Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 11, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | AGI | |
Entity Registrant Name | AFFINION GROUP, INC. | |
Entity Central Index Key | 1,361,394 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 100 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 33.6 | $ 36.2 |
Restricted cash | 24.8 | 26.1 |
Receivables (net of allowances for doubtful accounts of $3.5 and $3.0, respectively) | 151.6 | 135.9 |
Profit-sharing receivables from insurance carriers | 21.8 | 18.8 |
Prepaid commissions | 33.6 | 33.9 |
Other current assets | 86.3 | 70.6 |
Total current assets | 351.7 | 321.5 |
Non-current assets: | ||
Property and equipment, net | 105.8 | 105.5 |
Intangible assets, net | 39.4 | 41.5 |
Goodwill | 218.9 | 218.2 |
Receivables from related parties | 28.9 | 28.9 |
Other non-current assets | 33.8 | 34.3 |
Total assets | 795.1 | 766.3 |
Current liabilities: | ||
Current portion of long-term debt | 7.8 | 7.8 |
Accounts payable and accrued expenses | 353.7 | 322.9 |
Payables to related parties | 15.9 | 16.2 |
Deferred revenue | 54.2 | 54.8 |
Income taxes payable | 2.8 | 2.7 |
Total current liabilities | 434.4 | 404.4 |
Long-term debt | 1,828.2 | 1,837.6 |
Deferred income taxes | 27.7 | 26.9 |
Deferred revenue | 4.3 | 4.8 |
Other long-term liabilities | 30 | 31.4 |
Total liabilities | 2,324.6 | 2,305.1 |
Commitments and contingencies | ||
Deficit: | ||
Common stock and additional paid-in capital, $0.01 par value, 1,000 shares authorized, and 100 shares issued and outstanding | 210.4 | 210.4 |
Accumulated deficit | (1,726.2) | (1,734.3) |
Accumulated other comprehensive income | (14.9) | (15.7) |
Total Affinion Group, Inc. deficit | (1,530.7) | (1,539.6) |
Non-controlling interest in subsidiary | 1.2 | 0.8 |
Total deficit | (1,529.5) | (1,538.8) |
Total liabilities and deficit | 795.1 | 766.3 |
Contract rights and list fees, net | ||
Non-current assets: | ||
Intangible assets, net | 16.6 | 16.4 |
Other intangibles, net | ||
Non-current assets: | ||
Intangible assets, net | $ 39.4 | $ 41.5 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 3.5 | $ 3 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 100 | 100 |
Common stock, shares outstanding | 100 | 100 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Net revenues | $ 241.1 | $ 254.9 |
Expenses: | ||
Marketing and commissions | 77.9 | 88.1 |
Operating costs | 89.4 | 86.8 |
General and administrative | 24.3 | 32.1 |
Facility exit costs | 0.1 | |
Depreciation and amortization | 11.3 | 14.3 |
Total expenses | 203 | 221.3 |
Income from operations | 38.1 | 33.6 |
Interest income | 0.2 | 0.3 |
Interest expense | (27.4) | (28.1) |
Other expense, net | (0.1) | |
Income before income taxes and non-controlling interest | 10.8 | 5.8 |
Income tax expense | (2.4) | (3.1) |
Net income | 8.4 | 2.7 |
Less: net income attributable to non-controlling interest | (0.3) | (0.1) |
Net income attributable to Affinion Group, Inc. | 8.1 | 2.6 |
Net income | 8.4 | 2.7 |
Currency translation adjustment, net of tax for all periods | 0.9 | |
Comprehensive income | 9.3 | 2.7 |
Less: comprehensive income attributable to non-controlling interest | (0.4) | (0.1) |
Comprehensive income attributable to Affinion Group, Inc. | $ 8.9 | $ 2.6 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT - USD ($) $ in Millions | Total | Common Stock and Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest |
Beginning Balance at Dec. 31, 2015 | $ (1,545.9) | $ 210.4 | $ (1,750.8) | $ (6.2) | $ 0.7 |
Net income | 2.7 | 2.6 | 0.1 | ||
Ending Balance at Mar. 31, 2016 | (1,543.2) | 210.4 | (1,748.2) | (6.2) | 0.8 |
Beginning Balance at Dec. 31, 2016 | (1,538.8) | 210.4 | (1,734.3) | (15.7) | 0.8 |
Net income | 8.4 | 8.1 | 0.3 | ||
Currency translation adjustment, net of tax | 0.9 | 0.8 | 0.1 | ||
Ending Balance at Mar. 31, 2017 | $ (1,529.5) | $ 210.4 | $ (1,726.2) | $ (14.9) | $ 1.2 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating Activities | ||
Net income | $ 8.4 | $ 2.7 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 11.3 | 14.3 |
Amortization of debt discount and financing costs | 1.5 | 1.5 |
Provision for accounts receivable loss | 0.6 | 0.2 |
Facility exit costs | 0.1 | |
Amortization of carrying value adjustment | (9) | (8.5) |
Share-based compensation | 0.9 | 0.7 |
Deferred income taxes | 1 | 1.1 |
Net change in assets and liabilities: | ||
Restricted cash | 1.5 | (0.2) |
Receivables | (16) | (13.2) |
Profit-sharing receivables from insurance carriers | (3) | (2.9) |
Prepaid commissions | 0.5 | 4.3 |
Other current assets | (15.8) | 15.7 |
Contract rights and list fees | (0.3) | 0.9 |
Other non-current assets | 0.4 | (1.2) |
Accounts payable and accrued expenses | 31.1 | (8.4) |
Payables to related parties | (1.2) | (1.7) |
Deferred revenue | (1.2) | (7.7) |
Income taxes receivable and payable | 0.4 | 0.7 |
Other long-term liabilities | (1.5) | (1.7) |
Other, net | (0.2) | |
Net cash provided by (used in) operating activities | 9.5 | (3.4) |
Investing Activities | ||
Capital expenditures | (10.5) | (6) |
Restricted cash | 0.1 | |
Net cash used in investing activities | (10.5) | (5.9) |
Financing Activities | ||
Principal payments on borrowings | (1.9) | (2) |
Net cash used in financing activities | (1.9) | (2) |
Effect of changes in exchange rates on cash and cash equivalents | 0.3 | 0.3 |
Net decrease in cash and cash equivalents | (2.6) | (11) |
Cash and cash equivalents, beginning of period | 36.2 | 51.2 |
Cash and cash equivalents, end of period | 33.6 | 40.2 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest payments | 25.3 | 24.5 |
Income tax payments, net of refunds | 1 | $ 1.2 |
Non-cash investing and financing activities: | ||
Accrued capital expenditures | $ 0.3 |
Basis of Presentation and Busin
Basis of Presentation and Business Description | 3 Months Ended |
Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation and Business Description | 1. BASIS OF PRESENTATION AND BUSINESS DESCRIPTION Basis of Presentation — The accompanying unaudited condensed consolidated financial statements include the accounts and transactions of Affinion Group, Inc. (the “Company” or “Affinion”), a wholly-owned subsidiary of Affinion Group Holdings, Inc. (“Affinion Holdings”). In presenting these unaudited condensed consolidated financial statements, management makes estimates and assumptions that affect reported amounts of assets and liabilities and related disclosures, and disclosure of contingent assets and liabilities, at the date of the financial statements, and reported amounts of revenues and expenses during the reporting periods. Estimates, by their nature, are based on judgments and available information at the time such estimate is made. As such, actual results could differ from those estimates. In management’s opinion, the unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary for a fair statement of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and following the guidance of Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the U.S. Securities and Exchange Commission (the “SEC”). As permitted under such rules, certain notes and other financial information normally required by accounting principles generally accepted in the United States of America have been condensed or omitted; however, the unaudited condensed consolidated financial statements do include such notes and financial information sufficient so as to make the interim information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes of the Company, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 31, 2017 (the “Form 10-K”). Business Description — The Company develops programs and solutions that motivate and inspire loyalty. Through our proprietary technology platforms and end-to-end customer service capabilities, we design, administer and fulfill loyalty, customer engagement and insurance programs and solutions that strengthen and expand the value of customer relationships for many of the world’s largest and most respected companies. Our programs and solutions include: • Loyalty solutions that help reward, motivate and retain consumers. We create and manage any and all aspects of our clients’ points-based loyalty programs, including design, platform, analytics, points management and fulfillment. Our loyalty solutions offer relevant, best-in-class rewards (such as travel, gift cards and merchandise) to consumers enabling clients to motivate, retain and thank their best customers. For example, our platform and technology support points-based programs for financial services, automotive, gaming, travel and hospitality companies. • Customer engagement programs and solutions that address key consumer needs such as greater peace of mind and meaningful savings for everyday purchases. We provide these solutions to leading companies in the financial institution, telecommunications, ecommerce, retail and travel sectors globally. These differentiated programs help our clients enrich their offerings to drive deeper connections with their customers, and to encourage their customers to engage more, stay loyal and generate more revenue for our clients. For example, we develop and manage programs such as identity theft protection, credit monitoring, savings on everyday purchases, concierge services, discount travel services and roadside assistance. • Insurance programs and solutions that help protect consumers in the event of a covered accident, injury, illness, or death. We market accident and life insurance programs on behalf of our financial institution partners. We work with leading insurance carriers to administer coverage for over 19 million people across America. These insurance solutions provide affordable, convenient insurance to consumers resulting in proven customer loyalty and generating incremental revenue for our clients. Our insurance solutions include accidental death and dismemberment insurance (“AD&D”), hospital accident plan, recuperative care, graded benefit whole life and simplified issue term life insurance. In 2016, we implemented a new globalized organizational structure (the “Global Reorganization”) to better support our key strategic initiatives and enhance long-term revenue growth. This new organizational structure allows us to combine similar lines of business on common platforms and shared infrastructures on a global basis to drive best practices and efficiencies with meaningful cost savings. In addition, we no longer materially invest in lines of business that we believe are not essential to our long-term growth prospects. We remain committed to our business strategy of pursuing initiatives that maintain and enhance our position as a global leader in loyalty and customer engagement solutions. The implementation of the Global Reorganization marks another major step in our strategic plan and ongoing transformation. See Note 10 to our unaudited condensed consolidated financial statements for more information concerning our segment results. Starting in the first quarter of 2016, we have the following four operating segments: • Global Loyalty . This segment consists of all of our loyalty assets globally in which we are a provider of end-to-end loyalty solutions that help clients reward, enrich, motivate and retain customers, including program design, points management and administration, and broad-based fulfillment and redemption across multiple channels. • Global Customer Engagement . This segment consists of our customer engagement business, in which we are a leading global solutions provider that delivers a flexible mix of benefits and services for our clients that meet customers’ needs, including products that are designed to help consumers save money and gain peace of mind. • Insurance Solutions . This segment consists of the domestic insurance business, in which we are a leading third-party agent, administrator and marketer of certain accident & life insurance solutions. • Legacy Membership and Package . This segment consists of certain global membership and package programs that are no longer being actively marketed but continue to be serviced and supported. Recently Issued Accounting Pronouncements In May 2014, the FASB issued new accounting guidance related to revenue recognition. The new standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The fundamental principles of the guidance are that entities should recognize revenue in a manner that reflects the timing of transfer of goods and services to customers and the amount of revenue recognized reflects the consideration that an entity expects to receive for the goods and services provided. Entities have the option of using either a full retrospective or modified retrospective approach; however entities are not permitted to adopt the standard earlier than annual reporting periods beginning after December 15, 2016, with the new standard required to be adopted for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017 . We are evaluating the adoption method as well as the impact of this new accounting guidance on our consolidated financial statements. We have formed a project implementation team with representatives from each of our operating segments and have engaged a third-party consultant to assist in our evaluation of the impact of the new guidance. As part of our assessment work to date, we have analyzed a representative sampling of customer contracts across all segments and continue to progress with a comprehensive review and assessment of the total contract population. We have not yet completed our final review of the impact of this guidance; however, we continue to review variable consideration, incremental and direct costs, potential disclosures, and our method of adoption to complete our evaluation of the impact on our consolidated financial statements. In addition, we continue to monitor additional changes, modifications, clarifications or interpretations being undertaken by the FASB, which may impact our current conclusions . The Company expects to adopt the new standard on its effective date. In February 2016, the FASB issued ASU 2016-02, its new standard on accounting for leases. The new standard requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The new standard is effective for the Company on January 1, 2019 with early adoption permitted. Entities are required to adopt the guidance using a modified retrospective method. The Company has formed a project implementation team and is working with representatives from each of its operating segments to compile a lease database containing all of the relevant information required to assess the impact of the new guidance. The Company expects to adopt the new standard on its effective date. In August 2016, the FASB issued ASU 2016-15, which addresses eight specific cash flow issues, including presentation of debt prepayments or debt extinguishment costs, with the objective of reducing the existing diversity in practice. For public business entities, the new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. When adopted, the new guidance is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In January 2017, the FASB issued ASU 2017-04 to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the new guidance, an impairment charge, if triggered, is calculated as the difference between a reporting unit’s carrying value and fair value, but is limited to the carrying value of the goodwill. Current guidance, however, requires an impairment charge to be calculated as the excess of the carrying value of goodwill over its implied fair value. The new guidance is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. When adopted, the new guidance is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | 2. INTANGIBLE ASSETS AND GOODWILL Intangible assets consisted of: March 31, 2017 Gross Carrying Accumulated Net Carrying Amount Amortization Amount (in millions) Amortizable intangible assets: Member relationships $ 932.7 $ (931.3 ) $ 1.4 Affinity relationships 634.1 (603.6 ) 30.5 Proprietary databases and systems 59.6 (58.1 ) 1.5 Trademarks and tradenames 27.7 (22.0 ) 5.7 Patents and technology 47.7 (47.5 ) 0.2 Covenants not to compete 2.5 (2.4 ) 0.1 $ 1,704.3 $ (1,664.9 ) $ 39.4 December 31, 2016 Gross Carrying Accumulated Net Carrying Amount Amortization Amount (in millions) Amortizable intangible assets: Member relationships $ 932.4 $ (930.8 ) $ 1.6 Affinity relationships 632.9 (600.9 ) 32.0 Proprietary databases and systems 59.6 (58.0 ) 1.6 Trademarks and tradenames 27.7 (21.7 ) 6.0 Patents and technology 47.7 (47.5 ) 0.2 Covenants not to compete 2.4 (2.3 ) 0.1 $ 1,702.7 $ (1,661.2 ) $ 41.5 Foreign currency translation resulted in an increase in intangible assets and accumulated amortization of $1.6 million and $1.6 million, respectively, from December 31, 2016 to March 31, 2017. Amortization expense relating to intangible assets was as follows: For the Three Months Ended March 31, March 31, 2017 2016 (in millions) Amortizable intangible assets: Member relationships $ 0.1 $ 0.2 Affinity relationships 1.5 2.2 Proprietary databases and systems 0.1 0.1 Trademarks and tradenames 0.4 0.4 Patents and technology — 0.3 Covenants not to compete — — $ 2.1 $ 3.2 Based on the Company’s amortizable intangible assets as of March 31, 2017, the Company expects the related amortization expense for fiscal year 2017 and the four succeeding fiscal years to be approximately $13.4 million in 2017, $7.3 million in 2018, $5.9 million in 2019, $5.5 million in 2020 and $3.7 million in 2021. At March 31, 2017 and December 31, 2016, the Company had gross goodwill of $647.9 million and $647.2 million, respectively, and accumulated impairment losses of $429.0 million at each date. The accumulated impairment losses represent the $15.5 million impairment loss recognized in 2006 impairing all of the goodwill assigned to the Global Loyalty segment (previously included in the Global Loyalty Products segment) related to the Apollo Transactions (as defined in Note 8 to our unaudited condensed consolidated financial statements), the $31.5 million impairment loss recognized in 2012 impairing all of the goodwill assigned in connection with the acquisition of Prospectiv Direct, Inc. included in the Legacy Membership and Package segment (previously included in the former Membership Products segment) and the $292.4 million and the $89.6 million impairment losses recognized in 2014 and 2015, respectively, impairing all of the goodwill assigned to the former Membership Products segment, which has been allocated to the Legacy Membership and Package segment. The changes in the Company’s carrying amount of goodwill for the year ended December 31, 2016 and the three months ended March 31, 2017 are as follows: Balance Balance Balance at January Currency December Currency March 31, 2016 Translation 2016 Translation 2017 (in millions) Global Loyalty $ 105.1 $ (0.3 ) $ 104.8 $ 0.1 $ 104.9 Global Customer Engagement 62.4 (7.3 ) 55.1 0.6 55.7 Insurance Solutions 58.3 — 58.3 — 58.3 Legacy Membership and Package — — — — — Total $ 225.8 $ (7.6 ) $ 218.2 $ 0.7 $ 218.9 |
Contract Rights and List Fees,
Contract Rights and List Fees, Net | 3 Months Ended |
Mar. 31, 2017 | |
Contract rights and list fees, net | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Intangible Assets | 3. CONTRACT RIGHTS AND LIST FEES, NET Contract rights and list fees consisted of: March 31, 2017 December 31, 2016 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Contract $ 5.0 $ (5.0 ) $ — $ 5.0 $ (5.0 ) $ — List fees 63.0 (46.4 ) 16.6 61.6 (45.2 ) 16.4 $ 68.0 $ (51.4 ) $ 16.6 $ 66.6 $ (50.2 ) $ 16.4 Amortization expense for the three months ended March 31, 2017 and 2016 was $1.1 million and $1.3 million, respectively, of which $1.1 million and $1.2 million, respectively, is included in marketing expense and none and $0.1 million, respectively, is included in depreciation and amortization expense in the unaudited condensed consolidated statement of comprehensive income. Based on the Company’s contract rights and list fees as of March 31, 2017, the Company expects the related amortization expense for fiscal year 2017 and the four succeeding fiscal years to be approximately $4.3 million in 2017, $3.7 million in 2018, $3.0 million in 2019, $2.3 million in 2020 and $1.5 million in 2021. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 4. LONG-TERM DEBT Long-term debt consisted of: March 31, December 2017 2016 (in millions) First-lien term loan due 2018 $ 751.8 $ 753.7 Second-lien term loan due 2018 425.0 425.0 Revolving credit facility, expiring in 2018 — — 7.875% senior notes due 2018, net of unamortized discount of $0.3 million and $0.4 million, respectively, with an effective interest rate of 8.31% 474.7 474.6 7.5% cash/PIK senior notes due 2018, with an effective interest rate of 7.39% 116.2 116.2 13.50% senior subordinated notes due 2018, with an effective interest rate of 14.31% 22.6 22.6 Adjustment to carrying value of debt 53.5 62.5 Total debt 1,843.8 1,854.6 Less: current portion of long-term debt (7.8 ) (7.8 ) Less: unamortized deferred financing costs (7.8 ) (9.2 ) Long-term debt $ 1,828.2 $ 1,837.6 On April 9, 2010, the Company, as Borrower, and Affinion Holdings entered into a $1.0 billion amended and restated senior secured credit facility with its lenders (“Affinion Credit Facility”). On May 20, 2014, the Company, as Borrower, and Affinion Holdings entered into an amendment to the Affinion Credit Facility, which (i) extended the maturity to April 30, 2018 of $775.0 million in aggregate principal amount of existing senior secured term loans and existing senior secured revolving loans, which loans were designated as first lien term loans (the “First Lien Term Loans”), (ii) extended the maturity to October 31, 2018 of $377.9 million in aggregate principal amount of existing senior secured term loans on a second lien senior secured basis, which, together with additional borrowings obtained on the same terms, total $425.0 million (the “Second Lien Term Loans”), (iii) extended the maturity to January 29, 2018 of $80.0 million of the commitments (and related obligations) under the existing senior secured revolving credit facility on a first lien senior secured basis, (iv) reduced the commitments under the existing senior secured revolving credit facility by $85.0 million and (v) removed the existing financial covenant requiring the Company to maintain a minimum interest coverage ratio. The revolving credit facility includes a letter of credit subfacility and a swingline loan subfacility. The First Lien Term Loan facility provides for quarterly amortization payments totaling 1% per annum, with the balance payable upon the final maturity date. The Second Lien Term Loan facility does not provide for quarterly amortization payments. The Affinion Credit Facility also requires mandatory prepayments of the outstanding term loans based on excess cash flow (as defined), if any, and the proceeds from certain specified transactions. The interest rates with respect to First Lien Term Loans and revolving loans under the amended Affinion Credit Facility are based on, at the Company’s option, (a) the higher of (i) adjusted LIBOR and (ii) 1.50%, in each case plus 5.25%, or (b) the highest of (i) Deutsche Bank Trust Company Americas’ prime rate, (ii) the Federal Funds Effective Rate plus 0.5% and (iii) 2.50% (“ABR”), in each case plus 4.25%. The interest rates with respect to Second Lien Term Loans under the amended Affinion Credit Facility are based on, at the Company’s option, (a) the higher of (i) adjusted LIBOR and (ii) 1.50%, in each case plus 7.00%, or (b) the highest of (i) Deutsche Bank Trust Company Americas’ prime rate, (ii) the Federal Funds Effective Rate plus 0.5% and (iii) 2.50% (“ABR”), in each case plus 6.00%. The weighted average interest rate on the First Lien Term Loan for the three months ended March 31, 2017 and 2016 was 6.75% for each period and the weighted average interest rate on the Second Lien Term Loan for the three months ended March 31, 2017 and 2016 was 8.50% for each period. The weighted average interest rate on revolving credit facility borrowings for the three months ended March 31, 2017 and 2016 was 8.0%, and 7.8%, respectively. The Company’s obligations under the credit facility are, and the Company’s obligations under any interest rate protection or other hedging arrangements entered into with a lender or any of its affiliates will be, guaranteed by Affinion Holdings and by each of the Company’s existing and subsequently acquired or organized domestic subsidiaries, subject to certain exceptions. The Affinion Credit Facility is secured to the extent legally permissible by substantially all of the assets of (i) Affinion Holdings, which consists of a pledge of all the Company’s capital stock and (ii) the Company and the subsidiary guarantors, including but not limited to: (a) a pledge of substantially all capital stock held by the Company or any subsidiary guarantor and (b) security interests in substantially all tangible and intangible assets of the Company and each subsidiary guarantor, subject to certain exceptions. The Affinion Credit Facility also contains financial, affirmative and negative covenants. The negative covenants in the Affinion Credit Facility include, among other things, limitations (all of which are subject to certain exceptions) on the Company’s (and in certain cases, Affinion Holdings’) ability to: declare dividends and make other distributions, redeem or repurchase the Company’s capital stock; prepay, redeem or repurchase certain of the Company’s subordinated indebtedness; make loans or investments (including acquisitions); incur additional indebtedness (subject to certain exceptions); enter into agreements that would restrict the ability of the Company’s subsidiaries to pay dividends; merge or enter into acquisitions; sell assets; and enter into transactions with affiliates. The Affinion Credit Facility also requires the Company to comply with a financial maintenance covenant with a maximum ratio of senior secured debt (as defined) to EBITDA (as defined) of 4.25:1.00. As of March 31, 2017 and December 31, 2016, there were no outstanding borrowings under the revolving credit facility. During the three months ended March 31, 2017 and 2016, the Company had borrowings of $53.0 million and $17.0 million, respectively, under the revolving credit facility. During the three months ended March 31, 2017 and 2016, the Company had repayments of $53.0 million and $17.0 million, respectively, under the revolving credit facility. As of March 31, 2017, the Company had $69.2 million available for borrowing under the Affinion Credit Facility after giving effect to the issuance of $10.8 million of letters of credit. On November 9, 2015, (a) Affinion Holdings completed a private offer to exchange (the “2015 