,127 | (112) | 17,786 | 0 | 0 |
Common stock, shares outstanding, beginning balance at Dec. 31, 2013 | 36,951,000 | ||||||
Stockholders' equity, beginning balance at Dec. 31, 2013 | $ 266,663 | $ 37 | 245,055 | (88) | 35,960 | (20,489) | 6,188 |
Common stock, shares outstanding, ending balance at Dec. 31, 2014 | 36,344,921 | 36,345,000 | |||||
Stockholders' equity, ending balance at Dec. 31, 2014 | $ 250,760 | $ 36 | 255,921 | (130) | (5,067) | 0 | 0 |
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of common stock - options exercised, shares | 173,000 | ||||||
Issuance of common stock - options exercised, amount | 2,677 | $ 0 | 2,677 | ||||
Issuance of common stock- RSU's vested, shares | 235,000 | ||||||
Issuance of common stock- RSU's vested, amount | (7,144) | $ 1 | (7,145) | ||||
Excess tax benefit on employee share-based compensation | 5,578 | 5,578 | |||||
Share-based compensation | 14,140 | 14,140 | |||||
Other comprehensive loss | 122 | 122 | |||||
Dividends on common stock | (10,995) | (10,995) | |||||
Net income (loss) for the period | $ 62,025 | 62,025 | |||||
Common stock, shares outstanding, ending balance at Sep. 30, 2015 | 36,752,588 | 36,753,000 | |||||
Stockholders' equity, ending balance at Sep. 30, 2015 | $ 317,163 | $ 37 | $ 271,171 | $ (8) | $ 45,963 | $ 0 | $ 0 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities | ||
Net income (loss) | $ 62,025 | $ 51,639 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of capitalized customer acquisition costs | 44,420 | 38,056 |
Other depreciation and amortization | 46,283 | 33,516 |
Addition to loss reserves | 2,528 | 3,000 |
Provision for doubtful receivables | 4,991 | 3,010 |
Deferred taxes | 3,611 | 8,361 |
Share-based compensation | 14,140 | 10,936 |
Write off of fixed assets and other | 1,223 | (3,315) |
Changes in operating assets and liabilities: | ||
Increase in receivables | (27,594) | (11,339) |
Decrease (increase) in inventory | 1,896 | (287) |
Payment of signing bonuses, net | (33,855) | (27,647) |
Increase in capitalized customer acquisition costs | (20,650) | (18,349) |
Decrease (increase) in current tax assets | 19,870 | (2,957) |
Decrease in prepaid expenses, deposits and other assets | 1,190 | 29 |
Excess tax benefits on employee share-based compensation | (5,578) | (5,670) |
Increase in reserve for unrecognized tax benefits | 1,315 | 1,136 |
Increase in due to sponsor banks | 18,101 | 22,074 |
Decrease in accounts payable | (1,443) | (12,509) |
Increase (decrease) in unearned revenue | 4,620 | (2,414) |
Decrease in accrued expenses and other liabilities | (2,809) | (12,304) |
Decrease in processing liabilities | (2,076) | (29,016) |
Payouts of accrued buyout liability | (12,861) | (9,621) |
Increase in settlement obligation, net | 20,514 | 15,199 |
Net cash provided by operating activities | 139,861 | 51,528 |
Cash flows from investing activities | ||
Purchase of investments | (1,546) | (31,017) |
Sales of investments | 0 | 17,215 |
Maturities of investments | 1,800 | 0 |
Decrease in funds held for customers | 42,055 | 18,849 |
Decrease in customer fund deposits | (42,309) | (5,064) |
Acquisitions of businesses, net of cash acquired | (60,969) | (355,066) |
Capital expenditures | (42,734) | (39,140) |
Net cash used in investing activities | (103,703) | (394,223) |
Cash flows from financing activities | ||
Proceeds from borrowings, net | 171,000 | 436,392 |
Principal payments on borrowings | (232,063) | (17,500) |
Proceeds from exercise of stock options | 2,677 | 4,482 |
Excess tax benefits on employee share-based compensation | 5,578 | 5,670 |
Repurchases of common stock | 0 | (54,455) |
Dividends paid on common stock | (10,995) | (9,249) |
Net cash (used in) provided by financing activities | (63,803) | 365,340 |
Net (decrease) increase in cash | (27,645) | 22,645 |
Cash at beginning of year | 70,793 | 71,932 |
Cash at end of period | 43,148 | 94,577 |
Supplemental cash flow information | ||
Interest | 9,946 | 3,559 |
Income taxes | $ 12,311 | $ 28,038 |
Organization and Operations
Organization and Operations | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | Organization and Operations Basis of Financial Statement Presentation— The accompanying consolidated financial statements include those of Heartland Payment Systems, Inc. (the "Company," “we,” “us,” or “our”) and its wholly-owned subsidiaries, Heartland Payroll Solutions, Inc., Heartland Payment Solutions, Inc., Heartland Acquisition LLC, TouchNet Information Systems, Inc. (“TouchNet”) and Heartland Commerce, Inc. 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, 2015 , its results of operations for the three and nine months ended September 30, 2015 and 2014 and changes in equity and cash flows for the nine months ended September 30, 2015 and 2014 . Results of operations reported for interim periods are not necessarily indicative of the results to be expected for the year ending December 31, 2015 . 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, 2014 (the "2014 Form 10-K"). For a summary of all significant accounting policies, refer to Note 2 of the 2014 Form 10-K. The December 31, 2014 Condensed Consolidated Balance Sheet was derived from the audited 2014 consolidated financial statements. Out of Period Adjustments Recorded in Prior Year— 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 Consolidated Statements of Income) by $1.4 million and $0.9 million , respectively. These adjustments related to immaterial errors that originated in 2013 in the Company's 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 year ended December 31, 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 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, 2014, and accordingly, no restatement of prior period financial statements was warranted. Use of Estimates — The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates include, among other things, the accrued buyout liability, capitalized customer acquisition costs, goodwill and intangible asset impairment review, revenue recognition for multiple element arrangements, 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. Business Description— The Company’s primary business is to provide payment processing services to merchants throughout the United States. 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. The Company also provides additional services, including those provided through its subsidiaries, such as: • Integrated commerce solutions, payment processing, higher education loan services and open and closed-loop payment solutions to higher-education institutions through Campus Solutions, • School nutrition, point-of-sale solutions ("POS"), and associated payment solutions, including online prepayment solutions, to kindergarten through 12th grade ("K-12") schools through Heartland School Solutions, • Full-service payroll processing and related tax filing services, through Heartland Payroll Solutions, and • Others including (1) prepaid and stored-value card solutions through Micropayments, (2) POS solutions and other adjacent business service applications through Heartland Commerce, and (3) marketing solutions including loyalty and gift cards which the Company provides through Heartland Marketing Solutions. Approximately 72% of the Company's revenue is derived from processing and settling Visa and MasterCard bankcard transactions for its merchant customers. Because the Company is not a ''member bank'' as defined by Visa and MasterCard, in order to process and settle these bankcard transactions for its merchants, the Company has entered into sponsorship agreements with member banks. Visa and MasterCard rules restrict the Company from performing funds settlement or accessing merchant settlement funds and require that these funds be in the possession of the member bank until the merchant is funded. A sponsorship agreement 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 six months 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, 2015 , the Company has not been notified of any such issues by its sponsor banks, Visa or MasterCard. As of September 30, 2015 , the Company is party to three bank sponsorship agreements. • Processing for the majority of the Company’s small and mid-sized merchants (referred to as "Small and Midsized Enterprises," or “SME merchants”) is performed under a February 8, 2012, sponsorship agreement with Wells Fargo Bank, N.A. ("WFB"). The WFB sponsorship agreement is in effect until February 8, 2016 and would automatically renew for three years unless either party provides written notice of non-renewal to the other party. On November 5, 2015, the Company provided written notice of non-renewal to WFB. Under the terms of the WFB sponsorship agreement, the Company has up to six months beyond February 8, 2016 to complete a conversion of its SME merchants to another sponsorship arrangement. On November 5, 2015, the Company entered into a sponsorship agreement with Deutsche Bank Trust Company Americas ("Deutsche Bank") for its SME merchants. The Company is highly confident it will complete the conversion of its SME merchants to the Deutsche Bank sponsorship arrangement within the six -month conversion period beginning February 8, 2016. The sponsorship agreement with Deutsche Bank involves substantially the same terms as applied in the February 8, 2012 agreement with WFB. The agreement with Deutsche Bank is for a five -year term expiring on November 5, 2020 and will automatically renew for successive one -year periods unless either party provides six months written notice of non-renewal to the other party. • 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, which are predominantly petroleum industry merchants of all sizes (referred to as "Network Services Merchants"), and since October 2013, certain of the Company's SME merchants. In August 2015, the agreement with TBB automatically renewed until February 2017. The agreement with TBB expires in February 2017 and will automatically renew for successive one -year periods unless either party provides six months written notice of non-renewal to the other party. • On March 24, 2011, the Company entered into a sponsorship agreement with Barclays Bank Delaware to sponsor processing for certain of the Company's large national merchants. In September 2015, the agreement with Barclays Bank Delaware automatically renewed until March 2017. The agreement with Barclays Bank Delaware expires in March 2017 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, 2015 by percentage processed under its individual bank sponsorship agreements: % of September 2015 Sponsor Bank Bankcard Processing Wells Fargo Bank, N.A. 71% The Bancorp Bank 20% Barclays Bank Delaware 9% 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 the way it processes Visa and MasterCard transactions. The Company must comply with Discover's 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. 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 acquires, contracts, and establishes pricing, as well as provides customer service to merchants, similar to the transaction processing services the Company provides through Discover, Visa and MasterCard. The Company also uses its sponsor banks to assist in funding its merchants' American Express transactions. 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 the Company adopts as of the specified effective date. 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. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. On July 9, 2015, the FASB voted to approve a one-year deferral of the effective date. This made the new guidance effective December 15, 2017 for annual reporting periods beginning after that date. The FASB also approved early adoption of the standard, but not before the original effective date which was for reporting periods beginning after December 15, 2016. The Company has not yet selected a transition method and is currently assessing the impact the adoption of this guidance will have on the Company's consolidated financial statements and disclosures. In April 2015, the FASB issued guidance on debt issuance costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. In August 2015, the FASB issued updated guidance to clarify that an entity may elect to present debt issuance costs related to a line-of-credit arrangement as an asset, regardless of whether or not there are any outstanding borrowings on the line-of-credit arrangement. The new guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The new guidance should be applied on a retrospective basis. The effect on the Company’s consolidated financial statements is still being evaluated. In April 2015, the FASB issued guidance that defines specific criteria entities must apply to determine if a cloud computing arrangement includes an in-substance software license. The new guidance clarifies that software licenses included in a cloud computing software should be accounted for in the same manner as other software licenses. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2015. Early adoption is permitted. The new guidance can be applied on either a prospective or retrospective basis. The effect on the Company’s consolidated financial statements is still being evaluated. In July 2015, the FASB issued guidance to more clearly articulate the requirements for the subsequent measurement of inventory and related disclosures. The new guidance clarifies the basis for measuring inventory at the lower of cost and net realizable value. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2016. Early adoption is permitted. The new guidance should be applied on a prospective basis. The effect on the Company’s consolidated financial statements is still being evaluated. In September 2015, the FASB issued guidance to simplify the accounting for measurement-period adjustments for business combinations. The new guidance eliminates the requirement to retrospectively account for adjustments made to provisional amounts recognized in a business combination. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2015. Early adoption is permitted. The new guidance should be applied on a prospective basis. The effect on the Company’s consolidated financial statements is still being evaluated. |
Supplementary Financial Stateme
Supplementary Financial Statement Information | 9 Months Ended |
