Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 04, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'HMS HOLDINGS CORP | ' |
Entity Central Index Key | '0001196501 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 88,274,280 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $109,375 | $135,227 |
Short-term investments | 21,460 | ' |
Accounts receivable, net of allowance for doubtful accounts of $1,172 and $830, respectively and estimated allowance for appeals of $12,518 and $6,985 at September 30, 2013 and December 31, 2012, respectively | 168,011 | 153,014 |
Prepaid expenses | 13,108 | 14,283 |
Prepaid income taxes | 994 | ' |
Current portion of deferred financing costs | ' | 3,336 |
Other current assets | 406 | 317 |
Total current assets | 313,354 | 306,177 |
Property and equipment, net | 126,093 | 129,327 |
Goodwill | 361,468 | 361,468 |
Intangible assets, net | 100,502 | 119,119 |
Deferred financing costs | 9,562 | 5,867 |
Other assets | 4,472 | 3,988 |
Total assets | 915,451 | 925,946 |
Current liabilities: | ' | ' |
Accounts payable, accrued expenses and other liabilities | 45,426 | 40,867 |
Acquisition related contingent consideration | 435 | 425 |
Current portion of term loan | ' | 35,000 |
Deferred tax liabilities | 2,310 | 2,398 |
Estimated liability for appeals | 27,484 | 21,787 |
Total current liabilities | 75,655 | 100,477 |
Long-term liabilities: | ' | ' |
Deferred rent | 754 | 500 |
Acquisition related contingent consideration | 498 | 485 |
Revolving debt | 267,796 | ' |
Term loan | ' | 297,500 |
Other liabilities | 4,469 | 3,305 |
Deferred tax liabilities | 54,715 | 60,805 |
Total long-term liabilities | 328,232 | 362,595 |
Total liabilities | 403,887 | 463,072 |
Shareholders' equity: | ' | ' |
Preferred stock - $0.01 par value; 5,000,000 shares authorized; none issued | ' | ' |
Common stock - $0.01 par value; 125,000,000 shares authorized; 93,358,890 shares issued and 87,934,043, shares outstanding at September 30, 2013; 92,374,539 shares issued and 86,949,692 shares outstanding at December 31, 2012 | 932 | 923 |
Capital in excess of par value | 291,739 | 271,962 |
Retained earnings | 238,907 | 210,003 |
Treasury stock, at cost: 5,424,847 shares at September 30, 2013 and at December 31, 2012 | -20,014 | -20,014 |
Total shareholders' equity | 511,564 | 462,874 |
Total liabilities and shareholders' equity | $915,451 | $925,946 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ' | ' |
Accounts receivable, allowance for doubtful accounts (in dollars) | $1,172 | $830 |
Accounts receivable, allowance for appeals (in dollars) | $12,518 | $6,985 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 93,358,890 | 92,374,539 |
Common stock, shares outstanding | 87,934,043 | 86,949,692 |
Treasury stock, shares | 5,424,847 | 5,424,847 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ' | ' |
Revenue | $127,754 | $113,217 | $370,170 | $340,600 |
Cost of services: | ' | ' | ' | ' |
Compensation | 48,007 | 40,170 | 138,023 | 119,489 |
Data processing | 9,688 | 7,871 | 27,974 | 22,791 |
Occupancy | 4,363 | 4,428 | 13,766 | 12,742 |
Direct project costs | 10,790 | 14,530 | 36,329 | 40,573 |
Other operating costs | 6,035 | 3,198 | 20,325 | 14,311 |
Amortization of acquisition related software and intangibles | 7,899 | 8,149 | 24,587 | 24,447 |
Total cost of services | 86,782 | 78,346 | 261,004 | 234,353 |
Selling, general and administrative expenses | 19,689 | 14,158 | 52,249 | 43,897 |
Total operating expenses | 106,471 | 92,504 | 313,253 | 278,250 |
Operating income | 21,283 | 20,713 | 56,917 | 62,350 |
Interest expense | -2,318 | -4,125 | -10,097 | -12,488 |
Other income, net | ' | 27 | 799 | 346 |
Interest income | 18 | 13 | 36 | 17 |
Income before income taxes | 18,983 | 16,628 | 47,655 | 50,225 |
Income taxes | 7,475 | 6,121 | 18,751 | 19,695 |
Net income and comprehensive income | $11,508 | $10,507 | $28,904 | $30,530 |
Basic income per common share | ' | ' | ' | ' |
Net income per share - basic (in dollars per share) | $0.13 | $0.12 | $0.33 | $0.35 |
Diluted income per common share | ' | ' | ' | ' |
Net income per share - diluted (in dollars per share) | $0.13 | $0.12 | $0.32 | $0.35 |
Weighted average common shares: | ' | ' | ' | ' |
Basic (in shares) | 87,830 | 86,405 | 87,551 | 86,010 |
Diluted (in shares) | 89,167 | 88,744 | 88,998 | 88,399 |
CONSOLIDATED_STATEMENT_OF_SHAR
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (USD $) | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Treasury Stock |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2012 | $462,874 | $923 | $271,962 | $210,003 | ($20,014) |
Balance (in shares) at Dec. 31, 2012 | ' | 92,374,539 | ' | ' | 5,424,847 |
Increase (Decrease) in Shareholders' Equity | ' | ' | ' | ' | ' |
Net income and comprehensive income | 28,904 | ' | ' | 28,904 | ' |
Stock-based compensation cost | 8,749 | ' | 8,749 | ' | ' |
Exercise of stock options | 7,381 | 8 | 7,373 | ' | ' |
Exercise of stock options (in shares) | ' | 881,993 | ' | ' | ' |
Vesting of restricted stock awards and units, net of shares withheld for employee tax | -1,498 | 1 | -1,499 | ' | ' |
Vesting of restricted stock awards and units, net of shares withheld for employee tax (in shares) | ' | 102,358 | ' | ' | ' |
Excess tax benefit from exercise of stock options | 5,154 | ' | 5,154 | ' | ' |
Balance at Sep. 30, 2013 | $511,564 | $932 | $291,739 | $238,907 | ($20,014) |
Balance (in shares) at Sep. 30, 2013 | ' | 93,358,890 | ' | ' | 5,424,847 |
CONSOLIDATED_STATEMENT_OF_CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Operating activities: | ' | ' |
Net income | $28,904 | $30,530 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization expense | 44,315 | 40,840 |
Stock-based compensation expense | 8,749 | 10,194 |
Excess tax benefit from exercised stock options | -5,154 | -11,859 |
Deferred income taxes | -6,178 | -5,772 |
Increase in allowance for doubtful debts | 5,876 | 2,174 |
Change in fair value of contingent consideration | 23 | -2,300 |
Loss on disposal of fixed assets | 186 | 62 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -20,873 | -16,136 |
Prepaid expenses | 1,175 | -4,926 |
Prepaid income taxes | 4,160 | 4,810 |
Other current assets | -89 | 550 |
Other assets | 16 | -88 |
Accounts payable, accrued expenses and other liabilities | 8,397 | -4,862 |
Estimated liability for appeals | 5,697 | 10,613 |
Net cash provided by operating activities | 75,204 | 53,830 |
Investing activities: | ' | ' |
Proceeds from redemption of certificate of deposit | ' | 4,809 |
Purchase of short-term investments | -21,460 | ' |
Purchases of property and equipment | -18,272 | -18,541 |
Investment in common stock | -500 | -3,024 |
Acquisitions, net | ' | -1,605 |
Investment in capitalized software | -2,951 | -1,559 |
Net cash used in investing activities | -43,183 | -19,920 |
Financing activities: | ' | ' |
Financing related to revolving debt | -7,619 | ' |
Repayment of term loan | ' | -13,125 |
Repayment of revolving debt | -60,000 | ' |
Purchases of treasury stock | ' | -10,617 |
Payments on contingent consideration | ' | -250 |
Payments on capital lease obligations | -1,291 | -692 |
Proceeds from exercise of stock options | 7,381 | 10,991 |
Payments of tax withholdings on behalf of employees for net-share settlement for stock-based compensation | -1,498 | -1,127 |
Excess tax benefit from exercised stock options | 5,154 | 11,859 |
Net cash used in financing activities | -57,873 | -2,961 |
Net (decrease)/increase in cash and cash equivalents | -25,852 | 30,949 |
Cash and cash equivalents at beginning of period | 135,227 | 97,003 |
Cash and cash equivalents at end of period | 109,375 | 127,952 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid for income taxes | 24,090 | 20,145 |
Cash paid for interest | 7,666 | 10,093 |
Supplemental disclosure of noncash investing activities: | ' | ' |
Accrued property and equipment purchases | 1,040 | 267 |
Equipment purchased through capital leases | $2,401 | $1,693 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Basis of Presentation | ' | ||||
Basis of Presentation | ' | ||||
1. Basis of Presentation | |||||
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments necessary for a fair presentation of our and our subsidiaries’ financial position at September 30, 2013, the results of our operations for the three and nine months ended September 30, 2013 and 2012 and cash flows for the nine months ended September 30, 2013 and 2012. Interim financial statements are prepared on a basis consistent with our annual financial statements. The financial statements included herein should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2012, which we refer to as our Annual Report. | |||||
We provide cost containment services to government and private healthcare payers and sponsors. Our program integrity services ensure that healthcare claims are paid correctly, and our coordination of benefits services ensure that they are paid by the responsible party. Together, these services help clients recover amounts from liable third parties; prevent future improper payments; reduce fraud, waste and abuse; and ensure regulatory compliance. | |||||