Holdings Exchange Offer”) its outstanding 13.75%/14.50% senior secured PIK/toggle notes due 2018 (Affinion Holdings’ “2013 senior notes”) for shares of its Common Stock, par value $0.01 per share (Affinion Holdings’ “Common Stock”), (b) Affinion Investments, LLC (“Affinion Investments”) completed a private offer to exchange (the “2015 Investments Exchange Offer” and, together with the 2015 Holdings Exchange Offer, the “2015 Exchange Offers”) its outstanding 13.50% senior subordinated notes due 2018 (the “Investments senior subordinated notes”) for shares of Common Stock, and (c) Affinion Holdings and Affinion International Holdings Limited (“Affinion International”), a wholly-owned subsidiary of Affinion, jointly completed a rights offering giving holders of Affinion Holdings’ 2013 senior notes and the Investments senior subordinated notes the right to purchase an aggregate principal amount of $110.0 million of 7.5% Cash/PIK Senior Notes due 2018 (the “International Notes”) of Affinion International and up to 2,483,333 shares of Common Stock for an aggregate cash purchase price of $110.0 million. Under the terms of the 2015 Holdings Exchange Offer, for each $1,000 principal amount of Affinion Holdings’ 2013 senior notes tendered during the offer period, holders received 7.15066 shares of Affinion Holdings’ Common Stock. Under the terms of the 2015 Investments Exchange Offer, for each $1,000 principal amount of the Investments senior subordinated notes tendered during the offer period, holders received 15.52274 shares of Affinion Holdings’ Common Stock. Pursuant to the 2015 Holdings Exchange Offer, approximately $247.4 million of Affinion Holdings’ 2013 senior notes were exchanged for 1,769,104 shares of Common Stock and pursuant to the 2015 Investments Exchange Offer, approximately $337.3 million of Investments senior subordinated notes were exchanged for 5,236,517 shares of Common Stock. Concurrently with the 2015 Exchange Offers, Affinion Holdings and Affinion Investments successfully solicited consents (the “2015 Consent Solicitations”) from holders to certain amendments to (a) the indenture governing Affinion Holdings’ 2013 senior notes to remove substantially all of the restrictive covenants and certain of the default provisions and to release the collateral securing Affinion Holdings’ 2013 senior notes, (b) the indenture governing the Investments senior subordinated notes to remove substantially all of the restrictive covenants and certain of the default provisions, and (c) the note agreement governing Affinion’s 2013 senior subordinated notes (as defined below) to remove substantially all of the restrictive covenants and certain of the default provisions and to permit the repurchase and cancellation of Affinion’s 2013 senior subordinated notes by Affinion in the same aggregate principal amount as the aggregate principal amount of the Investments senior subordinated notes repurchased or redeemed by Affinion Investments at any time, including pursuant to the 2015 Investments Exchange Offer. In connection with the 2015 Exchange Offers, Affinion Holdings and Affinion International jointly conducted a rights offering (the “2015 Rights Offering”) for International Notes and shares of Affinion Holdings’ Common Stock. The 2015 Rights Offering was for an aggregate principal amount of $110.0 million of International Notes and up to 2,483,333 shares of Common Stock. Each unit sold in the 2015 Rights Offering consisted of (1) $1,000 principal amount of International Notes and (2) 22.57576 shares of Affinion Holdings’ Common Stock, and was sold at a purchase price per unit of $1,000. Each holder that properly tendered for exchange, and did not validly withdraw, all of their Affinion Holdings’ 2013 senior notes and the Investments senior subordinated notes in the 2015 Exchange Offers received non-certificated rights to subscribe for rights offering units. In connection with the 2015 Rights Offering, Empyrean Capital Partners, L.P. agreed to purchase any rights offering units that were unpurchased in the 2015 Rights Offering (the “Backstop”). Pursuant to the 2015 Rights Offering and the Backstop, Affinion International received cash of approximately $110.0 million in exchange for $110.0 million aggregate principal amount of International Notes and 2,021,042 shares of Common Stock and non-participating penny warrants (the “Limited Warrants”) of Affinion Holdings that are convertible into 462,266 shares of Common Stock upon certain conditions. The International Notes bear interest at 7.5% per annum, of which 3.5% per annum will be payable in cash (“International Cash Interest”) and 4.0% per annum will be payable by increasing the principal amount of the outstanding International Notes or by issuing International Notes (“International PIK Interest”); provided, that all of the accrued interest on the International Notes from the issue date to, but not including, May 1, 2016 was payable on May 1, 2016 entirely as International PIK Interest. Interest on the International Notes is payable semi-annually on May 1 and November 1 of each year, commencing on May 1, 2016. The International Notes will mature on July 30, 2018. The International Notes are redeemable at Affinion International’s option prior to maturity. The indenture governing the International Notes contains negative covenants which restrict the ability of Affinion International, Affinion and their respective restricted subsidiaries to engage in certain transactions and also contains customary events of default. Affinion International’s obligations under the International Notes are fully and unconditionally guaranteed on an unsecured senior basis by each of Affinion’s existing and future domestic subsidiaries that guarantee Affinion’s indebtedness under its senior secured credit facility (other than Affinion Investments and Affinion Investments II, LLC (“Affinion Investments II”), and additionally including (such additional guarantors, the “Foreign Guarantors”) Affinion International Limited, Affinion International Travel HoldCo Limited, Webloyalty International Limited, Loyalty Ventures Limited, Bassae Holding B.V., Webloyalty Holdings Coöperatief U.A. and Webloyalty International S.à r.l.). The International Notes and guarantees thereof are unsecured senior obligations of Affinion International’s and rank equally with all of Affinion International’s and the guarantors’ existing and future senior indebtedness and senior to Affinion International’s and the guarantors’ existing and future subordinated indebtedness. The carrying value of the aggregate debt instruments held by the participants to the 2015 Exchange Offers and 2015 Rights Offering (including associated debt discounts, deferred financing, and accrued interest), was $728.5 million. This was compared to the fair value of the equity issued in the 2015 Exchange Offers and 2015 Rights Offering for such debt instruments, which were valued at $107.8 million as of the date of the 2015 Exchange Offers. This exceeded the undiscounted cash flows of the aggregate lending. The Company recognized a gain in the consolidated statement of operations of $115.8 million on the 2015 Exchange Offers in 2015, which represented the write-down of the carrying value of the aggregate debt instruments to the undiscounted cash flows of the continuing debt instruments. The 2015 Exchange Offers contemplated a portion of the overall debt instruments held by the participants to the 2015 Exchange Offers. In connection with the recognition of the 2015 Exchange Offers and 2015 Rights Offering, the impact of these transactions is summarized as follows, including the aforementioned gain of $115.8 million (in millions). Reduction of carrying value of debt exchanged $ (337.3 ) Reduction of accrued interest associated with debt exchanged (10.6 ) Write-off of debt discount and deferred financing costs, plus professional fees 21.0 Fair value of equity issued in the debt exchange and rights offering 107.8 Gain recorded as noted above 115.8 Adjustment to carrying value of debt $ (103.3 ) The adjustment to the carrying value of the debt is the net impact of the aforementioned transaction and represents an adjustment of the carrying value of the First Lien Term Loans, the Second Lien Term Loans, Affinion’s 2010 senior notes (defined below) and the International Notes of $103.3 million. This amount represents the interest to be paid in cash on the continuing debt instruments held by those who participated in the exchange but were not subject to the exchange itself through the scheduled maturity of those instruments. This amount, net of amortization, increases the carrying value of the Company’s recorded long term debt at March 31, 2017 and December 31, 2016 by $53.5 million and $62.5 million, respectively. Such amounts have been and will continue to be reduced in future years as scheduled interest is paid on those remaining instruments. On December 12, 2013, the Company completed a private offer to exchange the Company’s 2006 senior subordinated notes for Investments senior subordinated notes, pursuant to which $360.0 million aggregate principal amount of Investments senior subordinated notes were issued in exchange for $352.9 million aggregate principal amount of the Company’s 2006 senior subordinated notes. The Investments senior subordinated notes bear interest at 13.50% per annum, payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2014. The Investments senior subordinated notes will mature on August 15, 2018. Affinion Investments may redeem some or all of the Investments senior subordinated notes at any time on or after December 12, 2016 at redemption prices (generally at a premium) set forth in the indenture governing the Investments senior subordinated notes. In addition, prior to December 12, 2016, up to 35% of the outstanding Investments senior subordinated notes were redeemable at the option of Affinion Investments, with the net proceeds raised by the Company or Affinion Holdings in one or more equity offerings, at 113.50% of their principal amount. In addition, prior to December 12, 2016, the Investments senior subordinated notes were redeemable, in whole or in part, at a redemption price equal to 100% of the principal amount of the Investments senior subordinated notes redeemed plus a “make-whole” premium. The indenture governing the Investments senior subordinated notes contains negative covenants which restrict the ability of Affinion Investments, any future restricted subsidiaries of Affinion Investments and one of the Company’s other wholly-owned subsidiaries that guarantees the Investments senior subordinated notes to engage in certain transactions and also contains customary events of default. Affinion Investments’ obligations under the Investments senior subordinated notes are guaranteed on an unsecured senior subordinated basis by Affinion Investments II. Each of Affinion Investments and Affinion Investments II is an unrestricted subsidiary of the Company and guarantees the Company’s indebtedness under its senior secured credit facility but does not guarantee the Company’s other indebtedness. The Investments senior subordinated notes and guarantee thereof are unsecured senior subordinated obligations of Affinion Investments, as issuer, and Affinion Investments II, as guarantor, and rank junior in right of payment to their respective guarantees of the Company’s senior secured credit facility. On December 12, 2013, Affinion Investments exchanged with the Company all of the 2006 senior subordinated notes received by it in the exchange offer for Affinion’s 13.50% senior subordinated notes due 2018 (Affinion’s “2013 senior subordinated notes”). Affinion’s 2013 senior subordinated notes bear interest at 13.50% per annum payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2014. The 2013 senior subordinated notes will mature on August 15, 2018. The 2013 senior subordinated notes are redeemable at the Company’s option prior to maturity. The indenture governing the 2013 senior subordinated notes contains negative covenants which restrict the ability of Affinion and its restricted subsidiaries to engage in certain transactions and also contains customary events of default. Affinion’s obligations under the 2013 senior subordinated notes are jointly and severally and fully and unconditionally guaranteed on an unsecured senior subordinated basis by each of Affinion’s existing and future domestic subsidiaries that guarantee Affinion’s indebtedness under its senior secured credit facility (other than Affinion Investments and Affinion Investments II). The 2013 senior subordinated notes and guarantees thereof are unsecured senior subordinated obligations of Affinion’s and rank junior to all of Affinion’s and the guarantors’ existing and future senior indebtedness, pari passu On November 19, 2010, the Company completed a private offering of $475.0 million aggregate principal amount of 7.875% senior notes due 2018 (Affinion’s “2010 senior notes”) which were registered under the Securities Act of 1933, as amended (the “Securities Act”) in 2011. The 2010 senior notes bear interest at 7.875% per annum payable semi-annually on June 15 and December 15 of each year, commencing on June 15, 2011. The 2010 senior notes will mature on December 15, 2018. The 2010 senior notes are redeemable at the Company’s option prior to maturity. The indenture governing the 2010 senior notes contains negative covenants which restrict the ability of the Company and its restricted subsidiaries to engage in certain transactions and also contains customary events of default. The Company’s obligations under the 2010 senior notes are jointly and severally and fully and unconditionally guaranteed on a senior unsecured basis by each of the Company’s existing and future domestic subsidiaries that guarantee the Company’s indebtedness under the Affinion Credit Facility, other than Affinion Investments and Affinion Investments II. The 2010 senior notes and guarantees thereof are senior unsecured obligations of the Company and rank equally with all of the Company’s and the guarantors’ existing and future senior indebtedness and senior to the Company’s and the guarantors’ existing and future subordinated indebtedness. The 2010 senior notes are therefore effectively subordinated to the Company’s and the guarantors’ existing and future secured indebtedness, including the Company’s obligations under the Affinion Credit Facility, to the extent of the value of the collateral securing such indebtedness. The 2010 senior notes are structurally subordinated to all indebtedness and other obligations of each of the Company’s existing and future subsidiaries that are not guarantors, including the Investments senior subordinated notes. On April 26, 2006, the Company issued $355.5 million aggregate principal amount of 2006 senior subordinated notes and applied the gross proceeds of $350.5 million to repay $349.5 million of outstanding borrowings under a then-outstanding $383.6 million senior subordinated loan facility (the “Bridge Loan”), plus accrued interest, and used cash on hand to pay fees and expenses associated with such issuance. The 2006 senior subordinated notes bore interest at 11 1 2 The amended Affinion Credit Facility and the indenture governing the 2010 senior notes both contain restrictive covenants related primarily to the Company’s ability to distribute dividends, redeem or repurchase capital stock, sell assets, issue additional debt or merge with or acquire other companies. Under the Affinion Credit Facility, payment of additional dividends requires the satisfaction of various conditions, including meeting defined leverage ratios and a defined fixed charge coverage ratio, and the total dividend paid cannot exceed a calculated amount of defined available free cash flow, or requires availability under specified baskets. The covenants in the Affinion Credit Facility also require compliance with a senior secured leverage ratio. During the three months ended March 31, 2017 and year ended December 31, 2016, the Company did not pay any cash dividends to Affinion Holdings. The Company was in compliance with the covenants referred to above as of March 31, 2017. Payment under each of the debt agreements may be accelerated in the event of a default. Events of default include the failure to pay principal and interest when due, covenant defaults (unless cured within applicable grace periods, if any), events of bankruptcy and, for the amended Affinion Credit Facility, a material breach of representation or warranty and a change of control. On October 5, 2010, Affinion Holdings issued $325.0 million aggregate principal amount of Affinion Holdings’ 2010 senior notes. Affinion Holdings used a portion of the proceeds of $320.3 million (net of issue discount), along with proceeds from a cash dividend from the Company in the amount of $115.3 million, to repay its senior unsecured term loan. A portion of the remaining proceeds from the offering of Affinion Holdings’ 2010 senior notes were utilized to pay related fees and expenses of approximately $6.7 million, with the balance retained for general corporate purposes. The indenture governing Affinion Holdings’ 2010 senior notes contains restrictive covenants related primarily to the Company’s and Affinion Holdings’ ability to distribute dividends, redeem or repurchase capital stock, sell assets, issue additional debt or merge with or acquire other companies. The outstanding Affinion Holdings’ 2010 senior notes matured on November 15, 2015. On December 12, 2013, Affinion Holdings completed an offer to exchange Affinion Holdings’ 2010 senior notes for Affinion Holdings’ 2013 senior notes. In connection with the exchange offer, $292.8 million aggregate principal amount of Affinion Holdings’ 2010 senior notes were exchanged for $292.8 million aggregate principal amount of Affinion Holdings’ 2013 senior notes. Affinion Holdings’ 2013 senior notes bear interest at 13.75% per annum, payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2014. At Affinion Holdings’ option (subject to certain exceptions), it may elect to pay interest (i) in cash, (ii) by increasing the principal amount of Affinion Holdings’ 2013 senior notes (“PIK Interest”), or (iii) 50% as cash and 50% as PIK Interest. PIK Interest accrues at 13.75% per annum plus 0.75%. Affinion Holdings’ 2013 senior notes will mature on September 15, 2018. In June 2014, Affinion Holdings completed an offer to exchange Affinion Holdings’ 2013 senior notes for Affinion Holdings’ Series A warrants to purchase shares of Affinion Holdings’ Class B common stock. In connection with the exchange offer, approximately $88.7 million aggregate principal amount of Affinion Holdings’ 2013 senior notes were exchanged for up to approximately 30.3 million Series A warrants to purchase shares of Affinion Holdings Class B common stock. As a result of the 2015 Consent Solicitations, substantially all of the restrictive covenants and certain of the default provisions were removed from the indenture governing Affinion Holdings’ 2013 senior notes and the collateral securing Affinion Holdings’ 2013 senior notes was released. The Company did not make any dividend distributions to Affinion Holdings during the years ended December 31, 2016 and 2015. The Company expects that, in the future, to the extent that it is permitted contractually and legally to pay cash dividends to Affinion Holdings, Affinion Holdings may require the Company to pay cash dividends to enable Affinion Holdings to service its net cash obligations under Affinion Holdings’ 2013 senior notes. Upon consummation of the 2015 Exchange Offers, 2015 Consent Solicitations and 2015 Rights Offering, Affinion Holdings effected a reclassification (the “Reclassification” and, together with the 2015 Exchange Offers, 2015 Consent Solicitations and 2015 Rights Offering and the related transactions, the “2015 Transactions”) as follows. Affinion Holdings’ existing Class A Common Stock (including Class A Common Stock issued as a result of a mandatory cashless exercise of all of its Series A Warrants) was converted into (i) shares of Affinion Holdings’ new Class C Common Stock (as defined below), that upon conversion will represent 5% of the outstanding shares of Common Stock on a fully diluted basis, and (ii) shares of Affinion Holdings’ new Class D Common Stock (as defined below), that upon conversion will represent 5% of the outstanding shares of Common Stock on a fully diluted basis. In addition, Affinion Holdings’ Series A Warrants and Affinion Holdings’ Class B Common Stock were eliminated from Affinion Holdings’ certificate of incorporation and Affinion Holdings’ Series B Warrants were cancelled for no additional consideration. On March 31, 2017, Affinion entered into a commitment letter with a lender, pursuant to which the lender committed to provide term loans in an aggregate principal amount equal to approximately $1.3 billion and committed to provide revolving loans in an aggregate principal amount at any one time outstanding not to exceed $110.0 million, decreasing to $80.0 million on the first anniversary of the closing date (the “New Credit Facility”). Execution and closing of the New Credit Facility was conditioned on the consummation of the private offers to exchange for new Senior Cash 12.5%/ PIK Step-Up to 15.5% Notes due 2022 of Affinion (the “New Notes”) and New Warrants (as defined below) or repurchase for cash Affinion’s 2010 senior notes, Affinion Holdings’ 2013 senior notes and Investments’ senior subordinated notes (the “Exchange Offers”). Also on March 31, 2017, certain holders of Existing Notes (the “Significant Holders”), which collectively held, as of such date, approximately 50% aggregate principal amount of Affinion’s 2010 senior notes, entered into a support agreement (the “Support Agreement”) with Affinion Holdings, Affinion and Affinion Investments. Pursuant to the Support Agreement, the Significant Holders agreed to tender in the Exchange Offers their Existing Notes. Subsequent Event — On May 10, 2017, Affinion entered into the New Credit Facility having a five year maturity with a lender, pursuant to which the lender provided term loans in an aggregate principal amount equal to approximately $1.3 billion and committed to provide revolving loans in an aggregate principal amount at any one time outstanding not to exceed $110.0 million, decreasing to $80.0 million on the first anniversary of the closing date. The proceeds of the term loans were used by Affinion to refinance its existing senior secured credit facility (the “Credit Agreement Refinancing”), to redeem in full the International Notes (the “International Notes Redemption”), to pay transaction fees and expenses and for general corporate purposes. The term loans provide for quarterly amortization payments totaling (i) for the first two years after the closing date, 1% per annum, (ii) for the third year after the closing date, 2.5% per annum, and (iii) for each year thereafter, 5% per annum, in each case, payable quarterly, with the balance due upon the final maturity date, subject in each case, to reduction of such amortization payments for certain prepayments. The New Credit Facility also requires mandatory prepayments of the outstanding term loans based on excess cash flow (as defined), if any, and the proceeds from certain specified transactions. The interest rates with respect to the term loans and revolving loans under the New Credit Facility are based on, at Affinion’s option, (x) the higher of (i) adjusted LIBOR and (ii) 1.00%, in each case, plus 7.75%, or (y) the highest of (i) the prime rate, (ii) the Federal Funds Effective Rate plus 0.5%, and (iii) 2.00% (“ABR”) in each case plus 6.75%. The Company’s obligations under the New Credit Facility are, and the Company’s obligations under any interest rate protection or other hedging arrangements entered into with a lender or any of its affiliates are, guaranteed by Affinion Holdings and by each of the Company’s existing and subsequently acquired or organized domestic subsidiaries, subject to certain exceptions. The New Credit Facility is secured on a first-priority basis to the extent legally permissible by substantially all of the assets of (i) Affinion Holdings, which consists of a pledge of all the Company’s capital stock and (ii) the Company and the subsidiary guarantors, including but not limited to: (a) a pledge of substantially all capital stock held by the Company or any subsidiary guarantor and (b) security interests in substantially all tangible and intangible assets of the Company and each subsidiary guarantor, subject to certain exceptions. The New Credit Facility also contains financial, affirmative and negative covenants. The negative covenants in the New Credit Facility include, among other things, limitations (all of which are subject to certain exceptions) on the Company’s (and in certain cases, Affinion Holdings’) ability to: declare dividends and make other distributions, redeem or repurchase the Company’s capital stock; prepay, redeem or repurchase certain of the Company’s subordinated indebtedness; make loans or investments (including acquisitions); incur additional indebtedness (subject to certain exceptions); enter into agreements that would restrict the ability of the Company’s subsidiaries to pay dividends; merge or enter into acquisitions; sell assets; and enter into transactions with affiliates. The New Credit Facility requires Affinion to comply with (a) a maximum ratio of senior secured debt to EBITDA (as defined in the New Credit Facility) and (y) a minimum ratio of EBITDA to consolidated fixed charges. For the quarter ending June 30, 2017, the maximum ratio of senior secured debt to EBITDA will be 7.5:1.0 and the minimum ratio of EBITDA to consolidated fixed charges will be 1.0:1.0. On May 10, 2017, (a) Affinion completed a private offer to exchange or repurchase at the holder’s election (collectively, the “AGI Exch |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 5. INCOME TAXES The Company is included as a member of Affinion Holdings’ consolidated federal income tax return and as a member of certain of Affinion Holdings’ unitary or combined state income tax returns. Income taxes are presented in the Company’s consolidated financial statements using the asset and liability approach based on the separate return method for the consolidated group. Under this method, current and deferred tax expense or benefit for the period is determined for the Company and its subsidiaries as a separate group on a standalone basis. Deferred tax assets and liabilities are calculated based upon the temporary differences between the financial statements and income tax bases of assets and liabilities using currently enacted tax rates. Deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion, or all, of the recorded deferred tax assets will not be realized in future periods. Decreases to the valuation allowance are recorded as reductions to the income tax provision, while increases to the valuation allowance result in additional income tax provision. The realization of deferred tax assets is primarily dependent on estimated future taxable income. As of March 31, 2017 and December 31, 2016, the Company has recorded a full valuation allowance for its U.S. federal net deferred tax assets. As of March 31, 2017 and December 31, 2016, the Company has also recorded valuation allowances against the deferred tax assets related to certain state and foreign tax jurisdictions. The Company’s effective income tax rates for the three months ended March 31, 2017 and 2016 were 22.3% and 53.7%, respectively. The difference in the effective tax rates for the three months ended March 31, 2017 and 2016 is primarily a result of the increase in income before income taxes and non-controlling interest of $5.8 million for the three months ended March 31, 2016 to $10.8 million for the three months ended March 31, 2017 and a decrease in the income tax provision from $3.1 million for the three months ended March 31, 2016 to $2.4 million for the three months ended March 31, 2017. The Company’s tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amount of income it earns in those jurisdictions. It is also affected by discrete items that may occur in any given year, but are not consistent from year to year. In addition to state and foreign income taxes and related foreign tax deductions impacting the effective tax rate, the requirement to maintain valuation allowances had the most significant impact on the difference between the Company’s effective tax rate and the statutory U.S. federal income tax rate of 35%. