Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 29, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | AGHI | |
Entity Registrant Name | AFFINION GROUP HOLDINGS, INC. | |
Entity Central Index Key | 1,404,624 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 84,913,613 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 60 | $ 32.3 |
Restricted cash | 33.2 | 35.8 |
Receivables (net of allowances for doubtful accounts of $8.8 and $8.5, respectively) | 115 | 119.3 |
Profit-sharing receivables from insurance carriers | 16.9 | 28.7 |
Prepaid commissions | 51.7 | 48 |
Income taxes receivable | 1.4 | 1.3 |
Other current assets | 103.7 | 104.6 |
Total current assets | 381.9 | 370 |
Non-current assets: | ||
Property and equipment, net | 130.6 | 139 |
Goodwill | 318.9 | 322.2 |
Other non-current assets | 72.7 | 68.4 |
Total assets | 998.3 | 1,019.6 |
Current liabilities: | ||
Current portion of long-term debt | 43 | 43.1 |
Accounts payable and accrued expenses | 411.7 | 426 |
Deferred revenue | 82.8 | 89.9 |
Income taxes payable | 3.1 | 3.2 |
Total current liabilities | 540.6 | 562.2 |
Long-term debt | 2,298.4 | 2,229.6 |
Deferred income taxes | 35.5 | 33 |
Deferred revenue | 9.5 | 10 |
Other long-term liabilities | 26.9 | 31.3 |
Total liabilities | $ 2,910.9 | $ 2,866.1 |
Commitments and contingencies | ||
Deficit: | ||
Common stock, $0.01 par value, 540,000,000 shares authorized, 85,129,859 shares issued and 84,842,535 shares outstanding | $ 0.9 | $ 0.9 |
Additional paid in capital | 144.5 | 144.1 |
Warrants | 124.8 | 124.8 |
Accumulated deficit | (2,180.8) | (2,117.5) |
Accumulated other comprehensive income | (2.2) | 1.2 |
Treasury stock, at cost, 287,324 shares | (1.1) | (1.1) |
Total Affinion Group Holdings, Inc. deficit | (1,913.9) | (1,847.6) |
Non-controlling interest in subsidiary | 1.3 | 1.1 |
Total deficit | (1,912.6) | (1,846.5) |
Total liabilities and deficit | 998.3 | 1,019.6 |
Contract rights and list fees, net | ||
Non-current assets: | ||
Intangible assets, net | 17.7 | 16.7 |
Other intangibles, net | ||
Non-current assets: | ||
Intangible assets, net | $ 76.5 | $ 103.3 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 8.8 | $ 8.5 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 540,000,000 | 540,000,000 |
Common stock, shares issued | 85,129,859 | 85,129,859 |
Common stock, shares outstanding | 84,842,535 | 84,842,535 |
Treasury Stock, Shares | 287,324 | 287,324 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Net revenues | $ 295 | $ 303.8 | $ 597.3 | $ 625.2 |
Expenses: | ||||
Marketing and commissions | 111 | 120.1 | 226.7 | 245.5 |
Operating costs | 99.4 | 106 | 203 | 214 |
General and administrative | 28.9 | 41.4 | 63.9 | 91.6 |
Facility exit costs | 0.6 | 0.7 | 1.1 | 0.6 |
Depreciation and amortization | 23.8 | 29.1 | 48 | 54.1 |
Total expenses | 263.7 | 297.3 | 542.7 | 605.8 |
Income from operations | 31.3 | 6.5 | 54.6 | 19.4 |
Interest income | 0.1 | 0.1 | 0.1 | |
Interest expense | (58) | (58.1) | (115.2) | (115.7) |
Loss on extinguishment of debt | (14.6) | (14.6) | ||
Other income, net | 0.1 | 0.6 | ||
Loss before income taxes and non-controlling interest | (26.5) | (66.2) | (59.9) | (110.8) |
Income tax expense | (1.1) | (4.1) | (3.1) | (8.3) |
Net loss | (27.6) | (70.3) | (63) | (119.1) |
Less: net income attributable to non-controlling interest | (0.1) | (0.1) | (0.3) | (0.2) |
Net loss attributable to Affinion Group Holdings, Inc. | (27.7) | (70.4) | (63.3) | (119.3) |
Net loss | (27.6) | (70.3) | (63) | (119.1) |
Currency translation adjustment, net of tax | 1.5 | (0.7) | (3.5) | (1) |
Comprehensive loss | (26.1) | (71) | (66.5) | (120.1) |
Less: comprehensive income attributable to non-controlling interest | (0.1) | (0.1) | (0.2) | (0.2) |
Comprehensive loss attributable to Affinion Group Holdings, Inc. | $ (26.2) | $ (71.1) | $ (66.7) | $ (120.3) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT - USD ($) $ in Millions | Total | Common Stock and Additional Paid-in Capital | Warrants | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Non Controlling Interest |
Beginning Balance at Dec. 31, 2013 | $ (1,519.8) | $ 137.5 | $ 25.8 | $ (1,688.8) | $ 5.7 | $ (1.1) | $ 1.1 |
Net income (loss) | (428.2) | (428.7) | 0.5 | ||||
Currency translation adjustment, net of tax | (4.5) | (4.5) | |||||
Dividend paid to non-controlling interest | (0.5) | (0.5) | |||||
Share-based compensation | 7.5 | 7.5 | |||||
Issuance of warrants | 99 | 99 | |||||
Ending Balance at Dec. 31, 2014 | (1,846.5) | 145 | 124.8 | (2,117.5) | 1.2 | (1.1) | 1.1 |
Net income (loss) | (63) | (63.3) | 0.3 | ||||
Currency translation adjustment, net of tax | (3.5) | (3.4) | (0.1) | ||||
Share-based compensation | 0.4 | 0.4 | |||||
Ending Balance at Jun. 30, 2015 | $ (1,912.6) | $ 145.4 | $ 124.8 | $ (2,180.8) | $ (2.2) | $ (1.1) | $ 1.3 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating Activities | ||
Net loss | $ (63) | $ (119.1) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 48 | 54.1 |
Amortization of debt discount and financing costs | 6.5 | 7.5 |
Financing costs | 6.7 | |
Loss on extinguishment of debt | 14.6 | |
Facility exit costs | 1.1 | 0.6 |
Share-based compensation | 0.6 | 6.1 |
Deferred income taxes | 1.5 | 5.3 |
Net change in assets and liabilities: | ||
Restricted cash | 2.2 | (3.5) |
Receivables | 1.3 | (7.4) |
Receivables from related parties | 4.2 | |
Profit-sharing receivables from insurance carriers | 11.8 | 25.3 |
Prepaid commissions | (3.7) | (0.2) |
Other current assets | (5.3) | 8.9 |
Contract rights and list fees | (1.1) | 1.1 |
Other non-current assets | (8.9) | (4.1) |
Accounts payable and accrued expenses | 5.3 | 15.2 |
Payables to related parties | (0.1) | (0.1) |
Deferred revenue | (6.1) | (12.2) |
Income taxes receivable and payable | 0.4 | |
Other long-term liabilities | (4.7) | (0.9) |
Other, net | 2.5 | (0.6) |
Net cash used in operating activities | (7.9) | (2.3) |
Investing Activities | ||
Capital expenditures | (15.2) | (23.7) |
Restricted cash | (0.1) | |
Proceeds from sale of investment | 1.5 | |
Net cash used in investing activities | (13.8) | (23.7) |
Financing Activities | ||
Borrowings (repayments) under revolving credit facility, net | 54 | (46) |
Proceeds from issuance of debt | 425 | |
Financing costs | (20) | |
Principal payments on borrowings | (4.1) | (311.9) |
Proceeds from issuance of warrants | 3.8 | |
Net cash provided by financing activities | 49.9 | 50.9 |
Effect of changes in exchange rates on cash and cash equivalents | (0.5) | 0.3 |
Net increase in cash and cash equivalents | 27.7 | 25.2 |
Cash and cash equivalents, beginning of period | 32.3 | 20.1 |
Cash and cash equivalents, end of period | 60 | 45.3 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest payments | 91.6 | 79.8 |
Income tax payments, net of refunds | 1.3 | 2.3 |
Non-cash investing and financing activities: | ||
Accrued capital expenditures | 0.2 | 0.8 |
Payment of in-kind interest | $ 16.4 | |
Exchange of debt and accrued interest for warrants | $ 95.1 |
Basis of Presentation and Busin
Basis of Presentation and Business Description | 6 Months Ended |
Jun. 30, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation and Business Description | 1. BASIS OF PRESENTATION AND BUSINESS DESCRIPTION Basis of Presentation —On October 17, 2005, Cendant Corporation (“Cendant”) completed the sale of the Cendant Marketing Services Division to Affinion Group, Inc. (“Affinion”), a wholly-owned subsidiary of Affinion Group Holdings, Inc. (the “Company” or “Affinion Holdings”) and an affiliate of Apollo Global Management, LLC (“Apollo”), pursuant to a purchase agreement dated July 26, 2005 for approximately $1.8 billion (the “Apollo Transactions”). All references to Cendant refer to Cendant Corporation, which changed its name to Avis Budget Group, Inc. in August 2006, and its consolidated subsidiaries, specifically in the context of its business and operations prior to, and in connection with, the Company’s separation from Cendant. The accompanying unaudited condensed consolidated financial statements include the accounts and transactions of the Company. In presenting these unaudited condensed consolidated financial statements, management makes estimates and assumptions that affect reported amounts of assets and liabilities and related disclosures, and disclosure of contingent assets and liabilities, at the date of the financial statements, and reported amounts of revenues and expenses during the reporting periods. Estimates, by their nature, are based on judgments and available information at the time such estimate is made. As such, actual results could differ from those estimates. In management’s opinion, the unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and following the guidance of Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the U.S. Securities and Exchange Commission (the “SEC”). As permitted under such rules, certain notes and other financial information normally required by accounting principles generally accepted in the United States of America have been condensed or omitted; however, the unaudited condensed consolidated financial statements do include such notes and financial information sufficient so as to make the interim information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes of the Company as of December 31, 2014 and 2013, and for the years ended December 31, 2014, 2013 and 2012, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 19, 2015 (the “Form 10-K”). Business Description — The Company is one of the world’s leading customer engagement and loyalty solutions companies. The Company designs, markets and services programs that strengthen and extend customer relationships for many of the world’s largest and most respected companies. The Company’s programs and services include: · Loyalty programs that help reward, motivate and retain consumers, · Membership programs that help consumers save money and gain peace of mind, · Package programs that bundle valuable discounts, protection and other benefits to enhance customer relationships, and · Insurance programs that help protect consumers in the event of a covered accident, injury, illness, or death. The Company designs customer engagement and loyalty solutions with an attractive suite of benefits and ease of usage that it believes are likely to interest and engage consumers based on their needs and interests. For example, the Company provides discount travel services, credit monitoring and identity-theft resolution, accidental death and dismemberment insurance, roadside assistance, various checking account and credit card enhancement services, loyalty program design and management, disaggregated loyalty points redemptions for gift cards, travel and merchandise, as well as other products and services. The Company is a global leader in the designing, marketing and servicing of comprehensive customer engagement and loyalty solutions that enhances and extends the relationship of millions of consumers with many of the largest and most respected companies in the world. The Company generally partners with these leading companies in two ways: 1) by developing and supporting programs that are natural extensions of its partner companies’ brand image and that provide valuable services to their end-customers, and 2) by providing the back-end technological support and redemption services for points-based loyalty programs. Using its expertise in customer engagement, product development, creative design and data-driven targeted marketing, the Company develops and markets programs and services that enable the companies it partners with to generate significant, high-margin incremental revenue, enhance its partners’ brands among targeted consumers as well as strengthen and enhance the loyalty of their customer relationships. The enhanced loyalty can lead to increased acquisition of new customers, longer retention of existing customers, improved customer satisfaction rates, and greater use of other services provided by such companies. The Company refers to the leading companies that it works with to provide customer engagement and loyalty solutions as marketing partners or clients. The Company refers to the consumers to whom it provides services directly under a contractual relationship as subscribers, insureds or members. The Company refers to those consumers that it services on behalf of a third party, such as one of its marketing partners, and with whom it has a contractual relationship as end-customers. The Company utilizes its substantial expertise in a variety of direct engagement media to market valuable products and services to the customers of its marketing partners on a highly targeted, campaign basis. The selection of the media employed in a campaign corresponds to the preferences and expectations the targeted customers have demonstrated for transacting with its marketing partners, as the Company believes this optimizes response, thereby improving the efficiency of our marketing investment. Accordingly, the Company maintains significant capabilities to market through direct mail, point-of-sale, direct response television, the internet, inbound and outbound telephony and voice response unit marketing, as well as other media as needed. The Company’s operating segments are as follows: Membership Products . The Company designs, implements and markets subscription programs that provide its members with personal protection benefits and value-added services including credit monitoring and identity-theft resolution services, as well as access to a variety of discounts and shop-at-home conveniences in such areas as retail merchandise, travel, automotive and home improvement. Insurance and Package Products . The Company markets AD&D and other insurance programs and designs and provides checking account enhancement programs to financial institutions. These programs allow financial institutions to bundle discounts, protection and other benefits with a standard checking account and offer these packages to customers for an additional monthly fee. Global Loyalty Products . The Company designs, implements and administers points-based loyalty programs for financial, travel, auto and other companies. The Company provides its clients with solutions that meet the most popular redemption options desired by their program points holders, including travel services, gift cards, cash back and merchandise. The Company also provides enhancement benefits to major financial institutions in connection with their credit and debit card programs. In addition, the Company provides and manages turnkey travel services that are sold on a private label basis to provide its clients’ customers with direct access to the Company’s proprietary travel platform. A marketing partner typically engages the Company on a fee-for-services contractual basis, where the Company generates revenue in connection with the volume of redemption transactions. International Products . T he Company designs, implements and markets membership and package customer engagement businesses outside North America and operates a discrete loyalty program benefit provider. The Company expects to leverage its current international operational platform to expand its range of products and services, develop new marketing partner relationships in various industries and grow its geographical footprint. In 2012, the Company expanded into Turkey through the acquisition of existing marketing capabilities and also launched business operations in Brazil. In 2015, the Company undertook business activities in Australia. Recently Issued Accounting Pronouncements On May 28, 2014, the FASB and International Accounting Standards Board issued their final standard on revenue from contracts with customers. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The fundamental principles of the guidance are that companies should recognize revenue in a manner that reflects the timing of transfer of goods and services to customers and the amount of revenue recognized reflects the consideration that a company expects to receive for the goods and services provided. The guidance establishes a five-step approach for the recognition of revenue. In addition, the guidance will also require significantly expanded disclosures about revenue recognition. In July 2015, the FASB issued a new standard that, for public entities, defers the effective date of the standard on revenue from contracts with customers by one year, to annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Entities have the option of using either a full retrospective or modified retrospective approach and early application is not permitted, other than entities may earlier adopt the new guidance as of the originally proposed effective date, which was for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. The Company is in the process of performing an initial evaluation of the impact of the new guidance. Based on its preliminary assessment, the Company does not believe that adoption of the new guidance will have a material impact on the Company’s consolidated financial position, results of operations or cash flows. On August 27, 2014, the FASB issued an Accounting Standards Update (“ASU”) that provides guidance on determining when and how reporting entities must disclose going concern uncertainties in their 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 of issuance of the financial statements (or within one year after the date on which the financial statements were available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” The ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. When adopted, the new guidance is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. On April 7, 2015, the FASB issued an ASU that requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability consistent with debt discounts and premiums, rather than as a separate asset. The new guidance is effective for financial statements issued for fiscal years beginning after December 31, 2015 and interim periods within those fiscal years. When adopted, the new guidance is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. Had the new guidance been in effect, at December 31, 2014, other noncurrent assets and long-term debt would each have been reduced by $29.5 million and at June 30, 2015, other noncurrent assets and long-term debt would each have been reduced by $25.5 million. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | 2. ACQUISITIONS On September 8, 2014, the Company entered into a Membership Interest Purchase Agreement (the “SkyMall Agreement”) that resulted in the acquisition on September 9, 2014 of SkyMall Ventures, LLC (“SkyMall”), a provider of merchandise, gift cards and experiential rewards for loyalty programs. In accordance with the SkyMall Agreement, the Company acquired all of the outstanding membership interests in SkyMall for an upfront cash payment of approximately $18.4 million, plus a working capital adjustment of $0.4 million, and contingent consideration of up to $3.9 million payable approximately one year after the acquisition date. In addition to providing merchandise, gift cards and experiential rewards for loyalty programs, it provides services including strategy, creative, technology and fulfillment. The acquisition of SkyMall enhances the Company’s position as a leading loyalty program administrator and incentives provider, as well as solidifies the Company’s position within certain current verticals and provides access to certain new verticals. On a preliminary basis, the Company allocated the purchase price of $19.1 million, consisting of the upfront cash payment of $18.4 million, plus the working capital adjustment of $0.4 million, and the acquisition date fair value of the up to $3.9 million contingent consideration, based on an income approach and probability model, of $0.3 million, among the assets acquired and liabilities assumed as follows (in millions): Trade receivables $ 3.8 Other current assets, including gift card inventory 37.7 Intangible assets 11.9 Goodwill 14.6 Accounts payable and accrued liabilities (48.8 ) Other current liabilities (0.1 ) Consideration transferred $ 19.1 The intangible assets are comprised of affinity relationships, which are being amortized on an accelerated basis over a weighted-average useful life of eight years. The goodwill, which is expected to be deductible for income tax purposes, has been attributed to the Global Loyalty Products segment. In connection with the acquisition of SkyMall, the Company incurred $0.8 million of acquisition costs, none of which was incurred during the six months ended June 30, 2015 or 2014. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2015 | |
Other intangibles, net | |
Intangible Assets | 3. INTANGIBLE ASSETS Intangible assets consisted of: June 30, 2015 Gross Carrying Accumulated Net Carrying Amount Amortization Amount (in millions) Amortizable intangible assets: Member relationships $ 938.6 $ (933.3 ) $ 5.3 Affinity relationships 642.9 (589.0 ) 53.9 Proprietary databases and systems 59.7 (57.5 ) 2.2 Trademarks and tradenames 32.7 (19.8 ) 12.9 Patents and technology 47.7 (45.8 ) 1.9 Covenants not to compete 2.6 (2.3 ) 0.3 $ 1,724.2 $ (1,647.7 ) $ 76.5 December 31, 2014 Gross Carrying Accumulated Net Carrying Amount Amortization Amount (in millions) Amortizable intangible assets: Member relationships $ 939.8 $ (932.0 ) $ 7.8 Affinity relationships 649.1 (574.4 ) 74.7 Proprietary databases and systems 59.9 (57.4 ) 2.5 Trademarks and tradenames 33.5 (18.8 ) 14.7 Patents and technology 47.8 (44.6 ) 3.2 Covenants not to compete 2.6 (2.2 ) 0.4 $ 1,732.7 $ (1,629.4 ) $ 103.3 Foreign currency translation resulted in a decrease in intangible assets and accumulated amortization of $8.5 million and $6.6 million, respectively, from December 31, 2014 to June 30, 2015. Amortization expense relating to intangible assets was as follows: For the Three Months Ended For the Six Months Ended June 30, June 30, June 30, June 30, 2015 2014 2015 2014 (in millions) Amortizable intangible assets: Member relationships $ 0.9 $ 3.5 $ 2.0 $ 7.2 Affinity relationships 9.8 9.9 19.7 19.8 Proprietary databases and systems 0.1 0.1 0.2 0.2 Trademarks and tradenames 0.6 0.6 1.3 1.3 Patents and technology 0.7 0.8 1.6 1.6 Covenants not to compete - 0.1 0.1 0.2 $ 12.1 $ 15.0 $ 24.9 $ 30.3 Based on the Company’s amortizable intangible assets as of June 30, 2015, the Company expects the related amortization expense for fiscal year 2015 and the four succeeding fiscal years to be approximately $42.1 million in 2015, $13.4 million in 2016, $9.1 million in 2017, $8.2 million in 2018 and $7.0 million in 2019. At January 1, 2015 and June 30, 2015, the Company had gross goodwill of $661.6 million and $658.3 million, respectively, and accumulated impairment losses of $339.4 million at both dates. The accumulated impairment losses represent the $15.5 million impairment loss recognized in 2006 impairing all of the goodwill assigned to the Global Loyalty Products segment related to the Apollo Transactions, the $31.5 million impairment loss recognized in 2012 impairing all of the goodwill assigned to the Prospectiv acquisition included in the Membership Products segment and the $292.4 million impairment loss recognized in 2014 impairing a portion of the goodwill assigned to the Membership Products segment. The changes in the Company’s carrying amount of goodwill for the year ended December 31, 2014 and the six months ended June 30, 2015 are as follows: Balance at Balance at Balance at January 1, Currency December 31, Currency June 30 , 2014 Acquisition Impairment Translation 2014 Translation 2015 (in millions) Membership products $ 382.0 $ - $ (292.4 ) $ - $ 89.6 $ - $ 89.6 Insurance and package products 58.3 — — — 58.3 — 58.3 Global loyalty products 81.7 15.8 — — 97.5 — 97.5 International products 84.3 — — (7.5 ) 76.8 (3.3 ) 73.5 Total $ 606.3 $ 15.8 $ (292.4 ) $ (7.5 ) $ 322.2 $ (3.3 ) $ 318.9 |
Contract Rights and List Fees,
Contract Rights and List Fees, Net | 6 Months Ended |
Jun. 30, 2015 | |
Contract rights and list fees, net | |
Intangible Assets | 4. CONTRACT RIGHTS AND LIST FEES, NET Contract rights and list fees consisted of: June 30, 2015 December 31, 2014 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Contract rights $ 59.7 $ (59.4 ) $ 0.3 $ 59.1 $ (58.7 ) $ 0.4 List fees 55.4 (38.0 ) 17.4 51.7 (35.4 ) 16.3 $ 115.1 $ (97.4 ) $ 17.7 $ 110.8 $ (94.1 ) $ 16.7 Amortization expense for the three months ended June 30, 2015 and 2014 was $1.4 million and $1.4 million, respectively, of which $1.3 million and $1.3 million, respectively, is included in marketing expense and $0.1 million and $0.1 million, respectively, is included in depreciation and amortization expense in the unaudited condensed consolidated statement of comprehensive income. Amortization expense for the six months ended June 30, 2015 and 2014 was $2.7 million and $2.9 million, respectively, of which $2.5 million and $2.7 million, respectively, is included in marketing expense and $0.2 million and $0.2 million, respectively, is included in depreciation and amortization expense in the unaudited condensed consolidated statement of comprehensive income. Based on the Company’s contract rights and list fees as of June 30, 2015, the Company expects the related amortization expense for fiscal year 2015 and the four succeeding fiscal years to be approximately $5.3 million in 2015, $4.4 million in 2016, $3.2 million in 2017, $2.5 million in 2018 and $1.9 million in 2019. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 5. LONG-TERM DEBT Long-term debt consisted of: June 30, December 31, 2015 2014 (in millions) First-lien term loan due 2018 $ 765.3 $ 769.2 Second-lien term loan due 2018 425.0 425.0 Revolving credit facility, expiring in 2018 59.0 5.0 7.875% senior notes due 2018, net of unamortized discount of $1.5 million and $1.7 million, respectively, with an effective interest rate of 8.31% 473.5 473.3 13.50% senior subordinated notes due 2018, net of unamortized discount of $6.0 million and $6.7 million, respectively, with an effective interest rate of 14.31% 354.0 353.3 11 1/2% senior subordinated notes due 2015, with an effective interest rate of 12.25% 2.6 2.6 13.75%/ 14.50% senior PIK toggle notes, due 2018, net of unamortized discount of $13.6 million and $15.1 million, respectively with an effective interest rate of 17.69% 229.2 211.3 11.625% senior notes due 2015, with an effective interest rate of 11.63% 32.2 32.2 Capital lease obligations 0.6 0.8 Total debt 2,341.4 2,272.7 Less: current portion of long-term debt (43.0 ) (43.1 ) Long-term debt $ 2,298.4 $ 2,229.6 On April 9, 2010, Affinion, as Borrower, and Affinion Holdings entered into a $1.0 billion amended and restated senior secured credit facility with its lenders (“Affinion Credit Facility”). On November 20, 2012, Affinion, as Borrower, and Affinion Holdings entered into an amendment to the Affinion Credit Facility, which (i) increased the margins on LIBOR loans from 3.50% to 5.00% and on base rate loans from 2.50% to 4.00%, (ii) replaced the financial covenant requiring Affinion to maintain a maximum consolidated leverage ratio with a financial covenant requiring Affinion to maintain a maximum senior secured leverage ratio, and (iii) adjusted the ratios under the financial covenant requiring Affinion to maintain a minimum interest coverage ratio. On December 12, 2013, in connection with the refinancing of Affinion’s 11 ½ % senior subordinated notes due 2015 (Affinion’s “2006 senior subordinated notes”) and Affinion Holdings’ 11.625% senior notes due 2015 (Affinion Holdings’ “2010 senior notes”), Affinion, as Borrower, and Affinion Holdings entered into an amendment to the Affinion Credit Facility, which (i) provided permission for the consummation of the exchange offers for Affinion’s 2006 senior subordinated notes and Affinion Holdings’ 2010 senior notes; (ii) removed the springing maturity provisions applicable to the term loan facility; (iii) modified the senior secured leverage ratio financial covenant in the Affinion Credit Facility; (iv) provided additional flexibility for Affinion to make dividends to the Company to be used to make certain payments with respect to the Company’s indebtedness and to repay, repurchase or redeem subordinated indebtedness of Affinion; and (v) increased the interest rate margins by 0.25%, to 5.25% on LIBOR loans and 4.25% on base rate loans. The amendment became effective upon the satisfaction of the conditions precedent set forth therein, including the payment by Affinion of the consent fee equal to 0.25% of the sum of (i) the aggregate principal amount of all term loans and (ii) the revolving loan commitments in effect, in each case, held by each lender that entered into the amendment on the date of effectiveness of the amendment. On May 20, 2014, Affinion, as Borrower, and Affinion Holdings entered into an amendment to the Affinion Credit Facility, which (i) extended the maturity to April 30, 2018 of $775.0 million in aggregate principal amount of existing senior secured term loans and existing senior secured revolving loans, which loans were designated as first lien term loans (the “First Lien Term Loans”), (ii) extended the maturity to October 31, 2018 of $377.9 million in aggregate principal amount of existing senior secured term loans on a second lien senior secured basis, which, together with additional borrowings obtained on the same terms, total $425.0 million (the “Second Lien Term Loans”), (iii) extended the maturity to January 29, 2018 of $80.0 million of the commitments (and related obligations) under the existing senior secured revolving credit facility on a first lien senior secured basis, (iv) reduced the commitments under the existing senior secured revolving credit facility by $85.0 million and (v) removed the existing financial covenant requiring Affinion to maintain a minimum interest coverage ratio. The revolving credit facility includes a letter of credit subfacility and a swingline loan subfacility. The First Lien Term Loan facility matures in April 2018 and the Second Lien Term Loan facility matures in October 2018. The First Lien Term Loan facility provides for quarterly amortization payments totaling 1% per annum, with the balance payable upon the final maturity date. The Second Lien Term Loan facility does not provide for quarterly amortization payments. The term loan facility also requires mandatory prepayments of the outstanding term loans based on excess cash flow (as defined), if any, and the proceeds from certain specified transactions. The interest rates with respect to First Lien Term Loans and revolving loans under the amended Affinion Credit Facility are based on, at Affinion’s option, (a) the higher of (i) adjusted LIBOR and (ii) 1.50%, in each case plus 5.25%, or (b) the highest of (i) Deutsche Bank Trust Company Americas’ prime rate, (ii) the Federal Funds Effective Rate plus 0.5% and (iii) 2.50% (“ABR”), in each case plus 4.25%. The interest rates with respect to Second Lien Term Loans under the amended Affinion Credit Facility are based on, at Affinion’s option, (a) the higher of (i) adjusted LIBOR and (ii) 1.50%, in each case plus 7.00%, or (b) the highest of (i) Deutsche Bank Trust Company Americas’ prime rate, (ii) the Federal Funds Effective Rate plus 0.5% and (iii) 2.50% (“ABR”), in each case plus 6.00%. The weighted average interest rate on the term loan for the period from April 1, 2014 through May 20, 2014 and for the period from January 1, 2014 through May 20, 2014 was 6.75%. The weighted average interest rate on the First Lien Term Loan and Second Lien Term Loan for the three and six months ended June 30, 2015 and for the period from May 20, 2014 through June 30, 2014 was 6.75% and 8.50%, respectively. The weighted average interest rate on revolving credit facility borrowings for the three and six months ended June 30, 2015 was 7.1% and 7.2%, respectively, and for the three and six months ended June 30, 2014 was 7.1%, for both periods. Affinion’s obligations under the credit facility are, and Affinion’s obligations under any interest rate protection or other