Since our inception, we have grown both organically and through targeted acquisitions. In 1985 we began providing coordination of benefits services to state Medicaid agencies. We expanded into the Medicaid managed care market, providing similar coordination of benefits services when Medicaid began to migrate members to managed care. We launched our program integrity services in 2007 and have since acquired several businesses to expand our service offerings. In 2009, we entered the Medicare market with our acquisition of IntegriGuard, LLC, or IntegriGuard, now doing business as HMS Federal, which provides fraud, waste and abuse analytical services to the Medicare program. In 2009 and 2010, we entered the employer market, working with large self-funded employers through our acquisitions of Verify Solutions, Inc. and Chapman Kelly, Inc. In 2011, we extended our reach in the federal, state and commercial markets with our acquisition of HealthDataInsights, Inc., or HDI. HDI provides improper payment identification services for government and commercial health plans, and is the Medicare Recovery Audit Contractor (RAC) in CMS Region D, covering 17 states and three U.S. territories. In December 2012, we acquired the assets and liabilities of MedRecovery Management, LLC, or MRM, a provider of Workers’ Compensation recovery services for commercial health plans. | |||||
These unaudited consolidated financial statements include our accounts and transactions and those of our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||
We are managed and operated as one business, with a single management team that reports to the Chief Executive Officer. We do not operate separate lines of business with respect to any of our product lines. | |||||
We provide products and services under contracts that contain various fee structures, including contingency fee and fixed fee arrangements. We recognize revenue when a contract exists, products or services have been provided to the client, the fee is fixed and determinable, and collectability is reasonably assured. In addition, we have contracts with the federal government which are generally cost-plus or time and material based. Revenue on cost-plus contracts is recognized based on costs incurred plus an estimate of the negotiated fee earned. Revenue on time and materials contracts is recognized based on hours worked and expenses incurred. | |||||
Under our Medicare RAC contract with CMS, we recognize revenue when claims are sent to CMS for offset against future Medicare claims payments. Providers have the right to appeal a claim and may pursue additional appeals if the initial appeal is found in favor of CMS. We accrue an estimated liability for appeals based on the amount of fees that are subject to appeal and which we estimate are probable of being returned to providers following a successful appeal. The estimated liability for appeals refers to the reserve related to estimated closures for appeals, discussions and other reasons. This estimated liability for appeals is an offset to revenue in our unaudited Consolidated Statements of Comprehensive Income. Our estimates are based on our historical experience with appeals activity under our Medicare RAC contract. The estimated liability of appeals of $27.5 million at September 30, 2013, and $21.8 million as of December 31, 2012, represents our estimate of the potential amount of repayments related to appeals of claims for which fees were previously collected. This is reflected as a separate line item in the current liabilities section of our balance sheet titled “Estimated liability for appeals” to reflect our estimate of this liability. To the extent the amount to be returned to providers following a successful appeal exceeds the amount accrued, revenue in the applicable period would be reduced by the amount of the excess. | |||||
As of September 30, 2013, we have accrued an estimated liability for appeals and estimated allowance for appeals based on our historical experience with appeals activity under our Medicare RAC contract. At this time, we do not believe that we face a risk of significant loss in excess of the amounts accrued. Accordingly, we believe that an estimate of any reasonably possible loss in excess of the amounts accrued is immaterial. Any future changes to the Medicare RAC contract, including further modifications to the transition plan for incumbent Medicare recovery audit contractors, may require us to apply different assumptions that could affect our estimated liability for appeals in future periods. We similarly accrue an allowance against accounts receivable related to fees yet to be collected, based on the same estimates used to establish the estimated liability for appeals of fees received. Our inability to correctly estimate the estimated liabilities and allowance against accounts receivable could adversely affect our revenue in future periods. | |||||
Allowance for doubtful accounts and estimated allowance and liability for appeals as of September 30, 2013 are as follows: | |||||
Allowance for doubtful accounts (in thousands): | |||||
Balance, December 31, 2011 | $ | 1,158 | |||
Provision | 19 | ||||
Recoveries | — | ||||
Charge-offs | (347 | ) | |||
Balance, December 31, 2012 | $ | 830 | |||
Provision | 551 | ||||
Recoveries | (42 | ) | |||
Charge-offs | (167 | ) | |||
Balance, September 30, 2013 | $ | 1,172 | |||
Estimated allowance for appeals and estimated liability for appeals (in thousands): | |||||
Balance, December 31, 2011 | $ | 10,383 | |||
Provision | 20,513 | ||||
Appeals found in Providers favor | (2,124 | ) | |||
Balance, December 31, 2012 | $ | 28,772 | * | ||
Provision | 17,261 | ||||
Appeals found in Providers favor | (6,031 | ) | |||
Balance, September 30, 2013 | $ | 40,002 | * | ||
*Includes $12,518 and $6,985 related to estimated allowance for appeals that apply to uncollected accounts receivable as of September 30, 2013 and December 31, 2012, respectively. | |||||
Where contracts have multiple deliverables, we evaluate these deliverables at the inception of each contract and as each item is delivered. As part of this evaluation, we (i) consider whether a delivered item has value to a client on a standalone basis; (ii) use the vendor specific objective evidence (VSOE) of selling price or third party estimate (TPE) of selling price, and if neither VSOE nor TPE of selling price exist for a deliverable, use best estimated selling price for that deliverable; and (iii) allocate revenue to each non-contingent element based upon the relative selling price of each element. Revenue allocated to each element is then recognized when the above four basic revenue recognition criteria are met for each element. Arrangements, including implementation and transaction related revenue, are accounted for as a single unit of accounting. Since implementation services do not carry a standalone value, the revenue relating to these services is recognized over the term of the client contract to which it relates. | |||||
In addition, some of our contracts may include client acceptance provisions. Formal client sign-off is not always necessary to recognize revenue, provided we objectively demonstrate that the criteria specified in the acceptance provision are satisfied. Due to the range of products and services that we provide and the differing fee structures associated with each type of contract, we may recognize revenue in irregular increments. | |||||
The preparation of the unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, primarily accounts receivable, intangible assets, accrued expenses, estimated allowance for appeals and estimated liability for appeals and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Our actual results could differ from those estimates. | |||||
Cash equivalents consist of deposits that are readily convertible into cash. We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. | |||||
Our financial instruments are categorized into a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. In the event the fair value is not readily available/determinable, the financial instrument is carried at cost and referred to as a cost method investment. The evaluation of whether an investment’s fair value is less than cost is determined by using a disclosed fair value estimate, if one is available, otherwise, it is determined by evaluating whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment (an impairment indicator). We are not aware of any identified events or change in circumstances that would have a significant adverse effect on the carrying value of our cost method investments. Financial instruments recorded at fair value on our unaudited consolidated balance sheets are categorized as follows: | |||||
· Level 1: Observable inputs such as quoted prices in active markets; | |||||
· Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | |||||
· Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | |||||
Our policy is to limit our credit exposure by placing our investments with financial institutions evaluated as being creditworthy, or in short-term money market funds that are exposed to minimal interest rate and credit risk. Our level 2 assets are short-term investments, which consist of variable rate demand notes ( “VRDNs”) classified as available-for-sale securities and reported at fair value. We maintain our cash in cash depository accounts and certificate of deposits with large financial institutions. The balance in certain of these accounts exceeds the maximum balance insured by the Federal Deposit Insurance Corporation of up to $250,000 per bank account. We have not experienced any losses on our bank deposits and we believe these deposits do not expose us to any significant credit risk. | |||||