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company recognized less than $0.1 million of interest related to uncertain tax positions in each of the three month periods ended March 31, 2017 and 2016. The interest has been included in income tax expense for the current period. The Company’s gross unrecognized tax benefits for the three months ended March 31, 2017 increased by less than $0.1 million as a result of tax positions taken during the current period, which was offset by a valuation allowance. The Company’s income tax returns are periodically examined by various tax authorities. In connection with these and future examinations, certain tax authorities, including the Internal Revenue Service, may raise issues and impose additional assessments. The Company regularly evaluates the likelihood of additional assessments resulting from these examinations and establishes liabilities, through the provision for income taxes, for potential amounts that may result therefrom. The recognition of uncertain tax benefits are not expected to have a material impact on the Company’s effective tax rate or results of operations. Federal, state and local jurisdictions are subject to examination by the taxing authorities for all open years as prescribed by applicable statute. For significant foreign jurisdictions, tax years in Germany, France, Turkey, Switzerland and the United Kingdom remain open as prescribed by applicable statute. The Company does not believe that it is reasonably possible that the total amount of unrecognized tax benefits will change significantly within the next 12 months. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. COMMITMENTS AND CONTINGENCIES Litigation In the ordinary course of business, the Company is involved in claims, governmental inquiries and legal proceedings related to employment matters, contract disputes, business practices, trademark and copyright infringement claims and other commercial matters. The Company is also a party to lawsuits which were brought against it and its affiliates and which purport to be a class action in nature and allege that the Company violated certain federal or state consumer protection statutes (as described below). The Company intends to vigorously defend itself against such lawsuits. On June 17, 2010, a class action complaint was filed against the Company and Trilegiant Corporation (“Trilegiant”) in the United States District Court for the District of Connecticut. The complaint asserts various causes of action on behalf of a putative nationwide class and a California-only subclass in connection with the sale by Trilegiant of its membership programs, including claims under the Electronic Communications Privacy Act (“ECPA”), the Connecticut Unfair Trade Practices Act (“CUTPA”), the Racketeer Influenced Corrupt Organizations Act (“RICO”), the California Consumers Legal Remedies Act, the California Unfair Competition Law, the California False Advertising Law, and for unjust enrichment. On September 29, 2010, the Company filed a motion to compel arbitration of all of the claims asserted in this lawsuit. On February 24, 2011, the court denied the Company’s motion. On March 28, 2011, the Company and Trilegiant filed a notice of appeal in the United States Court of Appeals for the Second Circuit, appealing the district court’s denial of their motion to compel arbitration. On September 7, 2012, the Second Circuit affirmed the decision of the district court denying arbitration. While that issue was on appeal, the matter proceeded in the district court. There was written discovery and depositions. Previously, the court had set a briefing schedule on class certification that called for the completion of class certification briefing on May 18, 2012. However, on March 28, 2012, the court suspended the briefing schedule on the motion due to the filing of two other overlapping class actions in the United States District Court for the District of Connecticut. The first of those cases was filed on March 6, 2012, against the Company, Trilegiant, Chase Bank USA, N.A., Bank of America, N.A., Capital One Financial Corp., Citigroup, Inc., Citibank, N.A., Apollo Global Management, LLC, 1-800-Flowers.Com, Inc., United Online, Inc., Memory Lane, Inc., Classmates Int’l, Inc., FTD Group, Inc., Days Inn Worldwide, Inc., Wyndham Worldwide Corp., People Finderspro, Inc., Beckett Media LLC, Buy.com, Inc., Rakuten USA, Inc., IAC/InteractiveCorp., and Shoebuy.com, Inc. The second of those cases was filed on March 25, 2012, against the same defendants as well as Adaptive Marketing, LLC, Vertrue, Inc., Webloyalty.com, Inc., and Wells Fargo & Co. These two cases assert similar claims as the claims asserted in the earlier-filed lawsuit in connection with the sale by Trilegiant of its membership programs. On April 26, 2012, the court consolidated these three cases. The court also set an initial status conference for May 17, 2012. At that status conference, the court ordered that Plaintiffs file a consolidated amended complaint to combine the claims in the three previously separate lawsuits. The court also struck the class certification briefing schedule that had been set previously. On September 7, 2012, the Plaintiffs filed a consolidated amended complaint asserting substantially the same legal claims. The consolidated amended complaint added Priceline, Orbitz, Chase Paymentech, Hotwire, and TigerDirect as Defendants and added three new Plaintiffs; it also dropped Webloyalty and Rakuten as Defendants. On December 7, 2012, all Defendants filed motions seeking to dismiss the consolidated amended complaint and to strike certain portions of the complaint. Plaintiff’s response brief was filed on February 7, 2013, and Defendants’ reply briefs were filed on April 5, 2013. On September 25, 2013, the court held oral argument on the motions to dismiss. On March 28, 2014, the court ruled on the motions to dismiss, granting them in part and denying them in part. The court dismissed the Plaintiffs’ RICO claims and claims under the California Automatic Renewal Statute as to all defendants. The court also dismissed certain named Plaintiffs as their claims were barred either by the statute of limitations and/or a prior settlement agreement. Certain Defendants were also dismissed from the case. The court also struck certain allegations from the consolidated amended complaint, including certain of Plaintiffs’ class action allegations under CUTPA. As to the Company and Trilegiant, the court denied the motion to dismiss certain Plaintiffs’ claims under ECPA and for unjust enrichment, as well as certain other claims of Plaintiffs under CUTPA. Also, on December 5, 2012, the Plaintiffs’ law firms in these consolidated cases filed an additional action in the United States District Court for the District of Connecticut. That case is identical in all respects to this case except that it was filed by a new Plaintiff (the named Plaintiff from the class action complaint previously filed against the Company, Trilegiant, 1-800-Flowers.com, and Chase Bank USA, N.A., in the United States District Court for the Eastern District of New York on November 10, 2010). On January 23, 2013, Plaintiff filed a motion to consolidate that case into the existing set of consolidated cases. On June 13, 2013, the court entered an order staying the date for all Defendants to respond to the Complaint until 21 days after the court ruled on the motion to consolidate. On March 28, 2014, the court entered an order granting the motion to consolidate. On May 12, 2014, remaining Defendants in the consolidated cases filed answers in which they denied the material allegations of the consolidated amended complaint. On April 28, 2014, Plaintiffs filed a motion seeking interlocutory appellate review of portions of the court’s order of March 28, 2014. Briefing on the motion was completed on June 5, 2014. On March 26, 2015, the court denied Plaintiff’s motion for interlocutory appeal. On May 29, 2015, the court issued a scheduling order indicating that discovery was to commence immediately and be completed by December 31, 2015. On May 29, 2015, the court also set deadlines for dispositive motions, which were due February 29, 2016. If no dispositive motions were filed, a joint trial memorandum would be due by April 1, 2016, and jury selection would take place on May 3, 2016. If dispositive motions were filed, the joint trial memorandum would be due by October 3, 2016, and jury selection would take place on November 1, 2016. On June 16, 2015, the court set a schedule for class certification, with Plaintiffs’ motion for class certification due on September 15, 2015, and with briefing to be completed by November 30, 2015. Plaintiffs filed their motion for class certification on September 15, 2015, and Defendants filed an opposition brief on December 15, 2015. Plaintiffs filed a reply brief on December 22, 2015, and Defendants filed a sur-reply on December 29, 2015. On February 29, 2016, the Company filed a Motion for Summary Judgment on the individual claims of the remaining named Plaintiffs. Plaintiffs filed a response on March 21, 2016, and the Company filed its response on April 4, 2016. On August 23, 2016 the court granted Defendant’s motion for Summary Judgment as to all remaining claims against the Defendants. Plaintiffs filed a notice of appeal on September 21, 2016. The Plaintiffs filed their opening brief on appeal on January 4, 2017. The Company filed its response brief on April 5, 2017. On August 27, 2010, a class action lawsuit was filed against Webloyalty, one of its former clients and one of the credit card associations in the United States District Court for the District of Connecticut alleging, among other things, violations of the EFT, ECPA, unjust enrichment, civil theft, negligent misrepresentation, fraud and CUTPA violation (the “Connecticut Action”). This lawsuit relates to Webloyalty’s alleged conduct occurring on and after October 1, 2008. On November 1, 2010, the Defendants moved to dismiss the initial complaint, which Plaintiff then amended on November 19, 2010. On December 23, 2010, Webloyalty filed a second motion to dismiss this lawsuit. On May 15, 2014, the court heard oral argument on Plaintiff’s motion to strike the Company’s request for judicial notice of the Plaintiff’s membership enrollment documents filed in support of the Company’s second motion to dismiss. On July 17, 2014, the court denied Plaintiff’s motion to strike. The court, at the same time, dismissed those claims grounded in fraud, but reserved until further proceedings the determination as to whether all of Plaintiff’s claims are grounded in fraud and whether those claims not grounded in fraud are dismissible. The court permitted the Plaintiff until August 15, 2014 to amend his complaint and allowed the parties the opportunity to conduct limited discovery, to be completed by September 26, 2014, concerning the issues addressed in its dismissal order. All other discovery was stayed in the case. The July 17, 2014 order indicated that the court would set a further motion to dismiss briefing schedule following the conclusion of this limited discovery. The Plaintiff amended his complaint as scheduled, and the parties conducted limited discovery as ordered. After this limited discovery, the parties proposed a motion to dismiss briefing schedule calling for the Defendants to file their opening briefs on January 9, 2015. The Plaintiff filed his opposition brief on March 24, 2015, and on April 24, 2015, the Defendants filed their reply briefs in response to that opposition. On October 15, 2015, the court entered a judgment dismissing all of the Plaintiff’s claims with prejudice and without further leave to amend. On November 13, 2015, the Plaintiff filed a notice of appeal of the dismissal decision. Plaintiff’s opening appeals brief was filed on February 10, 2016. The Company’s answering brief was filed on April 15, 2016 and the Plaintiff filed a reply brief on May 11, 2016. The court held oral argument on September 14, 2016. On December 20, 2016, the Court affirmed the District Court’s dismissal decisions, with the exception of Plaintiff’s claim under CUTPA and under the EFT with regard to delivery of a “copy” of the Plaintiff’s authorization to him. The Court vacated the District Court’s decision on both claims and remanded them to the District Court for further proceedings on the merits. On March 23, 2017, the District Court held a scheduling conference and took the parties’ respective recommendations for the remaining case schedule under advisement. On June 7, 2012, another class action lawsuit was filed in the U.S. District Court for the Southern District of California against Webloyalty that was factually similar to the Connecticut Action. The action claims that Webloyalty engaged in unlawful business practices in violation of California Business and Professional Code § 17200, et seq. and in violation of CUTPA. Both claims are based on allegations that in connection with enrollment and billing of the Plaintiff, Webloyalty charged Plaintiff’s credit or debit card using information obtained through a data pass process and without obtaining directly from Plaintiff his full account number, name, address, and contact information, as purportedly required under the Restore Online Shoppers’ Confidence Act. On September 25, 2012, Webloyalty filed a motion to dismiss the complaint in its entirety and the court scheduled a hearing on the motion for January 14, 2013. Webloyalty also sought judicial notice of the enrollment page and related enrollment and account documents. Plaintiff filed his opposition on December 12, 2012, and Webloyalty filed its reply submission on January 7, 2013. Thereafter, on January 10, 2013, the court cancelled the previously scheduled January 14, 2013 hearing and indicated that it would rule based on the parties’ written submissions without the need for a hearing. On August 28, 2013, the court sua sponte On May 11, 2016, Kohl’s Department Stores, Inc. (“Kohl’s”) filed a third-party complaint against Trilegiant in the United States District Court for the Eastern District of Pennsylvania, alleging claims for indemnification, contribution and breach of contract. The third-party complaint arises in a case filed in the same court on February 13, 2015, in which a putative class action has been brought against Kohl’s and the issuer of Kohl’s credit cards alleging breach of the covenant of good faith and fair dealing and unjust enrichment. Kohl’s third-party complaint alleges that Trilegiant breached alleged obligations to Kohl’s under a marketing agreement between Trilegiant and Kohl’s through which a Trilegiant membership program was offered to Kohl’s credit card customers, including Trilegiant’s purported obligation under that agreement to indemnify Kohl’s and participate in its defense of the class action. Kohl’s third-party complaint seeks damages from Trilegiant, including amounts for which Kohl’s may be liable to the named plaintiffs or the putative class in the class action relating to their claims pertaining to Trilegiant’s membership program and Kohl’s costs, including attorney fees, of defending against such claims. On July 5, 2016, Trilegiant filed a motion to dismiss or, in the alternative, to stay Kohl’s third-party complaint. On September 2, 2016, Kohl’s filed an opposition to Trilegiant’s motion to dismiss. On February 3, 2017, Trilegiant filed a reply to Kohl’s opposition. As of March 1, 2017, the parties entered into a settlement and release wherein Trilegiant agreed to make a payment to Kohl’s of approximately $0.3 million and to pay 30% of Kohl’s on-going legal fees in the putative class action, capped at $0.4 million (excluding Trilegiant’s initial payment of approximately $0.3 million), to resolve Kohl’s indemnification, contribution and breach of contract claims against Trilegiant with respect to fees and expenses that Kohl’s has incurred or will incur in connection with its defense of the putative class action. Kohl’s reserved its right to seek indemnity from Trilegiant for any liability Kohl’s may incur to the plaintiffs in the putative class action relating to Trilegiant’s membership program. The third-party complaint was dismissed without prejudice by stipulation of the parties on March 10, 2017. On August 18, 2016, Lion Receivables 2004 Trust (“Lion”) served Long Term Preferred Care, Inc. (“LTPC”), a subsidiary of Affinion Benefits Group, LLC, with a complaint (the “Lion Litigation”), which was filed in the United States District Court for the State of Delaware. LTPC filed a motion to dismiss in response to the complaint on October 24, 2016. On March 20, 2017, a magistrate judge recommended that the Court deny LTPC’s motion to dismiss. LTPC has filed objections to this recommendation, and the Court has not indicated when it will make a final decision on the motion to dismiss. In the complaint, Lion alleges that LTPC made certain inaccurate representations and warranties in the Commission Purchase Agreement, dated as of December 30, 2004, between LTPC and Lion. Lion seeks compensatory damages, pre-judgment and post-judgment interest, and attorneys’ fees. Pursuant to our purchase agreement with Cendant, the Cendant Entities (as such terms are defined in Note 8 to our unaudited condensed consolidated financial statements) have agreed to indemnify us for any liability relating to this matter. Other Contingencies From time to time, the Company receives inquiries from federal and state agencies which may include the FTC, the FCC, the CFPB, state attorneys general and other state regulatory agencies, including state insurance regulators. The Company responds to these matters and requests for documents, some of which may lead to further investigations and proceedings. Additionally, certain of our clients have become, and others may become, involved in legal proceedings or governmental inquiries relating to our programs and solutions or marketing practices. As a result, we may be subject to claims under our marketing agreements, and we have accrued $8.2 million for certain asserted claims, including claims for which no litigation has been commenced. From time to time, our international operations also receive inquiries from consumer protection, insurance or data protection agencies. The Company responds to these matters and requests for documents, some of which may lead to further investigations and proceedings. On January 27, 2015, following voluntary discussions with the FCA, AIL, one of our UK subsidiaries, and 11 UK retail banks and credit card issuers, announced a proposed joint arrangement, which allows eligible consumers to make claims for compensation in relation to a discontinued benefit in one of AIL’s products. The proposed arrangement has been approved by a majority of those affected consumers who voted at a creditors’ meeting held on June 30, 2015, and has also been approved by the High Court in London at a hearing held on July 9, 2015. The proposed arrangement, which will not result in the imposition of any fines on AIL or the Company, became effective on August 17, 2015 and eligible customers had until March 18, 2016 to claim compensation (in exceptional circumstances, they had until September 18, 2016). As of December 31, 2016, substantially all of the compensation to consumers had been paid and, based on the information currently available, the Company has recorded an estimated liability that represents any additional potential consumers’ refunds to be paid by the Company as part of such arrangement. On November 30, 2015, PNC Bank, N.A. (“PNC”) filed a pleading called a Praecipe for Writ of Summons (the “Writ”) in the Court of Common Pleas of Allegheny County, Pennsylvania, naming as defendants Trilegiant Corporation, Affinion Benefits Group, LLC, Affinion, and/or Affinion Holdings. The parties participated in a non-binding mediation on September 13, 2016. The parties were unable to resolve their dispute in the mediation. On November 18, 2016, PNC filed a complaint in the Pennsylvania Court of Common Pleas against Trilegiant for indemnification, breach of contract, unjust enrichment and breach of implied covenant of good faith and fair dealing. The complaint also alleges negligence and intentional misconduct by other Affinion entities. These claims arise out of consent orders that PNC entered into with the Office of the Comptroller of the Currency (“OCC”) to settle the OCC’s Section 5 claim against it. According to PNC, the damages it incurred pursuant to those consent orders were the result of Trilegiant’s failure to properly service PNC’s customers. Trilegiant’s preliminary objections to PNC’s complaint were filed on January 12, 2017 and are now fully briefed. On January 30, 2017, the case was transferred from the Court of Common Pleas to the Commerce Court and Complex Litigation Center. Oral argument on Trilegiant’s preliminary objections was held on May 9, 2017. On August 5, 2016, Citizens Bank, N.A. (“Citizens”) filed a complaint against Affinion Holdings, Affinion, Trilegiant, and Affinion Group, LLC (collectively, the “Defendants”) in the United States District Court for the District of Rhode Island. In the complaint, Citizens asserts various causes of action and requests for monetary relief, including a demand for contractual indemnification for customer refunds and attorneys’ fees that Citizens incurred related to a consent order entered into by Citizens with the Office of the Comptroller of the Currency on November 10, 2015 with respect to certain identity theft protection products offered to Citizens’ customers. On November 18, 2016, Defendants’ filed a motion to dismiss in response to the complaint. On February 6, 2017, the Court denied Defendants’ motion to dismiss. Dispositive motions are due by December 6, 2017. During the three months ended March 31, 2017, a charge of $5.2 million was recorded relating to the remediation of an external gift card inventory theft. An insurance claim related to the theft is currently being pursued with our carriers and we expect a recovery in a future period which will be recorded when received. The Company believes that the amount accrued for the above litigation and contingencies matters is adequate, and the reasonably possible loss beyond the amounts accrued will not have a material effect on its consolidated financial statements, taken as a whole, based on information currently available. However, litigation is inherently unpredictable and, although the Company believes that accruals are adequate and it intends to vigorously defend itself against such matters, unfavorable resolution could occur, which could have a material effect on the Company’s consolidated financial statements, taken as a whole. Surety Bonds and Letters of Credit In the ordinary course of business, the Company is required to provide surety bonds to various state authorities in order to operate its membership, insurance and travel agency programs. As of March 31, 2017, the Company provided guarantees for surety bonds totaling approximately $10.8 million and issued letters of credit totaling $12.1 million. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 7. STOCK-BASED COMPENSATION On October 17, 2005, Affinion Holdings adopted the 2005 Stock Incentive Plan (the “2005 Plan”). The Board was authorized to grant up to 4.9 million shares of Affinion Holdings’ common stock under the 2005 Plan over a ten year period. As discussed below, no additional grants may be made under Affinion Holdings’ 2005 Plan on or after November 7, 2007, the effective date of the 2007 Plan (as defined below). As discussed below, on November 9, 2015, the effective date of the Reclassification (as defined below), existing option awards under the 2005 Plan were adjusted in accordance with their terms. Generally, existing options for Class A Common Stock (as defined below) under the 2005 Plan have been converted into options for shares of Affinion Holdings’ Class C Common Stock, $0.01 par value per share (the “Class C Common Stock”), and Affinion Holdings’ Class D Common Stock, $0.01 par value per share (the “Class D Common Stock” and, together with the Class C Common Stock, the “Class C/D Common Stock”), and both the exercise price and the number of shares of Class C Common Stock and Class D Common Stock underlying such options have been adjusted. In November 2007, Affinion Holdings adopted the 2007 Stock Award Plan (the “2007 Plan”). The Board was authorized to grant up to 10.0 million shares of Affinion Holdings’ common stock under the 2007 Plan over a ten year period. As discussed below, no additional grants may be made under Affinion Holdings’ 2007 Plan on or after November 9, 2015, the effective date of the Reclassification, as defined below, and all outstanding options granted under the 2007 Plan were cancelled for no consideration, effective November 9, 2015. In connection with the acquisition of Webloyalty in January 2011, the Company assumed the Webloyalty Holdings, Inc. 2005 Equity Award Plan (the “Webloyalty 2005 Plan”). In connection with the Reclassification, as defined below, all outstanding options granted under the Webloyalty 2005 Plan were cancelled for no consideration, effective November 9, 2015. On November 9, 2015, in conjunction with the 2015 Exchange Offers, the 2015 Consent Solicitations and the 2015 Rights Offering, Affinion Holdings effected the Reclassification as follows. Immediately prior to the Reclassification, Affinion Holdings’ Series A Warrants (the “Series A Warrants”) were mandatorily cashlessly exercised for shares of Affinion Holdings’ then existing Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”), and Affinion Holdings’ Series B Warrants (the “Series B Warrants”) were cancelled for no additional consideration. In addition, all issued and outstanding options under the Webloyalty 2005 Plan and the 2007 Plan were cancelled for no additional consideration. Stock options issued and outstanding under the 2005 Plan were not affected by the cancellation. In accordance with the Reclassification, Affinion Holdings’ Class A Common Stock was converted into shares of Affinion Holdings’ Class C/D Common Stock. Issued and outstanding options under the 2005 Plan were converted into options to acquire shares of Affinion Holdings’ Class C Common Stock and shares of Affinion Holdings’ Class D Common Stock. The number of shares of Class C/D Common Stock subject to the issued and outstanding options was adjusted based on the conversion ratio utilized for the conversion of the Class A Common Stock, and the exercise price was correspondingly adjusted. As of March 31, 2017, there were outstanding options to acquire approximately 2,235 shares of Affinion Holdings’ Class C Common Stock and approximately 2,353 shares of Affinion Holdings’ Class D Common Stock. The weighted average exercise price of the outstanding options, all of which were vested at March 31, 2017, is $147.12 and the issued and outstanding options granted to employees and to directors each have a weighted average contractual life of 7.0 years. On November 9, 2015, the Board of Directors adopted the 2015 Equity Incentive Plan (the “2015 Plan”), which authorizes the Compensation Committee to grant stock options, restricted stock, restricted stock units (“RSUs”) and other equity-based awards. Under the 2015 Plan, 10% of the outstanding shares of common stock have been reserved for issuance pursuant to awards. On March 9, 2016, the Compensation Committee awarded 859,500 options to employees under the 2015 Plan, and subsequently issued another 28,000 options to employees under the 2015 Plan. As of March 31, 2017, there were 868,950 options outstanding. For employee stock awards, the Company recognizes compensation expense, net of estimated forfeitures, over the requisite service period, which is the period during which the employee is required to provide services in exchange for the award. The Company has elected to recognize compensation cost for awards with only a service condition and have a graded vesting schedule on a straight-line basis over the requisite service period for the entire award. Stock Options During the three months ended March 31, 2017 and 2016, there were no stock options granted to employees from the 2005 Plan. All options previously granted were granted with an exercise price equal to the estimated fair market value of a share of the underlying common stock on the date of grant. Stock options granted to employees from the 2005 Plan are comprised of three tranches with the following terms: Tranche A Tranche B Tranche C Vesting Ratably over 5 years* 100% after 8 years** 100% after 8 years** Initial option term 10 years 10 years 10 years * In the event of a sale of the Company, vesting for tranche A occurs 18 months after the date of sale. ** Tranche B and C vesting would be accelerated upon specified realized returns to Apollo. On March 28, 2014, the Company modified approximately 1.9 million of the outstanding options under the 2005 Plan, adjusting the exercise price to $1.14 per common share and extending the contractual life of the modified options until April 1, 2024. During the three months ended March 31, 2017 and 2016, there were no stock options granted to employees from the 2007 Plan. All options granted were granted with an exercise price equal to the estimated fair market value of a share of the underlying common stock on the date of grant. The stock options granted to employees from the 2007 Plan have the following terms: Vesting period Ratably over 4 years Initial option term 10 years On March 28, 2014, the Company modified approximately 2.4 million of the outstanding options under the 2007 Plan, adjusting the exercise price to $1.14 per common share and extending the contractual life of the modified options until April 1, 2024. On November 9, 2015, in conjunction with the Reclassification, all issued and outstanding options under the 2007 Plan were cancelled for no additional consideration. During the three months ended March 31, 2017 and 2016, there were no stock options granted to members of the Board of Directors from the 2007 Plan. Generally, options granted to members of the Board of Directors fully vest on the date of grant and have an initial option term of 10 years. On March 28, 2014, the Company modified approximately 0.2 million of the outstanding options granted to members of the Board of Directors, adjusting the exercise price to $1.14 per common share and extending the contractual life of the modified options until April 1, 2024. On November 9, 2015, in conjunction with the Reclassification, all issued and outstanding options granted to members of the Board of Directors under the 2007 Plan were cancelled for no additional consideration. During the three months ended March 31, 2016, the Compensation Committee granted options to employees under the 2015 Plan to purchase 0.9 million shares of Affinion Holdings’ Common Stock. There were no options granted to employees under the 2015 Plan during the three months ended March 31, 2017. The options have a contractual life of 10 years and vest ratably on each of the first four anniversaries of the grant date. The exercise price of the options is $13.97 per share, the grant date fair value of a share of Affinion Holdings’ Common Stock. The fair value of each option award was estimated on the date of grant using the Black-Scholes option-pricing model based on the assumptions noted in the following table. Expected volatilities are based on historical volatilities of comparable companies. The expected term of the options granted represents the period of time that options are expected to be outstanding, and is based on the average of the requisite service period and the contractual term of the option. 2016 Expected volatility 75 % Expected life (in years) 6.3 Risk-free interest rate 1.64 % Expected dividends — A summary of option activity for options to acquire shares of Class C/D Common Stock under the 2005 Plan for the three months ended March 31, 2017 is presented below (number of options in thousands): 2005 Plan 2005 Plan 2005 Plan Grants to Grants to Grants to Grants to Employees - Employees - Employees - Board of Tranche A Tranche B Tranche C Directors Outstanding options at January 1, 2017 2 1 1 1 Granted — — — — Exercised — — — — Forfeited or expired — — — — Outstanding options at March 31, 2017 2 1 1 1 Vested or expected to vest at March 31, 2017 2 1 1 1 Exercisable options at March 31, 2017 2 1 1 1 Weighted average remaining contractual term (in years) 7.0 7.0 7.0 7.0 Weighted average grant date fair value per option granted in 2017 $ — $ — $ — $ — Weighted average exercise price of exercisable options at March 31, 2017 $ 147.12 $ 147.12 $ 147.12 $ 147.12 Weighted average exercise price of outstanding options at March 31, 2017 $ 147.12 $ 147.12 $ 147.12 $ 147.12 A summary of option activity for options to acquire shares of Common Stock granted under the 2015 Plan for the three months ended March 31, 2017 is presented below (number of options in thousands): Outstanding options at January 1, 2017 874 Granted — Exercised — Forfeited or expired (5 ) Outstanding options at March 31, 2017 869 Vested or expected to vest at March 31, 2017 869 Exercisable options at March 31, 2017 212 Weighted average remaining contractual term (in years) 9.0 Weighted average grant date fair value per option granted in 2017 $ — Weighted average exercise price of exercisable options at March 31, 2017 $ 13.97 Weighted average exercise price of outstanding options at March 31, 2017 $ 13.97 Based on the estimated fair values of options granted, stock-based compensation expense for the three months ended March 31, 2017 and 2016 totaled $0.5 million and $0.1 million, respectively. As of March 31, 2017, there was $6.0 million of unrecognized compensation cost related to unvested stock options, which will be recognized over a weighted average period of approximately 1.6 years. Restricted Stock Units On March 25, 2016, each of the non-employee members of the Board of Directors was granted RSUs under the 2015 Plan as a component of their annual compensation. The RSUs vested 3/12 ths th th Based on the estimated fair value of the RSUs granted, stock-based compensation expense for the three months ended March 31, 2016 was $0.1 million. There was no stock-based compensation expense related to the RSU awards for the three months ended March 31, 2017. Incentive Awards On March 16, 2015, the Compensation Committee of the Board approved the terms of (i) the Affinion Group Holdings, Inc. 2015 Retention Award Program (the “2015 Retention Program”), an equity and cash incentive award program intended to foster retention of key employees of Affinion Holdings and its subsidiaries, and (ii) the awards (the “Retention Awards”) to each such key employee consisting of retention units (“RUs”) and a cash retention award (“CRA”) to be made by Affinion Holdings under the 2015 Retention Program. Each Retention Award will entitle the employee to one share of Affinion Holdings’ common stock for each RU and a cash payment in respect of the CRA, in each case, subject to applicable withholding taxes, when the applicable vesting conditions for the Retention Awards are met. The Retention Awards are subject to time-based vesting conditions. Upon termination of employment for any reason, an employee will forfeit the entire unvested portion of his or her Retention Award. In conjunction with the Reclassification, which was effective on November 9, 2015, Retention Awards under the 2015 Retention Program that called for vesting of Class A Common Stock will vest in an adjusted number of shares of Class C Common Stock and Class D Common Stock. During the year ended December 31, 2016, 6,466 shares of Class C Common Stock and 6,809 shares of Class D Common Stock vested, in addition to CRAs of approximately $2.0 million. During the three months ended March 31, 2017, 5,904 shares of Class C Common Stock and 6,209 shares of Class D Common Stock vested, in addition to CRAs of approximately $1.8 million During the three months ended March 31, 2017 and 2016, the Company recognized expense related to the 2015 Retention Program of $0.7 million and $1.0 million, respectively, of which $0.4 million and $0.5 million, respectively, related to the common stock portion of the Retention Awards. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 8. RELATED PARTY TRANSACTIONS Post-Closing Relationships with Cendant On October 17, 2005, Cendant Corporation (“Cendant”) completed the sale of the Cendant Marketing Services Division to the Company and an affiliate of Apollo Global Management, LLC (together with its subsidiaries, “Apollo”), pursuant to a purchase agreement dated July 26, 2005 for approximately $1.8 billion (the “Apollo Transactions”). All references to Cendant refer to Cendant Corporation, which changed its name to Avis Budget Group, Inc. in August 2006, and its consolidated subsidiaries, specifically in the context of its business and operations prior to, and in connection with, the Company’s separation from Cendant. In connection with the Apollo Transactions, Cendant has agreed to indemnify the Company, Affinion Holdings and the Company’s affiliates (collectively the “indemnified parties”) for breaches of representations, warranties and covenants made by Cendant, as well as for other specified matters, certain of which are described below. Affinion Holdings and the Company have agreed to indemnify Cendant for breaches of representations, warranties and covenants made in the purchase agreement, as well as for certain other specified matters. Generally, all parties’ indemnification obligations with respect to breaches of representations and warranties (except with respect to the matters described below) (i) are subject to a $0.1 million occurrence threshold, (ii) are not effective until the aggregate amount of losses suffered by the indemnified party exceeds $15.0 million (and then only for the amount of losses exceeding $15.0 million), and (iii) are limited to $275.1 million of recovery. Generally, subject to certain exceptions of greater duration, the parties’ indemnification obligations with respect to representations and warranties survived until April 15, 2007 with indemnification obligations related to covenants surviving until the applicable covenant has been fully performed. In connection with the purchase agreement, Cendant agreed to specific indemnification obligations with respect to the matters described below. Excluded Litigation . Cendant has agreed to fully indemnify the indemnified parties with respect to any pending or future litigation, arbitration, or other proceeding relating to accounting irregularities in the former CUC International, Inc. announced on April 15, 1998. Of the legal proceedings disclosed in Note 6 to our unaudited condensed consolidated financial statements, the Lion Litigation is a matter that involves the Cendant Entities (as defined below) agreeing to indemnify us for any related liabilities. Certain Litigation and Compliance with Law Matters . Cendant has agreed to indemnify the indemnified parties up to specified amounts for: (a) breaches of its representations and warranties with respect to legal proceedings that (1) occur after the date of the purchase agreement, (2) relate to facts and circumstances related to the business of Affinion Group, LLC or Affinion International Holdings Limited (“Affinion International”), and (3) constitute a breach or violation of its compliance with law representations and warranties and (b) breaches of its representations and warranties with respect to compliance with laws to the extent related to the business of Affinion Group, LLC or Affinion International. Cendant, Affinion Holdings and the Company have agreed that losses up to $15.0 million incurred with respect to these matters will be borne solely by the Company and losses in excess of $15.0 million will be shared by the parties in accordance with agreed upon allocations. The Company has the right at all times to control litigation related to shared losses and Cendant has consultation rights with respect to such litigation. Prior to 2009, Cendant (i) distributed the equity interests it previously held in its hospitality services business (“Wyndham”) and its real estate services business (“Realogy”) to Cendant stockholders and (ii) sold its travel services business (“Travelport”) to a third party. Cendant continues as a re-named publicly traded company which owns the vehicle rental business (“Avis Budget,” together with Wyndham and Realogy, the “Cendant Entities”). Subject to certain exceptions, Wyndham and Realogy have agreed to share Cendant’s contingent and other liabilities (including its indemnity obligations to the Company described above and other liabilities to the Company in connection with the Apollo Transactions) in specified percentages. If any Cendant Entity defaults in its payment, when due, of any such liabilities, the remaining Cendant Entities are required to pay an equal portion of the amounts in default. |
Financial Instruments, Derivati
Financial Instruments, Derivatives and Fair Value Measures | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments, Derivatives and Fair Value Measures | 9. FINANCIAL INSTRUMENTS, DERIVATIVES AND FAIR VALUE MEASURES As a matter of policy, the Company does not use derivatives for trading or speculative purposes. The following table provides information about the Company’s financial instruments that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted-average interest rates by expected maturity for the Company’s long-term debt as of March 31, 2017: Fair Value At 2022 and March 31, 2017 2018 2019 2020 2021 Thereafter Total 2017 (in millions) Fixed rate debt $ — $ 622.1 $ — $ — $ — $ — $ 622.1 $ 548.0 Average interest rate 8.01 % 7.97 % Variable rate debt $ 7.8 $ 1,169.0 $ — $ — $ — $ — $ 1,176.8 $ 1,162.3 Average interest rate (a) 7.38 % 7.68 % (a) Average interest rate is based on rates in effect at March 31, 2017. Foreign Currency Forward Contracts On a limited basis the Company has entered into 30 day foreign currency forward contracts, and upon expiration of the contracts, entered into successive 30 day foreign currency forward contracts. The contracts have been entered into to mitigate the Company’s foreign currency exposures related to intercompany loans which are not expected to be repaid within the next twelve months and that are denominated in Euros and British pounds. At March 31, 2017, the Company had in place contracts to sell EUR 10.0 million and receive $10.8 million and to sell GBP 13.9 million and receive $17.2 million. During the three months ended March 31, 2017 and 2016, the Company recognized a realized loss on the forward contracts of $0.6 million and a realized gain on the forward contracts of $0.5 million, respectively. As of March 31, 2017, the Company had an immaterial unrealized loss on the foreign currency forward contracts. Credit Risk and Exposure Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of receivables, profit-sharing receivables from insurance carriers, prepaid commissions and interest rate swaps. The Company manages such risk by evaluating the financial position and creditworthiness of such counterparties. Receivables and profit-sharing receivables from insurance carriers are from various marketing, insurance and business partners and the Company maintains an allowance for losses, based upon expected collectability. Commission advances are periodically evaluated as to recovery. Fair Value The Company determines the fair value of financial instruments as follows: a. Cash and Cash Equivalents, Restricted Cash, Receivables, Profit-Sharing Receivables from Insurance Carriers and Accounts Payable—Carrying amounts approximate fair value at March 31, 2017 and December 31, 2016 due to the short-term maturities of these assets and liabilities. b. Long-Term Debt—The Company’s estimated fair value of its long-term fixed-rate debt at March 31, 2017 and December 31, 2016 is based upon available information for debt having similar terms and risks (Level 2). The fair value of the publicly-traded debt is the published market price per unit multiplied by the number of units held or issued without consideration of transaction costs. The fair value of the non-publicly-traded debt, substantially all of which is variable-rate debt, is based on third party indicative valuations and estimates prepared by the Company after consideration of the creditworthiness of the counterparties. c. Foreign Currency Forward Contracts—At March 31, 2017 and December 31, 2016, the Company’s estimated fair value of its foreign currency forward contracts is based upon available market information. The fair value of the foreign currency forward contracts is based on significant other observable inputs, adjusted for contract restrictions and other terms specific to the foreign currency forward contracts. The fair value has been determined after consideration of foreign currency exchange rates and the creditworthiness of the parties to the foreign currency forward contracts. The counterparty to the foreign currency forward contracts is a major financial institution. The Company does not expect any losses from non-performance by the counterparty. Current accounting guidance establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, giving the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. Level 1 inputs to a fair value measurement are quoted market prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. There were no financial instruments measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016, other than foreign currency forward contracts. Such contracts have historically had a term of approximately thirty days and have been held to maturity. The fair value of the foreign currency forward contracts is measured based on significant observable inputs (Level 2). |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | 10. SEGMENT INFORMATION Management evaluates the operating results of each of its reportable segments based upon several factors, of which the primary factors are revenue and “Segment EBITDA,” which the Company defines as income from operations before depreciation and amortization. The presentation of Segment EBITDA may not be comparable to similarly titled measures used by other companies. The segment information discussed below reflects our new operating segments in effect as of January 1, 2016, as discussed in Note 1 to our unaudited condensed consolidated financial statements. The Segment EBITDA of the Company’s four reportable segments does not include general corporate expenses. Corporate expenses include certain departmental service costs such as human resources, legal, corporate finance and accounting and unallocated portions of information technology, in addition to expenses previously recorded in corporate such as professional fees related to debt financing activities and stock compensation costs. General corporate expenses have been excluded from the presentation of the Segment EBITDA for the Company’s four reportable segments because they are not reported to the chief operating decision maker for purposes of allocating resources among operating segments or assessing operating segment performance. The accounting policies of the reportable segments are the same as those described in Note 2—Summary of Significant Accounting Policies in the Company’s Form 10-K for the year ended December 31, 2016. Net Revenues For the Three Months Ended March 31, March 31, 2017 2016 (in millions) Global Loyalty $ 57.0 $ 39.9 Global Customer Engagement 89.2 103.6 Insurance Solutions 56.7 57.4 Subtotal 202.9 200.9 Legacy Membership and Package 38.2 54.2 Eliminations — (0.2 ) $ 241.1 $ 254.9 Segment EBITDA For the Three Months Ended March 31, March 31, 2017 2016 (in millions) Global Loyalty $ 20.1 $ 13.6 Global Customer Engagement 12.9 19.6 Insurance Solutions 20.0 21.7 Subtotal 53.0 54.9 Legacy Membership and Package 9.0 10.1 Corporate (12.6 ) (17.1 ) $ 49.4 $ 47.9 For the Three Months Ended March 31, March 31, 2017 2016 (in millions) Segment EBITDA $ 49.4 $ 47.9 Depreciation and amortization (11.3 ) (14.3 ) Income from operations $ 38.1 $ 33.6 |
Guarantor_Non-Guarantor Supplem
