Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Jan. 31, 2015 | Jun. 30, 2014 |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | CTRX | ||
Entity Registrant Name | Catamaran Corp | ||
Entity Central Index Key | 1363851 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 207,493,541 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filer | No | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Public Float | $9.20 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents | $1,011,952 | $387,241 |
Accounts receivable, net of allowance for doubtful accounts of $4,867 (2013 - $5,860) | 1,254,336 | 959,586 |
Rebates receivable | 863,824 | 305,955 |
Other current assets | 219,435 | 184,893 |
Total current assets | 3,349,547 | 1,837,675 |
Property and equipment, net of accumulated depreciation of $144,220 (2013 - $103,858) | 210,027 | 197,007 |
Goodwill | 4,724,639 | 4,720,275 |
Other intangible assets, net of accumulated amortization of $574,503 (2013 - $363,546) | 968,199 | 1,181,419 |
Other long-term assets | 71,773 | 59,387 |
Total assets | 9,324,185 | 7,995,763 |
Current liabilities | ||
Accounts payable | 967,791 | 817,805 |
Accrued expenses and other current liabilities | 327,190 | 254,100 |
Rebates payable | 967,733 | 356,265 |
Current portion - long-term debt | 81,250 | 50,000 |
Total current liabilities | 2,343,964 | 1,478,170 |
Deferred income taxes | 257,325 | 301,341 |
Long-term debt | 1,344,973 | 1,215,363 |
Other long-term liabilities | 98,816 | 89,391 |
Total liabilities | 4,045,078 | 3,084,265 |
Commitments and contingencies (Note 16) | ||
Shareholders’ equity | ||
Common shares: no par value, unlimited shares authorized; 207,493,541 shares issued and outstanding at December 31, 2014 (2013 - 206,305,070) | 4,264,764 | 4,215,291 |
Additional paid-in capital | 74,071 | 77,790 |
Retained earnings | 934,454 | 617,161 |
Accumulated other comprehensive loss | -1,310 | -1,752 |
Total shareholders' equity | 5,271,979 | 4,908,490 |
Non-controlling interest | 7,128 | 3,008 |
Total equity | 5,279,107 | 4,911,498 |
Total liabilities and equity | $9,324,185 | $7,995,763 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Assets | ||
Accounts receivable, allowance for doubtful accounts | $4,867 | $5,860 |
Property and equipment, accumulated depreciation | 144,220 | 103,858 |
Other intangible assets, accumulated amortization | $574,503 | $363,546 |
Shareholders’ equity | ||
Common Stock, shares issued | 207,493,541 | 206,305,070 |
Common Stock, shares outstanding | 207,493,541 | 206,305,070 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||
Revenue | $21,581,890 | $14,780,094 | $9,940,120 |
Cost of revenue | 20,221,837 | 13,654,449 | 9,206,744 |
Gross profit | 1,360,053 | 1,125,645 | 733,376 |
Expenses: | |||
Selling, general and administrative | 518,351 | 440,759 | 369,492 |
Depreciation of property and equipment | 59,486 | 37,926 | 16,749 |
Amortization of intangible assets | 213,220 | 203,192 | 130,116 |
Total expenses | 791,057 | 681,877 | 516,357 |
Operating income | 568,996 | 443,768 | 217,019 |
Interest and other expense, net | 61,088 | 41,626 | 26,682 |
Income before income taxes | 507,908 | 402,142 | 190,337 |
Income tax expense | 134,186 | 103,403 | 69,316 |
Net income | 373,722 | 298,739 | 121,021 |
Less net income attributable to non-controlling interest | 56,429 | 36,569 | 4,363 |
Net income attributable to the Company | $317,293 | $262,170 | $116,658 |
Earnings per share attributable to the Company: | |||
Basic (in dollars per share) | $1.53 | $1.27 | $0.70 |
Diluted (in dollars per share) | $1.53 | $1.27 | $0.70 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income | $373,722 | $298,739 | $121,021 |
Other comprehensive income, net of tax | |||
Unrealized income (loss) on cash flow hedge, net of income tax expense of $158, $156, and $0 in 2014, 2013, and 2012, respectively | 442 | 439 | -2,191 |
Comprehensive income | 374,164 | 299,178 | 118,830 |
Less comprehensive income attributable to non-controlling interest | 56,429 | 36,569 | 4,363 |
Comprehensive income attributable to the Company | $317,735 | $262,609 | $114,467 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Income tax expense on unrealized income (loss) cash flow hedges | $158 | $156 | $0 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income | $373,722 | $298,739 | $121,021 |
Items not involving cash: | |||
Stock-based compensation | 33,554 | 25,562 | 17,667 |
Depreciation of property and equipment | 63,468 | 42,232 | 20,234 |
Amortization of intangible assets | 213,220 | 203,192 | 130,116 |
Deferred lease inducements and rent | 5,523 | 28,119 | 3,136 |
Deferred income taxes | -58,047 | -44,336 | -37,925 |
Tax benefit on option exercises | -3,492 | -9,732 | -19,397 |
Deferred financing cost amortization | 9,595 | 9,127 | 4,985 |
Changes in operating assets and liabilities, net of effects from acquisitions: | |||
Accounts receivable | -294,728 | -217,468 | -134,282 |
Rebates receivable | -558,123 | 2,993 | -40,988 |
Other current assets | -44,628 | -25,346 | 82,797 |
Accounts payable | 149,990 | 149,429 | 70,620 |
Accrued expenses and other current liabilities | 72,601 | -43,657 | 1,720 |
Rebates payable | 611,468 | 39,616 | 60,929 |
Other long-term assets and liabilities | 16,058 | 16,951 | -30,900 |
Net cash provided by operating activities | 590,181 | 475,421 | 249,733 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | -2,026 | -388,866 | -1,565,705 |
Purchases of property and equipment | -78,078 | -128,842 | -40,236 |
Proceeds from restricted cash | 20,006 | 20,004 | 0 |
Net cash used in investing activities | -60,098 | -497,704 | -1,605,941 |
Cash flows from financing activities: | |||
Proceeds from issuance of debt | 492,500 | 450,000 | 1,475,448 |
Repayment of long-term debt | -337,500 | -362,500 | -616,993 |
Proceeds from public offering, net of issuance costs | 0 | 0 | 519,075 |
Payment of financing costs | -1,963 | -2,347 | -18,806 |
Proceeds from exercise of options | 5,639 | 2,992 | 7,763 |
Tax benefit on option exercises | 3,492 | 9,732 | 19,397 |
Proceeds from warrants exercised | 3,452 | 487 | 0 |
Payments of contingent consideration | -18,338 | -23,203 | 0 |
Distribution to non-controlling interest | -52,309 | -36,314 | 0 |
Other | -383 | 0 | -268 |
Net cash provided by financing activities | 94,590 | 38,847 | 1,385,616 |
Effect of foreign exchange on cash balances | 38 | -99 | -14 |
Increase in cash and cash equivalents | 624,711 | 16,465 | 29,394 |
Cash and cash equivalents, beginning of period | 387,241 | 370,776 | 341,382 |
Cash and cash equivalents, end of period | $1,011,952 | $387,241 | $370,776 |
Consolidated_Statements_of_Sha
Consolidated Statements of Shareholders' Equity (USD $) | Total | Common Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Non-Controlling Interest |
In Thousands, except Share data, unless otherwise specified | ||||||
Total shareholders’ equity, beginning at Dec. 31, 2011 | $671,038 | $394,769 | $37,936 | $238,333 | $0 | $0 |
Common stock, shares, beginning at Dec. 31, 2011 | 124,767,322 | |||||
Activities during the period [Roll Forward] | ||||||
Net income | 121,021 | 116,658 | 4,363 | |||
Issuance of common shares for public offering, shares | 11,960,000 | |||||
Issuance of common shares for public offering, value | 519,075 | 519,075 | ||||
Issuance of common shares for acquisitions, shares | 66,780,040 | |||||
Issuance of common shares for acquisitions, value | 3,237,877 | 3,237,877 | ||||
Issuance of warrants and common stock for acquisitions | 19,824 | 19,824 | ||||
Acquisition of non-controlling interest in conjunction with Catalyst Merger | -1,610 | -1,610 | ||||
Exercise of stock options, shares | 1,419,744 | |||||
Exercise of stock options, amount | 7,763 | 11,036 | -3,273 | |||
Vesting of restricted stock units, shares | 471,996 | |||||
Vesting of restricted stock units, amount | 0 | 18,021 | -18,021 | |||
Tax benefit on options exercised | 19,397 | 19,397 | ||||
Stock-based compensation | 17,667 | 17,667 | ||||
Other comprehensive income, net of tax | -2,191 | -2,191 | ||||
Total shareholders’ equity, ending at Dec. 31, 2012 | 4,609,861 | 4,180,778 | 73,530 | 354,991 | -2,191 | 2,753 |
Common stock, shares, ending at Dec. 31, 2012 | 205,399,102 | |||||
Activities during the period [Roll Forward] | ||||||
Net income | 298,739 | 262,170 | 36,569 | |||
Exercise of stock options, shares | 348,068 | |||||
Exercise of stock options, amount | 2,992 | 4,262 | -1,270 | |||
Exercise of warrants during period, shares | 60,000 | |||||
Exercise of warrants during period, value | 487 | 2,910 | -2,423 | |||
Vesting of restricted stock units, shares | 497,900 | |||||
Vesting of restricted stock units, amount | 0 | 27,341 | -27,341 | |||
Tax benefit on options exercised | 9,732 | 9,732 | ||||
Stock-based compensation | 25,562 | 25,562 | ||||
Distribution to non-controlling interest | -36,314 | -36,314 | ||||
Other comprehensive income, net of tax | 439 | 439 | ||||
Total shareholders’ equity, ending at Dec. 31, 2013 | 4,911,498 | 4,215,291 | 77,790 | 617,161 | -1,752 | 3,008 |
Common stock, shares, ending at Dec. 31, 2013 | 206,305,070 | 206,305,070 | ||||
Activities during the period [Roll Forward] | ||||||
Net income | 373,722 | 317,293 | 56,429 | |||
Exercise of stock options, shares | 298,108 | |||||
Exercise of stock options, amount | 5,639 | 8,011 | -2,372 | |||
Exercise of warrants during period, shares | 425,160 | |||||
Exercise of warrants during period, value | 3,452 | 20,624 | -17,172 | |||
Vesting of restricted stock units, shares | 465,203 | |||||
Vesting of restricted stock units, amount | 0 | 20,838 | -20,838 | |||
Tax benefit on options exercised | 3,492 | 3,492 | ||||
Stock-based compensation | 33,554 | 33,554 | ||||
Distribution to non-controlling interest | -52,309 | -52,309 | ||||
Other comprehensive income, net of tax | 442 | 442 | ||||
Other | -383 | -383 | ||||
Total shareholders’ equity, ending at Dec. 31, 2014 | $5,279,107 | $4,264,764 | $74,071 | $934,454 | ($1,310) | $7,128 |
Common stock, shares, ending at Dec. 31, 2014 | 207,493,541 | 207,493,541 |
Description_of_Business
Description of Business | 12 Months Ended |
Dec. 31, 2014 | |
Description of Business [Abstract] | |
Description of Business | Description of Business |
Catamaran Corporation (“Catamaran” or the “Company”) is a leading provider of pharmacy benefits management (“PBM”) services and healthcare information technology (“HCIT”) solutions to the healthcare benefits management industry. The Company’s product offerings and solutions combine a wide range of PBM services, software applications, application service provider (“ASP”) processing services and professional services designed for many of the largest organizations in the pharmaceutical supply chain, such as federal, provincial, state and local governments, unions, corporations, pharmacy benefit managers, managed care organizations, retail pharmacy chains and other healthcare intermediaries. The Company is headquartered in Schaumburg, Illinois with several locations in the U.S. and Canada. | |
In July 2012, SXC Health Solutions Corp. changed the name and brand for the company to Catamaran Corporation. The Company's common shares trade on the Nasdaq Stock Market under the ticker symbol "CTRX" and on the Toronto Stock Exchange under ticker symbol “CCT.” |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies |
(a) Significant accounting policies are summarized below: | |
Basis of presentation: | |
The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include its wholly-owned subsidiaries as well as non-controlled entities. Amounts in the consolidated financial statements are expressed in U.S. dollars, except where otherwise indicated. Within the financial statements and tables presented, the totals of certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain reclassifications have been made to conform the prior years’ consolidated financial statements to the current year’s presentation. | |
Principles of Consolidation: | |
The consolidated financial statements include the accounts of the Company and its controlled subsidiaries, which are generally wholly owned. All significant inter-company transactions and balances have been eliminated in consolidation. Any non-controlling interest in the equity of a subsidiary is reported in equity in the Consolidated Statements of Shareholders' Equity. Net income attributable to the non-controlling interest is subtracted from Net Income to arrive at Net Income Attributable to the Company in the Consolidated Statements of Operations. | |
Use of estimates: | |
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant items subject to such estimates and assumptions include revenue recognition, purchase price allocation and contingent consideration in connection with acquisitions, valuation of property and equipment, valuation of intangible assets acquired and related amortization periods, impairment of goodwill, contingencies, valuation allowances for receivables and income taxes. Actual results could differ from those estimates. | |
Revenue recognition: | |
The Company's revenue is primarily derived from prescription drug sales. The Company has a small portion of its revenue that is derived from transaction processing and other services related to its HCIT products. | |
The Company recognizes revenue when all of the following conditions are satisfied: (i) there is persuasive evidence of an arrangement; (ii) the service or product has been provided to the customer and no uncertainties exist surrounding product acceptance; (iii) the amount of fees to be paid by the customer is fixed or determinable; and (iv) the collection of fees is reasonably assured. | |
When the Company enters into arrangements with multiple deliverables, exclusive of arrangements with software deliverables, it applies the Financial Accounting Standards Board's guidance for revenue arrangements with multiple deliverables and evaluates each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (i) whether the delivered item has value to the customer on a stand-alone basis, and (ii) if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. Revenue is allocated to each unit of accounting or element based on relative selling prices. The Company determines relative selling prices by using either (i) vendor specific objective evidence (“VSOE”) if it exists; or (ii) third-party evidence of selling price ("TPE"). When neither VSOE nor TPE of selling price exists for a deliverable, the Company uses its best estimate of the selling price for that deliverable. | |
After determining which deliverables represent a separate unit of accounting, each unit is then accounted for under the applicable revenue recognition guidance. In cases where elements cannot be treated as separate units of accounting, the elements are combined into a single unit of accounting for revenue recognition purposes. | |
When the Company enters into arrangements with multiple deliverables involving software, the Company applies the accounting guidance for software. The entire arrangement fee is allocated to each element in the arrangement based on the respective VSOE of fair value of each element. | |
When an arrangement includes software and non-software deliverables, the Company allocates the arrangement consideration to the non-software deliverables, and to the software deliverables as a group, based on the relative selling prices of all deliverables in the arrangement. When a tangible product contains software that is not essential to the product’s functionality, that nonessential software and any other deliverables within the arrangement that relate to that nonessential software are accounted for under accounting guidance for software. The non-software deliverables sold by the Company typically do not include software deliverables that are considered essential to the functionality of a tangible product. | |
Revenue is recognized for specific types of transactions as follows: | |
PBM revenue: The Company’s PBM revenue is primarily derived from sales of prescription drugs, together with any associated administrative fees, to customers and participants through the Company’s nationwide network of pharmacies. Revenue related to the sales of prescription drugs by the Company’s nationwide network of pharmacies is recognized when the claims are adjudicated. Claims are adjudicated at the point-of-sale using the Company’s on-line processing system. The Company records an offsetting reduction to revenue for any rebates earned from pharmaceutical manufacturers and third-party administrators that are payable to the Company’s customers. | |
For transactions at the Company's participating pharmacies, under the terms of the customer contracts, the pharmacy is solely obligated to collect the co-payments from the participants. The Company does not assume liability for participant co-payments in non-Company owned pharmacy transactions, and therefore does not include participant co-payments in revenue or cost of revenue. If these amounts were included in the Company’s operating results, its operating income and net income would not have been affected. | |
The Company evaluates customer contracts to determine whether the Company acts as a principal or as an agent in the fulfillment of prescriptions through its participating pharmacy network. The Company acts as a principal in certain of its transactions with customers and, in these cases, revenues are recognized at the prescription price (ingredient cost plus dispensing fee) negotiated with customers, plus the Company’s administrative fees (“gross reporting”). Gross reporting is appropriate when the Company (i) has separate contractual relationships with customers and with pharmacies, (ii) is responsible to validate and manage a claim through its claims adjudication process, (iii) commits to set prescription prices for the pharmacy, (iv) manages the overall prescription drug plan relationship with the patients, who are members of customers’ plans, and (v) has credit risk for the amount due from the customer. | |
Revenue for the sale of prescription drugs dispensed at the Company's mail and specialty pharmacies, including amounts due from third-party payors and member co-payments, is recorded when the prescription drugs are shipped. | |
HCIT revenue: HCIT revenues are generated primarily from transaction processing and related services. The Company recognizes revenue for its HCIT products and services at the time the transaction is processed, or at the time the service is provided. If multiple elements are required to be delivered under a customer contract, the Company follows the guidance described above in relation to multiple elements. | |
Cost of revenue: | |
The Company’s cost of revenue includes the cost of pharmaceuticals dispensed, either directly dispensed at its mail and specialty pharmacy locations, or indirectly through its nationwide network of participating pharmacies. Cost of revenue is reduced for rebates earned from pharmaceutical manufacturers and third-party administrators. Cost of revenue also includes the cost of personnel to support the Company’s transaction processing services, system sales, maintenance, and professional services. In addition, the Company includes in cost of revenue an amount of depreciation expense that is related to property and equipment used to provide services to customers. | |
Cash and cash equivalents: | |
The Company considers cash on hand, deposits in banks, money market funds, and bank term deposits with original maturities of ninety days or less as cash and cash equivalents. The amounts presented in the consolidated balance sheets approximate fair value of cash and cash equivalents. These assets are deemed Level 1 securities in the fair value hierarchy. | |
Fair value measurements: | |
The Company applies the fair value accounting guidance for measuring its financial and non-financial assets and liabilities. Currently, none of the Company’s non-financial assets are required to be carried at fair value. The Company would apply the fair value accounting guidance to non-financial assets and liabilities in the event that a non-financial asset or liability was impaired, or, if non-financial assets and liabilities were purchased in a business acquisition. | |
The fair value of contingent consideration is based upon probability-weighted discounted cash flow models, utilizing the Company's expectation of the amounts to be paid in the future to settle the contingent purchase price. The inputs utilized in calculating the fair value of the contingent purchase price liabilities are not observable in the marketplace. The fair value of the Company’s interest rate contracts is based upon observable market-based inputs that reflect the current value of the difference between the fixed rate payments the Company will make to the counter party, and the future variable rate receipts from the counterparty. | |
Other assets and liabilities held by the Company deemed as financial instruments and required to be carried at fair value include cash and cash equivalents, accounts receivable, rebates receivable, accounts payable, accrued liabilities (current portion), pharmacy benefit management rebates payable and pharmacy benefit claim payments payable. The estimated fair values of these financial instruments approximate their carrying amounts due to the short-term nature of their maturities. | |
Inventory: | |
Inventory consists primarily of prescription drugs held for resale and is carried at the lower of cost or net realizable value. Inventory costs are calculated using the first-in, first-out method and the weighted-average method. | |
Property and equipment: | |
Property and equipment (“P&E”) are stated at cost less accumulated depreciation. Depreciation is generally calculated over the expected estimated useful lives of the assets. Assets are depreciated in the following manner: 1) Furniture and equipment is depreciated using the straight- line method based on a useful life of five years, 2) Computer equipment and software assets are depreciated using a straight-line method and a useful life of three to five years, and 3) Leasehold improvements are depreciated on a straight-line basis over the shorter of the asset’s life or the lease term. | |
Accounts receivable and allowance for doubtful accounts: | |
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. In assessing the valuation of the allowance for doubtful accounts, management reviews the collectability of accounts receivable in aggregate and on an individual account-basis. Individual customer events such as subsequent collections, discussions with management of the debtor companies, or other activities are used by management as factors in concluding whether to increase or decrease the calculated allowance. Any increase or decrease to the allowance is recognized in the statements of operations as bad debt expense within selling, general and administrative expense. | |
Impairment of long-lived assets: | |
Long-lived assets or asset groups held and used, including P&E and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances that could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; the accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and a current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its previously estimated useful life. Recoverability is assessed based on the carrying amount of the asset and the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset or asset group. An impairment loss is recognized when the carrying amount is not recoverable and exceeds the fair value of the asset or asset group. The impairment loss is measured as the amount by which the carrying amount of undiscounted cash flows exceeds fair value. During each of the years ended December 31, 2014, 2013 and 2012, no events or circumstances occurred that indicated that the carrying amounts of the long-lived assets may not be recoverable. | |
While no asset was deemed impaired during 2012, the Company assessed whether one of its assets was recoverable due to a triggering event. In October 2012, the Company launched its new specialty brand BriovaRx. The Company previously acquired MedfusionRx, a specialty pharmacy, and recorded a trade name intangible asset related to the acquisition. As a result of the re-branding of the specialty business, the Company concluded that a triggering event had occurred that could impair the value of the trade name. While the asset was not deemed impaired, the Company concluded that the useful life of the trade name intangible asset should be reduced since the name would no longer be used by the Company, which was the asset's highest and best use. Before adjusting the useful life of the asset, the Company considered whether the asset had any value as a defensible asset which would extend its useful life. The Company determined that the MedfusionRx trade name had an insignificant value as a defensible asset, and the asset's useful life should be shortened due to the name change of the business. As a result, the Company recorded an additional $8.0 million in amortization expense in 2012. | |
Goodwill: | |
Goodwill is the residual amount that results when the purchase price of an acquired business exceeds the sum of the amounts allocated to the identifiable assets acquired, less liabilities assumed, based on their fair values. Goodwill is allocated to the Company’s reporting unit that is expected to benefit from the business combination as of the date of the business combination. As of December 31, 2014, the amount of goodwill carried at the PBM and HCIT segments was $4.7 billion and $19.7 million, respectively. | |
Goodwill is not amortized, but rather, is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company completes its goodwill impairment test annually as of October 31. Circumstances that could trigger an interim impairment test include: a significant adverse change in the business climate or legal factors; an adverse action or assessment by a regulator; unanticipated competition; the loss of key personnel; a change in reporting units; the likelihood that a reporting unit or significant portion of a reporting unit will be sold or otherwise disposed of; the results of testing for recoverability of a significant asset group within a reporting unit; and the recognition of a goodwill impairment loss in the financial statements of a subsidiary that is a component of a reporting unit. | |
The Company performed its goodwill impairment assessment in 2014 and there was no indication of an impairment to the Company's goodwill balances. In addition, an impairment in the near future is not considered reasonably likely. The Company previously completed impairment tests in 2013 and 2012 and concluded no impairments existed. | |
The qualitative assessment performed by the Company considered the current operating results of the Company's reporting units, future expectations of each reporting unit, industry and competitor performance and other recent events that may impact each reporting unit. The Company then assessed whether, in light of the evidence gathered, it was more likely than not that a reporting unit's fair value was less than its carrying amount. As noted above, the Company concluded that it was not more likely than not that a reporting unit's fair value was less than its carrying value. If in the future the Company's qualitative assessment indicates that a reporting unit's fair value may be below its carrying value, the Company would prepare a quantitative test to determine whether an impairment existed, and the amount of such impairment. | |
The quantitative impairment test is carried out in two steps for each of the Company's reporting units. In the first step, the carrying amount of the reporting unit is compared with its fair value. When the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not to be impaired and the second step of the impairment test is unnecessary. The second step is carried out when the carrying amount of a reporting unit exceeds its fair value, in which case the implied fair value of the reporting unit’s goodwill is compared with its carrying amount to measure the amount of the impairment loss, if any. The implied fair value of goodwill is determined in the same manner as the value of goodwill is determined in a business combination using the fair value of the reporting unit as if it was the purchase price. When the carrying amount of reporting unit goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess and is presented as a separate line item in the consolidated statements of operations. | |
Intangible assets: | |
The cost of a group of intangible assets acquired in a transaction, including those acquired in a business combination that meet the specified criteria for recognition apart from goodwill, is recorded to the individual assets acquired based on their fair values. Intangible assets acquired individually or as part of a group of other assets are initially recognized and measured at cost. | |
Intangible assets with finite useful lives are amortized over their estimated useful lives on either a straight-line basis or in proportion to the economic benefits expected to be consumed. Customer relationships acquired with the acquisitions are amortized based on projected cash flows associated with existing customers at the acquisition date and typically have a life of three to ten years. The Company's remaining intangible assets are amortized on a straight-line basis over one to fifteen years. | |
Rebates: | |
The Company administers a rebate program through which it receives rebates and administrative fees from pharmaceutical manufacturers and third-party administrators that are shared with a majority of the Company’s customers. The rebates earned for the administration of the program are recorded as a reduction of cost of revenue and the portion of the rebate payable to customers, if applicable, is treated as a reduction of revenue. Rebates receivable include billed and unbilled PBM receivables from pharmaceutical manufacturers and third-party administrators. The Company records the gross rebate receivable and the related payable to the customers based on estimates, which are subject to final settlement due to the required validation of claims data submitted to the pharmaceutical manufacturers and third-party administrators, as well as contingent items contained in the total calculation for rebates earned. The estimates are based upon claims submitted and the Company’s rebate contracts, and are adjusted as additional information becomes available. Upon billing the pharmaceutical manufacturer or third-party administrator, any difference between the Company’s estimate and the actual amount of the rebate receivable is recorded to cost of revenue, net of the estimated impact to the Company’s customers. The Company generally pays rebates to its customers on a quarterly basis, or as agreed upon with its customers. There are certain instances where the Company pays rebates to its customers on a more accelerated basis. As of December 31, 2014 and 2013, total unbilled pharmaceutical manufacturer rebates receivable amounted to $366.7 million and $54.6 million, respectively. | |
Stock-based compensation: | |
For stock-based awards issued to employees and directors, compensation cost related to those awards is measured based on the fair value of the awards on the date of the grant. For stock options, the fair value is determined by using the Black-Scholes-Merton option-pricing model. The compensation cost of the awards expected to vest is recognized on a straight-line basis over the service period as compensation expense and additional paid-in capital. In addition, the Company estimates forfeitures as part of the initial measure of the grant date fair value of the award. | |
The cumulative compensation cost is treated as a temporary difference for stock-based awards that are deductible for tax purposes. If a deduction reported on a tax return exceeds the cumulative compensation cost for those awards, any resulting realized tax benefit that exceeds the previously recognized deferred tax asset for those awards (the excess tax benefit) is recognized as additional paid-in capital. If the amount deductible is less than the cumulative compensation cost recognized for financial reporting purposes, the write-off of a deferred tax asset related to that deficiency, net of the related valuation allowance, if any, is first offset to the extent of any remaining additional paid-in capital from excess tax benefits from previous awards with the remainder recognized in the statement of operations. | |
Derivatives: | |
The Company accounts for derivative instruments pursuant to derivative and hedge accounting guidance. The guidance requires that all derivative instruments are recorded on the balance sheet at their respective fair values. The Company records the change in the fair value of its derivative instruments deemed as cash flow hedges through other comprehensive income in each reporting period. | |
Foreign currency: | |
The Company’s functional currency and reporting currency is the U.S. dollar. Monetary items denominated in foreign currency are translated to U.S. dollars at exchange rates in effect at the balance sheet date and non-monetary items are translated at rates in effect when the assets were acquired or obligations incurred. Revenue and expenses are translated at rates in effect at the time of the transactions. Foreign exchange gains and losses are included in the consolidated statements of operations as "Interest and other expense, net." | |
Earnings per share: | |
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income by the weighted-average number of common shares adjusted for the dilutive effect of outstanding stock-based awards. The dilutive effect is calculated by assuming that the proceeds from the exercise of in-the-money stock options were used to acquire shares of common stock at the average market price for the period. | |
Income taxes: | |
The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment. | |
Future tax benefits resulting from historical net operating losses (“NOLs”) and deductible temporary differences are recognized in accordance with tax accounting guidance. In assessing the realizability of the related deferred income tax assets (“DTAs”), management considers whether it is more likely than not that some portion or all of the DTAs will be realized. The ultimate realization of DTAs is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible, in addition to management’s tax planning strategies. Management considers projected future taxable income, uncertainties related to the industry in which the Company operates, tax planning strategies, historical taxable income, and a comparison of actual levels of taxable income with pre-tax book income in making this assessment. Valuation allowances are established for DTAs that are not considered more likely than not to be realized. The amount of this valuation allowance is subject to adjustment by the Company in future periods based upon its assessment of evidence supporting the degree of probability that DTAs will be realized. | |
The Company recognizes liabilities for uncertain tax positions, although the Company believes its tax position is supportable, when the Company believes that the tax positions may not be fully sustained upon review by tax authorities. Benefits from uncertain tax positions are recognized in the consolidated financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority having full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon settlement. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. | |
Non-refundable investment tax credits for Scientific Research and Experimental Development (“SRED”) activities are recorded when the Company has reasonable assurance that the credit will be realized. Management has made a number of estimates and assumptions in determining the expenditures eligible for the investment tax credit claim. It is possible that the allowable amount of the investment tax credit claim could be materially different from the recorded amount upon assessment by the Canada Revenue Agency. Non-refundable investment tax credits are recorded as a reduction of income tax expense on the consolidated statements of operations. | |
(b) Recent accounting standards implemented are summarized below: | |