We are subject to potential credit risk related to changes in economic conditions within the healthcare market. However, we believe that our billing and collection policies are adequate to minimize the potential credit risk. | |||||
We evaluate the recoverability of goodwill either annually or whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to (i) a significant decrease in the market value of an asset, (ii) a significant adverse change in the extent or manner in which an asset is used, or (iii) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. | |||||
For long-lived assets and intangible assets, we measure the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. If the sum of the expected future undiscounted net cash flows is less than the carrying value of the asset being evaluated, we would recognize an impairment charge. The impairment charge would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The determination of fair value is based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. We did not recognize any impairment charges related to our long-lived assets, property and equipment, goodwill or intangible assets, during the nine months ended September 30, 2013 and 2012, as management believes that carrying amounts were not impaired. Depreciation and amortization expense related to property and equipment was $8.1 million and $7.0 million for the three months ended September 30, 2013 and 2012, respectively, and $23.3 and $19.8 million for the nine months ended September 30, 2013 and 2012, respectively. | |||||
The carrying amounts for our cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to their short-term nature. | |||||
On October 29, 2012, our Board of Directors authorized management to repurchase up to $50.0 million of our common stock from time to time on the open market or in privately negotiated transactions, for a period of up to two years. Repurchased shares will be available for future use in connection with our stock plans and for other corporate purposes. To date, we have not purchased any shares under this Share Repurchase Plan. | |||||
Certain reclassifications were made to prior year amounts to conform to the current period presentation. | |||||
Recently Issued Accounting Pronouncements | |||||
In December 2011, the Financial Accounting Standards Board, or FASB issued Accounting Standards Update (ASU) 2011-11, Balance Sheet (Topic 210), Disclosures about Offsetting Assets and Liabilities, updated by ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which requires companies to disclose information about financial instruments that have been offset and related arrangements to enable users of the company’s financial statements to understand the effect of those arrangements on the company’s financial position. Companies will be required to provide both net (offset amounts) and gross information in the notes to the financial statements for relevant assets and liabilities that are offset. ASU 2011-11, as amended by ASU 2013-01, is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. The adoption of this guidance did not have a material effect on our unaudited consolidated financial statements. | |||||
In July 2012, FASB issued ASU No. 2012-02, Intangibles — Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This newly issued accounting standard allows an entity the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test for indefinite-lived intangibles other than goodwill. Under that option, an entity would no longer be required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on that qualitative assessment, that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. This ASU is effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of this guidance did not have a material effect on our unaudited consolidated financial statements. | |||||
In March 2013, FASB issued ASU No. 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation is Fixed at the Reporting Date, which addresses the recognition, measurement, and disclosure of certain joint and several obligations including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance will not have a material effect on our unaudited consolidated financial statements. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2013 | |
Acquisitions | ' |
Acquisitions | ' |
2. Acquisitions | |
The results of operations for our acquisitions have been included in our unaudited consolidated financial statements from the respective dates of acquisition. | |
MedRecovery Management, LLC. (MRM) | |
In December 2012, we acquired the assets and liabilities of MRM, for an aggregate purchase price of $11.7 million, consisting of a $10.8 million initial cash payment and $0.9 million in future contingent payments that are based on the achievement of certain performance milestones. We recognized $1.9 million of goodwill in connection with our acquisition of MRM. | |
During the three months ended June 30, 2013, we finalized the valuation of intangibles and future contingent consideration related to this acquisition. Based on our valuation of the MRM acquisition, the intangible assets and future contingent consideration on the acquisition date were $9.2 million and $0.9 million, respectively. The consolidated balance sheet for the year ended December 31, 2012, was retrospectively adjusted to increase the carrying amount of intangible assets by $9.2 million, decrease the carrying value of future contingent consideration by $0.1 million and decrease the carrying value of goodwill by $9.3 million. Of the total intangible assets acquired, $8.9 million was related to client relationships and has an amortization period of seven years and $0.3 million was related to restrictive covenants and has an amortization period of two years. |
Shortterm_investments
Short-term investments | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Short-term investments | ' | |||||||
Short-term investments | ' | |||||||
3. Short-term investments | ||||||||
We invest in short-term investments in order to maximize our return on cash. Short-term investments consist of VRDN, which are classified as available –for-sale securities and reported at fair value. VRDNs are municipal and corporate securities with an interest rate that is reset frequently. While the contractual maturities of these instruments range between seven to twenty-two years, VRDNs are considered to be liquid instruments. All of the VRDNs currently in our portfolio are backed by a letter of credit from a reputed bank that may be tendered at any time with a typical settlement date of one week and the lack of volatility in the market has further helped to maintain the liquidity of the instrument. VRDNs are always purchased and redeemed at par value. Any unrealized gains or losses on available-for-sale securities would be recorded in other comprehensive income. As of September 30, 2013, there were no unrealized gains or losses with respect to available-for-sale securities. | ||||||||
The following table presents the amortized cost and fair value of our available-for sale investments, which are carried at fair value: | ||||||||
September 30, 2013 | ||||||||
Amortized Cost | Fair Value | |||||||
Variable —rate demand notes | $ | 21,460 | $ | 21,460 | ||||
Intangible_Assets
Intangible Assets | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Intangible Assets | ' | |||||||||
Intangible Assets | ' | |||||||||
4. Intangible Assets | ||||||||||
Intangible assets consisted of the following at September 30, 2013 and December 31, 2012 (in thousands): | ||||||||||
September 30, | December 31, | Useful Life | ||||||||
2013 | 2012 | |||||||||
Client relationships | $ | 102,755 | $ | 130,105 | 5-10 years | |||||
Trade name | 19,532 | 19,733 | 3-7 years | |||||||
Restrictive covenants | 18,300 | 19,600 | 2-5 years | |||||||
140,587 | 169,438 | |||||||||
Less accumulated amortization | (40,085 | ) | (50,319 | ) | ||||||
Intangible assets, net | $ | 100,502 | $ | 119,119 | ||||||
Estimated amortization expense for intangible assets is expected to approximate the following (in thousands): | ||||||||||
Year Ending December 31, | ||||||||||
Remainder of 2013 | $ | 5,190 | ||||||||
2014 | 20,733 | |||||||||
2015 | 20,270 | |||||||||
2016 | 19,934 | |||||||||
2017 | 16,613 | |||||||||
Thereafter | 17,762 | |||||||||
For the three and nine months ended September 30, 2013, amortization expense related to intangible assets was $5.9 million and $18.6 million, respectively. For the three and nine months ended September 30, 2012, amortization expense related to intangible assets was $6.1 million and $18.3 million, respectively. |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Taxes | ' |
Income Taxes | ' |
5. Income Taxes | |
Our effective tax rate increased to 39.4% for the nine months ended September 30, 2013 from 39.3% for the nine months ended September 30, 2012, primarily due to changes in state apportionments and permanent differences. The principal differences between the statutory rate and our effective rate are state taxes and permanent differences. | |
We file income tax returns with the U.S. federal government and various state jurisdictions. We are no longer subject to U.S. federal income tax examinations for years before 2010. We operate in a number of state and local jurisdictions, most of which have never audited our records. Accordingly, we are subject to state and local income tax examinations based upon the various statutes of limitations in each jurisdiction. We are currently being examined by the Internal Revenue Service and the States of New York and Idaho. | |