Guarantor/Non-Guarantor Supplemental Financial Information | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Guarantor/Non-Guarantor Supplemental Financial Information | 11. GUARANTOR/NON-GUARANTOR SUPPLEMENTAL FINANCIAL INFORMATION The following supplemental condensed consolidating financial information presents, in separate columns, the condensed consolidating balance sheets as of March 31, 2017 and December 31, 2016, and the related condensed consolidating statements of comprehensive income (loss) for the three month periods ended March 31, 2017 and 2016 and the related condensed consolidating statements of cash flows for the three month periods ended March 31, 2017 and 2016 for (i) the Company (Affinion Group, Inc.) on a parent-only basis, with its investment in subsidiaries recorded under the equity method, (ii) the Guarantor Subsidiaries (the Company’s subsidiaries that guarantee the 2010 senior notes) on a combined basis, (iii) the Non-Guarantor Subsidiaries (the Company’s subsidiaries that do not guarantee the 2010 senior notes) on a combined basis and (iv) the Company on a consolidated basis. The guarantees are full and unconditional and joint and several obligations of each of the guarantor subsidiaries, all of which are 100% owned by the Company. There are no significant restrictions on the ability of the Company to obtain funds from any of its guarantor subsidiaries by dividends or loan. The supplemental financial information has been presented in lieu of separate financial statements of the guarantors as such separate financial statements are not considered meaningful. The supplemental condensed consolidating financial information presented includes Incentive Networks LLC, a recently formed subsidiary, as a Guarantor Subsidiary. Incentive Networks LLC guarantees the 2010 senior notes and the International Notes, but does not guarantee the 2013 senior subordinated notes. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET AS OF MARCH 31, 2017 (In millions) Non- Parent Guarantor Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 2.6 $ 1.9 $ 29.1 $ — $ 33.6 Restricted cash — 15.9 8.9 — 24.8 Receivables, net 2.7 109.5 39.4 — 151.6 Profit-sharing receivables from insurance carriers — 21.8 — — 21.8 Prepaid commissions — 24.3 9.3 — 33.6 Intercompany interest receivable — — 0.4 (0.4 ) — Other current assets 43.0 18.2 25.1 — 86.3 Total current assets 48.3 191.6 112.2 (0.4 ) 351.7 Property and equipment, net 5.6 73.1 27.1 — 105.8 Contract rights and list fees, net — 16.6 — — 16.6 Goodwill — 155.6 63.3 — 218.9 Other intangibles, net — 34.2 5.2 — 39.4 Receivables from related parties 28.9 — — — 28.9 Investment in subsidiaries 2,495.1 81.9 63.9 (2,640.9 ) — Intercompany loan receivable 180.6 16.1 22.6 (219.3 ) — Intercompany receivables — 2,462.1 — (2,462.1 ) — Other non-current assets — 29.2 4.6 — 33.8 Total assets $ 2,758.5 $ 3,060.4 $ 298.9 $ (5,322.7 ) $ 795.1 Liabilities and Deficit Current liabilities: Current portion of long-term debt $ 7.8 $ — $ — $ — $ 7.8 Accounts payable and accrued expenses 107.0 164.1 82.6 — 353.7 Payables to related parties 15.9 — — — 15.9 Intercompany interest payable 0.4 — — (0.4 ) — Deferred revenue 0.1 37.0 17.1 — 54.2 Income taxes payable 0.6 — 2.2 — 2.8 Total current liabilities 131.8 201.1 101.9 (0.4 ) 434.4 Long-term debt 1,677.7 — 150.5 — 1,828.2 Deferred income taxes 2.3 24.9 0.5 — 27.7 Deferred revenue 0.3 2.0 2.0 — 4.3 Intercompany loans payable 22.6 — 196.7 (219.3 ) — Intercompany payables 2,446.3 — 15.8 (2,462.1 ) — Other long-term liabilities 8.2 17.4 4.4 — 30.0 Total liabilities 4,289.2 245.4 471.8 (2,681.8 ) 2,324.6 Total Affinion Group, Inc. deficit (1,530.7 ) 2,815.0 (174.1 ) (2,640.9 ) (1,530.7 ) Non-controlling interest in subsidiary — — 1.2 — 1.2 Total deficit (1,530.7 ) 2,815.0 (172.9 ) (2,640.9 ) (1,529.5 ) Total liabilities and deficit $ 2,758.5 $ 3,060.4 $ 298.9 $ (5,322.7 ) $ 795.1 UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2016 (In millions) Non- Parent Guarantor Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 9.1 $ 2.3 $ 24.8 $ — $ 36.2 Restricted cash — 16.3 9.8 — 26.1 Receivables, net 2.6 99.0 34.3 — 135.9 Profit-sharing receivables from insurance carriers — 18.8 — — 18.8 Prepaid commissions — 25.5 8.4 — 33.9 Intercompany interest receivable — — 1.2 (1.2 ) — Other current assets 11.9 31.9 26.8 — 70.6 Total current assets 23.6 193.8 105.3 (1.2 ) 321.5 Property and equipment, net 4.9 73.7 26.9 — 105.5 Contract rights and list fees, net — 16.4 — — 16.4 Goodwill — 155.6 62.6 — 218.2 Other intangibles, net — 35.9 5.6 — 41.5 Receivables from related parties 28.9 — — — 28.9 Investment in subsidiaries 2,437.6 81.0 63.9 (2,582.5 ) — Intercompany loan receivable 164.0 15.8 22.6 (202.4 ) — Intercompany receivables — 2,387.9 — (2,387.9 ) — Other non-current assets — 29.6 4.7 — 34.3 Total assets $ 2,659.0 $ 2,989.7 $ 291.6 $ (5,174.0 ) $ 766.3 Liabilities and Deficit Current liabilities: Current portion of long-term debt $ 7.8 $ — $ — $ — $ 7.8 Accounts payable and accrued expenses 83.2 157.0 82.7 — 322.9 Payables to related parties 16.2 — — — 16.2 Intercompany interest payable 1.2 — — (1.2 ) — Deferred revenue 0.1 37.2 17.5 — 54.8 Income taxes payable 0.5 — 2.2 — 2.7 Total current liabilities 109.0 194.2 102.4 (1.2 ) 404.4 Long-term debt 1,685.0 — 152.6 — 1,837.6 Deferred income taxes 2.1 24.2 0.6 — 26.9 Deferred revenue 0.3 2.1 2.4 — 4.8 Intercompany loans payable 22.6 — 179.8 (202.4 ) — Intercompany payables 2,371.3 — 16.6 (2,387.9 ) — Other long-term liabilities 8.3 18.8 4.3 — 31.4 Total liabilities 4,198.6 239.3 458.7 (2,591.5 ) 2,305.1 Total Affinion Group, Inc. deficit (1,539.6 ) 2,750.4 (167.9 ) (2,582.5 ) (1,539.6 ) Non-controlling interest in subsidiary — — 0.8 — 0.8 Total deficit (1,539.6 ) 2,750.4 (167.1 ) (2,582.5 ) (1,538.8 ) Total liabilities and deficit $ 2,659.0 $ 2,989.7 $ 291.6 $ (5,174.0 ) $ 766.3 UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 2017 (In millions) Non- Parent Guarantor Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Net revenues $ — $ 172.5 $ 68.6 $ — $ 241.1 Expenses: Cost of revenues, exclusive of depreciation and amortization shown separately below: Marketing and commissions — 53.6 24.3 — 77.9 Operating costs 10.6 39.3 39.5 — 89.4 General and administrative 12.0 6.9 5.4 — 24.3 Facility exit costs — 0.1 — — 0.1 Depreciation and amortization 0.1 8.1 3.1 — 11.3 Total expenses 22.7 108.0 72.3 — 203.0 Income (loss) from operations (22.7 ) 64.5 (3.7 ) — 38.1 Interest income 0.2 — — — 0.2 Interest expense (26.3 ) (0.1 ) (1.0 ) — (27.4 ) Interest income (expense) - intercompany (0.6 ) — 0.6 — — Other expense, net — (0.1 ) — — (0.1 ) Income (loss) before income taxes and non-controlling interest (49.4 ) 64.3 (4.1 ) — 10.8 Income tax expense (0.2 ) (0.9 ) (1.3 ) — (2.4 ) (49.6 ) 63.4 (5.4 ) — 8.4 Equity in income of subsidiaries 57.7 0.9 — (58.6 ) — Net income (loss) 8.1 64.3 (5.4 ) (58.6 ) 8.4 Less: net income attributable to non-controlling interest — — (0.3 ) — (0.3 ) Net income (loss) attributable to Affinion Group, Inc. $ 8.1 $ 64.3 $ (5.7 ) $ (58.6 ) $ 8.1 Net income (loss) $ 8.1 $ 64.3 $ (5.4 ) $ (58.6 ) $ 8.4 Currency translation adjustment, net of tax 0.8 0.3 (0.5 ) 0.3 0.9 Comprehensive income (loss) 8.9 64.6 (5.9 ) (58.3 ) 9.3 Less: comprehensive income attributable to non-controlling interest — — (0.4 ) — (0.4 ) Comprehensive income (loss) attributable to Affinion Group, Inc. $ 8.9 $ 64.6 $ (6.3 ) $ (58.3 ) $ 8.9 UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 2016 (In millions) Non- Parent Guarantor Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Net revenues $ — $ 174.6 $ 80.3 $ — $ 254.9 Expenses: Cost of revenues, exclusive of depreciation and amortization shown separately below: Marketing and commissions 0.1 61.3 26.7 — 88.1 Operating costs 11.6 32.4 42.8 — 86.8 General and administrative 16.6 6.9 8.6 — 32.1 Facility exit costs — — — — — Depreciation and amortization 0.1 9.2 5.0 — 14.3 Total expenses 28.4 109.8 83.1 — 221.3 Income from operations (28.4 ) 64.8 (2.8 ) — 33.6 Interest income 0.2 — 0.1 — 0.3 Interest expense (26.8 ) (0.2 ) (1.1 ) — (28.1 ) Interest income (expense) - intercompany (0.6 ) — 0.6 — — Other income, net — — — — — Loss before income taxes and non-controlling interest (55.6 ) 64.6 (3.2 ) — 5.8 Income tax expense (0.2 ) (1.2 ) (1.7 ) — (3.1 ) (55.8 ) 63.4 (4.9 ) — 2.7 Equity in income of subsidiaries 58.4 2.6 — (61.0 ) — Net loss 2.6 66.0 (4.9 ) (61.0 ) 2.7 Less: net income attributable to non-controlling interest — — (0.1 ) — (0.1 ) Net loss attributable to Affinion Group, Inc. $ 2.6 $ 66.0 $ (5.0 ) $ (61.0 ) $ 2.6 Net loss $ 2.6 $ 66.0 $ (4.9 ) $ (61.0 ) $ 2.7 Currency translation adjustment, net of tax — — — — — Comprehensive loss 2.6 66.0 (4.9 ) (61.0 ) 2.7 Less: comprehensive income attributable to non-controlling interest — — (0.1 ) — (0.1 ) Comprehensive loss attributable to Affinion Group, Inc. $ 2.6 $ 66.0 $ (5.0 ) $ (61.0 ) $ 2.6 UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2017 (In millions) Non- Parent Guarantor Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Operating Activities Net income (loss) $ 8.1 $ 64.3 $ (5.4 ) $ (58.6 ) $ 8.4 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 0.1 8.1 3.1 — 11.3 Amortization of debt discount and financing costs 1.5 — — — 1.5 Provision for accounts receivable loss — 0.6 — — 0.6 Facility exit costs — 0.1 — — 0.1 Amortization of carrying value adjustment (6.9 ) — (2.1 ) — (9.0 ) Share-based compensation 0.9 — — — 0.9 Equity in (income) loss of subsidiaries (57.7 ) (0.9 ) — 58.6 — Deferred income taxes 0.1 0.9 — — 1.0 Net change in assets and liabilities: Restricted cash — 0.4 1.1 — 1.5 Receivables (0.1 ) (11.2 ) (4.7 ) — (16.0 ) Receivables from related parties (0.8 ) — 0.8 — — Profit-sharing receivables from insurance carriers — (3.0 ) — — (3.0 ) Prepaid commissions — 1.3 (0.8 ) — 0.5 Other current assets (31.2 ) 13.7 1.7 — (15.8 ) Contract rights and list fees — (0.3 ) — — (0.3 ) Other non-current assets — 0.4 — — 0.4 Accounts payable and accrued expenses 23.8 8.5 (1.2 ) — 31.1 Payables to related parties (1.2 ) — — — (1.2 ) Deferred revenue — (0.3 ) (0.9 ) — (1.2 ) Income taxes receivable and payable 0.1 — 0.3 — 0.4 Other long-term liabilities (0.1 ) (1.5 ) 0.1 — (1.5 ) Other, net (0.3 ) — 0.1 — (0.2 ) Net cash provided by (used in) operating activities (63.7 ) 81.1 (7.9 ) — 9.5 Investing Activities Capital expenditures (0.7 ) (7.2 ) (2.6 ) — (10.5 ) Intercompany receivables and payables — (74.3 ) (0.8 ) 75.1 — Net cash used in investing activities (0.7 ) (81.5 ) (3.4 ) 75.1 (10.5 ) Financing Activities Principal payments on borrowings (1.9 ) — — — (1.9 ) Intercompany receivables and payables 75.1 — — (75.1 ) — Intercompany loans (15.3 ) — 15.3 — — Net cash provided by financing activities 57.9 — 15.3 (75.1 ) (1.9 ) Effect of changes in exchange rates on cash and cash equivalents — — 0.3 — 0.3 Net increase (decrease) in cash and cash equivalents (6.5 ) (0.4 ) 4.3 — (2.6 ) Cash and cash equivalents, beginning of period 9.1 2.3 24.8 — 36.2 Cash and cash equivalents, end of period $ 2.6 $ 1.9 $ 29.1 $ — $ 33.6 FOR THE THREE MONTHS ENDED MARCH 31, 2016 (In millions) Non- Parent Guarantor Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Operating Activities Net loss $ 2.6 $ 66.0 $ (4.9 ) $ (61.0 ) $ 2.7 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 0.1 9.2 5.0 — 14.3 Amortization of debt discount and financing costs 1.5 — — — 1.5 Recovery of accounts receivable loss provided for — 0.2 — — 0.2 Amortization of carrying value adjustment (6.4 ) — (2.1 ) — (8.5 ) Share-based compensation 0.7 — — — 0.7 Equity in (income) loss of subsidiaries (58.4 ) (2.6 ) — 61.0 — Deferred income taxes 0.1 1.2 (0.2 ) — 1.1 Net change in assets and liabilities: Restricted cash — (0.9 ) 0.7 — (0.2 ) Receivables (0.1 ) (9.6 ) (3.5 ) — (13.2 ) Receivables from related parties (1.0 ) — 1.0 — — Profit-sharing receivables from insurance carriers — (2.9 ) — — (2.9 ) Prepaid commissions — 3.9 0.4 — 4.3 Other current assets 9.3 6.7 (0.3 ) — 15.7 Contract rights and list fees — 0.9 — — 0.9 Other non-current assets — — (1.2 ) — (1.2 ) Accounts payable and accrued expenses 12.2 (22.1 ) 1.6 (0.1 ) (8.4 ) Payables to related parties (1.7 ) — — — (1.7 ) Deferred revenue — (6.4 ) (1.3 ) — (7.7 ) Income taxes receivable and payable 0.1 — 0.6 — 0.7 Other long-term liabilities — (0.4 ) (1.3 ) — (1.7 ) Net cash used in operating activities (41.0 ) 43.2 (5.5 ) (0.1 ) (3.4 ) Investing Activities Capital expenditures (0.8 ) (2.9 ) (2.3 ) — (6.0 ) Restricted cash — — 0.1 — 0.1 Intercompany receivables and payables — (39.6 ) — 39.6 — Net cash used in investing activities (0.8 ) (42.5 ) (2.2 ) 39.6 (5.9 ) Financing Activities Principal payments on borrowings (2.0 ) — — — (2.0 ) Intercompany receivables and payables 40.6 — (1.1 ) (39.5 ) — Capital contribution to subsidiary (0.3 ) — 0.3 — — Intercompany loan (13.3 ) — 13.3 — — Net cash provided by financing activities 25.0 — 12.5 (39.5 ) (2.0 ) Effect of changes in exchange rates on cash and cash equivalents — — 0.3 — 0.3 Net increase in cash and cash equivalents (16.8 ) 0.7 5.1 — (11.0 ) Cash and cash equivalents, beginning of period 31.0 1.6 18.6 — 51.2 Cash and cash equivalents, end of period $ 14.2 $ 2.3 $ 23.7 $ — $ 40.2 |
Basis of Presentation and Bus18
Basis of Presentation and Business Description (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation — The accompanying unaudited condensed consolidated financial statements include the accounts and transactions of Affinion Group, Inc. (the “Company” or “Affinion”), a wholly-owned subsidiary of Affinion Group Holdings, Inc. (“Affinion Holdings”). In presenting these unaudited condensed consolidated financial statements, management makes estimates and assumptions that affect reported amounts of assets and liabilities and related disclosures, and disclosure of contingent assets and liabilities, at the date of the financial statements, and reported amounts of revenues and expenses during the reporting periods. Estimates, by their nature, are based on judgments and available information at the time such estimate is made. As such, actual results could differ from those estimates. In management’s opinion, the unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary for a fair statement of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and following the guidance of Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the U.S. Securities and Exchange Commission (the “SEC”). As permitted under such rules, certain notes and other financial information normally required by accounting principles generally accepted in the United States of America have been condensed or omitted; however, the unaudited condensed consolidated financial statements do include such notes and financial information sufficient so as to make the interim information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes of the Company, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 31, 2017 (the “Form 10-K”). |
Business Description | Business Description — The Company develops programs and solutions that motivate and inspire loyalty. Through our proprietary technology platforms and end-to-end customer service capabilities, we design, administer and fulfill loyalty, customer engagement and insurance programs and solutions that strengthen and expand the value of customer relationships for many of the world’s largest and most respected companies. Our programs and solutions include: • Loyalty solutions that help reward, motivate and retain consumers. We create and manage any and all aspects of our clients’ points-based loyalty programs, including design, platform, analytics, points management and fulfillment. Our loyalty solutions offer relevant, best-in-class rewards (such as travel, gift cards and merchandise) to consumers enabling clients to motivate, retain and thank their best customers. For example, our platform and technology support points-based programs for financial services, automotive, gaming, travel and hospitality companies. • Customer engagement programs and solutions that address key consumer needs such as greater peace of mind and meaningful savings for everyday purchases. We provide these solutions to leading companies in the financial institution, telecommunications, ecommerce, retail and travel sectors globally. These differentiated programs help our clients enrich their offerings to drive deeper connections with their customers, and to encourage their customers to engage more, stay loyal and generate more revenue for our clients. For example, we develop and manage programs such as identity theft protection, credit monitoring, savings on everyday purchases, concierge services, discount travel services and roadside assistance. • Insurance programs and solutions that help protect consumers in the event of a covered accident, injury, illness, or death. We market accident and life insurance programs on behalf of our financial institution partners. We work with leading insurance carriers to administer coverage for over 19 million people across America. These insurance solutions provide affordable, convenient insurance to consumers resulting in proven customer loyalty and generating incremental revenue for our clients. Our insurance solutions include accidental death and dismemberment insurance (“AD&D”), hospital accident plan, recuperative care, graded benefit whole life and simplified issue term life insurance. In 2016, we implemented a new globalized organizational structure (the “Global Reorganization”) to better support our key strategic initiatives and enhance long-term revenue growth. This new organizational structure allows us to combine similar lines of business on common platforms and shared infrastructures on a global basis to drive best practices and efficiencies with meaningful cost savings. In addition, we no longer materially invest in lines of business that we believe are not essential to our long-term growth prospects. We remain committed to our business strategy of pursuing initiatives that maintain and enhance our position as a global leader in loyalty and customer engagement solutions. The implementation of the Global Reorganization marks another major step in our strategic plan and ongoing transformation. See Note 10 to our unaudited condensed consolidated financial statements for more information concerning our segment results. Starting in the first quarter of 2016, we have the following four operating segments: • Global Loyalty . This segment consists of all of our loyalty assets globally in which we are a provider of end-to-end loyalty solutions that help clients reward, enrich, motivate and retain customers, including program design, points management and administration, and broad-based fulfillment and redemption across multiple channels. • Global Customer Engagement . This segment consists of our customer engagement business, in which we are a leading global solutions provider that delivers a flexible mix of benefits and services for our clients that meet customers’ needs, including products that are designed to help consumers save money and gain peace of mind. • Insurance Solutions . This segment consists of the domestic insurance business, in which we are a leading third-party agent, administrator and marketer of certain accident & life insurance solutions. • Legacy Membership and Package . This segment consists of certain global membership and package programs that are no longer being actively marketed but continue to be serviced and supported. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued new accounting guidance related to revenue recognition. The new standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The fundamental principles of the guidance are that entities should recognize revenue in a manner that reflects the timing of transfer of goods and services to customers and the amount of revenue recognized reflects the consideration that an entity expects to receive for the goods and services provided. Entities have the option of using either a full retrospective or modified retrospective approach; however entities are not permitted to adopt the standard earlier than annual reporting periods beginning after December 15, 2016, with the new standard required to be adopted for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017 . We are evaluating the adoption method as well as the impact of this new accounting guidance on our consolidated financial statements. We have formed a project implementation team with representatives from each of our operating segments and have engaged a third-party consultant to assist in our evaluation of the impact of the new guidance. As part of our assessment work to date, we have analyzed a representative sampling of customer contracts across all segments and continue to progress with a comprehensive review and assessment of the total contract population. We have not yet completed our final review of the impact of this guidance; however, we continue to review variable consideration, incremental and direct costs, potential disclosures, and our method of adoption to complete our evaluation of the impact on our consolidated financial statements. In addition, we continue to monitor additional changes, modifications, clarifications or interpretations being undertaken by the FASB, which may impact our current conclusions . The Company expects to adopt the new standard on its effective date. In February 2016, the FASB issued ASU 2016-02, its new standard on accounting for leases. The new standard requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The new standard is effective for the Company on January 1, 2019 with early adoption permitted. Entities are required to adopt the guidance using a modified retrospective method. The Company has formed a project implementation team and is working with representatives from each of its operating segments to compile a lease database containing all of the relevant information required to assess the impact of the new guidance. The Company expects to adopt the new standard on its effective date. In August 2016, the FASB issued ASU 2016-15, which addresses eight specific cash flow issues, including presentation of debt prepayments or debt extinguishment costs, with the objective of reducing the existing diversity in practice. For public business entities, the new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. When adopted, the new guidance is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In January 2017, the FASB issued ASU 2017-04 to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the new guidance, an impairment charge, if triggered, is calculated as the difference between a reporting unit’s carrying value and fair value, but is limited to the carrying value of the goodwill. Current guidance, however, requires an impairment charge to be calculated as the excess of the carrying value of goodwill over its implied fair value. The new guidance is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. When adopted, the new guidance is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Amortizable Intangible Assets | Intangible assets consisted of: March 31, 2017 Gross Carrying Accumulated Net Carrying Amount Amortization Amount (in millions) Amortizable intangible assets: Member relationships $ 932.7 $ (931.3 ) $ 1.4 Affinity relationships 634.1 (603.6 ) 30.5 Proprietary databases and systems 59.6 (58.1 ) 1.5 Trademarks and tradenames 27.7 (22.0 ) 5.7 Patents and technology 47.7 (47.5 ) 0.2 Covenants not to compete 2.5 (2.4 ) 0.1 $ 1,704.3 $ (1,664.9 ) $ 39.4 December 31, 2016 Gross Carrying Accumulated Net Carrying Amount Amortization Amount (in millions) Amortizable intangible assets: Member relationships $ 932.4 $ (930.8 ) $ 1.6 Affinity relationships 632.9 (600.9 ) 32.0 Proprietary databases and systems 59.6 (58.0 ) 1.6 Trademarks and tradenames 27.7 (21.7 ) 6.0 Patents and technology 47.7 (47.5 ) 0.2 Covenants not to compete 2.4 (2.3 ) 0.1 $ 1,702.7 $ (1,661.2 ) $ 41.5 |
Schedule of Amortization Expense Relating to Intangible Assets | Amortization expense relating to intangible assets was as follows: For the Three Months Ended March 31, March 31, 2017 2016 (in millions) Amortizable intangible assets: Member relationships $ 0.1 $ 0.2 Affinity relationships 1.5 2.2 Proprietary databases and systems 0.1 0.1 Trademarks and tradenames 0.4 0.4 Patents and technology — 0.3 Covenants not to compete — — $ 2.1 $ 3.2 |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the Company’s carrying amount of goodwill for the year ended December 31, 2016 and the three months ended March 31, 2017 are as follows: Balance Balance Balance at January Currency December Currency March 31, 2016 Translation 2016 Translation 2017 (in millions) Global Loyalty $ 105.1 $ (0.3 ) $ 104.8 $ 0.1 $ 104.9 Global Customer Engagement 62.4 (7.3 ) 55.1 0.6 55.7 Insurance Solutions 58.3 — 58.3 — 58.3 Legacy Membership and Package — — — — — Total $ 225.8 $ (7.6 ) $ 218.2 $ 0.7 $ 218.9 |
Contract Rights and List Fees20
Contract Rights and List Fees, Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Schedule of Amortizable Intangible Assets | Intangible assets consisted of: March 31, 2017 Gross Carrying Accumulated Net Carrying Amount Amortization Amount (in millions) Amortizable intangible assets: Member relationships $ 932.7 $ (931.3 ) $ 1.4 Affinity relationships 634.1 (603.6 ) 30.5 Proprietary databases and systems 59.6 (58.1 ) 1.5 Trademarks and tradenames 27.7 (22.0 ) 5.7 Patents and technology 47.7 (47.5 ) 0.2 Covenants not to compete 2.5 (2.4 ) 0.1 $ 1,704.3 $ (1,664.9 ) $ 39.4 December 31, 2016 Gross Carrying Accumulated Net Carrying Amount Amortization Amount (in millions) Amortizable intangible assets: Member relationships $ 932.4 $ (930.8 ) $ 1.6 Affinity relationships 632.9 (600.9 ) 32.0 Proprietary databases and systems 59.6 (58.0 ) 1.6 Trademarks and tradenames 27.7 (21.7 ) 6.0 Patents and technology 47.7 (47.5 ) 0.2 Covenants not to compete 2.4 (2.3 ) 0.1 $ 1,702.7 $ (1,661.2 ) $ 41.5 |
Contract rights and list fees, net | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Schedule of Amortizable Intangible Assets | Contract rights and list fees consisted of: March 31, 2017 December 31, 2016 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Contract $ 5.0 $ (5.0 ) $ — $ 5.0 $ (5.0 ) $ — List fees 63.0 (46.4 ) 16.6 61.6 (45.2 ) 16.4 $ 68.0 $ (51.4 ) $ 16.6 $ 66.6 $ (50.2 ) $ 16.4 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Debt | Long-term debt consisted of: March 31, December 2017 2016 (in millions) First-lien term loan due 2018 $ 751.8 $ 753.7 Second-lien term loan due 2018 425.0 425.0 Revolving credit facility, expiring in 2018 — — 7.875% senior notes due 2018, net of unamortized discount of $0.3 million and $0.4 million, respectively, with an effective interest rate of 8.31% 474.7 474.6 7.5% cash/PIK senior notes due 2018, with an effective interest rate of 7.39% 116.2 116.2 13.50% senior subordinated notes due 2018, with an effective interest rate of 14.31% 22.6 22.6 Adjustment to carrying value of debt 53.5 62.5 Total debt 1,843.8 1,854.6 Less: current portion of long-term debt (7.8 ) (7.8 ) Less: unamortized deferred financing costs (7.8 ) (9.2 ) Long-term debt $ 1,828.2 $ 1,837.6 |
Summary of 2015 Exchange Offers and 2015 Rights Offering Impact on Recognition of Debt | In connection with the recognition of the 2015 Exchange Offers and 2015 Rights Offering, the impact of these transactions is summarized as follows, including the aforementioned gain of $115.8 million (in millions). Reduction of carrying value of debt exchanged $ (337.3 ) Reduction of accrued interest associated with debt exchanged (10.6 ) Write-off of debt discount and deferred financing costs, plus professional fees 21.0 Fair value of equity issued in the debt exchange and rights offering 107.8 Gain recorded as noted above 115.8 Adjustment to carrying value of debt $ (103.3 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Schedule of Fair Value Option Award | The expected term of the options granted represents the period of time that options are expected to be outstanding, and is based on the average of the requisite service period and the contractual term of the option. 2016 Expected volatility 75 % Expected life (in years) 6.3 Risk-free interest rate 1.64 % Expected dividends — |
2005 Plan | |
Stock Options Granted to Employees | Stock options granted to employees from the 2005 Plan are comprised of three tranches with the following terms: Tranche A Tranche B Tranche C Vesting Ratably over 5 years* 100% after 8 years** 100% after 8 years** Initial option term 10 years 10 years 10 years * In the event of a sale of the Company, vesting for tranche A occurs 18 months after the date of sale. ** Tranche B and C vesting would be accelerated upon specified realized returns to Apollo. |
2005 Plan | Class C and Class D common stock | |
Summary of Option Activity | A summary of option activity for options to acquire shares of Class C/D Common Stock under the 2005 Plan for the three months ended March 31, 2017 is presented below (number of options in thousands): 2005 Plan 2005 Plan 2005 Plan Grants to Grants to Grants to Grants to Employees - Employees - Employees - Board of Tranche A Tranche B Tranche C Directors Outstanding options at January 1, 2017 2 1 1 1 Granted — — — — Exercised — — — — Forfeited or expired — — — — Outstanding options at March 31, 2017 2 1 1 1 Vested or expected to vest at March 31, 2017 2 1 1 1 Exercisable options at March 31, 2017 2 1 1 1 Weighted average remaining contractual term (in years) 7.0 7.0 7.0 7.0 Weighted average grant date fair value per option granted in 2017 $ — $ — $ — $ — Weighted average exercise price of exercisable options at March 31, 2017 $ 147.12 $ 147.12 $ 147.12 $ 147.12 Weighted average exercise price of outstanding options at March 31, 2017 $ 147.12 $ 147.12 $ 147.12 $ 147.12 |
2007 Plan | |
Stock Options Granted to Employees | The stock options granted to employees from the 2007 Plan have the following terms: Vesting period Ratably over 4 years Initial option term 10 years |
2015 Plan | |