In July 2013, the FASB issued authoritative guidance containing changes to the presentation of an unrecognized tax benefit when a loss or credit carryforward exists. The new standard requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that would apply in the settlement of the uncertain tax positions. The Company adopted this standard on January 1, 2014; however, the implementation of the standard did not have a significant impact on its financial results or in the presentation and disclosure of its financial statements. | |
In February 2013, the FASB issued an update on the reporting of amounts reclassified from accumulated other comprehensive income. An entity is required to present either parenthetically on the face of the financial statements or in the notes, significant amounts reclassified from each component of accumulated other comprehensive income and the income statement line items affected by the reclassification. However, an entity is not required to show the income statement line item affected for certain components that are not required to be reclassified in their entirety to net income, such as amounts amortized into net periodic pension cost. The standard was effective prospectively for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2012. The Company adopted this standard on January 1, 2013; however, the implementation of the amendments did not have a significant impact on its financial results or in the presentation and disclosure of its financial statements. | |
No other new accounting standards have been adopted during the year ended December 31, 2014. | |
(c) Recent accounting standards issued and not yet adopted are summarized below: | |
In August 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. Adoption of the standard is not expected to have a significant impact on the Company's financial results or in the presentation and disclosure of its financial statements. | |
In June 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-12, Accounting for Share-Based Payments, when the terms of an award provide that a performance target could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target shall not be reflected in estimating the fair value of the award at the grant date. The amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015 for all entities, however earlier adoption is permitted. Adoption of the standard is not expected to have a significant impact on the Company's financial results or in the presentation and disclosure of its financial statements. | |
On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. | |
On April 10, 2014, the FASB issued (ASU) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. The standard is required to be adopted by the Company in annual periods beginning on or after December 15, 2014, and interim periods within those annual periods. However, all entities may early adopt the guidance for new disposals (or new classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. Adoption of the standard is not expected to have a significant impact on the Company's financial results or in the presentation and disclosure of its financial statements. | |
No other new standards have been issued during the year ended December 31, 2014 that the Company assessed to have a significant impact on its financial results or in the presentation and disclosure of its financial statements. |
Stock_Split
Stock Split | 12 Months Ended |
Dec. 31, 2014 | |
Stock Split [Abstract] | |
Stock Split | Stock Split |
On September 6, 2012, the Company announced that its board of directors had declared a nominal dividend on the issued and outstanding common shares of the Company to effect a two-for-one stock split. Shareholders of record at the close of business on September 20, 2012 were issued one additional common share for each share owned as of that date. The additional common shares were distributed on October 1, 2012. | |
All share and per share data presented in these consolidated financial statements have been adjusted to reflect the stock split noted above. |
Business_Combinations
Business Combinations | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||
Business Combinations | Business Combinations | |||||||||||||||
Restat Acquisition | ||||||||||||||||
On October 1, 2013, the Company completed the acquisition of all of outstanding equity interests of Restat, LLC ("Restat"), a privately held pharmacy benefit manager based in Milwaukee, Wisconsin, for a purchase price of $409.5 million in cash subject to certain customary post-closing adjustments. The purchase price was funded from Catamaran’s existing cash balance and $350.0 million in borrowings under a five-year senior secured revolving credit facility (the “Revolving Facility”). The acquisition provides the Company the opportunity to bring Catamaran's full-suite of technology and clinical services to Restat's clients, including mail and specialty pharmacy services. The results of Restat have been included in the Company's results since October 1, 2013. The consolidated statement of operations for the year ended December 31, 2013 includes Restat's total revenues of $209.2 million following the acquisition. | ||||||||||||||||
The acquisition was accounted for under the acquisition method of accounting with the Company treated as the acquiring entity. Accordingly, the consideration paid by the Company to complete the acquisition has been recorded to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition. The carrying values for current assets and liabilities were deemed to approximate their fair values due to the short-term nature of their maturities. Fair values for acquired amortizable intangible assets were determined as follows: customer relationships were valued using an excess earnings model based on expected future revenues derived from the customers acquired, non-compete agreements were valued using discounted cash flow models based on expected future results of Restat, trademarks/tradenames were valued using a royalty savings model based on future projected revenues of Restat and applicable market royalty rates and licenses utilized a replacement cost approach. The excess of the purchase price over the estimated fair values of the net assets acquired was recorded as goodwill. | ||||||||||||||||
All of the assets and liabilities recorded for the acquisition are included within the Company's PBM segment. The residual amount of the purchase price after allocation to identifiable net assets represents goodwill. Goodwill is non-amortizing for financial statement purposes. Goodwill of $227.8 million related to the Restat acquisition is tax deductible. The goodwill recognized by the Company represents many of the synergies and business growth opportunities that the Company anticipates may be realized from the acquisition of Restat. The synergies include improved pricing from the Company's suppliers due to the increased volume of prescription drug purchases, pull through opportunities of the Company's mail and specialty service offerings, and a more efficient leveraging of resources to achieve operating profits. | ||||||||||||||||
The following summarizes the fair values assigned to the assets acquired and liabilities assumed at the acquisition date (in thousands): | ||||||||||||||||
Initial Amounts Recognized at Acquisition Date (a) | Measurement Period Adjustments (b) | Final Amounts Recognized at Acquisition Date | ||||||||||||||
Accounts receivable | $ | 13,842 | $ | — | $ | 13,842 | ||||||||||
Rebates receivable | 6,635 | (254 | ) | 6,381 | ||||||||||||
Other current assets | 383 | — | 383 | |||||||||||||
Total current assets | 20,860 | (254 | ) | 20,606 | ||||||||||||
Property and equipment | 1,263 | — | 1,263 | |||||||||||||
Intangible assets | 182,720 | — | 182,720 | |||||||||||||
Goodwill | 223,474 | 4,364 | 227,838 | |||||||||||||
Total assets acquired | 428,317 | 4,110 | 432,427 | |||||||||||||
Accounts payable | 22,370 | — | 22,370 | |||||||||||||
Rebates payable | 16,106 | — | 16,106 | |||||||||||||
Accrued liabilities | 7,231 | — | 7,231 | |||||||||||||
Other long-term liabilities | — | 2,084 | 2,084 | |||||||||||||
Total liabilities assumed | 45,707 | 2,084 | 47,791 | |||||||||||||
Net assets acquired | $ | 382,610 | $ | 2,026 | $ | 384,636 | ||||||||||
(a) As previously reported in the Company's Form 10-K for the period ended December 31, 2013. | ||||||||||||||||
(b) These measurement period adjustments were recorded from January 1, 2014 through June 30, 2014 to reflect an additional $2.0 million paid to former Restat owners in connection with post-closing working capital adjustment as well as changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date. | ||||||||||||||||
During the years ended December 31, 2014 and 2013 the Company recognized $33.7 million and $8.7 million of amortization expense from intangible assets acquired in the Restat acquisition, respectively. | ||||||||||||||||
The estimated fair values and useful lives of intangible assets acquired are as follows (dollars in thousands): | ||||||||||||||||
Fair Value | Useful Life | |||||||||||||||
Customer relationships - PBM | $ | 143,200 | 10 years | |||||||||||||
Customer relationships - cash card | 35,500 | 3 years | ||||||||||||||
Trademarks/Trade names | 1,000 | 1 year | ||||||||||||||
Non-compete agreements | 3,020 | 5 years | ||||||||||||||
Total | $ | 182,720 | ||||||||||||||
None of the acquired intangible assets will have any residual value at the end of the amortization periods. There were no in-process research and development assets acquired. | ||||||||||||||||
Catalyst Merger | ||||||||||||||||
On July 2, 2012, the Company completed its merger with Catalyst, a full-service PBM. Each share of Catalyst common stock outstanding immediately prior to the effective time of the Merger (other than shares owned by the Company or Catalyst or any of their respective wholly-owned subsidiaries) was converted in the Merger into the right to receive 1.3212 (0.6606 prior to split adjustment) of a Company common share and $28.00 in cash. This resulted in the Company issuing approximately 66.8 million common shares, issuing 0.5 million warrants, and paying $1.4 billion in cash to Catalyst stockholders to complete the Merger. The results of Catalyst have been included in the Company's results since July 2, 2012. | ||||||||||||||||
The Merger was accounted for under the acquisition method of accounting with the Company treated as the acquiring entity. Accordingly, the consideration paid by the Company to complete the acquisition has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition. The carrying values for current assets and liabilities were deemed to approximate their fair values due to the short-term nature of their maturities. The fair value for the acquired customer relationships intangible asset was valued using an excess earnings model based on expected future revenues derived from the customers acquired. The excess of the purchase price over the estimated fair values of the net assets acquired was recorded as goodwill. | ||||||||||||||||
All of the assets and liabilities recorded for the Merger are included within the Company's PBM segment. Goodwill of $525 million related to the Catalyst Merger is tax deductible. The goodwill recognized by the Company represents many of the synergies and business growth opportunities that the Company expected to be realized from the Merger. The synergies included improved pricing from the Company's suppliers due to the increased volume of prescription drug purchases, pull through opportunities of the combined companies' mail and specialty service offerings, and a more efficient leveraging of resources to achieve operating profits. | ||||||||||||||||
The purchase price of the acquired Catalyst operations was comprised of the following (in thousands): | ||||||||||||||||
Amount | ||||||||||||||||
Cash paid to Catalyst shareholders | $ | 1,415,276 | ||||||||||||||
Fair value of common shares issued (a) | 3,238,141 | |||||||||||||||
Fair value of warrants and stock options issued (b) | 19,824 | |||||||||||||||
Total purchase price | $ | 4,673,241 | ||||||||||||||
(a) | Valued based on the number of outstanding shares issued in the Merger multiplied by the closing market price of Catamaran shares on July 2, 2012. | |||||||||||||||
(b) | The Black-Scholes option pricing model was used to calculate the fair value of the replacement warrants and stock options issued. | |||||||||||||||
The following summarizes the fair values assigned to the assets acquired and liabilities assumed at the acquisition date (in thousands): | ||||||||||||||||
Initial Amounts Recognized at Acquisition Date (a) | 2012 Measurement Period Adjustments (b) | 2013 Measurement Period Adjustments (c) | Final Amounts Recognized at Acquisition Date | |||||||||||||
Cash and cash equivalents | $ | 93,775 | $ | (315 | ) | $ | — | $ | 93,460 | |||||||
Other current assets | 695,888 | 5,202 | 2,411 | 703,501 | ||||||||||||
Total current assets | 789,663 | 4,887 | 2,411 | 796,961 | ||||||||||||
Goodwill | 4,010,235 | 8,492 | 16,141 | 4,034,868 | ||||||||||||
Customer relationships intangible | 1,184,800 | — | — | 1,184,800 | ||||||||||||
Other long-term assets | 87,174 | 1,547 | 8 | 88,729 | ||||||||||||
Total assets acquired | 6,071,872 | 14,926 | 18,560 | 6,105,358 | ||||||||||||
Accounts payable | 338,819 | — | 5 | 338,824 | ||||||||||||
Pharmacy benefit management rebates payable | 176,202 | 2,935 | (1,522 | ) | 177,615 | |||||||||||
Accrued expenses and other current liabilities | 187,851 | 1,348 | 5,473 | 194,672 | ||||||||||||
Long-term debt | 311,994 | — | — | 311,994 | ||||||||||||
Other long-term liabilities | 385,375 | 10,643 | 14,604 | 410,622 | ||||||||||||
Total liabilities assumed | 1,400,241 | 14,926 | 18,560 | 1,433,727 | ||||||||||||
Non-controlling interest | (1,610 | ) | — | — | (1,610 | ) | ||||||||||
Net assets acquired | $ | 4,673,241 | $ | — | $ | — | $ | 4,673,241 | ||||||||
(a) As previously reported in the Company's Form 10-Q for the period ended September 30, 2012. | ||||||||||||||||
(b) These measurement period adjustments from the acquisition date through December 31, 2012 were recorded to reflect changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date. | ||||||||||||||||
(c) These represent measurement period adjustments during 2013 through the end of the measurement period and were recorded to reflect changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date. | ||||||||||||||||
During the years ended December 31, 2014 and 2013 the Company recognized $154.7 million and $166.1 million of amortization expense from intangible assets acquired in the Merger, respectively. The estimated fair value of the customer relationship intangible asset was $1.2 billion at the date of acquisition with a useful life of 9 years. The intangible asset acquired will not have any residual value at the end of the amortization period. There were no in-process research and development assets acquired. | ||||||||||||||||
Separate Transactions and Preexisting Relationships | ||||||||||||||||
During the year ended December 31, 2012, the Company incurred transaction and integration expenses related to the Merger, exclusive of debt financing costs, totaling $27.2 million which includes transaction expenses of $22.8 million. These costs are included in selling, general and administrative ("SG&A") expenses. Additionally, during the year ended December 31, 2012, the Company recorded $17.0 million in charges to SG&A expenses due to transactions related to the Merger, recognized separately from the acquisition of assets and assumptions of liabilities from the Merger. The charges recorded related to $3.5 million in contract settlements and terminations made by Catalyst prior to the acquisition that had future benefit to the Company, $3.1 million for payments made to Catalyst employees based on contractual arrangements which had future benefit to the Company, and $10.4 million in severance charges incurred subsequent to the close of the Merger. | ||||||||||||||||
Due to the previous contractual relationship between the Company and Catalyst, there were pre-existing transactions between the entities which resulted in approximately $4.1 million in accounts receivable due to the Company from Catalyst at the time of the Merger, mainly for HCIT transaction processing services provided. No gain or loss was generated from the subsequent settlement of these pre-existing balances. | ||||||||||||||||
HealthTran LLC Acquisition | ||||||||||||||||
In January 2012, the Company completed the acquisition of all of the outstanding equity interests of HealthTran LLC (“HealthTran”), a full-service PBM, in exchange for $250.0 million in cash, subject to certain customary post-closing adjustments, in each case upon the terms and subject to the conditions contained in the HealthTran purchase agreement. HealthTran was an existing HCIT client and utilized a Company platform for its claims adjudication services. The acquisition provided the opportunity to create new revenues from HealthTran's customer base and generate cost savings through purchasing and SG&A synergies. The results of HealthTran have been included in the Company's results since January 1, 2012. Costs related to the HealthTran acquisition of $0.9 million were included in SG&A expenses for the year ended December 31, 2011. | ||||||||||||||||
The HealthTran acquisition was accounted for under the acquisition method of accounting with the Company treated as the acquiring entity. Accordingly, the consideration paid by the Company to complete the acquisition has been recorded to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition. The carrying values for current assets and liabilities were deemed to approximate their fair values due to the short-term nature of their maturities. Fair values for acquired amortized intangible assets were determined as follows: customer relationships were valued using an excess earnings model based on expected future revenues derived from the customers acquired, non-compete agreements were valued using discounted cash flow models based on expected future results of HealthTran, trademarks/tradenames were valued using a royalty savings model based on future projected revenues of HealthTran and applicable market royalty rates and licenses utilized a replacement cost approach. The excess of the purchase price over the estimated fair values of the net assets acquired was recorded as goodwill. All of the assets and liabilities recorded for the HealthTran acquisition are included within the Company's PBM segment. Goodwill is non-amortizing for financial statement purposes and the entire goodwill balance generated from the HealthTran acquisition is tax deductible. The goodwill recognized by the Company represents many of the synergies and business growth opportunities that may be realized from this acquisition. The synergies include the expansion of the Company's product offerings and improved pricing from the Company's suppliers due to the increased volume of prescription drug purchases. | ||||||||||||||||
The following summarizes the fair values assigned to the assets acquired and liabilities assumed at the acquisition date and related measurement period adjustments (in thousands): | ||||||||||||||||
Initial Amounts Recognized at Acquisition Date (a) | Measurement Period Adjustments (b) | Final Amounts Recognized at Acquisition Date | ||||||||||||||
Current assets | $ | 30,654 | $ | 245 | $ | 30,899 | ||||||||||
Property and equipment | 2,787 | — | 2,787 | |||||||||||||
Goodwill | 173,642 | 833 | 174,475 | |||||||||||||
Intangible assets | 77,130 | (2,600 | ) | 74,530 | ||||||||||||
Total assets acquired | 284,213 | (1,522 | ) | 282,691 | ||||||||||||
Current liabilities | 36,784 | (496 | ) | 36,288 | ||||||||||||
Total liabilities assumed | 36,784 | (496 | ) | 36,288 | ||||||||||||
Net assets acquired | $ | 247,429 | $ | (1,026 | ) | $ | 246,403 | |||||||||
(a) As previously reported in the Company's Form 10-Q for the period ended March 31, 2012. | ||||||||||||||||
(b) These measurement period adjustments were recorded to reflect an additional $1.0 million paid to the former HealthTran owners for the working capital reconciliation and changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date. | ||||||||||||||||
The estimated fair values and useful lives of intangible assets acquired are as follows (dollars in thousands): | ||||||||||||||||
Fair Value | Useful Life | |||||||||||||||
Trademarks/Trade names | $ | 1,750 | 6 months | |||||||||||||
Customer relationships | 69,800 | 4-9 years | ||||||||||||||
Non-compete agreements | 2,600 | 5 years | ||||||||||||||
License | 380 | 3 years | ||||||||||||||
Total | $ | 74,530 | ||||||||||||||
During the years ended December 31, 2014 and 2013 the Company recognized $12.6 million and $14.6 million of amortization expense from intangible assets acquired in the HealthTran acquisition, respectively. None of the acquired intangible assets will have any residual value at the end of the amortization periods. There were no in-process research and development assets acquired. | ||||||||||||||||
Unaudited Pro Forma Financial Information | ||||||||||||||||
The following unaudited pro forma financial information presents the combined historical results of operations of the Company and its acquisition of Restat as if the acquisition had occurred on the first day of the fiscal year prior to the fiscal year the acquisition was completed. The unaudited pro forma financial information includes certain adjustments related to the acquisition, such as increased amortization from the fair value of intangible assets acquired recorded as part of the purchase accounting, the elimination of transactions between the Company and the acquired entity, and related income tax effects. | ||||||||||||||||
Unaudited pro forma results of operations are as follows (dollars in thousands, except share and per share amounts): | ||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||
Revenue | $ | 15,344,028 | ||||||||||||||
Gross profit | $ | 1,187,714 | ||||||||||||||
Net income | $ | 270,024 | ||||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 1.31 | ||||||||||||||
Diluted | $ | 1.31 | ||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 206,013,876 | |||||||||||||||
Diluted | 206,719,526 | |||||||||||||||
This unaudited pro forma financial information is not intended to represent or be indicative of what would have occurred if the transactions had taken place on the dates presented and is not indicative of what the Company’s actual results of operations would have been had the acquisitions been completed at the beginning of the periods indicated above. Further, the pro forma combined results do not reflect one-time costs to fully merge and operate the combined organization more efficiently, or anticipated synergies expected to result from the combination and should not be relied upon as being indicative of the future results that the Company will experience. | ||||||||||||||||
Salveo Specialty Pharmacy Acquisition | ||||||||||||||||
Subsequent to the end of the Company's current reporting period, on January 2, 2015, the Company completed the acquisition of Salveo Specialty Pharmacy, Inc. ("Salveo"), an independent specialty pharmacy platform with pharmacy locations in New York and California, for a purchase price of $260.0 million in cash, subject to certain customary post-closing adjustments. The purchase price was funded from Catamaran's existing cash balance. The initial accounting for this acquisition was incomplete at the time these financial statements were available for issuance. The Company expects to finalize its accounting for this acquisition as soon as practicable, but no later than one year from the acquisition date. | ||||||||||||||||
Healthcare Solutions Inc. Acquisition | ||||||||||||||||
Subsequent to the end of the Company's current reporting period, on February 26, 2015, the Company announced it has entered into a definitive agreement to acquire Healthcare Solutions, Inc., a current PBM client that serves the workers' compensation market, for $405 million in cash, subject to certain customary post-closing adjustments. The acquisition is expected to be completed in the second quarter of 2015, subject to certain customary closing conditions. |
Variable_Interest_Entity
Variable Interest Entity | 12 Months Ended |
Dec. 31, 2014 | |
Variable Interest Entity [Abstract] | |
Variable Interest Entity | Variable Interest Entity |
The Company holds an ownership interest in excess of 40%, but not a controlling interest, in Script Relief LLC ("Script Relief"), a Delaware limited liability company. Script Relief operates a direct to consumer pharmacy benefit business, including discount card offerings and associated activities. The Company evaluated its investment in Script Relief and determined that Script Relief is a variable interest entity with Catamaran being the primary beneficiary, as the Company's underlying PBM and pharmacy contracts represent Script Relief's key business operations and the Company has the power to direct these activities. As a result, Script Relief is consolidated in the Company's consolidated financial statements with the amounts attributable to the non-controlling interests disclosed. Through April 2016, the Company has the right to purchase all of the outstanding interests owned by the other equity member of Script Relief. The purchase of the outstanding interests is at the Company's sole discretion and is subject to a contractually-defined purchase price. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Property and Equipment | Property and Equipment | |||||||||||
Net property and equipment was made up of the following at December 31, 2014 and 2013 (in thousands): | ||||||||||||
December 31, 2014 | Cost | Accumulated | Net Book Value | |||||||||
Depreciation | ||||||||||||
Furniture and equipment | $ | 39,690 | $ | (13,577 | ) | $ | 26,113 | |||||
Computer equipment and software | 208,628 | (107,565 | ) | 101,063 | ||||||||
Leasehold improvements | 96,784 | (23,078 | ) | 73,706 | ||||||||
Construction in progress | 9,145 | — | 9,145 | |||||||||
$ | 354,247 | $ | (144,220 | ) | $ | 210,027 | ||||||
December 31, 2013 | Cost | Accumulated | Net Book Value | |||||||||
Depreciation | ||||||||||||
Furniture and equipment | $ | 30,374 | $ | (10,815 | ) | $ | 19,559 | |||||
Computer equipment and software | 168,463 | (77,880 | ) | 90,583 | ||||||||
Leasehold improvements | 91,294 | (15,163 | ) | 76,131 | ||||||||
Construction in progress | 10,734 | — | 10,734 | |||||||||
$ | 300,865 | $ | (103,858 | ) | $ | 197,007 | ||||||
Depreciation expense, including property and equipment acquired under capital leases, totaled $63.5 million, $42.2 million, and $20.2 million for the years ended December 31, 2014, 2013, and 2012, respectively. Of the total depreciation expense, $4.0 million, $4.3 million, and $3.5 million was related to the data center operations and allocated to cost of revenue for the years ended December 31, 2014, 2013 and 2012, respectively. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets | |||||||||||||||||||||||
The changes in the carrying amounts of goodwill by reportable segment for the years ended December 31, 2014 and 2013 are as follows (in thousands): | ||||||||||||||||||||||||
PBM | HCIT | Total | ||||||||||||||||||||||
Balance at December 31, 2012 | $ | 4,458,373 | $ | 19,665 | $ | 4,478,038 | ||||||||||||||||||
Acquisitions (1) | 225,761 | — | 225,761 | |||||||||||||||||||||
Measurement period adjustments (2) | 16,476 | — | 16,476 | |||||||||||||||||||||
Balance at December 31, 2013 | 4,700,610 | 19,665 | 4,720,275 | |||||||||||||||||||||
Acquisitions (3) | 2,026 | — | 2,026 | |||||||||||||||||||||
Measurement period adjustments (4) | 2,338 | — | 2,338 | |||||||||||||||||||||
Balance at December 31, 2014 | $ | 4,704,974 | $ | 19,665 | $ | 4,724,639 | ||||||||||||||||||
-1 | Initial goodwill recorded in connection with the acquisition of Restat in October 2013 and another insignificant acquisition in 2013. | |||||||||||||||||||||||
-2 | Adjustments to the fair value of assets acquired and liabilities assumed for recent acquisitions during the measurement period. The measurement period adjustments were not recast to the 2012 consolidated financial statements as they were not deemed material. | |||||||||||||||||||||||
-3 | Represents adjustments to purchase price for the Restat acquisition, including settlement of working capital adjustment. | |||||||||||||||||||||||
-4 | Represents adjustments in connection with the post-closing working capital adjustment as well as changes in the estimated fair values of the associated assets acquired and liabilities assumed for Restat acquisition during the measurement period. The measurement period adjustments were not recast to the 2013 consolidated financial statements as they were not deemed material. | |||||||||||||||||||||||
Definite-lived intangible assets are amortized over the useful lives of the related assets. The components of intangible assets were as follows (in thousands): | ||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||||
Customer relationships | $ | 1,527,722 | $ | 564,623 | $ | 963,099 | $ | 1,528,475 | $ | 355,737 | $ | 1,172,738 | ||||||||||||
Non-compete agreements | 11,920 | 7,435 | 4,485 | 13,430 | 6,463 | 6,967 | ||||||||||||||||||
Other intangible assets | 3,060 | 2,445 | 615 | 3,060 | 1,346 | 1,714 | ||||||||||||||||||
Total | $ | 1,542,702 | $ | 574,503 | $ | 968,199 | $ | 1,544,965 | $ | 363,546 | $ | 1,181,419 | ||||||||||||
Future amortization associated with intangible assets recorded as of December 31, 2014 is estimated to be $194.0 million in 2015, $166.7 million in 2016, $147.5 million in 2017, $137.2 million in 2018, $126.8 million in 2019, and $196.0 million for years after 2019. |
Accrued_Expenses_and_Other_Cur
Accrued Expenses and Other Current Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities | ||||||||
The Company's accrued expenses and other current liabilities are comprised of the following (in thousands): | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Customer deposits | $ | 13,619 | $ | 12,148 | |||||
Salaries and wages payable | 65,481 | 54,761 | |||||||
Deferred revenue | 31,630 | 10,053 | |||||||
Income taxes payable | — | 7,456 | |||||||
Other accrued expenses | 216,460 | 169,682 | |||||||
Total accrued expenses and other current liabilities | $ | 327,190 | $ | 254,100 | |||||
LongTerm_Liabilities
Long-Term Liabilities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Long-term Liabilities [Abstract] | ||||||||
Long-Term Liabilities | Long-Term Liabilities | |||||||
Long- term debt | ||||||||
The following table sets forth the components of long-term debt (in thousands), net of unamortized debt discounts as of December 31, 2014 and December 31, 2013. | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Senior secured term loan facility due June 1, 2018 with an interest rate of 1.81% at December 31, 2014 and 2013 | $ | 932,875 | $ | 965,363 | ||||
Senior secured revolving credit facility due June 1, 2018 with an interest rate of 1.81% at December 31, 2014 and 2013 | — | 300,000 | ||||||
4.75% Senior Notes due 2021 | 493,348 | — | ||||||
Less current maturities | (81,250 | ) | (50,000 | ) | ||||
Long-term debt | $ | 1,344,973 | $ | 1,215,363 | ||||
Senior Notes | ||||||||
In March 2014, the Company issued $500.0 million aggregate principal amount of 4.75% Senior Notes due 2021 (the “Senior Notes”). The Senior Notes mature on March 15, 2021 and bear interest at 4.75% per year. The Company pays interest semi-annually on the Senior Notes on March 15 and September 15 of each year, or the first business day thereafter if such date is not a business day. The Company made an initial interest payment of $12.1 million in September 2014 on the Senior Notes. The Company received approximately $492.5 million in net proceeds from the Senior Note offering, after deducting $7.5 million in underwriting discounts. Additionally the Company incurred approximately $2.0 million in offering expenses. The Company used part of the net proceeds from this offering to repay $300.0 million of the Company's outstanding borrowings under the Revolving Facility and the remainder of the net proceeds from this offering for general corporate purposes. | ||||||||
As discussed, in connection with the Senior Notes, the Company incurred approximately $7.5 million in underwriting debt discount and approximately $2.0 million in debt issuance costs. The $7.5 million debt discount incurred in connection with the Senior Notes is presented on the consolidated balance sheet as a reduction to long-term debt. The debt discount amounts are being amortized to interest expense over the life of the Senior Notes. The Company uses the straight-line method to amortize the debt discount amounts as it does not result in a materially different amount of interest expense than the effective interest rate method. The $2.0 million in offering expenses incurred in connection with the issuance of the Senior Notes are presented on the consolidated balance sheet as other assets. The offering expenses are being amortized to interest expense over the life of the Senior Notes using the straight-line method. The amortization related to financing costs and debt discounts totaled $1.1 million for the year ended December 31, 2014. | ||||||||
Guarantees | ||||||||
The Senior Notes are jointly and severally and fully and unconditionally guaranteed by each of the Company’s existing and future wholly-owned subsidiaries that guarantees obligations under (i) the Credit Agreement or (ii) certain other future indebtedness in aggregate principal amount in excess of $175.0 million. | ||||||||
A subsidiary guarantor will be released from its obligations under its respective guarantee of the Senior Notes upon the release or discharge of such subsidiary guarantor from its guarantee of obligations under the Credit Agreement or certain other future indebtedness in an aggregate principal amount in excess of $175.0 million, or upon the earlier occurrence of certain other customary circumstances as set forth in the indenture governing the Senior Notes. The Senior Notes and the guarantees by the subsidiary guarantors are the general senior unsecured obligations of the Company and the subsidiary guarantors, respectively and rank equally in right of payment with the existing and future senior unsecured indebtedness of the Company and the subsidiary guarantors, respectively. | ||||||||
Prepayments and Repayments | ||||||||
Prior to the scheduled maturity of the Senior Notes, the Company may at any time redeem all or a part of the Senior Notes, upon not less than 30 nor more than 60 days’ prior written notice at a redemption price equal to the greater of: (i) 100% of the principal amount of the Senior Notes to be redeemed, and (ii) the sum of the present values of the remaining scheduled payments of principal of and interest on the Senior Notes to be redeemed (exclusive of interest accrued to the applicable redemption date) discounted to such redemption date on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the then current treasury rate plus 50 basis points, plus, in each case, accrued and unpaid interest thereon to, but not including, the applicable redemption date. | ||||||||
If the Company experiences a change of control triggering event (as defined in the supplemental indenture governing the Senior Notes), holders of the Senior Notes may require the Company to purchase the Senior Notes at a purchase price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest, if any, to the date of purchase. | ||||||||
The Company is not required to make mandatory redemption payments or sinking fund payments with respect to the Senior Notes. | ||||||||
Certain Covenants and Events of Default | ||||||||
The indenture governing the Senior Notes includes certain restrictive covenants, including covenants that limit the Company's ability and the ability of our subsidiaries to, among other things, incur secured debt; enter into sale and leaseback transactions; and amalgamate, consolidate, merge or transfer substantially all of the Company's assets to another entity. The covenants are subject to a number of important exceptions and qualifications set forth in the indenture. | ||||||||