During the nine months ended September 30, 2013 and 2012, we recorded a tax benefit of $5.2 million and $11.8 million, respectively, related to the utilization of the income tax benefit from stock transactions by reducing income tax payable and increasing capital. | |
At September 30, 2013 and 2012, we had approximately $2.9 million and $1.7 million, respectively, of net unrecognized tax benefits for which there is uncertainty about the allocation and apportionment impacting state taxable income. We do not expect any significant change in unrecognized tax benefits during the next twelve months. We have recognized interest accrued related to unrecognized tax benefits in interest expense and penalties in tax expense. The accrued liabilities related to uncertain tax positions were $1.1 million and $0.8 million as of September 30, 2013 and December 31, 2012, respectively. |
Credit_Agreement
Credit Agreement | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Credit Agreement | ' | |||||||||||||
Credit Agreement | ' | |||||||||||||
6. Credit Agreement | ||||||||||||||
In connection with our acquisition of HDI, we entered into a five-year, revolving and term secured credit agreement, which we refer to as the 2011 Credit Agreement, with certain financial institutions and Citibank, N.A. as Administrative Agent. In May 2013, we amended and restated the 2011 Credit Agreement and entered into a $500 million five-year, amended and restated revolving credit agreement, which we refer to as the 2013 Credit Agreement. | ||||||||||||||
The 2013 Credit Agreement provides for an initial $500 million revolving credit facility, and, under specified circumstances, the revolving credit facility can be increased or one or more incremental term loan facilities can be added, provided that the incremental credit facilities do not exceed in the aggregate the sum of (a) $75 million plus (b) an additional amount not less than $25 million, so long as our total secured leverage ratio, calculated giving pro forma effect to the requested incremental borrowing and other customary and appropriate pro forma adjustment events, including any permitted acquisitions, is no greater than 2.5:1.0. | ||||||||||||||
The 2013 Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants, and events of default. The 2013 Credit Agreement requires us to comply, on a quarterly basis, with certain principal financial covenants, including a maximum consolidated leverage ratio reducing from 3.50:1.00 to 3.25:1.00 over the next five years and a minimum interest coverage ratio of 3.00:1.00. | ||||||||||||||
The interest rates applicable to the revolving credit facility are, at our option, either (a) the LIBOR multiplied by the statutory reserve rate plus an interest margin ranging from 1.50% to 2.25% based on our consolidated leverage ratio, or (b) a base rate (which is equal to the greatest of (a) Citibank’s prime rate, (b) the federal funds effective rate plus 0.50% and (c) the one-month LIBOR plus 1.00% plus an interest margin ranging from 0.50% to 1.25% based on our consolidated leverage ratio). We will pay an unused commitment fee on the revolving credit facility during the term of the 2013 Credit Agreement ranging from 0.375% to 0.50% per annum based on our consolidated leverage ratio. | ||||||||||||||
Our obligations under the 2013 Credit Agreement may be accelerated upon the occurrence of an event of default, which includes customary events of default including, without limitation, payment defaults, failures to perform affirmative covenants, failure to refrain from actions or omissions prohibited by negative covenants, the inaccuracy of representations or warranties, cross-defaults, bankruptcy and insolvency related defaults, defaults relating to judgments, defaults due to certain ERISA related events and a change of control default. As of September 30, 2013, we were in compliance with all the terms of the 2013 Credit Agreement. | ||||||||||||||
Borrowings under the 2013 Credit Agreement were used to refinance the outstanding principal and unpaid interest of $323.8 million and $1.1 million, respectively, under the term loan facility of the 2011 Credit Agreement. We paid lender fees of $2.9 million in connection with amending and restating the Credit Agreement. | ||||||||||||||
The interest expense on revolving debt and commitment fees on unused revolving credit facility are as follows (in thousands): | ||||||||||||||
September 30, | September 30, | |||||||||||||
Three months ended | Nine months ended | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Interest expense | $ | 1,757 | $ | 2,294 | $ | 6,712 | $ | 9,152 | ||||||
Commitment fees | $ | 255 | $ | 177 | $ | 548 | $ | 375 | ||||||
At September 30, 2013 and December 31, 2012, the unamortized balance of deferred origination fees and debt issue costs were $9.6 million and $9.2 million, respectively. For the three months ended September 30, 2013 and 2012, we amortized $0.5 million and $0.9 million, respectively, of interest expense related to our deferred origination fees and debt issue costs. For the nine months ended September 30, 2013 and 2012, we amortized $2.6 million and $2.8 million, respectively, of interest expense related to our deferred origination fees and debt issue costs. | ||||||||||||||
As part of our contractual agreement with a client, we have an outstanding irrevocable letter of credit or Letter of Credit for $4.6 million, which we established against our existing revolving credit facility. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Earnings Per Share | ' | |||||||||
Earnings Per Share | ' | |||||||||
7. Earnings Per Share | ||||||||||
Basic income per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted income per share is calculated by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding during the period. Our common share equivalents consist of stock options and restricted stock awards and units. | ||||||||||
The following table reconciles the basic to diluted weighted average shares outstanding using the treasury stock method (shares in thousands): | ||||||||||
September 30, | September 30, | |||||||||
Three months ended | Nine months ended | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Weighted average shares outstanding — basic | 87,830 | 86,405 | 87,551 | 86,010 | ||||||
Dilutive effect of stock options | 1,146 | 2,036 | 1,268 | 2,107 | ||||||
Dilutive effect of restricted stock awards and units | 191 | 303 | 179 | 282 | ||||||
Weighted average shares outstanding - diluted | 89,167 | 88,744 | 88,998 | 88,399 | ||||||
For the three months ended September 30, 2013 and 2012, 1,249,399 and 145,510 stock options, respectively, were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive. For the three months ended September 30, 2013, restricted stock units representing 178,421 shares of common stock, were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive. | ||||||||||
For the nine months ended September 30, 2013 and 2012, 1,375,604 and 204,376 stock options, respectively, were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive. For the nine months ended September 30, 2013 and 2012, restricted stock units representing 106,194 and 50,722 shares of common stock, respectively, were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive. |
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Stock-Based Compensation | ' | |||||||||||
Stock-Based Compensation | ' | |||||||||||
8. Stock-Based Compensation | ||||||||||||
Total stock-based compensation expense charged as a selling, general and administrative expense in our unaudited consolidated statements of comprehensive income related to our stock compensation plans was $2.6 million and $3.1 million for the three months ended September 30, 2013 and September 30, 2012, respectively, and $8.7 million and $10.2 million for the nine months ended September 30, 2013 and September 30, 2012, respectively. During the period ended September 30, 2013, we reversed stock based compensation expense relating to performance-based non-qualified stock options previously granted to our executive officers as the associated performance targets were not expected to be met. As a result of this reversal, we recognized a benefit of $0.4 million in compensation expense for the three month period ended September 30, 2013. | ||||||||||||
The total income tax benefit related to stock-based compensation expense recognized in our unaudited consolidated statements of comprehensive income was $0.9 million and $5.0 million, for the three months ended September 30, 2013 and 2012, respectively, and $5.2 million and $11.8 million, for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||||||
Presented below is a summary of our stock option activity for the nine months ended September 30, 2013 (shares in thousands): | ||||||||||||
Shares | Weighted | Weighted | Aggregate | |||||||||
Average | Average | Intrinsic | ||||||||||
Exercise | Remaining | Value | ||||||||||
Price | Contractual | |||||||||||
Terms | ||||||||||||
Outstanding at December 31, 2012 | 4,757 | $ | 14.11 | |||||||||
Granted | 3 | $ | 28.74 | |||||||||
Exercised | (882 | ) | $ | 8.37 | ||||||||
Forfeited | (241 | ) | $ | 21.36 | ||||||||
Expired | (4 | ) | $ | 22.27 | ||||||||
Outstanding at September 30, 2013 | 3,633 | $ | 15.05 | 4.08 | $ | 30,956 | ||||||
Expected to vest at September 30, 2013 | 1,245 | $ | 24.04 | 5.71 | $ | 2,873 | ||||||
Exercisable at September 30, 2013 | 2,199 | $ | 9.17 | 3 | $ | 28,004 | ||||||