Sep. 30, 2015 | |
Selected Quarterly Financial Information [Abstract] | |
Supplementary Financial Statement Information | Supplementary Financial Statement Information Cash— At September 30, 2015 , cash included approximately $16.5 million of processing-related cash in transit and collateral, compared to approximately $17.8 million of processing-related cash in transit and collateral at December 31, 2014 . Processing-related cash in transit and collateral includes merchant deposits, collateral deposits, and funds in transit relating to timing differences for the Company's card and non-card payment processing businesses. Other Income (Expense) — Other income (expense) consists of interest income on cash and investments, the interest cost on the Company's borrowings, gains or losses on the disposal of assets, write downs of capitalized information technology development projects 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 Acquisition, LLC ("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. 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 impact on deferred assets and liabilities of a change in tax rates is recognized in the period that the rate change is enacted . Valuation allowances are recorded when it is determined that it is more likely than not that a deferred tax asset will not be realized. The provision for income taxes for the three and nine months ended September 30, 2015 and 2014 and the resulting effective tax rates were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 (In thousands) Provision for income taxes $ 15,006 $ 11,727 $ 37,274 $ 34,579 Effective tax rate 38.6 % 36.8 % 37.5 % 40.1 % The effective tax rate for the three months ended September 30, 2015 , reflects an increase as compared to the three months ended September 30, 2014 due to a benefit recognized in the three months ended September 30, 2014 for 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 decrease in the effective tax rate for the nine months ended September 30, 2015 , as compared to the nine months ended September 30, 2014 , primarily reflects the partial recognition of deferred tax benefits during the first quarter of 2015 from past accumulated losses of Leaf due to the generation of future taxable income resulting from the Company's acquisition of Dinerware, Inc. ("Dinerware"). The structure of this acquisition along with the corresponding preliminary purchase price allocation resulted in the recording of deferred tax liabilities on finite lived intangible assets that will provide a source of future taxable income. Additionally, the Company’s effective tax rate benefited from its ability to utilize the losses generated from Leaf against consolidated taxable income since its August 6, 2014 acquisition of the shares held by the former noncontrolling shareholders of Leaf. 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 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. The Company does not expect any material changes to unrecognized tax benefits in the next twelve months. At September 30, 2015 , the reserve for unrecognized tax benefits related to uncertain tax positions was $8.6 million , of which $5.8 million would, if recognized, impact the effective tax rate. At December 31, 2014 , the reserve for unrecognized tax benefits related to uncertain tax positions was $7.3 million , of which $4.9 million would, if recognized, impact the effective tax rate. Share–Based Compensation— The Company expenses employee share-based compensation under the fair value method. Share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite service period. The Company grants three types of Restricted Share Units (“RSUs”): service-based RSUs, performance-based RSUs (“PRSUs”), and total shareholder return RSUs (“TRSUs”). The Company's Board of Directors approves grants of PRSUs and TRSUs with grant-specific vesting and performance target terms. The methods and assumptions used in the determination of the fair value of share-based awards and measurement of performance targets are consistent with those described in the 2014 Form 10-K. Share-based compensation costs recognized were $4.4 million and $3.4 million , respectively, for the three months ended September 30, 2015 and 2014 and $14.1 million and $10.9 million , respectively, for the nine months ended September 30, 2015 and 2014 . Common Stock Repurchases— 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. During the nine months ended September 30, 2014 , the Company had repurchased 1,347,817 shares for $54.5 million at an average cost of approximately $40.40 per share. Total repurchases under this authorization were 1,882,417 shares for $74.9 million at an average cost of approximately $39.81 per share. Repurchases under this authorization were completed during the second quarter of 2014. These repurchases were made through the open market in accordance with applicable laws and regulations. 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, 2015 , the Company has not repurchased any shares under the May 8, 2014 authorization. The Company intends to fund any repurchases with cash flow from operations, existing cash on the balance sheet, and other sources, including the 2014 Revolving Credit Facility. The manner, timing and amount of repurchases, if any, will be determined by management and will depend on a variety of factors, including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements. The repurchase program may be modified or discontinued at any time. Noncontrolling Interests— Prior to August 6, 2014, the Company owned 66.67% of the outstanding capital stock of Leaf. Noncontrolling shareholders' share of after-tax net loss of Leaf was included in Net loss attributable to noncontrolling interests in the Condensed Consolidated Statements of Income for the 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. As a result of this transaction, Leaf became a wholly-owned subsidiary of the Company and there is no noncontrolling interest on the Condensed Consolidated Balance Sheet as of September 30, 2015 and December 31, 2014 . Subsequent Events— The Company evaluated subsequent events through the issuance date with respect to the condensed consolidated financial statements as of and for the nine months ended September 30, 2015 . On October 30, 2015, the Company acquired the stock of Menusoft Systems Corporation (a.k.a. “Digital Dining”) for a cash payment of $18.7 million . The purchase price was financed under the 2014 Revolving Credit Facility. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Campus Solutions 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 through a new five -year $375 million term loan. The transaction was accounted for under the acquisition 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, approximately $221.6 million , was recorded as goodwill, which is deductible for income tax reporting. Acquisition-related costs of approximately $2.3 million for advisory, legal and regulatory costs incurred in connection with the TouchNet acquisition have been expensed in general and administrative expenses. The following table summarizes the purchase price allocation (in thousands): Cash and cash equivalents $ 34,576 Receivables, net 12,243 Inventory 66 Prepaid expenses 601 Property and equipment, net 3,360 Intangible assets, net 144,400 Goodwill 221,575 Total assets acquired 416,821 Accounts payable 2,236 Accrued expenses and other liabilities 2,896 Current portion of unearned revenue 24,014 Current tax liability 13,914 Long-term portion of unearned revenue 2,037 Net assets acquired $ 371,724 The weighted average amortization life for the 2014 acquired finite lived intangible assets related to the acquisition of TouchNet is as follows: Weighted average amortization life (In years) Customer relationships 20 Software 15 Trademark 5 Non-compete agreements 5 Overall 18 The following pro forma information shows the results of the Company's operations for the three and nine months ended September 30, 2014 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 September 30, 2014 Nine Months Ended September 30, 2014 (In thousands, except share data) Total revenues $ 619,861 $ 1,760,516 Net income attributable to Heartland $ 19,205 $ 55,538 Basic earnings per share $ 0.53 $ 1.53 Diluted earnings per share $ 0.52 $ 1.49 Heartland School Solutions MCS Software Corporation On April 1, 2014, the Company purchased the net assets of MCS Software Corporation ("MCS Software") for a $17.3 million cash payment. The purchase price was financed under an existing credit facility and from operating cash flows. The transaction was accounted for under the acquisition 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: $11.2 million to goodwill, $6.4 million to intangible assets and $0.3 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 MCS Software is as follows: Weighted average amortization life (In years) Customer relationships 14 Software 5 Non-compete agreement 5 Overall 11 Heartland Payroll Solutions Payroll 1, Inc. On February 27, 2015, the Company purchased the stock of Payroll 1, Inc. ("Payroll 1") for a $30.0 million cash payment, plus net working capital. The purchase price was financed under the 2014 Revolving Credit Facility. The transaction was accounted for under the acquisition method of accounting. Beginning February 27, 2015, Payroll 1's results of operations were included in the Company's results of operations. The allocation of the total purchase price was as follows: $20.8 million to goodwill, $14.5 million to intangible assets and $4.5 million to net tangible liabilities . The fair values are preliminary, based on estimates, and may be adjusted as the Company analyzes what was known and knowable at the acquisition date, 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 not expected to be deductible for income tax reporting. The weighted average amortization life for the 2015 acquired finite lived intangible assets related to the acquisition of Payroll 1 is as follows: Weighted average amortization life (In years) Customer relationships 13 Software 6 Non-compete agreement 4 Overall 12 Heartland Commerce Dinerware, LLC On February 11, 2015, the Company purchased the stock of Dinerware for a $15.0 million cash payment, plus net working capital. The purchase price was funded from a combination of operating cash and financing under the 2014 Revolving Credit Facility. The transaction was accounted for under the acquisition method of accounting. Beginning on February 11, 2015, Dinerware's results of operations are included in the Company's results of operations. The allocation of the total purchase price was as follows: $12.8 million to goodwill, $2.6 million to intangible assets, and $0.2 million to net tangible liabilities . The fair values are preliminary, based on estimates, and may be adjusted as the Company analyzes what was known and knowable at the acquisition date, 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 not expected to be deductible for income tax reporting. The weighted average amortization life for the 2015 acquired finite lived intangible assets related to the acquisition of Dinerware is as follows: Weighted average amortization life (In years) Customer relationships 17 Software 5 Trademark 5 Non-compete agreement 3 Overall 13 pcAmerica, LLC On January 30, 2015, the Company purchased the assets of Automation, Inc. ("pcAmerica") for a $15.0 million cash payment, plus net working capital. The cash purchase price was funded from a combination of operating cash and financing under the 2014 Revolving Credit Facility. The transaction was accounted for under the acquisition method of accounting. Beginning on January 30, 2015, pcAmerica's results of operations are included in the Company's results of operations. The allocation of the total purchase price was as follows: $14.9 million to goodwill, $1.5 million to intangible assets, and $1.3 million to net tangible liabilities . The fair values are preliminary, based on estimates, and may be adjusted as the Company analyzes what was known and knowable at the acquisition date, 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 2015 acquired finite lived intangible assets related to the acquisition of pcAmerica is as follows: Weighted average amortization life (In years) Customer relationships 20 Software 5 Trademark 5 Non-compete agreement 5 Overall 14 Xpient Solutions, LLC 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. The transaction was accounted for under the acquisition method of accounting. Beginning October 31, 2014, Xpient's results of operations are included in the Company's results of operations. The allocation of the total purchase price was as follows: $21.5 million to goodwill, $9.5 million to intangible assets and $3.0 million to net tangible assets. The fair values of Xpient's assets acquired and liabilities assumed were estimated as of their acquisition date. 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 Xpient is as follows: Weighted average amortization life (In years) Customer relationships 21 Software 10 Trademark 5 Non-compete agreement 3 Overall 14 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 funded from operating cash flows. The transaction was accounted for under the acquisition method of accounting. Beginning on February 15, 2014, Liquor POS's 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 is as follows: Weighted average amortization life (In years) Customer relationships 10 Software 7 Patents 5 Non-compete agreement 5 Overall 9 |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Receivables | Receivables A summary of receivables by major class was as follows at September 30, 2015 and December 31, 2014 : September 30, December 31, (In thousands) Accounts receivable from merchants and customers $ 222,422 $ 200,912 Accounts receivable from bankcard networks 33,613 31,279 Accounts receivable from others 4,297 3,465 260,332 235,656 Less allowance for doubtful accounts (1,954 ) (1,552 ) Total receivables, net $ 258,378 $ 234,104 Included in accounts receivable from others are amounts due from employees (predominantly salespersons), which were $2.7 million and $1.6 million at September 30, 2015 and December 31, 2014 , respectively. Accounts receivable related to bankcard networks are primarily amounts due from Discover and American Express for bankcard transactions. A summary of the activity in the allowance for doubtful accounts for the three and nine months ended September 30, 2015 and 2014 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Beginning balance $ 1,593 $ 1,780 $ 1,552 $ 1,032 Out-of-Period adjustment (a) — — — 875 Additions to allowance 2,285 557 4,991 1,685 Charges against allowance (1,924 ) (1,234 ) (4,652 ) (2,489 ) Additions for acquisitions (b) — 450 63 450 Ending balance $ 1,954 $ 1,553 $ 1,954 $ 1,553 (a) See Note 1, Organization and Operations for a discussion of an Out-of-Period adjustment. (b) Consists of allowances of businesses acquired during the nine months ended September 30, 2015 and 2014 . |