The indenture governing the Senior Notes provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the indenture and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, the trustee or holders of at least 25% in aggregate principal amount of and accrued but unpaid interest on the then outstanding Senior Notes may declare the principal amount of all the Senior Notes to be due and payable immediately. As of December 31, 2014, the Company was in compliance with the covenants under the Senior Notes. | ||||||||
Senior secured credit facility | ||||||||
Concurrent with the consummation of the Merger on July 2, 2012, the Company executed a credit agreement (the "Credit Agreement") with JPMorgan Chase Bank, N.A. ("JPMCB"), as administrative agent, and a syndicate of lenders. The Credit Agreement initially provided for a senior secured credit facility in an aggregate amount of $1.8 billion consisting of (i) a five-year senior secured term loan facility in the amount of $1.1 billion (the “Term Loan Facility”) and (ii) the Revolving Facility in the amount of $700.0 million. In July 2012, the Company borrowed $1.4 billion under the Credit Agreement consisting of $1.1 billion under the Term Loan Facility and $300.0 million under the Revolving Facility to fund in part the aggregate cash consideration payable to Catalyst stockholders in the Merger, repay and discharge existing indebtedness of the Company and Catalyst and pay related transaction fees and expenses. Net proceeds received under the Term Loan Facility were $1.1 billion less $29.6 million in debt discount. Additionally, the Company paid $18.8 million in debt issuance costs related to the Revolving Facility. | ||||||||
On June 3, 2013, the Company entered into an Amendment (the “Amendment”) to the Credit Agreement. Pursuant to the Amendment, the following key terms of the Credit Agreement were modified: | ||||||||
• | an extension of the maturity date for the Term Loan Facility and the Revolving Facility from July 2, 2017 to June 1, 2018; | |||||||
• | an increase in the commitments under the Revolving Facility from $700.0 million to $800.0 million; | |||||||
• | a decrease in the commitments under the Term Loan Facility from $1.1 billion to $1.0 billion; | |||||||
• | additional flexibility for the Company and its subsidiaries to (i) make certain permitted acquisitions, (ii) create liens, (iii) make | |||||||
investments, loans, advances or guarantees, and (iv) pay dividends and distributions or repurchase its own capital stock; and | ||||||||
• | modifications to the interest rates and financial covenants applicable to the Company and its subsidiaries as described further below. | |||||||
After giving effect to the Amendment, the interest rates applicable to the Term Loan Facility and the Revolving Facility will continue to be based on a fluctuating rate of interest measured by reference to either, at the Company's option, (i) a base rate, plus an applicable margin, or (ii) an adjusted London interbank offered rate (adjusted for maximum reserves) (“LIBOR”), plus an applicable margin. The applicable margin, in each case, will continue to be adjusted from time to time based on the Company's consolidated leverage ratio for the previous fiscal quarter. The Amendment provides for a reduction in the applicable margins that would be in effect at any time when the Company's consolidated leverage ratio is greater than 1.50 to 1 and less than 2.50 to 1. After giving effect to the Amendment, the initial applicable margin for all borrowings was 0.625% per annum with respect to base rate borrowings and 1.625% per annum with respect to LIBOR borrowings. The Company intends to continue to elect the LIBOR rate as it has previously done during the term of the loan. This resulted in the applicable interest rate decreasing to 1.81% at December 31, 2014 from 2.25% prior to the Amendment. See Note 18 — Financial Instruments for information on the Company's interest rate swap agreements. | ||||||||
In connection with the Amendment, the Company made a $100.0 million prepayment on the Term Loan Facility to reduce its outstanding balance to $1.0 billion from $1.1 billion. In addition, the Company made scheduled principal repayments of $12.5 million in 2013 on the Term Loan Facility leaving the Company with $987.5 million outstanding as of December 31, 2013. The Company made scheduled principal repayments of $37.5 million on the Term Loan Facility in 2014 leaving the Company with $950.0 million outstanding as of December 31, 2014. | ||||||||
The Company utilized funds from the Revolving Facility to make the prepayment in connection with the Amendment, leaving the Company with $700.0 million of remaining available borrowing capacity under the Revolving Facility at the time of the Amendment execution. On October 1, 2013, the Company utilized $350.0 million under the Revolving Facility to partially fund the acquisition of Restat. In 2013, the Company repaid $150.0 million, of the amount borrowed under the Revolving Facility, leaving the Company with approximately $500.0 million of borrowing capacity under the Revolving Facility as of December 31, 2013. In March 2014 the Company used the proceeds from the offering of the Senior Notes (refer above for a detailed discussion) to repay $300.0 million of the outstanding borrowings under the Revolving Facility. As of December 31, 2014, the Company had approximately $800.0 million of available borrowing capacity under the Revolving Facility. | ||||||||
In connection with executing the Amendment, the Company paid $2.3 million in direct lender fees to the syndication of banks providing credit to the Company. The fees consisted of a $1.3 million debt discount related to the Term Loan Facility and $1.0 million of debt issuance costs related to the Revolving Facility. The $1.3 million debt discount incurred in connection with the Amendment is presented on the consolidated balance sheet as a reduction to long-term debt, along with the $24.1 million of unamortized debt discount incurred in connection with the execution of the Credit Agreement. The debt discount amounts are being amortized to interest expense over the amended life of the Term Loan Facility. The Company uses the straight-line method to amortize the debt discount as it does not result in a materially different amount of interest expense than the effective interest rate method. The additional $1.0 million debt issue cost incurred in connection with the execution of the Amendment related to the Revolving Facility, along with $16.6 million of unamortized debt issuance costs incurred in connection with the execution of the Credit Agreement are presented on the consolidated balance sheet as other assets. The debt issuance costs are being amortized to interest expense over the amended life of the Revolving Facility using the straight-line method. | ||||||||
The amortization related to financing costs and debt discounts totaled $8.5 million, $9.1 million, and $5.0 million for the years ended December 31, 2014, December 31, 2013, and December 31, 2012, respectively. | ||||||||
As a result of executing the Amendment, the Company assessed whether the modifications to the Credit Agreement were substantial and should be accounted for using extinguishment accounting. The Company made its assessment both on a total basis of all lenders and on an individual basis for each member of the syndicate. The Company performed separate assessments for the Term Loan Facility and the Revolving Facility. As a result of the assessments, the Company recorded an additional interest expense charge of $0.4 million from unamortized debt discount and debt issuance costs during the year ended December 31, 2013. | ||||||||
The Credit Agreement, as amended by the Amendment, requires the Company to maintain a consolidated leverage ratio at all times less than or equal to 4.00 to 1 and a consolidated senior secured leverage ratio at all times less than or equal to 3.25 to 1. The Company's consolidated leverage ratio is defined as the ratio of (1) consolidated total debt to (2) consolidated EBITDA (with add-backs permitted to consolidated EBITDA for (a) fees and expenses related to the Merger, the closing of the Credit Agreement, a specified historic acquisition and future permitted acquisitions, (b) synergies projected by the Company in good faith to be realized as a result of the Merger in an aggregate amount not to exceed a specified threshold and (c) fees and expenses and integration costs related to historical acquisitions by Catalyst in an aggregate amount not to exceed a specified threshold). The Company's new consolidated senior secured leverage ratio is defined as the ratio of (1) (a) consolidated total debt minus (b) any portion of consolidated total debt that is subordinated or not secured by a lien upon the assets of the Company or its subsidiaries to (2) consolidated EBITDA (subject to the permitted add-backs noted above). The Amendment continues to require the Company to maintain an interest coverage ratio greater than or equal to 4.00 to 1. The interest coverage ratio is defined as the ratio of (1) consolidated EBIT (subject to the permitted add-backs noted above) to (2) consolidated interest expense, tested at the end of each fiscal quarter for the rolling four fiscal quarter period then most recently ended. As of December 31, 2014, the Company was in compliance with the covenants of the Credit Agreement, as amended by the Amendment. | ||||||||
Principal amounts outstanding under the Revolving Facility are due and payable in full on June 1, 2018. Principal repayments on the Term Loan Facility will be due as follows (in thousands): | ||||||||
Year | Amount due | |||||||
2015 | 81,250 | |||||||
2016 | 93,750 | |||||||
2017 | 118,750 | |||||||
2018 | 656,250 | |||||||
Total | $ | 950,000 | ||||||
The Credit Agreement also contains a number of covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its subsidiaries to: incur additional indebtedness; create liens; make investments, loans, advances or guarantees; sell or transfer assets; pay dividends and distributions or repurchase its own capital stock; prepay certain indebtedness; engage in mergers, acquisitions or consolidations (subject to exceptions for certain permitted acquisitions); change its lines of business or enter into new lines of business; engage in certain transactions with affiliates; enter into agreements restricting the ability to grant liens in favor of the collateral agent for the benefit of the secured parties; engage in sale and leaseback transactions; or enter into swap, forward, future or derivative transaction or option or similar agreements. In addition, the Credit Agreement includes various (i) customary affirmative covenants and other reporting requirements and (ii) customary events of default, including, without limitation, payment defaults, violation of covenants, material inaccuracy of representations or warranties, cross-defaults to other material agreements evidencing indebtedness, bankruptcy events, certain ERISA events, material judgments, invalidity of guarantees or security documents and change of control. Drawings under the Revolving Facility are subject to certain conditions precedent, including material accuracy of representations and warranties and absence of default. | ||||||||
The Company’s obligations under the Credit Agreement are guaranteed by all existing and future, direct and indirect, material subsidiaries of the Company (collectively, the “Subsidiary Guarantors”). In addition, the Company and each Subsidiary Guarantor have pledged substantially all of their assets, subject to certain exceptions, to secure the Company’s obligations under the Credit Agreement. | ||||||||
The carrying value of the Company's debt at December 31, 2014 approximates its fair value. |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||
Shareholders' Equity | Shareholders' Equity | |||||||||||||||||||
(a) | Common shares: | |||||||||||||||||||
(i) Authorized: Unlimited no par value voting common shares | ||||||||||||||||||||
(ii) Issuance of common shares: | ||||||||||||||||||||
On May 16, 2012, the Company completed a public offering of 12.0 million of its common shares at a price to the public of $45.30 per share. The net proceeds to the Company from the offering were approximately $519.1 million, after deducting the underwriting discounts and commissions and offering expenses. The Company used part of the net proceeds from the offering to pay a portion of the cash component of the Merger consideration and other related fees and expenses in connection with the Merger and the balance was used for general corporate purposes. | ||||||||||||||||||||
On July 2, 2012, the Company issued 66.8 million common shares and 0.5 million warrants in connection with the Catalyst Merger. See Note 4 — Business Combinations for further information related to the Merger. | ||||||||||||||||||||
(b) | Equity incentive plans: | |||||||||||||||||||
Effective on March 11, 2009, the Board of Directors of the Company adopted the Catamaran Corporation Long-Term Incentive Plan (“LTIP”), which was approved by the shareholders of the Company at the Annual and Special Meeting of Shareholders on May 13, 2009. The LTIP provides for the grant of stock option awards, stock appreciation rights, restricted stock awards, restricted stock unit ("RSU") awards, performance awards and other stock-based awards to eligible persons, including executive officers and directors of the Company. The purpose of the LTIP is to advance the interests of the Company by attracting and retaining high caliber employees and other key individuals who perform services for the Company, a subsidiary or an affiliate; align the interests of the Company’s shareholders and recipients of awards under the LTIP by increasing the proprietary interest of such recipients in the Company’s growth and success; and motivate award recipients to act in the best long-term interest of the Company and its shareholders. The LTIP replaced the previous stock option plan, and no further grants or awards will be issued under the previous stock option plan. The maximum common shares of the Company allowed to be issued under the LTIP was increased by 3.6 million on May 11, 2011, after the Company’s shareholders approved an amendment to the LTIP at the Annual and Special Meeting of Shareholders of the Company. In July 2012, the maximum common shares of the Company allowed to be issued under the LTIP was increased by 5.0 million. Any full-value awards (i.e., any awards other than stock options or stock appreciation rights) granted under the LTIP are counted against this share limit as 1.79 shares for every one share granted. There were 4,815,112 stock-based awards available for grant under the LTIP as of December 31, 2014. | ||||||||||||||||||||
In connection with the closing of the Merger with Catalyst on July 2, 2012, the Company assumed two stock incentive plans (together the "Assumed Plans"), each as amended and adjusted for the purpose of granting awards to certain employees of the Company subsequent to the close of the Merger or to newly hired employees of the Company who were not employed with the Company as of the close of the Merger. The Assumed Plans provide for the grant of stock option awards, RSU awards, performance awards and other stock-based awards to eligible persons. The maximum common shares of the Company allowed to be issued under the Assumed Plans is 1,480,936. Any full-value awards (i.e., any awards other than stock options or SARs) granted under the Assumed Plans are counted against this share limit as 1.45 shares for every one share granted. There were 730,056 stock-based awards available for grant under the Assumed Plans as of December 31, 2014. | ||||||||||||||||||||
(c) | Stock Options | |||||||||||||||||||
The following table summarizes activity related to stock options for the year ended | ||||||||||||||||||||
December 31, 2014: | ||||||||||||||||||||
Number of Options | Weighted Average Exercise Price | |||||||||||||||||||
Outstanding, beginning of period | 1,396,144 | $ | 31.6 | |||||||||||||||||
Granted | 432,586 | $ | 44.72 | |||||||||||||||||
Exercised | (298,108 | ) | $ | 18.92 | ||||||||||||||||
Forfeited | (82,090 | ) | $ | 47.54 | ||||||||||||||||
Outstanding, end of period | 1,448,532 | $ | 37.22 | |||||||||||||||||
Options granted during 2014, were primarily subject to a graded vesting schedule of four years. Options granted expire seven years from the grant date. | ||||||||||||||||||||
The following table summarizes certain information about the options outstanding at December 31, 2014: | ||||||||||||||||||||
Range of Exercise Price | Options Outstanding | Weighted Average Remaining Contractual Life (Years) | Weighted Average Exercise Price | Options Exercisable | Weighted Average Exercise Price | |||||||||||||||
$6.39- $24.92 | 233,300 | 2.16 | $ | 14.05 | 230,038 | $ | 13.88 | |||||||||||||
$24.93 - $32.45 | 233,294 | 3.25 | $ | 25.51 | 140,764 | $ | 25.57 | |||||||||||||
$32.46 - $44.15 | 279,524 | 4.29 | $ | 35.78 | 110,540 | $ | 35.25 | |||||||||||||
$44.16 - $44.90 | 347,132 | 6.18 | $ | 44.7 | — | $ | — | |||||||||||||
$44.91 - $56.25 | 355,282 | 5.26 | $ | 53.99 | 86,773 | $ | 54.22 | |||||||||||||
$6.39 - $56.25 | 1,448,532 | 4.47 | $ | 37.22 | 568,115 | $ | 27.1 | |||||||||||||
The aggregate intrinsic value and remaining contractual term of exercisable stock options at December 31, 2014 was $14.0 million and 3.26 years, respectively. The aggregate intrinsic value and remaining contractual term of all vested options and options that are expected to vest are $21.0 million and 4.47 years, respectively. The total fair value of stock options which vested during the years ended December 31, 2014, 2013 and 2012 was approximately $4.6 million, $3.5 million, and $2.8 million, respectively. | ||||||||||||||||||||
As of December 31, 2014, there were $8.2 million and $1.7 million of unrecognized compensation costs related to stock options for LTIP and Assumed Plans, respectively, which are expected to be recognized over a weighted-average period of 2.39 years and 3.01 years, respectively. | ||||||||||||||||||||
The total intrinsic value of stock options exercised during the years ended December 31, 2014, 2013, and 2012 was $8.2 million, $14.9 million, and $50.3 million, respectively. | ||||||||||||||||||||
(d) | Employee Stock Purchase Plan: | |||||||||||||||||||
On May 16, 2007, shareholders of the Company approved the creation of the Employee Stock Purchase Plan (“ESPP”) which allows eligible employees to withhold annually up to a maximum of 15% of their base salary, or $25,000, subject to U.S. Internal Revenue Service limitations, for the purchase of the Company’s common shares. Common shares will be purchased on the last day of each offering period at a discount of 5% of the fair market value of the common shares on such date. The aggregate number of common shares that may be awarded under the ESPP may not exceed 400,000 common shares. Common shares available for purchase under the ESPP are drawn from reacquired common shares purchased on behalf of the Company in the open market. During 2014, 2013, and 2012, the Company delivered 40,156, 33,728, and 14,697 common shares, respectively, under the ESPP. | ||||||||||||||||||||
The ESPP is not considered compensatory as the plan terms are no more favorable than to all other shareholders, and the purchase discount does not exceed the per-share costs that would be incurred through a public offering. Since the plan is not considered compensatory, no portion of the costs related to ESPP purchases is included in the Company’s stock-based compensation expense. | ||||||||||||||||||||
(e) | Restricted Stock Units: | |||||||||||||||||||
During 2014, the Company granted both time-based RSUs and performance based RSUs to its employees and non-employee directors under both the LTIP and the Assumed Plans. Time-based RSUs vest on a straight-line basis over a range of three to four years. During 2012 and 2013, the Company also granted time-based RSUs that cliff vest after a three to four year period. Performance-based RSUs cliff vest based upon reaching agreed upon three-year performance conditions. The number of outstanding performance-based RSUs as of December 31, 2014 stated below assumes the associated performance targets will be met at the maximum level. The table below summarizes the number of time-based and performance-based RSUs that were granted and outstanding under both plans for the year ended December 31, 2014: | ||||||||||||||||||||
LTIP Plan | Assumed Plans | |||||||||||||||||||
Number of Restricted Stock Units | Number of Restricted Stock Units | |||||||||||||||||||
Time-Based | Performance - Based | Weighted Average Grant Date Fair Value Per Unit | Time-Based | Performance - Based | Weighted Average Grant Date Fair Value Per Unit | |||||||||||||||
Granted | 302,257 | 392,388 | $ | 44.84 | 155,615 | 91,516 | $ | 44.41 | ||||||||||||
Outstanding | 714,810 | 830,880 | — | 243,925 | 86,948 | — | ||||||||||||||
The total fair value of RSUs that vested during 2014, 2013, and 2012 was $20.8 million, $27.3 million, and $18.0 million, respectively. The weighted average grant date fair value of awards granted during 2014, 2013, and 2012 was $44.72, $55.99, and $38.49, respectively. | ||||||||||||||||||||
The following table summarizes the information about RSUs for the year ended December 31, 2014 under the Company's equity incentive plans: | ||||||||||||||||||||
LTIP Plan | Assumed Plans | |||||||||||||||||||
Number of Restricted Stock Units | Weighted Average Grant Date Fair Value Per Unit | Number of Restricted Stock Units | Weighted Average Grant Date Fair Value Per Unit | |||||||||||||||||
Nonvested balance as of the beginning of the period | 1,334,694 | $ | 40.14 | 213,656 | $ | 50.98 | ||||||||||||||
Granted | 694,645 | $ | 44.84 | 247,131 | $ | 44.41 | ||||||||||||||
Vested | (411,817 | ) | $ | 30.23 | (53,386 | ) | $ | 50.38 | ||||||||||||
Forfeited | (71,832 | ) | $ | 44.57 | (76,528 | ) | $ | 49.06 | ||||||||||||
Nonvested balance as of the end of the period | 1,545,690 | $ | 44.69 | 330,873 | $ | 46.62 | ||||||||||||||
(f) | Warrants: | |||||||||||||||||||
On July 2, 2012, the Company issued 66.8 million common shares and 0.5 million warrants in connection with the Company's merger with Catalyst Health Solutions, Inc. As of December 31, 2013, 425,160 of the warrants issued were outstanding. In June 2014, all of the outstanding warrants were exercised carrying a weighted average exercise price of $8.12. As of December 31, 2014, there were no warrants outstanding. | ||||||||||||||||||||
(g) | Stock-based Compensation: | |||||||||||||||||||
For the years ended December 31, 2014, 2013, and 2012, the Company recorded stock-based compensation expense of $33.6 million, $25.6 million, and $17.7 million, respectively. At December 31, 2014, there was $34.6 million and $12.0 million unrecognized compensation cost related to RSUs under the LTIP and Assumed Plans, respectively, which is expected to be recognized over a weighted-average period of 2.02 and 2.49 years, respectively. | ||||||||||||||||||||
The Company allocated stock-based compensation costs to the same statement of operations line item as the cash compensation to those employees. Accordingly, the allocation of the compensation costs is as follows for the years ended December 31, 2014, 2013, and 2012 (in thousands): | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Cost of revenue | $ | 2,284 | $ | 1,404 | $ | 687 | ||||||||||||||
Selling, general and administrative | 31,270 | 24,158 | 16,980 | |||||||||||||||||
Total stock-based compensation | $ | 33,554 | $ | 25,562 | $ | 17,667 | ||||||||||||||
The total income tax benefit, using the Company’s statutory tax rates, recognized in the statements of operations for stock-based compensation arrangements for years ended December 31, 2014, 2013, and 2012 was $12.7 million, $9.5 million, and $6.5 million, respectively. | ||||||||||||||||||||
The Black-Scholes-Merton option-pricing model was used to estimate the fair value of the options at grant date for the years ended December 31, 2014, 2013, and 2012, based on the following assumptions: | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Volatility | 37.7-39.2% | 41.4-45.4% | 47.2-49.2% | |||||||||||||||||
Risk-free interest rate | 1.54 - 1.73% | 0.81-1.74% | 0.65-0.83% | |||||||||||||||||
Expected life | 4.5 years | 4.5 years | 4.5 years | |||||||||||||||||
Dividend yield | — | — | — | |||||||||||||||||
Weighted average grant date fair value | $ | 15.47 | $ | 21.33 | $ | 14.7 | ||||||||||||||
The volatility assumption is based on historical volatility at the date of grant for the period equal to the expected life of the option. | ||||||||||||||||||||
The expected life assumption is based on historical exercise patterns. The options issued to employees typically have a longer expected life of 4.5 to 5 years due to the vesting schedules, whereas options issued to directors have a shorter expected life of 1 to 2.5 years due to the shorter vesting period of some director options. | ||||||||||||||||||||
The Company does not expect to pay dividends and, therefore, no dividend yield assumption is used in calculating the fair value of stock options. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | Income Taxes | ||||||||||||
The income tax effects of temporary differences that give rise to significant portions of deferred income tax assets and liabilities are as follows. | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||
Deferred income tax assets: | |||||||||||||
Non-capital loss carryforwards (“NOL”) | $ | 28,906 | $ | 18,229 | |||||||||
Lease inducements and deferred financing | 15,826 | 12,528 | |||||||||||
Reserves and accruals | 62,487 | 45,974 | |||||||||||
Stock-based compensation | 17,889 | 12,763 | |||||||||||
Other | 12,318 | 9,408 | |||||||||||
Total | 137,426 | 98,902 | |||||||||||
Less valuation allowance - current | 804 | 875 | |||||||||||
Less valuation allowance - long term | 28,915 | 17,486 | |||||||||||
Total valuation allowance | 29,719 | 18,361 | |||||||||||
Total deferred tax assets | $ | 107,707 | $ | 80,541 | |||||||||
Deferred tax assets — current | $ | 58,631 | $ | 44,029 | |||||||||
Deferred tax assets — long term | 49,076 | 36,512 | |||||||||||
Total | $ | 107,707 | $ | 80,541 | |||||||||
Deferred income tax liabilities: | |||||||||||||
Property and equipment and intangible assets | $ | 297,978 | $ | 329,842 | |||||||||
Dividend withholding tax | 5,675 | 5,675 | |||||||||||
Other | 5,156 | 3,146 | |||||||||||
Total | $ | 308,809 | $ | 338,663 | |||||||||
At December 31, 2014, the Company had gross deferred tax assets (“DTAs”) totaling $137.4 million compared to $98.9 million at December 31, 2013. Of the $137.4 million, $30.8 million of DTAs related to its Canadian operations compared to $18.1 million at December 31, 2013. The Company also had deferred tax liabilities which decreased to $308.8 million at December 31, 2014 from $338.7 million at December 31, 2013. | |||||||||||||
The balance of the valuation allowance was $29.7 million at December 31, 2014 compared to $18.4 million at December 31, 2013. The valuation allowance arising from the Canadian operations was $28.4 million at December 31, 2014 and $17.1 million at December 31, 2013. The Canadian valuation allowance increased during the year as a result of a loss from operations. The amount of this valuation allowance is subject to adjustment by the Company in future periods based upon its assessment of evidence supporting the degree of probability that DTAs will be realized. | |||||||||||||
At December 31, 2014, the Company had a DTA of $28.9 million related to Canadian, US Federal and state NOLs. The NOLs are available to reduce future years’ taxable income and expire beginning in 2031. A valuation allowance of $26.7 million has been established against a portion of the NOLs not anticipated to be utilized. | |||||||||||||
The differences between the effective tax rate reflected in the provision for income taxes and the U.S. statutory income tax rate are as follows (dollars in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Corporate statutory rate | 35 | % | 35 | % | 35 | % | |||||||
Income tax expense on income before income taxes | $ | 177,768 | $ | 140,751 | $ | 66,618 | |||||||
Tax effect of: | |||||||||||||
State and local income taxes, net of federal benefit | 13,527 | 10,726 | 4,281 | ||||||||||
Transaction costs and transaction related expenses | 453 | 938 | 5,252 | ||||||||||
Dividend withholding tax | — | (65 | ) | 13,074 | |||||||||
Impact of foreign tax rates | (3,191 | ) | (3,693 | ) | (1,582 | ) | |||||||
Non-controlling interest | (22,452 | ) | (13,670 | ) | (1,645 | ) | |||||||
Cross-jurisdictional financing | (48,252 | ) | (44,659 | ) | (23,937 | ) | |||||||
Other | 3,662 | 4,479 | 3,763 | ||||||||||
Valuation allowance | 12,671 | 8,596 | 3,492 | ||||||||||
$ | 134,186 | $ | 103,403 | $ | 69,316 | ||||||||
Income from U.S. operations before income taxes was $428.7 million, $319.8 million, and $158.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. Income from outside the U.S. before income taxes, including taxable income attributable to intercompany debt, was $79.2 million, $82.3 million, and $31.6 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
The components of the provision for income taxes are as follows (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current tax expense | |||||||||||||
United States | $ | 192,021 | $ | 146,484 | $ | 94,834 | |||||||
Foreign | 212 | 1,255 | 12,407 | ||||||||||
Total current tax expense | 192,233 | 147,739 | 107,241 | ||||||||||
Deferred tax expense (benefit) | |||||||||||||
United States | (57,889 | ) | (44,180 | ) | (38,441 | ) | |||||||
Foreign | (158 | ) | (156 | ) | 516 | ||||||||
Total deferred tax expense | (58,047 | ) | (44,336 | ) | (37,925 | ) | |||||||
Total tax expense | $ | 134,186 | $ | 103,403 | $ | 69,316 | |||||||
Uncertain Tax Positions | |||||||||||||
Accounting guidance for uncertain tax positions prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of December 31, 2014, the Company has an accrued liability in the consolidated balance sheet of $35.4 million. As of December 31, 2013 and 2012, the Company had an accrued liability of $28.9 million and $18.8 million, respectively. This liability related to various uncertain federal and state income tax matters, the resolution of all of which would not have a material impact on the Company’s effective tax rate. | |||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits, including interest and penalties, for 2014, 2013 and 2012 , respectively are as follows (in millions): | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Balance at January 1 | $ | 28.9 | $ | 18.8 | $ | 0.6 | |||||||
Additions for tax positions related to prior years | 9 | 26.5 | 10.3 | ||||||||||
Reductions for tax positions related to prior years | (0.9 | ) | (13.9 | ) | — | ||||||||
Additions based on tax positions related to the current year | 3.8 | 0.4 | 7.9 | ||||||||||
Reductions due to lapse of the applicable statute of limitations | (4.7 | ) | — | — | |||||||||
Decrease related to settlements with taxing authorities | (0.7 | ) | (2.9 | ) | — | ||||||||
Balance at December 31 | $ | 35.4 | $ | 28.9 | $ | 18.8 | |||||||
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Accrued interest and penalties at December 31, 2014, 2013, and 2012 was $5.9 million, $4.7 million, and $0.5 million, respectively. It is reasonably possible that the total amount of unrecognized tax benefits will increase or decrease within twelve months of December 31, 2014. The Company currently estimates that such increases or decreases will not be material. | |||||||||||||
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions, including Canada. With few exceptions, the Company is no longer subject to tax examinations by tax authorities for years prior to 2010. |
Lease_Exit_Costs
Lease Exit Costs | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Leases [Abstract] | |||||
Lease Exit Costs | Lease Exit Costs | ||||
Bannockburn Lease | |||||
In September 2014, the Company executed a plan to exit the space it had leased in Bannockburn, IL. As a result of this exit, the Company recorded a charge and corresponding lease loss accrual equal to the present value of the amount by which the net future lease obligations exceed the remaining rent-related deferred balances. As a result of this exit, the Company recorded approximately $5.7 million of lease loss expense during 2014 in SG&A expense in the consolidated statements of operations. As of December 31, 2014, the Company had an accrual for the present value of future amounts due through the end of the lease term of approximately $6.9 million, which is included in accrued expenses and other current liabilities in the consolidated balance sheets. Based on the Company's current assumptions as of December 31, 2014, we expect that cash outflows totaling $7.0 million will occur through July 2015. The exit from the space in Bannockburn, IL did not involve any employee termination costs. | |||||
Maryland Lease | |||||
In August 2013, the Company executed a plan to exit a portion of space it had leased in Maryland and entered into a sub-lease agreement with a third-party tenant that was coterminous with the Company's remaining lease term. As a result of this exit, the Company recorded an approximately $5.6 million charge in SG&A expense and corresponding lease loss accrual equal to the present value of the amount by which the net future lease obligations exceed the remaining rent-related deferred balances. The net future lease obligations were calculated by taking the remaining contractual rent obligation less the amount the Company will receive from the sub-lease agreement and recorded at its present value based on the Company's credit adjusted risk-free interest rate. As of December 31, 2014, the Company had an accrual of approximately $5.2 million related to lease exit costs included in accrued expenses and other current liabilities in the consolidated balance sheets. A roll forward of the lease exit cost accrual is presented below (in thousands): | |||||
Amount | |||||
Liability at 12/31/2013 | $ | 5,774 | |||
Net payments | (819 | ) | |||
Change in Present Value | 260 | ||||
Liability at 12/31/2014 | $ | 5,215 | |||
Based on the Company's current assumptions as of December 31, 2014, we expect that cash outflows totaling $6.1 million will occur through June 2022. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Earnings Per Share | Earnings Per Share | |||||||||||
The following table sets forth the computation of basic and diluted EPS for the years ended December 31, 2014, 2013, and 2012 (in thousands, except share and per share data): | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Numerator: | ||||||||||||
Net income available to common shareholders | $ | 317,293 | $ | 262,170 | $ | 116,658 | ||||||
Denominator for basic EPS — weighted average common shares outstanding | 207,103,603 | 206,013,876 | 166,765,682 | |||||||||
Effect of dilutive securities: | ||||||||||||
Restricted stock units | 402,992 | 321,587 | 329,975 | |||||||||
Stock options | 245,550 | 384,063 | 734,963 | |||||||||
Denominator for diluted EPS | 207,752,145 | 206,719,526 | 167,830,620 | |||||||||
Earnings per share: | ||||||||||||
Basic | $ | 1.53 | $ | 1.27 | $ | 0.7 | ||||||
Diluted | $ | 1.53 | $ | 1.27 | $ | 0.7 | ||||||
The Company calculated the number of options and RSUs included in the diluted EPS calculation following the treasury stock method as outlined in earnings per-share accounting guidance. The following represents the stock options and RSUs that are not included in the calculation of diluted EPS due to their anti-dilutive impact: | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Anti-dilutive RSUs | 746,999 | 615,608 | 773,509 | |||||||||
Anti-dilutive stock options | 669,144 | 30,381 | 288,532 | |||||||||
1,416,143 | 645,989 | 1,062,041 | ||||||||||
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Supplemental Cash Flow Information [Abstract] | ||||||||||||
Supplemental Cash Flow Information | Supplemental Cash Flow Information | |||||||||||
(a) Other non-cash activities (in thousands): | ||||||||||||
Year Ended December 31, 2012 | ||||||||||||
Equity shares issued as a result of the NMHC acquisition | $ | 4 | ||||||||||