hedging arrangements entered into with a lender or any of its affiliates will be, guaranteed by Affinion Holdings and by each of Affinion’s existing and subsequently acquired or organized domestic subsidiaries, subject to certain exceptions. The Affinion Credit Facility is secured to the extent legally permissible by substantially all of the assets of (i) Affinion Holdings, which consists of a pledge of all Affinion’s capital stock and (ii) Affinion and the subsidiary guarantors, including but not limited to: (a) a pledge of substantially all capital stock held by Affinion or any subsidiary guarantor and (b) security interests in substantially all tangible and intangible assets of Affinion and each subsidiary guarantor, subject to certain exceptions. The Affinion Credit Facility also contains financial, affirmative and negative covenants. The negative covenants in the Affinion Credit Facility include, among other things, limitations (all of which are subject to certain exceptions) on Affinion’s (and in certain cases, Affinion Holdings’) ability to: declare dividends and make other distributions, redeem or repurchase Affinion’s capital stock; prepay, redeem or repurchase certain of Affinion’s subordinated indebtedness; make loans or investments (including acquisitions); incur additional indebtedness (subject to certain exceptions); enter into agreements that would restrict the ability of Affinion’s subsidiaries to pay dividends; merge or enter into acquisitions; sell assets; and enter into transactions with affiliates. The Affinion Credit Facility also requires Affinion to comply with a financial maintenance covenant with a maximum ratio of senior secured debt (as defined) to EBITDA (as defined) of 4.25:1.00. As of June 30, 2015 and December 31, 2014, there were outstanding borrowings of $59.0 million and $5.0 million, respectively, under the revolving credit facility. During the six months ended June 30, 2015, Affinion had borrowings and repayments of $74.0 million and $20.0 million, respectively, under the revolving credit facility. During the six months ended June 30, 2014, Affinion had borrowings and repayments of $83.0 million and $129.0 million, respectively, under the revolving credit facility. As of June 30, 2015, Affinion had $7.1 million available for borrowing under the Affinion Credit Facility after giving effect to the issuance of $13.9 million of letters of credit. In December 2013, Affinion Holdings and Affinion completed exchange offers and consent solicitations pursuant to which, among other things, (i) $292.8 million principal amount of Affinion Holdings’ 11.625% senior notes due 2015 (“2010 senior notes”) were exchanged by the holders thereof for $292.8 million principal amount of new 13.75%/14.50% senior secured PIK/toggle notes due 2018 (the Affinion Holdings “2013 senior notes”), On December 12, 2013, Affinion Holdings completed a private offer to exchange Affinion Holdings’ 2010 senior notes for Affinion Holdings’ 2013 senior notes, pursuant to which $292.8 million aggregate principal amount of Affinion Holdings’ 2013 senior notes were issued in exchange for $292.8 million aggregate principal amount of its 2010 senior notes. Under the terms of the exchange offer, for each $1,000 principal amount of Affinion Holdings’ 2010 senior notes tendered at or prior to the consent time, holders received (i) $1,000 principal amount of Affinion Holdings’ 2013 senior notes, (ii) Series A warrants to purchase 46.1069 shares of Affinion Holdings’ Class B common stock, and (iii) Series B warrants to purchase 239.8612 shares of Affinion Holdings’ Class B common stock. For each $1,000 principal amount of Affinion Holdings’ 2010 senior notes tendered during the offer period but after the consent period, holders received (i) $950 principal amount of Affinion Holdings’ 2013 senior notes, (ii) Series A warrants to purchase 46.1069 shares of Affinion Holdings’ Class B common stock, and (iii) Series B warrants to purchase 239.8612 shares of Affinion Holdings’ Class B common stock. Affinion Holdings’ 2013 senior notes bear interest at 13.75% per annum, payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2014. At Affinion Holdings’ option (subject to certain exceptions), it may elect to pay interest (i) entirely in cash (“Cash Interest”), (ii) entirely by increasing the outstanding principal amount of Affinion Holdings’ 2013 senior notes or by issuing PIK notes (“PIK Interest”), or (iii) 50% as Cash Interest and 50% as PIK Interest; provided that if (i) no Default or Event of Default (each as defined in the Affinion Credit Facility) shall have occurred and be continuing or would result from such interest payment, (ii) immediately after giving effect to such interest payment, on a pro forma basis, the Consolidated Leverage Ratio (as defined in the Affinion Credit Facility) of Affinion is less than or equal to 5.0:1.0 as of the last day of the most recently completed fiscal quarter preceding the interest payment date for which financial statements have been delivered to the agent under the Affinion Credit Facility and (iii) immediately after giving effect to such interest payment, on a pro forma basis, the Adjusted Consolidated Leverage Ratio (as defined in the note agreement governing the Investments senior subordinated notes) of Affinion is less than or equal to 5.0:1.0, then Affinion Holdings shall be required to pay interest on Affinion Holdings’ 2013 senior notes for such interest period in cash. PIK Interest accrues at 13.75% per annum plus 0.75%. For the interest periods ended September 15, 2014 and March 31, 2015, Affinion Holdings paid interest by increasing the principal amount of Affinion Holdings’ 2013 senior notes by $22.4 million and $16.4 million, respectively. Affinion Holdings’ 2013 senior notes will mature on September 15, 2018. Affinion Holdings may redeem some or all of Affinion Holdings’ 2013 senior notes at any time on or after December 12, 2016 at redemption prices (generally at a premium) set forth in the indenture governing Affinion Holdings’ 2013 senior notes. In addition, prior to December 12, 2016, up to 100% of Affinion Holdings’ outstanding 2013 senior notes are redeemable at the option of Affinion Holdings, with the net proceeds raised by Affinion Holdings in one or more equity offerings, at 113.75% of their principal amount. In addition, prior to December 12, 2016, Affinion Holdings’ 2013 senior notes are redeemable, in whole or in part, at a redemption price equal to 100% of the principal amount of Affinion Holdings’ 2013 senior notes redeemed plus a “make-whole” premium. The indenture governing Affinion Holdings’ 2013 senior notes contains negative covenants which restrict the ability of Affinion Holdings and any restricted subsidiaries of Affinion Holdings to engage in certain transactions and also contains customary events of default. Affinion Holdings’ 2013 senior notes are senior secured obligations of Affinion Holdings and rank pari passu In connection with the exchange, Affinion Holdings recognized a loss of $4.6 million, representing the write-off of unamortized debt issuance costs and discounts of $2.8 million and $1.8 million, respectively. In connection with the exchange offer and consent solicitation relating to Affinion Holdings’ 2010 senior notes and the issuance of Affinion Holdings’ 2013 senior notes, Affinion Holdings incurred financing costs of $4.7 million, which are included in other non-current assets on the accompanying unaudited condensed consolidated balance sheet and are being amortized over the term of Affinion Holdings’ 2013 senior notes. On June 9, 2014, Affinion Holdings completed an offer to exchange Affinion Holdings’ 2013 senior notes for Affinion Holdings’ Series A warrants to purchase shares of Affinion Holdings’ Class B common stock. In connection with the exchange offer, approximately $88.7 million aggregate principal amount of Affinion Holdings’ 2013 senior notes were exchanged for Series A warrants to purchase up to approximately 30.3 million shares of Affinion Holdings Class B common stock. In addition, on June 9, 2014, in connection with a pre-emptive rights offer, Affinion Holdings issued Series A warrants to purchase up to approximately 1.2 million shares of Affinion Holdings Class B common stock in exchange for cash proceeds of approximately $3.8 million. In connection with the debt exchange, Affinion Holdings recognized a loss on extinguishment of debt of $8.6 million, which represented the write off of a pro rata portion of the unamortized deferred financing costs and debt discount. On December 12, 2013, Affinion completed a private offer to exchange Affinion’s 2006 senior subordinated notes for the Investments senior subordinated notes, pursuant to which $360.0 million aggregate principal amount of Investments senior subordinated notes were issued in exchange for $352.9 million aggregate principal amount of Affinion’s 2006 senior subordinated notes. Under the terms of the exchange offer, for each $1,000 principal amount of Affinion’s 2006 senior subordinated notes tendered at or prior to the consent time, holders received $1,020 principal amount of Investments senior subordinated notes. For each $1,000 principal amount of Affinion’s 2006 senior subordinated notes tendered during the offer period but after the consent period, holders received $1,000 principal amount of Investments senior subordinated notes. The Investments senior subordinated notes bear interest at 13.50% per annum, payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2014. The Investments senior subordinated notes will mature on August 15, 2018. Affinion Investments may redeem some or all of the Investments senior subordinated notes at any time on or after December 12, 2016 at redemption prices (generally at a premium) set forth in the indenture governing the Investments senior subordinated notes. In addition, prior to December 12, 2016, up to 35% of the outstanding Investments senior subordinated notes are redeemable at the option of Affinion Investments, with the net proceeds raised by Affinion or Affinion Holdings in one or more equity offerings, at 113.50% of their principal amount. In addition, prior to December 12, 2016, the Investments senior subordinated notes are redeemable, in whole or in part, at a redemption price equal to 100% of the principal amount of the Investments senior subordinated notes redeemed plus a “make-whole” premium. The indenture governing the Investments senior subordinated notes contains negative covenants which restrict the ability of Affinion Investments, any future restricted subsidiaries of Affinion Investments and one of the Company’s other wholly-owned subsidiaries that guarantees the Investments senior subordinated notes to engage in certain transactions and also contains customary events of default. Affinion Investments’ obligations under the Investments senior subordinated notes are guaranteed on an unsecured senior subordinated basis by Affinion Investments II. Each of Affinion Investments and Affinion Investments II is an unrestricted subsidiary of Affinion and guarantees Affinion’s indebtedness under its senior secured credit facility but does not guarantee Affinion’s other indebtedness. The Investments senior subordinated notes and guarantee thereof are unsecured senior subordinated obligations of Affinion Investments, as issuer, and Affinion Investments II, as guarantor, and rank junior in right of payment to their respective guarantees of Affinion’s senior secured credit facility. On December 12, 2013, Affinion Investments exchanged with Affinion all of Affinion’s 2006 senior subordinated notes received by it in the exchange offer for Affinion’s 2013 senior subordinated notes. Affinion’s 2013 senior subordinated notes bear interest at 13.50% per annum payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2014. Affinion’s 2013 senior subordinated notes will mature on August 15, 2018. Affinion’s 2013 senior subordinated notes are redeemable at Affinion’s option prior to maturity. The indenture governing Affinion’s 2013 senior subordinated notes contains negative covenants which restrict the ability of Affinion and its restricted subsidiaries to engage in certain transactions and also contains customary events of default. Affinion’s obligations under Affinion’s 2013 senior subordinated notes are jointly and severally and fully and unconditionally guaranteed on an unsecured senior subordinated basis by each of Affinion’s existing and future domestic subsidiaries that guarantee Affinion’s indebtedness under its senior secured credit facility (other than Affinion Investments and Affinion Investments II). Affinion’s 2013 senior subordinated notes and guarantees thereof are unsecured senior subordinated obligations of Affinion’s and rank junior to all of Affinion’s and the guarantors’ existing and future senior indebtedness, pari passu On October 5, 2010, Affinion Holdings issued $325.0 million aggregate principal amount of its 2010 senior notes. Affinion Holdings used a portion of the proceeds of $320.3 million (net of issue discount), along with proceeds from a cash dividend from Affinion in the amount of $115.3 million, to repay its senior unsecured term loan. A portion of the remaining proceeds from the offering of its 2010 senior notes were utilized to pay related fees and expenses of approximately $6.7 million, with the balance retained for general corporate purposes. The fees and expenses were capitalized and were being amortized over the term of the Affinion Holdings’ 2010 senior notes. On August 24, 2011, pursuant to the registration rights agreement entered into in connection with the issuance of Affinion Holdings’ 2010 senior notes, Affinion Holdings completed a registered exchange offer and exchanged all of its then-outstanding Affinion Holdings’ 2010 senior notes for a like principal amount of Affinion Holdings’ 2010 senior notes that have been registered under the Securities Act. On November 19, 2010, Affinion completed a private offering of $475.0 million aggregate principal amount of its 2010 senior notes. Affinion’s 2010 senior notes bear interest at 7.875% per annum payable semi-annually on June 15 and December 15 of each year, commencing on June 15, 2011. Affinion’s 2010 senior notes will mature on December 15, 2018. Affinion’s 2010 senior notes are redeemable at Affinion’s option prior to maturity. The indenture governing Affinion’s 2010 senior notes contains negative covenants which restrict the ability of Affinion and its restricted subsidiaries to engage in certain transactions and also contains customary events of default. Affinion’s obligations under Affinion’s 2010 senior notes are jointly and severally and fully and unconditionally guaranteed on a senior unsecured basis by each of Affinion’s existing and future domestic subsidiaries that guarantee Affinion’s indebtedness under the Affinion Credit Facility, other than Affinion Investments and Affinion Investments II. Affinion’s 2010 senior notes and guarantees thereof are senior unsecured obligations of Affinion and rank equally with all of Affinion’s and the guarantors’ existing and future senior indebtedness and senior to Affinion’s and the guarantors existing and future subordinated indebtedness. Affinion’s 2010 senior notes are therefore effectively subordinated to Affinion’s and the guarantors’ existing and future secured indebtedness, including Affinion’s obligations under the Affinion Credit Facility, to the extent of the value of the collateral securing such indebtedness. Affinion’s 2010 senior notes are structurally subordinated to all indebtedness and other obligations of each of Affinion’s existing and future subsidiaries that are not guarantors, including the Investments senior subordinated notes. On August 24, 2011, pursuant to the registration rights agreement entered into in connection with the issuance of Affinion’s 2010 senior notes, Affinion completed a registered exchange offer and exchanged all of its then-outstanding 2010 senior notes for a like principal amount of its 2010 