The fair value of each option grant was estimated using the Black-Scholes option pricing model. Expected volatilities are calculated based on the historical volatility of our common stock. Management monitors stock option exercises and employee termination patterns to estimate forfeiture rates within the valuation model. Separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected holding period of options represents the period of time that options granted are expected to be outstanding. The expected terms of options granted are based on our historical experience for similar types of stock option awards. The risk-free interest rate is based on U.S. Treasury Notes. | ||||||||||||
We estimated the fair value of each stock option grant on the date of grant using a Black-Scholes option-pricing model and the weighted-average assumptions set forth in the following table: | ||||||||||||
Nine months ended September 30, | ||||||||||||
2013 | 2012 | |||||||||||
Expected dividend yield | — | — | ||||||||||
Risk-free interest rate | 0.67 | % | 0.7 | % | ||||||||
Expected volatility | 40.05 | % | 41.35 | % | ||||||||
Expected life | 4.47 years | 4.47 years | ||||||||||
During the three months ended September 30, 2013 and 2012, we issued 0.2 million shares and 0.5 million shares, respectively, of our common stock upon the exercise of outstanding stock options and received proceeds of $1.1 million and $3.5 million, respectively. For the three months ended September 30, 2013 and 2012, we realized a tax benefit of $0.9 million and $5.0 million, respectively from the exercise of stock options. | ||||||||||||
For the nine months ended September 30, 2013 and 2012, we issued 0.9 million shares, and 1.5 million shares, respectively, of our common stock upon the exercise of outstanding stock options and received proceeds of $7.4 million, and $11.0 million, respectively. For the nine months ended September 30, 2013 and 2012, we realized $5.2 million and $11.8 million, respectively in tax benefits from the exercise of stock options. | ||||||||||||
For the three months ended September 30, 2013 approximately $1.3 million of stock-based compensation expense was charged against income, which reflects the reversal of $0.4 million in compensation expense relating to the cancellation of certain performance based non-qualified stock options in the third quarter of 2013. For the three months ended September 30, 2012, $2.1 million of stock-based compensation expense relating to stock options was charged against income. For the nine months ended September 30, 2013, and 2012, $4.9 million, and $7.3 million, respectively, of stock-based compensation expense relating to stock options was charged against income, which for 2013, includes the reversal of the $0.4 million compensation expense related to the cancellation of certain performance-based stock options in the third quarter of 2013. As of September 30, 2013, there was approximately $9.1 million of total unrecognized compensation cost, adjusted for estimated forfeitures, related to stock options outstanding, which is expected to be recognized over a weighted-average period of 1.2 years. | ||||||||||||
The aggregate intrinsic value in the previous table reflects the total pretax intrinsic value (the difference between our closing stock price on the last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all option holders exercised their options on September 30, 2013. The intrinsic value of our stock options changes based on the closing price of our common stock. The total intrinsic value of options exercised (the difference in the market price of our common stock on the exercise date and the price paid by the optionee to exercise the option) for the three months ended September 30, 2013 and 2012 was approximately $3.1 million and $14.1 million, respectively. The total intrinsic value of options exercised during the nine month periods ended September 30, 2013 and 2012 was $17.0 million and $35.1 million, respectively. | ||||||||||||
Restricted Stock Units | ||||||||||||
Our non-employee members of the Board and certain employees have received restricted stock units under our 2006 Stock Plan, as amended. The fair value of restricted stock units is estimated based on the closing sale price of our common stock on the NASDAQ Global Select Market on the date of issuance. The total number of restricted stock units expected to vest is adjusted by estimated forfeiture rates. Shares withheld to pay taxes upon the vesting of the restricted stock units are retired. | ||||||||||||
For the three months ended September 30, 2013, we granted 1,891 restricted stock units with an aggregate fair market value of $41,000. For the nine months ended September 30, 2013, we granted 220,589 restricted stock units, with an aggregate fair market value of $6.3 million. At September 30, 2013, 498,204 restricted stock units remained unvested and there was $9.8 million of unamortized compensation cost related to restricted stock units, which is expected to be recognized over the remaining weighted-average vesting period of 1.7 years. Stock-based compensation expense related to restricted stock units was $1.2 million and $0.8 million for the three months ended September 30, 2013 and 2012, respectively and $3.3 million and $2.3 million for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||||||
A summary of the status of our restricted stock units and of changes in restricted stock units outstanding under the 2006 Stock Plan, as amended, for the nine months ended September 30, 2013 is as follows (in thousands, except for weighted average grant date fair value per unit): | ||||||||||||
Number | Weighted Average | Aggregate | ||||||||||
of | Grant Date Fair | Intrinsic | ||||||||||
Units | Value per Unit | Value | ||||||||||
Outstanding balance at December 31, 2012 | 446 | $ | 25.44 | |||||||||
Granted | 221 | $ | 28.49 | |||||||||
Vesting of restricted stock units, net of shares withheld for taxes | (41 | ) | $ | 25.05 | ||||||||
Shares withheld for taxes | (20 | ) | $ | 25.05 | ||||||||
Forfeitures | (52 | ) | $ | 25.65 | ||||||||
Outstanding balance at September 30, 2013 | 554 | $ | 26.8 | $ | 11,896 | |||||||
Restricted Stock Awards | ||||||||||||
Our executive officers have received grants of restricted stock awards under the 2006 Stock Plan. The vesting of restricted stock awards is subject to the executive officers’ continued employment with us. Recipients of restricted stock awards are not required to provide us with any consideration other than rendering service. Holders of restricted stock are permitted to vote and to receive dividends. | ||||||||||||
The stock-based compensation expense for restricted stock awards is determined based on the closing market price of our common stock on the grant date of the awards applied to the total number of awards that are anticipated to fully vest. Shares withheld to pay taxes are retired upon the vesting of the restricted stock awards. We did not issue restricted stock awards during the nine months ended September 30, 2013. At September 30, 2013 approximately 81,549 shares underlying restricted stock awards remained unvested and there was approximately $0.3 million of unrecognized compensation cost related to restricted stock awards, which is expected to be recognized over the weighted-average period of 0.4 years. Stock-based compensation expense related to restricted stock awards was $0.1 million and $0.2 million for the three months ended September 30, 2013 and 2012, respectively, and $0.5 and $0.6 million for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||||||
A summary of the status of our restricted stock awards at September 30, 2013 and of changes in restricted stock awards outstanding under the 2006 Stock Plan for the nine months ended September 30, 2013 is as follows (in thousands, except for weighted average grant date fair value): | ||||||||||||
Shares | Weighted Average | Aggregate | ||||||||||
Grant Date Fair | Intrinsic | |||||||||||
Value per Share | Value | |||||||||||
Outstanding balance at December 31, 2012 | 192 | $ | 10.42 | |||||||||
Granted | — | — | ||||||||||
Vesting of restricted stock awards | (61 | ) | $ | 10.42 | ||||||||
Shares withheld for payment of taxes upon vesting of restricted stock awards | (35 | ) | $ | 10.42 | ||||||||
Forfeitures | (14 | ) | $ | 10.42 | ||||||||
Outstanding balance at September 30, 2013 | 82 | $ | 10.42 | $ | 1,752 | |||||||
The total fair value of restricted stock awards vested during the nine months ended September 30, 2013 was $1.0 million. |
Commitment_and_Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitment and Contingencies | ' |
Commitment and Contingencies | ' |
9. Commitment and Contingencies | |
From time to time, we may be subject to investigations, legal proceedings and other disputes arising in the ordinary course of our business, including but not limited to regulatory audits, billing and contractual disputes and employment-related matters. We record accruals for outstanding legal matters when we believe it is probable that a loss will be incurred and the amount can be reasonably estimated. We evaluate, on a quarterly basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and estimable, we do not establish an accrued liability. None of our accruals for outstanding legal matters are material in the aggregate to our financial position. | |