Equity shares issued as a result of the Catalyst Merger | $ | 3,238,141 | ||||||||||
(b) Cash paid / received for income taxes and interest was as follows for the years ended December 31, 2014, 2013, and 2012 (in thousands): | ||||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Income taxes paid | $ | 201,263 | $ | 158,053 | $ | 22,052 | ||||||
Interest paid | $ | 38,880 | $ | 30,322 | $ | 18,711 | ||||||
Interest received | $ | 837 | $ | 735 | $ | 473 | ||||||
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans |
The Company has a 401(k) savings plan that allows eligible employees to defer a percentage of their salary, not to exceed $17,500 in 2014 and 2013 and $17,000 in 2012. The Company matches an amount equal to 100% of the first 1% of eligible earnings and 50% of the next 2% through 6% eligible earnings. All participant contributions are 100% vested. Employer contributions become 20% vested after one year of service and 100% vested after completion of two years of service. For 2014, 2013 and 2012, the Company’s contributions to this plan were $9.0 million, $7.0 million, and $4.9 million, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Commitments and Contingencies | Commitments and Contingencies | |||
(a) | Lease Commitments: | |||
The Company maintains operating lease agreements for office space in its main operating locations. The Company also leases certain office equipment. | ||||
Aggregate future minimum payments in respect of non-cancellable operating lease agreements as of December 31, 2014, which extend until 2025, are as follows (in thousands): | ||||
Operating Leases | ||||
2015 | $ | 20,747 | ||
2016 | 19,529 | |||
2017 | 19,847 | |||
2018 | 16,901 | |||
2019 | 15,752 | |||
After 2019 | 53,633 | |||
$ | 146,409 | |||
The total rental expense under operating leases for the years ended December 31, 2014, 2013, and 2012 was $36.0 million, $35.4 million, and $17.1 million, respectively. The lease renewal terms have not been factored into the commitments noted above as not renewing these leases would not have a detrimental impact on the Company. | ||||
(b) | Contingencies: | |||
In July 2014, the Company received a subpoena from the United States Attorney's Office for the District of Rhode Island, requesting documents and information concerning bona fide service fees and rebates received from certain pharmaceutical manufacturers in connection with certain drugs utilized under Part D of the Medicare program. The Company has been cooperating with the government, collecting and producing documents in response to the subpoena. | ||||
Beeman, et al. v. Anthem Prescription Management, Inc., et al. A purported class action lawsuit was filed in February 2004 in the United States District Court for the Central District of California against a number of pharmacy benefit managers, including current subsidiaries of the Company, by several California pharmacies. Plaintiffs allege that defendants failed to comply with statutory obligations under California Civil Code Section 2527 to conduct studies of pharmacy dispensing fees and provide the results to third-party payors in California, and seek money damages. Because the lawsuit was stayed by appeals, including a challenge to the constitutionality of the statute, for nearly its entire history and was remanded back to the District Court in 2014, it is still in its early stages. As of December 31, 2014, based on currently available information, the Company cannot reasonably estimate a potential impact in this matter. | ||||
From time to time in connection with its operations, the Company is named as a defendant in other actions for damages and costs allegedly sustained by third-party plaintiffs. The Company has considered these proceedings and disputes in determining the necessity of any accruals for losses that are probable and reasonably estimable. In addition, various aspects of the Company’s business may subject it to litigation and liability for damages arising from errors in processing the pricing of prescription drug claims, failure to meet performance measures within certain contracts relating to its services performed, its ability to obtain certain levels of discounts or rebates on prescription purchases from retail pharmacies and drug manufacturers or other actions or omissions. The Company’s recorded accruals are based on estimates developed with consideration given to the potential merits of claims or quantification of any performance obligations. The Company takes into account its history of claims, the limitations of any insurance coverage, advice from outside counsel, and management’s strategy with regard to the settlement or defense of such claims and obligations. While the ultimate outcome of those claims, lawsuits or performance obligations cannot be predicted with certainty, the Company believes, based on its understanding of the facts of these claims and performance obligations, that adequate provisions have been recorded in the accounts where required. As of December 31, 2014, the Company did not have any material contingencies accrual related to lawsuits or allegations brought against the Company. | ||||
(c) | Guarantees: | |||
The Company provides routine indemnification to its customers against liability if the Company’s products infringe on a third-party’s intellectual property rights. The maximum amount of these indemnifications cannot be reasonably estimated due to their uncertain nature. Historically, the Company has not made payments related to these indemnifications. |
Segment_Information
Segment Information | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Segment Information | Segment Information | |||||||||||||||
(a) Reportable Segments | ||||||||||||||||
The Company manages its business in two segments: PBM and HCIT. The Company evaluates segment performance and allocates resources based upon revenue and gross profit. Selling, general and administrative expenses, depreciation and amortization, interest and other income and interest expense are reported as corporate expenses as these are managed on a consolidated basis by the Company. The Merger with Catalyst or the acquisition of Restat did not change the Company's conclusion on its reporting segments. | ||||||||||||||||
PBM Segment | ||||||||||||||||
The Company provides comprehensive PBM services to customers, which include managed care organizations, local governments, unions, corporations, HMOs, employers, workers’ compensation plans, third-party health care plan administrators, and federal and state government programs through its network of licensed pharmacies throughout the United States. The PBM services include electronic point-of-sale pharmacy claims management, retail pharmacy network management, mail and specialty pharmacy claims management, Medicare Part D services, benefit design consultation, preferred drug management programs, drug review and analysis, consulting services, data access and reporting and information analysis. | ||||||||||||||||
Revenue primarily consists of sales of prescription drugs, together with any associated administrative fees, to customers and participants, through the Company’s nationwide network of participating pharmacies and the Company's own mail and specialty pharmacies. Revenue and costs related to the sales of prescription drugs are recognized when the claims are adjudicated and the prescription drugs are shipped. Claims are adjudicated at the point-of-sale using an on-line processing system. Revenue and cost primarily consists of sales of prescription drugs to customers and participants. | ||||||||||||||||
HCIT Segment | ||||||||||||||||
The Company also provides HCIT solutions and services to providers, payors and other participants in the pharmaceutical supply chain in North America. The Company’s product offerings include a wide range of software products for managing prescription drug programs and for drug prescribing and dispensing. The Company’s solutions are available on a license basis with on-going maintenance and support or on a transaction fee basis using an ASP model. The Company’s payor customers include managed care organizations, Blue Cross Blue Shield organizations, government agencies, employers and intermediaries such as pharmacy benefit managers. The Company’s provider customers include independent, regional chain, institutional, and mail-order pharmacies. The solutions offered by the Company’s services assist both payors and providers in managing the complexity and reducing the cost of their prescription drug programs and dispensing activities. The Company’s profitability from HCIT depends primarily on revenue derived from transaction processing services, software license sales, hardware sales, maintenance, and professional services. | ||||||||||||||||
Financial information by segment (in thousands): | ||||||||||||||||
Year Ended December 31, 2014 | PBM | HCIT | Corporate | Total | ||||||||||||
Revenue | $ | 21,429,983 | $ | 151,907 | $ | — | $ | 21,581,890 | ||||||||
Cost of revenue | 20,155,768 | 66,069 | — | 20,221,837 | ||||||||||||
Gross profit | 1,274,215 | 85,838 | — | 1,360,053 | ||||||||||||
Corporate expenses | — | — | 852,145 | 852,145 | ||||||||||||
Income before income taxes | — | — | — | 507,908 | ||||||||||||
Income tax expense | — | — | — | 134,186 | ||||||||||||
Net income | — | — | — | 373,722 | ||||||||||||
Less net income attributable to non-controlling interest | — | — | — | 56,429 | ||||||||||||
Net income attributable to the Company | — | — | — | 317,293 | ||||||||||||
Goodwill | 4,704,974 | 19,665 | — | 4,724,639 | ||||||||||||
Total assets | $ | 9,103,603 | $ | 220,582 | $ | — | $ | 9,324,185 | ||||||||
Year Ended December 31, 2013 | PBM | HCIT | Corporate | Total | ||||||||||||
Revenue | $ | 14,632,104 | $ | 147,990 | $ | — | $ | 14,780,094 | ||||||||
Cost of revenue | 13,583,941 | 70,508 | — | 13,654,449 | ||||||||||||
Gross profit | 1,048,163 | 77,482 | — | 1,125,645 | ||||||||||||
Corporate expenses | — | — | 723,503 | 723,503 | ||||||||||||
Income before income taxes | — | — | — | 402,142 | ||||||||||||
Income tax expense | — | — | — | 103,403 | ||||||||||||
Net income | — | — | — | 298,739 | ||||||||||||
Less net income attributable to non-controlling interest | — | — | — | 36,569 | ||||||||||||
Net income attributable to the Company | — | — | — | 262,170 | ||||||||||||
Goodwill | 4,700,610 | 19,665 | — | 4,720,275 | ||||||||||||
Total assets | $ | 7,634,033 | $ | 361,730 | $ | — | $ | 7,995,763 | ||||||||
Year Ended December 31, 2012 | PBM | HCIT | Corporate | Total | ||||||||||||
Revenue | $ | 9,785,084 | $ | 155,036 | $ | — | $ | 9,940,120 | ||||||||
Cost of revenue | 9,141,029 | 65,715 | — | 9,206,744 | ||||||||||||
Gross profit | 644,055 | 89,321 | — | 733,376 | ||||||||||||
Corporate expenses | — | — | 543,039 | 543,039 | ||||||||||||
Income before income taxes | — | — | — | 190,337 | ||||||||||||
Income tax expense | — | — | — | 69,316 | ||||||||||||
Net income | — | — | — | 121,021 | ||||||||||||
Less net income attributable to non-controlling interest | — | — | — | 4,363 | ||||||||||||
Net income attributable to the Company | — | — | — | 116,658 | ||||||||||||
Goodwill | 4,458,373 | 19,665 | — | 4,478,038 | ||||||||||||
Total assets | $ | 7,159,098 | $ | 226,029 | $ | 7,385,127 | ||||||||||
(b) Geographic Information | ||||||||||||||||
Revenues of the Company are primarily earned in the United States. The Company’s Canadian operations represented less than 0.2% of the Company’s consolidated revenue for the years ended December 31, 2014, 2013 and 2012. | ||||||||||||||||
(c) Major Customers | ||||||||||||||||
During the year ended December 31, 2014, one customer accounted for 34% of total revenue. During the year ended December 31, 2013, one customer accounted for 23% of total revenue. During the year ended December 31, 2012, one customer accounted for 31% of total revenue. In 2014, 2013 and 2012, this major customer was included in the PBM segment. | ||||||||||||||||
At December 31, 2014, one customer accounted for 17% of the total accounts receivable balance. At December 31, 2013, one customer accounted for 15% of the total accounts receivable balance. |
Financial_Instruments
Financial Instruments | 12 Months Ended | |
Dec. 31, 2014 | ||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Financial Instruments | Financial Instruments | |
(a) | Credit risk: | |
The Company is subject to concentrations of credit risk through cash and cash equivalents and accounts receivable. The Company monitors the credit risk and credit standing of counterparties on a regular basis. | ||
(b) | Interest rate risk: | |
To manage credit risks, the Company selects counterparties based on credit assessments, limits overall exposure to any single counterparty, and monitors the market position with each counterparty. The Company assesses interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. | ||
The Company used variable rate debt to assist in financing its Merger with Catalyst and acquisition of Restat. The Company is subject to interest rate risk related to the variable rate debt. When interest rates increase, interest expense could increase. Conversely, when interest rates decrease, interest expense could also decrease. | ||
In order to manage fluctuations in cash flows resulting from interest rate risk attributable to changes in the benchmark interest rates, the Company entered into 3-year interest rate swap agreements with a total notional amount of $500 million to fix the variable LIBOR rate on the Company's term loan to 0.52%, resulting in an effective rate of 2.14% after adding the 1.63% margin per the Credit Agreement. Under the interest rate swap, the Company receives LIBOR-based variable interest rate payments and makes fixed interest rate payments, thereby creating the equivalent to fixed-rate debt with respect to the notional amount of such swap agreements. The interest rate contract derivative instrument was designated as a cash flow hedge upon its inception in August 2012 and it expires in August 2015. Hedge effectiveness is assessed by the Company on a quarterly basis. Based on the Company's assessment as of December 31, 2014, the Company concluded that the hedge is highly effective and thus hedge accounting is appropriate. | ||
The Company assesses interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. The Company does not enter into derivative instruments for any purpose other than hedging identified exposures. That is, the Company does not speculate using derivative instruments and has not designated any instruments as fair value hedges or hedges of the foreign currency exposure of a net investment in foreign operations. | ||
(c) | Fair value: | |
The fair value of the interest rate swap liability as of December 31, 2014 was $1.1 million, and is included in other long-term liabilities on the consolidated balance sheet. Interest expense for the year ended December 31, 2014 includes $1.7 million of interest expense reclassified from other comprehensive income into current earnings. As of December 31, 2014, approximately $1.1 million of deferred expenses related to the derivative instruments accumulated in other comprehensive income is expected to be reclassified as interest expense during the next twelve months. This expectation is based on the expected timing of the occurrence of the hedged forecasted transactions. | ||
The estimated fair value of the Company’s financial instruments has been determined based on the Company’s assessment of available market information and appropriate valuation methodologies. However, these estimates may not necessarily be indicative of the amounts that the Company could realize in a current market exchange. See Note 19 for the Company’s disclosure on the fair value of derivative instruments. | ||
(d) | Foreign exchange risk: | |
The Company is subject to foreign exchange risk related to its operations in Canada. The Company does not enter into derivative instruments to mitigate this risk. Exposure to fluctuations in Canadian-dollar denominated transactions is partially offset by Canadian dollar-denominated assets and liabilities. |
Fair_Value
Fair Value | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value | Fair Value | |||||||||||||||
Fair value measurement guidance defines a hierarchy to prioritize the inputs to valuation techniques used to measure fair value into three broad levels, with Level 1 considered the most reliable. For assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheet, the table below categorizes fair value measurements across the three levels as of December 31, 2014 (in thousands): | ||||||||||||||||
Year Ended December 31, 2014 | Quoted Prices in Active Markets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||
Liabilities: | ||||||||||||||||
Derivative | $ | — | $ | 1,096 | $ | — | $ | 1,096 | ||||||||
Year Ended December 31, 2013 | Quoted Prices in Active Markets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||
Liabilities | ||||||||||||||||
Contingent purchase price consideration | $ | — | $ | — | $ | 19,954 | $ | 19,954 | ||||||||
Derivatives | $ | — | $ | 1,719 | $ | — | $ | 1,719 | ||||||||
Contingent purchase price consideration | ||||||||||||||||
The contingent purchase price consideration liability as of December 31, 2013 reflects the fair values of potential future payments related to the acquisition of Walgreens Health Initiatives (acquired by Catalyst in 2011). The potential future payments were contingent upon the acquired entity meeting or exceeding certain revenue, gross profit or client retention targets. The contingent consideration criteria was met and during 2014 this liability was settled. Accordingly, there is no outstanding balance as of December 31, 2014. There was no impact on the consolidated statement of operations as a result of this settlement. | ||||||||||||||||
As the fair value measurement for the contingent consideration was based on inputs not observed in the market, these measurements are classified as Level 3 measurements as defined by fair value measurements guidance. | ||||||||||||||||
Derivatives | ||||||||||||||||
Derivative liabilities relate to the interest rate swap (refer to Note 18 — Financial Instruments for further information), which had a fair value of $1.1 million as of December 31, 2014. As the fair value measurement for the derivative instrument is based on quoted prices from a financial institution, the measurement is classified as Level 2 measurement as defined by fair value measurements guidance. | ||||||||||||||||
During 2014 and 2013, there were no movements of fair value measurements between levels 1, 2 and 3. |
Supplemental_Information
Supplemental Information | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||
Supplemental Information | Supplemental Information | |||||||||||||||
Beginning Balance | Charged to Expense | Adjustments | Ending Balance | |||||||||||||
(In thousands) | ||||||||||||||||
Allowance for doubtful accounts | ||||||||||||||||
Year Ended December 31, 2014 | $ | 5,860 | $ | 2,259 | $ | (3,252 | ) | $ | 4,867 | |||||||
Year Ended December 31, 2013 | $ | 7,899 | $ | 1,187 | $ | (3,226 | ) | $ | 5,860 | |||||||
Year Ended December 31, 2012 | $ | 2,725 | $ | 3,328 | $ | 1,846 | $ | 7,899 | ||||||||
Beginning Balance | Charged to Expense | Adjustments | Ending Balance | |||||||||||||
(In thousands) | ||||||||||||||||
Valuation allowance for deferred tax assets | ||||||||||||||||
Year Ended December 31, 2014 | $ | 18,361 | $ | 12,671 | $ | (1,313 | ) | $ | 29,719 | |||||||
Year Ended December 31, 2013 | $ | 5,797 | $ | 8,596 | $ | 3,968 | $ | 18,361 | ||||||||
Year Ended December 31, 2012 | $ | 3,603 | $ | 2,194 | $ | — | $ | 5,797 | ||||||||
Condensed_Consolidating_Financ
Condensed Consolidating Financial Statements | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||||||||||||
Condensed Consolidating Financial Information | Condensed Consolidating Financial Information | |||||||||||||||||||
The Senior Notes issued by the Company are fully and unconditionally (subject to certain customary release provisions), guaranteed by certain of our wholly-owned subsidiaries. | ||||||||||||||||||||
The following condensed consolidating financial information has been prepared in accordance with the requirements for presentation of such information (statements of comprehensive income were omitted as all other comprehensive income is attributed to the issuer and was not material in any period presented). The condensed consolidating financial information presented below is not indicative of what the financial position, results of operations or cash flows would have been had each of the entities operated as an independent company during the period for various reasons, including, but not limited to, intercompany transactions and integration of systems. | ||||||||||||||||||||
The condensed consolidating financial information is presented separately for: | ||||||||||||||||||||
i. | Catamaran Corporation (the parent company), the issuer of the Senior Notes; | |||||||||||||||||||
ii. | Guarantor subsidiaries, on a combined basis | |||||||||||||||||||
iii. | Non-guarantor subsidiaries, on a combined basis; | |||||||||||||||||||
iv. | Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among Catamaran Corporation, the guarantor subsidiaries and the non-guarantor subsidiaries, (b) eliminate the investments in our subsidiaries and (c) record consolidating entries; and | |||||||||||||||||||
v. | Catamaran Corporation and subsidiaries on a consolidated basis. | |||||||||||||||||||
CATAMARAN CORPORATION | ||||||||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 333,469 | $ | 648,903 | $ | 29,580 | $ | — | $ | 1,011,952 | ||||||||||
Accounts receivable, net | 304 | 1,217,675 | 166,937 | (130,580 | ) | 1,254,336 | ||||||||||||||
Rebates receivable | 10,710 | 851,929 | 155,719 | (154,534 | ) | 863,824 | ||||||||||||||
Other current assets | 99 | 166,858 | 52,478 | — | 219,435 | |||||||||||||||
Intercompany receivable | — | 675,551 | — | (675,551 | ) | — | ||||||||||||||
Total current assets | 344,582 | 3,560,916 | 404,714 | (960,665 | ) | 3,349,547 | ||||||||||||||
Property and equipment, net | 110 | 154,413 | 55,504 | — | 210,027 | |||||||||||||||
Goodwill | — | 4,689,522 | 35,117 | — | 4,724,639 | |||||||||||||||
Other intangible assets, net | — | 963,096 | 5,103 | — | 968,199 | |||||||||||||||
Investment in subsidiaries | 6,375,214 | 266,096 | 71 | (6,641,381 | ) | — | ||||||||||||||
Other long-term assets | 13,874 | 42,876 | 22,084 | (7,061 | ) | 71,773 | ||||||||||||||
Total assets | $ | 6,733,780 | $ | 9,676,919 | $ | 522,593 | $ | (7,609,107 | ) | $ | 9,324,185 | |||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Accounts payable | $ | 4 | $ | 1,079,598 | $ | 3,150 | $ | (114,961 | ) | $ | 967,791 | |||||||||
Accrued expenses and other current liabilities | 10,580 | 304,309 | 18,846 | (6,545 | ) | 327,190 | ||||||||||||||
Rebates payable | — | 967,733 | 42,932 | (42,932 | ) | 967,733 | ||||||||||||||
Current portion - long-term debt | 81,250 | — | — | — | 81,250 | |||||||||||||||
Intercompany payable | 23,898 | — | 626,434 | (650,332 | ) | — | ||||||||||||||
Total current liabilities | 115,732 | 2,351,640 | 691,362 | (814,770 | ) | 2,343,964 | ||||||||||||||
Deferred income taxes | — | 255,777 | 1,548 | — | 257,325 | |||||||||||||||
Long-term debt | 1,344,973 | — | — | — | 1,344,973 | |||||||||||||||
Other long-term liabilities | 1,096 | 71,475 | 26,245 | — | 98,816 | |||||||||||||||
Total liabilities | 1,461,801 | 2,678,892 | 719,155 | (814,770 | ) | 4,045,078 | ||||||||||||||
Commitments and contingencies (Note 16) | ||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||
Total shareholders' equity | 5,271,979 | 6,998,027 | (197,807 | ) | (6,800,220 | ) | 5,271,979 | |||||||||||||
Non-controlling interest | — | — | 1,245 | 5,883 | 7,128 | |||||||||||||||
Total equity | 5,271,979 | 6,998,027 | (196,562 | ) | (6,794,337 | ) | 5,279,107 | |||||||||||||
Total liabilities and equity | $ | 6,733,780 | $ | 9,676,919 | $ | 522,593 | $ | (7,609,107 | ) | $ | 9,324,185 | |||||||||
CATAMARAN CORPORATION | ||||||||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 15,090 | $ | 362,647 | $ | 9,504 | $ | — | $ | 387,241 | ||||||||||
Accounts receivable, net | 294 | 889,267 | 120,869 | (50,844 | ) | 959,586 | ||||||||||||||
Rebates receivable | 35,776 | 270,179 | 80,030 | (80,030 | ) | 305,955 | ||||||||||||||
Other current assets | 107 | 149,233 | 35,553 | — | 184,893 | |||||||||||||||
Intercompany receivable | — | — | 130,377 | (130,377 | ) | — | ||||||||||||||
Total current assets | 51,267 | 1,671,326 | 376,333 | (261,251 | ) | 1,837,675 | ||||||||||||||
Property and equipment, net | 69 | 172,090 | 24,848 | — | 197,007 | |||||||||||||||
Goodwill | — | 4,685,158 | 35,117 | — | 4,720,275 | |||||||||||||||
Other intangible assets, net | — | 1,173,347 | 8,072 | — | 1,181,419 | |||||||||||||||
Intercompany loans receivable | — | 175,000 | — | (175,000 | ) | — | ||||||||||||||
Investment in subsidiaries | 6,137,281 | 202,292 | 71 | (6,339,644 | ) | — | ||||||||||||||
Other long-term assets | 15,675 | 24,117 | 21,818 | (2,223 | ) | 59,387 | ||||||||||||||
Total assets | $ | 6,204,292 | $ | 8,103,330 | $ | 466,259 | $ | (6,778,118 | ) | $ | 7,995,763 | |||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Accounts payable | $ | — | $ | 851,260 | $ | 8,315 | $ | (41,770 | ) | $ | 817,805 | |||||||||
Accrued expenses and other current liabilities | 3,047 | 228,801 | 22,252 | — | 254,100 | |||||||||||||||
Rebates payable | — | 356,266 | 31,332 | (31,333 | ) | 356,265 | ||||||||||||||
Current portion - long-term debt | 50,000 | — | — | — | 50,000 | |||||||||||||||
Intercompany payable | 25,673 | 3,885 | — | (29,558 | ) | — | ||||||||||||||
Total current liabilities | 78,720 | 1,440,212 | 61,899 | (102,661 | ) | 1,478,170 | ||||||||||||||
Deferred income taxes | — | 299,794 | 1,547 | — | 301,341 | |||||||||||||||
Long-term debt | 1,215,363 | — | — | — | 1,215,363 | |||||||||||||||
Intercompany loans payable | — | — | 175,000 | (175,000 | ) | — | ||||||||||||||
Other long-term liabilities | 1,719 | 65,812 | 21,860 | — | 89,391 | |||||||||||||||
Total liabilities | 1,295,802 | 1,805,818 | 260,306 | (277,661 | ) | 3,084,265 | ||||||||||||||
Commitments and contingencies (Note 16) | ||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||
Total shareholders' equity | 4,908,490 | 6,297,512 | 204,707 | (6,502,219 | ) | 4,908,490 | ||||||||||||||
Non-controlling interest | — | — | 1,246 | 1,762 | 3,008 | |||||||||||||||
Total equity | 4,908,490 | 6,297,512 | 205,953 | (6,500,457 | ) | 4,911,498 | ||||||||||||||
Total liabilities and equity | $ | 6,204,292 | $ | 8,103,330 | $ | 466,259 | $ | (6,778,118 | ) | $ | 7,995,763 | |||||||||
CATAMARAN CORPORATION | ||||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||
Revenue | $ | 40,141 | $ | 20,849,801 | $ | 3,028,412 | $ | (2,336,464 | ) | $ | 21,581,890 | |||||||||
Cost of revenue | 33,917 | 19,764,270 | 2,760,114 | (2,336,464 | ) | 20,221,837 | ||||||||||||||
Gross profit | 6,224 | 1,085,531 | 268,298 | — | 1,360,053 | |||||||||||||||
Expenses: | ||||||||||||||||||||
Selling, general and administrative | 2,931 | 418,400 | 97,020 | — | 518,351 | |||||||||||||||
Depreciation of property and equipment | 30 | 53,932 | 5,524 | — | 59,486 | |||||||||||||||
Amortization of intangible assets | — | 210,251 | 2,969 | — | 213,220 | |||||||||||||||
Total Expenses | 2,961 | 682,583 | 105,513 | — | 791,057 | |||||||||||||||
Operating income | 3,263 | 402,948 | 162,785 | — | 568,996 | |||||||||||||||
Interest and other expense, net | 51,904 | 3,007 | 6,177 | — | 61,088 | |||||||||||||||
Equity in (income) of subsidiaries | (365,934 | ) | (58,804 | ) | — | 424,738 | — | |||||||||||||
Income before income taxes | 317,293 | 458,745 | 156,608 | (424,738 | ) | 507,908 | ||||||||||||||
Income tax expense | — | 92,811 | 41,375 | — | 134,186 | |||||||||||||||
Net income | 317,293 | 365,934 | 115,233 | (424,738 | ) | 373,722 | ||||||||||||||
Less net income attributable to non-controlling interest | — | — | — | 56,429 | 56,429 | |||||||||||||||
Net income attributable to the Company | $ | 317,293 | $ | 365,934 | $ | 115,233 | $ | (481,167 | ) | $ | 317,293 | |||||||||
CATAMARAN CORPORATION | ||||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||||
Revenue | $ | 34,875 | $ | 13,682,194 | $ | 1,750,509 | $ | (687,484 | ) | $ | 14,780,094 | |||||||||
Cost of revenue | 30,217 | 12,756,828 | 1,554,888 | (687,484 | ) | 13,654,449 | ||||||||||||||
Gross profit | 4,658 | 925,366 | 195,621 | — | 1,125,645 | |||||||||||||||
Expenses: | ||||||||||||||||||||
Selling, general and administrative | 1,094 | 374,435 | 65,230 | — | 440,759 | |||||||||||||||
Depreciation of property and equipment | 29 | 35,005 | 2,892 | — | 37,926 | |||||||||||||||
Amortization of intangible assets | — | 200,065 | 3,127 | — | 203,192 | |||||||||||||||
Total Expenses | 1,123 | 609,505 | 71,249 | — | 681,877 | |||||||||||||||
Operating income | 3,535 | 315,861 | 124,372 | — | 443,768 | |||||||||||||||
Interest and other (income) expense, net | 36,700 | (344 | ) | 5,270 | — | 41,626 | ||||||||||||||
Equity in (income) of subsidiaries | (295,335 | ) | (51,924 | ) | — | 347,259 | — | |||||||||||||
Income before income taxes | 262,170 | 368,129 | 119,102 | (347,259 | ) | 402,142 | ||||||||||||||
Income tax expense | — | 72,794 | 30,609 | — | 103,403 | |||||||||||||||
Net income | 262,170 | 295,335 | 88,493 | (347,259 | ) | 298,739 | ||||||||||||||
Less net income attributable to non-controlling interest | — | — | — | 36,569 | 36,569 | |||||||||||||||
Net income attributable to the Company | $ | 262,170 | $ | 295,335 | $ | 88,493 | $ | (383,828 | ) | $ | 262,170 | |||||||||
CATAMARAN CORPORATION | ||||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
For the year ended December 31, 2012 | ||||||||||||||||||||
Revenue | $ | 15,343 | $ | 9,578,406 | $ | 911,107 | $ | (564,736 | ) | $ | 9,940,120 | |||||||||
Cost of revenue | 12,306 | 8,926,325 | 832,849 | (564,736 | ) | 9,206,744 | ||||||||||||||
Gross profit | 3,037 | 652,081 | 78,258 | — | 733,376 | |||||||||||||||
Expenses: | ||||||||||||||||||||
Selling, general and administrative | 4,688 | 322,843 | 41,961 | — | 369,492 | |||||||||||||||
Depreciation of property and equipment | 50 | 14,784 | 1,915 | — | 16,749 | |||||||||||||||
Amortization of intangible assets | — | 126,847 | 3,269 | — | 130,116 | |||||||||||||||
Total Expenses | 4,738 | 464,474 | 47,145 | — | 516,357 | |||||||||||||||
Operating income | (1,701 | ) | 187,607 | 31,113 | — | 217,019 | ||||||||||||||
Interest and other expense, net | 11,731 | 13,577 | 1,374 | — | 26,682 | |||||||||||||||
Equity in (income) of subsidiaries | (130,090 | ) | (14,551 | ) | — | 144,641 | — | |||||||||||||
Income before income taxes | 116,658 | 188,581 | 29,739 | (144,641 | ) | 190,337 | ||||||||||||||
Income tax expense | — | 58,491 | 10,825 | — | 69,316 | |||||||||||||||
Net income | 116,658 | 130,090 | 18,914 | (144,641 | ) | 121,021 | ||||||||||||||
Less net income attributable to non-controlling interest | — | — | — | 4,363 | 4,363 | |||||||||||||||
Net income attributable to the Company | $ | 116,658 | $ | 130,090 | $ | 18,914 | $ | (149,004 | ) | $ | 116,658 | |||||||||
CATAMARAN CORPORATION | ||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net cash provided (used) by operating activities | $ | 341,698 | $ | 612,430 | $ | (6,952 | ) | $ | (356,995 | ) | $ | 590,181 | ||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Acquisitions, net of cash acquired | — | (2,026 | ) | — | — | (2,026 | ) | |||||||||||||
Purchases of property and equipment | (71 | ) | (41,664 | ) | (36,343 | ) | — | (78,078 | ) | |||||||||||
Proceeds from restricted cash | — | 20,006 | — | — | 20,006 | |||||||||||||||
Net cash used in investing activities | (71 | ) | (23,684 | ) | (36,343 | ) | — | (60,098 | ) | |||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from issuance of debt | 492,500 | — | — | — | 492,500 | |||||||||||||||
Repayment of long-term debt | (337,500 | ) | — | — | — | (337,500 | ) | |||||||||||||
Payment of financing costs | (1,963 | ) | — | — | — | (1,963 | ) | |||||||||||||
Proceeds from exercise of options | 8,011 | (2,355 | ) | (17 | ) | — | 5,639 | |||||||||||||
Tax benefit on option exercises | — | 3,455 | 37 | — | 3,492 | |||||||||||||||
Proceeds from warrants exercised | 3,452 | — | — | — | 3,452 | |||||||||||||||
Payments of contingent consideration | — | (18,338 | ) | — | — | (18,338 | ) | |||||||||||||
Distributions to non-controlling interest | — | — | — | (52,309 | ) | (52,309 | ) | |||||||||||||
Net transactions with parent and affiliates | (208,486 | ) | (264,620 | ) | 63,802 | 409,304 | — | |||||||||||||
Proceeds from restricted stock | 20,700 | (20,249 | ) | (451 | ) | — | — | |||||||||||||
Other | — | (383 | ) | — | — | (383 | ) | |||||||||||||
Net cash provided (used) by financing activities | (23,286 | ) | (302,490 | ) | 63,371 | 356,995 | 94,590 | |||||||||||||
Effect of foreign exchange on cash balances | 38 | — | — | — | 38 | |||||||||||||||
Change in cash and cash equivalents | 318,379 | 286,256 | 20,076 | — | 624,711 | |||||||||||||||
Cash and cash equivalents, beginning of period | 15,090 | 362,647 | 9,504 | — | 387,241 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 333,469 | $ | 648,903 | $ | 29,580 | $ | — | $ | 1,011,952 | ||||||||||
CATAMARAN CORPORATION | ||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net cash provided (used) by operating activities | $ | 186,985 | $ | 616,168 | $ | (30,476 | ) | $ | (297,256 | ) | $ | 475,421 | ||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Acquisitions, net of cash acquired | — | (388,866 | ) | — | — | (388,866 | ) | |||||||||||||
Purchases of property and equipment | (11 | ) | (117,799 | ) | (11,032 | ) | — | (128,842 | ) | |||||||||||
Proceeds from restricted cash | — | 20,004 | — | — | 20,004 | |||||||||||||||
Net cash used by investing activities | (11 | ) | (486,661 | ) | (11,032 | ) | — | (497,704 | ) | |||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from issuance of debt | 450,000 | — | — | — | 450,000 | |||||||||||||||
Repayment of long-term debt | (362,500 | ) | — | — | — | (362,500 | ) | |||||||||||||
Payment of financing costs | (2,347 | ) | — | — | — | (2,347 | ) | |||||||||||||
Proceeds from exercise of options and warrants | 4,729 | (1,248 | ) | (2 | ) | — | 3,479 | |||||||||||||
Tax benefit on option exercises | — | 9,704 | 28 | — | 9,732 | |||||||||||||||
Payments of contingent consideration | — | (18,338 | ) | (4,865 | ) | — | (23,203 | ) | ||||||||||||
Distributions to non-controlling interest | — | — | — | (36,314 | ) | (36,314 | ) | |||||||||||||
Net transactions with parent and affiliates | (322,377 | ) | (49,103 | ) | 37,910 | 333,570 | — | |||||||||||||
Proceeds from restricted stock | 27,107 | (26,645 | ) | (462 | ) | — | — | |||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Net cash (used) provided by financing activities | (205,388 | ) | (85,630 | ) | 32,609 | 297,256 | 38,847 | |||||||||||||
Effect of foreign exchange on cash balances | (99 | ) | — | — | — | (99 | ) | |||||||||||||
Change in cash and cash equivalents | (18,513 | ) | 43,877 | (8,899 | ) | — | 16,465 | |||||||||||||
Cash and cash equivalents, beginning of period | 33,603 | 318,770 | 18,403 | — | 370,776 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 15,090 | $ | 362,647 | $ | 9,504 | $ | — | $ | 387,241 | ||||||||||
CATAMARAN CORPORATION | ||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
For the year ended December 31, 2012 | ||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net cash provided (used) by operating activities | $ | (27,257 | ) | $ | 430,091 | $ | (18,449 | ) | $ | (134,652 | ) | $ | 249,733 | |||||||
Cash flows from investing activities: | ||||||||||||||||||||
Acquisitions, net of cash acquired | 3,644,364 | (5,210,069 | ) | — | — | (1,565,705 | ) | |||||||||||||
Purchases of property and equipment | (66 | ) | (30,549 | ) | (9,621 | ) | (40,236 | ) | ||||||||||||
Net cash provided by (used in) investing activities | 3,644,298 | (5,240,618 | ) | (9,621 | ) | — | (1,605,941 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from issuance of debt | 1,475,448 | — | — | — | 1,475,448 | |||||||||||||||
Repayment of long-term debt | (616,993 | ) | — | — | — | (616,993 | ) | |||||||||||||