Funds Held for Customers
Funds Held for Customers | 9 Months Ended |
Sep. 30, 2015 | |
Funds Held for Payroll Customers and Investments [Abstract] | |
Funds Held for Customers | Funds Held for Customers A summary of Funds held for customers, including the amortized cost, gross unrealized gains (losses) and estimated fair value for available-for-sale securities by major security type and class of security were as follows at September 30, 2015 and December 31, 2014 : Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In thousands) September 30, 2015 Funds held for customers Conservative income bond fund - available for sale $ 13,012 $ — $ (29 ) $ 12,983 Fixed income - municipal bonds - available for sale 14,031 32 (8 ) 14,055 Cash and cash equivalents held for customers 153,420 — — 153,420 Total funds held for customers $ 180,463 $ 32 $ (37 ) $ 180,458 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In thousands) December 31, 2014 Funds held for customers Conservative income bond fund - available for sale $ 13,012 $ — $ (16 ) $ 12,996 Fixed income - municipal bonds - available for sale 14,688 2 (51 ) 14,639 Cash and cash equivalents held for customers 148,857 — — 148,857 Total funds held for customers $ 176,557 $ 2 $ (67 ) $ 176,492 Expected maturities of the Fixed income - municipal bonds at September 30, 2015 are as follows: Total Less Than 1 Year 1 To 5 Years 5 To 10 Years (In thousands) September 30, 2015 Funds held for customers: Fixed income - municipal bonds - available for sale cost $ 14,031 $ 2,931 $ 11,100 $ — Fixed income - municipal bonds - available for sale estimated fair value $ 14,055 $ 2,933 $ 11,122 $ — During the nine months ended September 30, 2015 , 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 of $0.3 million which was recognized in the Condensed Consolidated Statements of Income for the nine months ended September 30, 2014 . |
Capitalized Customer Acquisitio
Capitalized Customer Acquisition Costs, Net | 9 Months Ended |
Sep. 30, 2015 | |
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, 2015 and December 31, 2014 was as follows: September 30, December 31, (In thousands) Capitalized signing bonuses $ 111,155 $ 98,879 Less accumulated amortization (51,539 ) (47,238 ) 59,616 51,641 Capitalized customer deferred acquisition costs 61,570 54,583 Less accumulated amortization (37,994 ) (33,117 ) 23,576 21,466 Capitalized customer acquisition costs, net $ 83,192 $ 73,107 A summary of the activity in capitalized customer acquisition costs, net for the three and nine month periods ended September 30, 2015 and 2014 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Balance at beginning of period $ 78,640 $ 66,433 $ 73,107 $ 61,027 Plus additions to: Capitalized signing bonuses, net 12,468 9,468 33,855 27,647 Capitalized customer deferred acquisition costs 7,521 6,192 20,650 18,349 19,989 15,660 54,505 45,996 Less amortization expense on: Capitalized signing bonuses, net (8,928 ) (7,703 ) (25,880 ) (22,357 ) Capitalized customer deferred acquisition costs (6,509 ) (5,423 ) (18,540 ) (15,699 ) (15,437 ) (13,126 ) (44,420 ) (38,056 ) Balance at end of period $ 83,192 $ 68,967 $ 83,192 $ 68,967 Net signing bonus adjustments from estimated amounts to actual were $(1.5) million and $(0.7) million for the three months ended September 30, 2015 and 2014 , respectively and $(3.8) million and $(2.8) million , respectively, for the nine months ended September 30, 2015 and 2014 . 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 $6.6 million and $6.9 million , respectively, were written off during the three month periods ended September 30, 2015 and 2014 and $21.6 million and $19.4 million , respectively, were written off during the nine month periods ended September 30, 2015 and 2014 . In addition, fully amortized customer deferred acquisition costs of $4.4 million and $3.9 million , respectively, were written off during the three months ended September 30, 2015 and 2014 and $13.3 million and $11.3 million , respectively, were written off during the nine months ended September 30, 2015 and 2014 . The Company believes that no impairment of capitalized customer acquisition costs has occurred as of September 30, 2015 . |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2015 | |
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, 2015 and December 31, 2014 : September 30, 2015 Amortization Life and Method Gross Assets Accumulated Amortization Net Asset (In thousands) Finite Lived Assets: Customer relationships $ 176,175 $ 31,349 $ 144,826 5 to 21 years—proportional cash flow Merchant portfolios 4,214 3,456 758 7 years—proportional cash flow Software 61,404 16,953 44,451 3 to 15 years—straight line Non-compete agreements 6,162 3,713 2,449 3 to 5 years—straight line Other 6,076 1,306 4,770 5 to 9 years—straight line $ 254,031 $ 56,777 $ 197,254 December 31, 2014 Amortization Life and Method Gross Assets Accumulated Amortization Net Asset (In thousands) Finite Lived Assets: Customer relationships $ 159,925 $ 22,011 $ 137,914 6 to 21 years—proportional cash flow Merchant portfolios 4,214 3,161 1,053 7 years—proportional cash flow Software 58,377 13,300 45,077 1 to 15 years—straight line Non-compete agreements 5,947 2,830 3,117 5 years—straight line Other 5,800 408 5,392 5 to 9 years—straight line $ 234,263 $ 41,710 $ 192,553 Amortization expense related to the intangible assets was $5.1 million and $3.4 million , respectively, for the three months ended September 30, 2015 and 2014 and $15.1 million and $8.3 million , respectively, for the nine months ended September 30, 2015 and 2014 . The estimated amortization expense related to intangible assets for the remainder of 2015 and the next five fiscal years are as follows: For the Fiscal Year Ending December 31, (In thousands) 2015 $ 5,031 2016 19,018 2017 17,472 2018 15,662 2019 14,236 2020 12,426 Thereafter 113,409 $ 197,254 Goodwill — The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2015 and 2014 were as follows (in thousands): Payment Processing Campus Solutions Heartland School Solutions Heartland Payroll Solutions Leaf Other Total Balance, January 1, 2014 $ 43,701 $ 35,789 $ 53,350 $ 31,018 $ 20,619 $ 6,501 $ 190,978 Goodwill acquired during the period — 222,076 13,592 — — 2,247 237,915 Other (a) — — (2,493 ) — (2,130 ) — (4,623 ) Balance, September 30, 2014 43,701 257,865 64,449 31,018 18,489 8,748 424,270 Balance, January 1, 2015 43,701 257,337 64,522 31,018 — 29,134 425,712 Goodwill acquired during the period — — — 21,915 — 27,927 49,842 Other (a) — 26 — (1,165 ) — 902 (237 ) Balance, September 30, 2015 $ 43,701 $ 257,363 $ 64,522 $ 51,768 $ — $ 57,963 $ 475,317 (a) Reflects adjustments to allocations of purchase price after the quarter of acquisition. The percentage of total reportable segments' assets comprised of goodwill as of September 30, 2015 and 2014 was as follows: Percent of Goodwill to Reportable Segments' Total Assets September 30, 2015 September 30, 2014 Payment Processing 7.9% 8.0% Campus Solutions 53.4% 51.4% Heartland School Solutions 75.3% 70.3% Heartland Payroll Solutions 22.0% 23.3% Leaf —% 44.7% Other 61.6% 37.3% In the fourth quarter of 2014, the Company considered the overlapping cloud-based POS systems in development at Heartland Commerce businesses (see Note 3, Acquisitions) and decided that it would stop POS development efforts at Leaf, a previous Heartland Commerce business. This decision caused a significant adverse change in the extent or manner in which the long-lived asset group of Leaf would be used, including Prosper, an internally developed POS software technology. Due to these changes in circumstances, the implied fair value of the Leaf reporting unit was determined to be significantly below its carrying value. This led to a Goodwill impairment charge for the full balance of Leaf goodwill as of December 31, 2014. In the fourth quarter of 2014, the Company recorded pre-tax goodwill and asset impairment charges of $18.5 million and $18.9 million , respectively. |
Processing Liabilities
Processing Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Processing Liabilities and Loss Reserves [Abstract] | |
Processing Liabilities | 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, 2015 and December 31, 2014 : September 30, 2015 December 31, 2014 (In thousands) Merchant processing $ 111,634 $ 109,361 Merchant deposits 6,758 6,655 Loss reserves 1,492 3,382 $ 119,884 $ 119,398 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 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. At September 30, 2015 and December 31, 2014 , the Company did not use any of its available cash to fund merchant advances. The amount due to sponsor banks for funding merchant advances was $47.7 million at September 30, 2015 and $29.9 million at December 31, 2014 . The liability to sponsor banks is repaid at the beginning of the following month out of the fees the Company collects from its merchants. The Company's merchants have the liability for any charges properly reversed by the cardholder through a mechanism known as a chargeback. If the merchant is unable to pay this amount, the Company will be liable to the card brand networks for the reversed charges. The Company has determined that the fair value of its obligation to stand ready to perform is minimal. The Company requires personal guarantees and merchant deposits from certain merchants to minimize its obligation. The card brand networks generally allow chargebacks 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 $32.5 billion and $ 27.8 billion for the four months ended September 30, 2015 and December 31, 2014 , respectively. However, for the four months ended September 30, 2015 and December 31, 2014 , the Company was presented with $17.5 million and $16.0 million , respectively, in chargebacks by issuing banks. In the nine months ended September 30, 2015 and 2014 , the Company incurred merchant losses of $2.6 million and $2.5 million , respectively, or 0.37 basis points and 0.42 basis points, respectively, on total SME card processing volumes processed of $69.1 billion and $60.1 billion , respectively. These losses are included in processing and servicing costs in the Company's Condensed Consolidated Statements of 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 $1.5 million and $3.4 million at September 30, 2015 and December 31, 2014 , respectively. This reserve is determined by performing an analysis of the Company's historical loss experience applied to current processing volumes and exposures. A summary of the activity in the loss reserve for the three and nine months ended September 30, 2015 and 2014 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Beginning balance $ 1,437 $ 1,762 $ 3,382 $ 1,505 Additions to reserve 759 943 2,528 3,000 Charges against reserve (704 ) (1,073 ) (4,418 ) (2,873 ) Ending balance $ 1,492 $ 1,632 $ 1,492 $ 1,632 |
Accrued Buyout Liability
Accrued Buyout Liability | 9 Months Ended |
Sep. 30, 2015 | |
Accrued Buyout Liability [Abstract] | |
Accrued Buyout Liability | Accrued Buyout Liability A summary of the accrued buyout liability was as follows as of September 30, 2015 and December 31, 2014 : September 30, December 31, (In thousands) Vested Relationship Managers and sales managers $ 53,971 $ 46,301 Unvested Relationship Managers and sales managers 1,675 1,692 55,646 47,993 Less current portion (17,471 ) (15,023 ) Long-term portion of accrued buyout liability $ 38,175 $ 32,970 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 at September 30, 2015 and December 31, 2014 , respectively. A summary of the activity in the accrued buyout liability for the three and nine months ended September 30, 2015 and 2014 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Beginning balance $ 51,140 $ 41,268 $ 47,993 $ 39,379 Increase in settlement obligation, net 7,585 5,354 20,514 15,199 Buyouts (3,079 ) (1,665 ) (12,861 ) (9,621 ) Ending balance $ 55,646 $ 44,957 $ 55,646 $ 44,957 |
Credit Facilities
Credit Facilities | 9 Months Ended |
Sep. 30, 2015 | |
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. 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 initial principal amount of $375 million (the “2014 Term Credit Facility”). The following is a summary of the Company's borrowings under its credit facilities as of September 30, 2015 and December 31, 2014 : September 30, 2015 December 31, 2014 Amount outstanding: 2014 Term Credit Facility $ 356,250 $ 370,000 2014 Revolving Credit Facility 142,500 189,500 Total amount outstanding $ 498,750 $ 559,500 The weighted average interest rate at September 30, 2015 was 2.3% . Remaining unamortized fees and direct costs incurred for the Company's credit facilities as of September 30, 2015 were $4.9 million . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