Summary of Option Activity | A summary of option activity for options to acquire shares of Common Stock granted under the 2015 Plan for the three months ended March 31, 2017 is presented below (number of options in thousands): Outstanding options at January 1, 2017 874 Granted — Exercised — Forfeited or expired (5 ) Outstanding options at March 31, 2017 869 Vested or expected to vest at March 31, 2017 869 Exercisable options at March 31, 2017 212 Weighted average remaining contractual term (in years) 9.0 Weighted average grant date fair value per option granted in 2017 $ — Weighted average exercise price of exercisable options at March 31, 2017 $ 13.97 Weighted average exercise price of outstanding options at March 31, 2017 $ 13.97 |
Financial Instruments, Deriva23
Financial Instruments, Derivatives and Fair Value Measures (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Principal Cash Flows and Related Weighted-Average Interest Rates by Expected Maturity | The following table provides information about the Company’s financial instruments that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted-average interest rates by expected maturity for the Company’s long-term debt as of March 31, 2017: Fair Value At 2022 and March 31, 2017 2018 2019 2020 2021 Thereafter Total 2017 (in millions) Fixed rate debt $ — $ 622.1 $ — $ — $ — $ — $ 622.1 $ 548.0 Average interest rate 8.01 % 7.97 % Variable rate debt $ 7.8 $ 1,169.0 $ — $ — $ — $ — $ 1,176.8 $ 1,162.3 Average interest rate (a) 7.38 % 7.68 % (a) Average interest rate is based on rates in effect at March 31, 2017. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Net Revenues For the Three Months Ended March 31, March 31, 2017 2016 (in millions) Global Loyalty $ 57.0 $ 39.9 Global Customer Engagement 89.2 103.6 Insurance Solutions 56.7 57.4 Subtotal 202.9 200.9 Legacy Membership and Package 38.2 54.2 Eliminations — (0.2 ) $ 241.1 $ 254.9 Segment EBITDA For the Three Months Ended March 31, March 31, 2017 2016 (in millions) Global Loyalty $ 20.1 $ 13.6 Global Customer Engagement 12.9 19.6 Insurance Solutions 20.0 21.7 Subtotal 53.0 54.9 Legacy Membership and Package 9.0 10.1 Corporate (12.6 ) (17.1 ) $ 49.4 $ 47.9 For the Three Months Ended March 31, March 31, 2017 2016 (in millions) Segment EBITDA $ 49.4 $ 47.9 Depreciation and amortization (11.3 ) (14.3 ) Income from operations $ 38.1 $ 33.6 |
Guarantor_Non-Guarantor Suppl25
Guarantor/Non-Guarantor Supplemental Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Schedule of Condensed Consolidating Balance Sheet | UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET AS OF MARCH 31, 2017 (In millions) Non- Parent Guarantor Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 2.6 $ 1.9 $ 29.1 $ — $ 33.6 Restricted cash — 15.9 8.9 — 24.8 Receivables, net 2.7 109.5 39.4 — 151.6 Profit-sharing receivables from insurance carriers — 21.8 — — 21.8 Prepaid commissions — 24.3 9.3 — 33.6 Intercompany interest receivable — — 0.4 (0.4 ) — Other current assets 43.0 18.2 25.1 — 86.3 Total current assets 48.3 191.6 112.2 (0.4 ) 351.7 Property and equipment, net 5.6 73.1 27.1 — 105.8 Contract rights and list fees, net — 16.6 — — 16.6 Goodwill — 155.6 63.3 — 218.9 Other intangibles, net — 34.2 5.2 — 39.4 Receivables from related parties 28.9 — — — 28.9 Investment in subsidiaries 2,495.1 81.9 63.9 (2,640.9 ) — Intercompany loan receivable 180.6 16.1 22.6 (219.3 ) — Intercompany receivables — 2,462.1 — (2,462.1 ) — Other non-current assets — 29.2 4.6 — 33.8 Total assets $ 2,758.5 $ 3,060.4 $ 298.9 $ (5,322.7 ) $ 795.1 Liabilities and Deficit Current liabilities: Current portion of long-term debt $ 7.8 $ — $ — $ — $ 7.8 Accounts payable and accrued expenses 107.0 164.1 82.6 — 353.7 Payables to related parties 15.9 — — — 15.9 Intercompany interest payable 0.4 — — (0.4 ) — Deferred revenue 0.1 37.0 17.1 — 54.2 Income taxes payable 0.6 — 2.2 — 2.8 Total current liabilities 131.8 201.1 101.9 (0.4 ) 434.4 Long-term debt 1,677.7 — 150.5 — 1,828.2 Deferred income taxes 2.3 24.9 0.5 — 27.7 Deferred revenue 0.3 2.0 2.0 — 4.3 Intercompany loans payable 22.6 — 196.7 (219.3 ) — Intercompany payables 2,446.3 — 15.8 (2,462.1 ) — Other long-term liabilities 8.2 17.4 4.4 — 30.0 Total liabilities 4,289.2 245.4 471.8 (2,681.8 ) 2,324.6 Total Affinion Group, Inc. deficit (1,530.7 ) 2,815.0 (174.1 ) (2,640.9 ) (1,530.7 ) Non-controlling interest in subsidiary — — 1.2 — 1.2 Total deficit (1,530.7 ) 2,815.0 (172.9 ) (2,640.9 ) (1,529.5 ) Total liabilities and deficit $ 2,758.5 $ 3,060.4 $ 298.9 $ (5,322.7 ) $ 795.1 UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2016 (In millions) Non- Parent Guarantor Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 9.1 $ 2.3 $ 24.8 $ — $ 36.2 Restricted cash — 16.3 9.8 — 26.1 Receivables, net 2.6 99.0 34.3 — 135.9 Profit-sharing receivables from insurance carriers — 18.8 — — 18.8 Prepaid commissions — 25.5 8.4 — 33.9 Intercompany interest receivable — — 1.2 (1.2 ) — Other current assets 11.9 31.9 26.8 — 70.6 Total current assets 23.6 193.8 105.3 (1.2 ) 321.5 Property and equipment, net 4.9 73.7 26.9 — 105.5 Contract rights and list fees, net — 16.4 — — 16.4 Goodwill — 155.6 62.6 — 218.2 Other intangibles, net — 35.9 5.6 — 41.5 Receivables from related parties 28.9 — — — 28.9 Investment in subsidiaries 2,437.6 81.0 63.9 (2,582.5 ) — Intercompany loan receivable 164.0 15.8 22.6 (202.4 ) — Intercompany receivables — 2,387.9 — (2,387.9 ) — Other non-current assets — 29.6 4.7 — 34.3 Total assets $ 2,659.0 $ 2,989.7 $ 291.6 $ (5,174.0 ) $ 766.3 Liabilities and Deficit Current liabilities: Current portion of long-term debt $ 7.8 $ — $ — $ — $ 7.8 Accounts payable and accrued expenses 83.2 157.0 82.7 — 322.9 Payables to related parties 16.2 — — — 16.2 Intercompany interest payable 1.2 — — (1.2 ) — Deferred revenue 0.1 37.2 17.5 — 54.8 Income taxes payable 0.5 — 2.2 — 2.7 Total current liabilities 109.0 194.2 102.4 (1.2 ) 404.4 Long-term debt 1,685.0 — 152.6 — 1,837.6 Deferred income taxes 2.1 24.2 0.6 — 26.9 Deferred revenue 0.3 2.1 2.4 — 4.8 Intercompany loans payable 22.6 — 179.8 (202.4 ) — Intercompany payables 2,371.3 — 16.6 (2,387.9 ) — Other long-term liabilities 8.3 18.8 4.3 — 31.4 Total liabilities 4,198.6 239.3 458.7 (2,591.5 ) 2,305.1 Total Affinion Group, Inc. deficit (1,539.6 ) 2,750.4 (167.9 ) (2,582.5 ) (1,539.6 ) Non-controlling interest in subsidiary — — 0.8 — 0.8 Total deficit (1,539.6 ) 2,750.4 (167.1 ) (2,582.5 ) (1,538.8 ) Total liabilities and deficit $ 2,659.0 $ 2,989.7 $ 291.6 $ (5,174.0 ) $ 766.3 |
Schedule of Condensed Consolidating Statement of Comprehensive Income (Loss) | UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 2017 (In millions) Non- Parent Guarantor Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Net revenues $ — $ 172.5 $ 68.6 $ — $ 241.1 Expenses: Cost of revenues, exclusive of depreciation and amortization shown separately below: Marketing and commissions — 53.6 24.3 — 77.9 Operating costs 10.6 39.3 39.5 — 89.4 General and administrative 12.0 6.9 5.4 — 24.3 Facility exit costs — 0.1 — — 0.1 Depreciation and amortization 0.1 8.1 3.1 — 11.3 Total expenses 22.7 108.0 72.3 — 203.0 Income (loss) from operations (22.7 ) 64.5 (3.7 ) — 38.1 Interest income 0.2 — — — 0.2 Interest expense (26.3 ) (0.1 ) (1.0 ) — (27.4 ) Interest income (expense) - intercompany (0.6 ) — 0.6 — — Other expense, net — (0.1 ) — — (0.1 ) Income (loss) before income taxes and non-controlling interest (49.4 ) 64.3 (4.1 ) — 10.8 Income tax expense (0.2 ) (0.9 ) (1.3 ) — (2.4 ) (49.6 ) 63.4 (5.4 ) — 8.4 Equity in income of subsidiaries 57.7 0.9 — (58.6 ) — Net income (loss) 8.1 64.3 (5.4 ) (58.6 ) 8.4 Less: net income attributable to non-controlling interest — — (0.3 ) — (0.3 ) Net income (loss) attributable to Affinion Group, Inc. $ 8.1 $ 64.3 $ (5.7 ) $ (58.6 ) $ 8.1 Net income (loss) $ 8.1 $ 64.3 $ (5.4 ) $ (58.6 ) $ 8.4 Currency translation adjustment, net of tax 0.8 0.3 (0.5 ) 0.3 0.9 Comprehensive income (loss) 8.9 64.6 (5.9 ) (58.3 ) 9.3 Less: comprehensive income attributable to non-controlling interest — — (0.4 ) — (0.4 ) Comprehensive income (loss) attributable to Affinion Group, Inc. $ 8.9 $ 64.6 $ (6.3 ) $ (58.3 ) $ 8.9 UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 2016 (In millions) Non- Parent Guarantor Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Net revenues $ — $ 174.6 $ 80.3 $ — $ 254.9 Expenses: Cost of revenues, exclusive of depreciation and amortization shown separately below: Marketing and commissions 0.1 61.3 26.7 — 88.1 Operating costs 11.6 32.4 42.8 — 86.8 General and administrative 16.6 6.9 8.6 — 32.1 Facility exit costs — — — — — Depreciation and amortization 0.1 9.2 5.0 — 14.3 Total expenses 28.4 109.8 83.1 — 221.3 Income from operations (28.4 ) 64.8 (2.8 ) — 33.6 Interest income 0.2 — 0.1 — 0.3 Interest expense (26.8 ) (0.2 ) (1.1 ) — (28.1 ) Interest income (expense) - intercompany (0.6 ) — 0.6 — — Other income, net — — — — — Loss before income taxes and non-controlling interest (55.6 ) 64.6 (3.2 ) — 5.8 Income tax expense (0.2 ) (1.2 ) (1.7 ) — (3.1 ) (55.8 ) 63.4 (4.9 ) — 2.7 Equity in income of subsidiaries 58.4 2.6 — (61.0 ) — Net loss 2.6 66.0 (4.9 ) (61.0 ) 2.7 Less: net income attributable to non-controlling interest — — (0.1 ) — (0.1 ) Net loss attributable to Affinion Group, Inc. $ 2.6 $ 66.0 $ (5.0 ) $ (61.0 ) $ 2.6 Net loss $ 2.6 $ 66.0 $ (4.9 ) $ (61.0 ) $ 2.7 Currency translation adjustment, net of tax — — — — — Comprehensive loss 2.6 66.0 (4.9 ) (61.0 ) 2.7 Less: comprehensive income attributable to non-controlling interest — — (0.1 ) — (0.1 ) Comprehensive loss attributable to Affinion Group, Inc. $ 2.6 $ 66.0 $ (5.0 ) $ (61.0 ) $ 2.6 |
Schedule of Condensed Consolidating Statement of Cash Flows | UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2017 (In millions) Non- Parent Guarantor Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Operating Activities Net income (loss) $ 8.1 $ 64.3 $ (5.4 ) $ (58.6 ) $ 8.4 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 0.1 8.1 3.1 — 11.3 Amortization of debt discount and financing costs 1.5 — — — 1.5 Provision for accounts receivable loss — 0.6 — — 0.6 Facility exit costs — 0.1 — — 0.1 Amortization of carrying value adjustment (6.9 ) — (2.1 ) — (9.0 ) Share-based compensation 0.9 — — — 0.9 Equity in (income) loss of subsidiaries (57.7 ) (0.9 ) — 58.6 — Deferred income taxes 0.1 0.9 — — 1.0 Net change in assets and liabilities: Restricted cash — 0.4 1.1 — 1.5 Receivables (0.1 ) (11.2 ) (4.7 ) — (16.0 ) Receivables from related parties (0.8 ) — 0.8 — — Profit-sharing receivables from insurance carriers — (3.0 ) — — (3.0 ) Prepaid commissions — 1.3 (0.8 ) — 0.5 Other current assets (31.2 ) 13.7 1.7 — (15.8 ) Contract rights and list fees — (0.3 ) — — (0.3 ) Other non-current assets — 0.4 — — 0.4 Accounts payable and accrued expenses 23.8 8.5 (1.2 ) — 31.1 Payables to related parties (1.2 ) — — — (1.2 ) Deferred revenue — (0.3 ) (0.9 ) — (1.2 ) Income taxes receivable and payable 0.1 — 0.3 — 0.4 Other long-term liabilities (0.1 ) (1.5 ) 0.1 — (1.5 ) Other, net (0.3 ) — 0.1 — (0.2 ) Net cash provided by (used in) operating activities (63.7 ) 81.1 (7.9 ) — 9.5 Investing Activities Capital expenditures (0.7 ) (7.2 ) (2.6 ) — (10.5 ) Intercompany receivables and payables — (74.3 ) (0.8 ) 75.1 — Net cash used in investing activities (0.7 ) (81.5 ) (3.4 ) 75.1 (10.5 ) Financing Activities Principal payments on borrowings (1.9 ) — — — (1.9 ) Intercompany receivables and payables 75.1 — — (75.1 ) — Intercompany loans (15.3 ) — 15.3 — — Net cash provided by financing activities 57.9 — 15.3 (75.1 ) (1.9 ) Effect of changes in exchange rates on cash and cash equivalents — — 0.3 — 0.3 Net increase (decrease) in cash and cash equivalents (6.5 ) (0.4 ) 4.3 — (2.6 ) Cash and cash equivalents, beginning of period 9.1 2.3 24.8 — 36.2 Cash and cash equivalents, end of period $ 2.6 $ 1.9 $ 29.1 $ — $ 33.6 FOR THE THREE MONTHS ENDED MARCH 31, 2016 (In millions) Non- Parent Guarantor Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Operating Activities Net loss $ 2.6 $ 66.0 $ (4.9 ) $ (61.0 ) $ 2.7 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 0.1 9.2 5.0 — 14.3 Amortization of debt discount and financing costs 1.5 — — — 1.5 Recovery of accounts receivable loss provided for — 0.2 — — 0.2 Amortization of carrying value adjustment (6.4 ) — (2.1 ) — (8.5 ) Share-based compensation 0.7 — — — 0.7 Equity in (income) loss of subsidiaries (58.4 ) (2.6 ) — 61.0 — Deferred income taxes 0.1 1.2 (0.2 ) — 1.1 Net change in assets and liabilities: Restricted cash — (0.9 ) 0.7 — (0.2 ) Receivables (0.1 ) (9.6 ) (3.5 ) — (13.2 ) Receivables from related parties (1.0 ) — 1.0 — — Profit-sharing receivables from insurance carriers — (2.9 ) — — (2.9 ) Prepaid commissions — 3.9 0.4 — 4.3 Other current assets 9.3 6.7 (0.3 ) — 15.7 Contract rights and list fees — 0.9 — — 0.9 Other non-current assets — — (1.2 ) — (1.2 ) Accounts payable and accrued expenses 12.2 (22.1 ) 1.6 (0.1 ) (8.4 ) Payables to related parties (1.7 ) — — — (1.7 ) Deferred revenue — (6.4 ) (1.3 ) — (7.7 ) Income taxes receivable and payable 0.1 — 0.6 — 0.7 Other long-term liabilities — (0.4 ) (1.3 ) — (1.7 ) Net cash used in operating activities (41.0 ) 43.2 (5.5 ) (0.1 ) (3.4 ) Investing Activities Capital expenditures (0.8 ) (2.9 ) (2.3 ) — (6.0 ) Restricted cash — — 0.1 — 0.1 Intercompany receivables and payables — (39.6 ) — 39.6 — Net cash used in investing activities (0.8 ) (42.5 ) (2.2 ) 39.6 (5.9 ) Financing Activities Principal payments on borrowings (2.0 ) — — — (2.0 ) Intercompany receivables and payables 40.6 — (1.1 ) (39.5 ) — Capital contribution to subsidiary (0.3 ) — 0.3 — — Intercompany loan (13.3 ) — 13.3 — — Net cash provided by financing activities 25.0 — 12.5 (39.5 ) (2.0 ) Effect of changes in exchange rates on cash and cash equivalents — — 0.3 — 0.3 Net increase in cash and cash equivalents (16.8 ) 0.7 5.1 — (11.0 ) Cash and cash equivalents, beginning of period 31.0 1.6 18.6 — 51.2 Cash and cash equivalents, end of period $ 14.2 $ 2.3 $ 23.7 $ — $ 40.2 |
Basis of Presentation and Bus26
Basis of Presentation and Business Description - Additional Information (Details) | Jan. 02, 2016Segment | Dec. 31, 2016Customer |
Basis Of Presentation And Business Description [Line Items] | ||
Number of operating segments | Segment | 4 | |
Minimum | ||
Basis Of Presentation And Business Description [Line Items] | ||
Number of customers across American under our insurance solution coverage | Customer | 19,000,000 |
Intangible Assets and Goodwil27
Intangible Assets and Goodwill - Schedule of Amortizable Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,704.3 | $ 1,702.7 |
Accumulated Amortization | (1,664.9) | (1,661.2) |
Net Carrying Amount | 39.4 | 41.5 |
Member relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 932.7 | 932.4 |
Accumulated Amortization | (931.3) | (930.8) |
Net Carrying Amount | 1.4 | 1.6 |
Affinity relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 634.1 | 632.9 |
Accumulated Amortization | (603.6) | (600.9) |
Net Carrying Amount | 30.5 | 32 |
Proprietary databases and systems | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 59.6 | 59.6 |
Accumulated Amortization | (58.1) | (58) |
Net Carrying Amount | 1.5 | 1.6 |
Trademarks and trade names | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 27.7 | 27.7 |
Accumulated Amortization | (22) | (21.7) |
Net Carrying Amount | 5.7 | 6 |
Patents and technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 47.7 | 47.7 |
Accumulated Amortization | (47.5) | (47.5) |
Net Carrying Amount | 0.2 | 0.2 |
Covenants not to compete | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2.5 | 2.4 |
Accumulated Amortization | (2.4) | (2.3) |
Net Carrying Amount | $ 0.1 | $ 0.1 |
Intangible Assets and Goodwil28
Intangible Assets and Goodwill - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Finite Lived Intangible Assets [Line Items] | ||
Increase in intangible assets | $ 1.6 | |
Increase in accumulated amortization | 1.6 | |
Expected amortization expense in 2017 | 13.4 | |
Expected amortization expense in 2018 | 7.3 | |
Expected amortization expense in 2019 | 5.9 | |
Expected amortization expense in 2020 | 5.5 | |
Expected amortization expense in 2021 | 3.7 | |
Goodwill, gross | 647.9 | $ 647.2 |
Accumulated impairment loss | 429 | 429 |
Global loyalty products | 2006 Recognition Period | ||
Finite Lived Intangible Assets [Line Items] | ||
Accumulated impairment loss | 15.5 | 15.5 |
Legacy Membership and Package | 2014 Recognition Period | ||
Finite Lived Intangible Assets [Line Items] | ||
Accumulated impairment loss | 292.4 | 292.4 |
Legacy Membership and Package | 2015 Recognition Period | ||
Finite Lived Intangible Assets [Line Items] | ||
Accumulated impairment loss | 89.6 | 89.6 |
Prospectiv | Legacy Membership and Package | 2012 Recognition Period | ||
Finite Lived Intangible Assets [Line Items] | ||
Accumulated impairment loss | $ 31.5 | $ 31.5 |
Intangible Assets and Goodwil29
Intangible Assets and Goodwill - Schedule of Amortization Expense Relating to Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Finite Lived Intangible Assets [Line Items] | ||
Amortization expenses | $ 2.1 | $ 3.2 |
Member relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Amortization expenses | 0.1 | 0.2 |
Affinity relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Amortization expenses | 1.5 | 2.2 |
Proprietary databases and systems | ||
Finite Lived Intangible Assets [Line Items] | ||
Amortization expenses | 0.1 | 0.1 |
Trademarks and trade names | ||
Finite Lived Intangible Assets [Line Items] | ||
Amortization expenses | $ 0.4 | 0.4 |
Patents and technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Amortization expenses | $ 0.3 |
Intangible Assets and Goodwil30
Intangible Assets and Goodwill - Schedule of Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | $ 218.2 | $ 225.8 |
Currency Translation | 0.7 | (7.6) |
Goodwill, Ending Balance | 218.9 | 218.2 |
Global Loyalty | ||
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | 104.8 | 105.1 |
Currency Translation | 0.1 | (0.3) |
Goodwill, Ending Balance | 104.9 | 104.8 |
Global Customer Engagement | ||
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | 55.1 | 62.4 |
Currency Translation | 0.6 | (7.3) |
Goodwill, Ending Balance | 55.7 | 55.1 |
Insurance Solutions | ||
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | 58.3 | 58.3 |
Goodwill, Ending Balance | $ 58.3 | $ 58.3 |
Contract Rights and List Fees31
Contract Rights and List Fees, Net - Components of Contract Rights and List Fees (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,704.3 | $ 1,702.7 |
Accumulated Amortization | (1,664.9) | (1,661.2) |
Net Carrying Amount | 39.4 | 41.5 |
Contract rights | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5 | 5 |
Accumulated Amortization | (5) | (5) |
List fees | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 63 | 61.6 |
Accumulated Amortization | (46.4) | (45.2) |
Net Carrying Amount | 16.6 | 16.4 |
Contract rights and list fees, net | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 68 | 66.6 |
Accumulated Amortization | (51.4) | (50.2) |
Net Carrying Amount | $ 16.6 | $ 16.4 |
Contract Rights and List Fees32
Contract Rights and List Fees, Net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Finite Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 2.1 | $ 3.2 |
Expected amortization expense in 2017 | 13.4 | |
Expected amortization expense in 2018 | 7.3 | |
Expected amortization expense in 2019 | 5.9 | |
Expected amortization expense in 2020 | 5.5 | |
Expected amortization expense in 2021 | 3.7 | |
Contract rights and list fees, net | ||
Finite Lived Intangible Assets [Line Items] | ||
Amortization expense | 1.1 | 1.3 |
Expected amortization expense in 2017 | 4.3 | |
Expected amortization expense in 2018 | 3.7 | |
Expected amortization expense in 2019 | 3 | |
Expected amortization expense in 2020 | 2.3 | |
Expected amortization expense in 2021 | 1.5 | |
Contract rights and list fees, net | Marketing expense | ||
Finite Lived Intangible Assets [Line Items] | ||
Amortization expense | 1.1 | 1.2 |
Contract rights and list fees, net | Depreciation and amortization expense | ||
Finite Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 0 | $ 0.1 |
Long-Term Debt - Components of
Long-Term Debt - Components of Long-Term Debt (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | May 20, 2014 | |
Debt Instrument [Line Items] | |||
Adjustment to carrying value of debt | $ 53.5 | $ 62.5 | |
Total debt | 1,843.8 | 1,854.6 | |
Less: current portion of long-term debt | (7.8) | (7.8) | |
Less: unamortized deferred financing costs | (7.8) | (9.2) | |
Long-term debt | 1,828.2 | 1,837.6 | |
First lien term loan due 2018 | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 751.8 | 753.7 | $ 775 |
Second lien term loan due 2018 | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 425 | 425 | $ 377.9 |
7.875% senior notes due 2018 | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 474.7 | 474.6 | |
7.5 % Cash/PIK senior notes due 2018 | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | 116.2 | 116.2 | |
13.50% senior subordinated notes due 2018 | |||
Debt Instrument [Line Items] | |||
Carrying value of debt | $ 22.6 | $ 22.6 |
Long-Term Debt - Components o34
Long-Term Debt - Components of Long-Term Debt (Parenthetical) (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 12, 2013 | Nov. 19, 2010 |
7.875% senior notes due 2018 | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate on notes | 7.875% | 7.875% | 7.875% | |
Debt Instruments, unamortized discount | $ 0.3 | $ 0.4 | ||
Effective interest rate on notes | 8.31% | 8.31% | ||
7.5 % Cash/PIK senior notes due 2018 | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate on notes | 7.50% | 7.50% | ||
Effective interest rate on notes | 7.39% | 7.39% | ||
13.50% senior subordinated notes due 2018 | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate on notes | 13.50% | 13.50% | 13.50% | |
Effective interest rate on notes | 14.31% | 14.31% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | May 20, 2014 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Apr. 09, 2010 |
Debt Instrument [Line Items] | |||||
Maturity date of term loan facility | Nov. 10, 2022 | ||||
First lien term loan due 2018 | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount on term loans | $ 775,000,000 | $ 751,800,000 | $ 753,700,000 | ||
Debt instrument amortization percentage | 1.00% | ||||
Interest rate under line of credit facility | 6.75% | 6.75% | |||
First lien term loan due 2018 | Federal Funds Effective Rate | Option Two | |||||
Debt Instrument [Line Items] | |||||
Interest margin of loans | 0.50% | ||||
First lien term loan due 2018 | Alternate Base Rate | |||||
Debt Instrument [Line Items] | |||||
Interest rate under line of credit facility | 2.50% | ||||
Second lien term loan due 2018 | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount on term loans | 377,900,000 | $ 425,000,000 | $ 425,000,000 | ||
Interest rate under line of credit facility | 8.50% | 8.50% | |||
Second lien term loan due 2018 | Federal Funds Effective Rate | Option Two | |||||
Debt Instrument [Line Items] | |||||
Interest margin of loans | 0.50% | ||||
Second lien term loan due 2018 | Alternate Base Rate | |||||
Debt Instrument [Line Items] | |||||
Interest rate under line of credit facility | 2.50% | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Secured credit facility with lenders | 80,000,000 | $ 110,000,000 | |||
Maturity date of term loan facility | Jan. 29, 2018 | ||||
Reduction amount of revolving credit facility | (85,000,000) | ||||
Revolving Credit Facility | Option Two | |||||
Debt Instrument [Line Items] | |||||
Interest margin of loans | 4.25% | ||||
Revolving Credit Facility | Federal Funds Effective Rate | Option Two | |||||
Debt Instrument [Line Items] | |||||
Interest margin of loans | 0.50% | ||||
Revolving Credit Facility | Alternate Base Rate | |||||
Debt Instrument [Line Items] | |||||
Interest rate under line of credit facility | 2.50% | ||||
Affinion Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Secured credit facility with lenders | $ 1,000,000,000 | ||||
Amended Affinion Credit Facility | Option One | |||||
Debt Instrument [Line Items] | |||||
Interest margin of loans | 5.25% | ||||
Amended Affinion Credit Facility | LIBOR Loans | Option One | |||||
Debt Instrument [Line Items] | |||||
Interest margin of loans | 7.00% | ||||
Amended Affinion Credit Facility | Base Rate | Option Two | |||||
Debt Instrument [Line Items] | |||||
Interest margin of loans | 6.00% | ||||
Amended Affinion Credit Facility | First lien term loan due 2018 | |||||
Debt Instrument [Line Items] | |||||
Maturity date of term loan facility | Apr. 30, 2018 | ||||
Amended Affinion Credit Facility | First lien term loan due 2018 | LIBOR Loans | |||||
Debt Instrument [Line Items] | |||||
Interest rate under line of credit facility | 1.50% | ||||
Amended Affinion Credit Facility | Second lien term loan due 2018 | |||||
Debt Instrument [Line Items] | |||||
Maturity date of term loan facility | Oct. 31, 2018 | ||||
Interest rate under line of credit facility | 1.50% | ||||
Amended Affinion Credit Facility | Second Lien Term Loan Including Additional Borrowing Due Twenty Eighteen | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount on term loans | $ 425,000,000 | ||||
Amended Affinion Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Interest rate under line of credit facility | 8.00% | 7.80% | |||
Amended Affinion Credit Facility | Revolving Credit Facility | LIBOR Loans | |||||
Debt Instrument [Line Items] | |||||
Interest rate under line of credit facility | 1.50% | ||||
Maximum Required Ratio For Financial Maintenance Covenants | 4.25% |
Long-Term Debt - Additional I36
Long-Term Debt - Additional Information 1 (Details) | Nov. 09, 2015USD ($)shares$ / shares | Mar. 31, 2017USD ($)$ / shares | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)$ / shares | Dec. 12, 2013USD ($) | Nov. 19, 2010USD ($) |
Debt Instrument [Line Items] | ||||||
Letters of credit issued | $ 12,100,000 | |||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | ||||
Aggregate principal amount of notes | $ 360,000,000 | |||||
Maturity date of notes | Nov. 10, 2022 | |||||
Adjustment to carrying value of debt | $ 53,500,000 | $ 62,500,000 | ||||
Debt instrument, payment terms | The Investments senior subordinated notes bear interest at 13.50% per annum, payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2014. The Investments senior subordinated notes will mature on August 15, 2018. | |||||
Scenario One | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of Senior Subordinate Notes redeemable | 35.00% | |||||
Debt Instrument, Redemption Price, Percentage | 113.50% | |||||
Scenario Two | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Redemption Price, Percentage | 100.00% | |||||
2015 Exchange Offers and 2015 Rights Offering | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument aggregate carrying amount | $ 728,500,000 | |||||