Proceeds from public offering, net of issuance costs | 519,075 | — | — | — | 519,075 | |||||||||||||||
Payment of financing costs | (18,806 | ) | — | — | — | (18,806 | ) | |||||||||||||
Proceeds from exercise of options | 11,016 | (3,253 | ) | — | — | 7,763 | ||||||||||||||
Tax benefit on option exercises | — | 19,206 | 191 | — | 19,397 | |||||||||||||||
Net transactions with parent and affiliates | (5,093,214 | ) | 4,913,963 | 44,599 | 134,652 | — | ||||||||||||||
Proceeds from restricted stock | 17,903 | (17,651 | ) | (252 | ) | — | — | |||||||||||||
Other | (268 | ) | — | — | — | (268 | ) | |||||||||||||
Net cash (used) provided by financing activities | (3,705,839 | ) | 4,912,265 | 44,538 | 134,652 | 1,385,616 | ||||||||||||||
Effect of foreign exchange on cash balances | (14 | ) | — | — | — | (14 | ) | |||||||||||||
Change in cash and cash equivalents | (88,812 | ) | 101,738 | 16,468 | — | 29,394 | ||||||||||||||
Cash and cash equivalents, beginning of period | 122,415 | 217,032 | 1,935 | — | 341,382 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 33,603 | $ | 318,770 | $ | 18,403 | $ | — | $ | 370,776 | ||||||||||
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation: |
The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include its wholly-owned subsidiaries as well as non-controlled entities. Amounts in the consolidated financial statements are expressed in U.S. dollars, except where otherwise indicated. Within the financial statements and tables presented, the totals of certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain reclassifications have been made to conform the prior years’ consolidated financial statements to the current year’s presentation. | |
Principles of consolidation | Principles of Consolidation: |
The consolidated financial statements include the accounts of the Company and its controlled subsidiaries, which are generally wholly owned. All significant inter-company transactions and balances have been eliminated in consolidation. Any non-controlling interest in the equity of a subsidiary is reported in equity in the Consolidated Statements of Shareholders' Equity. Net income attributable to the non-controlling interest is subtracted from Net Income to arrive at Net Income Attributable to the Company in the Consolidated Statements of Operations. | |
Use of estimates | Use of estimates: |
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant items subject to such estimates and assumptions include revenue recognition, purchase price allocation and contingent consideration in connection with acquisitions, valuation of property and equipment, valuation of intangible assets acquired and related amortization periods, impairment of goodwill, contingencies, valuation allowances for receivables and income taxes. Actual results could differ from those estimates. | |
Revenue recognition | Revenue recognition: |
The Company's revenue is primarily derived from prescription drug sales. The Company has a small portion of its revenue that is derived from transaction processing and other services related to its HCIT products. | |
The Company recognizes revenue when all of the following conditions are satisfied: (i) there is persuasive evidence of an arrangement; (ii) the service or product has been provided to the customer and no uncertainties exist surrounding product acceptance; (iii) the amount of fees to be paid by the customer is fixed or determinable; and (iv) the collection of fees is reasonably assured. | |
When the Company enters into arrangements with multiple deliverables, exclusive of arrangements with software deliverables, it applies the Financial Accounting Standards Board's guidance for revenue arrangements with multiple deliverables and evaluates each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (i) whether the delivered item has value to the customer on a stand-alone basis, and (ii) if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. Revenue is allocated to each unit of accounting or element based on relative selling prices. The Company determines relative selling prices by using either (i) vendor specific objective evidence (“VSOE”) if it exists; or (ii) third-party evidence of selling price ("TPE"). When neither VSOE nor TPE of selling price exists for a deliverable, the Company uses its best estimate of the selling price for that deliverable. | |
After determining which deliverables represent a separate unit of accounting, each unit is then accounted for under the applicable revenue recognition guidance. In cases where elements cannot be treated as separate units of accounting, the elements are combined into a single unit of accounting for revenue recognition purposes. | |
When the Company enters into arrangements with multiple deliverables involving software, the Company applies the accounting guidance for software. The entire arrangement fee is allocated to each element in the arrangement based on the respective VSOE of fair value of each element. | |
When an arrangement includes software and non-software deliverables, the Company allocates the arrangement consideration to the non-software deliverables, and to the software deliverables as a group, based on the relative selling prices of all deliverables in the arrangement. When a tangible product contains software that is not essential to the product’s functionality, that nonessential software and any other deliverables within the arrangement that relate to that nonessential software are accounted for under accounting guidance for software. The non-software deliverables sold by the Company typically do not include software deliverables that are considered essential to the functionality of a tangible product. | |
Revenue is recognized for specific types of transactions as follows: | |
PBM revenue: The Company’s PBM revenue is primarily derived from sales of prescription drugs, together with any associated administrative fees, to customers and participants through the Company’s nationwide network of pharmacies. Revenue related to the sales of prescription drugs by the Company’s nationwide network of pharmacies is recognized when the claims are adjudicated. Claims are adjudicated at the point-of-sale using the Company’s on-line processing system. The Company records an offsetting reduction to revenue for any rebates earned from pharmaceutical manufacturers and third-party administrators that are payable to the Company’s customers. | |
For transactions at the Company's participating pharmacies, under the terms of the customer contracts, the pharmacy is solely obligated to collect the co-payments from the participants. The Company does not assume liability for participant co-payments in non-Company owned pharmacy transactions, and therefore does not include participant co-payments in revenue or cost of revenue. If these amounts were included in the Company’s operating results, its operating income and net income would not have been affected. | |
The Company evaluates customer contracts to determine whether the Company acts as a principal or as an agent in the fulfillment of prescriptions through its participating pharmacy network. The Company acts as a principal in certain of its transactions with customers and, in these cases, revenues are recognized at the prescription price (ingredient cost plus dispensing fee) negotiated with customers, plus the Company’s administrative fees (“gross reporting”). Gross reporting is appropriate when the Company (i) has separate contractual relationships with customers and with pharmacies, (ii) is responsible to validate and manage a claim through its claims adjudication process, (iii) commits to set prescription prices for the pharmacy, (iv) manages the overall prescription drug plan relationship with the patients, who are members of customers’ plans, and (v) has credit risk for the amount due from the customer. | |
Revenue for the sale of prescription drugs dispensed at the Company's mail and specialty pharmacies, including amounts due from third-party payors and member co-payments, is recorded when the prescription drugs are shipped. | |
HCIT revenue: HCIT revenues are generated primarily from transaction processing and related services. The Company recognizes revenue for its HCIT products and services at the time the transaction is processed, or at the time the service is provided. If multiple elements are required to be delivered under a customer contract, the Company follows the guidance described above in relation to multiple elements. | |
Cost of revenue | Cost of revenue: |
The Company’s cost of revenue includes the cost of pharmaceuticals dispensed, either directly dispensed at its mail and specialty pharmacy locations, or indirectly through its nationwide network of participating pharmacies. Cost of revenue is reduced for rebates earned from pharmaceutical manufacturers and third-party administrators. Cost of revenue also includes the cost of personnel to support the Company’s transaction processing services, system sales, maintenance, and professional services. In addition, the Company includes in cost of revenue an amount of depreciation expense that is related to property and equipment used to provide services to customers. | |
Cash and cash equivalents | Cash and cash equivalents: |
The Company considers cash on hand, deposits in banks, money market funds, and bank term deposits with original maturities of ninety days or less as cash and cash equivalents. The amounts presented in the consolidated balance sheets approximate fair value of cash and cash equivalents. These assets are deemed Level 1 securities in the fair value hierarchy. | |
Fair value measurements | Fair value measurements: |
The Company applies the fair value accounting guidance for measuring its financial and non-financial assets and liabilities. Currently, none of the Company’s non-financial assets are required to be carried at fair value. The Company would apply the fair value accounting guidance to non-financial assets and liabilities in the event that a non-financial asset or liability was impaired, or, if non-financial assets and liabilities were purchased in a business acquisition. | |
The fair value of contingent consideration is based upon probability-weighted discounted cash flow models, utilizing the Company's expectation of the amounts to be paid in the future to settle the contingent purchase price. The inputs utilized in calculating the fair value of the contingent purchase price liabilities are not observable in the marketplace. The fair value of the Company’s interest rate contracts is based upon observable market-based inputs that reflect the current value of the difference between the fixed rate payments the Company will make to the counter party, and the future variable rate receipts from the counterparty. | |
Other assets and liabilities held by the Company deemed as financial instruments and required to be carried at fair value include cash and cash equivalents, accounts receivable, rebates receivable, accounts payable, accrued liabilities (current portion), pharmacy benefit management rebates payable and pharmacy benefit claim payments payable. The estimated fair values of these financial instruments approximate their carrying amounts due to the short-term nature of their maturities. | |
Inventory | Inventory: |
Inventory consists primarily of prescription drugs held for resale and is carried at the lower of cost or net realizable value. Inventory costs are calculated using the first-in, first-out method and the weighted-average method. | |
Property and equipment | Property and equipment: |
Property and equipment (“P&E”) are stated at cost less accumulated depreciation. Depreciation is generally calculated over the expected estimated useful lives of the assets. Assets are depreciated in the following manner: 1) Furniture and equipment is depreciated using the straight- line method based on a useful life of five years, 2) Computer equipment and software assets are depreciated using a straight-line method and a useful life of three to five years, and 3) Leasehold improvements are depreciated on a straight-line basis over the shorter of the asset’s life or the lease term. | |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts: |
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. In assessing the valuation of the allowance for doubtful accounts, management reviews the collectability of accounts receivable in aggregate and on an individual account-basis. Individual customer events such as subsequent collections, discussions with management of the debtor companies, or other activities are used by management as factors in concluding whether to increase or decrease the calculated allowance. Any increase or decrease to the allowance is recognized in the statements of operations as bad debt expense within selling, general and administrative expense. | |
Impairment of long-lived assets | Impairment of long-lived assets: |
Long-lived assets or asset groups held and used, including P&E and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances that could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; the accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and a current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its previously estimated useful life. Recoverability is assessed based on the carrying amount of the asset and the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset or asset group. An impairment loss is recognized when the carrying amount is not recoverable and exceeds the fair value of the asset or asset group. The impairment loss is measured as the amount by which the carrying amount of undiscounted cash flows exceeds fair value. During each of the years ended December 31, 2014, 2013 and 2012, no events or circumstances occurred that indicated that the carrying amounts of the long-lived assets may not be recoverable. | |
While no asset was deemed impaired during 2012, the Company assessed whether one of its assets was recoverable due to a triggering event. In October 2012, the Company launched its new specialty brand BriovaRx. The Company previously acquired MedfusionRx, a specialty pharmacy, and recorded a trade name intangible asset related to the acquisition. As a result of the re-branding of the specialty business, the Company concluded that a triggering event had occurred that could impair the value of the trade name. While the asset was not deemed impaired, the Company concluded that the useful life of the trade name intangible asset should be reduced since the name would no longer be used by the Company, which was the asset's highest and best use. Before adjusting the useful life of the asset, the Company considered whether the asset had any value as a defensible asset which would extend its useful life. The Company determined that the MedfusionRx trade name had an insignificant value as a defensible asset, and the asset's useful life should be shortened due to the name change of the business. | |
Goodwill | Goodwill: |
Goodwill is the residual amount that results when the purchase price of an acquired business exceeds the sum of the amounts allocated to the identifiable assets acquired, less liabilities assumed, based on their fair values. Goodwill is allocated to the Company’s reporting unit that is expected to benefit from the business combination as of the date of the business combination. As of December 31, 2014, the amount of goodwill carried at the PBM and HCIT segments was $4.7 billion and $19.7 million, respectively. | |
Goodwill is not amortized, but rather, is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company completes its goodwill impairment test annually as of October 31. Circumstances that could trigger an interim impairment test include: a significant adverse change in the business climate or legal factors; an adverse action or assessment by a regulator; unanticipated competition; the loss of key personnel; a change in reporting units; the likelihood that a reporting unit or significant portion of a reporting unit will be sold or otherwise disposed of; the results of testing for recoverability of a significant asset group within a reporting unit; and the recognition of a goodwill impairment loss in the financial statements of a subsidiary that is a component of a reporting unit. | |
The Company performed its goodwill impairment assessment in 2014 and there was no indication of an impairment to the Company's goodwill balances. In addition, an impairment in the near future is not considered reasonably likely. The Company previously completed impairment tests in 2013 and 2012 and concluded no impairments existed. | |
The qualitative assessment performed by the Company considered the current operating results of the Company's reporting units, future expectations of each reporting unit, industry and competitor performance and other recent events that may impact each reporting unit. The Company then assessed whether, in light of the evidence gathered, it was more likely than not that a reporting unit's fair value was less than its carrying amount. As noted above, the Company concluded that it was not more likely than not that a reporting unit's fair value was less than its carrying value. If in the future the Company's qualitative assessment indicates that a reporting unit's fair value may be below its carrying value, the Company would prepare a quantitative test to determine whether an impairment existed, and the amount of such impairment. | |
The quantitative impairment test is carried out in two steps for each of the Company's reporting units. In the first step, the carrying amount of the reporting unit is compared with its fair value. When the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not to be impaired and the second step of the impairment test is unnecessary. The second step is carried out when the carrying amount of a reporting unit exceeds its fair value, in which case the implied fair value of the reporting unit’s goodwill is compared with its carrying amount to measure the amount of the impairment loss, if any. The implied fair value of goodwill is determined in the same manner as the value of goodwill is determined in a business combination using the fair value of the reporting unit as if it was the purchase price. When the carrying amount of reporting unit goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess and is presented as a separate line item in the consolidated statements of operations. | |
Intangible assets | Intangible assets: |
The cost of a group of intangible assets acquired in a transaction, including those acquired in a business combination that meet the specified criteria for recognition apart from goodwill, is recorded to the individual assets acquired based on their fair values. Intangible assets acquired individually or as part of a group of other assets are initially recognized and measured at cost. | |
Intangible assets with finite useful lives are amortized over their estimated useful lives on either a straight-line basis or in proportion to the economic benefits expected to be consumed. Customer relationships acquired with the acquisitions are amortized based on projected cash flows associated with existing customers at the acquisition date and typically have a life of three to ten years. The Company's remaining intangible assets are amortized on a straight-line basis over one to fifteen years. | |
Rebates | Rebates: |
The Company administers a rebate program through which it receives rebates and administrative fees from pharmaceutical manufacturers and third-party administrators that are shared with a majority of the Company’s customers. The rebates earned for the administration of the program are recorded as a reduction of cost of revenue and the portion of the rebate payable to customers, if applicable, is treated as a reduction of revenue. Rebates receivable include billed and unbilled PBM receivables from pharmaceutical manufacturers and third-party administrators. The Company records the gross rebate receivable and the related payable to the customers based on estimates, which are subject to final settlement due to the required validation of claims data submitted to the pharmaceutical manufacturers and third-party administrators, as well as contingent items contained in the total calculation for rebates earned. The estimates are based upon claims submitted and the Company’s rebate contracts, and are adjusted as additional information becomes available. Upon billing the pharmaceutical manufacturer or third-party administrator, any difference between the Company’s estimate and the actual amount of the rebate receivable is recorded to cost of revenue, net of the estimated impact to the Company’s customers. The Company generally pays rebates to its customers on a quarterly basis, or as agreed upon with its customers. There are certain instances where the Company pays rebates to its customers on a more accelerated basis. | |
Stock-based compensation | Stock-based compensation: |
For stock-based awards issued to employees and directors, compensation cost related to those awards is measured based on the fair value of the awards on the date of the grant. For stock options, the fair value is determined by using the Black-Scholes-Merton option-pricing model. The compensation cost of the awards expected to vest is recognized on a straight-line basis over the service period as compensation expense and additional paid-in capital. In addition, the Company estimates forfeitures as part of the initial measure of the grant date fair value of the award. | |
The cumulative compensation cost is treated as a temporary difference for stock-based awards that are deductible for tax purposes. If a deduction reported on a tax return exceeds the cumulative compensation cost for those awards, any resulting realized tax benefit that exceeds the previously recognized deferred tax asset for those awards (the excess tax benefit) is recognized as additional paid-in capital. If the amount deductible is less than the cumulative compensation cost recognized for financial reporting purposes, the write-off of a deferred tax asset related to that deficiency, net of the related valuation allowance, if any, is first offset to the extent of any remaining additional paid-in capital from excess tax benefits from previous awards with the remainder recognized in the statement of operations. | |
Derivatives | Derivatives: |
The Company accounts for derivative instruments pursuant to derivative and hedge accounting guidance. The guidance requires that all derivative instruments are recorded on the balance sheet at their respective fair values. The Company records the change in the fair value of its derivative instruments deemed as cash flow hedges through other comprehensive income in each reporting period. | |
Foreign currency | Foreign currency: |
The Company’s functional currency and reporting currency is the U.S. dollar. Monetary items denominated in foreign currency are translated to U.S. dollars at exchange rates in effect at the balance sheet date and non-monetary items are translated at rates in effect when the assets were acquired or obligations incurred. Revenue and expenses are translated at rates in effect at the time of the transactions. Foreign exchange gains and losses are included in the consolidated statements of operations as "Interest and other expense, net." | |
Earnings per share | Earnings per share: |
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income by the weighted-average number of common shares adjusted for the dilutive effect of outstanding stock-based awards. The dilutive effect is calculated by assuming that the proceeds from the exercise of in-the-money stock options were used to acquire shares of common stock at the average market price for the period. | |
Income taxes | Income taxes: |
The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment. | |
Future tax benefits resulting from historical net operating losses (“NOLs”) and deductible temporary differences are recognized in accordance with tax accounting guidance. In assessing the realizability of the related deferred income tax assets (“DTAs”), management considers whether it is more likely than not that some portion or all of the DTAs will be realized. The ultimate realization of DTAs is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible, in addition to management’s tax planning strategies. Management considers projected future taxable income, uncertainties related to the industry in which the Company operates, tax planning strategies, historical taxable income, and a comparison of actual levels of taxable income with pre-tax book income in making this assessment. Valuation allowances are established for DTAs that are not considered more likely than not to be realized. The amount of this valuation allowance is subject to adjustment by the Company in future periods based upon its assessment of evidence supporting the degree of probability that DTAs will be realized. | |
The Company recognizes liabilities for uncertain tax positions, although the Company believes its tax position is supportable, when the Company believes that the tax positions may not be fully sustained upon review by tax authorities. Benefits from uncertain tax positions are recognized in the consolidated financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority having full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon settlement. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. | |
Non-refundable investment tax credits for Scientific Research and Experimental Development (“SRED”) activities are recorded when the Company has reasonable assurance that the credit will be realized. Management has made a number of estimates and assumptions in determining the expenditures eligible for the investment tax credit claim. It is possible that the allowable amount of the investment tax credit claim could be materially different from the recorded amount upon assessment by the Canada Revenue Agency. Non-refundable investment tax credits are recorded as a reduction of income tax expense on the consolidated statements of operations. | |
Recent accounting pronouncements | Recent accounting standards implemented are summarized below: |
In July 2013, the FASB issued authoritative guidance containing changes to the presentation of an unrecognized tax benefit when a loss or credit carryforward exists. The new standard requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that would apply in the settlement of the uncertain tax positions. The Company adopted this standard on January 1, 2014; however, the implementation of the standard did not have a significant impact on its financial results or in the presentation and disclosure of its financial statements. | |
In February 2013, the FASB issued an update on the reporting of amounts reclassified from accumulated other comprehensive income. An entity is required to present either parenthetically on the face of the financial statements or in the notes, significant amounts reclassified from each component of accumulated other comprehensive income and the income statement line items affected by the reclassification. However, an entity is not required to show the income statement line item affected for certain components that are not required to be reclassified in their entirety to net income, such as amounts amortized into net periodic pension cost. The standard was effective prospectively for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2012. The Company adopted this standard on January 1, 2013; however, the implementation of the amendments did not have a significant impact on its financial results or in the presentation and disclosure of its financial statements. | |
No other new accounting standards have been adopted during the year ended December 31, 2014. | |
(c) Recent accounting standards issued and not yet adopted are summarized below: | |
In August 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. Adoption of the standard is not expected to have a significant impact on the Company's financial results or in the presentation and disclosure of its financial statements. | |
In June 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-12, Accounting for Share-Based Payments, when the terms of an award provide that a performance target could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target shall not be reflected in estimating the fair value of the award at the grant date. The amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015 for all entities, however earlier adoption is permitted. Adoption of the standard is not expected to have a significant impact on the Company's financial results or in the presentation and disclosure of its financial statements. | |
On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. | |
On April 10, 2014, the FASB issued (ASU) No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. The standard is required to be adopted by the Company in annual periods beginning on or after December 15, 2014, and interim periods within those annual periods. However, all entities may early adopt the guidance for new disposals (or new classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. Adoption of the standard is not expected to have a significant impact on the Company's financial results or in the presentation and disclosure of its financial statements. | |
No other new standards have been issued during the year ended December 31, 2014 that the Company assessed to have a significant impact on its financial results or in the presentation and disclosure of its financial statements. |
Business_Combinations_Tables
Business Combinations (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Restat | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Schedule of fair values assigned to assets acquired and liabilities assumed at the acquisition date | The following summarizes the fair values assigned to the assets acquired and liabilities assumed at the acquisition date (in thousands): | |||||||||||||||
Initial Amounts Recognized at Acquisition Date (a) | Measurement Period Adjustments (b) | Final Amounts Recognized at Acquisition Date | ||||||||||||||
Accounts receivable | $ | 13,842 | $ | — | $ | 13,842 | ||||||||||
Rebates receivable | 6,635 | (254 | ) | 6,381 | ||||||||||||
Other current assets | 383 | — | 383 | |||||||||||||
Total current assets | 20,860 | (254 | ) | 20,606 | ||||||||||||
Property and equipment | 1,263 | — | 1,263 | |||||||||||||
Intangible assets | 182,720 | — | 182,720 | |||||||||||||
Goodwill | 223,474 | 4,364 | 227,838 | |||||||||||||
Total assets acquired | 428,317 | 4,110 | 432,427 | |||||||||||||
Accounts payable | 22,370 | — | 22,370 | |||||||||||||
Rebates payable | 16,106 | — | 16,106 | |||||||||||||
Accrued liabilities | 7,231 | — | 7,231 | |||||||||||||
Other long-term liabilities | — | 2,084 | 2,084 | |||||||||||||
Total liabilities assumed | 45,707 | 2,084 | 47,791 | |||||||||||||
Net assets acquired | $ | 382,610 | $ | 2,026 | $ | 384,636 | ||||||||||
(a) As previously reported in the Company's Form 10-K for the period ended December 31, 2013. | ||||||||||||||||
(b) These measurement period adjustments were recorded from January 1, 2014 through June 30, 2014 to reflect an additional $2.0 million paid to former Restat owners in connection with post-closing working capital adjustment as well as changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date. | ||||||||||||||||
Schedule of estimated fair values and useful lives of intangible assets acquired | The estimated fair values and useful lives of intangible assets acquired are as follows (dollars in thousands): | |||||||||||||||
Fair Value | Useful Life | |||||||||||||||
Customer relationships - PBM | $ | 143,200 | 10 years | |||||||||||||
Customer relationships - cash card | 35,500 | 3 years | ||||||||||||||
Trademarks/Trade names | 1,000 | 1 year | ||||||||||||||
Non-compete agreements | 3,020 | 5 years | ||||||||||||||
Total | $ | 182,720 | ||||||||||||||
Unaudited pro forma results of operations | Unaudited pro forma results of operations are as follows (dollars in thousands, except share and per share amounts): | |||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||
Revenue | $ | 15,344,028 | ||||||||||||||
Gross profit | $ | 1,187,714 | ||||||||||||||
Net income | $ | 270,024 | ||||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 1.31 | ||||||||||||||
Diluted | $ | 1.31 | ||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 206,013,876 | |||||||||||||||
Diluted | 206,719,526 | |||||||||||||||
Catalyst | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Schedule of fair values assigned to assets acquired and liabilities assumed at the acquisition date | The following summarizes the fair values assigned to the assets acquired and liabilities assumed at the acquisition date (in thousands): | |||||||||||||||
Initial Amounts Recognized at Acquisition Date (a) | 2012 Measurement Period Adjustments (b) | 2013 Measurement Period Adjustments (c) | Final Amounts Recognized at Acquisition Date | |||||||||||||
Cash and cash equivalents | $ | 93,775 | $ | (315 | ) | $ | — | $ | 93,460 | |||||||
Other current assets | 695,888 | 5,202 | 2,411 | 703,501 | ||||||||||||
Total current assets | 789,663 | 4,887 | 2,411 | 796,961 | ||||||||||||
Goodwill | 4,010,235 | 8,492 | 16,141 | 4,034,868 | ||||||||||||
Customer relationships intangible | 1,184,800 | — | — | 1,184,800 | ||||||||||||
Other long-term assets | 87,174 | 1,547 | 8 | 88,729 | ||||||||||||
Total assets acquired | 6,071,872 | 14,926 | 18,560 | 6,105,358 | ||||||||||||
Accounts payable | 338,819 | — | 5 | 338,824 | ||||||||||||
Pharmacy benefit management rebates payable | 176,202 | 2,935 | (1,522 | ) | 177,615 | |||||||||||
Accrued expenses and other current liabilities | 187,851 | 1,348 | 5,473 | 194,672 | ||||||||||||
Long-term debt | 311,994 | — | — | 311,994 | ||||||||||||
Other long-term liabilities | 385,375 | 10,643 | 14,604 | 410,622 | ||||||||||||
Total liabilities assumed | 1,400,241 | 14,926 | 18,560 | 1,433,727 | ||||||||||||
Non-controlling interest | (1,610 | ) | — | — | (1,610 | ) | ||||||||||
Net assets acquired | $ | 4,673,241 | $ | — | $ | — | $ | 4,673,241 | ||||||||
(a) As previously reported in the Company's Form 10-Q for the period ended September 30, 2012. | ||||||||||||||||
(b) These measurement period adjustments from the acquisition date through December 31, 2012 were recorded to reflect changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date. | ||||||||||||||||
(c) These represent measurement period adjustments during 2013 through the end of the measurement period and were recorded to reflect changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date. | ||||||||||||||||
Schedule of total purchase price | The purchase price of the acquired Catalyst operations was comprised of the following (in thousands): | |||||||||||||||
Amount | ||||||||||||||||
Cash paid to Catalyst shareholders | $ | 1,415,276 | ||||||||||||||
Fair value of common shares issued (a) | 3,238,141 | |||||||||||||||
Fair value of warrants and stock options issued (b) | 19,824 | |||||||||||||||
Total purchase price | $ | 4,673,241 | ||||||||||||||
(a) | Valued based on the number of outstanding shares issued in the Merger multiplied by the closing market price of Catamaran shares on July 2, 2012. | |||||||||||||||
(b) | The Black-Scholes option pricing model was used to calculate the fair value of the replacement warrants and stock options issued. | |||||||||||||||
HealthTran | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Schedule of fair values assigned to assets acquired and liabilities assumed at the acquisition date | The following summarizes the fair values assigned to the assets acquired and liabilities assumed at the acquisition date and related measurement period adjustments (in thousands): | |||||||||||||||
Initial Amounts Recognized at Acquisition Date (a) | Measurement Period Adjustments (b) | Final Amounts Recognized at Acquisition Date | ||||||||||||||
Current assets | $ | 30,654 | $ | 245 | $ | 30,899 | ||||||||||
Property and equipment | 2,787 | — | 2,787 | |||||||||||||
Goodwill | 173,642 | 833 | 174,475 | |||||||||||||
Intangible assets | 77,130 | (2,600 | ) | 74,530 | ||||||||||||
Total assets acquired | 284,213 | (1,522 | ) | 282,691 | ||||||||||||
Current liabilities | 36,784 | (496 | ) | 36,288 | ||||||||||||