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. 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 that could be material. Leases— The Company leases various office spaces and certain equipment under operating leases with remaining terms ranging up to 15 years . The majority of the office space lease agreements contain renewal options and generally require the Company to pay certain operating expenses. The future minimum lease payments for all non-cancelable leases for the remainder of 2015 and the next five fiscal years are as follows: For the Fiscal Year Ending December 31, Operating Leases (a) (In thousands) 2015 $ 3,696 2016 16,610 2017 13,964 2018 12,054 2019 9,247 2020 7,618 Thereafter 43,826 Total future minimum lease payments $ 107,015 (a) There were no material capital leases at September 30, 2015 . Rent expense for leased facilities and equipment was $4.3 million and $2.9 million , respectively, for the three months ended September 30, 2015 and 2014 , and $13.5 million and $8.7 million , respectively, for the nine months ended September 30, 2015 and 2014 . 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, 2015 : Payments Due by Period Contractual Obligations Total Less than 1 year 1 to 3 Years 3 to 5 years More than 5 years (In thousands) Processing providers (a) $ 9,008 $ 4,013 $ 4,995 $ — Telecommunications providers (b) 6,818 3,307 3,511 — — Facility and equipment leases 107,015 16,673 26,777 17,843 45,722 2014 Term Credit Facility 356,250 18,750 51,563 285,937 — 2014 Revolving Credit Facility (c) 142,500 — — 142,500 — Capital Lease Obligation 84 43 41 — — $ 621,675 $ 42,786 $ 86,887 $ 446,280 $ 45,722 (a) The Company has agreements with several third-party processors to provide to it 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 $3.8 million . The 2014 Revolving Credit Facility is available on a revolving basis until September 4, 2019. While the Company is not contractually obligated to pay $30.0 million of the outstanding balance of the 2014 Revolving Credit Facility, the Company includes this amount in the Current portion of borrowings on the Condensed Consolidated Balance Sheet since the Company intends to pay this amount in October 2015 . |
Segments
Segments | 9 Months Ended |
Sep. 30, 2015 | |
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 six reportable segments: (1) Payment Processing, which provides card payment processing and related services to the Company's SME merchants and Network Services merchants, (2) Campus Solutions, which provides payment processing, integrated commerce solutions, loan services and open- and closed-loop payment solutions to institutions of higher education, (3) Heartland School Solutions, which provides school nutrition and POS solutions and associated payment solutions to K-12 schools, (4) Heartland Payroll Solutions, which provides payroll processing and related tax filing services, (5) Leaf, which includes the operating losses for Leaf as well as the goodwill and POS asset impairment charges recorded in the fourth quarter of 2014, (see Note 7, Intangible Assets and Goodwill for further details) and (6) Other. The Other segment consists of (a) prepaid and stored-value card solutions provided by Micropayments, (b) loyalty and gift card marketing solutions including loyalty and gift cards provided by Heartland Marketing Solutions, and (c) POS solutions and other adjacent business service applications provided by Heartland Commerce. The individual components of the Other segment do not meet the defined thresholds for being individually reportable segments under applicable accounting guidance. SME merchants and Network Services merchants are aggregated for financial reporting purposes in the Payment Processing 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 Educational Computer Systems, Inc. ("ECSI") for financial reporting purposes because they provide similar commerce solutions, exhibit similar economic characteristics, and provide services to a similar higher education customer base, including some client 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. We have reclassified our comparable segment information for consistent presentation in this Quarterly Report on Form 10-Q. 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, 2015 and 2014 , 62% and 60% , respectively, of Heartland Payroll Solutions segment's total assets were funds that the Company holds as a fiduciary in its payroll processing services activities primarily for payment to taxing authorities. At September 30, 2015 and 2014 , 7% and 8% , 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 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 as of and for the three and nine months ended September 30, 2015 and 2014 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Revenues (In thousands) Payment Processing $ 626,039 $ 551,176 $ 1,753,722 $ 1,567,593 Campus Solutions 31,475 14,400 89,369 36,883 Heartland School Solutions 14,564 15,061 45,464 42,685 Heartland Payroll Solutions 17,171 12,170 50,869 37,978 Other 16,418 7,819 44,394 21,629 Total revenues $ 705,667 $ 600,626 $ 1,983,818 $ 1,706,768 Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Depreciation and amortization (In thousands) Payment Processing $ 8,951 $ 8,212 $ 25,789 $ 23,106 Campus Solutions 3,561 1,473 10,212 2,756 Heartland School Solutions 1,274 1,282 3,583 2,665 Heartland Payroll Solutions 1,117 727 3,153 2,416 Other 1,055 804 3,149 2,291 Unallocated corporate administration amounts 128 165 397 282 Total depreciation and amortization $ 16,086 $ 12,663 $ 46,283 $ 33,516 Income (loss) from operations Payment Processing $ 33,657 $ 34,094 $ 92,563 $ 96,833 Campus Solutions 11,295 3,187 26,633 8,060 Heartland School Solutions 4,769 2,720 17,151 5,290 Heartland Payroll Solutions 1,911 1,590 6,308 7,289 Leaf — (2,710 ) (4,692 ) (8,172 ) Other 16 623 (792 ) 1,757 Unallocated corporate administration amounts (9,134 ) (9,093 ) (26,467 ) (24,353 ) Total income from operations $ 42,514 $ 30,411 $ 110,704 $ 86,704 Interest expense Payment Processing $ 1,065 $ 1,453 $ 3,669 $ 3,761 Campus Solutions 2,019 689 6,037 689 Heartland Payroll Solutions 180 — 419 — Other 383 — 1,053 — Total interest expense $ 3,647 $ 2,142 $ 11,178 $ 4,450 Net income (loss) Payment Processing $ 19,881 $ 19,138 $ 54,568 $ 56,503 Campus Solutions 5,830 2,239 12,930 5,566 Heartland School Solutions 2,929 1,658 10,784 3,240 Heartland Payroll Solutions 985 940 3,603 4,487 Leaf — 1,657 (2,148 ) (3,843 ) Other (135 ) 273 (1,117 ) 625 Unallocated corporate administration amounts (5,609 ) (5,749 ) (16,595 ) (14,939 ) Total net income $ 23,881 $ 20,156 $ 62,025 $ 51,639 September 30, September 30, 2015 2014 Assets (In thousands) Payment Processing $ 555,886 $ 545,033 Campus Solutions 481,944 501,982 Heartland School Solutions 85,653 91,703 Heartland Payroll Solutions 235,099 133,204 Leaf (a) — 41,374 Other 94,157 23,468 Total assets $ 1,452,739 $ 1,336,764 (a) See Note 7, Intangible Assets and Goodwill for a discussion of Goodwill and Asset Impairments. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 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, 2015 2014 2015 2014 (In thousands, except per share) Basic: Net income attributable to Heartland $ 23,881 $ 20,458 $ 62,025 $ 53,650 Weighted average common stock outstanding 36,744 36,069 36,600 36,388 Earnings per share $ 0.65 $ 0.57 $ 1.69 $ 1.47 Diluted: Net income attributable to Heartland $ 23,881 $ 20,458 $ 62,025 $ 53,650 Basic weighted average common stock outstanding 36,744 36,069 36,600 36,388 Effect of dilutive instruments: Stock options and restricted stock units 537 781 586 861 Diluted weighted average common stock outstanding 37,281 36,850 37,186 37,249 Earnings per share $ 0.64 $ 0.56 $ 1.67 $ 1.44 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
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, 2015 , 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, 2015 and at December 31, 2014 : September 30, 2015 Fair Value Measurement Category Total Level 1 Level 2 Level 3 Assets: (In thousands) Investments available for sale: Conservative income bond fund (a) $ 12,983 $ 12,983 $ — $ — Fixed income bonds (a) 14,055 14,055 — — Total assets $ 27,038 $ 27,038 $ — $ — December 31, 2014 Fair Value Measurement Category Total Level 1 Level 2 Level 3 Assets: (In thousands) Investments available for sale: Conservative income bond fund (a) $ 12,996 $ 12,996 $ — $ — Fixed income bonds (a) 14,639 14,639 — — Total assets $ 27,635 $ 27,635 $ — $ — (a) amounts included in Funds held for customers on the Condensed Consolidated Balance Sheets The following tables provide the liabilities carried at fair value measured on a non-recurring basis as of September 30, 2015 and at December 31, 2014 : September 30, 2015 Fair Value Measurement Category Total Level 1 Level 2 Level 3 Liabilities: (In thousands) 2014 Term Credit Facility $ 356,250 $ — $ 356,250 $ — 2014 Revolving Credit Facility 142,500 — 142,500 — Capital Lease Obligation 84 — — 84 Total liabilities $ 498,834 $ — $ 498,750 $ 84 December 31, 2014 Fair Value Measurement Category Total Level 1 Level 2 Level 3 Liabilities: (In thousands) 2014 Term Credit Facility $ 370,312 $ — $ 370,312 $ — 2014 Revolving Credit Facility 189,500 — 189,500 — Capital Lease Obligation 102 — — 102 Total liabilities $ 559,914 $ — $ 559,812 $ 102 |
Organization and Operations (Po
Organization and Operations (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Financial Statement Presentation | Basis of Financial Statement Presentation— The accompanying consolidated financial statements include those of Heartland Payment Systems, Inc. (the "Company," “we,” “us,” or “our”) and its wholly-owned subsidiaries, Heartland Payroll Solutions, Inc., Heartland Payment Solutions, Inc., Heartland Acquisition LLC, TouchNet Information Systems, Inc. (“TouchNet”) and Heartland Commerce, Inc. 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, 2015 , its results of operations for the three and nine months ended September 30, 2015 and 2014 and changes in equity and cash flows for the nine months ended September 30, 2015 and 2014 . Results of operations reported for interim periods are not necessarily indicative of the results to be expected for the year ending December 31, 2015 . 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, 2014 (the "2014 Form 10-K"). For a summary of all significant accounting policies, refer to Note 2 of the 2014 Form 10-K. The December 31, 2014 Condensed Consolidated Balance Sheet was derived from the audited 2014 consolidated financial statements. |
Use of Estimates | Use of Estimates — The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates include, among other things, the accrued buyout liability, capitalized customer acquisition costs, goodwill and intangible asset impairment review, revenue recognition for multiple element arrangements, 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. |
New Accounting Pronouncements | New Accounting Pronouncements— From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standards setting bodies that the Company adopts as of the specified effective date. 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. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. On July 9, 2015, the FASB voted to approve a one-year deferral of the effective date. This made the new guidance effective December 15, 2017 for annual reporting periods beginning after that date. The FASB also approved early adoption of the standard, but not before the original effective date which was for reporting periods beginning after December 15, 2016. The Company has not yet selected a transition method and is currently assessing the impact the adoption of this guidance will have on the Company's consolidated financial statements and disclosures. In April 2015, the FASB issued guidance on debt issuance costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. In August 2015, the FASB issued updated guidance to clarify that an entity may elect to present debt issuance costs related to a line-of-credit arrangement as an asset, regardless of whether or not there are any outstanding borrowings on the line-of-credit arrangement. The new guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The new guidance should be applied on a retrospective basis. The effect on the Company’s consolidated financial statements is still being evaluated. In April 2015, the FASB issued guidance that defines specific criteria entities must apply to determine if a cloud computing arrangement includes an in-substance software license. The new guidance clarifies that software licenses included in a cloud computing software should be accounted for in the same manner as other software licenses. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2015. Early adoption is permitted. The new guidance can be applied on either a prospective or retrospective basis. The effect on the Company’s consolidated financial statements is still being evaluated. In July 2015, the FASB issued guidance to more clearly articulate the requirements for the subsequent measurement of inventory and related disclosures. The new guidance clarifies the basis for measuring inventory at the lower of cost and net realizable value. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2016. Early adoption is permitted. The new guidance should be applied on a prospective basis. The effect on the Company’s consolidated financial statements is still being evaluated. In September 2015, the FASB issued guidance to simplify the accounting for measurement-period adjustments for business combinations. The new guidance eliminates the requirement to retrospectively account for adjustments made to provisional amounts recognized in a business combination. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2015. Early adoption is permitted. The new guidance should be applied on a prospective basis. The effect on the Company’s consolidated financial statements is still being evaluated. |
Organization and Operations (Ta
Organization and Operations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Visa And MasterCard [Member] | |
Bankcard Processing Volume [Line Items] | |
Bankcard Processing Volume | The following is a breakout of the Company’s total Visa and MasterCard settled card processing volume for the month ending September 30, 2015 by percentage processed under its individual bank sponsorship agreements: % of September 2015 Sponsor Bank Bankcard Processing Wells Fargo Bank, N.A. 71% The Bancorp Bank 20% Barclays Bank Delaware 9% |
Supplementary Financial State25
Supplementary Financial Statement Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Selected Quarterly Financial Information [Abstract] | |
Schedule of Provision for Income Taxes and Resulting Effective tax Rates | The provision for income taxes for the three and nine months ended September 30, 2015 and 2014 and the resulting effective tax rates were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 (In thousands) Provision for income taxes $ 15,006 $ 11,727 $ 37,274 $ 34,579 Effective tax rate 38.6 % 36.8 % 37.5 % 40.1 % |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Acquisition [Line Items] | |