Fair value of equity issued in the debt exchange and rights offering | 107,800,000 | |||||
Gain (loss) on extinguishment of debt | 115,800,000 | |||||
Adjustment to carrying value of debt | (103,300,000) | |||||
Affinion Holdings and Affinion International Holdings Limited | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount of notes | $ 110,000,000 | |||||
Debt conversion, shares issued | shares | 2,483,333 | |||||
Debt conversion, price per unit | $ / shares | $ 1,000 | |||||
Affinion International | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate of notes | 7.50% | |||||
Aggregate principal amount of notes | $ 1,000 | |||||
Proceeds from rights offering | $ 110,000,000 | |||||
Cash interest percentage | 3.50% | |||||
PIK interest percentage | 4.00% | |||||
Maturity date of notes | Jul. 30, 2018 | |||||
Affinion International | Maximum | Limited Warrants | ||||||
Debt Instrument [Line Items] | ||||||
Debt conversion, shares issued | shares | 462,266 | |||||
Affinion International | New Common Stock | ||||||
Debt Instrument [Line Items] | ||||||
Debt conversion, shares issued | shares | 2,021,042 | |||||
Affinion Investment | ||||||
Debt Instrument [Line Items] | ||||||
Debt conversion, shares issued | 22.57576 | |||||
2013 senior subordinated notes | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date of notes | Aug. 15, 2018 | |||||
2013 senior subordinated notes | 13.75% senior secured PIK | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate of notes | 13.75% | |||||
2013 senior subordinated notes | 14.50% toggle notes due 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate of notes | 14.50% | |||||
2013 senior subordinated notes | 13.50% senior subordinated notes due 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate of notes | 13.50% | |||||
2013 senior subordinated notes | Affinion Holdings | ||||||
Debt Instrument [Line Items] | ||||||
Common stock, par value | $ / shares | $ 0.01 | |||||
Aggregate principal amount of notes | $ 1,000 | |||||
Principal amount of notes exchanged | $ 247,400,000 | |||||
Debt conversion, shares issued | 7.15066 | |||||
2013 senior subordinated notes | Affinion Holdings | New Common Stock | ||||||
Debt Instrument [Line Items] | ||||||
Debt conversion, shares issued | shares | 1,769,104 | |||||
2013 senior subordinated notes | Affinion Holdings and Affinion International Holdings Limited | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount of notes | $ 110,000,000 | |||||
Principal amount of notes exchanged | $ 110,000,000 | |||||
2013 senior subordinated notes | Affinion Holdings and Affinion International Holdings Limited | 7.5 % Cash/PIK senior notes due 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate of notes | 7.50% | |||||
2013 senior subordinated notes | Affinion Holdings and Affinion International Holdings Limited | New Common Stock | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Maximum amount of shares note holders could receive on exchange | shares | 2,483,333 | |||||
2013 senior subordinated notes | Affinion Investment | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount of notes | $ 1,000 | |||||
Principal amount of notes exchanged | $ 337,300,000 | |||||
Debt conversion, shares issued | 15.52274 | |||||
2013 senior subordinated notes | Affinion Investment | New Common Stock | ||||||
Debt Instrument [Line Items] | ||||||
Debt conversion, shares issued | shares | 5,236,517 | |||||
13.50% Senior subordinated notes due 2015 | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount of notes | $ 352,900,000 | |||||
13.50% senior subordinated notes due 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate of notes | 13.50% | 13.50% | 13.50% | |||
Third party beneficiaries | 25.00% | |||||
7.875% senior notes due 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate of notes | 7.875% | 7.875% | 7.875% | |||
Aggregate principal amount of notes | $ 475,000,000 | |||||
Principal amount of notes exchanged | $ 292,800,000 | |||||
Maturity date of notes | Dec. 15, 2018 | |||||
Affinion Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Available for borrowings under revolving credit facility | $ 69,200,000 | |||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding borrowings | 0 | $ 0 | ||||
Borrowings under revolving credit facility | 53,000,000 | $ 17,000,000 | ||||
Repayments under revolving credit facility | 53,000,000 | $ 17,000,000 | ||||
Letters of credit issued | $ 10,800,000 | |||||
Maturity date of notes | Jan. 29, 2018 | |||||
First Lien And Second Lien Term Loans | Two Thousand Ten Senior Notes And International Notes | ||||||
Debt Instrument [Line Items] | ||||||
Adjustment to carrying value of debt | $ 103,300,000 | |||||
Increases the carrying value of long term debt | $ 53,500,000 | $ 62,500,000 |
Long-Term Debt - Summary of 201
Long-Term Debt - Summary of 2015 Exchange Offers and 2015 Rights Offering Impact on Recognition of Debt (Details) - USD ($) $ in Millions | Nov. 09, 2015 | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Adjustment to carrying value of debt | $ 53.5 | $ 62.5 | |
2015 Exchange Offers and 2015 Rights Offering | |||
Debt Instrument [Line Items] | |||
Reduction of carrying value of debt exchanged | $ (337.3) | ||
Reduction of accrued interest associated with debt exchanged | (10.6) | ||
Write-off of debt discount and deferred financing costs, plus professional fees | 21 | ||
Fair value of equity issued in the debt exchange and rights offering | 107.8 | ||
Gain recorded as noted above | 115.8 | ||
Adjustment to carrying value of debt | $ (103.3) |
Long-Term Debt - Additional I38
Long-Term Debt - Additional Information 2 (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | ||
Cash dividends paid | $ 0 | $ 0 |
Long-Term Debt - Additional I39
Long-Term Debt - Additional Information 3 (Details) - USD ($) | May 10, 2017 | Mar. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Nov. 09, 2015 | Jun. 30, 2014 | May 20, 2014 | Nov. 19, 2010 |
Debt Instrument [Line Items] | ||||||||
Debt instrument, payment terms | The Investments senior subordinated notes bear interest at 13.50% per annum, payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2014. The Investments senior subordinated notes will mature on August 15, 2018. | |||||||
Maturity date of term loan facility | Nov. 10, 2022 | |||||||
Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrants to purchase common stock | 3,974,581 | |||||||
New Credit Facility | Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility maturity period | 5 years | |||||||
New Credit Facility | Subsequent Event | Option Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest margin of loans | 6.75% | |||||||
New Credit Facility | Subsequent Event | LIBOR Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate under line of credit facility | 1.00% | |||||||
New Credit Facility | Subsequent Event | LIBOR Loans | Option One | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest margin of loans | 7.75% | |||||||
New Credit Facility | Subsequent Event | Federal Funds Effective Rate | Option Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest margin of loans | 0.50% | |||||||
New Credit Facility | Subsequent Event | Alternate Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate under line of credit facility | 2.00% | |||||||
Term Loan Facility | Commitment Letter | ||||||||
Debt Instrument [Line Items] | ||||||||
Carrying value of debt | $ 1,300,000,000 | $ 1,300,000,000 | ||||||
Term Loan Facility | New Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Term loans, quarterly amortization payments terms | The term loans provide for quarterly amortization payments totaling (i) for the first two years after the closing date, 1% per annum, (ii) for the third year after the closing date, 2.5% per annum, and (iii) for each year thereafter, 5% per annum, in each case, payable quarterly, with the balance due upon the final maturity date, subject in each case, to reduction of such amortization payments for certain prepayments. The New Credit Facility also requires mandatory prepayments of the outstanding term loans based on excess cash flow (as defined), if any, and the proceeds from certain specified transactions. | |||||||
Debt instrument, frequency of periodic payment | Quarterly | |||||||
Term Loan Facility | New Credit Facility | Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Carrying value of debt | $ 1,300,000,000 | |||||||
Quarterly amortization payments in year one | 1.00% | |||||||
Quarterly amortization payments in year two | 1.00% | |||||||
Quarterly amortization payments in year three | 2.50% | |||||||
Quarterly amortization payments in after year three | 5.00% | |||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity date of term loan facility | Jan. 29, 2018 | |||||||
Maximum borrowing capacity | $ 110,000,000 | $ 110,000,000 | $ 80,000,000 | |||||
Revolving Credit Facility | Option Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest margin of loans | 4.25% | |||||||
Revolving Credit Facility | Federal Funds Effective Rate | Option Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest margin of loans | 0.50% | |||||||
Revolving Credit Facility | Alternate Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate under line of credit facility | 2.50% | |||||||
Revolving Credit Facility | Commitment Letter | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 110,000,000 | $ 110,000,000 | ||||||
Revolving Credit Facility | New Credit Facility | Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 80,000,000 | |||||||
Revolving Credit Facility | New Credit Facility | Commitment Letter | Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 80,000,000 | |||||||
13.75% senior notes due 2018 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, payment terms | Affinion Holdings’ 2013 senior notes bear interest at 13.75% per annum, payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2014. At Affinion Holdings’ option (subject to certain exceptions), it may elect to pay interest (i) in cash, (ii) by increasing the principal amount of Affinion Holdings’ 2013 senior notes (“PIK Interest”), or (iii) 50% as cash and 50% as PIK Interest. PIK Interest accrues at 13.75% per annum plus 0.75%. Affinion Holdings’ 2013 senior notes will mature on September 15, 2018. In June 2014, Affinion Holdings completed an offer to exchange Affinion Holdings’ 2013 senior notes for Affinion Holdings’ Series A warrants to purchase shares of Affinion Holdings’ Class B common stock. | |||||||
Maturity date of term loan facility | Sep. 15, 2018 | |||||||
Interest rate of notes | 13.75% | 13.75% | ||||||
Incremental percentage on interest rate | 0.75% | |||||||
Principal amount of debt exchanged | $ 88,700,000 | |||||||
Face amount of bonds would be received for the tender of each bond | $ 292,800,000 | |||||||
2010 senior notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity date of term loan facility | Dec. 15, 2018 | |||||||
Interest rate of notes | 7.875% | 7.875% | 7.875% | 7.875% | ||||
Aggregate principal amount of senior notes holders would receive on exchange | $ 292,800,000 | |||||||
Carrying value of debt | $ 474,700,000 | $ 474,700,000 | $ 474,600,000 | |||||
New Notes Due 2022 | Commitment Letter | ||||||||
Debt Instrument [Line Items] | ||||||||
Cash interest percentage | 12.50% | |||||||
PIK interest percentage | 15.50% | |||||||
Affinion’s 2010 Senior Notes | Senior notes held by Significant Holders | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount percentage | 50.00% | 50.00% | ||||||
Maximum | Series A Warrants | ||||||||
Debt Instrument [Line Items] | ||||||||
Warrants to purchase common stock | 30,300,000 | |||||||
Class C Common Stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of outstanding shares of common stock issued upon conversion | 5.00% | |||||||
Class D Common Stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of outstanding shares of common stock issued upon conversion | 5.00% |
Long-Term Debt - Additional I40
Long-Term Debt - Additional Information 4 (Details) - USD ($) | May 10, 2017 | Nov. 09, 2015 | Jun. 30, 2017 | Dec. 12, 2013 |
Debt Instrument [Line Items] | ||||
Aggregate principal amount of notes | $ 360,000,000 | |||
Affinion Holdings | 2013 senior subordinated notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount of notes | $ 1,000 | |||
Principal amount of notes exchanged | 247,400,000 | |||
Affinion Investment | 2013 senior subordinated notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount of notes | 1,000 | |||
Principal amount of notes exchanged | $ 337,300,000 | |||
Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount of notes | $ 532,600,000 | |||
Warrants to purchase common stock | 3,974,581 | |||
Subsequent Event | Affinion’s 2010 Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Cash consideration offered for tendered notes | $ 417,386 | |||
Principal amount of notes exchanged | 269,700,000 | |||
Face amount of bonds would be received for the tender of each bond | $ 277,800,000 | |||
Subsequent Event | Affinion’s 2010 Senior Notes | New Common Stock | ||||
Debt Instrument [Line Items] | ||||
Warrants to purchase common stock | 1,103,203 | |||
Subsequent Event | Affinion Holdings | ||||
Debt Instrument [Line Items] | ||||
Principal amount of notes exchanged | $ 4,600,000 | |||
Face amount of bonds would be received for the tender of each bond | $ 4,700,000 | |||
Subsequent Event | Affinion Holdings | New Common Stock | ||||
Debt Instrument [Line Items] | ||||
Warrants to purchase common stock | 18,539 | |||
Subsequent Event | Affinion Investment | ||||
Debt Instrument [Line Items] | ||||
Cash consideration offered for tendered notes | $ 912 | |||
Principal amount of notes exchanged | 12,400,000 | |||
Face amount of bonds would be received for the tender of each bond | $ 12,800,000 | |||
Subsequent Event | Affinion Investment | New Common Stock | ||||
Debt Instrument [Line Items] | ||||
Warrants to purchase common stock | 51,005 | |||
Scenario Forecast | New Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum required ratio for consolidated fixed charges | 750.00% | |||
Minimum required ratio for consolidated fixed charges | 100.00% | |||
Private Offer | Subsequent Event | Affinion’s 2010 Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount of notes | $ 1,000 | |||
Warrants to purchase common stock | 3.37 | |||
Cash consideration offered for tendered notes | $ 930 | |||
Private Offer | Subsequent Event | Affinion Holdings | 2013 senior subordinated notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount of notes | $ 1,000 | |||
Warrants to purchase common stock | 3.37 | |||
Cash consideration offered for tendered notes | $ 700 | |||
Private Offer | Subsequent Event | Affinion Investment | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount of notes | $ 1,000 | |||
Warrants to purchase common stock | 3.37 | |||
Cash consideration offered for tendered notes | $ 880 |
Long-Term Debt - Additional I41
Long-Term Debt - Additional Information 5 (Details) - New Notes - Subsequent Event $ in Millions | May 10, 2017USD ($) |
Debt Instrument [Line Items] | |
Cash interest percentage | 12.50% |
PIK interest percentage | 14.00% |
Minimum | |
Debt Instrument [Line Items] | |
Amount of anticipated cash interest payment | $ 80 |
If Senior Secured Leverage would be less than or equal to 4.375 to 1.000, Consolidated Fixed Charge Coverage Ratio would be greater than or equal to 1.375 to 1.000, and Average Liquidity Less Amount of Anticipated Cash Interest Payment is equal to or greater than $80.0 million Member. | |
Debt Instrument [Line Items] | |
Cash interest percentage | 12.50% |
If Senior Secured Leverage would be less than or equal to 4.375 to 1.000, Consolidated Fixed Charge Coverage Ratio would be greater than or equal to 1.375 to 1.000, and Average Liquidity Less Amount of Anticipated Cash Interest Payment is equal to or greater than $80.0 million Member. | Maximum | |
Debt Instrument [Line Items] | |
Senior secured leverage ratio | 437.50% |
If Senior Secured Leverage would be less than or equal to 4.375 to 1.000, Consolidated Fixed Charge Coverage Ratio would be greater than or equal to 1.375 to 1.000, and Average Liquidity Less Amount of Anticipated Cash Interest Payment is equal to or greater than $80.0 million Member. | Minimum | |
Debt Instrument [Line Items] | |
Consolidated fixed charge coverage ratio | 137.50% |
If Senior Secured Leverage would be less than or equal to 4.375 to 1.000, Consolidated Fixed Charge Coverage Ratio would be greater than or equal to 1.250 to 1.000 but less than 1.375 to 1.000, and Average Liquidity Less Amount of Anticipated Cash Interest Payment is equal to or greater than $80.0 million Member. | |
Debt Instrument [Line Items] | |
Cash interest percentage | 6.50% |
PIK interest percentage | 7.50% |
If Senior Secured Leverage would be less than or equal to 4.375 to 1.000, Consolidated Fixed Charge Coverage Ratio would be greater than or equal to 1.250 to 1.000 but less than 1.375 to 1.000, and Average Liquidity Less Amount of Anticipated Cash Interest Payment is equal to or greater than $80.0 million Member. | Maximum | |
Debt Instrument [Line Items] | |
Consolidated fixed charge coverage ratio | 137.50% |
If Senior Secured Leverage would be less than or equal to 4.375 to 1.000, Consolidated Fixed Charge Coverage Ratio would be greater than or equal to 1.250 to 1.000 but less than 1.375 to 1.000, and Average Liquidity Less Amount of Anticipated Cash Interest Payment is equal to or greater than $80.0 million Member. | Minimum | |
Debt Instrument [Line Items] | |
Consolidated fixed charge coverage ratio | 125.00% |
If Senior Secured Leverage would be less than or equal to 4.375 to 1.000, Consolidated Fixed Charge Coverage Ratio would be less than 1.250 to 1.000, and Average Liquidity Less Amount of Anticipated Cash Interest Payment is Less than $80.0 million Member. | |
Debt Instrument [Line Items] | |
Percentage of Interest payment period ending on or prior to settlement date | 14.75% |
Percentage of Interest payment period ending or after settlement date | 15.50% |
If Senior Secured Leverage would be less than or equal to 4.375 to 1.000, Consolidated Fixed Charge Coverage Ratio would be less than 1.250 to 1.000, and Average Liquidity Less Amount of Anticipated Cash Interest Payment is Less than $80.0 million Member. | Maximum | |
Debt Instrument [Line Items] | |
Consolidated fixed charge coverage ratio | 125.00% |
If Senior Secured Leverage would be less than or equal to 4.375 to 1.000, Consolidated Fixed Charge Coverage Ratio would be less than 1.250 to 1.000, and Average Liquidity Less Amount of Anticipated Cash Interest Payment is Less than $80.0 million Member. | Minimum | |
Debt Instrument [Line Items] | |
Senior secured leverage ratio | 437.50% |
Long-Term Debt - Additional I42
Long-Term Debt - Additional Information 6 (Details) - USD ($) $ / shares in Units, $ in Millions | May 10, 2017 | Mar. 31, 2017 | Dec. 12, 2013 |
Debt Instrument [Line Items] | |||
Debt Instrument, interest rate terms | Interest on the New Notes is payable semi-annually on May 10 and November 10 of each year, commencing on November 10, 2017. | ||
Maturity date of notes | Nov. 10, 2022 | ||
Aggregate principal amount of notes | $ 360 | ||
Subsequent Event | |||
Debt Instrument [Line Items] | |||
Investor purchase agreement commitment premium payable amount | $ 17.5 | ||
Aggregate principal amount of notes | $ 532.6 | ||
Warrants to purchase common stock | 3,974,581 | ||
Subsequent Event | Participating Holders | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of notes | $ 295.3 | ||
Warrants to purchase common stock | 1,172,747 | ||
Subsequent Event | Investors | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of notes | $ 237.3 | ||
Warrants to purchase common stock | 2,801,834 | ||
Subsequent Event | New Warrant | |||
Debt Instrument [Line Items] | |||
Exercise price of warrants | $ 0.01 | ||
Investor pro forma fully diluted maximum ownership percentage on warrant | 26.70% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Taxes [Line Items] | ||
Effective income tax rates | 22.30% | 53.70% |
Income (Loss) before income taxes and non-controlling interest | $ 10.8 | $ 5.8 |
Income tax expense | $ 2.4 | 3.1 |
Statutory U.S federal income tax rate | 35.00% | |
Unrecognized tax benefits, Maturity Period | 12 months | |
Maximum | ||
Income Taxes [Line Items] | ||
Interest in income tax expense related to uncertain tax positions | $ 0.1 | $ 0.1 |
Increased in gross unrecognized tax benefits as a result of tax positions taken during the current period | $ 0.1 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | Mar. 01, 2017 | Mar. 31, 2017 |
Commitments And Contingencies [Line Items] | ||
Letters of credit issued | $ 12,100,000 | |
Surety Bond | ||
Commitments And Contingencies [Line Items] | ||
Surety bonds outstanding | 10,800,000 | |
Other Contingencies | ||
Commitments And Contingencies [Line Items] | ||
Loss contingency accrual | 8,200,000 | |
Remediation Gift Card | ||
Commitments And Contingencies [Line Items] | ||
Loss contingency accrual | $ 5,200,000 | |
Trilegiant Corporation | Putative Class Action | ||
Commitments And Contingencies [Line Items] | ||
Litigation settlement | $ (300,000) | |
Percentage of on-going legal fees | 30.00% | |
Trilegiant Corporation | Indemnification, Contribution, and Breach of Contract Claims | Maximum | ||
Commitments And Contingencies [Line Items] | ||
Litigation settlement | $ (400,000) |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | Nov. 09, 2015 | Mar. 28, 2014 | Oct. 17, 2005 | Nov. 30, 2007 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Mar. 31, 2017 | Mar. 09, 2016 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Exercise price of the outstanding options vested | $ 147.12 | ||||||||
Outstanding options granted to employees have a weighted average contractual life | 7 years | ||||||||
CRAs | $ 1,800,000 | $ 2,000,000 | |||||||
Board of Directors | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Maximum authorized period for grant of shares | 10 years | ||||||||
Outstanding options granted to employees have a weighted average contractual life | 7 years | ||||||||
Employee Stock Option | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock-based compensation expense | $ 500,000 | $ 100,000 | |||||||
Stock-based compensation, nonvested awards, total compensation cost not yet recognized | $ 6,000,000 | $ 6,000,000 | |||||||
Weighted average period of recognition | 1 year 7 months 6 days | ||||||||
Modified Stock Option | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Range of exercise price, Minimum | $ 1.14 | ||||||||
Modified Stock Option | Board of Directors | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Number of stock options granted | 200,000 | ||||||||
Range of exercise price, Minimum | $ 1.14 | ||||||||
RSU | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock-based compensation expense | $ 0 | 100,000 | |||||||
2015 Retention Program | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock-based compensation expense | 700,000 | 1,000,000 | |||||||
Common Stock, Value | $ 400,000 | $ 500,000 | |||||||
2005 Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Authorized shares granted | 4,900,000 | ||||||||
Number of stock options granted | 0 | 0 | |||||||
2005 Plan | Employee Stock Option | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Maximum authorized period for grant of shares | 10 years | ||||||||
2005 Plan | Modified Stock Option | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Number of option outstanding | 1,900,000 | ||||||||
2007 Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Authorized shares granted | 10,000,000 | ||||||||
Number of stock options granted | 0 | 0 | |||||||
2007 Plan | Employee Stock Option | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Maximum authorized period for grant of shares | 10 years | 10 years | |||||||
Vesting period | 4 years | ||||||||
2007 Plan | Modified Stock Option | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Number of option outstanding | 2,400,000 | ||||||||
2007 Plan | Modified Stock Option | Board of Directors | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Number of stock options granted | 0 | 0 | |||||||
2015 Equity Incentive Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Maximum authorized period for grant of shares | 10 years | ||||||||
Percentage of common stock reserved for issuance | 10.00% | ||||||||
Number of option outstanding | 868,950 | 868,950 | 859,500 | ||||||
Number of stock options granted | 0 | 900,000 | 28,000 | ||||||
Vesting period | 4 years | ||||||||
Exercise price of the options | $ 13.97 | $ 13.97 | |||||||
Common Class C | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Common stock, par value | $ 0.01 | ||||||||
Outstanding options | 2,235 | 2,235 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 5,904 | 6,466 | |||||||
Common Class D | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Common stock, par value | 0.01 | ||||||||
Outstanding options | 2,353 | 2,353 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 6,209 | 6,809 | |||||||
Class A Common Stock | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Common stock, par value | $ 0.01 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options Granted to Employees (Details) - Employee Stock Option | Oct. 17, 2005 | Nov. 30, 2007 | Mar. 31, 2017 | |
2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Initial option term | 10 years | |||
2007 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting | Ratably over 4 years | |||
Initial option term | 10 years | 10 years | ||
Vesting period | 4 years | |||
Tranche A | 2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting | [1] | Ratably over 5 years | ||
Initial option term | 10 years | |||
Vesting period | 5 years | |||
Tranche B | 2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting | [2] | 100% after 8 years | ||
Initial option term | 10 years | |||
Vesting period | 8 years | |||
Vesting, rate | 100.00% | |||
Tranche C | 2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting | [2] | 100% after 8 years | ||
Initial option term | 10 years | |||
Vesting period | 8 years | |||
Vesting, rate | 100.00% | |||
[1] | In the event of a sale of the Company, vesting for tranche A occurs 18 months after the date of sale. | |||
[2] | Tranche B and C vesting would be accelerated upon specified realized returns to Apollo. |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Fair Value Option Award (Details) - 2016 Grants - Employee Stock Option | 3 Months Ended |
Mar. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected volatility | 75.00% |
Expected life (in years) | 6 years 6 months |
Risk-free interest rate | 1.64% |