Total liabilities assumed | 36,784 | (496 | ) | 36,288 | ||||||||||||
Net assets acquired | $ | 247,429 | $ | (1,026 | ) | $ | 246,403 | |||||||||
(a) As previously reported in the Company's Form 10-Q for the period ended March 31, 2012. | ||||||||||||||||
(b) These measurement period adjustments were recorded to reflect an additional $1.0 million paid to the former HealthTran owners for the working capital reconciliation and changes in the estimated fair values of the associated assets acquired and liabilities assumed based on factors existing as of the acquisition date. | ||||||||||||||||
Schedule of estimated fair values and useful lives of intangible assets acquired | The estimated fair values and useful lives of intangible assets acquired are as follows (dollars in thousands): | |||||||||||||||
Fair Value | Useful Life | |||||||||||||||
Trademarks/Trade names | $ | 1,750 | 6 months | |||||||||||||
Customer relationships | 69,800 | 4-9 years | ||||||||||||||
Non-compete agreements | 2,600 | 5 years | ||||||||||||||
License | 380 | 3 years | ||||||||||||||
Total | $ | 74,530 | ||||||||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||
Schedule of net property and equipment | Net property and equipment was made up of the following at December 31, 2014 and 2013 (in thousands): | |||||||||||
December 31, 2014 | Cost | Accumulated | Net Book Value | |||||||||
Depreciation | ||||||||||||
Furniture and equipment | $ | 39,690 | $ | (13,577 | ) | $ | 26,113 | |||||
Computer equipment and software | 208,628 | (107,565 | ) | 101,063 | ||||||||
Leasehold improvements | 96,784 | (23,078 | ) | 73,706 | ||||||||
Construction in progress | 9,145 | — | 9,145 | |||||||||
$ | 354,247 | $ | (144,220 | ) | $ | 210,027 | ||||||
December 31, 2013 | Cost | Accumulated | Net Book Value | |||||||||
Depreciation | ||||||||||||
Furniture and equipment | $ | 30,374 | $ | (10,815 | ) | $ | 19,559 | |||||
Computer equipment and software | 168,463 | (77,880 | ) | 90,583 | ||||||||
Leasehold improvements | 91,294 | (15,163 | ) | 76,131 | ||||||||
Construction in progress | 10,734 | — | 10,734 | |||||||||
$ | 300,865 | $ | (103,858 | ) | $ | 197,007 | ||||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||
Changes in carrying amounts of goodwill by reportable segments | The changes in the carrying amounts of goodwill by reportable segment for the years ended December 31, 2014 and 2013 are as follows (in thousands): | |||||||||||||||||||||||
PBM | HCIT | Total | ||||||||||||||||||||||
Balance at December 31, 2012 | $ | 4,458,373 | $ | 19,665 | $ | 4,478,038 | ||||||||||||||||||
Acquisitions (1) | 225,761 | — | 225,761 | |||||||||||||||||||||
Measurement period adjustments (2) | 16,476 | — | 16,476 | |||||||||||||||||||||
Balance at December 31, 2013 | 4,700,610 | 19,665 | 4,720,275 | |||||||||||||||||||||
Acquisitions (3) | 2,026 | — | 2,026 | |||||||||||||||||||||
Measurement period adjustments (4) | 2,338 | — | 2,338 | |||||||||||||||||||||
Balance at December 31, 2014 | $ | 4,704,974 | $ | 19,665 | $ | 4,724,639 | ||||||||||||||||||
-1 | Initial goodwill recorded in connection with the acquisition of Restat in October 2013 and another insignificant acquisition in 2013. | |||||||||||||||||||||||
-2 | Adjustments to the fair value of assets acquired and liabilities assumed for recent acquisitions during the measurement period. The measurement period adjustments were not recast to the 2012 consolidated financial statements as they were not deemed material. | |||||||||||||||||||||||
-3 | Represents adjustments to purchase price for the Restat acquisition, including settlement of working capital adjustment. | |||||||||||||||||||||||
-4 | Represents adjustments in connection with the post-closing working capital adjustment as well as changes in the estimated fair values of the associated assets acquired and liabilities assumed for Restat acquisition during the measurement period. The measurement period adjustments were not recast to the 2013 consolidated financial statements as they were not deemed material. | |||||||||||||||||||||||
Components of intangible assets | Definite-lived intangible assets are amortized over the useful lives of the related assets. The components of intangible assets were as follows (in thousands): | |||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||||
Customer relationships | $ | 1,527,722 | $ | 564,623 | $ | 963,099 | $ | 1,528,475 | $ | 355,737 | $ | 1,172,738 | ||||||||||||
Non-compete agreements | 11,920 | 7,435 | 4,485 | 13,430 | 6,463 | 6,967 | ||||||||||||||||||
Other intangible assets | 3,060 | 2,445 | 615 | 3,060 | 1,346 | 1,714 | ||||||||||||||||||
Total | $ | 1,542,702 | $ | 574,503 | $ | 968,199 | $ | 1,544,965 | $ | 363,546 | $ | 1,181,419 | ||||||||||||
Accrued_Expenses_and_Other_Cur1
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Schedule of accrued expenses and other current liabilities | The Company's accrued expenses and other current liabilities are comprised of the following (in thousands): | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Customer deposits | $ | 13,619 | $ | 12,148 | |||||
Salaries and wages payable | 65,481 | 54,761 | |||||||
Deferred revenue | 31,630 | 10,053 | |||||||
Income taxes payable | — | 7,456 | |||||||
Other accrued expenses | 216,460 | 169,682 | |||||||
Total accrued expenses and other current liabilities | $ | 327,190 | $ | 254,100 | |||||
LongTerm_Liabilities_Tables
Long-Term Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Long-term Liabilities [Abstract] | ||||||||
Components of long-term debt | The following table sets forth the components of long-term debt (in thousands), net of unamortized debt discounts as of December 31, 2014 and December 31, 2013. | |||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Senior secured term loan facility due June 1, 2018 with an interest rate of 1.81% at December 31, 2014 and 2013 | $ | 932,875 | $ | 965,363 | ||||
Senior secured revolving credit facility due June 1, 2018 with an interest rate of 1.81% at December 31, 2014 and 2013 | — | 300,000 | ||||||
4.75% Senior Notes due 2021 | 493,348 | — | ||||||
Less current maturities | (81,250 | ) | (50,000 | ) | ||||
Long-term debt | $ | 1,344,973 | $ | 1,215,363 | ||||
Schedule of maturities of principal amounts outstanding under Revolving Facility | Principal amounts outstanding under the Revolving Facility are due and payable in full on June 1, 2018. Principal repayments on the Term Loan Facility will be due as follows (in thousands): | |||||||
Year | Amount due | |||||||
2015 | 81,250 | |||||||
2016 | 93,750 | |||||||
2017 | 118,750 | |||||||
2018 | 656,250 | |||||||
Total | $ | 950,000 | ||||||
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||
Schedule of stock options activity | ||||||||||||||||||||
The following table summarizes activity related to stock options for the year ended | ||||||||||||||||||||
December 31, 2014: | ||||||||||||||||||||
Number of Options | Weighted Average Exercise Price | |||||||||||||||||||
Outstanding, beginning of period | 1,396,144 | $ | 31.6 | |||||||||||||||||
Granted | 432,586 | $ | 44.72 | |||||||||||||||||
Exercised | (298,108 | ) | $ | 18.92 | ||||||||||||||||
Forfeited | (82,090 | ) | $ | 47.54 | ||||||||||||||||
Outstanding, end of period | 1,448,532 | $ | 37.22 | |||||||||||||||||
Summary of stock options outstanding by exercise price range | The following table summarizes certain information about the options outstanding at December 31, 2014: | |||||||||||||||||||
Range of Exercise Price | Options Outstanding | Weighted Average Remaining Contractual Life (Years) | Weighted Average Exercise Price | Options Exercisable | Weighted Average Exercise Price | |||||||||||||||
$6.39- $24.92 | 233,300 | 2.16 | $ | 14.05 | 230,038 | $ | 13.88 | |||||||||||||
$24.93 - $32.45 | 233,294 | 3.25 | $ | 25.51 | 140,764 | $ | 25.57 | |||||||||||||
$32.46 - $44.15 | 279,524 | 4.29 | $ | 35.78 | 110,540 | $ | 35.25 | |||||||||||||
$44.16 - $44.90 | 347,132 | 6.18 | $ | 44.7 | — | $ | — | |||||||||||||
$44.91 - $56.25 | 355,282 | 5.26 | $ | 53.99 | 86,773 | $ | 54.22 | |||||||||||||
$6.39 - $56.25 | 1,448,532 | 4.47 | $ | 37.22 | 568,115 | $ | 27.1 | |||||||||||||
Schedule of restricted stock units activity | The following table summarizes the information about RSUs for the year ended December 31, 2014 under the Company's equity incentive plans: | |||||||||||||||||||
LTIP Plan | Assumed Plans | |||||||||||||||||||
Number of Restricted Stock Units | Weighted Average Grant Date Fair Value Per Unit | Number of Restricted Stock Units | Weighted Average Grant Date Fair Value Per Unit | |||||||||||||||||
Nonvested balance as of the beginning of the period | 1,334,694 | $ | 40.14 | 213,656 | $ | 50.98 | ||||||||||||||
Granted | 694,645 | $ | 44.84 | 247,131 | $ | 44.41 | ||||||||||||||
Vested | (411,817 | ) | $ | 30.23 | (53,386 | ) | $ | 50.38 | ||||||||||||
Forfeited | (71,832 | ) | $ | 44.57 | (76,528 | ) | $ | 49.06 | ||||||||||||
Nonvested balance as of the end of the period | 1,545,690 | $ | 44.69 | 330,873 | $ | 46.62 | ||||||||||||||
The table below summarizes the number of time-based and performance-based RSUs that were granted and outstanding under both plans for the year ended December 31, 2014: | ||||||||||||||||||||
LTIP Plan | Assumed Plans | |||||||||||||||||||
Number of Restricted Stock Units | Number of Restricted Stock Units | |||||||||||||||||||
Time-Based | Performance - Based | Weighted Average Grant Date Fair Value Per Unit | Time-Based | Performance - Based | Weighted Average Grant Date Fair Value Per Unit | |||||||||||||||
Granted | 302,257 | 392,388 | $ | 44.84 | 155,615 | 91,516 | $ | 44.41 | ||||||||||||
Outstanding | 714,810 | 830,880 | — | 243,925 | 86,948 | — | ||||||||||||||
Schedule of allocated stock-based compensation | The Company allocated stock-based compensation costs to the same statement of operations line item as the cash compensation to those employees. Accordingly, the allocation of the compensation costs is as follows for the years ended December 31, 2014, 2013, and 2012 (in thousands): | |||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Cost of revenue | $ | 2,284 | $ | 1,404 | $ | 687 | ||||||||||||||
Selling, general and administrative | 31,270 | 24,158 | 16,980 | |||||||||||||||||
Total stock-based compensation | $ | 33,554 | $ | 25,562 | $ | 17,667 | ||||||||||||||
Schedule of fair value assumptions | The Black-Scholes-Merton option-pricing model was used to estimate the fair value of the options at grant date for the years ended December 31, 2014, 2013, and 2012, based on the following assumptions: | |||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Volatility | 37.7-39.2% | 41.4-45.4% | 47.2-49.2% | |||||||||||||||||
Risk-free interest rate | 1.54 - 1.73% | 0.81-1.74% | 0.65-0.83% | |||||||||||||||||
Expected life | 4.5 years | 4.5 years | 4.5 years | |||||||||||||||||
Dividend yield | — | — | — | |||||||||||||||||
Weighted average grant date fair value | $ | 15.47 | $ | 21.33 | $ | 14.7 | ||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Schedule of deferred income tax assets and liabilities | The income tax effects of temporary differences that give rise to significant portions of deferred income tax assets and liabilities are as follows. | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||
Deferred income tax assets: | |||||||||||||
Non-capital loss carryforwards (“NOL”) | $ | 28,906 | $ | 18,229 | |||||||||
Lease inducements and deferred financing | 15,826 | 12,528 | |||||||||||
Reserves and accruals | 62,487 | 45,974 | |||||||||||
Stock-based compensation | 17,889 | 12,763 | |||||||||||
Other | 12,318 | 9,408 | |||||||||||
Total | 137,426 | 98,902 | |||||||||||
Less valuation allowance - current | 804 | 875 | |||||||||||
Less valuation allowance - long term | 28,915 | 17,486 | |||||||||||
Total valuation allowance | 29,719 | 18,361 | |||||||||||
Total deferred tax assets | $ | 107,707 | $ | 80,541 | |||||||||
Deferred tax assets — current | $ | 58,631 | $ | 44,029 | |||||||||
Deferred tax assets — long term | 49,076 | 36,512 | |||||||||||
Total | $ | 107,707 | $ | 80,541 | |||||||||
Deferred income tax liabilities: | |||||||||||||
Property and equipment and intangible assets | $ | 297,978 | $ | 329,842 | |||||||||
Dividend withholding tax | 5,675 | 5,675 | |||||||||||
Other | 5,156 | 3,146 | |||||||||||
Total | $ | 308,809 | $ | 338,663 | |||||||||
Schedule of effective income tax rate reconciliation | The differences between the effective tax rate reflected in the provision for income taxes and the U.S. statutory income tax rate are as follows (dollars in thousands): | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Corporate statutory rate | 35 | % | 35 | % | 35 | % | |||||||
Income tax expense on income before income taxes | $ | 177,768 | $ | 140,751 | $ | 66,618 | |||||||
Tax effect of: | |||||||||||||
State and local income taxes, net of federal benefit | 13,527 | 10,726 | 4,281 | ||||||||||
Transaction costs and transaction related expenses | 453 | 938 | 5,252 | ||||||||||
Dividend withholding tax | — | (65 | ) | 13,074 | |||||||||
Impact of foreign tax rates | (3,191 | ) | (3,693 | ) | (1,582 | ) | |||||||
Non-controlling interest | (22,452 | ) | (13,670 | ) | (1,645 | ) | |||||||
Cross-jurisdictional financing | (48,252 | ) | (44,659 | ) | (23,937 | ) | |||||||
Other | 3,662 | 4,479 | 3,763 | ||||||||||
Valuation allowance | 12,671 | 8,596 | 3,492 | ||||||||||
$ | 134,186 | $ | 103,403 | $ | 69,316 | ||||||||
Components of income tax expense (benefit) | The components of the provision for income taxes are as follows (in thousands): | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current tax expense | |||||||||||||
United States | $ | 192,021 | $ | 146,484 | $ | 94,834 | |||||||
Foreign | 212 | 1,255 | 12,407 | ||||||||||
Total current tax expense | 192,233 | 147,739 | 107,241 | ||||||||||
Deferred tax expense (benefit) | |||||||||||||
United States | (57,889 | ) | (44,180 | ) | (38,441 | ) | |||||||
Foreign | (158 | ) | (156 | ) | 516 | ||||||||
Total deferred tax expense | (58,047 | ) | (44,336 | ) | (37,925 | ) | |||||||
Total tax expense | $ | 134,186 | $ | 103,403 | $ | 69,316 | |||||||
Reconciliation of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits, including interest and penalties, for 2014, 2013 and 2012 , respectively are as follows (in millions): | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Balance at January 1 | $ | 28.9 | $ | 18.8 | $ | 0.6 | |||||||
Additions for tax positions related to prior years | 9 | 26.5 | 10.3 | ||||||||||
Reductions for tax positions related to prior years | (0.9 | ) | (13.9 | ) | — | ||||||||
Additions based on tax positions related to the current year | 3.8 | 0.4 | 7.9 | ||||||||||
Reductions due to lapse of the applicable statute of limitations | (4.7 | ) | — | — | |||||||||
Decrease related to settlements with taxing authorities | (0.7 | ) | (2.9 | ) | — | ||||||||
Balance at December 31 | $ | 35.4 | $ | 28.9 | $ | 18.8 | |||||||
Lease_Exit_Costs_Tables
Lease Exit Costs (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Leases [Abstract] | |||||
Lease Loss Accrual | A roll forward of the lease exit cost accrual is presented below (in thousands): | ||||
Amount | |||||
Liability at 12/31/2013 | $ | 5,774 | |||
Net payments | (819 | ) | |||
Change in Present Value | 260 | ||||
Liability at 12/31/2014 | $ | 5,215 | |||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Schedule of computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted EPS for the years ended December 31, 2014, 2013, and 2012 (in thousands, except share and per share data): | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Numerator: | ||||||||||||
Net income available to common shareholders | $ | 317,293 | $ | 262,170 | $ | 116,658 | ||||||
Denominator for basic EPS — weighted average common shares outstanding | 207,103,603 | 206,013,876 | 166,765,682 | |||||||||
Effect of dilutive securities: | ||||||||||||
Restricted stock units | 402,992 | 321,587 | 329,975 | |||||||||
Stock options | 245,550 | 384,063 | 734,963 | |||||||||
Denominator for diluted EPS | 207,752,145 | 206,719,526 | 167,830,620 | |||||||||
Earnings per share: | ||||||||||||
Basic | $ | 1.53 | $ | 1.27 | $ | 0.7 | ||||||
Diluted | $ | 1.53 | $ | 1.27 | $ | 0.7 | ||||||
Schedule of stock options and RSUs not included in calculation of diluted earnings per share due to their anti-dilutive impact | The following represents the stock options and RSUs that are not included in the calculation of diluted EPS due to their anti-dilutive impact: | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Anti-dilutive RSUs | 746,999 | 615,608 | 773,509 | |||||||||
Anti-dilutive stock options | 669,144 | 30,381 | 288,532 | |||||||||
1,416,143 | 645,989 | 1,062,041 | ||||||||||
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Supplemental Cash Flow Information [Abstract] | ||||||||||||
Schedule of other cash flow non-cash activities | Other non-cash activities (in thousands): | |||||||||||
Year Ended December 31, 2012 | ||||||||||||
Equity shares issued as a result of the NMHC acquisition | $ | 4 | ||||||||||
Equity shares issued as a result of the Catalyst Merger | $ | 3,238,141 | ||||||||||
Schedule of cash paid (received) for income taxes and interest | ||||||||||||
(b) Cash paid / received for income taxes and interest was as follows for the years ended December 31, 2014, 2013, and 2012 (in thousands): | ||||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Income taxes paid | $ | 201,263 | $ | 158,053 | $ | 22,052 | ||||||
Interest paid | $ | 38,880 | $ | 30,322 | $ | 18,711 | ||||||
Interest received | $ | 837 | $ | 735 | $ | 473 | ||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Schedule of future minimum payments for non-cancellable operating lease agreements | Aggregate future minimum payments in respect of non-cancellable operating lease agreements as of December 31, 2014, which extend until 2025, are as follows (in thousands): | |||
Operating Leases | ||||
2015 | $ | 20,747 | ||
2016 | 19,529 | |||
2017 | 19,847 | |||
2018 | 16,901 | |||
2019 | 15,752 | |||
After 2019 | 53,633 | |||
$ | 146,409 | |||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Schedule of financial information by segment | Financial information by segment (in thousands): | |||||||||||||||
Year Ended December 31, 2014 | PBM | HCIT | Corporate | Total | ||||||||||||
Revenue | $ | 21,429,983 | $ | 151,907 | $ | — | $ | 21,581,890 | ||||||||
Cost of revenue | 20,155,768 | 66,069 | — | 20,221,837 | ||||||||||||
Gross profit | 1,274,215 | 85,838 | — | 1,360,053 | ||||||||||||
Corporate expenses | — | — | 852,145 | 852,145 | ||||||||||||
Income before income taxes | — | — | — | 507,908 | ||||||||||||
Income tax expense | — | — | — | 134,186 | ||||||||||||
Net income | — | — | — | 373,722 | ||||||||||||
Less net income attributable to non-controlling interest | — | — | — | 56,429 | ||||||||||||
Net income attributable to the Company | — | — | — | 317,293 | ||||||||||||
Goodwill | 4,704,974 | 19,665 | — | 4,724,639 | ||||||||||||
Total assets | $ | 9,103,603 | $ | 220,582 | $ | — | $ | 9,324,185 | ||||||||
Year Ended December 31, 2013 | PBM | HCIT | Corporate | Total | ||||||||||||
Revenue | $ | 14,632,104 | $ | 147,990 | $ | — | $ | 14,780,094 | ||||||||
Cost of revenue | 13,583,941 | 70,508 | — | 13,654,449 | ||||||||||||
Gross profit | 1,048,163 | 77,482 | — | 1,125,645 | ||||||||||||
Corporate expenses | — | — | 723,503 | 723,503 | ||||||||||||
Income before income taxes | — | — | — | 402,142 | ||||||||||||
Income tax expense | — | — | — | 103,403 | ||||||||||||
Net income | — | — | — | 298,739 | ||||||||||||
Less net income attributable to non-controlling interest | — | — | — | 36,569 | ||||||||||||
Net income attributable to the Company | — | — | — | 262,170 | ||||||||||||
Goodwill | 4,700,610 | 19,665 | — | 4,720,275 | ||||||||||||
Total assets | $ | 7,634,033 | $ | 361,730 | $ | — | $ | 7,995,763 | ||||||||
Year Ended December 31, 2012 | PBM | HCIT | Corporate | Total | ||||||||||||
Revenue | $ | 9,785,084 | $ | 155,036 | $ | — | $ | 9,940,120 | ||||||||
Cost of revenue | 9,141,029 | 65,715 | — | 9,206,744 | ||||||||||||
Gross profit | 644,055 | 89,321 | — | 733,376 | ||||||||||||
Corporate expenses | — | — | 543,039 | 543,039 | ||||||||||||
Income before income taxes | — | — | — | 190,337 | ||||||||||||
Income tax expense | — | — | — | 69,316 | ||||||||||||
Net income | — | — | — | 121,021 | ||||||||||||
Less net income attributable to non-controlling interest | — | — | — | 4,363 | ||||||||||||
Net income attributable to the Company | — | — | — | 116,658 | ||||||||||||
Goodwill | 4,458,373 | 19,665 | — | 4,478,038 | ||||||||||||
Total assets | $ | 7,159,098 | $ | 226,029 | $ | 7,385,127 | ||||||||||
Fair_Value_Tables
Fair Value (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair value measurements on recurring basis | For assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheet, the table below categorizes fair value measurements across the three levels as of December 31, 2014 (in thousands): | |||||||||||||||
Year Ended December 31, 2014 | Quoted Prices in Active Markets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||
Liabilities: | ||||||||||||||||
Derivative | $ | — | $ | 1,096 | $ | — | $ | 1,096 | ||||||||
Year Ended December 31, 2013 | Quoted Prices in Active Markets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||
Liabilities | ||||||||||||||||
Contingent purchase price consideration | $ | — | $ | — | $ | 19,954 | $ | 19,954 | ||||||||
Derivatives | $ | — | $ | 1,719 | $ | — | $ | 1,719 | ||||||||
Supplemental_Information_Table
Supplemental Information (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||
Schedule of allowance for doubtful accounts and valuation allowance for deferred tax assets | ||||||||||||||||
Beginning Balance | Charged to Expense | Adjustments | Ending Balance | |||||||||||||
(In thousands) | ||||||||||||||||
Allowance for doubtful accounts | ||||||||||||||||
Year Ended December 31, 2014 | $ | 5,860 | $ | 2,259 | $ | (3,252 | ) | $ | 4,867 | |||||||
Year Ended December 31, 2013 | $ | 7,899 | $ | 1,187 | $ | (3,226 | ) | $ | 5,860 | |||||||
Year Ended December 31, 2012 | $ | 2,725 | $ | 3,328 | $ | 1,846 | $ | 7,899 | ||||||||
Beginning Balance | Charged to Expense | Adjustments | Ending Balance | |||||||||||||
(In thousands) | ||||||||||||||||
Valuation allowance for deferred tax assets | ||||||||||||||||
Year Ended December 31, 2014 | $ | 18,361 | $ | 12,671 | $ | (1,313 | ) | $ | 29,719 | |||||||
Year Ended December 31, 2013 | $ | 5,797 | $ | 8,596 | $ | 3,968 | $ | 18,361 | ||||||||
Year Ended December 31, 2012 | $ | 3,603 | $ | 2,194 | $ | — | $ | 5,797 | ||||||||
Condensed_Consolidating_Financ1
Condensed Consolidating Financial Statements (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||||||||||||
Summary of condensed balance sheets | CATAMARAN CORPORATION | |||||||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 333,469 | $ | 648,903 | $ | 29,580 | $ | — | $ | 1,011,952 | ||||||||||
Accounts receivable, net | 304 | 1,217,675 | 166,937 | (130,580 | ) | 1,254,336 | ||||||||||||||
Rebates receivable | 10,710 | 851,929 | 155,719 | (154,534 | ) | 863,824 | ||||||||||||||
Other current assets | 99 | 166,858 | 52,478 | — | 219,435 | |||||||||||||||
Intercompany receivable | — | 675,551 | — | (675,551 | ) | — | ||||||||||||||
Total current assets | 344,582 | 3,560,916 | 404,714 | (960,665 | ) | 3,349,547 | ||||||||||||||
Property and equipment, net | 110 | 154,413 | 55,504 | — | 210,027 | |||||||||||||||
Goodwill | — | 4,689,522 | 35,117 | — | 4,724,639 | |||||||||||||||
Other intangible assets, net | — | 963,096 | 5,103 | — | 968,199 | |||||||||||||||
Investment in subsidiaries | 6,375,214 | 266,096 | 71 | (6,641,381 | ) | — | ||||||||||||||
Other long-term assets | 13,874 | 42,876 | 22,084 | (7,061 | ) | 71,773 | ||||||||||||||
Total assets | $ | 6,733,780 | $ | 9,676,919 | $ | 522,593 | $ | (7,609,107 | ) | $ | 9,324,185 | |||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Accounts payable | $ | 4 | $ | 1,079,598 | $ | 3,150 | $ | (114,961 | ) | $ | 967,791 | |||||||||
Accrued expenses and other current liabilities | 10,580 | 304,309 | 18,846 | (6,545 | ) | 327,190 | ||||||||||||||
Rebates payable | — | 967,733 | 42,932 | (42,932 | ) | 967,733 | ||||||||||||||
Current portion - long-term debt | 81,250 | — | — | — | 81,250 | |||||||||||||||
Intercompany payable | 23,898 | — | 626,434 | (650,332 | ) | — | ||||||||||||||
Total current liabilities | 115,732 | 2,351,640 | 691,362 | (814,770 | ) | 2,343,964 | ||||||||||||||
Deferred income taxes | — | 255,777 | 1,548 | — | 257,325 | |||||||||||||||
Long-term debt | 1,344,973 | — | — | — | 1,344,973 | |||||||||||||||
Other long-term liabilities | 1,096 | 71,475 | 26,245 | — | 98,816 | |||||||||||||||
Total liabilities | 1,461,801 | 2,678,892 | 719,155 | (814,770 | ) | 4,045,078 | ||||||||||||||
Commitments and contingencies (Note 16) | ||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||
Total shareholders' equity | 5,271,979 | 6,998,027 | (197,807 | ) | (6,800,220 | ) | 5,271,979 | |||||||||||||
Non-controlling interest | — | — | 1,245 | 5,883 | 7,128 | |||||||||||||||
Total equity | 5,271,979 | 6,998,027 | (196,562 | ) | (6,794,337 | ) | 5,279,107 | |||||||||||||
Total liabilities and equity | $ | 6,733,780 | $ | 9,676,919 | $ | 522,593 | $ | (7,609,107 | ) | $ | 9,324,185 | |||||||||
CATAMARAN CORPORATION | ||||||||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 15,090 | $ | 362,647 | $ | 9,504 | $ | — | $ | 387,241 | ||||||||||
Accounts receivable, net | 294 | 889,267 | 120,869 | (50,844 | ) | 959,586 | ||||||||||||||
Rebates receivable | 35,776 | 270,179 | 80,030 | (80,030 | ) | 305,955 | ||||||||||||||
Other current assets | 107 | 149,233 | 35,553 | — | 184,893 | |||||||||||||||
Intercompany receivable | — | — | 130,377 | (130,377 | ) | — | ||||||||||||||
Total current assets | 51,267 | 1,671,326 | 376,333 | (261,251 | ) | 1,837,675 | ||||||||||||||
Property and equipment, net | 69 | 172,090 | 24,848 | — | 197,007 | |||||||||||||||
Goodwill | — | 4,685,158 | 35,117 | — | 4,720,275 | |||||||||||||||
Other intangible assets, net | — | 1,173,347 | 8,072 | — | 1,181,419 | |||||||||||||||
Intercompany loans receivable | — | 175,000 | — | (175,000 | ) | — | ||||||||||||||
Investment in subsidiaries | 6,137,281 | 202,292 | 71 | (6,339,644 | ) | — | ||||||||||||||
Other long-term assets | 15,675 | 24,117 | 21,818 | (2,223 | ) | 59,387 | ||||||||||||||
Total assets | $ | 6,204,292 | $ | 8,103,330 | $ | 466,259 | $ | (6,778,118 | ) | $ | 7,995,763 | |||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Accounts payable | $ | — | $ | 851,260 | $ | 8,315 | $ | (41,770 | ) | $ | 817,805 | |||||||||
Accrued expenses and other current liabilities | 3,047 | 228,801 | 22,252 | — | 254,100 | |||||||||||||||
Rebates payable | — | 356,266 | 31,332 | (31,333 | ) | 356,265 | ||||||||||||||
Current portion - long-term debt | 50,000 | — | — | — | 50,000 | |||||||||||||||
Intercompany payable | 25,673 | 3,885 | — | (29,558 | ) | — | ||||||||||||||
Total current liabilities | 78,720 | 1,440,212 | 61,899 | (102,661 | ) | 1,478,170 | ||||||||||||||
Deferred income taxes | — | 299,794 | 1,547 | — | 301,341 | |||||||||||||||
Long-term debt | 1,215,363 | — | — | — | 1,215,363 | |||||||||||||||
Intercompany loans payable | — | — | 175,000 | (175,000 | ) | — | ||||||||||||||
Other long-term liabilities | 1,719 | 65,812 | 21,860 | — | 89,391 | |||||||||||||||
Total liabilities | 1,295,802 | 1,805,818 | 260,306 | (277,661 | ) | 3,084,265 | ||||||||||||||
Commitments and contingencies (Note 16) | ||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||
Total shareholders' equity | 4,908,490 | 6,297,512 | 204,707 | (6,502,219 | ) | 4,908,490 | ||||||||||||||
Non-controlling interest | — | — | 1,246 | 1,762 | 3,008 | |||||||||||||||
Total equity | 4,908,490 | 6,297,512 | 205,953 | (6,500,457 | ) | 4,911,498 | ||||||||||||||
Total liabilities and equity | $ | 6,204,292 | $ | 8,103,330 | $ | 466,259 | $ | (6,778,118 | ) | $ | 7,995,763 | |||||||||
Summary of condensed income statements | CATAMARAN CORPORATION | |||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||
Revenue | $ | 40,141 | $ | 20,849,801 | $ | 3,028,412 | $ | (2,336,464 | ) | $ | 21,581,890 | |||||||||
Cost of revenue | 33,917 | 19,764,270 | 2,760,114 | (2,336,464 | ) | 20,221,837 | ||||||||||||||
Gross profit | 6,224 | 1,085,531 | 268,298 | — | 1,360,053 | |||||||||||||||
Expenses: | ||||||||||||||||||||
Selling, general and administrative | 2,931 | 418,400 | 97,020 | — | 518,351 | |||||||||||||||
Depreciation of property and equipment | 30 | 53,932 | 5,524 | — | 59,486 | |||||||||||||||
Amortization of intangible assets | — | 210,251 | 2,969 | — | 213,220 | |||||||||||||||
Total Expenses | 2,961 | 682,583 | 105,513 | — | 791,057 | |||||||||||||||
Operating income | 3,263 | 402,948 | 162,785 | — | 568,996 | |||||||||||||||
Interest and other expense, net | 51,904 | 3,007 | 6,177 | — | 61,088 | |||||||||||||||
Equity in (income) of subsidiaries | (365,934 | ) | (58,804 | ) | — | 424,738 | — | |||||||||||||
Income before income taxes | 317,293 | 458,745 | 156,608 | (424,738 | ) | 507,908 | ||||||||||||||
Income tax expense | — | 92,811 | 41,375 | — | 134,186 | |||||||||||||||
Net income | 317,293 | 365,934 | 115,233 | (424,738 | ) | 373,722 | ||||||||||||||
Less net income attributable to non-controlling interest | — | — | — | 56,429 | 56,429 | |||||||||||||||
Net income attributable to the Company | $ | 317,293 | $ | 365,934 | $ | 115,233 | $ | (481,167 | ) | $ | 317,293 | |||||||||
CATAMARAN CORPORATION | ||||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||||
Revenue | $ | 34,875 | $ | 13,682,194 | $ | 1,750,509 | $ | (687,484 | ) | $ | 14,780,094 | |||||||||
Cost of revenue | 30,217 | 12,756,828 | 1,554,888 | (687,484 | ) | 13,654,449 | ||||||||||||||
Gross profit | 4,658 | 925,366 | 195,621 | — | 1,125,645 | |||||||||||||||
Expenses: | ||||||||||||||||||||
Selling, general and administrative | 1,094 | 374,435 | 65,230 | — | 440,759 | |||||||||||||||
Depreciation of property and equipment | 29 | 35,005 | 2,892 | — | 37,926 | |||||||||||||||
Amortization of intangible assets | — | 200,065 | 3,127 | — | 203,192 | |||||||||||||||
Total Expenses | 1,123 | 609,505 | 71,249 | — | 681,877 | |||||||||||||||
Operating income | 3,535 | 315,861 | 124,372 | — | 443,768 | |||||||||||||||
Interest and other (income) expense, net | 36,700 | (344 | ) | 5,270 | — | 41,626 | ||||||||||||||
Equity in (income) of subsidiaries | (295,335 | ) | (51,924 | ) | — | 347,259 | — | |||||||||||||
Income before income taxes | 262,170 | 368,129 | 119,102 | (347,259 | ) | 402,142 | ||||||||||||||
Income tax expense | — | 72,794 | 30,609 | — | 103,403 | |||||||||||||||
Net income | 262,170 | 295,335 | 88,493 | (347,259 | ) | 298,739 | ||||||||||||||
Less net income attributable to non-controlling interest | — | — | — | 36,569 | 36,569 | |||||||||||||||
Net income attributable to the Company | $ | 262,170 | $ | 295,335 | $ | 88,493 | $ | (383,828 | ) | $ | 262,170 | |||||||||
CATAMARAN CORPORATION | ||||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
For the year ended December 31, 2012 | ||||||||||||||||||||
Revenue | $ | 15,343 | $ | 9,578,406 | $ | 911,107 | $ | (564,736 | ) | $ | 9,940,120 | |||||||||
Cost of revenue | 12,306 | 8,926,325 | 832,849 | (564,736 | ) | 9,206,744 | ||||||||||||||
Gross profit | 3,037 | 652,081 | 78,258 | — | 733,376 | |||||||||||||||
Expenses: | ||||||||||||||||||||
Selling, general and administrative | 4,688 | 322,843 | 41,961 | — | 369,492 | |||||||||||||||
Depreciation of property and equipment | 50 | 14,784 | 1,915 | — | 16,749 | |||||||||||||||
Amortization of intangible assets | — | 126,847 | 3,269 | — | 130,116 | |||||||||||||||
Total Expenses | 4,738 | 464,474 | 47,145 | — | 516,357 | |||||||||||||||
Operating income | (1,701 | ) | 187,607 | 31,113 | — | 217,019 | ||||||||||||||
Interest and other expense, net | 11,731 | 13,577 | 1,374 | — | 26,682 | |||||||||||||||
Equity in (income) of subsidiaries | (130,090 | ) | (14,551 | ) | — | 144,641 | — | |||||||||||||
Income before income taxes | 116,658 | 188,581 | 29,739 | (144,641 | ) | 190,337 | ||||||||||||||
Income tax expense | — | 58,491 | 10,825 | — | 69,316 | |||||||||||||||
Net income | 116,658 | 130,090 | 18,914 | (144,641 | ) | 121,021 | ||||||||||||||
Less net income attributable to non-controlling interest | — | — | — | 4,363 | 4,363 | |||||||||||||||
Net income attributable to the Company | $ | 116,658 | $ | 130,090 | $ | 18,914 | $ | (149,004 | ) | $ | 116,658 | |||||||||
Summary of condensed cash flow statements | CATAMARAN CORPORATION | |||||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net cash provided (used) by operating activities | $ | 341,698 | $ | 612,430 | $ | (6,952 | ) | $ | (356,995 | ) | $ | 590,181 | ||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Acquisitions, net of cash acquired | — | (2,026 | ) | — | — | (2,026 | ) | |||||||||||||
Purchases of property and equipment | (71 | ) | (41,664 | ) | (36,343 | ) | — | (78,078 | ) | |||||||||||
Proceeds from restricted cash | — | 20,006 | — | — | 20,006 | |||||||||||||||
Net cash used in investing activities | (71 | ) | (23,684 | ) | (36,343 | ) | — | (60,098 | ) | |||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from issuance of debt | 492,500 | — | — | — | 492,500 | |||||||||||||||
Repayment of long-term debt | (337,500 | ) | — | — | — | (337,500 | ) | |||||||||||||
Payment of financing costs | (1,963 | ) | — | — | — | (1,963 | ) | |||||||||||||
Proceeds from exercise of options | 8,011 | (2,355 | ) | (17 | ) | — | 5,639 | |||||||||||||
Tax benefit on option exercises | — | 3,455 | 37 | — | 3,492 | |||||||||||||||
Proceeds from warrants exercised | 3,452 | — | — | — | 3,452 | |||||||||||||||
Payments of contingent consideration | — | (18,338 | ) | — | — | (18,338 | ) | |||||||||||||
Distributions to non-controlling interest | — | — | — | (52,309 | ) | (52,309 | ) | |||||||||||||
Net transactions with parent and affiliates | (208,486 | ) | (264,620 | ) | 63,802 | 409,304 | — | |||||||||||||
Proceeds from restricted stock | 20,700 | (20,249 | ) | (451 | ) | — | — | |||||||||||||
Other | — | (383 | ) | — | — | (383 | ) | |||||||||||||
Net cash provided (used) by financing activities | (23,286 | ) | (302,490 | ) | 63,371 | 356,995 | 94,590 | |||||||||||||
Effect of foreign exchange on cash balances | 38 | — | — | — | 38 | |||||||||||||||
Change in cash and cash equivalents | 318,379 | 286,256 | 20,076 | — | 624,711 | |||||||||||||||
Cash and cash equivalents, beginning of period | 15,090 | 362,647 | 9,504 | — | 387,241 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 333,469 | $ | 648,903 | $ | 29,580 | $ | — | $ | 1,011,952 | ||||||||||
CATAMARAN CORPORATION | ||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net cash provided (used) by operating activities | $ | 186,985 | $ | 616,168 | $ | (30,476 | ) | $ | (297,256 | ) | $ | 475,421 | ||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Acquisitions, net of cash acquired | — | (388,866 | ) | — | — | (388,866 | ) | |||||||||||||
Purchases of property and equipment | (11 | ) | (117,799 | ) | (11,032 | ) | — | (128,842 | ) | |||||||||||
Proceeds from restricted cash | — | 20,004 | — | — | 20,004 | |||||||||||||||
Net cash used by investing activities | (11 | ) | (486,661 | ) | (11,032 | ) | — | (497,704 | ) | |||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from issuance of debt | 450,000 | — | — | — | 450,000 | |||||||||||||||
Repayment of long-term debt | (362,500 | ) | — | — | — | (362,500 | ) | |||||||||||||
Payment of financing costs | (2,347 | ) | — | — | — | (2,347 | ) | |||||||||||||
Proceeds from exercise of options and warrants | 4,729 | (1,248 | ) | (2 | ) | — | 3,479 | |||||||||||||
Tax benefit on option exercises | — | 9,704 | 28 | — | 9,732 | |||||||||||||||
Payments of contingent consideration | — | (18,338 | ) | (4,865 | ) | — | (23,203 | ) | ||||||||||||
Distributions to non-controlling interest | — | — | — | (36,314 | ) | (36,314 | ) | |||||||||||||
Net transactions with parent and affiliates | (322,377 | ) | (49,103 | ) | 37,910 | 333,570 | — | |||||||||||||
Proceeds from restricted stock | 27,107 | (26,645 | ) | (462 | ) | — | — | |||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Net cash (used) provided by financing activities | (205,388 | ) | (85,630 | ) | 32,609 | 297,256 | 38,847 | |||||||||||||