senior notes that have been registered under the Securities Act of 1933, as amended (the “Securities Act”). On April 26, 2006, Affinion issued $355.5 million aggregate principal amount of its 2006 senior subordinated notes and applied the gross proceeds of $350.5 million to repay $349.5 million of outstanding borrowings under a then-outstanding $383.6 million senior subordinated loan facility (the “Bridge Loan”), plus accrued interest, and used cash on hand to pay fees and expenses associated with such issuance. Affinion’s 2006 senior subordinated notes bear interest at 11 1 2 On September 13, 2006, Affinion completed a registered exchange offer and exchanged all of its then-outstanding 2006 senior subordinated notes for a like principal amount of Affinion’s 2006 senior subordinated notes that have been registered under the Securities Act of 1933, as amended. The amended Affinion Credit Facility, Affinion’s 2010 senior notes and Affinion’s 2013 senior subordinated notes all contain restrictive covenants related primarily to Affinion’s ability to distribute dividends, redeem or repurchase capital stock, sell assets, issue additional debt or merge with or acquire other companies. Under the Affinion Credit Facility,Affinion generally may pay dividends of up to approximately $13.8 million in the aggregate, provided that no default or event of default has occurred or is continuing, or would result from the dividend. Under the Affinion Credit Facility, payment of additional dividends requires the satisfaction of various conditions, including meeting defined leverage ratios and a defined fixed charge coverage ratio, and the total dividend paid cannot exceed a calculated amount of defined available free cash flow, or requires availability under specified baskets. The covenants in the Affinion Credit Facility also require compliance with a senior secured leverage ratio. During the six months ended June 30, 2015 and 2014, Affinion did not pay any cash dividends to Affinion Holdings. Affinion was in compliance with the covenants referred to above as of June 30, 2015. Payment under each of the debt agreements may be accelerated in the event of a default. Events of default include the failure to pay principal and interest when due, covenant defaults (unless cured within applicable grace periods, if any), events of bankruptcy and, for the amended Affinion Credit Facility, a material breach of representation or warranty and a change of control. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. INCOME TAXES The income tax provision is determined using the asset and liability approach, under which deferred tax assets and liabilities are calculated based upon the temporary differences between the financial statements and income tax bases of assets and liabilities using currently enacted tax rates. Deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion, or all, of the recorded deferred tax assets will not be realized in future periods. Decreases to the valuation allowance are recorded as reductions to the income tax provision, while increases to the valuation allowance result in additional income tax provision. The realization of deferred tax assets is primarily dependent on estimated future taxable income. As of June 30, 2015 and December 31, 2014, the Company has recorded a full valuation allowance for its U.S. federal net deferred tax assets. As of June 30, 2015 and December 31, 2014, the Company has also recorded valuation allowances against the deferred tax assets related to certain state and foreign tax jurisdictions. The Company’s effective income tax rates for the three and six months ended June 30, 2015 were (4.0)% and (5.1)%, respectively. The Company’s effective income tax rates for the three and six months ended June 30, 2014 were (6.1)% and (7.5)%, respectively. The difference in the effective tax rates for the three months ended June 30, 2015 and 2014 is primarily a result of the decrease from loss before income taxes and non-controlling interest of $66.2 million for the three months ended June 30, 2014 to $26.5 million for the three months ended June 30, 2015 and a decrease in the income tax provision from $4.1 million for the three months ended June 30, 2014 to $1.1 million for the three months ended June 30, 2015. The difference in the effective tax rates for the six months ended June 30, 2015 and 2014 is primarily a result of the decrease from loss before income taxes and non-controlling interest of $110.8 million for the six months ended June 30, 2014 to $59.9 million for the six months ended June 30, 2015 and a decrease in the income tax provision from $8.3 million for the six months ended June 30, 2014 to $3.1 million for the six months ended June 30, 2015.The Company’s tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amount of income it earns in those jurisdictions. It is also affected by discrete items that may occur in any given year, but are not consistent from year to year. In addition to state and foreign income taxes, the requirement to maintain valuation allowances had the most significant impact on the difference between the Company’s effective tax rate and the statutory U.S. federal income tax rate of 35%. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company recognized less than $0.1 million and $0.1 million of interest related to uncertain tax positions for the three and six months ended June 30, 2015, respectively. The Company recognized less than $0.1 million and $0.1 million of interest related to uncertain tax positions for the three and six months ended June 30, 2014, respectively. The interest has been included in income tax expense for the current period. The Company’s gross unrecognized tax benefits for the six months ended June 30, 2015 decreased by $1.6 million as a result of tax positions taken during the current period, which was offset by a valuation allowance. The Company’s income tax returns are periodically examined by various tax authorities. In connection with these and future examinations, certain tax authorities, including the Internal Revenue Service, may raise issues and impose additional assessments. The Company regularly evaluates the likelihood of additional assessments resulting from these examinations and establishes liabilities, through the provision for income taxes, for potential amounts that may result therefrom. The recognition of uncertain tax benefits are not expected to have a material impact on the Company’s effective tax rate or results of operations. Federal, state and local jurisdictions are subject to examination by the taxing authorities for all open years as prescribed by applicable statute. For significant foreign jurisdictions, tax years in Germany, France, Turkey, Switzerland and the United Kingdom remain open as prescribed by applicable statute. During 2014, income tax waivers were executed in certain states that extend the period subject to examination beyond the period prescribed by statute. There are no significant changes anticipated in accordance with the extension of the income tax statutes in these jurisdictions. The Company does not believe that it is reasonably possible that the total amount of unrecognized tax benefits will change significantly within the next 12 months. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. COMMITMENTS AND CONTINGENCIES Litigation In the ordinary course of business, the Company is involved in claims, governmental inquiries and legal proceedings related to employment matters, contract disputes, business practices, trademark and copyright infringement claims and other commercial matters. The Company is also a party to lawsuits which were brought against it and its affiliates and which purport to be a class action in nature and allege that the Company violated certain federal or state consumer protection statutes (as described below). The Company intends to vigorously defend itself against such lawsuits. On June 17, 2010, a class action complaint was filed against the Company and Trilegiant Corporation (“Trilegiant”) in the United States District Court for the District of Connecticut. The complaint asserts various causes of action on behalf of a putative nationwide class and a California-only subclass in connection with the sale by Trilegiant of its membership programs, including claims under the Electronic Communications Privacy Act (“ECPA”), the Connecticut Unfair Trade Practices Act (“CUTPA”), the Racketeer Influenced Corrupt Organizations Act (“RICO”), the California Consumers Legal Remedies Act, the California Unfair Competition Law, the California False Advertising Law, and for unjust enrichment. On September 29, 2010, the Company filed a motion to compel arbitration of all of the claims asserted in this lawsuit. On February 24, 2011, the court denied the Company’s motion. On March 28, 2011, the Company and Trilegiant filed a notice of appeal in the United States Court of Appeals for the Second Circuit, appealing the district court’s denial of their motion to compel arbitration. On September 7, 2012, the Second Circuit affirmed the decision of the district court denying arbitration. While that issue was on appeal, the matter proceeded in the district court. There was written discovery and depositions. Previously, the court had set a briefing schedule on class certification that called for the completion of class certification briefing on May 18, 2012. However, on March 28, 2012, the court suspended the briefing schedule on the motion due to the filing of two other overlapping class actions in the United States District Court for the District of Connecticut. The first of those cases was filed on March 6, 2012, against the Company, Trilegiant, Chase Bank USA, N.A., Bank of America, N.A., Capital One Financial Corp., Citigroup, Inc., Citibank, N.A., Apollo Global Management, LLC, 1-800-Flowers.Com, Inc., United Online, Inc., Memory Lane, Inc., Classmates Int’l, Inc., FTD Group, Inc., Days Inn Worldwide, Inc., Wyndham Worldwide Corp., People Finderspro, Inc., Beckett Media LLC, Buy.com, Inc., Rakuten USA, Inc., IAC/InteractiveCorp., and Shoebuy.com, Inc. The second of those cases was filed on March 25, 2012, against the same defendants as well as Adaptive Marketing, LLC, Vertrue, Inc., Webloyalty.com, Inc., and Wells Fargo & Co. These two cases assert similar claims as the claims asserted in the earlier-filed lawsuit in connection with the sale by Trilegiant of its membership programs. On April 26, 2012, the court consolidated these three cases. The court also set an initial status conference for May 17, 2012. At that status conference, the court ordered that Plaintiffs file a consolidated amended complaint to combine the claims in the three previously separate lawsuits. The court also struck the class certification briefing schedule that had been set previously. On September 7, 2012, the Plaintiffs filed a consolidated amended complaint asserting substantially the same legal claims. The consolidated amended complaint added Priceline, Orbitz, Chase Paymentech, Hotwire, and TigerDirect as Defendants and added three new Plaintiffs; it also dropped Webloyalty and Rakuten as Defendants. On December 7, 2012, all Defendants filed motions seeking to dismiss the consolidated amended complaint and to strike certain portions of the complaint. Plaintiff’s response brief was filed on February 7, 2013, and Defendants’ reply briefs were filed on April 5, 2013. On September 25, 2013, the court held oral argument on the motions to dismiss. On March 28, 2014, the court ruled on the motions to dismiss, granting them in part and denying them in part. The court dismissed the Plaintiffs’ RICO claims and claims under the California Automatic Renewal Statute as to all defendants. The court also dismissed certain named Plaintiffs as their claims were barred either by the statute of limitations and/or a prior settlement agreement. Certain Defendants were also dismissed from the case. The court also struck certain allegations from the consolidated amended complaint, including certain of Plaintiffs’ class action allegations under CUTPA. As to the Company and Trilegiant, the court denied the motion to dismiss certain Plaintiffs’ claims under ECPA and for unjust enrichment, as well as certain other claims of Plaintiffs under CUTPA. Also, on December 5, 2012, the Plaintiffs’ law firms in these consolidated cases filed an additional action in the United States District Court for the District of Connecticut. That case is identical in all respects to this case except that it was filed by a new Plaintiff (the named Plaintiff from the class action complaint previously filed against the Company, Trilegiant, 1-800-Flowers.com, and Chase Bank USA, N.A., in the United States District Court for the Eastern District of New York on November 10, 2010). On January 23, 2013, Plaintiff filed a motion to consolidate that case into the existing set of consolidated cases. On June 13, 2013, the court entered an order staying the date for all Defendants to respond to the Complaint until 21 days after the court ruled on the motion to consolidate. On March 28, 2014, the court entered an order granting the motion to consolidate. On May 12, 2014, remaining Defendants in the consolidated cases filed answers in which they denied the material allegations of the consolidated amended complaint. On April 28, 2014, Plaintiffs filed a motion seeking interlocutory appellate review of portions of the court’s order of March 28, 2014. Briefing on the motion was completed on June 5, 2014. On March 26, 2015, the court denied Plaintiff’s motion for interlocutory appeal. On May 29, 2015, the court issued a scheduling order indicating that discovery was to commence immediately and be completed by December 31, 2015. On May 29, 2015, the court also set deadlines for dispositive motions, which are due February 29, 2016. If no dispositive motions are filed, a joint trial memorandum would be due by April 1, 2016, and jury selection would take place on May 3, 2016. If dispositive motions are filed, the joint trial memorandum would be due by October 3, 2016, and jury selection would take place on November 1, 2016. On June 16, 2015, the court set a schedule for class certification, with plaintiffs’ motion for class certification due on September 15, 2015, and with briefing to be completed by November 30, 2015. On August 27, 2010, a class action lawsuit was filed against Webloyalty, one of its former clients and one of the credit card associations in the United States District Court for the District of Connecticut alleging, among other things, violations of the Electronic Fund Transfer Act, Electronic Communications Privacy Act, unjust enrichment, civil theft, negligent misrepresentation, fraud and Connecticut Unfair Trade Practices Act violation (the “Connecticut Action”). This lawsuit relates to Webloyalty’s alleged conduct occurring on and after October 1, 2008. On November 1, 2010, the defendants moved to dismiss the initial complaint, which plaintiff then amended on November 19, 2010. On December 23, 2010, Webloyalty filed a second motion to dismiss this lawsuit. On May 15, 2014, the court heard oral argument on plaintiff’s motion to strike the Company’s request for judicial notice of the plaintiff’s membership enrollment documents filed in support of the Company’s second motion to dismiss. On July 17, 2014, the court denied plaintiff’s motion to strike. The court, at the same time, dismissed those claims grounded in fraud, but reserved until further proceedings the determination as to whether all of plaintiff’s claims are grounded in fraud and whether those claims not grounded in fraud are dismissible. The court permitted the plaintiff until August 15, 2014 to amend his complaint and allowed the parties the opportunity to conduct limited discovery, to be completed by September 26, 2014, concerning the issues addressed in its dismissal order. All other discovery is currently stayed in the case. The July 17, 2014 order indicated that the court will set a further motion to dismiss briefing schedule following the