Business Acquisition, Pro Forma Information | The following pro forma information shows the results of the Company's operations for the three and nine months ended September 30, 2014 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 September 30, 2014 Nine Months Ended September 30, 2014 (In thousands, except share data) Total revenues $ 619,861 $ 1,760,516 Net income attributable to Heartland $ 19,205 $ 55,538 Basic earnings per share $ 0.53 $ 1.53 Diluted earnings per share $ 0.52 $ 1.49 |
TouchNet Information Systems, Inc. [Member] | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the purchase price allocation (in thousands): Cash and cash equivalents $ 34,576 Receivables, net 12,243 Inventory 66 Prepaid expenses 601 Property and equipment, net 3,360 Intangible assets, net 144,400 Goodwill 221,575 Total assets acquired 416,821 Accounts payable 2,236 Accrued expenses and other liabilities 2,896 Current portion of unearned revenue 24,014 Current tax liability 13,914 Long-term portion of unearned revenue 2,037 Net assets acquired $ 371,724 |
Schedule of Acquired 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 TouchNet is as follows: Weighted average amortization life (In years) Customer relationships 20 Software 15 Trademark 5 Non-compete agreements 5 Overall 18 |
MCS Software [Member] | |
Business Acquisition [Line Items] | |
Schedule of Acquired 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 MCS Software is as follows: Weighted average amortization life (In years) Customer relationships 14 Software 5 Non-compete agreement 5 Overall 11 |
Payroll 1 [Member] | |
Business Acquisition [Line Items] | |
Schedule of Acquired Finite-Lived Intangible Assets, Weighted Average Amortization Life | The weighted average amortization life for the 2015 acquired finite lived intangible assets related to the acquisition of Payroll 1 is as follows: Weighted average amortization life (In years) Customer relationships 13 Software 6 Non-compete agreement 4 Overall 12 |
Dinerware [Member] | |
Business Acquisition [Line Items] | |
Schedule of Acquired Finite-Lived Intangible Assets, Weighted Average Amortization Life | The weighted average amortization life for the 2015 acquired finite lived intangible assets related to the acquisition of Dinerware is as follows: Weighted average amortization life (In years) Customer relationships 17 Software 5 Trademark 5 Non-compete agreement 3 Overall 13 |
pcAmerica [Member] | |
Business Acquisition [Line Items] | |
Schedule of Acquired Finite-Lived Intangible Assets, Weighted Average Amortization Life | The weighted average amortization life for the 2015 acquired finite lived intangible assets related to the acquisition of pcAmerica is as follows: Weighted average amortization life (In years) Customer relationships 20 Software 5 Trademark 5 Non-compete agreement 5 Overall 14 |
Xpient [Member] | |
Business Acquisition [Line Items] | |
Schedule of Acquired 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 Xpient is as follows: Weighted average amortization life (In years) Customer relationships 21 Software 10 Trademark 5 Non-compete agreement 3 Overall 14 |
Liquor Point of Sale [Member] | |
Business Acquisition [Line Items] | |
Schedule of Acquired 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 is as follows: Weighted average amortization life (In years) Customer relationships 10 Software 7 Patents 5 Non-compete agreement 5 Overall 9 |
Receivables (Tables)
Receivables (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | A summary of receivables by major class was as follows at September 30, 2015 and December 31, 2014 : September 30, December 31, (In thousands) Accounts receivable from merchants and customers $ 222,422 $ 200,912 Accounts receivable from bankcard networks 33,613 31,279 Accounts receivable from others 4,297 3,465 260,332 235,656 Less allowance for doubtful accounts (1,954 ) (1,552 ) Total receivables, net $ 258,378 $ 234,104 |
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, 2015 and 2014 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Beginning balance $ 1,593 $ 1,780 $ 1,552 $ 1,032 Out-of-Period adjustment (a) — — — 875 Additions to allowance 2,285 557 4,991 1,685 Charges against allowance (1,924 ) (1,234 ) (4,652 ) (2,489 ) Additions for acquisitions (b) — 450 63 450 Ending balance $ 1,954 $ 1,553 $ 1,954 $ 1,553 (a) See Note 1, Organization and Operations for a discussion of an Out-of-Period adjustment. (b) Consists of allowances of businesses acquired during the nine months ended September 30, 2015 and 2014 . |
Funds Held for Customers (Table
Funds Held for Customers (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Funds Held for Payroll Customers and Investments [Abstract] | |
Funds Held for Payroll Customers and Investments | A summary of Funds held for customers, including the amortized cost, gross unrealized gains (losses) and estimated fair value for available-for-sale securities by major security type and class of security were as follows at September 30, 2015 and December 31, 2014 : Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In thousands) September 30, 2015 Funds held for customers Conservative income bond fund - available for sale $ 13,012 $ — $ (29 ) $ 12,983 Fixed income - municipal bonds - available for sale 14,031 32 (8 ) 14,055 Cash and cash equivalents held for customers 153,420 — — 153,420 Total funds held for customers $ 180,463 $ 32 $ (37 ) $ 180,458 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In thousands) December 31, 2014 Funds held for customers Conservative income bond fund - available for sale $ 13,012 $ — $ (16 ) $ 12,996 Fixed income - municipal bonds - available for sale 14,688 2 (51 ) 14,639 Cash and cash equivalents held for customers 148,857 — — 148,857 Total funds held for customers $ 176,557 $ 2 $ (67 ) $ 176,492 |
Schedule of Expected Maturities for Fixed Income-Municipal Bonds | Expected maturities of the Fixed income - municipal bonds at September 30, 2015 are as follows: Total Less Than 1 Year 1 To 5 Years 5 To 10 Years (In thousands) September 30, 2015 Funds held for customers: Fixed income - municipal bonds - available for sale cost $ 14,031 $ 2,931 $ 11,100 $ — Fixed income - municipal bonds - available for sale estimated fair value $ 14,055 $ 2,933 $ 11,122 $ — |
Capitalized Customer Acquisit29
Capitalized Customer Acquisition Costs, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Capitalized Customer Acquisition Costs, Net [Abstract] | |
Capitalized Customer Acquisition Costs Net | A summary of net capitalized customer acquisition costs as of September 30, 2015 and December 31, 2014 was as follows: September 30, December 31, (In thousands) Capitalized signing bonuses $ 111,155 $ 98,879 Less accumulated amortization (51,539 ) (47,238 ) 59,616 51,641 Capitalized customer deferred acquisition costs 61,570 54,583 Less accumulated amortization (37,994 ) (33,117 ) 23,576 21,466 Capitalized customer acquisition costs, net $ 83,192 $ 73,107 |
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, 2015 and 2014 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Balance at beginning of period $ 78,640 $ 66,433 $ 73,107 $ 61,027 Plus additions to: Capitalized signing bonuses, net 12,468 9,468 33,855 27,647 Capitalized customer deferred acquisition costs 7,521 6,192 20,650 18,349 19,989 15,660 54,505 45,996 Less amortization expense on: Capitalized signing bonuses, net (8,928 ) (7,703 ) (25,880 ) (22,357 ) Capitalized customer deferred acquisition costs (6,509 ) (5,423 ) (18,540 ) (15,699 ) (15,437 ) (13,126 ) (44,420 ) (38,056 ) Balance at end of period $ 83,192 $ 68,967 $ 83,192 $ 68,967 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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, 2015 and December 31, 2014 : September 30, 2015 Amortization Life and Method Gross Assets Accumulated Amortization Net Asset (In thousands) Finite Lived Assets: Customer relationships $ 176,175 $ 31,349 $ 144,826 5 to 21 years—proportional cash flow Merchant portfolios 4,214 3,456 758 7 years—proportional cash flow Software 61,404 16,953 44,451 3 to 15 years—straight line Non-compete agreements 6,162 3,713 2,449 3 to 5 years—straight line Other 6,076 1,306 4,770 5 to 9 years—straight line $ 254,031 $ 56,777 $ 197,254 December 31, 2014 Amortization Life and Method Gross Assets Accumulated Amortization Net Asset (In thousands) Finite Lived Assets: Customer relationships $ 159,925 $ 22,011 $ 137,914 6 to 21 years—proportional cash flow Merchant portfolios 4,214 3,161 1,053 7 years—proportional cash flow Software 58,377 13,300 45,077 1 to 15 years—straight line Non-compete agreements 5,947 2,830 3,117 5 years—straight line Other 5,800 408 5,392 5 to 9 years—straight line $ 234,263 $ 41,710 $ 192,553 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated amortization expense related to intangible assets for the remainder of 2015 and the next five fiscal years are as follows: For the Fiscal Year Ending December 31, (In thousands) 2015 $ 5,031 2016 19,018 2017 17,472 2018 15,662 2019 14,236 2020 12,426 Thereafter 113,409 $ 197,254 |
Schedule of Goodwill | Goodwill — The changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2015 and 2014 were as follows (in thousands): Payment Processing Campus Solutions Heartland School Solutions Heartland Payroll Solutions Leaf Other Total Balance, January 1, 2014 $ 43,701 $ 35,789 $ 53,350 $ 31,018 $ 20,619 $ 6,501 $ 190,978 Goodwill acquired during the period — 222,076 13,592 — — 2,247 237,915 Other (a) — — (2,493 ) — (2,130 ) — (4,623 ) Balance, September 30, 2014 43,701 257,865 64,449 31,018 18,489 8,748 424,270 Balance, January 1, 2015 43,701 257,337 64,522 31,018 — 29,134 425,712 Goodwill acquired during the period — — — 21,915 — 27,927 49,842 Other (a) — 26 — (1,165 ) — 902 (237 ) Balance, September 30, 2015 $ 43,701 $ 257,363 $ 64,522 $ 51,768 $ — $ 57,963 $ 475,317 (a) Reflects adjustments to allocations of purchase price after the quarter of acquisition. |
Schedule of Segment Reporting Information, Goodwill | The percentage of total reportable segments' assets comprised of goodwill as of September 30, 2015 and 2014 was as follows: Percent of Goodwill to Reportable Segments' Total Assets September 30, 2015 September 30, 2014 Payment Processing 7.9% 8.0% Campus Solutions 53.4% 51.4% Heartland School Solutions 75.3% 70.3% Heartland Payroll Solutions 22.0% 23.3% Leaf —% 44.7% Other 61.6% 37.3% |
Processing Liabilities (Tables)
Processing Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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, 2015 and December 31, 2014 : September 30, 2015 December 31, 2014 (In thousands) Merchant processing $ 111,634 $ 109,361 Merchant deposits 6,758 6,655 Loss reserves 1,492 3,382 $ 119,884 $ 119,398 |
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, 2015 and 2014 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Beginning balance $ 1,437 $ 1,762 $ 3,382 $ 1,505 Additions to reserve 759 943 2,528 3,000 Charges against reserve (704 ) (1,073 ) (4,418 ) (2,873 ) Ending balance $ 1,492 $ 1,632 $ 1,492 $ 1,632 |
Accrued Buyout Liability (Table
Accrued Buyout Liability (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accrued Buyout Liability [Abstract] | |
Summary of Accrued Buyout Liability | A summary of the accrued buyout liability was as follows as of September 30, 2015 and December 31, 2014 : September 30, December 31, (In thousands) Vested Relationship Managers and sales managers $ 53,971 $ 46,301 Unvested Relationship Managers and sales managers 1,675 1,692 55,646 47,993 Less current portion (17,471 ) (15,023 ) Long-term portion of accrued buyout liability $ 38,175 $ 32,970 |
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, 2015 and 2014 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Beginning balance $ 51,140 $ 41,268 $ 47,993 $ 39,379 Increase in settlement obligation, net 7,585 5,354 20,514 15,199 Buyouts (3,079 ) (1,665 ) (12,861 ) (9,621 ) Ending balance $ 55,646 $ 44,957 $ 55,646 $ 44,957 |
Credit Facilities (Tables)
Credit Facilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Summary of Credit Facilities | The following is a summary of the Company's borrowings under its credit facilities as of September 30, 2015 and December 31, 2014 : September 30, 2015 December 31, 2014 Amount outstanding: 2014 Term Credit Facility $ 356,250 $ 370,000 2014 Revolving Credit Facility 142,500 189,500 Total amount outstanding $ 498,750 $ 559,500 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The future minimum lease payments for all non-cancelable leases for the remainder of 2015 and the next five fiscal years are as follows: For the Fiscal Year Ending December 31, Operating Leases (a) (In thousands) 2015 $ 3,696 2016 16,610 2017 13,964 2018 12,054 2019 9,247 2020 7,618 Thereafter 43,826 Total future minimum lease payments $ 107,015 (a) There were no material capital leases at September 30, 2015 . |