Effect of foreign exchange on cash balances | (99 | ) | — | — | — | (99 | ) | |||||||||||||
Change in cash and cash equivalents | (18,513 | ) | 43,877 | (8,899 | ) | — | 16,465 | |||||||||||||
Cash and cash equivalents, beginning of period | 33,603 | 318,770 | 18,403 | — | 370,776 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 15,090 | $ | 362,647 | $ | 9,504 | $ | — | $ | 387,241 | ||||||||||
CATAMARAN CORPORATION | ||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Catamaran Corporation | Guarantors | Non-Guarantors | Consolidations | Consolidated | ||||||||||||||||
For the year ended December 31, 2012 | ||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net cash provided (used) by operating activities | $ | (27,257 | ) | $ | 430,091 | $ | (18,449 | ) | $ | (134,652 | ) | $ | 249,733 | |||||||
Cash flows from investing activities: | ||||||||||||||||||||
Acquisitions, net of cash acquired | 3,644,364 | (5,210,069 | ) | — | — | (1,565,705 | ) | |||||||||||||
Purchases of property and equipment | (66 | ) | (30,549 | ) | (9,621 | ) | (40,236 | ) | ||||||||||||
Net cash provided by (used in) investing activities | 3,644,298 | (5,240,618 | ) | (9,621 | ) | — | (1,605,941 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from issuance of debt | 1,475,448 | — | — | — | 1,475,448 | |||||||||||||||
Repayment of long-term debt | (616,993 | ) | — | — | — | (616,993 | ) | |||||||||||||
Proceeds from public offering, net of issuance costs | 519,075 | — | — | — | 519,075 | |||||||||||||||
Payment of financing costs | (18,806 | ) | — | — | — | (18,806 | ) | |||||||||||||
Proceeds from exercise of options | 11,016 | (3,253 | ) | — | — | 7,763 | ||||||||||||||
Tax benefit on option exercises | — | 19,206 | 191 | — | 19,397 | |||||||||||||||
Net transactions with parent and affiliates | (5,093,214 | ) | 4,913,963 | 44,599 | 134,652 | — | ||||||||||||||
Proceeds from restricted stock | 17,903 | (17,651 | ) | (252 | ) | — | — | |||||||||||||
Other | (268 | ) | — | — | — | (268 | ) | |||||||||||||
Net cash (used) provided by financing activities | (3,705,839 | ) | 4,912,265 | 44,538 | 134,652 | 1,385,616 | ||||||||||||||
Effect of foreign exchange on cash balances | (14 | ) | — | — | — | (14 | ) | |||||||||||||
Change in cash and cash equivalents | (88,812 | ) | 101,738 | 16,468 | — | 29,394 | ||||||||||||||
Cash and cash equivalents, beginning of period | 122,415 | 217,032 | 1,935 | — | 341,382 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 33,603 | $ | 318,770 | $ | 18,403 | $ | — | $ | 370,776 | ||||||||||
Significant_Accounting_Policie2
Significant Accounting Policies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | |
Significant Accounting Policies [Line Items] | |||
Amortization of intangible assets | $8,000,000 | ||
Goodwill | 4,478,038,000 | 4,724,639,000 | 4,720,275,000 |
Unbilled rebates receivable | 366,700,000 | 54,600,000 | |
PBM | |||
Significant Accounting Policies [Line Items] | |||
Goodwill | 4,458,373,000 | 4,704,974,000 | 4,700,610,000 |
HCIT | |||
Significant Accounting Policies [Line Items] | |||
Goodwill | $19,665,000 | 19,665,000 | $19,665,000 |
Minimum | |||
Significant Accounting Policies [Line Items] | |||
Finite-lived intangibles, estimated useful life | 1 year | ||
Minimum | Customer Relationships | |||
Significant Accounting Policies [Line Items] | |||
Finite-lived intangibles, estimated useful life | 3 years | ||
Maximum | |||
Significant Accounting Policies [Line Items] | |||
Finite-lived intangibles, estimated useful life | 15 years | ||
Maximum | Customer Relationships | |||
Significant Accounting Policies [Line Items] | |||
Finite-lived intangibles, estimated useful life | 10 years | ||
Furniture and equipment | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, useful Life | 5 years | ||
Computer equipment and software | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, useful Life | 3 years | ||
Computer equipment and software | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, useful Life | 5 years |
Stock_Split_Details
Stock Split (Details) | 0 Months Ended |
Sep. 06, 2012 | |
Stock Split [Abstract] | |
Stock split ratio | 2 |
Business_Combinations_Restat_D
Business Combinations - Restat (Details) (USD $) | 12 Months Ended | 0 Months Ended | 6 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 01, 2013 | Jun. 30, 2014 | |
Business Acquisition [Line Items] | |||||
Amortization of intangible assets | $213,220,000 | $203,192,000 | $130,116,000 | ||
Future amortization expense, 2015 | 194,000,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | 4,724,639,000 | 4,720,275,000 | 4,478,038,000 | ||
Restat | |||||
Business Acquisition [Line Items] | |||||
Purchase price | 409,500,000 | ||||
Revenue of acquiree | 209,200,000 | ||||
Amortization of intangible assets | 33,700,000 | 8,700,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | 182,720,000 | ||||
Goodwill expected to be tax deductible | 227,800,000 | ||||
Restat | Revolving credit facility | |||||
Business Acquisition [Line Items] | |||||
Debt amount | 350,000,000 | ||||
Term of long-term debt | 5 years | ||||
Restat | Customer Relationship - PBM | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | 143,200,000 | ||||
Finite-lived intangibles, estimated useful life | 10 years | ||||
Restat | Customer relationships - cash card | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | 35,500,000 | ||||
Finite-lived intangibles, estimated useful life | 3 years | ||||
Restat | Trademarks/Trade names | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | 1,000,000 | ||||
Finite-lived intangibles, estimated useful life | 1 year | ||||
Restat | Non-compete agreements | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | 3,020,000 | ||||
Finite-lived intangibles, estimated useful life | 5 years | ||||
Initial Amounts Recognized at Acquisition Date | Restat | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Accounts receivable | 13,842,000 | ||||
Rebates receivable | 6,635,000 | ||||
Other current assets | 383,000 | ||||
Total current assets | 20,860,000 | ||||
Property and equipment | 1,263,000 | ||||
Intangible assets | 182,720,000 | ||||
Goodwill | 223,474,000 | ||||
Total assets acquired | 428,317,000 | ||||
Accounts payable | 22,370,000 | ||||
Rebates payable | 16,106,000 | ||||
Accrued liabilities | 7,231,000 | ||||
Other long-term liabilities | 0 | ||||
Total liabilities assumed | 45,707,000 | ||||
Net assets acquired | 382,610,000 | ||||
Measurement Period Adjustments | Restat | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, consideration transferred | 2,000,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Accounts receivable | 0 | ||||
Rebates receivable | -254,000 | ||||
Other current assets | 0 | ||||
Total current assets | -254,000 | ||||
Property and equipment | 0 | ||||
Intangible assets | 0 | ||||
Goodwill | 4,364,000 | ||||
Total assets acquired | 4,110,000 | ||||
Accounts payable | 0 | ||||
Rebates payable | 0 | ||||
Accrued liabilities | 0 | ||||
Other long-term liabilities | 2,084,000 | ||||
Total liabilities assumed | 2,084,000 | ||||
Net assets acquired | 2,026,000 | ||||
Final Amounts Recognized at Acquisition Date | Restat | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Accounts receivable | 13,842,000 | ||||
Rebates receivable | 6,381,000 | ||||
Other current assets | 383,000 | ||||
Total current assets | 20,606,000 | ||||
Property and equipment | 1,263,000 | ||||
Intangible assets | 182,720,000 | ||||
Goodwill | 227,838,000 | ||||
Total assets acquired | 432,427,000 | ||||
Accounts payable | 22,370,000 | ||||
Rebates payable | 16,106,000 | ||||
Accrued liabilities | 7,231,000 | ||||
Other long-term liabilities | 2,084,000 | ||||
Total liabilities assumed | 47,791,000 | ||||
Net assets acquired | $384,636,000 |
Business_Combinations_Catalyst
Business Combinations - Catalyst Merger (Details) (USD $) | 0 Months Ended | 12 Months Ended | |||
Jul. 02, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 02, 2012 | |
Merger Agreement [Abstract] | |||||
Amortization of intangible assets | $213,220,000 | $203,192,000 | $130,116,000 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | 4,724,639,000 | 4,720,275,000 | 4,478,038,000 | ||
Common Shares | |||||
Merger Agreement [Abstract] | |||||
Public offering, shares of common stock | 11,960,000 | ||||
Catalyst | |||||
Merger Agreement [Abstract] | |||||
Goodwill expected to be tax deductible | 525,000,000 | 525,000,000 | |||
Amortization of intangible assets | 154,700,000 | 166,100,000 | |||
Fair value of intangible assets | 1,200,000,000 | ||||
Customer relationships, weighted average useful life | 9 years | ||||
Business Combination, Consideration Transferred [Abstract] | |||||
Fair value of common shares issued | 3,238,141,000 | ||||
Fair value of warrants and stock options issued | 19,824,000 | ||||
Total purchase price | 4,673,241,000 | ||||
Separate Tranactions and Preexisting Relationships [Abstract] | |||||
Transaction and integration expense | 27,200,000 | ||||
Business Combination, Transaction Expense | 22,800,000 | ||||
Acquisition costs included in selling, general and administrative expenses | 17,000,000 | ||||
Contract settlements and termination charges recorded | 3,500,000 | ||||
Accounts receivable with acquired business | 4,100,000 | ||||
Catalyst | Common Shares | |||||
Merger Agreement [Abstract] | |||||
Stock conversion, share received per share converted | 1.3212 | 1.3212 | |||
Stock conversion, cash received per share converted, prior to stock split | 0.6606 | 0.6606 | |||
Stock conversion, cash received per share converted | $28 | $28 | |||
Public offering, shares of common stock | 66,800,000 | ||||
Warrants, Issued | 500,000 | ||||
Business Combination, Consideration Transferred [Abstract] | |||||
Cash paid to shareholders | 1,415,276,000 | ||||
Catalyst | Initial Amounts Recognized at Acquisition Date | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Cash and cash equivalents | 93,775,000 | 93,775,000 | |||
Other current assets | 695,888,000 | 695,888,000 | |||
Total current assets | 789,663,000 | 789,663,000 | |||
Goodwill | 4,010,235,000 | 4,010,235,000 | |||
Customer relationships intangible | 1,184,800,000 | 1,184,800,000 | |||
Other long-term assets | 87,174,000 | 87,174,000 | |||
Total assets acquired | 6,071,872,000 | 6,071,872,000 | |||
Accounts payable | 338,819,000 | 338,819,000 | |||
Pharmacy benefit management rebates payable | 176,202,000 | 176,202,000 | |||
Accrued expenses and other current liabilities | 187,851,000 | 187,851,000 | |||
Long-term debt | 311,994,000 | 311,994,000 | |||
Other long-term liabilities | 385,375,000 | 385,375,000 | |||
Total liabilities assumed | 1,400,241,000 | 1,400,241,000 | |||
Non-controlling interest | -1,610,000 | -1,610,000 | |||
Net assets acquired | 4,673,241,000 | 4,673,241,000 | |||
Catalyst | Measurement Period Adjustments | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Cash and cash equivalents | 0 | -315,000 | |||
Other current assets | 2,411,000 | 5,202,000 | |||
Total current assets | 2,411,000 | 4,887,000 | |||
Goodwill | 16,141,000 | 8,492,000 | |||
Customer relationships intangible | 0 | 0 | |||
Other long-term assets | 8,000 | 1,547,000 | |||
Total assets acquired | 18,560,000 | 14,926,000 | |||
Accounts payable | 5,000 | 0 | |||
Pharmacy benefit management rebates payable | -1,522,000 | 2,935,000 | |||
Accrued expenses and other current liabilities | 5,473,000 | 1,348,000 | |||
Long-term debt | 0 | 0 | |||
Other long-term liabilities | 14,604,000 | 10,643,000 | |||
Total liabilities assumed | 18,560,000 | 14,926,000 | |||
Non-controlling interest | 0 | 0 | |||
Net assets acquired | 0 | 0 | |||
Catalyst | Final Amounts Recognized at Acquisition Date | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Cash and cash equivalents | 93,460,000 | 93,460,000 | |||
Other current assets | 703,501,000 | 703,501,000 | |||
Total current assets | 796,961,000 | 796,961,000 | |||
Goodwill | 4,034,868,000 | 4,034,868,000 | |||
Customer relationships intangible | 1,184,800,000 | 1,184,800,000 | |||
Other long-term assets | 88,729,000 | 88,729,000 | |||
Total assets acquired | 6,105,358,000 | 6,105,358,000 | |||
Accounts payable | 338,824,000 | 338,824,000 | |||
Pharmacy benefit management rebates payable | 177,615,000 | 177,615,000 | |||
Accrued expenses and other current liabilities | 194,672,000 | 194,672,000 | |||
Long-term debt | 311,994,000 | 311,994,000 | |||
Other long-term liabilities | 410,622,000 | 410,622,000 | |||
Total liabilities assumed | 1,433,727,000 | 1,433,727,000 | |||
Non-controlling interest | -1,610,000 | -1,610,000 | |||
Net assets acquired | 4,673,241,000 | 4,673,241,000 | |||
Catalyst | Employees Settlements | |||||
Separate Tranactions and Preexisting Relationships [Abstract] | |||||
Expenses and losses recognized | 3,100,000 | ||||
Catalyst | Severence Cost | |||||
Separate Tranactions and Preexisting Relationships [Abstract] | |||||
Expenses and losses recognized | $10,400,000 |
Business_Combinations_HealthTr
Business Combinations - HealthTran (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 31, 2012 | Dec. 31, 2011 | |
Business Acquisition [Line Items] | |||||
Amortization of acquired intangible assets | $213,220,000 | $203,192,000 | $130,116,000 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | 4,724,639,000 | 4,720,275,000 | 4,478,038,000 | ||
Minimum | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles, estimated useful life | 1 year | ||||
Maximum | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles, estimated useful life | 15 years | ||||
Customer Relationships | Minimum | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles, estimated useful life | 3 years | ||||
Customer Relationships | Maximum | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles, estimated useful life | 10 years | ||||
HealthTran | |||||
Business Acquisition [Line Items] | |||||
Cash paid to shareholders | 250,000,000 | ||||
Acquisition costs included in selling, general and administrative expenses | 900,000 | ||||
Amortization of acquired intangible assets | 14,600,000 | 12,600,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | 74,530,000 | ||||
HealthTran | Trade Mark Trade Name | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles, estimated useful life | 6 months | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | 1,750,000 | ||||
HealthTran | Customer Relationships | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | 69,800,000 | ||||
HealthTran | Customer Relationships | Minimum | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles, estimated useful life | 4 years | ||||
HealthTran | Customer Relationships | Maximum | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles, estimated useful life | 9 years | ||||
HealthTran | Non-compete agreements | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles, estimated useful life | 5 years | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | 2,600,000 | ||||
HealthTran | Licensing Agreements | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles, estimated useful life | 3 years | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | 380,000 | ||||
HealthTran | Initial Amounts Recognized at Acquisition Date | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Current assets | 30,654,000 | ||||
Property and equipment | 2,787,000 | ||||
Goodwill | 173,642,000 | ||||
Intangible assets | 77,130,000 | ||||
Total assets acquired | 284,213,000 | ||||
Current liabilities | 36,784,000 | ||||
Total liabilities assumed | 36,784,000 | ||||
Net assets acquired | 247,429,000 | ||||
HealthTran | Measurement Period Adjustments | |||||
Business Acquisition [Line Items] | |||||
Adjustment paid to former owners | 1,000,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Current assets | 245,000 | ||||
Property and equipment | 0 | ||||
Goodwill | 833,000 | ||||
Intangible assets | -2,600,000 | ||||
Total assets acquired | -1,522,000 | ||||
Current liabilities | -496,000 | ||||
Total liabilities assumed | -496,000 | ||||
Net assets acquired | -1,026,000 | ||||
HealthTran | Final Amounts Recognized at Acquisition Date | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Current assets | 30,899,000 | ||||
Property and equipment | 2,787,000 | ||||
Goodwill | 174,475,000 | ||||
Intangible assets | 74,530,000 | ||||
Total assets acquired | 282,691,000 | ||||
Current liabilities | 36,288,000 | ||||
Total liabilities assumed | 36,288,000 | ||||
Net assets acquired | $246,403,000 |
Business_Combinations_Pro_Form
Business Combinations - Pro Forma Information (Details) (Restat, USD $) | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 |
Restat | |
Business Acquisition, Pro Forma Information [Abstract] | |
Revenue | $15,344,028 |
Gross profit | 1,187,714 |
Net income | $270,024 |
Earnings per share attributable to the Company: | |
Basic (in dollars per share) | $1.31 |
Diluted (in dollars per share) | $1.31 |
Weighted average number of shares used in computing earnings per share: | |
Basic (in shares) | 206,013,876 |
Diluted (in shares) | 206,719,526 |
Business_Combinations_Salveo_S
Business Combinations - Salveo Specialty Pharmacy (Details) (Subsequent Event, Salveo Specialty Pharmacy, USD $) | 0 Months Ended |
In Thousands, unless otherwise specified | Jan. 02, 2015 |
Subsequent Event | Salveo Specialty Pharmacy | |
Business Acquisition [Line Items] | |
Purchase price | $260,000 |
Business_Combinations_Business
Business Combinations Business Combination - Healthcare Solutions Inc. (Details) (Subsequent Event, Healthcare Solutions Inc., USD $) | 0 Months Ended |
In Thousands, unless otherwise specified | Feb. 26, 2015 |
Subsequent Event | Healthcare Solutions Inc. | |
Business Acquisition [Line Items] | |
Purchase price | $405,000 |
Variable_Interest_Entity_Detai
Variable Interest Entity (Details) (Variable Interest Entity, Primary Beneficiary) | Dec. 31, 2014 |
Variable Interest Entity, Primary Beneficiary | |
Variable Interest Entity [Line Items] | |
Ownership percentage (in excess of 40%) | 40.00% |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Line Items] | |||
Cost | $354,247,000 | $300,865,000 | |
Accumulated Depreciation | -144,220,000 | -103,858,000 | |
Net Book Value | 210,027,000 | 197,007,000 | |
Depreciation | 63,468,000 | 42,232,000 | 20,234,000 |
Depreciation, cost of revenue | 4,000,000 | 4,300,000 | 3,500,000 |
Furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 39,690,000 | 30,374,000 | |
Accumulated Depreciation | -13,577,000 | -10,815,000 | |
Net Book Value | 26,113,000 | 19,559,000 | |
Computer equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 208,628,000 | 168,463,000 | |
Accumulated Depreciation | -107,565,000 | -77,880,000 | |
Net Book Value | 101,063,000 | 90,583,000 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 96,784,000 | 91,294,000 | |
Accumulated Depreciation | -23,078,000 | -15,163,000 | |
Net Book Value | 73,706,000 | 76,131,000 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 9,145,000 | 10,734,000 | |
Accumulated Depreciation | 0 | 0 | |
Net Book Value | $9,145,000 | $10,734,000 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Goodwill) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | $4,720,275 | $4,478,038 |
Acquisitions | 2,026 | 225,761 |
Measurement periods adjustments | 2,338 | 16,476 |
Goodwill, end of period | 4,724,639 | 4,720,275 |
PBM | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | 4,700,610 | 4,458,373 |
Acquisitions | 2,026 | 225,761 |
Measurement periods adjustments | 2,338 | 16,476 |
Goodwill, end of period | 4,704,974 | 4,700,610 |
HCIT | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | 19,665 | 19,665 |
Acquisitions | 0 | 0 |
Measurement periods adjustments | 0 | 0 |
Goodwill, end of period | $19,665 | $19,665 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets (Intangible Assets) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $1,542,702,000 | $1,544,965,000 |
Accumulated Amortization | 574,503,000 | 363,546,000 |
Net | 968,199,000 | 1,181,419,000 |
Definite-lived Intangible Assets, Future Amortization Expense [Abstract] | ||
Future amortization expense, 2015 | 194,000,000 | |
Future amortization expense, 2016 | 166,700,000 | |
Future amortization expense, 2017 | 147,500,000 | |
Future amortization expense, 2018 | 137,200,000 | |
Future amortization expense, 2019 | 126,800,000 | |
Future amortization expense, after 2019 | 196,000,000 | |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,527,722,000 | 1,528,475,000 |
Accumulated Amortization | 564,623,000 | 355,737,000 |
Net | 963,099,000 | 1,172,738,000 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 11,920,000 | 13,430,000 |
Accumulated Amortization | 7,435,000 | 6,463,000 |
Net | 4,485,000 | 6,967,000 |
Other Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,060,000 | 3,060,000 |
Accumulated Amortization | 2,445,000 | 1,346,000 |
Net | $615,000 | $1,714,000 |
Accrued_Expenses_and_Other_Cur2
Accrued Expenses and Other Current Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ||
Customer deposits | $13,619 | $12,148 |
Salaries and wages payable | 65,481 | 54,761 |
Deferred revenue | 31,630 | 10,053 |
Income taxes payable | 0 | 7,456 |
Other accrued expenses | 216,460 | 169,682 |
Total accrued expenses and other current liabilities | $327,190 | $254,100 |
LongTerm_Liabilities_Component
Long-Term Liabilities (Components of Long-term Debt) (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||
Jun. 02, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 02, 2012 | Sep. 30, 2014 | Mar. 31, 2014 | Jun. 03, 2013 | Oct. 01, 2013 | |
Debt Instrument [Line Items] | |||||||||
Interest rate | 2.14% | ||||||||
Less current maturities | ($81,250,000) | ($50,000,000) | |||||||
Long-term debt | 1,344,973,000 | 1,215,363,000 | |||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Debt amount | 1,800,000,000 | ||||||||
Interest rate | 0.52% | ||||||||
Initial applicable margin for borrowings | 1.63% | ||||||||
Interest rate during period | 2.25% | ||||||||
Amortization of financing costs and discounts | 8,500,000 | 9,100,000 | 5,000,000 | ||||||
Interest expense charge | 400,000 | ||||||||
Term A Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 1.81% | 1.81% | |||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Debt amount | 1,100,000,000 | ||||||||
Term of long-term debt | 5 years | ||||||||
Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Less current maturities | -81,250,000 | -50,000,000 | |||||||
Secured Debt | Term A Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, current and noncurrent maturities | 932,875,000 | 965,363,000 | |||||||
Senior Notes, 4.75% Due 2021 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, current and noncurrent maturities | 493,348,000 | 0 | |||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Debt amount | 500,000,000 | ||||||||
Interest rate | 4.75% | ||||||||
Periodic interest payment | 12,100,000 | ||||||||
Proceeds from issuance of long-term debt | 492,500,000 | ||||||||
Debt discount | 7,500,000 | ||||||||
Debt issuance cost | 2,000,000 | ||||||||
Amortization of financing costs and discounts | 1,100,000 | ||||||||
Catalyst | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Debt amount | 1,400,000,000 | ||||||||
Catalyst | Term A Facility | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Debt amount | 1,100,000,000 | ||||||||
Debt discount | 29,600,000 | ||||||||
Amended Credit Agreement | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Interest rate during period | 1.81% | ||||||||
Maximum leverage ratio | 4 | ||||||||
Required maximum consolidated senior secured leverage ratio required | 3.25 | ||||||||
Maximum ratio of EBIT to interest expense | 4 | ||||||||
Amended Credit Agreement | Term A Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, current and noncurrent maturities | 950,000,000 | 987,500,000 | |||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Debt amount | 1,000,000,000 | ||||||||
Debt discount | 24,100,000 | ||||||||
Repayments of debt | 37,500,000 | 12,500,000 | 100,000,000 | ||||||
Payment of debt discount | 1,300,000 | ||||||||
Amended Credit Agreement | Secured Debt | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Payments for fees | 2,300,000 | ||||||||
Revolving credit facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 1.81% | 1.81% | |||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Debt amount | 700,000,000 | ||||||||
Revolving credit facility | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, current and noncurrent maturities | 0 | 300,000,000 | |||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Repayments of long-term lines of credit | 300,000,000 | ||||||||
Revolving credit facility | Catalyst | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Debt amount | 300,000,000 | ||||||||
Payments of debt issuance costs | 18,800,000 | ||||||||
Revolving credit facility | Restat | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Term of long-term debt | 5 years | ||||||||
Proceeds from lines of credit | 350,000,000 | ||||||||
Revolving credit facility | Amended Credit Agreement | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Debt amount | 800,000,000 | ||||||||
Debt discount | 16,600,000 | ||||||||
Repayments of debt | 150,000,000 | ||||||||
Remaining borrowing capacity | 800,000,000 | 500,000,000 | 700,000,000 | ||||||
Deferred finance costs | 1,000,000 | ||||||||
Base Rate Borrowings | Amended Credit Agreement | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Initial applicable margin for borrowings | 0.63% | ||||||||
LIBOR Borrowings | Amended Credit Agreement | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Initial applicable margin for borrowings | 1.63% | ||||||||
Minimum | LIBOR Borrowings | Amended Credit Agreement | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Leverage ratio allowed | 1.5 | ||||||||
Maximum | LIBOR Borrowings | Amended Credit Agreement | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Leverage ratio allowed | 2.5 | ||||||||
Debt Instrument, Redemption, Period One | Senior Notes, 4.75% Due 2021 | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Percentage of principal amount redeemed | 100.00% | ||||||||
Redemption price, percentage | 101.00% | ||||||||
Percentage of aggregate amount of debt required to make note due and payable immediately | 25.00% | ||||||||
Initial applicable margin for borrowings | 0.50% | ||||||||
Debt Instrument, Redemption, Period One | Minimum | Senior Notes, 4.75% Due 2021 | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Redemption period | 30 days | ||||||||
Debt Instrument, Redemption, Period One | Maximum | Senior Notes, 4.75% Due 2021 | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Redemption period | 60 days | ||||||||
Financial Guarantee | Senior Notes, 4.75% Due 2021 | |||||||||
Long-term Debt, by Category, Current and Noncurrent [Abstract] | |||||||||
Guarantor obligations, triggering amount | $175,000,000 |
LongTerm_Liabilities_Maturitie
Long-Term Liabilities (Maturities of Long-term Debt) (Details) (Term A Facility, Amended Credit Agreement, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Term A Facility | Amended Credit Agreement | ||
Maturities of Long-term Debt [Abstract] | ||
2015 | $81,250 | |
2016 | 93,750 | |
2017 | 118,750 | |
2018 | 656,250 | |
Total | $950,000 | $987,500 |
Shareholders_Equity_Common_Sha
Shareholders' Equity (Common Shares) (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 02, 2012 | 16-May-12 |
Class of Stock [Line Items] | |||||
Proceeds from public offering, net of issuance costs | $0 | $0 | $519,075 | ||
Common Shares | |||||
Class of Stock [Line Items] | |||||
Public offering, shares of common stock | 11,960,000 | ||||
Catalyst | Common Shares | |||||
Class of Stock [Line Items] | |||||
Public offering, shares of common stock | 66,800,000 | ||||
Warrants issued | 500,000 | ||||
Public Offering | |||||
Class of Stock [Line Items] | |||||
Proceeds from public offering, net of issuance costs | $519,100 | ||||
Public Offering | Common Shares | |||||
Class of Stock [Line Items] | |||||
Public offering, shares of common stock | 12,000,000 | ||||
Public offering, price per share | $45.30 |
Shareholders_Equity_Equity_Inc
Shareholders' Equity (Equity Incentive Plans) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 11-May-11 | Jul. 31, 2012 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | |||||
Total intrinsic value of stock options exercised | $8.20 | $14.90 | $50.30 | ||
LTIP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares counted against share limitations per share granted | 1.79 | ||||
Number of stock-based awards available for grant | 4,815,112 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 3,600,000 | 5,000,000 | |||
Compensation not yet recognized, stock options | 8.2 | ||||
Unrecognized compensation costs on nonvested awards, weighted average period of recognition (in years) | 2 years 4 months 21 days | ||||
Assumed Plans | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares counted against share limitations per share granted | 1.45 | ||||
Number of stock-based awards available for grant | 730,056 | ||||
Maximum common shares issued under plan | 1,480,936 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | |||||
Compensation not yet recognized, stock options | 1.7 | ||||
Unrecognized compensation costs on nonvested awards, weighted average period of recognition (in years) | 3 years 0 months 4 days | ||||
US Dollars | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of options expired, duration | 7 years | ||||
Vesting period | 4 years | ||||
Number of Options (in shares): | |||||
Beginning balance | 1,396,144 | ||||
Granted | 432,586 | ||||
Exercised | -298,108 | ||||
Forfeited | -82,090 | ||||
Ending balances | 1,448,532 | 1,396,144 | |||
Weighted Average Exercise Price (in dollars per share): | |||||
Beginning balance | $31.60 | ||||
Granted | $44.72 | ||||
Exercised | $18.92 | ||||
Forfeited | $47.54 | ||||
Ending balance | $37.22 | $31.60 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | |||||
Range of Exercise Price, lower (in dollars per share | $6.39 | ||||
Range of Exercise Price, upper (in dollars per share) | $56.25 | ||||
Options Outstanding (in shares) | 1,448,532 | ||||
Options Outstanding, Weighted Average Contractual Life (in years) | 4 years 5 months 21 days | ||||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $37.22 | ||||
Options Exercisable (in shares) | 568,115 | ||||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $27.10 | ||||
Aggregate intrinsic value, exercisable stock options | 14 | ||||
Options Exercisable, Weighted Average Remaining Contractual Life | 3 years 3 months 4 days | ||||
Aggregate intrinsic value, vested and expected to vest stock options | 21 | ||||
Total fair value of vested stock options | $4.60 | $3.50 | $2.80 | ||
US Dollars | $6.39- $24.92 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | |||||
Range of Exercise Price, lower (in dollars per share | $6.39 | ||||
Range of Exercise Price, upper (in dollars per share) | $24.92 | ||||
Options Outstanding (in shares) | 233,300 | ||||
Options Outstanding, Weighted Average Contractual Life (in years) | 2 years 1 month 28 days | ||||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $14.05 | ||||
Options Exercisable (in shares) | 230,038 | ||||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $13.88 | ||||
US Dollars | $24.93 - $32.45 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | |||||
Range of Exercise Price, lower (in dollars per share | $24.93 | ||||
Range of Exercise Price, upper (in dollars per share) | $32.45 | ||||
Options Outstanding (in shares) | 233,294 | ||||
Options Outstanding, Weighted Average Contractual Life (in years) | 3 years 3 months 0 days | ||||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $25.51 | ||||
Options Exercisable (in shares) | 140,764 | ||||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $25.57 | ||||
US Dollars | $32.46 - $44.15 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | |||||
Range of Exercise Price, lower (in dollars per share | $32.46 | ||||
Range of Exercise Price, upper (in dollars per share) | $44.15 | ||||
Options Outstanding (in shares) | 279,524 | ||||
Options Outstanding, Weighted Average Contractual Life (in years) | 4 years 3 months 15 days | ||||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $35.78 | ||||
Options Exercisable (in shares) | 110,540 | ||||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $35.25 | ||||
US Dollars | $44.16 - $44.90 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | |||||
Range of Exercise Price, lower (in dollars per share | $44.16 | ||||
Range of Exercise Price, upper (in dollars per share) | $44.90 | ||||
Options Outstanding (in shares) | 347,132 | ||||
Options Outstanding, Weighted Average Contractual Life (in years) | 6 years 2 months 5 days | ||||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $44.70 | ||||
Options Exercisable (in shares) | 0 | ||||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $0 | ||||
US Dollars | $44.91 - $56.25 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, End of Period [Abstract] | |||||
Range of Exercise Price, lower (in dollars per share | $44.91 | ||||
Range of Exercise Price, upper (in dollars per share) | $56.25 | ||||
Options Outstanding (in shares) | 355,282 | ||||
Options Outstanding, Weighted Average Contractual Life (in years) | 5 years 3 months 4 days | ||||
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $53.99 | ||||
Options Exercisable (in shares) | 86,773 | ||||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $54.22 |
Shareholders_Equity_Employee_S
Shareholders' Equity (Employee Stock Purchase Plan) (Details) (ESPP, USD $) | 0 Months Ended | 12 Months Ended | |||
16-May-07 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 16-May-07 | |
ESPP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Base salary annual withholdings, maximum percentage | 15.00% | 15.00% | |||
Base salary annual withholdings, maximum amount | $25,000 | $25,000 | |||
Discount from market price | 5.00% | ||||
Aggregate shares issuable under ESPP, maximum | 400,000 | 400,000 | |||
Shares delivered (in shares) | 40,156 | 33,728 | 14,697 |
Shareholders_Equity_Restricted
Shareholders' Equity (Restricted Stock Units) (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total fair value of vested stock options | $20.80 | $27.30 | $18 |
Weighted Average Grant Date Fair Value Per Unit (in dollars per share): | |||
Vested | $44.72 | $55.99 | $38.49 |
Time-based RSUs | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | 3 years | 3 years |
Time-based RSUs | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | 4 years | 4 years |
Performance-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
LTIP | Restricted Stock Units (RSUs) | |||
Number of Restricted Stock Units (in shares): | |||
Nonvested balance as of the beginning of the period | 1,334,694 | ||
Granted | 694,645 | ||
Vested | -411,817 | ||
Forfeited | -71,832 | ||
Nonvested balance as of the end of the period | 1,545,690 | ||
Weighted Average Grant Date Fair Value Per Unit (in dollars per share): | |||
Nonvested balance as of the beginning of the period | $40.14 | ||
Granted | $44.84 | ||
Vested | $30.23 | ||
Forfeited | $44.57 | ||
Nonvested balance as of the end of the period | $44.69 | ||
Catamaran Corporation Long-Term Incentive Plan | Restricted Stock Units (RSUs) | |||
Weighted Average Grant Date Fair Value Per Unit (in dollars per share): | |||
Granted | $44.84 | ||
Catamaran Corporation Long-Term Incentive Plan | Time-based RSUs | |||
Number of Restricted Stock Units (in shares): | |||
Granted | 302,257 | ||
Nonvested balance as of the end of the period | 714,810 | ||
Catamaran Corporation Long-Term Incentive Plan | Performance-based RSUs | |||
Number of Restricted Stock Units (in shares): | |||
Granted | 392,388 | ||
Nonvested balance as of the end of the period | 830,880 | ||
Assumed Plans | Restricted Stock Units (RSUs) | |||
Number of Restricted Stock Units (in shares): | |||
Nonvested balance as of the beginning of the period | 213,656 | ||
Granted | 247,131 | ||
Vested | -53,386 | ||
Forfeited | -76,528 | ||
Nonvested balance as of the end of the period | 330,873 | ||
Weighted Average Grant Date Fair Value Per Unit (in dollars per share): | |||
Nonvested balance as of the beginning of the period | $50.98 | ||