conclusion of this limited discovery. The plaintiff amended his complaint as scheduled, and the parties conducted limited discovery as ordered. After this limited discovery, the parties proposed a motion to dismiss briefing schedule calling for the defendants to file their opening briefs on January 9, 2015. The plaintiff filed his opposition brief on March 24, 2015, and on April 24, 2015, the defendants filed their reply briefs in response to that opposition. The court has not yet scheduled a hearing on the defendants’ motions to dismiss the second amended complaint. On June 7, 2012, another class action lawsuit was filed in the U.S. District Court for the Southern District of California against Webloyalty that was factually similar to the Connecticut Action. The action claims that Webloyalty engaged in unlawful business practices in violation of California Business and Professional Code § 17200, et seq. and in violation of the Connecticut Unfair Trade Practices Act. Both claims are based on allegations that in connection with enrollment and billing of the plaintiff, Webloyalty charged plaintiff’s credit or debit card using information obtained through a data pass process and without obtaining directly from plaintiff his full account number, name, address, and contact information, as purportedly required under Restore Online Shoppers’ Confidence Act. On September 25, 2012, Webloyalty filed a motion to dismiss the complaint in its entirety and the court scheduled a hearing on the motion for January 14, 2013. Webloyalty also sought judicial notice of the enrollment page and related enrollment and account documents. Plaintiff filed his opposition on December 12, 2012, and Webloyalty filed its reply submission on January 7, 2013. Thereafter, on January 10, 2013, the court cancelled the previously scheduled January 14, 2013 hearing and indicated that it would rule based on the parties’ written submissions without the need for a hearing. On August 28, 2013, the court sua sponte On February 7, 2014 a class action lawsuit was filed against the Company and one of its clients in the United States District Court for the District of Massachusetts alleging, among other things, violations of the Electronic Fund Transfer Act and Electronic Communications Privacy Act, unjust enrichment, money had and received, conversion, misrepresentation, violation of the Massachusetts Consumer Protection Act and equitable relief. Claims are based on allegations that plaintiff was enrolled and billed for a package program without plaintiff’s proper consent and knowledge. On April 4, 2014, the Company filed a motion to dismiss. A hearing on that motion was held on July 24, 2014. On March 11, 2015, the magistrate judge to whom the motion was referred by the district court judge issued a report and recommendation granting in part and denying in part the motion to dismiss. The magistrate judge granted the motion to dismiss on the fraud claim, which was dismissed as time-barred, but denied the remainder of the motion. On March 25, 2015, the Company filed objections to the magistrate judge’s report and recommendation. Briefing on the objections concluded on April 9, 2015. On June 4, 2015, the court accepted and adopted the report and recommendation of the magistrate judge over the Company’s objections. The Company filed its answer to the complaint on July 2, 2015. A scheduling conference with the court is set for August 11, 2015. On May 12, 2014, a class action lawsuit was filed against the Company and one of its clients in the United States District Court, Northern District of California – San Francisco Division. The complaint alleges plaintiff was unknowingly enrolled in and charged for an Identity Theft Protection program. The defendants moved to compel individual arbitration of the case or in the alternative to dismiss the case, and briefing on that motion concluded on September 26, 2014. On October 31, 2014, the court granted the Company’s motion to compel individual arbitration of the case. On April 28, 2015, the plaintiff voluntarily dismissed her claims against the Company without prejudice. Other Contingencies From time to time, the Company receives inquiries from federal and state agencies which may include the Federal Trade Commission, the Federal Communications Commission, the Consumer Financial Protection Bureau (the “CFPB”), state attorneys general and other state regulatory agencies, including state insurance regulators. The Company responds to these matters and requests for documents, some of which may lead to further investigations and proceedings. From time to time, our international operations also receive inquiries from consumer protection, insurance or data protection agencies. The Company responds to these matters and requests for documents, some of which may lead to further investigations and proceedings. On January 27, 2015, following voluntary discussions with the Financial Conduct Authority in the United Kingdom (the “FCA”), Affinion International Limited (“AIL”), one of our UK subsidiaries, and 11 UK retail banks and credit card issuers, announced a proposed joint arrangement, which will allow eligible consumers to make claims for compensation in relation to a discontinued benefit in one of AIL’s products. The proposed arrangement has been approved by a majority of those affected consumers who voted at a creditors’ meeting held on June 30, 2015, and has also been approved by the High Court in London at a hearing held on July 9, 2015. The proposed arrangement, which will not result in the imposition of any fines on AIL or the Company, should therefore become effective on August 17, 2015. Based on the information currently available, the Company has recorded an estimated liability that represents potential consumers’ refunds to be paid by the Company as part of such arrangement. On April 18, 2014, Bank of America, N.A. (“Bank of America”) and FIA Card Services, N.A. (“FIA Card Services”) commenced an arbitration proceeding against Trilegiant and Affinion pursuant to the terms of the parties’ servicing agreements. In the arbitration proceeding, Bank of America asserted various causes of action and requests for monetary and other relief, including a demand for contractual indemnification of the losses and costs, including in particular customer refunds and reasonable attorneys’ fees that Bank of America incurred related to consent orders entered into by Bank of America with the Office of the Comptroller of the Currency on April 7, 2014 and with the CFPB on April 9, 2014. On May 16, 2014, Trilegiant commenced two separate arbitration proceedings against Bank of America, asserting that Bank of America breached the parties’ servicing agreements. On July 7, 2014, the parties agreed to stay one of the arbitrations initiated by Trilegiant and to dismiss the other arbitrations without prejudice, pending mediation. On September 22, 2014, Bank of America and Trilegiant participated in a mediation to attempt to resolve their outstanding disputes. The mediation process was ultimately unsuccessful in resolving the parties’ disputes. As such, the parties have resumed the arbitration process. The final arbitration hearing is scheduled to take place in mid-October 2015. Assuming the parties submit post-hearing memoranda, a decision is not expected until late 2015 or early 2016. In September 2014, the Company received a Notice and Opportunity to Respond and Advise ("NORA") letter indicating that the CFPB was considering taking legal action against the Company for violations of Sections 1031 and 1036 of the Consumer Financial Protection Act relating to the Company’s identity theft protection products. In July 2015, the Company entered into a Stipulated Final Judgment and Order (“Consent Order”) settling allegations regarding unfair billing practices related to certain of the Company’s protection products and deceptive retention practices related to these same products. The Consent Order is subject to court approval, which the Company expects to occur in August 2015. The Consent Order required a payment by the Company of $1.9 million to the CFPB’s civil penalty fund and approximately $6.75 million in consumer restitution, as well as injunctive provisions against the Company related to certain of its billing and retention practices, which are not expected to have a material effect on the Company. The Company believes that the amount accrued for the above litigation and contingencies matters is adequate, and the reasonably possible loss beyond the amounts accrued will not have a material effect on its consolidated financial statements, taken as a whole, based on information currently available. However, litigation is inherently unpredictable and, although the Company believes that accruals are adequate and it intends to vigorously defend itself against such matters, unfavorable resolution could occur, which could have a material effect on the Company’s consolidated financial statements, taken as a whole. Surety Bonds and Letters of Credit In the ordinary course of business, the Company is required to provide surety bonds to various state authorities in order to operate its membership, insurance and travel agency programs. As of June 30, 2015, the Company provided guarantees for surety bonds totaling approximately $10.8 million and issued letters of credit totaling $15.9 million. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 8. STOCK-BASED COMPENSATION In connection with the closing of the Apollo Transactions on October 17, 2005, Affinion Holdings adopted the 2005 Stock Incentive Plan (the “2005 Plan”). The 2005 Plan authorizes the Board of Directors (the “Board”) of Affinion Holdings to grant non-qualified, non-assignable stock options and rights to purchase shares of Affinion Holdings’ common stock to directors and employees of, and consultants to, Affinion Holdings and its subsidiaries. Options granted under the 2005 Plan have an exercise price no less than the fair market value of a share of the underlying common stock on the date of grant. Stock awards have a purchase price determined by the Board. The Board was authorized to grant up to 4.9 million shares of Affinion Holdings’ common stock under the 2005 Plan over a ten year period. As discussed below, no additional grants may be made under Affinion Holdings’ 2005 Plan on or after November 7, 2007, the effective date of the 2007 Plan, as defined below. In November 2007, Affinion Holdings adopted the 2007 Stock Award Plan (the “2007 Plan”). The 2007 Plan authorizes the Board to grant awards of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, stock bonus awards, performance compensation awards (including cash bonus awards) or any combination of these awards to directors and employees of, and consultants to, Affinion Holdings and its subsidiaries. Unless otherwise determined by the Board of Directors, options granted under the 2007 Plan will have an exercise price no less than the fair market value of a share of the underlying common stock on the date of grant. Stock awards have a purchase price determined by the Board. The Board was authorized to grant up to 10.0 million shares of Affinion Holdings’ common stock under the 2007 Plan over a ten year period. As of June 30, 2015, there were 2.2 million shares available under the 2007 Plan for future grants. In connection with the acquisition of Webloyalty in January 2011, the Company assumed the Webloyalty Holdings, Inc. 2005 Equity Award Plan (the “Webloyalty 2005 Plan”). The Webloyalty 2005 Plan, adopted by Webloyalty’s board of directors in May 2005, authorized Webloyalty’s board of directors to grant awards of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonuses and performance compensation awards or any combination of these awards to directors and employees of, and consultants to, Webloyalty. Unless otherwise determined by Webloyalty’s board of directors, incentive stock options granted under the Webloyalty 2005 Plan were to have an exercise price no less than the fair market value of a share of the underlying common stock on the date of grant and nonqualified stock options granted under the Webloyalty 2005 Plan were to have an exercise price no less than the par value of a share of Webloyalty’s common stock on the date of grant. The Webloyalty board of directors was authorized to grant shares of Webloyalty’s common stock under the Webloyalty 2005 Plan over a ten year period. As of June 30, 2015, after conversion of the outstanding options under the Webloyalty 2005 Plan into options to acquire shares of Affinion Holdings’ common stock, there were options to acquire 0.5 million shares of Affinion Holdings’ common stock. On March 28, 2014, the Company modified approximately 0.5 million of the outstanding options under the Webloyalty 2005 Plan, adjusting the exercise price to $1.14 per common share and extending the contractual life of the modified options until April 1, 2024. At June 30, 2015, the outstanding options had exercise prices ranging from $1.14 to $7.32. All of the outstanding options were vested as of June 30, 2015 and expire between December 2016 and April 2024. For employee stock awards, the Company recognizes compensation expense, net of estimated forfeitures, over the requisite service period, which is the period during which the employee is required to provide services in exchange for the award. The Company has elected to recognize compensation cost for awards with only a service condition and have a graded vesting schedule on a straight-line basis over the requisite service period for the entire award. Stock Options During the three and six months ended June 30, 2015 and 2014, there were no stock options granted to employees from the 2005 Plan. All options previously granted were granted with an exercise price equal to the estimated fair market value of a share of the underlying common stock on the date of grant. Stock options granted to employees from the 2005 Plan are comprised of three tranches with the following terms: Tranche A Tranche B Tranche C Vesting Ratably over 5 years* 100% after 8 years** 100% after 8 years** Initial option term 10 years 10 years 10 years * In the event of a sale of the Company, vesting for tranche A occurs 18 months after the date of sale. ** Tranche B and C vesting would be accelerated upon specified realized returns to Apollo. On March 28, 2014, the Company modified approximately 1.9 million of the outstanding options under the 2005 Plan, adjusting the exercise price to $1.14 per common share and extending the contractual life of the modified options until April 1, 2024. During the three and six months ended June 30, 2015, there were no stock options granted to employees from the 2007 Plan. During the three and six months ended June 30, 2014, 1.4 million stock options were granted to employees from the 2007 Plan. All options granted were granted with an exercise price equal to the estimated fair market value of a share of the underlying common stock on the date of grant. The stock options granted to employees from the 2007 Plan have the following terms: Vesting period Ratably over 4 years Initial option term 10 years On March 28, 2014, the Company modified approximately 2.4 million of the outstanding options under the 2007 Plan, adjusting the exercise price to $1.14 per common share and extending the contractual life of the modified options until April 1, 2024. During the three and six months ended June 30, 2015, there were no stock options granted to members of the Board of Directors. During the three and six months ended June 30, 2014, there were 0.1 million stock options granted to members of the Board of Directors. Generally, options granted to members of the Board of Directors fully vest on the date of grant and have an initial option term of 10 years. On March 28, 2014, the Company modified approximately 0.2 million of the outstanding options granted to members of the Board of Directors, adjusting the exercise price to $1.14 per common share and extending the contractual life of the modified options until April 1, 2024. The fair value of each option award from the 2007 Plan was estimated on the date of grant using the Black-Scholes option-pricing model based on the assumptions noted in the following table. Expected volatilities are based on historical volatilities of comparable companies. The expected term of the options granted represents the period of time that options are expected to be outstanding, and is based on the average of the requisite service period and the contractual term of the option. 