Schedule Of Contractual Obligations | The following table reflects the Company’s other significant contractual obligations, including leases from above, as of September 30, 2015 : Payments Due by Period Contractual Obligations Total Less than 1 year 1 to 3 Years 3 to 5 years More than 5 years (In thousands) Processing providers (a) $ 9,008 $ 4,013 $ 4,995 $ — Telecommunications providers (b) 6,818 3,307 3,511 — — Facility and equipment leases 107,015 16,673 26,777 17,843 45,722 2014 Term Credit Facility 356,250 18,750 51,563 285,937 — 2014 Revolving Credit Facility (c) 142,500 — — 142,500 — Capital Lease Obligation 84 43 41 — — $ 621,675 $ 42,786 $ 86,887 $ 446,280 $ 45,722 (a) The Company has agreements with several third-party processors to provide to it 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 $3.8 million . The 2014 Revolving Credit Facility is available on a revolving basis until September 4, 2019. While the Company is not contractually obligated to pay $30.0 million of the outstanding balance of the 2014 Revolving Credit Facility, the Company includes this amount in the Current portion of borrowings on the Condensed Consolidated Balance Sheet since the Company intends to pay this amount in October 2015 . |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | A summary of the Company’s segments as of and for the three and nine months ended September 30, 2015 and 2014 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Revenues (In thousands) Payment Processing $ 626,039 $ 551,176 $ 1,753,722 $ 1,567,593 Campus Solutions 31,475 14,400 89,369 36,883 Heartland School Solutions 14,564 15,061 45,464 42,685 Heartland Payroll Solutions 17,171 12,170 50,869 37,978 Other 16,418 7,819 44,394 21,629 Total revenues $ 705,667 $ 600,626 $ 1,983,818 $ 1,706,768 Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Depreciation and amortization (In thousands) Payment Processing $ 8,951 $ 8,212 $ 25,789 $ 23,106 Campus Solutions 3,561 1,473 10,212 2,756 Heartland School Solutions 1,274 1,282 3,583 2,665 Heartland Payroll Solutions 1,117 727 3,153 2,416 Other 1,055 804 3,149 2,291 Unallocated corporate administration amounts 128 165 397 282 Total depreciation and amortization $ 16,086 $ 12,663 $ 46,283 $ 33,516 Income (loss) from operations Payment Processing $ 33,657 $ 34,094 $ 92,563 $ 96,833 Campus Solutions 11,295 3,187 26,633 8,060 Heartland School Solutions 4,769 2,720 17,151 5,290 Heartland Payroll Solutions 1,911 1,590 6,308 7,289 Leaf — (2,710 ) (4,692 ) (8,172 ) Other 16 623 (792 ) 1,757 Unallocated corporate administration amounts (9,134 ) (9,093 ) (26,467 ) (24,353 ) Total income from operations $ 42,514 $ 30,411 $ 110,704 $ 86,704 Interest expense Payment Processing $ 1,065 $ 1,453 $ 3,669 $ 3,761 Campus Solutions 2,019 689 6,037 689 Heartland Payroll Solutions 180 — 419 — Other 383 — 1,053 — Total interest expense $ 3,647 $ 2,142 $ 11,178 $ 4,450 Net income (loss) Payment Processing $ 19,881 $ 19,138 $ 54,568 $ 56,503 Campus Solutions 5,830 2,239 12,930 5,566 Heartland School Solutions 2,929 1,658 10,784 3,240 Heartland Payroll Solutions 985 940 3,603 4,487 Leaf — 1,657 (2,148 ) (3,843 ) Other (135 ) 273 (1,117 ) 625 Unallocated corporate administration amounts (5,609 ) (5,749 ) (16,595 ) (14,939 ) Total net income $ 23,881 $ 20,156 $ 62,025 $ 51,639 September 30, September 30, 2015 2014 Assets (In thousands) Payment Processing $ 555,886 $ 545,033 Campus Solutions 481,944 501,982 Heartland School Solutions 85,653 91,703 Heartland Payroll Solutions 235,099 133,204 Leaf (a) — 41,374 Other 94,157 23,468 Total assets $ 1,452,739 $ 1,336,764 (a) See Note 7, Intangible Assets and Goodwill for a discussion of Goodwill and Asset Impairments. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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, 2015 2014 2015 2014 (In thousands, except per share) Basic: Net income attributable to Heartland $ 23,881 $ 20,458 $ 62,025 $ 53,650 Weighted average common stock outstanding 36,744 36,069 36,600 36,388 Earnings per share $ 0.65 $ 0.57 $ 1.69 $ 1.47 Diluted: Net income attributable to Heartland $ 23,881 $ 20,458 $ 62,025 $ 53,650 Basic weighted average common stock outstanding 36,744 36,069 36,600 36,388 Effect of dilutive instruments: Stock options and restricted stock units 537 781 586 861 Diluted weighted average common stock outstanding 37,281 36,850 37,186 37,249 Earnings per share $ 0.64 $ 0.56 $ 1.67 $ 1.44 |
Fair Value of Financial Instr37
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
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, 2015 and at December 31, 2014 : September 30, 2015 Fair Value Measurement Category Total Level 1 Level 2 Level 3 Assets: (In thousands) Investments available for sale: Conservative income bond fund (a) $ 12,983 $ 12,983 $ — $ — Fixed income bonds (a) 14,055 14,055 — — Total assets $ 27,038 $ 27,038 $ — $ — December 31, 2014 Fair Value Measurement Category Total Level 1 Level 2 Level 3 Assets: (In thousands) Investments available for sale: Conservative income bond fund (a) $ 12,996 $ 12,996 $ — $ — Fixed income bonds (a) 14,639 14,639 — — Total assets $ 27,635 $ 27,635 $ — $ — (a) amounts included in Funds held for customers on the Condensed Consolidated Balance Sheets |
Fair Value Measurements, Nonrecurring | The following tables provide the liabilities carried at fair value measured on a non-recurring basis as of September 30, 2015 and at December 31, 2014 : September 30, 2015 Fair Value Measurement Category Total Level 1 Level 2 Level 3 Liabilities: (In thousands) 2014 Term Credit Facility $ 356,250 $ — $ 356,250 $ — 2014 Revolving Credit Facility 142,500 — 142,500 — Capital Lease Obligation 84 — — 84 Total liabilities $ 498,834 $ — $ 498,750 $ 84 December 31, 2014 Fair Value Measurement Category Total Level 1 Level 2 Level 3 Liabilities: (In thousands) 2014 Term Credit Facility $ 370,312 $ — $ 370,312 $ — 2014 Revolving Credit Facility 189,500 — 189,500 — Capital Lease Obligation 102 — — 102 Total liabilities $ 559,914 $ — $ 559,812 $ 102 |
Organization and Operations (Ba
Organization and Operations (Bankcard Processing Volume) (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2015bank_sponsorship_agreement | Sep. 30, 2015USD ($)bank_sponsorship_agreement$ / shares | Sep. 30, 2014USD ($)$ / shares | Jun. 30, 2014USD ($) | Sep. 30, 2015USD ($)bank_sponsorship_agreement$ / shares | Sep. 30, 2014USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares | |
Organization and Operations | |||||||
Revenue | $ 705,667 | $ 600,626 | $ 1,983,818 | $ 1,706,768 | |||
Net income (loss) | $ 23,881 | $ 20,156 | $ 62,025 | $ 51,639 | |||
Diluted earnings per share (in dollars per share) | $ / shares | $ 0.64 | $ 0.56 | $ 1.67 | $ 1.44 | |||
Days to identify alternative bank sponsor following terminated agreement | 6 years | ||||||
Number of bank sponsorship agreements | bank_sponsorship_agreement | 3 | 3 | 3 | ||||
Wells Fargo Bank [Member] | |||||||
Organization and Operations | |||||||
Automatic renewal period, sponsor bank agreement | 3 years | ||||||
Conversion period | 6 months | ||||||
Deutsche Bank [Member] | |||||||
Organization and Operations | |||||||
Automatic renewal period, sponsor bank agreement | 1 year | ||||||
Written notice of non-renewal | 6 months | ||||||
Conversion period | 6 months | ||||||
Sponsor bank agreement, term | 5 years | ||||||
The Bancorp Bank [Member] | |||||||
Organization and Operations | |||||||
Automatic renewal period, sponsor bank agreement | 1 year | ||||||
Written notice of non-renewal | 6 months | ||||||
Barclays Bank Delaware [Member] | |||||||
Organization and Operations | |||||||
Automatic renewal period, sponsor bank agreement | 1 year | ||||||
Written notice of non-renewal | 6 months | ||||||
Visa And MasterCard [Member] | Wells Fargo Bank [Member] | |||||||
Organization and Operations | |||||||
Sponsor banks, bankcard processing volume percentage | 71.00% | ||||||
Visa And MasterCard [Member] | The Bancorp Bank [Member] | |||||||
Organization and Operations | |||||||
Sponsor banks, bankcard processing volume percentage | 20.00% | ||||||
Visa And MasterCard [Member] | Barclays Bank Delaware [Member] | |||||||
Organization and Operations | |||||||
Sponsor banks, bankcard processing volume percentage | 9.00% | ||||||
Visa And MasterCard [Member] | Merchant bankcard processing [Member] | |||||||
Organization and Operations | |||||||
Sales revenue, minimum percentage | 72.00% | ||||||
Heartland School Solutions [Member] | Restatement adjustment [Member] | |||||||
Organization and Operations | |||||||
Revenue | $ 1,400 | ||||||
Bad debt expense | $ 900 | ||||||
Earnings before income taxes | $ 2,300 | ||||||
Net income (loss) | $ 1,400 | ||||||
Diluted earnings per share (in dollars per share) | $ / shares | $ 0.04 |
Supplementary Financial State39
Supplementary Financial Statement Information (Details) - USD ($) $ in Thousands | Aug. 06, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Aug. 05, 2014 |
Noncontrolling Interest [Line Items] | |||||||
Cash in transit and collateral | $ 16,500 | $ 16,500 | $ 17,800 | ||||
Share-based compensation | $ 4,400 | $ 3,400 | $ 14,140 | $ 10,936 | |||
Leaf Acquisition, LLC [Member] | |||||||
Noncontrolling Interest [Line Items] | |||||||
Gain on decrease in contingent consideration | $ 3,600 | ||||||
Noncontrolling Interest, Ownership Percentage by Parent | 66.67% |
Supplementary Financial State40
Supplementary Financial Statement Information (Effective Income Tax Rate) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Selected Quarterly Financial Information [Abstract] | |||||
Provision for income taxes | $ 15,006 | $ 11,727 | $ 37,274 | $ 34,579 | |
Effective tax rate | 38.60% | 36.80% | 37.50% | 40.10% | |
Reserve for unrecognized tax benefits | $ 8,630 | $ 8,630 | $ 7,315 | ||
Unrecognized tax benefits that would impact effective tax rate | $ 5,800 | $ 5,800 | $ 4,900 |
Supplementary Financial State41
Supplementary Financial Statement Information (Common Stock Repurchases) (Details) - USD ($) | 9 Months Ended | 14 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | May. 08, 2014 | May. 08, 2013 | |
Class of Stock [Line Items] | |||||
Cost of shares repurchased | $ 0 | $ 54,455,000 | |||
Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares repurchased | 1,347,817 | 1,882,417 | |||
Cost of shares repurchased | $ 54,500,000 | $ 74,900,000 | |||
Average cost per share (in dollars per share) | $ 40.40 | $ 39.81 | |||
May 8, 2013 Program [Member] | |||||
Class of Stock [Line Items] | |||||
Stock repurchase program, amount authorized | $ 75,000,000 | ||||
May 8, 2014 Program [Member] | |||||
Class of Stock [Line Items] | |||||
Stock repurchase program, amount authorized | $ 75,000,000 |
Supplementary Financial State42
Supplementary Financial Statement Information (Subsequent Events) (Details) $ in Millions | Oct. 30, 2015USD ($) |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Cost of acquired entity, cash payment | $ 18.7 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 27, 2015 | Feb. 11, 2015 | Jan. 30, 2015 | Oct. 31, 2014 | Sep. 04, 2014 | Apr. 01, 2014 | Feb. 14, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Combination, Purchase Price Allocation [Abstract] | ||||||||||||
Goodwill | $ 424,270 | $ 424,270 | $ 475,317 | $ 425,712 | $ 190,978 | |||||||
TouchNet Information Systems, Inc. [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cost of acquired entity, cash payment | $ 375,000 | |||||||||||
Business combination, acquisition related costs | 2,300 | |||||||||||
Business Combination, Purchase Price Allocation [Abstract] | ||||||||||||
Cash and cash equivalents | 34,576 | |||||||||||
Receivables, net | 12,243 | |||||||||||
Inventory | 66 | |||||||||||
Prepaid expenses | 601 | |||||||||||
Property and equipment, net | 3,360 | |||||||||||
Intangible assets, net | 144,400 | |||||||||||
Goodwill | 221,575 | |||||||||||
Total assets acquired | 416,821 | |||||||||||
Accounts payable | 2,236 | |||||||||||
Accrued expenses and other liabilities | 2,896 | |||||||||||
Current portion of unearned revenue | 24,014 | |||||||||||
Current tax liability | 13,914 | |||||||||||
Long-term portion of unearned revenue | 2,037 | |||||||||||
Net assets acquired | $ 371,724 | |||||||||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||||||||
Total revenues | 619,861 | 1,760,516 | ||||||||||
Net income attributable to Heartland | $ 19,205 | $ 55,538 | ||||||||||
Basic earnings per share (in dollars per share) | $ 0.53 | $ 1.53 | ||||||||||
Diluted earnings per share (in dollars per share) | $ 0.52 | $ 1.49 | ||||||||||
TouchNet Information Systems, Inc. [Member] | Term Credit Facility [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Debt instrument, term | 5 years | |||||||||||
Maximum borrowing capacity | $ 375,000 | |||||||||||
MCS Software [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cost of acquired entity, cash payment | $ 17,300 | |||||||||||
Business combination, net tangible assets (liabilities) | (300) | |||||||||||
Business Combination, Purchase Price Allocation [Abstract] | ||||||||||||
Intangible assets, net | 6,400 | |||||||||||
Goodwill | $ 11,200 | |||||||||||
Payroll 1 [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cost of acquired entity, cash payment | $ 30,000 | |||||||||||
Business combination, net tangible assets (liabilities) | (4,500) | |||||||||||
Business Combination, Purchase Price Allocation [Abstract] | ||||||||||||
Intangible assets, net | 14,500 | |||||||||||
Goodwill | $ 20,800 | |||||||||||
Dinerware [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cost of acquired entity, cash payment | $ 15,000 | |||||||||||
Business combination, net tangible assets (liabilities) | (200) | |||||||||||
Business Combination, Purchase Price Allocation [Abstract] | ||||||||||||
Intangible assets, net | 2,600 | |||||||||||
Goodwill | $ 12,800 | |||||||||||
pcAmerica [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cost of acquired entity, cash payment | $ 15,000 | |||||||||||
Business combination, net tangible assets (liabilities) | (1,300) | |||||||||||
Business Combination, Purchase Price Allocation [Abstract] | ||||||||||||
Intangible assets, net | 1,500 | |||||||||||
Goodwill | $ 14,900 | |||||||||||
Xpient [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cost of acquired entity, cash payment | $ 30,000 | |||||||||||
Business combination, net tangible assets (liabilities) | 3,000 | |||||||||||
Business Combination, Purchase Price Allocation [Abstract] | ||||||||||||
Intangible assets, net | 9,500 | |||||||||||
Goodwill | $ 21,500 | |||||||||||
Liquor Point of Sale [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cost of acquired entity, cash payment | $ 3,300 | |||||||||||
Business combination, net tangible assets (liabilities) | (100) | |||||||||||
Business Combination, Purchase Price Allocation [Abstract] | ||||||||||||
Intangible assets, net | 1,200 | |||||||||||
Goodwill | $ 2,200 |
Acquisitions (Weighted Average
Acquisitions (Weighted Average Amortization Lives) (Details) | Feb. 27, 2015 | Feb. 11, 2015 | Jan. 30, 2015 | Oct. 31, 2014 | Sep. 04, 2014 | Apr. 01, 2014 | Feb. 14, 2014 |
TouchNet Information Systems, Inc. [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 18 years | ||||||
TouchNet Information Systems, Inc. [Member] | Customer relationships [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 20 years | ||||||
TouchNet Information Systems, Inc. [Member] | Software [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 15 years | ||||||
TouchNet Information Systems, Inc. [Member] | Trademarks [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 5 years | ||||||