Granted | $44.41 | ||
Vested | $50.38 | ||
Forfeited | $49.06 | ||
Nonvested balance as of the end of the period | $46.62 | ||
Assumed Plans | Time-based RSUs | |||
Number of Restricted Stock Units (in shares): | |||
Granted | 155,615 | ||
Nonvested balance as of the end of the period | 243,925 | ||
Assumed Plans | Performance-based RSUs | |||
Number of Restricted Stock Units (in shares): | |||
Granted | 91,516 | ||
Nonvested balance as of the end of the period | 86,948 |
Shareholders_Equity_Warrants_D
Shareholders' Equity (Warrants) (Details) (Catalyst, USD $) | 0 Months Ended | |||
Jul. 02, 2012 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Catalyst | ||||
Class of Stock [Line Items] | ||||
Issuance of common shares for acquisitions, shares | 66,800,000 | |||
Warrants issued | 500,000 | |||
Warrants outstanding | 0 | 425,160 | ||
Weighted average exercise price | $8.12 |
Shareholders_Equity_StockBased
Shareholders' Equity (Stock-Based Compensation) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stockholders' Equity Note [Abstract] | |||
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $12,700,000 | $9,500,000 | $6,500,000 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 33,554,000 | 25,562,000 | 17,667,000 |
Allocated stock-based compensation expense | 33,554,000 | 25,562,000 | 17,667,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Volatility rate, minimum | 37.70% | 41.40% | 47.20% |
Volatility rate, maximum | 39.20% | 45.40% | 49.20% |
Risk free interest rate, minimum | 1.54% | 0.81% | 0.65% |
Risk free interest rate, maximum | 1.73% | 1.74% | 0.83% |
Expected life | 4 years 6 months | 4 years 6 months | 4 years 6 months |
Dividend yield | 0.00% | 0.00% | 0.00% |
Weighted-average grant date fair value (in dollars per share) | $15.47 | $21.33 | $14.70 |
Employee | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected life | 4 years 6 months | ||
Employee | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected life | 5 years | ||
Director | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected life | 1 year | ||
Director | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected life | 2 years 6 months | ||
Cost of Revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated stock-based compensation expense | 2,284,000 | 1,404,000 | 687,000 |
Selling, General and Administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated stock-based compensation expense | 31,270,000 | 24,158,000 | 16,980,000 |
LTIP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation costs on nonvested awards, weighted average period of recognition (in years) | 2 years 4 months 21 days | ||
Assumed Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation costs on nonvested awards, weighted average period of recognition (in years) | 3 years 0 months 4 days | ||
Restricted Stock Units (RSUs) | LTIP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation costs on nonvested awards | 34,600,000 | ||
Unrecognized compensation costs on nonvested awards, weighted average period of recognition (in years) | 2 years 0 months 7 days | ||
Restricted Stock Units (RSUs) | Assumed Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation costs on nonvested awards | $12,000,000 | ||
Unrecognized compensation costs on nonvested awards, weighted average period of recognition (in years) | 2 years 5 months 27 days |
Income_Taxes_Deferred_Income_T
Income Taxes (Deferred Income Tax Assets and Liabilities) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred income tax assets: | ||
Non-capital loss carryforwards (“NOLâ€) | $28,906 | $18,229 |
Lease inducements and deferred financing | 15,826 | 12,528 |
Reserves and accruals | 62,487 | 45,974 |
Stock-based compensation | 17,889 | 12,763 |
Other | 12,318 | 9,408 |
Total | 137,426 | 98,902 |
Less valuation allowance - current | 804 | 875 |
Less valuation allowance - long term | 28,915 | 17,486 |
Total valuation allowance | 29,719 | 18,361 |
Total deferred tax assets | 107,707 | 80,541 |
Deferred tax assets — current | 58,631 | 44,029 |
Deferred tax assets — long term | 49,076 | 36,512 |
Deferred income tax liabilities: | ||
Property and equipment and intangible assets | 297,978 | 329,842 |
Dividend withholding tax | 5,675 | 5,675 |
Other | 5,156 | 3,146 |
Total | 308,809 | 338,663 |
Foreign | ||
Deferred income tax assets: | ||
Total | 30,800 | 18,100 |
Total valuation allowance | 28,400 | 17,100 |
Canada, US Federal and state NOLs | ||
Deferred income tax assets: | ||
Total | 28,900 | |
Total valuation allowance | $26,700 |
Income_Taxes_Income_Tax_Reconc
Income Taxes (Income Tax Reconciliation) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Corporate statutory rate | 35.00% | 35.00% | 35.00% |
Income tax expense on income before income taxes | $177,768 | $140,751 | $66,618 |
Tax effect of: | |||
State and local income taxes, net of federal benefit | 13,527 | 10,726 | 4,281 |
Transaction costs and transaction related expenses | 453 | 938 | 5,252 |
Dividend withholding tax | 0 | -65 | 13,074 |
Impact of foreign tax rates | -3,191 | -3,693 | -1,582 |
Non-controlling interest | -22,452 | -13,670 | -1,645 |
Cross-jurisdictional financing | -48,252 | -44,659 | -23,937 |
Other | 3,662 | 4,479 | 3,763 |
Valuation allowance | 12,671 | 8,596 | 3,492 |
Income tax expense | $134,186 | $103,403 | $69,316 |
Income_Taxes_Components_of_Inc
Income Taxes (Components of Income Tax) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Current tax expense | |||
Current tax expense | $192,233,000 | $147,739,000 | $107,241,000 |
Deferred tax expense (benefit) | |||
Deferred tax expense | -58,047,000 | -44,336,000 | -37,925,000 |
Income tax expense | 134,186,000 | 103,403,000 | 69,316,000 |
Income from U.S. operations before income taxes | 428,700,000 | 319,800,000 | 158,700,000 |
United States | |||
Current tax expense | |||
Current tax expense | 192,021,000 | 146,484,000 | 94,834,000 |
Deferred tax expense (benefit) | |||
Deferred tax expense | -57,889,000 | -44,180,000 | -38,441,000 |
Foreign | |||
Current tax expense | |||
Current tax expense | 212,000 | 1,255,000 | 12,407,000 |
Deferred tax expense (benefit) | |||
Deferred tax expense | -158,000 | -156,000 | 516,000 |
Income from Canadian operations before income taxes | $79,200,000 | $82,300,000 | $31,600,000 |
Income_Taxes_Uncertain_Tax_Pos
Income Taxes (Uncertain Tax Positions) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of Unrecognized Tax Benefits, Excluding Interests and Penalties [Roll Forward] | |||
Balance at January 1 | $28.90 | $18.80 | $0.60 |
Additions for tax positions related to prior years | 9 | 26.5 | 10.3 |
Reductions for tax positions related to prior years | -0.9 | -13.9 | 0 |
Additions based on tax positions related to the current year | 3.8 | 0.4 | 7.9 |
Reductions due to lapse of the applicable statute of limitations | -4.7 | 0 | 0 |
Decrease related to settlements with taxing authorities | -0.7 | -2.9 | 0 |
Balance at December 31 | 35.4 | 28.9 | 18.8 |
Accrued interest for uncertain tax positions | $5.90 | $4.70 | $0.50 |
Lease_Exit_Costs_Details
Lease Exit Costs (Details) (USD $) | 1 Months Ended | |||
Sep. 30, 2014 | Aug. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Bannockburn | ||||
Operating Leased Assets [Line Items] | ||||
Lease loss accrual, cash outflow | $7,000,000 | |||
Bannockburn | Accrued expenses and other current liabilities | ||||
Operating Leased Assets [Line Items] | ||||
Lease loss accrual | 6,900,000 | |||
Bannockburn | Selling, general and administrative expenses | ||||
Operating Leased Assets [Line Items] | ||||
Lease loss expense | 5,700,000 | |||
Maryland | ||||
Operating Leased Assets [Line Items] | ||||
Lease loss accrual, cash outflow | 6,100,000 | |||
Maryland | Accrued expenses and other current liabilities | ||||
Operating Leased Assets [Line Items] | ||||
Lease loss accrual | 5,215,000 | 5,774,000 | ||
Maryland | Selling, general and administrative expenses | ||||
Operating Leased Assets [Line Items] | ||||
Lease loss expense | $5,600,000 |
Lease_Exit_Costs_Details_2
Lease Exit Costs (Details 2) (Accrued expenses and other current liabilities, Maryland, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Accrued expenses and other current liabilities | Maryland | |
Lease Exit Cost Accrual [Roll Forward] | |
Liability, beginning of period | $5,774 |
Net payments | 819 |
Change in Present Value | 260 |
Liability, end of period | $5,215 |
Earnings_Per_Share_Computation
Earnings Per Share (Computation of Basic and Diluted Earnings Per Share) (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share [Line Items] | |||
Net income available to common shareholders | $317,293 | $262,170 | $116,658 |
Denominator for basic EPS — weighted average common shares outstanding (in shares) | 207,103,603 | 206,013,876 | 166,765,682 |
Effect of dilutive securities: | |||
Denominator for diluted EPS (in shares) | 207,752,145 | 206,719,526 | 167,830,620 |
Earnings per share: | |||
Basic (in dollars per share) | $1.53 | $1.27 | $0.70 |
Diluted (in dollars per share) | $1.53 | $1.27 | $0.70 |
Restricted Stock Units (RSUs) | |||
Effect of dilutive securities: | |||
Stock-based compensation (in shares) | 402,992 | 321,587 | 329,975 |
Stock Options | |||
Effect of dilutive securities: | |||
Stock-based compensation (in shares) | 245,550 | 384,063 | 734,963 |
Earnings_Per_Share_Antidilutiv
Earnings Per Share (Anti-dilutive Securities) (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Shares not included in the computation of diluted earnings per share | 1,416,143 | 645,989 | 1,062,041 |
Restricted Stock Units (RSUs) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Shares not included in the computation of diluted earnings per share | 746,999 | 615,608 | 773,509 |
Anti-dilutive stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Shares not included in the computation of diluted earnings per share | 669,144 | 30,381 | 288,532 |
Supplemental_Cash_Flow_Informa2
Supplemental Cash Flow Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental Cash Flow Information [Line Items] | |||
Income taxes paid | $201,263 | $158,053 | $22,052 |
Interest paid | 38,880 | 30,322 | 18,711 |
Interest received | 837 | 735 | 473 |
NMHC | |||
Supplemental Cash Flow Information [Line Items] | |||
Equity shares issued as a result of acquisition | 4 | ||
Catalyst | |||
Supplemental Cash Flow Information [Line Items] | |||
Equity shares issued as a result of acquisition | $3,238,141 |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Maximum annual contributions | $17,500 | $17,500 | $17,000 |
Employer's matching contribution | 100.00% | ||
Percentage of employee eligible earnings matched | 1.00% | ||
Additional employer's matching contribution | 50.00% | ||
Participant contributions, vested percentage | 100.00% | ||
Company contributions | $9,000,000 | $7,000,000 | $4,900,000 |
Minimum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Additional percentage of employee eligible earnings matched | 2.00% | ||
Maximum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Additional percentage of employee eligible earnings matched | 6.00% | ||
One Year of Service | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions, vested percentage | 20.00% | ||
Employer contributions, requisite service period for vesting | 1 year | ||
Two Years of Service | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions, vested percentage | 100.00% | ||
Employer contributions, requisite service period for vesting | 2 years |
Commitments_and_Contingencies_1
Commitments and Contingencies (Lease Commitments) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2015 | $20,747,000 | ||
2016 | 19,529,000 | ||
2017 | 19,847,000 | ||
2018 | 16,901,000 | ||
2019 | 15,752,000 | ||
After 2019 | 53,633,000 | ||
Total | 146,409,000 | ||
Rent expense | $36,000,000 | $35,400,000 | $17,100,000 |
Segment_Information_Details
Segment Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
segment | |||
Segment Reporting Information [Line Items] | |||
Number of operating segments | 2 | ||
Revenue | $21,581,890 | $14,780,094 | $9,940,120 |
Cost of revenue | 20,221,837 | 13,654,449 | 9,206,744 |
Gross profit | 1,360,053 | 1,125,645 | 733,376 |
Corporate expenses | 852,145 | 723,503 | 543,039 |
Income before income taxes | 507,908 | 402,142 | 190,337 |
Income tax expense | 134,186 | 103,403 | 69,316 |
Net income | 373,722 | 298,739 | 121,021 |
Less net income attributable to non-controlling interest | 56,429 | 36,569 | 4,363 |
Net income attributable to the Company | 317,293 | 262,170 | 116,658 |
Goodwill | 4,724,639 | 4,720,275 | 4,478,038 |
Total assets | 9,324,185 | 7,995,763 | 7,385,127 |
Customer Concentration Risk | Accounts Receivable | |||
Segment Reporting Information [Line Items] | |||
Number of customers accounting for greater than 10% of accounts receivable | 1 | 1 | |
Concentration risk, percentage (less than 0.2% for Canadian Operations) | 17.00% | 15.00% | |
PBM | |||
Segment Reporting Information [Line Items] | |||
Revenue | 21,429,983 | 14,632,104 | 9,785,084 |
Cost of revenue | 20,155,768 | 13,583,941 | 9,141,029 |
Gross profit | 1,274,215 | 1,048,163 | 644,055 |
Corporate expenses | 0 | 0 | 0 |
Income before income taxes | 0 | 0 | 0 |
Income tax expense | 0 | 0 | 0 |
Net income | 0 | 0 | 0 |
Less net income attributable to non-controlling interest | 0 | 0 | 0 |
Net income attributable to the Company | 0 | 0 | 0 |
Goodwill | 4,704,974 | 4,700,610 | 4,458,373 |
Total assets | 9,103,603 | 7,634,033 | 7,159,098 |
PBM | Customer Concentration Risk | Sales | |||
Segment Reporting Information [Line Items] | |||
Number of customers accounting for greater than 10% of revenue | 1 | 1 | 1 |
Concentration risk, percentage (less than 0.2% for Canadian Operations) | 34.00% | 23.00% | 31.00% |
HCIT | |||
Segment Reporting Information [Line Items] | |||
Revenue | 151,907 | 147,990 | 155,036 |
Cost of revenue | 66,069 | 70,508 | 65,715 |
Gross profit | 85,838 | 77,482 | 89,321 |
Corporate expenses | 0 | 0 | 0 |
Income before income taxes | 0 | 0 | 0 |
Income tax expense | 0 | 0 | 0 |
Net income | 0 | 0 | 0 |
Less net income attributable to non-controlling interest | 0 | 0 | 0 |
Net income attributable to the Company | 0 | 0 | 0 |
Goodwill | 19,665 | 19,665 | 19,665 |
Total assets | 220,582 | 361,730 | 226,029 |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Revenue | 0 | 0 | 0 |
Cost of revenue | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 |
Corporate expenses | 852,145 | 723,503 | 543,039 |
Income before income taxes | 0 | 0 | 0 |
Income tax expense | 0 | 0 | 0 |
Net income | 0 | 0 | 0 |
Less net income attributable to non-controlling interest | 0 | 0 | 0 |
Net income attributable to the Company | 0 | 0 | 0 |
Goodwill | 0 | 0 | 0 |
Total assets | $0 | $0 | |
CANADA | Geographic Concentration Risk [Member] | Sales | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage (less than 0.2% for Canadian Operations) | 0.20% | 0.20% | 0.20% |
Financial_Instruments_Details
Financial Instruments (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative [Line Items] | ||
Interest rate | 0.52% | |
Debt instrument interest, effective percentage rate | 2.14% | |
Interest rate margin for default | 1.63% | |
Deferred expenses related to derivative instruments accumulated in other comprehensive income expected to reclassified in the next twelve months | $1,100,000 | |
Recurring Basis | ||
Derivative [Line Items] | ||
Interest rate swap liability | 1,096,000 | 1,719,000 |
Interest Rate Swap | ||
Derivative [Line Items] | ||
Derivative, Term | 3 years | |
Notional amount of interest rate derivatives | 500,000,000 | |
Interest Rate Swap | Recurring Basis | ||
Derivative [Line Items] | ||
Interest expense reclassified from other comprehensive income into earnings | 1,700,000 | |
Interest Rate Swap | Significant Observable Inputs (Level 2) | Recurring Basis | ||
Derivative [Line Items] | ||
Interest rate swap liability | $1,096,000 | $1,719,000 |
Fair_Value_Details
Fair Value (Details) (Recurring Basis, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value of contingent purchase price | $19,954 | |
Derivatives | 1,096 | 1,719 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value of contingent purchase price | 19,954 | |
Interest Rate Swap | Significant Observable Inputs (Level 2) | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivatives | $1,096 | $1,719 |
Supplemental_Information_Detai
Supplemental Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for Doubtful Accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning Balance | $5,860 | $7,899 | $2,725 |
Charged to Expense | 2,259 | 1,187 | 3,328 |
Adjustments | -3,252 | -3,226 | 1,846 |
Ending Balance | 4,867 | 5,860 | 7,899 |
Deferred Tax Assets | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning Balance | 18,361 | 5,797 | 3,603 |
Charged to Expense | 12,671 | 8,596 | 2,194 |
Adjustments | -1,313 | 3,968 | 0 |
Ending Balance | $29,719 | $18,361 | $5,797 |
Condensed_Consolidating_Financ2
Condensed Consolidating Financial Statements Balance Sheet (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Current assets | ||||
Cash and cash equivalents | $1,011,952 | $387,241 | $370,776 | $341,382 |
Accounts receivable, net | 1,254,336 | 959,586 | ||
Rebates receivable | 863,824 | 305,955 | ||
Other current assets | 219,435 | 184,893 | ||
Intercompany receivable | 0 | 0 | ||
Total current assets | 3,349,547 | 1,837,675 | ||
Property and equipment, net | 210,027 | 197,007 | ||
Goodwill | 4,724,639 | 4,720,275 | 4,478,038 | |
Other intangible assets, net | 968,199 | 1,181,419 | ||
Intercompany loans receivable | 0 | |||
Investment in subsidiaries | 0 | 0 | ||
Other long-term assets | 71,773 | 59,387 | ||
Total assets | 9,324,185 | 7,995,763 | 7,385,127 | |
Current liabilities | ||||
Accounts payable | 967,791 | 817,805 | ||
Accrued expenses and other current liabilities | 327,190 | 254,100 | ||
Rebates payable | 967,733 | 356,265 | ||
Current portion - long-term debt | 81,250 | 50,000 | ||
Intercompany payable | 0 | 0 | ||
Total current liabilities | 2,343,964 | 1,478,170 | ||
Deferred income taxes | 257,325 | 301,341 | ||
Long-term debt | 1,344,973 | 1,215,363 | ||
Intercompany loans payable | 0 | |||
Other long-term liabilities | 98,816 | 89,391 | ||
Total liabilities | 4,045,078 | 3,084,265 | ||
Commitments and contingencies (Note 16) | ||||
Shareholders’ equity | ||||
Shareholders’ equity | 5,271,979 | 4,908,490 | ||
Non-controlling interest | 7,128 | 3,008 | ||
Total equity | 5,279,107 | 4,911,498 | 4,609,861 | 671,038 |
Total liabilities and equity | 9,324,185 | 7,995,763 | ||
Reportable Legal Entities | Catamaran Corporation | ||||
Current assets | ||||
Cash and cash equivalents | 333,469 | 15,090 | 33,603 | 122,415 |
Accounts receivable, net | 304 | 294 | ||
Rebates receivable | 10,710 | 35,776 | ||
Other current assets | 99 | 107 | ||
Intercompany receivable | 0 | 0 | ||
Total current assets | 344,582 | 51,267 | ||
Property and equipment, net | 110 | 69 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Intercompany loans receivable | 0 | |||
Investment in subsidiaries | 6,375,214 | 6,137,281 | ||
Other long-term assets | 13,874 | 15,675 | ||
Total assets | 6,733,780 | 6,204,292 | ||
Current liabilities | ||||
Accounts payable | 4 | 0 | ||
Accrued expenses and other current liabilities | 10,580 | 3,047 | ||
Rebates payable | 0 | 0 | ||
Current portion - long-term debt | 81,250 | 50,000 | ||
Intercompany payable | 23,898 | 25,673 | ||
Total current liabilities | 115,732 | 78,720 | ||
Deferred income taxes | 0 | 0 | ||
Long-term debt | 1,344,973 | 1,215,363 | ||
Intercompany loans payable | 0 | |||
Other long-term liabilities | 1,096 | 1,719 | ||
Total liabilities | 1,461,801 | 1,295,802 | ||
Commitments and contingencies (Note 16) | ||||
Shareholders’ equity | ||||
Shareholders’ equity | 5,271,979 | 4,908,490 | ||
Non-controlling interest | 0 | 0 | ||
Total equity | 5,271,979 | 4,908,490 | ||
Total liabilities and equity | 6,733,780 | 6,204,292 | ||
Reportable Legal Entities | Guarantors | ||||
Current assets | ||||
Cash and cash equivalents | 648,903 | 362,647 | 318,770 | 217,032 |
Accounts receivable, net | 1,217,675 | 889,267 | ||
Rebates receivable | 851,929 | 270,179 | ||
Other current assets | 166,858 | 149,233 | ||
Intercompany receivable | 675,551 | 0 | ||
Total current assets | 3,560,916 | 1,671,326 | ||
Property and equipment, net | 154,413 | 172,090 | ||
Goodwill | 4,689,522 | 4,685,158 | ||
Other intangible assets, net | 963,096 | 1,173,347 | ||
Intercompany loans receivable | 175,000 | |||
Investment in subsidiaries | 266,096 | 202,292 | ||
Other long-term assets | 42,876 | 24,117 | ||
Total assets | 9,676,919 | 8,103,330 | ||
Current liabilities | ||||
Accounts payable | 1,079,598 | 851,260 | ||
Accrued expenses and other current liabilities | 304,309 | 228,801 | ||
Rebates payable | 967,733 | 356,266 | ||
Current portion - long-term debt | 0 | 0 | ||
Intercompany payable | 0 | 3,885 | ||
Total current liabilities | 2,351,640 | 1,440,212 | ||
Deferred income taxes | 255,777 | 299,794 | ||
Long-term debt | 0 | 0 | ||
Intercompany loans payable | 0 | |||
Other long-term liabilities | 71,475 | 65,812 | ||
Total liabilities | 2,678,892 | 1,805,818 | ||
Commitments and contingencies (Note 16) | ||||
Shareholders’ equity | ||||
Shareholders’ equity | 6,998,027 | 6,297,512 | ||
Non-controlling interest | 0 | 0 | ||
Total equity | 6,998,027 | 6,297,512 | ||
Total liabilities and equity | 9,676,919 | 8,103,330 | ||
Reportable Legal Entities | Non-Guarantors | ||||
Current assets | ||||
Cash and cash equivalents | 29,580 | 9,504 | 18,403 | 1,935 |
Accounts receivable, net | 166,937 | 120,869 | ||
Rebates receivable | 155,719 | 80,030 | ||
Other current assets | 52,478 | 35,553 | ||
Intercompany receivable | 0 | 130,377 | ||
Total current assets | 404,714 | 376,333 | ||
Property and equipment, net | 55,504 | 24,848 | ||
Goodwill | 35,117 | 35,117 | ||
Other intangible assets, net | 5,103 | 8,072 | ||
Intercompany loans receivable | 0 | |||
Investment in subsidiaries | 71 | 71 | ||
Other long-term assets | 22,084 | 21,818 | ||
Total assets | 522,593 | 466,259 | ||
Current liabilities | ||||
Accounts payable | 3,150 | 8,315 | ||
Accrued expenses and other current liabilities | 18,846 | 22,252 | ||
Rebates payable | 42,932 | 31,332 | ||
Current portion - long-term debt | 0 | 0 | ||
Intercompany payable | 626,434 | 0 | ||
Total current liabilities | 691,362 | 61,899 | ||
Deferred income taxes | 1,548 | 1,547 | ||
Long-term debt | 0 | 0 | ||
Intercompany loans payable | 175,000 | |||
Other long-term liabilities | 26,245 | 21,860 | ||
Total liabilities | 719,155 | 260,306 | ||
Commitments and contingencies (Note 16) | ||||
Shareholders’ equity | ||||
Shareholders’ equity | -197,807 | 204,707 | ||
Non-controlling interest | 1,245 | 1,246 | ||
Total equity | -196,562 | 205,953 | ||
Total liabilities and equity | 522,593 | 466,259 | ||
Consolidations | ||||
Current assets | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | -130,580 | -50,844 | ||
Rebates receivable | -154,534 | -80,030 | ||
Other current assets | 0 | 0 | ||
Intercompany receivable | -675,551 | -130,377 | ||
Total current assets | -960,665 | -261,251 | ||
Property and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Intercompany loans receivable | -175,000 | |||
Investment in subsidiaries | -6,641,381 | -6,339,644 | ||
Other long-term assets | -7,061 | -2,223 | ||
Total assets | -7,609,107 | -6,778,118 | ||
Current liabilities | ||||
Accounts payable | -114,961 | -41,770 | ||
Accrued expenses and other current liabilities | -6,545 | 0 | ||
Rebates payable | -42,932 | -31,333 | ||
Current portion - long-term debt | 0 | 0 | ||
Intercompany payable | -650,332 | -29,558 | ||
Total current liabilities | -814,770 | -102,661 | ||
Deferred income taxes | 0 | 0 | ||
Long-term debt | 0 | 0 | ||
Intercompany loans payable | -175,000 | |||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | -814,770 | -277,661 | ||
Commitments and contingencies (Note 16) | ||||
Shareholders’ equity | ||||
Shareholders’ equity | -6,800,220 | -6,502,219 | ||
Non-controlling interest | 5,883 | 1,762 | ||
Total equity | -6,794,337 | -6,500,457 | ||
Total liabilities and equity | ($7,609,107) | ($6,778,118) |
Condensed_Consolidating_Financ3
Condensed Consolidating Financial Statements Income Statement (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Income Statements, Captions [Line Items] | |||
Revenue | $21,581,890 | $14,780,094 | $9,940,120 |
Cost of revenue | 20,221,837 | 13,654,449 | 9,206,744 |
Gross profit | 1,360,053 | 1,125,645 | 733,376 |
Expenses: | |||
Selling, general and administrative | 518,351 | 440,759 | 369,492 |
Depreciation of property and equipment | 59,486 | 37,926 | 16,749 |
Amortization of intangible assets | 213,220 | 203,192 | 130,116 |
Total expenses | 791,057 | 681,877 | 516,357 |
Operating income | 568,996 | 443,768 | 217,019 |
Interest and other expense, net | 61,088 | 41,626 | 26,682 |
Equity in (income) of subsidiaries | 0 | 0 | 0 |
Income before income taxes | 507,908 | 402,142 | 190,337 |
Income tax expense | 134,186 | 103,403 | 69,316 |
Net income | 373,722 | 298,739 | 121,021 |
Less net income attributable to non-controlling interest | 56,429 | 36,569 | 4,363 |
Net income attributable to the Company | 317,293 | 262,170 | 116,658 |
Reportable Legal Entities | Catamaran Corporation | |||
Condensed Income Statements, Captions [Line Items] | |||
Revenue | 40,141 | 34,875 | 15,343 |
Cost of revenue | 33,917 | 30,217 | 12,306 |
Gross profit | 6,224 | 4,658 | 3,037 |
Expenses: | |||
Selling, general and administrative | 2,931 | 1,094 | 4,688 |
Depreciation of property and equipment | 30 | 29 | 50 |
Amortization of intangible assets | 0 | 0 | 0 |
Total expenses | 2,961 | 1,123 | 4,738 |
Operating income | 3,263 | 3,535 | -1,701 |
Interest and other expense, net | 51,904 | 36,700 | 11,731 |
Equity in (income) of subsidiaries | -365,934 | -295,335 | -130,090 |
Income before income taxes | 317,293 | 262,170 | 116,658 |
Income tax expense | 0 | 0 | 0 |
Net income | 317,293 | 262,170 | 116,658 |
Less net income attributable to non-controlling interest | 0 | 0 | 0 |
Net income attributable to the Company | 317,293 | 262,170 | 116,658 |
Reportable Legal Entities | Guarantors | |||
Condensed Income Statements, Captions [Line Items] | |||
Revenue | 20,849,801 | 13,682,194 | 9,578,406 |
Cost of revenue | 19,764,270 | 12,756,828 | 8,926,325 |
Gross profit | 1,085,531 | 925,366 | 652,081 |
Expenses: | |||
Selling, general and administrative | 418,400 | 374,435 | 322,843 |
Depreciation of property and equipment | 53,932 | 35,005 | 14,784 |
Amortization of intangible assets | 210,251 | 200,065 | 126,847 |
Total expenses | 682,583 | 609,505 | 464,474 |
Operating income | 402,948 | 315,861 | 187,607 |
Interest and other expense, net | 3,007 | -344 | 13,577 |
Equity in (income) of subsidiaries | -58,804 | -51,924 | -14,551 |
Income before income taxes | 458,745 | 368,129 | 188,581 |
Income tax expense | 92,811 | 72,794 | 58,491 |
Net income | 365,934 | 295,335 | 130,090 |
Less net income attributable to non-controlling interest | 0 | 0 | 0 |
Net income attributable to the Company | 365,934 | 295,335 | 130,090 |
Reportable Legal Entities | Non-Guarantors | |||
Condensed Income Statements, Captions [Line Items] | |||
Revenue | 3,028,412 | 1,750,509 | 911,107 |
Cost of revenue | 2,760,114 | 1,554,888 | 832,849 |
Gross profit | 268,298 | 195,621 | 78,258 |
Expenses: | |||
Selling, general and administrative | 97,020 | 65,230 | 41,961 |
Depreciation of property and equipment | 5,524 | 2,892 | 1,915 |
Amortization of intangible assets | 2,969 | 3,127 | 3,269 |
Total expenses | 105,513 | 71,249 | 47,145 |
Operating income | 162,785 | 124,372 | 31,113 |
Interest and other expense, net | 6,177 | 5,270 | 1,374 |
Equity in (income) of subsidiaries | 0 | 0 | 0 |
Income before income taxes | 156,608 | 119,102 | 29,739 |
Income tax expense | 41,375 | 30,609 | 10,825 |
Net income | 115,233 | 88,493 | 18,914 |
Less net income attributable to non-controlling interest | 0 | 0 | 0 |
Net income attributable to the Company | 115,233 | 88,493 | 18,914 |
Consolidations | |||
Condensed Income Statements, Captions [Line Items] | |||
Revenue | -2,336,464 | -687,484 | -564,736 |
Cost of revenue | -2,336,464 | -687,484 | -564,736 |
Gross profit | 0 | 0 | 0 |
Expenses: | |||
Selling, general and administrative | 0 | 0 | 0 |
Depreciation of property and equipment | 0 | 0 | 0 |
Amortization of intangible assets | 0 | 0 | 0 |
Total expenses | 0 | 0 | 0 |
Operating income | 0 | 0 | 0 |
Interest and other expense, net | 0 | 0 | 0 |
Equity in (income) of subsidiaries | 424,738 | 347,259 | 144,641 |
Income before income taxes | -424,738 | -347,259 | -144,641 |
Income tax expense | 0 | 0 | 0 |
Net income | -424,738 | -347,259 | -144,641 |
Less net income attributable to non-controlling interest | 56,429 | 36,569 | 4,363 |
Net income attributable to the Company | ($481,167) | ($383,828) | ($149,004) |
Condensed_Consolidating_Financ4
Condensed Consolidating Financial Statements Cash Flows (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net cash provided (used) by operating activities | $590,181 | $475,421 | $249,733 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | -2,026 | -388,866 | -1,565,705 |
Purchases of property and equipment | -78,078 | -128,842 | -40,236 |
Proceeds from restricted cash | 20,006 | 20,004 | 0 |
Net cash used in investing activities | -60,098 | -497,704 | -1,605,941 |
Cash flows from financing activities: | |||
Proceeds from issuance of debt | 492,500 | 450,000 | 1,475,448 |
Repayment of long-term debt | -337,500 | -362,500 | -616,993 |
Proceeds from public offering, net of issuance costs | 0 | 0 | 519,075 |
Payment of financing costs | -1,963 | -2,347 | -18,806 |
Proceeds from exercise of options and warrants | 3,479 | 7,763 | |
Proceeds from exercise of options | 5,639 | 2,992 | 7,763 |
Tax benefit on option exercises | 3,492 | 9,732 | 19,397 |
Proceeds from warrants exercised | 3,452 | 487 | 0 |
Payments of contingent consideration | -18,338 | -23,203 | |
Distribution to non-controlling interest | -52,309 | -36,314 | 0 |
Net transactions with parent and affiliates | 0 | 0 | 0 |
Proceeds from restricted stock | 0 | 0 | 0 |
Other | -383 | 0 | -268 |
Net cash provided by financing activities | 94,590 | 38,847 | 1,385,616 |
Effect of foreign exchange on cash balances | 38 | -99 | -14 |
Increase in cash and cash equivalents | 624,711 | 16,465 | 29,394 |
Cash and cash equivalents, beginning of period | 387,241 | 370,776 | 341,382 |
Cash and cash equivalents, end of period | 1,011,952 | 387,241 | 370,776 |
Reportable Legal Entities | Catamaran Corporation | |||
Cash flows from operating activities: | |||
Net cash provided (used) by operating activities | 341,698 | 186,985 | -27,257 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | 0 | 0 | 3,644,364 |
Purchases of property and equipment | -71 | -11 | -66 |
Proceeds from restricted cash | 0 | 0 | |
Net cash used in investing activities | -71 | -11 | 3,644,298 |
Cash flows from financing activities: | |||
Proceeds from issuance of debt | 492,500 | 450,000 | 1,475,448 |
Repayment of long-term debt | -337,500 | -362,500 | -616,993 |
Proceeds from public offering, net of issuance costs | 519,075 | ||
Payment of financing costs | -1,963 | -2,347 | -18,806 |
Proceeds from exercise of options and warrants | 4,729 | 11,016 | |
Proceeds from exercise of options | 8,011 | ||
Tax benefit on option exercises | 0 | 0 | 0 |
Proceeds from warrants exercised | 3,452 | ||
Payments of contingent consideration | 0 | 0 | |
Distribution to non-controlling interest | 0 | 0 | |
Net transactions with parent and affiliates | -208,486 | -322,377 | -5,093,214 |
Proceeds from restricted stock | 20,700 | 27,107 | 17,903 |
Other | 0 | 0 | -268 |
Net cash provided by financing activities | -23,286 | -205,388 | -3,705,839 |
Effect of foreign exchange on cash balances | 38 | -99 | -14 |
Increase in cash and cash equivalents | 318,379 | -18,513 | -88,812 |
Cash and cash equivalents, beginning of period | 15,090 | 33,603 | 122,415 |
Cash and cash equivalents, end of period | 333,469 | 15,090 | 33,603 |
Reportable Legal Entities | Guarantors | |||
Cash flows from operating activities: | |||
Net cash provided (used) by operating activities | 612,430 | 616,168 | 430,091 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | -2,026 | -388,866 | -5,210,069 |
Purchases of property and equipment | -41,664 | -117,799 | -30,549 |
Proceeds from restricted cash | 20,006 | 20,004 | |
Net cash used in investing activities | -23,684 | -486,661 | -5,240,618 |
Cash flows from financing activities: | |||
Proceeds from issuance of debt | 0 | 0 | 0 |
Repayment of long-term debt | 0 | 0 | 0 |
Proceeds from public offering, net of issuance costs | 0 | ||
Payment of financing costs | 0 | 0 | 0 |
Proceeds from exercise of options and warrants | -1,248 | -3,253 | |
Proceeds from exercise of options | -2,355 | ||
Tax benefit on option exercises | 3,455 | 9,704 | 19,206 |
Proceeds from warrants exercised | 0 | ||
Payments of contingent consideration | -18,338 | -18,338 | |
Distribution to non-controlling interest | 0 | 0 | |
Net transactions with parent and affiliates | -264,620 | -49,103 | 4,913,963 |
Proceeds from restricted stock | -20,249 | -26,645 | -17,651 |
Other | -383 | 0 | 0 |
Net cash provided by financing activities | -302,490 | -85,630 | 4,912,265 |
Effect of foreign exchange on cash balances | 0 | 0 | 0 |
Increase in cash and cash equivalents | 286,256 | 43,877 | 101,738 |
Cash and cash equivalents, beginning of period | 362,647 | 318,770 | 217,032 |
Cash and cash equivalents, end of period | 648,903 | 362,647 | 318,770 |
Reportable Legal Entities | Non-Guarantors | |||
Cash flows from operating activities: | |||
Net cash provided (used) by operating activities | -6,952 | -30,476 | -18,449 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | 0 | 0 | 0 |
Purchases of property and equipment | -36,343 | -11,032 | -9,621 |
Proceeds from restricted cash | 0 | 0 | |
Net cash used in investing activities | -36,343 | -11,032 | -9,621 |
Cash flows from financing activities: | |||
Proceeds from issuance of debt | 0 | 0 | 0 |
Repayment of long-term debt | 0 | 0 | 0 |
Proceeds from public offering, net of issuance costs | 0 | ||
Payment of financing costs | 0 | 0 | 0 |
Proceeds from exercise of options and warrants | -2 | 0 | |
Proceeds from exercise of options | -17 | ||
Tax benefit on option exercises | 37 | 28 | 191 |
Proceeds from warrants exercised | 0 | ||
Payments of contingent consideration | 0 | -4,865 | |
Distribution to non-controlling interest | 0 | 0 | |
Net transactions with parent and affiliates | 63,802 | 37,910 | 44,599 |
Proceeds from restricted stock | -451 | -462 | -252 |
Other | 0 | 0 | 0 |
Net cash provided by financing activities | 63,371 | 32,609 | 44,538 |
Effect of foreign exchange on cash balances | 0 | 0 | 0 |
Increase in cash and cash equivalents | 20,076 | -8,899 | 16,468 |
Cash and cash equivalents, beginning of period | 9,504 | 18,403 | 1,935 |
Cash and cash equivalents, end of period | 29,580 | 9,504 | 18,403 |
Consolidations | |||
Cash flows from operating activities: | |||
Net cash provided (used) by operating activities | -356,995 | -297,256 | -134,652 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | 0 | 0 | 0 |
Purchases of property and equipment | 0 | 0 | |
Proceeds from restricted cash | 0 | 0 | |
Net cash used in investing activities | 0 | 0 | 0 |
Cash flows from financing activities: | |||
Proceeds from issuance of debt | 0 | 0 | 0 |
Repayment of long-term debt | 0 | 0 | 0 |
Proceeds from public offering, net of issuance costs | 0 | ||
Payment of financing costs | 0 | 0 | 0 |
Proceeds from exercise of options and warrants | 0 | 0 | |
Proceeds from exercise of options | 0 | ||
Tax benefit on option exercises | 0 | 0 | 0 |
Proceeds from warrants exercised | 0 | ||
Payments of contingent consideration | 0 | 0 | |
Distribution to non-controlling interest | -52,309 | -36,314 | |
Net transactions with parent and affiliates | 409,304 | 333,570 | 134,652 |
Proceeds from restricted stock | 0 | 0 | 0 |
Other | 0 | 0 | 0 |
Net cash provided by financing activities | 356,995 | 297,256 | 134,652 |
Effect of foreign exchange on cash balances | 0 | 0 | 0 |
Increase in cash and cash equivalents | 0 | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 | 0 |
Cash and cash equivalents, end of period | $0 | $0 | $0 |