Our contractual relationships, including those with federal and State government entities, subject our operations, billing, and business practices to scrutiny and audit, including by multiple agencies and levels of government, as well as to frequent transitions and changes in the personnel responsible for oversight of our contractual performance. From time to time, we may have contractual disputes with our clients arising from differing interpretations of contractual provisions that define our rights, obligations, scope of work, or terms of payment, and with associated claims of liability for inaccurate or improper billing for reimbursement of contract fees, or for sanctions or damages for alleged performance deficiencies. Resolution of such disputes may involve litigation or may require that we accept some amount of loss or liability in order to avoid client abrasion, negative marketplace perceptions and other disadvantageous results that could impact our business, results of operations and financial condition. | |
For the period ending September 30, 2013, we accrued $2.3 million for litigation or other legal proceedings asserted or pending against us that could have, in the aggregate, a material adverse effect on our financial position, results of operations or cash flows, and believe that adequate provision for any probable and estimable losses has been made in our consolidated financial statements. However, the ultimate result of any current or future litigation or other legal proceedings, audits or disputes is inherently unpredictable and could result in liabilities that are higher than currently predicted. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events | ' |
Subsequent Events | ' |
10. Subsequent Events | |
In connection with the preparation of these unaudited Consolidated Financial Statements, an evaluation of subsequent events was performed through the date these unaudited Consolidated Financial Statements were issued and there are no other events that have occurred that would require adjustments or disclosure to our unaudited Consolidated Financial Statements. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation | ' |
Recently Issued Accounting Pronouncements | ' |
Recently Issued Accounting Pronouncements | |
In December 2011, the Financial Accounting Standards Board, or FASB issued Accounting Standards Update (ASU) 2011-11, Balance Sheet (Topic 210), Disclosures about Offsetting Assets and Liabilities, updated by ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which requires companies to disclose information about financial instruments that have been offset and related arrangements to enable users of the company’s financial statements to understand the effect of those arrangements on the company’s financial position. Companies will be required to provide both net (offset amounts) and gross information in the notes to the financial statements for relevant assets and liabilities that are offset. ASU 2011-11, as amended by ASU 2013-01, is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. The adoption of this guidance did not have a material effect on our unaudited consolidated financial statements. | |
In July 2012, FASB issued ASU No. 2012-02, Intangibles — Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This newly issued accounting standard allows an entity the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test for indefinite-lived intangibles other than goodwill. Under that option, an entity would no longer be required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on that qualitative assessment, that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. This ASU is effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of this guidance did not have a material effect on our unaudited consolidated financial statements. | |
In March 2013, FASB issued ASU No. 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation is Fixed at the Reporting Date, which addresses the recognition, measurement, and disclosure of certain joint and several obligations including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance will not have a material effect on our unaudited consolidated financial statements. |
Basis_of_Presentation_Tables
Basis of Presentation (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Basis of Presentation | ' | ||||
Schedule of allowances for doubtful accounts | ' | ||||
Allowance for doubtful accounts (in thousands): | |||||
Balance, December 31, 2011 | $ | 1,158 | |||
Provision | 19 | ||||
Recoveries | — | ||||
Charge-offs | (347 | ) | |||
Balance, December 31, 2012 | $ | 830 | |||
Provision | 551 | ||||
Recoveries | (42 | ) | |||
Charge-offs | (167 | ) | |||
Balance, September 30, 2013 | $ | 1,172 | |||
Estimated allowance for appeals and estimated liability for appeals (in thousands): | |||||
Balance, December 31, 2011 | $ | 10,383 | |||
Provision | 20,513 | ||||
Appeals found in Providers favor | (2,124 | ) | |||
Balance, December 31, 2012 | $ | 28,772 | * | ||
Provision | 17,261 | ||||
Appeals found in Providers favor | (6,031 | ) | |||
Balance, September 30, 2013 | $ | 40,002 | * | ||
*Includes $12,518 and $6,985 related to estimated allowance for appeals that apply to uncollected accounts receivable as of September 30, 2013 and December 31, 2012, respectively |
Shortterm_investments_Tables
Short-term investments (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Short-term investments | ' | |||||||
Schedule of amortized cost and fair value of the entity's available-for sale investments carried at fair value | ' | |||||||
September 30, 2013 | ||||||||
Amortized Cost | Fair Value | |||||||
Variable —rate demand notes | $ | 21,460 | $ | 21,460 | ||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Intangible Assets | ' | |||||||||
Summary of intangible assets | ' | |||||||||
Intangible assets consisted of the following at September 30, 2013 and December 31, 2012 (in thousands): | ||||||||||
September 30, | December 31, | Useful Life | ||||||||
2013 | 2012 | |||||||||
Client relationships | $ | 102,755 | $ | 130,105 | 5-10 years | |||||
Trade name | 19,532 | 19,733 | 3-7 years | |||||||
Restrictive covenants | 18,300 | 19,600 | 2-5 years | |||||||
140,587 | 169,438 | |||||||||
Less accumulated amortization | (40,085 | ) | (50,319 | ) | ||||||
Intangible assets, net | $ | 100,502 | $ | 119,119 | ||||||
Schedule of estimated amortization expense of intangible assets | ' | |||||||||
Estimated amortization expense for intangible assets is expected to approximate the following (in thousands): | ||||||||||
Year Ending December 31, | ||||||||||
Remainder of 2013 | $ | 5,190 | ||||||||
2014 | 20,733 | |||||||||
2015 | 20,270 | |||||||||
2016 | 19,934 | |||||||||
2017 | 16,613 | |||||||||
Thereafter | 17,762 | |||||||||
Credit_Agreement_Tables
Credit Agreement (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Credit Agreement | ' | |||||||||||||
Schedule of interest expense on revolving debt and commitment fees on unused revolving credit facility | ' | |||||||||||||
The interest expense on revolving debt and commitment fees on unused revolving credit facility are as follows (in thousands): | ||||||||||||||
September 30, | September 30, | |||||||||||||
Three months ended | Nine months ended | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Interest expense | $ | 1,757 | $ | 2,294 | $ | 6,712 | $ | 9,152 | ||||||
Commitment fees | $ | 255 | $ | 177 | $ | 548 | $ | 375 |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Earnings Per Share | ' | |||||||||
Schedule of reconciliation of basic to diluted weighted average shares outstanding | ' | |||||||||
The following table reconciles the basic to diluted weighted average shares outstanding using the treasury stock method (shares in thousands): | ||||||||||
September 30, | September 30, | |||||||||
Three months ended | Nine months ended | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Weighted average shares outstanding — basic | 87,830 | 86,405 | 87,551 | 86,010 | ||||||
Dilutive effect of stock options | 1,146 | 2,036 | 1,268 | 2,107 | ||||||
Dilutive effect of restricted stock awards and units | 191 | 303 | 179 | 282 | ||||||
Weighted average shares outstanding - diluted | 89,167 | 88,744 | 88,998 | 88,399 |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Stock-Based Compensation | ' | |||||||||||
Summary of stock option activity | ' | |||||||||||
Presented below is a summary of our stock option activity for the nine months ended September 30, 2013 (shares in thousands): | ||||||||||||
Shares | Weighted | Weighted | Aggregate | |||||||||
Average | Average | Intrinsic | ||||||||||
Exercise | Remaining | Value | ||||||||||
Price | Contractual | |||||||||||
Terms | ||||||||||||
Outstanding at December 31, 2012 | 4,757 | $ | 14.11 | |||||||||
Granted | 3 | $ | 28.74 | |||||||||
Exercised | (882 | ) | $ | 8.37 | ||||||||
Forfeited | (241 | ) | $ | 21.36 | ||||||||
Expired | (4 | ) | $ | 22.27 | ||||||||
Outstanding at September 30, 2013 | 3,633 | $ | 15.05 | 4.08 | $ | 30,956 | ||||||
Expected to vest at September 30, 2013 | 1,245 | $ | 24.04 | 5.71 | $ | 2,873 | ||||||
Exercisable at September 30, 2013 | 2,199 | $ | 9.17 | 3 | $ | 28,004 | ||||||
Schedule of assumptions used for estimating fair value of options granted | ' | |||||||||||
Nine months ended September 30, | ||||||||||||
2013 | 2012 | |||||||||||
Expected dividend yield | — | — | ||||||||||
Risk-free interest rate | 0.67 | % | 0.7 | % | ||||||||
Expected volatility | 40.05 | % | 41.35 | % | ||||||||
Expected life | 4.47 years | 4.47 years | ||||||||||
Summary of status of restricted stock units | ' | |||||||||||