2014 Grants Expected volatility 85 % Expected life (in years) 6.25 Risk-free interest rate 2.04 % Expected dividends — A summary of option activity for the six months ended June 30, 2015 is presented below (number of options in thousands): 2005 Plan 2005 Plan 2005 Plan Grants to Grants to Grants to Grants to 2007 Plan Employees - Employees - Employees - Board of Grants to Tranche A Tranche B Tranche C Directors Employees Outstanding options at January 1, 2015 1,109 554 554 383 4,003 Granted — — — — — Exercised — — — — — Forfeited or expired (18) (10) (10) — (240) Outstanding options at June 30, 2015 1,091 544 544 383 3,763 Vested or expected to vest at June 30, 2015 1,091 544 544 383 3,763 Exercisable options at June 30, 2015 1,091 544 544 383 2,521 Weighted average remaining contractual term (in years) 7.5 7.5 7.5 5.8 8.7 Weighted average grant date fair value per option granted in 2015 $ - $ - $ - $ - $ - Weighted average exercise price of exercisable options at June 30, 2015 $ 1.18 $ 1.18 $ 1.18 $ 1.57 $ 2.52 Weighted average exercise price of outstanding options at June 30, 2015 $ 1.18 $ 1.18 $ 1.18 $ 1.57 $ 2.09 Based on the estimated fair values of options granted, stock-based compensation expense for the three and six months ended June 30, 2015 totaled $0.3 million and $0.9 million, respectively. Based on the estimated fair values of options granted, stock-based compensation expense for the three and six months ended June 30, 2014 totaled $0.6 million and $4.6 million, respectively. The stock-based compensation expense recognized during the six months ended June 30, 2014 included $3.4 million of stock-based compensation expense recognized during the three months ended March 31, 2014 related to the modification of certain stock options held by approximately 200 employees. As of June 30, 2015, there was $1.3 million of unrecognized compensation cost related to unvested stock options, which will be recognized over a weighted average period of approximately 1.2 years. Restricted Stock Units On March 30, 2012, the Board’s Compensation Committee approved the 2012 Retention Award Program (the “2012 RAP”), which provides for awards of RSUs under the 2007 Stock Award Plan. During the year ended December 31, 2012, the Company granted approximately 1.4 million RSUs to key employees. The RSUs awarded under the 2012 RAP have an aggregate cash election dollar value of approximately $11.3 million and are subject to time-based vesting conditions that generally ran through December 31, 2014. Generally, the number of RSUs awarded to each participant is equal to the quotient of (i) the Dollar Award Value, divided by (ii) $8.16, the value per share of Affinion Holdings’ common stock as of the grant date. Upon vesting of the RSUs, participants are able to settle the RSUs in shares of common stock or elect to receive cash in lieu of shares of common stock upon any of the three vesting dates for such RSUs. Due to the ability of the participants to settle their awards in cash, the Company accounts for these RSUs as a liability award. A summary of restricted stock unit activity for the six months ended June 30, 2015 is presented below (number of restricted stock units in thousands): Number of Weighted Average Restricted Grant Date Stock Units Fair Value Outstanding restricted unvested awards at January 1, 2015 522 $ 1.14 Granted — Vested (261 ) 1.14 Forfeited — Outstanding restricted unvested awards at June 30, 2015 261 $ 1.14 Weighted average remaining contractual term (in years) 0.6 Based on the estimated fair value of the restricted stock units granted, stock-based compensation expense for the three and six months ended June 30, 2015 was $0.1 million and $0.2 million, respectively. Based on the estimated fair value of the restricted stock units granted, stock-based compensation expense for both the three and six months ended June 30, 2014 was $1.0 million. As of June 30, 2015, there was $0.2 million of unrecognized compensation cost related to the remaining vesting period of restricted stock units granted under the 2007 Plan. This cost will be recorded in future periods as stock-based compensation expense over a weighted average period of approximately 0.3 years. Incentive Awards On April 1, 2014, the Compensation Committee of the Board approved the terms of the Affinion Group Holdings, Inc. 2014 Performance Incentive Award Program (the “2014 Performance Program”), an equity and cash incentive award program intended to foster retention of key employees of the Company. The awards to key employees consisted of performance incentive units (“PIUs”) and a cash incentive award (“CIA”) and the aggregate cash value of awarded PIUs and CIA comprise the Award Value. The number of PIUs awarded to a participant, which will be awarded from the 2007 Plan, will be equal to the quotient of (i) 50% of the Award Value divided by (ii) the fair market value per share of common stock as of the grant date, which was determined to be $1.14. The amount of the CIA granted to a participant was equal to 50% of the Award Value. Each of the two components of an award was subject to adjustment based on the achievement of performance goals. The awards were subject to certain performance and time-based vesting factors. The maximum number of PIUs and the maximum amount of the CIA into which a participant would be eligible to vest would be determined based on the achievement of certain overall corporate and business unit performance goals, as applicable, during the 2014 calendar year. A participant’s maximum amount of PIUs and the maximum amount of a participant’s CIA would vest in three substantially equal installments on March 15, 2015, 2016 and 2017, subject to that participant’s continued service with the Company on each applicable vesting date. Each PIU that would have vested on a vesting date would be settled for a share of common stock and for the portion of the CIA that vested on a vesting date the Company would have paid the participant an amount equal to the vested portion of the CIA. The aggregate award value granted to participants under the 2014 Performance Program was approximately $9.6 million, subject to adjustment as described above. In March 2015, the Compensation Committee determined that the performance goals established under the 2014 Performance Program had not been achieved and therefore the PIUs and CIA were not eligible to vest and were terminated. During the six months ended June 30, 2015, the Company recognized an expense reduction related to the 2014 Performance Program of $2.2 million, of which $1.1 million related to the common stock portion of the 2014 Performance Program awards. During the three and six months ended June 30, 2015, there was no expense recognized related to the 2014 Performance Program. During the three and six months ended June 30, 2014, stock-based compensation expense of $0.4 million was recognized related to the 2014 Performance Program. On March 16, 2015, the Compensation Committee of the Board approved the terms of (i) the Affinion Group Holdings, Inc. 2015 Retention Award Program (the “2015 Retention Program”), an equity and cash incentive award program intended to foster retention of key employees of Affinion Holdings and its subsidiaries, and (ii) the awards (the “Retention Awards”) to each such key employee consisting of retention units (“RUs”) and a cash retention award (“CRA”) to be made by Affinion Holdings under the 2015 Retention Program. Each Retention Award will entitle the employee to one share of Affinion Holdings’ common stock for each RU and a cash payment in respect of the CRA, in each case, subject to applicable withholding taxes, when the applicable vesting conditions for the Awards are met. The Retention Awards are subject to time-based vesting conditions. An employee’s RUs and CRA will vest in two substantially equal installments on each of March 15, 2016 and March 15, 2017 (each, a “Vesting Date”), subject to that employee’s continued service with Affinion Holdings and its subsidiaries on each applicable Vesting Date. An employee’s RUs and the portion of his or her CRA that become vested as of a given Vesting Date in accordance with the above vesting criteria will be settled as follows: (i) for each RU that vests on such Vesting Date, Affinion Holdings will deliver to the employee on the Settlement Date one share of common stock and (ii) for the portion of the CRA that vests on such Vesting Date, Affinion Holdings will pay to the employee on the Settlement Date an amount in cash equal to such vested portion of the CRA, in each case, subject to applicable tax withholding. An employee’s RUs and the portion of his or her CRA that become vested on a given Vesting Date will be settled as soon as practicable following such Vesting Date but in no event later than the sixtieth (60th) day following such Vesting Date (the “Settlement Date”). Upon termination of employment for any reason, an employee will forfeit the entire unvested portion of his or her Retention Award. The aggregate award value granted to participants under the 2015 Retention Program outstanding as of June 30, 2015 was approximately $8.3 million, net of forfeitures of $0.1 million. During the three and six months ended June 30, 2015, the Company recognized expense related to the 2015 Retention Program of $1.0 million and $1.2 million, respectively, of which $0.5 million and $0.6 million, respectively, related to the common stock portion of the 2015 Retention Program awards. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. RELATED PARTY TRANSACTIONS Post-Closing Relationships with Cendant Cendant has agreed to indemnify the Company, Affinion and the Company’s affiliates (collectively the “indemnified parties”) for breaches of representations, warranties and covenants made by Cendant, as well as for other specified matters, certain of which are described below. Affinion and the Company have agreed to indemnify Cendant for breaches of representations, warranties and covenants made in the purchase agreement, as well as for certain other specified matters. Generally, all parties’ indemnification obligations with respect to breaches of representations and warranties (except with respect to the matters described below) (i) are subject to a $0.1 million occurrence threshold, (ii) are not effective until the aggregate amount of losses suffered by the indemnified party exceeds $15.0 million (and then only for the amount of losses exceeding $15.0 million), and (iii) are limited to $275.1 million of recovery. Generally, subject to certain exceptions of greater duration, the parties’ indemnification obligations with respect to representations and warranties survived until April 15, 2007 with indemnification obligations related to covenants surviving until the applicable covenant has been fully performed. In connection with the purchase agreement, Cendant agreed to specific indemnification obligations with respect to the matters described below. Excluded Litigation . Cendant has agreed to fully indemnify the indemnified parties with respect to any pending or future litigation, arbitration, or other proceeding relating to accounting irregularities in the former CUC International, Inc. announced on April 15, 1998. Certain Litigation and Compliance with Law Matters . Cendant has agreed to indemnify the indemnified parties up to specified amounts for: (a) breaches of its representations and warranties with respect to legal proceedings that (1) occur after the date of the purchase agreement, (2) relate to facts and circumstances related to the business of AGLLC or Affinion International Holdings Limited (“Affinion International”), and (3) constitute a breach or violation of its compliance with law representations and warranties and (b) breaches of its representations and warranties with respect to compliance with laws to the extent related to the business of AGLLC or Affinion International. Cendant, Affinion and the Company have agreed that losses up to $15.0 million incurred with respect to these matters will be borne solely by the Company and losses in excess of $15.0 million will be shared by the parties in accordance with agreed upon allocations. The Company has the right at all times to control litigation related to shared losses and Cendant has consultation rights with respect to such litigation. Prior to 2009, Cendant (i) distributed the equity interests it previously held in its hospitality services business (“Wyndham”) and its real estate services business (“Realogy”) to Cendant stockholders and (ii) sold its travel services business (“Travelport”) to a third party. Cendant continues as a re-named publicly traded company which owns the vehicle rental business (“Avis Budget,” together with Wyndham and Realogy, the “Cendant Entities”). Subject to certain exceptions, Wyndham and Realogy have agreed to share Cendant’s contingent and other liabilities (including its indemnity obligations to the Company described above and other liabilities to the Company in connection with the Apollo Transactions) in specified percentages. If any Cendant Entity defaults in its payment, when due, of any such liabilities, the remaining Cendant Entities are required to pay an equal portion of the amounts in default. Wyndham held a portion of the preferred stock issued in connection with the Apollo Transactions until the preferred stock was redeemed in 2011, and a portion of the warrants issued in connection with the Apollo Transactions until the warrants expired in 2011, while Realogy was subsequently acquired by an affiliate of Apollo and remained an affiliate of Apollo until July 2013. Therefore, for the three and six months ended June 30, 2015 and 2014, none of the Cendant Entities is a related party. Other Agreements On October 17, 2005, Apollo entered into a consulting agreement with the Company for the provision of certain structuring and advisory services. The consulting agreement allows Apollo and its affiliates to provide certain advisory services for a period of twelve years or until Apollo owns less than 5% of the beneficial economic interests of the Company, whichever is earlier. The agreement could be terminated earlier by mutual consent. The Company was required to pay Apollo an annual fee of $2.0 million for these services commencing in 2006. On January 14, 2011, the Company and Apollo entered into an Amended and Restated Consulting Agreement (“Consulting Agreement”), pursuant to which Apollo and its affiliates will continue to provide Affinion with certain advisory services on substantially the same terms as the previous consulting agreement, except that the annual fee paid by Affinion increased to $2.6 million from $2.0 million, commencing January 1, 2012, with an additional one-time fee of $0.6 million which was paid in January 2011 in respect of calendar year 2011. In connection with the December 2013 refinancing of Affinion’s 2006 senior subordinated notes and Affinion Holdings’ 2010 senior notes, Apollo and the Company further amended the consulting agreement, pursuant to which Apollo will not be paid any fees due under the consulting agreement until such time as none of Affinion Holdings’ 2013 senior notes remain outstanding. The amounts expensed related to this consulting agreement were $0.6 million for each of the three month periods ended June 30, 2015 and 2014 and $1.3 million for each of the six month periods ended June 30, 2015 and 2014, which are included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of comprehensive income. If a transaction is consummated involving a change of control