TouchNet Information Systems, Inc. [Member] | Noncompete agreements [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 5 years | ||||||
MCS Software [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 11 years | ||||||
MCS Software [Member] | Customer relationships [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 14 years | ||||||
MCS Software [Member] | Software [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 5 years | ||||||
MCS Software [Member] | Noncompete agreements [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 5 years | ||||||
Payroll 1 [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 12 years | ||||||
Payroll 1 [Member] | Customer relationships [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 13 years | ||||||
Payroll 1 [Member] | Software [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 6 years | ||||||
Payroll 1 [Member] | Noncompete agreements [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 4 years | ||||||
Dinerware [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 13 years | ||||||
Dinerware [Member] | Customer relationships [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 17 years | ||||||
Dinerware [Member] | Software [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 5 years | ||||||
Dinerware [Member] | Trademarks [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 5 years | ||||||
Dinerware [Member] | Noncompete agreements [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 3 years | ||||||
pcAmerica [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 14 years | ||||||
pcAmerica [Member] | Customer relationships [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 20 years | ||||||
pcAmerica [Member] | Software [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 5 years | ||||||
pcAmerica [Member] | Trademarks [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 5 years | ||||||
pcAmerica [Member] | Noncompete agreements [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 5 years | ||||||
Xpient [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 14 years | ||||||
Xpient [Member] | Customer relationships [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 21 years | ||||||
Xpient [Member] | Software [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 10 years | ||||||
Xpient [Member] | Trademarks [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 5 years | ||||||
Xpient [Member] | Noncompete agreements [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 3 years | ||||||
Liquor Point of Sale [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 9 years | ||||||
Liquor Point of Sale [Member] | Customer relationships [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 10 years | ||||||
Liquor Point of Sale [Member] | Software [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 7 years | ||||||
Liquor Point of Sale [Member] | Patents [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 5 years | ||||||
Liquor Point of Sale [Member] | Noncompete agreements [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Weighted average amortization life, finite-lived intangible assets | 5 years |
Receivables (Schedule of Accoun
Receivables (Schedule of Accounts, Notes, Loans and Financing Receivable) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables, gross | $ 260,332 | $ 235,656 |
Less allowance for doubtful accounts | (1,954) | (1,552) |
Total receivables, net | 258,378 | 234,104 |
Due from employees | 2,700 | 1,600 |
Accounts receivable from merchants [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables, gross | 222,422 | 200,912 |
Receivables from bankcard networks [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables, gross | 33,613 | 31,279 |
Accounts receivable from others [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables, gross | $ 4,297 | $ 3,465 |
Receivables (Summary of Allowan
Receivables (Summary of Allowance for Doubtful Accounts Receivables) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Additions to allowance | $ 4,991 | $ 3,010 | ||
Allowance for Doubtful Accounts [Member] | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Beginning balance | $ 1,593 | $ 1,780 | 1,552 | 1,032 |
Out-of-Period adjustment | 0 | 0 | 0 | 875 |
Additions to allowance | 2,285 | 557 | 4,991 | 1,685 |
Charges against allowance | (1,924) | (1,234) | (4,652) | (2,489) |
Additions for acquisitions | 0 | 450 | 63 | 450 |
Ending balance | $ 1,954 | $ 1,553 | $ 1,954 | $ 1,553 |
Funds Held for Customers (Funds
Funds Held for Customers (Funds Held for Payroll Customers and Investments) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Funds Held for Payroll Customers: | ||
Cost | $ 180,463 | $ 176,557 |
Gross Unrealized Gains | 32 | 2 |
Gross Unrealized Losses | (37) | (67) |
Estimated Fair Value | 180,458 | 176,492 |
Fixed income - municipal bonds [Member] | ||
Funds Held for Payroll Customers: | ||
Cost | 14,031 | |
Estimated Fair Value | 14,055 | |
Conservative income bond fund - available for sale [Member] | ||
Funds Held for Payroll Customers: | ||
Cost | 13,012 | 13,012 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (29) | (16) |
Estimated Fair Value | 12,983 | 12,996 |
Fixed income - municipal bonds [Member] | ||
Funds Held for Payroll Customers: | ||
Cost | 14,031 | 14,688 |
Gross Unrealized Gains | 32 | 2 |
Gross Unrealized Losses | (8) | (51) |
Estimated Fair Value | 14,055 | 14,639 |
Cash held for customers | ||
Funds Held for Payroll Customers: | ||
Cost | 153,420 | 148,857 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 153,420 | $ 148,857 |
Funds Held for Customers (Expec
Funds Held for Customers (Expected Maturity) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2015 | Dec. 31, 2014 | |
Fixed-income - Municipal Bonds, Expected Maturities [Abstract] | |||
Cost | $ 180,463 | $ 176,557 | |
Estimated Fair Value | 180,458 | $ 176,492 | |
Fixed income - municipal bonds - available for sale [Member] | |||
Fixed-income - Municipal Bonds, Expected Maturities [Abstract] | |||
Cost | 14,031 | ||
Fixed income - municipal bonds - available for sale cost, Less Than 1 Year | 2,931 | ||
Fixed income - municipal bonds - available for sale cost, 1 to 5 Years | 11,100 | ||
Fixed income - municipal bonds - available for sale cost, 5 to 10 Years | 0 | ||
Estimated Fair Value | 14,055 | ||
Fixed income - municipal bonds - available for sale estimated fair value, Less Than 1 Year | 2,933 | ||
Fixed income - municipal bonds - available for sale estimated fair value, 1 to 5 Years | 11,122 | ||
Fixed income - municipal bonds - available for sale estimated fair value, 5 to 10 Years | $ 0 | ||
Fixed income - municipal bonds - available for sale [Member] | Investments available for sale [Member] | |||
Fixed-income - Municipal Bonds, Expected Maturities [Abstract] | |||
Proceeds from sale of investments | $ 17,200 | ||
Gain on sale of investments | $ 300 |
Capitalized Customer Acquisit49
Capitalized Customer Acquisition Costs, Net (Capitalized Customer Acquisition Costs Net) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Capitalized Customer Acquisition Costs, Net [Abstract] | ||||||
Capitalized signing bonuses | $ 111,155 | $ 98,879 | ||||
Less accumulated amortization | (51,539) | (47,238) | ||||
Capitalized signing bonuses, net | 59,616 | 51,641 | ||||
Capitalized customer deferred acquisition costs | 61,570 | 54,583 | ||||
Less accumulated amortization | (37,994) | (33,117) | ||||
Capitalized customer deferred acquisition costs, net | 23,576 | 21,466 | ||||
Capitalized customer acquisition costs, net | $ 83,192 | $ 78,640 | $ 73,107 | $ 68,967 | $ 66,433 | $ 61,027 |
Capitalized Customer Acquisit50
Capitalized Customer Acquisition Costs, Net (Capitalized Customer Acquisition Activity) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Capitalized Customer Acquisition Costs, Net [Roll Forward] | ||||
Balance at beginning of period | $ 78,640,000 | $ 66,433,000 | $ 73,107,000 | $ 61,027,000 |
Capitalized signing bonuses, net | 12,468,000 | 9,468,000 | 33,855,000 | 27,647,000 |
Capitalized customer deferred acquisition costs | 7,521,000 | 6,192,000 | 20,650,000 | 18,349,000 |
Capitalized customer acquisition costs, additions | 19,989,000 | 15,660,000 | 54,505,000 | 45,996,000 |
Capitalized signing bonuses, net | (8,928,000) | (7,703,000) | (25,880,000) | (22,357,000) |
Capitalized customer deferred acquisition costs | (6,509,000) | (5,423,000) | (18,540,000) | (15,699,000) |
Capitalized customer acquisition costs, amortization expense | (15,437,000) | (13,126,000) | (44,420,000) | (38,056,000) |
Balance at end of period | 83,192,000 | 68,967,000 | 83,192,000 | 68,967,000 |
Signing bonus adjustments from estimated amounts to actual | (1,500,000) | (700,000) | (3,800,000) | (2,800,000) |
Write-off of fully amortized signing bonuses | (6,600,000) | (6,900,000) | (21,600,000) | (19,400,000) |
Write-off of fully amortized customer deferred acquisition costs | $ (4,400,000) | $ (3,900,000) | (13,300,000) | $ (11,300,000) |
Impairment of capitalized customer acquisition costs | $ 0 |
Intangible Assets and Goodwil51
Intangible Assets and Goodwill (Schedule of Finite-Lived Intangible Assets by Major Class) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Finite Lived Assets: | ||||||
Gross Assets | $ 254,031 | $ 234,263 | $ 254,031 | $ 234,263 | ||
Accumulated Amortization | 56,777 | 41,710 | 56,777 | 41,710 | ||
Net Asset | 197,254 | 192,553 | 197,254 | 192,553 | ||
Finite-lived intangible assets, amortization expense | 5,100 | $ 3,400 | 15,100 | $ 8,300 | ||
Goodwill, impairment charges | 18,500 | |||||
Intangible assets, impairment charges | 18,900 | |||||
Customer relationships [Member] | ||||||
Finite Lived Assets: | ||||||
Gross Assets | 176,175 | 159,925 | 176,175 | 159,925 | ||
Accumulated Amortization | 31,349 | 22,011 | 31,349 | 22,011 | ||
Net Asset | 144,826 | 137,914 | $ 144,826 | $ 137,914 | ||
Customer relationships [Member] | Minimum [Member] | ||||||
Finite Lived Assets: | ||||||
Amortization life and method, useful life | 5 years | 6 years | ||||
Customer relationships [Member] | Maximum [Member] | ||||||
Finite Lived Assets: | ||||||
Amortization life and method, useful life | 21 years | 21 years | ||||
Merchant portfolios [Member] | ||||||
Finite Lived Assets: | ||||||
Gross Assets | 4,214 | 4,214 | $ 4,214 | $ 4,214 | ||
Accumulated Amortization | 3,456 | 3,161 | 3,456 | 3,161 | ||
Net Asset | 758 | 1,053 | $ 758 | $ 1,053 | ||
Amortization life and method, useful life | 7 years | 7 years | ||||
Software [Member] | ||||||
Finite Lived Assets: | ||||||
Gross Assets | 61,404 | 58,377 | $ 61,404 | $ 58,377 | ||
Accumulated Amortization | 16,953 | 13,300 | 16,953 | 13,300 | ||
Net Asset | 44,451 | 45,077 | $ 44,451 | $ 45,077 | ||
Software [Member] | Minimum [Member] | ||||||
Finite Lived Assets: | ||||||
Amortization life and method, useful life | 3 years | 1 year | ||||
Software [Member] | Maximum [Member] | ||||||
Finite Lived Assets: | ||||||
Amortization life and method, useful life | 15 years | 15 years | ||||
Noncompete agreements [Member] | ||||||
Finite Lived Assets: | ||||||
Gross Assets | 6,162 | 5,947 | $ 6,162 | $ 5,947 | ||
Accumulated Amortization | 3,713 | 2,830 | 3,713 | 2,830 | ||
Net Asset | 2,449 | 3,117 | $ 2,449 | $ 3,117 | ||
Amortization life and method, useful life | 5 years | |||||
Noncompete agreements [Member] | Minimum [Member] | ||||||
Finite Lived Assets: | ||||||
Amortization life and method, useful life | 3 years | |||||
Noncompete agreements [Member] | Maximum [Member] | ||||||
Finite Lived Assets: | ||||||
Amortization life and method, useful life | 5 years | |||||
Other [Member] | ||||||
Finite Lived Assets: | ||||||
Gross Assets | 6,076 | 5,800 | $ 6,076 | $ 5,800 | ||
Accumulated Amortization | 1,306 | 408 | 1,306 | 408 | ||
Net Asset | $ 4,770 | $ 5,392 | $ 4,770 | $ 5,392 | ||
Other [Member] | Minimum [Member] | ||||||
Finite Lived Assets: | ||||||
Amortization life and method, useful life | 5 years | 5 years | ||||
Other [Member] | Maximum [Member] | ||||||
Finite Lived Assets: | ||||||
Amortization life and method, useful life | 9 years | 9 years |
Intangible Assets and Goodwil52
Intangible Assets and Goodwill (Schedule of Finite-Lived Intangible Assets, Future Amortization Expense) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | ||
2,015 | $ 5,031 | |
2,016 | 19,018 | |
2,017 | 17,472 | |
2,018 | 15,662 | |
2,019 | 14,236 | |
2,020 | 12,426 | |
Thereafter | 113,409 | |
Net Asset | $ 197,254 | $ 192,553 |
Intangible Assets and Goodwil53
Intangible Assets and Goodwill (Schedule of Goodwill) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 425,712 | $ 190,978 |
Goodwill acquired during the period | 49,842 | 237,915 |
Other (a) | (237) | (4,623) |
Ending balance | 475,317 | 424,270 |
Payment Processing [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 43,701 | 43,701 |
Goodwill acquired during the period | 0 | 0 |
Other (a) | 0 | 0 |
Ending balance | 43,701 | 43,701 |
Campus Solutions [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 257,337 | 35,789 |
Goodwill acquired during the period | 0 | 222,076 |
Other (a) | 26 | 0 |
Ending balance | 257,363 | 257,865 |
Heartland School Solutions [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 64,522 | 53,350 |
Goodwill acquired during the period | 0 | 13,592 |
Other (a) | 0 | (2,493) |
Ending balance | 64,522 | 64,449 |
Heartland Payroll Solutions [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 31,018 | 31,018 |
Goodwill acquired during the period | 21,915 | 0 |
Other (a) | (1,165) | 0 |
Ending balance | 51,768 | 31,018 |
Leaf [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 0 | 20,619 |
Goodwill acquired during the period | 0 | 0 |
Other (a) | 0 | (2,130) |
Ending balance | 0 | 18,489 |
Other [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 29,134 | 6,501 |
Goodwill acquired during the period | 27,927 | 2,247 |
Other (a) | 902 | 0 |
Ending balance | $ 57,963 | $ 8,748 |
Intangible Assets and Goodwil54
Intangible Assets and Goodwill (Goodwill by Segment) (Details) | Sep. 30, 2015 | Sep. 30, 2014 |
Payment Processing [Member] | ||
Segment Reporting Information [Line Items] | ||
Portion of total assets that are goodwill | 7.90% | 8.00% |
Campus Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Portion of total assets that are goodwill | 53.40% | 51.40% |