Expected dividends | 0.00% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Option Activity (Details) | 3 Months Ended | |
Mar. 31, 2017$ / sharesshares | Mar. 31, 2016shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Weighted average remaining contractual term (in years) | 7 years | |
2005 Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Granted | 0 | 0 |
2015 Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Outstanding options, beginning of year | 874,000 | |
Exercised | 0 | |
Forfeited or expired | (5,000) | |
Outstanding options, end of period | 869,000 | |
Vested or expected to vest at March 31, 2017 | 869,000 | |
Exercisable options at March 31, 2017 | 212,000 | |
Weighted average remaining contractual term (in years) | 9 years | |
Weighted average grant date fair value per option granted in 2017 | $ / shares | $ 0 | |
Weighted average exercise price of exercisable options at March 31, 2017 | $ / shares | 13.97 | |
Weighted average exercise price of outstanding options at March 31, 2017 | $ / shares | $ 13.97 | |
Class C/D Common Stock | Grants to Board of Directors | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Outstanding options, beginning of year | 1,000 | |
Granted | 0 | |
Exercised | 0 | |
Forfeited or expired | 0 | |
Outstanding options, end of period | 1,000 | |
Vested or expected to vest at March 31, 2017 | 1,000 | |
Exercisable options at March 31, 2017 | 1,000 | |
Weighted average remaining contractual term (in years) | 7 years | |
Weighted average grant date fair value per option granted in 2017 | $ / shares | $ 0 | |
Weighted average exercise price of exercisable options at March 31, 2017 | $ / shares | 147.12 | |
Weighted average exercise price of outstanding options at March 31, 2017 | $ / shares | $ 147.12 | |
Class C/D Common Stock | Tranche A | 2005 Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Outstanding options, beginning of year | 2,000 | |
Granted | 0 | |
Exercised | 0 | |
Forfeited or expired | 0 | |
Outstanding options, end of period | 2,000 | |
Vested or expected to vest at March 31, 2017 | 2,000 | |
Exercisable options at March 31, 2017 | 2,000 | |
Weighted average remaining contractual term (in years) | 7 years | |
Weighted average grant date fair value per option granted in 2017 | $ / shares | $ 0 | |
Weighted average exercise price of exercisable options at March 31, 2017 | $ / shares | 147.12 | |
Weighted average exercise price of outstanding options at March 31, 2017 | $ / shares | $ 147.12 | |
Class C/D Common Stock | Tranche B | 2005 Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Outstanding options, beginning of year | 1,000 | |
Granted | 0 | |
Exercised | 0 | |
Forfeited or expired | 0 | |
Outstanding options, end of period | 1,000 | |
Vested or expected to vest at March 31, 2017 | 1,000 | |
Exercisable options at March 31, 2017 | 1,000 | |
Weighted average remaining contractual term (in years) | 7 years | |
Weighted average grant date fair value per option granted in 2017 | $ / shares | $ 0 | |
Weighted average exercise price of exercisable options at March 31, 2017 | $ / shares | 147.12 | |
Weighted average exercise price of outstanding options at March 31, 2017 | $ / shares | $ 147.12 | |
Class C/D Common Stock | Tranche C | 2005 Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Outstanding options, beginning of year | 1,000 | |
Granted | 0 | |
Exercised | 0 | |
Forfeited or expired | 0 | |
Outstanding options, end of period | 1,000 | |
Vested or expected to vest at March 31, 2017 | 1,000 | |
Exercisable options at March 31, 2017 | 1,000 | |
Weighted average remaining contractual term (in years) | 7 years | |
Weighted average grant date fair value per option granted in 2017 | $ / shares | $ 0 | |
Weighted average exercise price of exercisable options at March 31, 2017 | $ / shares | 147.12 | |
Weighted average exercise price of outstanding options at March 31, 2017 | $ / shares | $ 147.12 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Oct. 17, 2005 | |
Cendant Subsidiaries | ||
Related Party Transaction [Line Items] | ||
Aggregate amount of losses | $ 15,000,000 | |
Indemnification obligation, recovery limit | 275,100,000 | |
Cendant Subsidiaries | Minimum | ||
Related Party Transaction [Line Items] | ||
Indemnification obligation occurrence threshold | 100,000 | |
Cendant And Affinion | ||
Related Party Transaction [Line Items] | ||
Maximum amount of loss borne by company | $ 15,000,000 | |
Cendant Marketing Services Division | ||
Related Party Transaction [Line Items] | ||
Sale pursuant to a purchase agreement | $ 1,800,000,000 |
Financial Instruments, Deriva50
Financial Instruments, Derivatives and Fair Value Measures - Principal Cash Flows and Related Weighted-Average Interest Rates by Expected Maturity (Details) $ in Millions | Mar. 31, 2017USD ($) | |
Long-Term Debt Percentage Bearing Fixed Interest Rate | ||
Debt Instrument [Line Items] | ||
2,018 | $ 622.1 | |
Total | 622.1 | |
Fair Value At March 31,2017 | 548 | |
Long-Term Debt Percentage Bearing Variable Interest Rate | ||
Debt Instrument [Line Items] | ||
2,017 | 7.8 | |
2,018 | 1,169 | |
Total | 1,176.8 | |
Fair Value At March 31,2017 | $ 1,162.3 | |
Year One | Long-Term Debt Percentage Bearing Fixed Interest Rate | ||
Debt Instrument [Line Items] | ||
Average interest rate | 8.01% | |
Year One | Long-Term Debt Percentage Bearing Variable Interest Rate | ||
Debt Instrument [Line Items] | ||
Average interest rate | 7.38% | [1] |
Year Two | Long-Term Debt Percentage Bearing Fixed Interest Rate | ||
Debt Instrument [Line Items] | ||
Average interest rate | 7.97% | |
Year Two | Long-Term Debt Percentage Bearing Variable Interest Rate | ||
Debt Instrument [Line Items] | ||
Average interest rate | 7.68% | [1] |
[1] | Average interest rate is based on rates in effect at March 31, 2017. |
Financial Instruments, Deriva51
Financial Instruments, Derivatives and Fair Value Measures - Additional Information (Details) - Foreign Exchange Forward € in Millions, £ in Millions, $ in Millions | 3 Months Ended | |||
Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2017EUR (€) | Mar. 31, 2017GBP (£) | |
Derivative Instruments Gain Loss [Line Items] | ||||
Derivative contract period | 30 days | |||
Foreign currency contracts, realized gain (loss) | $ (0.6) | $ 0.5 | ||
Buy USD Sell EUR | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Notional amount of foreign currency derivative sale contracts | 10.8 | € 10 | ||
Buy USD Sell GBP | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Notional amount of foreign currency derivative sale contracts | $ 17.2 | £ 13.9 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2017Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 4 |
Segment Information - Schedule
Segment Information - Schedule of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Net revenues | $ 241.1 | $ 254.9 |
Operating income loss before depreciation and amortization | 49.4 | 47.9 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 202.9 | 200.9 |
Operating income loss before depreciation and amortization | 53 | 54.9 |
Operating Segments | Global Loyalty | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 57 | 39.9 |
Operating income loss before depreciation and amortization | 20.1 | 13.6 |
Operating Segments | Global Customer Engagement | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 89.2 | 103.6 |
Operating income loss before depreciation and amortization | 12.9 | 19.6 |
Operating Segments | Insurance Solutions | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 56.7 | 57.4 |
Operating income loss before depreciation and amortization | 20 | 21.7 |
Operating Segments | Legacy Membership and Package | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 38.2 | 54.2 |
Operating income loss before depreciation and amortization | 9 | 10.1 |
Eliminations | ||
Segment Reporting Information [Line Items] | ||
Net revenues | (0.2) | |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Operating income loss before depreciation and amortization | $ (12.6) | $ (17.1) |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment EBITDA to Income from Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting [Abstract] | ||
Operating income loss before depreciation and amortization | $ 49.4 | $ 47.9 |
Depreciation and amortization | (11.3) | (14.3) |
Income from operations | $ 38.1 | $ 33.6 |
Guarantor_Non-Guarantor Suppl55
Guarantor/Non-Guarantor Supplemental Financial Information - Additional Information (Details) | Mar. 31, 2017 |
Guarantor Subsidiaries | |
Condensed Financial Statements Captions [Line Items] | |
Percentage of ownership | 100.00% |
Guarantor_Non-Guarantor Suppl56
Guarantor/Non-Guarantor Supplemental Financial Information - Schedule of Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||||
Cash and cash equivalents | $ 33.6 | $ 36.2 | $ 40.2 | $ 51.2 |
Restricted cash | 24.8 | 26.1 | ||
Receivables, net | 151.6 | 135.9 | ||
Profit-sharing receivables from insurance carriers | 21.8 | 18.8 | ||
Prepaid commissions | 33.6 | 33.9 | ||
Other current assets | 86.3 | 70.6 | ||
Total current assets | 351.7 | 321.5 | ||
Non-current assets: | ||||
Property and equipment, net | 105.8 | 105.5 | ||
Intangible assets, net | 39.4 | 41.5 | ||
Goodwill | 218.9 | 218.2 | 225.8 | |
Receivables from related parties | 28.9 | 28.9 | ||
Other non-current assets | 33.8 | 34.3 | ||
Total assets | 795.1 | 766.3 | ||
Current liabilities: | ||||
Current portion of long-term debt | 7.8 | 7.8 | ||
Accounts payable and accrued expenses | 353.7 | 322.9 | ||
Payables to related parties | 15.9 | 16.2 | ||
Deferred revenue | 54.2 | 54.8 | ||
Income taxes payable | 2.8 | 2.7 | ||
Total current liabilities | 434.4 | 404.4 | ||
Long-term debt | 1,828.2 | 1,837.6 | ||
Deferred income taxes | 27.7 | 26.9 | ||
Deferred revenue | 4.3 | 4.8 | ||
Other long-term liabilities | 30 | 31.4 | ||
Total liabilities | 2,324.6 | 2,305.1 | ||
Total Affinion Group, Inc. deficit | (1,530.7) | (1,539.6) | ||
Non-controlling interest in subsidiary | 1.2 | 0.8 | ||
Total deficit | (1,529.5) | (1,538.8) | (1,543.2) | (1,545.9) |
Total liabilities and deficit | 795.1 | 766.3 | ||
Eliminations | ||||
Current assets: | ||||
Intercompany interest receivable | (0.4) | (1.2) | ||
Total current assets | (0.4) | (1.2) | ||
Non-current assets: | ||||
Investment in subsidiaries | (2,640.9) | (2,582.5) | ||
Intercompany loan receivable | (219.3) | (202.4) | ||
Intercompany receivables | (2,462.1) | (2,387.9) | ||
Total assets | (5,322.7) | (5,174) | ||
Current liabilities: | ||||
Intercompany interest payable | (0.4) | (1.2) | ||
Total current liabilities | (0.4) | (1.2) | ||
Intercompany loans payable | (219.3) | (202.4) | ||
Intercompany payables | (2,462.1) | (2,387.9) | ||
Total liabilities | (2,681.8) | (2,591.5) | ||
Total Affinion Group, Inc. deficit | (2,640.9) | (2,582.5) | ||
Total deficit | (2,640.9) | (2,582.5) | ||
Total liabilities and deficit | (5,322.7) | (5,174) | ||
Contract rights and list fees, net | ||||
Non-current assets: | ||||
Intangible assets, net | 16.6 | 16.4 | ||
Other intangibles, net | ||||
Non-current assets: | ||||
Intangible assets, net | 39.4 | 41.5 | ||
Parent Company | ||||
Current assets: | ||||
Cash and cash equivalents | 2.6 | 9.1 | 14.2 | 31 |
Receivables, net | 2.7 | 2.6 | ||
Other current assets | 43 | 11.9 | ||
Total current assets | 48.3 | 23.6 | ||
Non-current assets: | ||||
Property and equipment, net | 5.6 | 4.9 | ||
Receivables from related parties | 28.9 | 28.9 | ||
Investment in subsidiaries | 2,495.1 | 2,437.6 | ||
Intercompany loan receivable | 180.6 | 164 | ||
Total assets | 2,758.5 | 2,659 | ||
Current liabilities: | ||||
Current portion of long-term debt | 7.8 | 7.8 | ||
Accounts payable and accrued expenses | 107 | 83.2 | ||
Payables to related parties | 15.9 | 16.2 | ||
Intercompany interest payable | 0.4 | 1.2 | ||
Deferred revenue | 0.1 | 0.1 | ||
Income taxes payable | 0.6 | 0.5 | ||
Total current liabilities | 131.8 | 109 | ||
Long-term debt | 1,677.7 | 1,685 | ||
Deferred income taxes | 2.3 | 2.1 | ||
Deferred revenue | 0.3 | 0.3 | ||
Intercompany loans payable | 22.6 | 22.6 | ||
Intercompany payables | 2,446.3 | 2,371.3 | ||
Other long-term liabilities | 8.2 | 8.3 | ||
Total liabilities | 4,289.2 | 4,198.6 | ||
Total Affinion Group, Inc. deficit | (1,530.7) | (1,539.6) | ||
Total deficit | (1,530.7) | (1,539.6) | ||
Total liabilities and deficit | 2,758.5 | 2,659 | ||
Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 1.9 | 2.3 | 2.3 | 1.6 |
Restricted cash | 15.9 | 16.3 | ||
Receivables, net | 109.5 | 99 | ||
Profit-sharing receivables from insurance carriers | 21.8 | 18.8 | ||
Prepaid commissions | 24.3 | 25.5 | ||
Other current assets | 18.2 | 31.9 | ||
Total current assets | 191.6 | 193.8 | ||
Non-current assets: | ||||
Property and equipment, net | 73.1 | 73.7 | ||
Goodwill | 155.6 | 155.6 | ||
Investment in subsidiaries | 81.9 | 81 | ||
Intercompany loan receivable | 16.1 | 15.8 | ||
Intercompany receivables | 2,462.1 | 2,387.9 | ||
Other non-current assets | 29.2 | 29.6 | ||
Total assets | 3,060.4 | 2,989.7 | ||
Current liabilities: | ||||
Accounts payable and accrued expenses | 164.1 | 157 | ||
Deferred revenue | 37 | 37.2 | ||
Total current liabilities | 201.1 | 194.2 | ||
Deferred income taxes | 24.9 | 24.2 | ||
Deferred revenue | 2 | 2.1 | ||
Other long-term liabilities | 17.4 | 18.8 | ||
Total liabilities | 245.4 | 239.3 | ||
Total Affinion Group, Inc. deficit | 2,815 | 2,750.4 | ||
Total deficit | 2,815 | 2,750.4 | ||
Total liabilities and deficit | 3,060.4 | 2,989.7 | ||
Guarantor Subsidiaries | Contract rights and list fees, net | ||||
Non-current assets: | ||||
Intangible assets, net | 16.6 | 16.4 | ||
Guarantor Subsidiaries | Other intangibles, net | ||||
Non-current assets: | ||||
Intangible assets, net | 34.2 | 35.9 | ||
Non-Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 29.1 | 24.8 | $ 23.7 | $ 18.6 |
Restricted cash | 8.9 | 9.8 | ||
Receivables, net | 39.4 | 34.3 | ||
Prepaid commissions | 9.3 | 8.4 | ||
Intercompany interest receivable | 0.4 | 1.2 | ||
Other current assets | 25.1 | 26.8 | ||
Total current assets | 112.2 | 105.3 | ||
Non-current assets: | ||||
Property and equipment, net | 27.1 | 26.9 | ||
Goodwill | 63.3 | 62.6 | ||
Investment in subsidiaries | 63.9 | 63.9 | ||
Intercompany loan receivable | 22.6 | 22.6 | ||
Other non-current assets | 4.6 | 4.7 | ||
Total assets | 298.9 | 291.6 | ||
Current liabilities: | ||||
Accounts payable and accrued expenses | 82.6 | 82.7 | ||
Deferred revenue | 17.1 | 17.5 | ||
Income taxes payable | 2.2 | 2.2 | ||
Total current liabilities | 101.9 | 102.4 | ||
Long-term debt | 150.5 | 152.6 | ||
Deferred income taxes | 0.5 | 0.6 | ||
Deferred revenue | 2 | 2.4 | ||
Intercompany loans payable | 196.7 | 179.8 | ||
Intercompany payables | 15.8 | 16.6 | ||
Other long-term liabilities | 4.4 | 4.3 | ||
Total liabilities | 471.8 | 458.7 | ||
Total Affinion Group, Inc. deficit | (174.1) | (167.9) | ||
Non-controlling interest in subsidiary | 1.2 | 0.8 | ||
Total deficit | (172.9) | (167.1) | ||
Total liabilities and deficit | 298.9 | 291.6 | ||
Non-Guarantor Subsidiaries | Other intangibles, net | ||||
Non-current assets: | ||||
Intangible assets, net | $ 5.2 | $ 5.6 |
Guarantor_Non-Guarantor Suppl57
Guarantor/Non-Guarantor Supplemental Financial Information - Schedule of Condensed Consolidating Statement of Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Condensed Income Statements Captions [Line Items] | ||
Net revenues | $ 241.1 | $ 254.9 |
Cost of revenues, exclusive of depreciation and amortization shown separately below: | ||
Marketing and commissions | 77.9 | 88.1 |
Operating costs | 89.4 | 86.8 |
General and administrative | 24.3 | 32.1 |
Facility exit costs | 0.1 | |
Depreciation and amortization | 11.3 | 14.3 |
Total expenses | 203 | 221.3 |
Income from operations | 38.1 | 33.6 |
Interest income | 0.2 | 0.3 |
Interest expense | (27.4) | (28.1) |
Other expense, net | (0.1) | |
Income before income taxes and non-controlling interest | 10.8 | 5.8 |
Income tax expense | (2.4) | (3.1) |
Income from continuing operations after income taxes, before equity method investments, extraordinary items, noncontrolling interest | 8.4 | 2.7 |
Net income | 8.4 | 2.7 |
Less: net income attributable to non-controlling interest | (0.3) | (0.1) |
Net income attributable to Affinion Group, Inc. | 8.1 | 2.6 |
Currency translation adjustment, net of tax | 0.9 | |
Comprehensive income | 9.3 | 2.7 |
Less: comprehensive income attributable to non-controlling interest | (0.4) | (0.1) |
Comprehensive income attributable to Affinion Group, Inc. | 8.9 | 2.6 |
Eliminations | ||
Cost of revenues, exclusive of depreciation and amortization shown separately below: | ||
Equity in income of subsidiaries | (58.6) | (61) |
Net income | (58.6) | (61) |
Net income attributable to Affinion Group, Inc. | (58.6) | (61) |
Currency translation adjustment, net of tax | 0.3 | |
Comprehensive income | (58.3) | (61) |
Comprehensive income attributable to Affinion Group, Inc. | (58.3) | (61) |
Parent Company | ||
Cost of revenues, exclusive of depreciation and amortization shown separately below: | ||
Marketing and commissions | 0.1 | |
Operating costs | 10.6 | 11.6 |
General and administrative | 12 | 16.6 |
Depreciation and amortization | 0.1 | 0.1 |
Total expenses | 22.7 | 28.4 |
Income from operations | (22.7) | (28.4) |
Interest income | 0.2 | 0.2 |
Interest expense | (26.3) | (26.8) |
Interest income (expense) - intercompany | (0.6) | (0.6) |
Income before income taxes and non-controlling interest | (49.4) | (55.6) |
Income tax expense | (0.2) | (0.2) |
Income from continuing operations after income taxes, before equity method investments, extraordinary items, noncontrolling interest | (49.6) | (55.8) |
Equity in income of subsidiaries | 57.7 | 58.4 |
Net income | 8.1 | 2.6 |
Net income attributable to Affinion Group, Inc. | 8.1 | 2.6 |
Currency translation adjustment, net of tax | 0.8 | |
Comprehensive income | 8.9 | 2.6 |
Comprehensive income attributable to Affinion Group, Inc. | 8.9 | 2.6 |
Guarantor Subsidiaries | ||
Condensed Income Statements Captions [Line Items] | ||
Net revenues | 172.5 | 174.6 |
Cost of revenues, exclusive of depreciation and amortization shown separately below: | ||
Marketing and commissions | 53.6 | 61.3 |
Operating costs | 39.3 | 32.4 |
General and administrative | 6.9 | 6.9 |
Facility exit costs | 0.1 | |
Depreciation and amortization | 8.1 | 9.2 |
Total expenses | 108 | 109.8 |
Income from operations | 64.5 | 64.8 |
Interest expense | (0.1) | (0.2) |
Other expense, net | (0.1) | |
Income before income taxes and non-controlling interest | 64.3 | 64.6 |
Income tax expense | (0.9) | (1.2) |
Income from continuing operations after income taxes, before equity method investments, extraordinary items, noncontrolling interest | 63.4 | 63.4 |
Equity in income of subsidiaries | 0.9 | 2.6 |
Net income | 64.3 | 66 |
Net income attributable to Affinion Group, Inc. | 64.3 | 66 |
Currency translation adjustment, net of tax | 0.3 | |
Comprehensive income | 64.6 | 66 |
Comprehensive income attributable to Affinion Group, Inc. | 64.6 | 66 |
Non-Guarantor Subsidiaries | ||
Condensed Income Statements Captions [Line Items] | ||
Net revenues | 68.6 | 80.3 |
Cost of revenues, exclusive of depreciation and amortization shown separately below: | ||
Marketing and commissions | 24.3 | 26.7 |
Operating costs | 39.5 | 42.8 |
General and administrative | 5.4 | 8.6 |
Depreciation and amortization | 3.1 | 5 |
Total expenses | 72.3 | 83.1 |
Income from operations | (3.7) | (2.8) |
Interest income | 0.1 | |
Interest expense | (1) | (1.1) |
Interest income (expense) - intercompany | 0.6 | 0.6 |
Income before income taxes and non-controlling interest | (4.1) | (3.2) |
Income tax expense | (1.3) | (1.7) |
Income from continuing operations after income taxes, before equity method investments, extraordinary items, noncontrolling interest | (5.4) | (4.9) |
Net income | (5.4) | (4.9) |
Less: net income attributable to non-controlling interest | (0.3) | (0.1) |
Net income attributable to Affinion Group, Inc. | (5.7) | (5) |
Currency translation adjustment, net of tax | (0.5) | |
Comprehensive income | (5.9) | (4.9) |
Less: comprehensive income attributable to non-controlling interest | (0.4) | (0.1) |
Comprehensive income attributable to Affinion Group, Inc. | $ (6.3) | $ (5) |
Guarantor_Non-Guarantor Suppl58
Guarantor/Non-Guarantor Supplemental Financial Information - Schedule of Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating Activities | ||
Net income (loss) | $ 8.4 | $ 2.7 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 11.3 | 14.3 |
Amortization of debt discount and financing costs | 1.5 | 1.5 |
Provision for (recovery of) accounts receivable loss provided for | 0.6 | 0.2 |
Facility exit costs | 0.1 | |
Amortization of carrying value adjustment | (9) | (8.5) |
Share-based compensation | 0.9 | 0.7 |
Deferred income taxes | 1 | 1.1 |
Net change in assets and liabilities: | ||
Restricted cash | 1.5 | (0.2) |
Receivables | (16) | (13.2) |
Profit-sharing receivables from insurance carriers | (3) | (2.9) |
Prepaid commissions | 0.5 | 4.3 |
Other current assets | (15.8) | 15.7 |
Contract rights and list fees | (0.3) | 0.9 |
Other non-current assets | 0.4 | (1.2) |
Accounts payable and accrued expenses | 31.1 | (8.4) |
Payables to related parties | (1.2) | (1.7) |
Deferred revenue | (1.2) | (7.7) |
Income taxes receivable and payable | 0.4 | 0.7 |
Other long-term liabilities | (1.5) | (1.7) |
Other, net | (0.2) | |
Net cash provided by (used in) operating activities | 9.5 | (3.4) |
Investing Activities | ||
Capital expenditures | (10.5) | (6) |
Restricted cash | 0.1 | |
Net cash used in investing activities | (10.5) | (5.9) |
Financing Activities | ||
Principal payments on borrowings | (1.9) | (2) |
Net cash used in financing activities | (1.9) | (2) |
Effect of changes in exchange rates on cash and cash equivalents | 0.3 | 0.3 |
Net decrease in cash and cash equivalents | (2.6) | (11) |
Cash and cash equivalents, beginning of period | 36.2 | 51.2 |
Cash and cash equivalents, end of period | 33.6 | 40.2 |
Eliminations | ||
Operating Activities | ||
Net income (loss) | (58.6) | (61) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Equity in (income) loss of subsidiaries | 58.6 | 61 |
Net change in assets and liabilities: | ||
Accounts payable and accrued expenses | (0.1) | |
Net cash provided by (used in) operating activities | (0.1) | |
Investing Activities | ||
Intercompany receivables and payables | 75.1 | 39.6 |
Net cash used in investing activities | 75.1 | 39.6 |
Financing Activities | ||
Intercompany receivables and payables | (75.1) | (39.5) |
Net cash used in financing activities | (75.1) | (39.5) |
Parent Company | ||
Operating Activities | ||
Net income (loss) | 8.1 | 2.6 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 0.1 | 0.1 |
Amortization of debt discount and financing costs | 1.5 | 1.5 |
Amortization of carrying value adjustment | (6.9) | (6.4) |
Share-based compensation | 0.9 | 0.7 |
Equity in (income) loss of subsidiaries | (57.7) | (58.4) |
Deferred income taxes | 0.1 | 0.1 |
Net change in assets and liabilities: | ||
Receivables | (0.1) | (0.1) |
Receivables from related parties | (0.8) | (1) |
Other current assets | (31.2) | 9.3 |
Accounts payable and accrued expenses | 23.8 | 12.2 |
Payables to related parties | (1.2) | (1.7) |
Income taxes receivable and payable | 0.1 | 0.1 |
Other long-term liabilities | (0.1) | |
Other, net | (0.3) | |
Net cash provided by (used in) operating activities | (63.7) | (41) |
Investing Activities | ||
Capital expenditures | (0.7) | (0.8) |
Net cash used in investing activities | (0.7) | (0.8) |
Financing Activities | ||
Principal payments on borrowings | (1.9) | (2) |
Intercompany receivables and payables | 75.1 | 40.6 |
Capital contribution to subsidiary | (0.3) | |
Intercompany loans | (15.3) | (13.3) |
Net cash used in financing activities | 57.9 | 25 |
Net decrease in cash and cash equivalents | (6.5) | (16.8) |
Cash and cash equivalents, beginning of period | 9.1 | 31 |
Cash and cash equivalents, end of period | 2.6 | 14.2 |
Guarantor Subsidiaries | ||
Operating Activities | ||
Net income (loss) | 64.3 | 66 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 8.1 | 9.2 |
Provision for (recovery of) accounts receivable loss provided for | 0.6 | 0.2 |
Facility exit costs | 0.1 | |
Equity in (income) loss of subsidiaries | (0.9) | (2.6) |
Deferred income taxes | 0.9 | 1.2 |
Net change in assets and liabilities: | ||
Restricted cash | 0.4 | (0.9) |
Receivables | (11.2) | (9.6) |
Profit-sharing receivables from insurance carriers | (3) | (2.9) |
Prepaid commissions | 1.3 | 3.9 |
Other current assets | 13.7 | 6.7 |
Contract rights and list fees | (0.3) | 0.9 |
Other non-current assets | 0.4 | |
Accounts payable and accrued expenses | 8.5 | (22.1) |
Deferred revenue | (0.3) | (6.4) |
Other long-term liabilities | (1.5) | (0.4) |
Net cash provided by (used in) operating activities | 81.1 | 43.2 |
Investing Activities | ||
Capital expenditures | (7.2) | (2.9) |
Intercompany receivables and payables | (74.3) | (39.6) |
Net cash used in investing activities | (81.5) | (42.5) |
Financing Activities | ||
Net decrease in cash and cash equivalents | (0.4) | 0.7 |
Cash and cash equivalents, beginning of period | 2.3 | 1.6 |
Cash and cash equivalents, end of period | 1.9 | 2.3 |
Non-Guarantor Subsidiaries | ||
Operating Activities | ||
Net income (loss) | (5.4) | (4.9) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 3.1 | 5 |
Amortization of carrying value adjustment | (2.1) | (2.1) |
Deferred income taxes | (0.2) | |
Net change in assets and liabilities: | ||
Restricted cash | 1.1 | 0.7 |
Receivables | (4.7) | (3.5) |
Receivables from related parties | 0.8 | 1 |
Prepaid commissions | (0.8) | 0.4 |
Other current assets | 1.7 | (0.3) |
Other non-current assets | (1.2) | |
Accounts payable and accrued expenses | (1.2) | 1.6 |
Deferred revenue | (0.9) | (1.3) |
Income taxes receivable and payable | 0.3 | 0.6 |
Other long-term liabilities | 0.1 | (1.3) |
Other, net | 0.1 | |
Net cash provided by (used in) operating activities | (7.9) | (5.5) |
Investing Activities | ||
Capital expenditures | (2.6) | (2.3) |
Restricted cash | 0.1 | |
Intercompany receivables and payables | (0.8) | |
Net cash used in investing activities | (3.4) | (2.2) |
Financing Activities | ||
Intercompany receivables and payables | (1.1) | |
Capital contribution to subsidiary | 0.3 | |
Intercompany loans | 15.3 | 13.3 |
Net cash used in financing activities | 15.3 | 12.5 |
Effect of changes in exchange rates on cash and cash equivalents | 0.3 | 0.3 |
Net decrease in cash and cash equivalents | 4.3 | 5.1 |
Cash and cash equivalents, beginning of period | 24.8 | 18.6 |
Cash and cash equivalents, end of period | $ 29.1 | $ 23.7 |