or an initial public offering, then, in lieu of the annual consulting fee and subject to certain qualifications, Apollo may elect to receive a lump sum payment equal to the present value of all consulting fees payable through the end of the term of the consulting agreement. In addition, the Company will be required to pay Apollo a transaction fee if it engages in any merger, acquisition or similar transaction. The Company will also indemnify Apollo and its affiliates and their directors, officers and representatives for potential losses relating to the services to be provided under the consulting agreement. In July 2014, Novitex Enterprise Solutions (“Novitex”), a document outsourcing provider owned by affiliates of Apollo, commenced providing administrative services to the Company. In addition, in June 2015, Novitex assumed responsibility for the performance and management of the Company’s domestic print and mailing operations. During the three and six months ended June 30, 2015, the Company recognized expenses of $0.3 million and $0.6 million, respectively, which are included in general and administrative expenses in the accompanying unaudited condensed consolidated statement of comprehensive income for the three and six months ended June 30, 2015. In connection with the transfer of responsibility for performance and management of the Company’s domestic print and mailing operations, the Company also recognized a reduction of operating expense of $0.2 million for the three and six months ended June 30, 2015 for usage of certain equipment by Novitex and also sold certain assets to Novitex for $0.1 million and recognized a gain of less than $0.1 million. SkyMall, which was acquired by the Company in September 2014, provides fulfillment services to Caesar’s Entertainment Corporation, which is owned by an affiliate of Apollo. During the three and six months ended June 30, 2015, the Company recognized revenues, net of the cost to acquire the merchandise and gift cards, of $0.4 million and $0.8 million, respectively, which are included in net revenues in the accompanying unaudited condensed consolidated statement of comprehensive income for the three and six months ended June 30, 2015. On January 28, 2010, the Company acquired an ownership interest of approximately 5%, subsequently reduced to approximately 2.9%, in Alclear Holdings, LLC (“Alclear”) for $1.0 million. A family member of one of the Company’s directors controls and partially funded Alclear and serves as its chief executive officer. In March 2015, the Company sold its ownership interest in Alclear to certain existing members of Alclear who are not related parties or otherwise affiliated with the Company for $1.5 million, and the related gain of $0.5 million is included in other income, net in the accompanying unaudited condensed consolidated statement of comprehensive income for the six months ended June 30, 2015. The Company continues to provide support services to Alclear and recognized revenue of $0.1 million and $0.2 million, respectively, for the three months ended June 30, 2015 and 2014 and $0.2 million and $0.3 million, respectively, for the six months ended June 30, 2015 and 2014. On May 8, 2013, in connection with his resignation as Chief Executive Officer of Global Retail Services and Co-President of Affinion, Mr. Richard J. Fernandes entered into a consulting agreement with Trilegiant Corporation, a wholly owned subsidiary of the Company, effective May 13, 2013, pursuant to which he would continue working with the Company until the one-year anniversary of such resignation. The contract was subsequently amended to extend the term on a month-to-month basis and the contract may be terminated by either party upon thirty days written notice. Mr. Fernandes provides certain consulting services to the Company on a part-time basis and receives a fee of $7,500 per month, subject to increase depending on the level of consulting services provided. The agreement also provides for reimbursement of Mr. Fernandes’ out-of-pocket business and travel expenses and for his healthcare insurance costs during the contract period. |
Financial Instruments, Derivati
Financial Instruments, Derivatives and Fair Value Measures | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments, Derivatives and Fair Value Measures | 10. FINANCIAL INSTRUMENTS, DERIVATIVES AND FAIR VALUE MEASURES As a matter of policy, the Company does not use derivatives for trading or speculative purposes. The following table provides information about the Company’s financial instruments that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted-average interest rates by expected maturity for the Company’s long-term debt as of June 30, 2015: Fair Value At 2020 and June 30, 2015 2016 2017 2018 2019 Thereafter Total 2015 (in millions) Fixed rate debt $ 35.1 $ 0.3 $ — $ 1,206.9 $ — $ — $ 1,242.3 $ 649.9 Average interest rate 11.26 % 11.36 % 11.47 % 11.05 % Variable rate debt $ 3.9 $ 7.8 $ 7.7 $ 1,229.9 $ — $ — $ 1,249.3 $ 1,172.8 Average interest rate (a) 7.37 % 7.37 % 7.37 % 7.84 % (a) Average interest rate is based on rates in effect at June 30, 2015. Foreign Currency Forward Contracts On a limited basis the Company has entered into 30 day foreign currency forward contracts, and upon expiration of the contracts, entered into successive 30 day foreign currency forward contracts. The contracts have been entered into to mitigate the Company’s foreign currency exposures related to intercompany loans which are not expected to be repaid within the next twelve months and that are denominated in Euros and British pounds. At June 30, 2015, the Company had in place contracts to sell EUR 10.0 million and receive $11.2 million and to sell GBP 13.9 million and receive $21.9 million. During the three and six months ended June 30, 2015, the Company recognized a realized loss on the forward contracts of $1.6 million and a realized gain $2.7 million, respectively, and during the three and six months ended June 30, 2014, the Company recognized a realized loss on the forward contracts of $0.4 million and $0.7 million, respectively. As of June 30, 2015, the Company had a de minimis unrealized gain on the foreign currency forward contracts. Credit Risk and Exposure Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of receivables, profit-sharing receivables from insurance carriers, prepaid commissions and interest rate swaps. The Company manages such risk by evaluating the financial position and creditworthiness of such counterparties. Receivables and profit-sharing receivables from insurance carriers are from various marketing, insurance and business partners and the Company maintains an allowance for losses, based upon expected collectability. Commission advances are periodically evaluated as to recovery. Fair Value The Company determines the fair value of financial instruments as follows: a. Cash and Cash Equivalents, Restricted Cash, Receivables, Profit-Sharing Receivables from Insurance Carriers and Accounts Payable—Carrying amounts approximate fair value at June 30, 2015 and December 31, 2014 due to the short-term maturities of these assets and liabilities. b. Long-Term Debt—The Company’s estimated fair value of its long-term fixed-rate debt at June 30, 2015 and December 31, 2014 is based upon available information for debt having similar terms and risks. The fair value of the publicly-traded debt is the published market price per unit multiplied by the number of units held or issued without consideration of transaction costs. The fair value of the non-publicly-traded debt, substantially all of which is variable-rate debt, is based on third party indicative valuations and estimates prepared by the Company after consideration of the creditworthiness of the counterparties. c. Foreign Currency Forward Contracts—At June 30, 2015 and December 31, 2014, the Company’s estimated fair value of its foreign currency forward contracts is based upon available market information. The fair value of the foreign currency forward contracts is based on significant other observable inputs, adjusted for contract restrictions and other terms specific to the foreign currency forward contracts. The fair value has been determined after consideration of foreign currency exchange rates and the creditworthiness of the parties to the foreign currency forward contracts. The counterparty to the foreign currency forward contracts is a major financial institution. The Company does not expect any losses from non-performance by the counterparty. Current accounting guidance establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, giving the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. Level 1 inputs to a fair value measurement are quoted market prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. There were no financial instruments measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014, other than foreign currency forward contracts. Such contracts have historically had a term of approximately thirty days and have been held to maturity. The fair value of the foreign currency forward contracts is measured based on significant observable inputs (Level 2). The following table summarizes assets measured at fair value using Level 3 inputs on a nonrecurring basis subsequent to initial recognition: Fair Value Measurements at December 31, 2014 Impairment Losses Fair Value at Quoted Prices in Active Significant Other Significant Year December 31, Markets for Identical Observable Unobservable Ended 2014 Assets (Level 1) Inputs (Level 2) Inputs (Level 3) December 31, 2014 (in millions) Goodwill - Membership Products $ 89.6 $ — $ — $ 89.6 $ (292.4 ) |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | 11. SEGMENT INFORMATION Management evaluates the operating results of each of its reportable segments based upon several factors, of which the primary factors are revenue and “Segment EBITDA,” which the Company defines as income from operations before depreciation and amortization. The presentation of Segment EBITDA may not be comparable to similarly titled measures used by other companies. The Segment EBITDA of the Company’s four reportable segments does not include general corporate expenses. General corporate expenses include costs and expenses that are of a general corporate nature or managed on a corporate basis, including primarily stock-based compensation expense and consulting fees payable to Apollo. General corporate expenses have been excluded from the presentation of the Segment EBITDA for the Company’s four reportable segments because they are not reported to the chief operating decision maker for purposes of allocating resources among operating segments or assessing operating segment performance. The accounting policies of the reportable segments are the same as those described in Note 2—Summary of Significant Accounting Policies in the Company’s Form 10-K for the year ended December 31, 2014. Net Revenues For the Three Months Ended For the Six Months Ended June 30, June 30, June 30, June 30, 2015 2014 2015 2014 (in millions) Membership products $ 102.1 $ 113.4 $ 205.0 $ 229.5 Insurance and package products 67.3 57.3 135.6 128.2 Global loyalty products 42.1 42.8 87.4 84.2 International products 83.9 90.8 170.0 184.3 Eliminations (0.4 ) (0.5 ) (0.7 ) (1.0 ) $ 295.0 $ 303.8 $ 597.3 $ 625.2 Segment EBITDA For the Three Months Ended For the Six Months Ended June 30, June 30, June 30, June 30, 2015 2014 2015 2014 (in millions) Membership products $ 15.7 $ 18.2 $ 19.7 $ 32.5 Insurance and package products 20.7 6.7 41.2 28.0 Global loyalty products 14.7 17.1 30.2 32.1 International products 6.8 3.0 14.0 (4.0 ) Total products 57.9 45.0 105.1 88.6 Corporate (2.8 ) (9.4 ) (2.5 ) (15.1 ) $ 55.1 $ 35.6 $ 102.6 $ 73.5 For the Three Months Ended For the Six Months Ended June 30, June 30, June 30, June 30, 2015 2014 2015 2014 (in millions) Segment EBITDA $ 55.1 $ 35.6 $ 102.6 $ 73.5 Depreciation and amortization (23.8 ) (29.1 ) (48.0 ) (54.1 ) Income from operations $ 31.3 $ 6.5 $ 54.6 $ 19.4 |
Basis of Presentation and Bus18
Basis of Presentation and Business Description (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation —On October 17, 2005, Cendant Corporation (“Cendant”) completed the sale of the Cendant Marketing Services Division to Affinion Group, Inc. (“Affinion”), a wholly-owned subsidiary of Affinion Group Holdings, Inc. ( the “Company” or “Affinion Holdings”) and an affiliate of Apollo Global Management, LLC (“Apollo”), pursuant to a purchase agreement dated July 26, 2005 for approximately $1.8 billion (the “Apollo Transactions”). All references to Cendant refer to Cendant Corporation, which changed its name to Avis Budget Group, Inc. in August 2006, and its consolidated subsidiaries, specifically in the context of its business and operations prior to, and in connection with, the Company’s separation from Cendant. The accompanying unaudited condensed consolidated financial statements include the accounts and transactions of the Company. In presenting these unaudited condensed consolidated financial statements, management makes estimates and assumptions that affect reported amounts of assets and liabilities and related disclosures, and disclosure of contingent assets and liabilities, at the date of the financial statements, and reported amounts of revenues and expenses during the reporting periods. Estimates, by their nature, are based on judgments and available information at the time such estimate is made. As such, actual results could differ from those estimates. In management’s opinion, the unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and following the guidance of Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the U.S. Securities and Exchange Commission (the “SEC”). As permitted under such rules, certain notes and other financial information normally required by accounting principles generally accepted in the United States of America have been condensed or omitted; however, the unaudited condensed consolidated financial statements do include such notes and financial information sufficient so as to make the interim information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes of the Company as of December 31, 2014 and 2013, and for the years ended December 31, 2014, 2013 and 2012, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 19, 2015 (the “Form 10-K”). |