A summary of the status of our restricted stock units and of changes in restricted stock units outstanding under the 2006 Stock Plan, as amended, for the nine months ended September 30, 2013 is as follows (in thousands, except for weighted average grant date fair value per unit): | ||||||||||||
Number | Weighted Average | Aggregate | ||||||||||
of | Grant Date Fair | Intrinsic | ||||||||||
Units | Value per Unit | Value | ||||||||||
Outstanding balance at December 31, 2012 | 446 | $ | 25.44 | |||||||||
Granted | 221 | $ | 28.49 | |||||||||
Vesting of restricted stock units, net of shares withheld for taxes | (41 | ) | $ | 25.05 | ||||||||
Shares withheld for taxes | (20 | ) | $ | 25.05 | ||||||||
Forfeitures | (52 | ) | $ | 25.65 | ||||||||
Outstanding balance at September 30, 2013 | 554 | $ | 26.8 | $ | 11,896 | |||||||
Summary of status of restricted stock awards | ' | |||||||||||
A summary of the status of our restricted stock awards at September 30, 2013 and of changes in restricted stock awards outstanding under the 2006 Stock Plan for the nine months ended September 30, 2013 is as follows (in thousands, except for weighted average grant date fair value): | ||||||||||||
Shares | Weighted Average | Aggregate | ||||||||||
Grant Date Fair | Intrinsic | |||||||||||
Value per Share | Value | |||||||||||
Outstanding balance at December 31, 2012 | 192 | $ | 10.42 | |||||||||
Granted | — | — | ||||||||||
Vesting of restricted stock awards | (61 | ) | $ | 10.42 | ||||||||
Shares withheld for payment of taxes upon vesting of restricted stock awards | (35 | ) | $ | 10.42 | ||||||||
Forfeitures | (14 | ) | $ | 10.42 | ||||||||
Outstanding balance at September 30, 2013 | 82 | $ | 10.42 | $ | 1,752 | |||||||
Basis_of_Presentation_Details
Basis of Presentation (Details) (HDI) | 9 Months Ended |
Sep. 30, 2013 | |
item | |
HDI | ' |
Organization and Business | ' |
Medicare Recovery Audit Contractor (RAC) for number of states | 17 |
Medicare recovery audit contractor for number of U.S territories | 3 |
Basis_of_Presentation_Details_
Basis of Presentation (Details 2) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
item | ||||||
Basis of Presentation | ' | ' | ' | ' | ' | ' |
Number of businesses under which the entity is managed and operated | ' | ' | ' | 1 | ' | ' |
Estimated liability for appeals | ' | $27,484,000 | ' | $27,484,000 | ' | $21,787,000 |
Allowance for doubtful accounts | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | ' | 830,000 | 1,158,000 | 1,158,000 |
Provision | ' | ' | ' | 551,000 | ' | 19,000 |
Recoveries | ' | ' | ' | -42,000 | ' | ' |
Charge-offs | ' | ' | ' | -167,000 | ' | -347,000 |
Balance at the end of the period | ' | 1,172,000 | ' | 1,172,000 | ' | 830,000 |
Estimated allowance for appeals and estimated liability for appeals | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | ' | 28,772,000 | 10,383,000 | 10,383,000 |
Provision | ' | ' | ' | 17,261,000 | ' | 20,513,000 |
Appeals found in Providers favor | ' | ' | ' | -6,031,000 | ' | -2,124,000 |
Balance at the end of the period | ' | 40,002,000 | ' | 40,002,000 | ' | 28,772,000 |
Estimated allowance for appeals that apply to uncollected accounts receivable | ' | 12,518,000 | ' | 12,518,000 | ' | 6,985,000 |
Revenue Recognition | ' | ' | ' | ' | ' | ' |
Number of characteristics for revenue recognition | ' | ' | ' | 4 | ' | ' |
Amount of maximum balance per bank account as insured by Federal Deposit Insurance Corporation | ' | 250,000 | ' | 250,000 | ' | ' |
Depreciation and amortization expense related to property and equipment | ' | 8,100,000 | 7,000,000 | 23,300,000 | 19,800,000 | ' |
Stock repurchase agreement, authorized amount | $50,000,000 | ' | ' | ' | ' | ' |
Maximum period for repurchase for common stock | '2 years | ' | ' | ' | ' | ' |
Acquisitions_Details
Acquisitions (Details) (MRM, USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 |
In Millions, unless otherwise specified | Adjustment | Client relationships | Restrictive covenant | ||
Business combination | ' | ' | ' | ' | ' |
Aggregate consideration | ' | $11.70 | ' | ' | ' |
Cash paid for business acquisition | ' | 10.8 | ' | ' | ' |
Future contingent consideration | 0.9 | 0.9 | 0.1 | ' | ' |
Goodwill | ' | 1.9 | -9.3 | ' | ' |
Intangible assets | $9.20 | ' | $9.20 | $8.90 | $0.30 |
Amortization period of intangible assets | ' | ' | ' | '7 years | '2 years |
Shortterm_investments_Details
Short-term investments (Details) (Variable rate demand notes, USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Short-term investments | ' |
Settlement term | '7 days |
Unrealized gains or losses of available-for-sale securities | $0 |
Amortized cost | 21,460 |
Fair value | $21,460 |
Minimum | ' |
Short-term investments | ' |
Contractual maturities term | '7 years |
Maximum | ' |
Short-term investments | ' |
Contractual maturities term | '22 years |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Intangible assets | ' | ' | ' | ' | ' |
Intangible assets, gross | $140,587,000 | ' | $140,587,000 | ' | $169,438,000 |
Less accumulated amortization | -40,085,000 | ' | -40,085,000 | ' | -50,319,000 |
Intangible assets, net | 100,502,000 | ' | 100,502,000 | ' | 119,119,000 |
Amortization of intangibles | ' | ' | ' | ' | ' |
Remainder of 2013 | 5,190,000 | ' | 5,190,000 | ' | ' |
2014 | 20,733,000 | ' | 20,733,000 | ' | ' |
2015 | 20,270,000 | ' | 20,270,000 | ' | ' |
2016 | 19,934,000 | ' | 19,934,000 | ' | ' |
2017 | 16,613,000 | ' | 16,613,000 | ' | ' |
Thereafter | 17,762,000 | ' | 17,762,000 | ' | ' |
Amortization expense related to intangible assets | ' | ' | ' | ' | ' |
Amortization expense | 5,900,000 | 6,100,000 | 18,600,000 | 18,300,000 | ' |
Client relationships | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' |
Intangible assets, gross | 102,755,000 | ' | 102,755,000 | ' | 130,105,000 |
Client relationships | Minimum | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' |
Useful Life | ' | ' | '5 years | ' | ' |
Client relationships | Maximum | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' |
Useful Life | ' | ' | '10 years | ' | ' |
Trade name | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' |
Intangible assets, gross | 19,532,000 | ' | 19,532,000 | ' | 19,733,000 |
Trade name | Minimum | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' |
Useful Life | ' | ' | '3 years | ' | ' |
Trade name | Maximum | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' |
Useful Life | ' | ' | '7 years | ' | ' |
Restrictive covenant | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' |
Intangible assets, gross | $18,300,000 | ' | $18,300,000 | ' | $19,600,000 |
Restrictive covenant | Minimum | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' |
Useful Life | ' | ' | '2 years | ' | ' |
Restrictive covenant | Maximum | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' |
Useful Life | ' | ' | '5 years | ' | ' |
Income_Taxes_Details
Income Taxes (Details) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Income Taxes | ' | ' |
Effective income tax rate (as a percent) | 39.40% | 39.30% |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Income Taxes | ' | ' | ' | ' | ' |
Excess tax benefit from exercise of stock options | $900,000 | $5,000,000 | $5,154,000 | $11,800,000 | ' |
Net unrecognized tax benefits | 2,900,000 | 1,700,000 | 2,900,000 | 1,700,000 | ' |
Accrued liabilities for interest and penalties related to uncertain tax positions | $1,100,000 | ' | $1,100,000 | ' | $800,000 |
Credit_Agreement_Details
Credit Agreement (Details) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | Sep. 30, 2013 | 31-May-13 | 31-May-13 | Sep. 30, 2013 | |
Health Data Insights, Inc | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2013 Credit Agreement | 2011 Credit Agreement | ||||||
Minimum | Maximum | LIBOR Rate | LIBOR Rate | LIBOR Rate | Base rate | Prime rate | Federal funds rate | One-month LIBOR Rate | One-month LIBOR Rate | One-month LIBOR Rate | Minimum | Maximum | |||||||||||||||
Minimum | Maximum | Minimum | Maximum | ||||||||||||||||||||||||
Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $500,000,000 | ' | ' | ' | ' |
Period of revolving credit facility | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' |
Amount of incremental credit facilities under specified circumstances | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75,000,000 | ' | ' | ' | ' |
Additional amount of incremental credit facilities under specified circumstances | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' |
Secured leverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.5 | ' |
Maximum consolidated leverage ratio before reduction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.5 | ' | ' | ' | ' |
Maximum consolidated leverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.25 | ' | ' | ' | ' |
Reduction period of maximum consolidated leverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' |
Minimum interest coverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' |
Interest rate margin (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.50% | 2.25% | ' | ' | 0.50% | 1.00% | 0.50% | 1.25% | ' | ' | ' | ' | ' |
Interest rate of debts | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'LIBOR multiplied by a statutory reserve rate | ' | ' | 'Base Rate | 'Prime Rate | 'Federal funds rate | 'one-month LIBOR | ' | ' | ' | ' | ' | ' | ' |