Heartland School Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Portion of total assets that are goodwill | 75.30% | 70.30% |
Heartland Payroll Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Portion of total assets that are goodwill | 22.00% | 23.30% |
Leaf [Member] | ||
Segment Reporting Information [Line Items] | ||
Portion of total assets that are goodwill | 0.00% | 44.70% |
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Portion of total assets that are goodwill | 61.60% | 37.30% |
Processing Liabilities (Details
Processing Liabilities (Details) - USD ($) $ in Thousands | 4 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Processing Liabilities and Loss Reserves [Line Items] | ||||
Due to sponsor banks | $ 49,266 | $ 31,165 | $ 49,266 | |
Processing liabilities and loss reserves | $ 119,884 | 119,398 | 119,884 | |
SME [Member] | ||||
Processing Liabilities and Loss Reserves [Line Items] | ||||
Chargebacks, card brand networks, period | 4 months | |||
Processing volume | $ 32,500,000 | 27,800,000 | 69,100,000 | $ 60,100,000 |
Bank chargebacks | 17,500 | 16,000 | ||
Merchant credit losses | $ 2,600 | $ 2,500 | ||
Merchant losses - basis points | 0.0037% | 0.0042% | ||
Merchant processing [Member] | ||||
Processing Liabilities and Loss Reserves [Line Items] | ||||
Processing liabilities and loss reserves | 111,634 | 109,361 | $ 111,634 | |
Merchant deposits [Member] | ||||
Processing Liabilities and Loss Reserves [Line Items] | ||||
Processing liabilities and loss reserves | 6,758 | 6,655 | 6,758 | |
Loss reserves [Member] | ||||
Processing Liabilities and Loss Reserves [Line Items] | ||||
Processing liabilities and loss reserves | 1,492 | 3,382 | 1,492 | |
Funding Advances [Member] | ||||
Processing Liabilities and Loss Reserves [Line Items] | ||||
Due to sponsor banks | $ 47,700 | $ 29,900 | $ 47,700 |
Processing Liabilities (Schedul
Processing Liabilities (Schedule Of Credit And Fraud Loss Reserve) (Details) - Loss reserves [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Beginning balance | $ 1,437 | $ 1,762 | $ 3,382 | $ 1,505 |
Additions to reserve | 759 | 943 | 2,528 | 3,000 |
Charges against reserve | (704) | (1,073) | (4,418) | (2,873) |
Ending balance | $ 1,492 | $ 1,632 | $ 1,492 | $ 1,632 |
Accrued Buyout Liability (Summa
Accrued Buyout Liability (Summary of Accrued Buyout Liability) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Accrued Buyout Liability [Line Items] | ||||||
Accrued Buyout Liability Total | $ 55,646 | $ 51,140 | $ 47,993 | $ 44,957 | $ 41,268 | $ 39,379 |
Less current portion | (17,471) | (15,023) | ||||
Long-term portion of accrued buyout liability | $ 38,175 | 32,970 | ||||
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 | 200 | ||||
Accrued Buyout Liability [Member] | ||||||
Accrued Buyout Liability [Line Items] | ||||||
Accrued Buyout Liability Total | 55,646 | 47,993 | ||||
Less current portion | (17,471) | (15,023) | ||||
Long-term portion of accrued buyout liability | 38,175 | 32,970 | ||||
Accrued Buyout Liability [Member] | Vested Relationship Managers and sales managers [Member] | ||||||
Accrued Buyout Liability [Line Items] | ||||||
Accrued Buyout Liability Total | 53,971 | 46,301 | ||||
Accrued Buyout Liability [Member] | Unvested Relationship Managers and sales managers [Member] | ||||||
Accrued Buyout Liability [Line Items] | ||||||
Accrued Buyout Liability Total | $ 1,675 | $ 1,692 |
Accrued Buyout Liability (Sum58
Accrued Buyout Liability (Summary of Activity in Accrued Buyout Liability) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Accrued Buyout Liability [Roll Forward] | ||||
Beginning balance | $ 51,140 | $ 41,268 | $ 47,993 | $ 39,379 |
Increase in settlement obligation, net | 7,585 | 5,354 | 20,514 | 15,199 |
Buyouts | (3,079) | (1,665) | (12,861) | (9,621) |
Ending balance | $ 55,646 | $ 44,957 | $ 55,646 | $ 44,957 |
Credit Facilities (Schedule of
Credit Facilities (Schedule of Maturities of Long-term Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 04, 2014 |
Line of Credit Facilities | |||
Credit facilities, outstanding | $ 498,750 | $ 559,500 | |
Weighted average interest rate | 2.30% | ||
Unamortized fees and direct cost | $ 4,943 | ||
2014 Term Credit Facility [Member] | |||
Line of Credit Facilities | |||
Credit facilities, outstanding | 356,250 | 370,000 | |
2014 Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 400,000 | ||
Line of Credit Facilities | |||
Credit facilities, outstanding | $ 142,500 | $ 189,500 | |
TouchNet Information Systems, Inc. [Member] | 2014 Term Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 375,000 |
Commitments and Contingencies60
Commitments and Contingencies (Schedule of Future Minimum Rental Payments for Operating Leases) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($)capital_lease | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)capital_lease | Sep. 30, 2014USD ($) | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
2,015 | $ 3,696 | $ 3,696 | ||
2,016 | 16,610 | 16,610 | ||
2,017 | 13,964 | 13,964 | ||
2,018 | 12,054 | 12,054 | ||
2,019 | 9,247 | 9,247 | ||
2,020 | 7,618 | 7,618 | ||
Thereafter | 43,826 | 43,826 | ||
Total future minimum lease payments | $ 107,015 | $ 107,015 | ||
Leases, Operating [Abstract] | ||||
Number of capital leases | capital_lease | 0 | 0 | ||
Rent expense, leased facilities and expense | $ 4,300 | $ 2,900 | $ 13,500 | $ 8,700 |
Maximum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Term of operating lease agreement | 15 years |
Commitments and Contingencies61
Commitments and Contingencies (Schedule of Contractual Obligations) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Contractual Obligation Commitments [Line Items] | ||
Severance pay | $ 600 | |
Other significant contractual obligations: | ||
Total | $ 621,675 | |
Less than 1 year | 42,786 | |
1 to 3 Years | 86,887 | |
3 to 5 years | 446,280 | |
More than 5 years | 45,722 | |
Principal amount outstanding on loans securitized or asset-backed financing arrangement | 30,000 | |
Interest Rate Swap [Member] | ||
Other significant contractual obligations: | ||
Derivative, notional amount | 3,800 | |
Processing providers [Member] | ||
Other significant contractual obligations: | ||
Total | 9,008 | |
Less than 1 year | 4,013 | |
1 to 3 Years | $ 4,995 | |
3 to 5 years | ||
More than 5 years | $ 0 | |
Telecommunications providers [Member] | ||
Other significant contractual obligations: | ||
Total | 6,818 | |
Less than 1 year | 3,307 | |
1 to 3 Years | 3,511 | |
3 to 5 years | 0 | |
More than 5 years | 0 | |
Facility and equipment leases [Member] | ||
Other significant contractual obligations: | ||
Total | 107,015 | |
Less than 1 year | 16,673 | |
1 to 3 Years | 26,777 | |
3 to 5 years | 17,843 | |
More than 5 years | 45,722 | |
Term Credit Facility [Member] | ||
Other significant contractual obligations: | ||
Total | 356,250 | |
Less than 1 year | 18,750 | |
1 to 3 Years | 51,563 | |
3 to 5 years | 285,937 | |
More than 5 years | 0 | |
Revolving Credit Facility [Member] | ||
Other significant contractual obligations: | ||
Total | 142,500 | |
Less than 1 year | 0 | |
1 to 3 Years | 0 | |
3 to 5 years | 142,500 | |
More than 5 years | 0 | |
Capital Lease Obligations [Member] | ||
Other significant contractual obligations: | ||
Total | 84 | |
Less than 1 year | 43 | |
1 to 3 Years | 41 | |
3 to 5 years | 0 | |
More than 5 years | $ 0 | |
Minimum [Member] | ||
Contractual Obligation Commitments [Line Items] | ||
Severance pay, term | 1 year | |
Maximum [Member] | ||
Contractual Obligation Commitments [Line Items] | ||
Severance pay, term | 2 years |
Segments (Schedule of Segment R
Segments (Schedule of Segment Reporting Information, by Segment) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 6 | ||||
Revenues | $ 705,667 | $ 600,626 | $ 1,983,818 | $ 1,706,768 | |
Depreciation and amortization | 16,086 | 12,663 | 46,283 | 33,516 | |
Income (loss) from operations | 42,514 | 30,411 | 110,704 | 86,704 | |
Interest expense | 3,647 | 2,142 | 11,178 | 4,450 | |
Net income (loss) | 23,881 | 20,156 | 62,025 | 51,639 | |
Total assets | $ 1,452,739 | $ 1,336,764 | $ 1,452,739 | $ 1,336,764 | $ 1,387,773 |
Campus Solutions [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Restricted funds, percent of total assets | 7.00% | 8.00% | 7.00% | 8.00% | |
Heartland Payroll Solutions [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Restricted funds, percent of total assets | 62.00% | 60.00% | 62.00% | 60.00% | |
Operating Segments [Member] | Payment Processing [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 626,039 | $ 551,176 | $ 1,753,722 | $ 1,567,593 | |
Depreciation and amortization | 8,951 | 8,212 | 25,789 | 23,106 | |
Income (loss) from operations | 33,657 | 34,094 | 92,563 | 96,833 | |
Interest expense | 1,065 | 1,453 | 3,669 | 3,761 | |
Net income (loss) | 19,881 | 19,138 | 54,568 | 56,503 | |
Total assets | 555,886 | 545,033 | 555,886 | 545,033 | |
Operating Segments [Member] | Campus Solutions [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 31,475 | 14,400 | 89,369 | 36,883 | |
Depreciation and amortization | 3,561 | 1,473 | 10,212 | 2,756 | |
Income (loss) from operations | 11,295 | 3,187 | 26,633 | 8,060 | |
Interest expense | 2,019 | 689 | 6,037 | 689 | |
Net income (loss) | 5,830 | 2,239 | 12,930 | 5,566 | |
Total assets | 481,944 | 501,982 | 481,944 | 501,982 | |
Operating Segments [Member] | Heartland School Solutions [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 14,564 | 15,061 | 45,464 | 42,685 | |
Depreciation and amortization | 1,274 | 1,282 | 3,583 | 2,665 | |
Income (loss) from operations | 4,769 | 2,720 | 17,151 | 5,290 | |
Net income (loss) | 2,929 | 1,658 | 10,784 | 3,240 | |
Total assets | 85,653 | 91,703 | 85,653 | 91,703 | |
Operating Segments [Member] | Heartland Payroll Solutions [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 17,171 | 12,170 | 50,869 | 37,978 | |
Depreciation and amortization | 1,117 | 727 | 3,153 | 2,416 | |
Income (loss) from operations | 1,911 | 1,590 | 6,308 | 7,289 | |
Interest expense | 180 | 0 | 419 | 0 | |
Net income (loss) | 985 | 940 | 3,603 | 4,487 | |
Total assets | 235,099 | 133,204 | 235,099 | 133,204 | |
Operating Segments [Member] | Leaf [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Income (loss) from operations | 0 | (2,710) | (4,692) | (8,172) | |
Net income (loss) | 0 | 1,657 | (2,148) | (3,843) | |
Total assets | 0 | 41,374 | 0 | 41,374 | |
Operating Segments [Member] | Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 16,418 | 7,819 | 44,394 | 21,629 | |
Depreciation and amortization | 1,055 | 804 | 3,149 | 2,291 | |
Income (loss) from operations | 16 | 623 | (792) | 1,757 | |
Interest expense | 383 | 0 | 1,053 | 0 | |
Net income (loss) | (135) | 273 | (1,117) | 625 | |
Total assets | 94,157 | 23,468 | 94,157 | 23,468 | |
Unallocated corporate administration amounts [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | 128 | 165 | 397 | 282 | |
Income (loss) from operations | (9,134) | (9,093) | (26,467) | (24,353) | |
Net income (loss) | $ (5,609) | $ (5,749) | $ (16,595) | $ (14,939) |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of Calculation of Numerator and Denominator in Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Basic: | ||||
Net income attributable to Heartland | $ 23,881 | $ 20,458 | $ 62,025 | $ 53,650 |
Basic weighted average common stock outstanding (in shares) | 36,744 | 36,069 | 36,600 | 36,388 |
Basic (in dollars per share) | $ 0.65 | $ 0.57 | $ 1.69 | $ 1.47 |
Diluted: | ||||
Basic weighted average common stock outstanding (in shares) | 36,744 | 36,069 | 36,600 | 36,388 |
Stock options and restricted share units (in shares) | 537 | 781 | 586 | 861 |
Diluted weighted average shares outstanding (in shares) | 37,281 | 36,850 | 37,186 | 37,249 |
Diluted (in dollars per share) | $ 0.64 | $ 0.56 | $ 1.67 | $ 1.44 |
Fair Value of Financial Instr64
Fair Value of Financial Instruments (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurement, transfers between Level 1 and Level 2 | $ 0 | |
Liabilities: | ||
Credit facility | 498,750,000 | $ 559,500,000 |
Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Total assets | 27,038,000 | 27,635,000 |
Fair Value, Measurements, Recurring [Member] | Conservative income bond fund [Member] | ||
Assets: | ||
Investments available for sale | 12,983,000 | 12,996,000 |
Fair Value, Measurements, Recurring [Member] | Fixed income - municipal bonds [Member] | ||
Assets: | ||
Investments available for sale | 14,055,000 | 14,639,000 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ||
Assets: | ||
Total assets | 27,038,000 | 27,635,000 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Conservative income bond fund [Member] | ||
Assets: | ||
Investments available for sale | 12,983,000 | 12,996,000 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Fixed income - municipal bonds [Member] | ||
Assets: | ||
Investments available for sale | 14,055,000 | 14,639,000 |
Fair Value, Measurements, Nonrecurring [Member] | ||
Liabilities: | ||
Total liabilities | 498,834,000 | 559,914,000 |
Fair Value, Measurements, Nonrecurring [Member] | Capital Lease Obligations [Member] | ||
Liabilities: | ||
Capital Lease Obligation | 84,000 | 102,000 |
Fair Value, Measurements, Nonrecurring [Member] | Term Credit Facility [Member] | ||
Liabilities: | ||
Credit facility | 356,250,000 | 370,312,000 |
Fair Value, Measurements, Nonrecurring [Member] | Revolving Credit Facility [Member] | ||
Liabilities: | ||
Credit facility | 142,500,000 | 189,500,000 |
Fair Value, Measurements, Nonrecurring [Member] | Level 2 [Member] | ||
Liabilities: | ||
Total liabilities | 498,750,000 | 559,812,000 |
Fair Value, Measurements, Nonrecurring [Member] | Level 2 [Member] | Term Credit Facility [Member] | ||
Liabilities: | ||
Credit facility | 356,250,000 | 370,312,000 |
Fair Value, Measurements, Nonrecurring [Member] | Level 2 [Member] | Revolving Credit Facility [Member] | ||
Liabilities: | ||
Credit facility | 142,500,000 | 189,500,000 |
Fair Value, Measurements, Nonrecurring [Member] | Level 3 [Member] | ||
Liabilities: | ||
Total liabilities | 84,000 | 102,000 |
Fair Value, Measurements, Nonrecurring [Member] | Level 3 [Member] | Capital Lease Obligations [Member] | ||
Liabilities: | ||
Capital Lease Obligation | $ 84,000 | $ 102,000 |