Unused commitment fee on the revolving credit facility of the 2013 credit agreement (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.38% | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding principal repaid | ' | ' | ' | 13,125,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 323,800,000 |
Unpaid interest paid | ' | ' | 7,666,000 | 10,093,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 |
Interest expense | ' | ' | ' | ' | ' | ' | 1,757,000 | 2,294,000 | 6,712,000 | 9,152,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment fees | 255,000 | 177,000 | 548,000 | 375,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan origination fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,900,000 | ' | ' | ' |
Unamortized balance of deferred origination fees and debt issue costs | 9,600,000 | ' | 9,600,000 | ' | 9,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of interest expense related to our deferred origination fees and debt issue costs | 500,000 | 900,000 | 2,600,000 | 2,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Irrevocable letter of credit outstanding | ' | ' | ' | ' | ' | ' | $4,600,000 | ' | $4,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Reconciliation of basic to diluted weighted average shares outstanding | ' | ' | ' | ' |
Weighted average shares outstanding - basic (in shares) | 87,830,000 | 86,405,000 | 87,551,000 | 86,010,000 |
Dilutive effect of stock options (in shares) | 1,146,000 | 2,036,000 | 1,268,000 | 2,107,000 |
Dilutive effect of restricted stock awards and units (in shares) | 191,000 | 303,000 | 179,000 | 282,000 |
Weighted average shares outstanding - diluted (in shares) | 89,167,000 | 88,744,000 | 88,998,000 | 88,399,000 |
Stock options | ' | ' | ' | ' |
Anti-dilutive securities | ' | ' | ' | ' |
Anti-dilutive securities excluded from diluted earnings per share calculations (in shares) | 1,249,399 | 145,510 | 1,375,604 | 204,376 |
Restricted Stock Units | ' | ' | ' | ' |
Anti-dilutive securities | ' | ' | ' | ' |
Anti-dilutive securities excluded from diluted earnings per share calculations (in shares) | 178,421 | ' | 106,194 | 50,722 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Stock-based compensation | ' | ' | ' | ' |
Stock-based compensation expense recognized related to stock compensation plans | $2,600,000 | $3,100,000 | $8,700,000 | $10,200,000 |
Additional disclosures | ' | ' | ' | ' |
Proceeds from exercise of stock options | ' | ' | 7,381,000 | 10,991,000 |
Tax benefit from exercise of stock options | 900,000 | 5,000,000 | 5,154,000 | 11,800,000 |
Stock options | ' | ' | ' | ' |
Stock-based compensation | ' | ' | ' | ' |
Stock-based compensation expense recognized related to stock compensation plans | 1,300,000 | 2,100,000 | 4,900,000 | 7,300,000 |
Stock option activity | ' | ' | ' | ' |
Options outstanding at the beginning of the period (in shares) | ' | ' | 4,757,000 | ' |
Granted (in shares) | ' | ' | 3,000 | ' |
Exercised (in shares) | -200,000 | -500,000 | -882,000 | -1,500,000 |
Forfeited (in shares) | ' | ' | -241,000 | ' |
Expired (in shares) | ' | ' | -4,000 | ' |
Options outstanding at the end of the period (in shares) | 3,633,000 | ' | 3,633,000 | ' |
Options expected to vest at the end of the period (in shares) | 1,245,000 | ' | 1,245,000 | ' |
Options exercisable at the end of the period (in shares) | 2,199,000 | ' | 2,199,000 | ' |
Stock options, Weighted Average Exercise Price | ' | ' | ' | ' |
Options outstanding at the beginning of the period (in dollars per share) | ' | ' | $14.11 | ' |
Granted (in dollars per share) | ' | ' | $28.74 | ' |
Exercised (in dollars per share) | ' | ' | $8.37 | ' |
Forfeited (in dollars per share) | ' | ' | $21.36 | ' |
Expired (in dollars per shares) | ' | ' | $22.27 | ' |
Options outstanding at the end of the period (in dollars per share) | $15.05 | ' | $15.05 | ' |
Options expected to vest at the end of the period (in dollars per share) | $24.04 | ' | $24.04 | ' |
Options exercisable at the end of the period (in dollars per share) | $9.17 | ' | $9.17 | ' |
Stock options, Weighted Average Remaining Contractual Terms | ' | ' | ' | ' |
Options outstanding at the end of the period | ' | ' | '4 years 29 days | ' |
Options expected to vest at the end of the period | ' | ' | '5 years 8 months 16 days | ' |
Options exercisable at the end of the period | ' | ' | '3 years | ' |
Stock options, Aggregate Intrinsic Value | ' | ' | ' | ' |
Options outstanding at the end of the period | 30,956,000 | ' | 30,956,000 | ' |
Options expected to vest at the end of the period | 2,873,000 | ' | 2,873,000 | ' |
Options exercisable at the end of the period | 28,004,000 | ' | 28,004,000 | ' |
Assumptions used to determine fair value of options granted | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | 0.67% | 0.70% |
Expected volatility (as a percent) | ' | ' | 40.05% | 41.35% |
Expected life | ' | ' | '4 years 5 months 19 days | '4 years 5 months 19 days |
Additional disclosures | ' | ' | ' | ' |
Proceeds from exercise of stock options | 1,100,000 | 3,500,000 | 7,400,000 | 11,000,000 |
Tax benefit from exercise of stock options | 900,000 | 5,000,000 | 5,200,000 | 11,800,000 |
Performance-based non-qualified stock options | ' | ' | ' | ' |
Stock-based compensation | ' | ' | ' | ' |
Benefit recognized on reversal of compensation expense | 400,000 | ' | ' | ' |
Performance-based stock options | ' | ' | ' | ' |
Stock-based compensation | ' | ' | ' | ' |
Benefit recognized on reversal of compensation expense | $400,000 | ' | ' | ' |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Stock-based compensation expense | ' | ' | ' | ' |
Recognized stock-based compensation expense | $2,600,000 | $3,100,000 | $8,700,000 | $10,200,000 |
Stock options | ' | ' | ' | ' |
Stock-based compensation expense | ' | ' | ' | ' |
Recognized stock-based compensation expense | 1,300,000 | 2,100,000 | 4,900,000 | 7,300,000 |
Unrecognized stock-based compensation | 9,100,000 | ' | 9,100,000 | ' |
Weighted-average period over which compensation will be recognized | ' | ' | '1 year 2 months 12 days | ' |
Total intrinsic value of options exercised | 3,100,000 | 14,100,000 | 17,000,000 | 35,100,000 |
Restricted Stock Units | ' | ' | ' | ' |
Stock-based compensation expense | ' | ' | ' | ' |
Recognized stock-based compensation expense | 1,200,000 | 800,000 | 3,300,000 | 2,300,000 |
Unrecognized stock-based compensation | 9,800,000 | ' | 9,800,000 | ' |
Weighted-average period over which compensation will be recognized | ' | ' | '1 year 8 months 12 days | ' |
Restricted stock units and restricted stock awards | ' | ' | ' | ' |
Non-vested stock at the beginning of the period (in shares) | ' | ' | 446,000 | ' |
Granted (in shares) | 1,891 | ' | 221,000 | ' |
Vesting of restricted stock units, net of shares withheld for taxes (in shares) | ' | ' | -41,000 | ' |
Shares withheld for payment of taxes upon vesting of restricted stock awards | ' | ' | -20,000 | ' |
Forfeitures (in shares) | ' | ' | -52,000 | ' |
Non-vested stock at the end of the period (in shares) | 554,000 | ' | 554,000 | ' |
Restricted stock units and restricted stock awards, Weighted Average Grant Date Fair Value | ' | ' | ' | ' |
Non-vested stock at the beginning of the period (in dollars per share) | ' | ' | $25.44 | ' |
Granted (in dollars per share) | ' | ' | $28.49 | ' |
Vesting of restricted stock units, net of shares withheld for taxes (in dollars per share) | ' | ' | $25.05 | ' |
Shares withheld for payment of taxes upon vesting of restricted stock awards (in dollars per share) | ' | ' | $25.05 | ' |
Forfeitures (in dollars per share) | ' | ' | $25.65 | ' |
Non-vested stock at the end of the period (in dollars per share) | $26.80 | ' | $26.80 | ' |
Aggregate Intrinsic Value | ' | ' | ' | ' |
Non-vested stock at the end of the period | ' | ' | 11,896,000 | ' |
Fair value of shares vested | 41,000 | ' | 6,300,000 | ' |
Restricted Stock Awards | ' | ' | ' | ' |
Stock-based compensation expense | ' | ' | ' | ' |
Recognized stock-based compensation expense | 100,000 | 200,000 | 500,000 | 600,000 |
Unrecognized stock-based compensation | 300,000 | ' | 300,000 | ' |
Weighted-average period over which compensation will be recognized | ' | ' | '4 months 24 days | ' |
Restricted stock units and restricted stock awards | ' | ' | ' | ' |
Non-vested stock at the beginning of the period (in shares) | ' | ' | 192,000 | ' |
Vesting of restricted stock units, net of shares withheld for taxes (in shares) | ' | ' | -61,000 | ' |
Shares withheld for payment of taxes upon vesting of restricted stock awards | ' | ' | -35,000 | ' |
Forfeitures (in shares) | ' | ' | -14,000 | ' |
Non-vested stock at the end of the period (in shares) | 82,000 | ' | 82,000 | ' |
Restricted stock units and restricted stock awards, Weighted Average Grant Date Fair Value | ' | ' | ' | ' |
Non-vested stock at the beginning of the period (in dollars per share) | ' | ' | $10.42 | ' |
Vesting of restricted stock units, net of shares withheld for taxes (in dollars per share) | ' | ' | $10.42 | ' |
Shares withheld for payment of taxes upon vesting of restricted stock awards (in dollars per share) | ' | ' | $10.42 | ' |
Forfeitures (in dollars per share) | ' | ' | $10.42 | ' |
Non-vested stock at the end of the period (in dollars per share) | $10.42 | ' | $10.42 | ' |
Aggregate Intrinsic Value | ' | ' | ' | ' |
Non-vested stock at the end of the period | ' | ' | 1,752,000 | ' |
Fair value of shares vested | ' | ' | $1,000,000 | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Commitment and Contingencies | ' |
Accrued litigation or other legal proceedings expenses | $2.30 |