Business Description | Business Description — The Company is one of the world’s leading customer engagement and loyalty solutions companies. The Company designs, markets and services programs that strengthen and extend customer relationships for many of the world’s largest and most respected companies. The Company’s programs and services include: · Loyalty programs that help reward, motivate and retain consumers, · Membership programs that help consumers save money and gain peace of mind, · Package programs that bundle valuable discounts, protection and other benefits to enhance customer relationships, and · Insurance programs that help protect consumers in the event of a covered accident, injury, illness, or death. The Company designs customer engagement and loyalty solutions with an attractive suite of benefits and ease of usage that it believes are likely to interest and engage consumers based on their needs and interests. For example, the Company provides discount travel services, credit monitoring and identity-theft resolution, accidental death and dismemberment insurance, roadside assistance, various checking account and credit card enhancement services, loyalty program design and management, disaggregated loyalty points redemptions for gift cards, travel and merchandise, as well as other products and services. The Company is a global leader in the designing, marketing and servicing of comprehensive customer engagement and loyalty solutions that enhances and extends the relationship of millions of consumers with many of the largest and most respected companies in the world. The Company generally partners with these leading companies in two ways: 1) by developing and supporting programs that are natural extensions of its partner companies’ brand image and that provide valuable services to their end-customers, and 2) by providing the back-end technological support and redemption services for points-based loyalty programs. Using its expertise in customer engagement, product development, creative design and data-driven targeted marketing, the Company develops and markets programs and services that enable the companies it partners with to generate significant, high-margin incremental revenue, enhance its partners’ brands among targeted consumers as well as strengthen and enhance the loyalty of their customer relationships. The enhanced loyalty can lead to increased acquisition of new customers, longer retention of existing customers, improved customer satisfaction rates, and greater use of other services provided by such companies. The Company refers to the leading companies that it works with to provide customer engagement and loyalty solutions as marketing partners or clients. The Company refers to the consumers to whom it provides services directly under a contractual relationship as subscribers, insureds or members. The Company refers to those consumers that it services on behalf of a third party, such as one of its marketing partners, and with whom it has a contractual relationship as end-customers. The Company utilizes its substantial expertise in a variety of direct engagement media to market valuable products and services to the customers of its marketing partners on a highly targeted, campaign basis. The selection of the media employed in a campaign corresponds to the preferences and expectations the targeted customers have demonstrated for transacting with its marketing partners, as the Company believes this optimizes response, thereby improving the efficiency of our marketing investment. Accordingly, the Company maintains significant capabilities to market through direct mail, point-of-sale, direct response television, the internet, inbound and outbound telephony and voice response unit marketing, as well as other media as needed. The Company’s operating segments are as follows: Membership Products . The Company designs, implements and markets subscription programs that provide its members with personal protection benefits and value-added services including credit monitoring and identity-theft resolution services, as well as access to a variety of discounts and shop-at-home conveniences in such areas as retail merchandise, travel, automotive and home improvement. Insurance and Package Products . The Company markets AD&D and other insurance programs and designs and provides checking account enhancement programs to financial institutions. These programs allow financial institutions to bundle discounts, protection and other benefits with a standard checking account and offer these packages to customers for an additional monthly fee. Global Loyalty Products . The Company designs, implements and administers points-based loyalty programs for financial, travel, auto and other companies. The Company provides its clients with solutions that meet the most popular redemption options desired by their program points holders, including travel services, gift cards, cash back and merchandise. The Company also provides enhancement benefits to major financial institutions in connection with their credit and debit card programs. In addition, the Company provides and manages turnkey travel services that are sold on a private label basis to provide its clients’ customers with direct access to the Company’s proprietary travel platform. A marketing partner typically engages the Company on a fee-for-services contractual basis, where the Company generates revenue in connection with the volume of redemption transactions. International Products . T he Company designs, implements and markets membership and package customer engagement businesses outside North America and operates a discrete loyalty program benefit provider. The Company expects to leverage its current international operational platform to expand its range of products and services, develop new marketing partner relationships in various industries and grow its geographical footprint. In 2012, the Company expanded into Turkey through the acquisition of existing marketing capabilities and also launched business operations in Brazil. In 2015, the Company undertook business activities in Australia. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements On May 28, 2014, the FASB and International Accounting Standards Board issued their final standard on revenue from contracts with customers. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The fundamental principles of the guidance are that companies should recognize revenue in a manner that reflects the timing of transfer of goods and services to customers and the amount of revenue recognized reflects the consideration that a company expects to receive for the goods and services provided. The guidance establishes a five-step approach for the recognition of revenue. In addition, the guidance will also require significantly expanded disclosures about revenue recognition. In July 2015, the FASB issued a new standard that, for public entities, defers the effective date of the standard on revenue from contracts with customers by one year, to annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Entities have the option of using either a full retrospective or modified retrospective approach and early application is not permitted, other than entities may earlier adopt the new guidance as of the originally proposed effective date, which was for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. The Company is in the process of performing an initial evaluation of the impact of the new guidance. Based on its preliminary assessment, the Company does not believe that adoption of the new guidance will have a material impact on the Company’s consolidated financial position, results of operations or cash flows. On August 27, 2014, the FASB issued an Accounting Standards Update (“ASU”) that provides guidance on determining when and how reporting entities must disclose going concern uncertainties in their 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 of issuance of the financial statements (or within one year after the date on which the financial statements were available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” The ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. When adopted, the new guidance is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. On April 7, 2015, the FASB issued an ASU that requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability consistent with debt discounts and premiums, rather than as a separate asset. The new guidance is effective for financial statements issued for fiscal years beginning after December 31, 2015 and interim periods within those fiscal years. When adopted, the new guidance is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. Had the new guidance been in effect, at December 31, 2014, other noncurrent assets and long-term debt would each have been reduced by $29.5 million and at June 30, 2015, other noncurrent assets and long-term debt would each have been reduced by $25.5 million. |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
SkyMall Ventures, LLC | |
Assets Acquired and Liabilities Assumed | On a preliminary basis, the Company allocated the purchase price of $19.1 million, consisting of the upfront cash payment of $18.4 million, plus the working capital adjustment of $0.4 million, and the acquisition date fair value of the up to $3.9 million contingent consideration, based on an income approach and probability model, of $0.3 million, among the assets acquired and liabilities assumed as follows (in millions): Trade receivables $ 3.8 Other current assets, including gift card inventory 37.7 Intangible assets 11.9 Goodwill 14.6 Accounts payable and accrued liabilities (48.8 ) Other current liabilities (0.1 ) Consideration transferred $ 19.1 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the Company’s carrying amount of goodwill for the year ended December 31, 2014 and the six months ended June 30, 2015 are as follows: Balance at Balance at Balance at January 1, Currency December 31, Currency June 30 , 2014 Acquisition Impairment Translation 2014 Translation 2015 (in millions) Membership products $ 382.0 $ - $ (292.4 ) $ - $ 89.6 $ - $ 89.6 Insurance and package products 58.3 — — — 58.3 — 58.3 Global loyalty products 81.7 15.8 — — 97.5 — 97.5 International products 84.3 — — (7.5 ) 76.8 (3.3 ) 73.5 Total $ 606.3 $ 15.8 $ (292.4 ) $ (7.5 ) $ 322.2 $ (3.3 ) $ 318.9 |
Other intangibles, net | |
Schedule of Amortizable Intangible Assets | Intangible assets consisted of: June 30, 2015 Gross Carrying Accumulated Net Carrying Amount Amortization Amount (in millions) Amortizable intangible assets: Member relationships $ 938.6 $ (933.3 ) $ 5.3 Affinity relationships 642.9 (589.0 ) 53.9 Proprietary databases and systems 59.7 (57.5 ) 2.2 Trademarks and tradenames 32.7 (19.8 ) 12.9 Patents and technology 47.7 (45.8 ) 1.9 Covenants not to compete 2.6 (2.3 ) 0.3 $ 1,724.2 $ (1,647.7 ) $ 76.5 December 31, 2014 Gross Carrying Accumulated Net Carrying Amount Amortization Amount (in millions) Amortizable intangible assets: Member relationships $ 939.8 $ (932.0 ) $ 7.8 Affinity relationships 649.1 (574.4 ) 74.7 Proprietary databases and systems 59.9 (57.4 ) 2.5 Trademarks and tradenames 33.5 (18.8 ) 14.7 Patents and technology 47.8 (44.6 ) 3.2 Covenants not to compete 2.6 (2.2 ) 0.4 $ 1,732.7 $ (1,629.4 ) $ 103.3 |
Schedule of Amortization Expense Relating to Intangible Assets | Amortization expense relating to intangible assets was as follows: For the Three Months Ended For the Six Months Ended June 30, June 30, June 30, June 30, 2015 2014 2015 2014 (in millions) Amortizable intangible assets: Member relationships $ 0.9 $ 3.5 $ 2.0 $ 7.2 Affinity relationships 9.8 9.9 19.7 19.8 Proprietary databases and systems 0.1 0.1 0.2 0.2 Trademarks and tradenames 0.6 0.6 1.3 1.3 Patents and technology 0.7 0.8 1.6 1.6 Covenants not to compete - 0.1 0.1 0.2 $ 12.1 $ 15.0 $ 24.9 $ 30.3 |
Contract Rights and List Fees21
Contract Rights and List Fees, Net (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Contract rights and list fees, net | |
Schedule of Amortizable Intangible Assets | Contract rights and list fees consisted of: June 30, 2015 December 31, 2014 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount (in millions) Contract rights $ 59.7 $ (59.4 ) $ 0.3 $ 59.1 $ (58.7 ) $ 0.4 List fees 55.4 (38.0 ) 17.4 51.7 (35.4 ) 16.3 $ 115.1 $ (97.4 ) $ 17.7 $ 110.8 $ (94.1 ) $ 16.7 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Debt | Long-term debt consisted of: June 30, December 31, 2015 2014 (in millions) First-lien term loan due 2018 $ 765.3 $ 769.2 Second-lien term loan due 2018 425.0 425.0 Revolving credit facility, expiring in 2018 59.0 5.0 7.875% senior notes due 2018, net of unamortized discount of $1.5 million and $1.7 million, respectively, with an effective interest rate of 8.31% 473.5 473.3 13.50% senior subordinated notes due 2018, net of unamortized discount of $6.0 million and $6.7 million, respectively, with an effective interest rate of 14.31% 354.0 353.3 11 1/2% senior subordinated notes due 2015, with an effective interest rate of 12.25% 2.6 2.6 13.75%/ 14.50% senior PIK toggle notes, due 2018, net of unamortized discount of $13.6 million and $15.1 million, respectively with an effective interest rate of 17.69% 229.2 211.3 11.625% senior notes due 2015, with an effective interest rate of 11.63% 32.2 32.2 Capital lease obligations 0.6 0.8 Total debt 2,341.4 2,272.7 Less: current portion of long-term debt (43.0 ) (43.1 ) Long-term debt $ 2,298.4 $ 2,229.6 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Schedule of Fair Value Option Award | The expected term of the options granted represents the period of time that options are expected to be outstanding, and is based on the average of the requisite service period and the contractual term of the option. 2014 Grants Expected volatility 85 % Expected life (in years) 6.25 Risk-free interest rate 2.04 % Expected dividends — |
Summary of Option Activity | A summary of option activity for the six months ended June 30, 2015 is presented below (number of options in thousands): 2005 Plan 2005 Plan 2005 Plan Grants to Grants to Grants to Grants to 2007 Plan Employees - Employees - Employees - Board of Grants to Tranche A Tranche B Tranche C Directors Employees Outstanding options at January 1, 2015 1,109 554 554 383 4,003 Granted — — — — — Exercised — — — — — Forfeited or expired (18) (10) (10) — (240) Outstanding options at June 30, 2015 1,091 544 544 383 3,763 Vested or expected to vest at June 30, 2015 1,091 544 544 383 3,763 Exercisable options at June 30, 2015 1,091 544 544 383 2,521 Weighted average remaining contractual term (in years) 7.5 7.5 7.5 5.8 8.7 Weighted average grant date fair value per option granted in 2015 $ - $ - $ - $ - $ - Weighted average exercise price of exercisable options at June 30, 2015 $ 1.18 $ 1.18 $ 1.18 $ 1.57 $ 2.52 Weighted average exercise price of outstanding options at June 30, 2015 $ 1.18 $ 1.18 $ 1.18 $ 1.57 $ 2.09 |
Summary of Restricted Stock Unit Activity | A summary of restricted stock unit activity for the six months ended June 30, 2015 is presented below (number of restricted stock units in thousands): Number of Weighted Average Restricted Grant Date Stock Units Fair Value Outstanding restricted unvested awards at January 1, 2015 522 $ 1.14 Granted — Vested (261 ) 1.14 Forfeited — Outstanding restricted unvested awards at June 30, 2015 261 $ 1.14 Weighted average remaining contractual term (in years) 0.6 |
2005 Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock Options Granted to Employees | Stock options granted to employees from the 2005 Plan are comprised of three tranches with the following terms: Tranche A Tranche B Tranche C Vesting Ratably over 5 years* 100% after 8 years** 100% after 8 years** Initial option term 10 years 10 years 10 years * In the event of a sale of the Company, vesting for tranche A occurs 18 months after the date of sale. ** Tranche B and C vesting would be accelerated upon specified realized returns to Apollo. |
2007 Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock Options Granted to Employees | The stock options granted to employees from the 2007 Plan have the following terms: Vesting period Ratably over 4 years Initial option term 10 years |
Financial Instruments, Deriva24
Financial Instruments, Derivatives and Fair Value Measures (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Principal Cash Flows and Related Weighted-Average Interest Rates by Expected Maturity | The following table provides information about the Company’s financial instruments that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted-average interest rates by expected maturity for the Company’s long-term debt as of June 30, 2015: Fair Value At 2020 and June 30, 2015 2016 2017 2018 2019 Thereafter Total 2015 (in millions) Fixed rate debt $ 35.1 $ 0.3 $ — $ 1,206.9 $ — $ — $ 1,242.3 $ 649.9 Average interest rate 11.26 % 11.36 % 11.47 % 11.05 % Variable rate debt $ 3.9 $ 7.8 $ 7.7 $ 1,229.9 $ — $ — $ 1,249.3 $ 1,172.8 Average interest rate (a) 7.37 % 7.37 % 7.37 % 7.84 % (a) Average interest rate is based on rates in effect at June 30, 2015. |
Schedule of Fair Value Measured on Nonrecurring Basis | The following table summarizes assets measured at fair value using Level 3 inputs on a nonrecurring basis subsequent to initial recognition: Fair Value Measurements at December 31, 2014 Impairment Losses Fair Value at Quoted Prices in Active Significant Other Significant Year December 31, Markets for Identical Observable Unobservable Ended 2014 Assets (Level 1) Inputs (Level 2) Inputs (Level 3) December 31, 2014 (in millions) Goodwill - Membership Products $ 89.6 $ — $ — $ 89.6 $ (292.4 ) |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Net Revenues For the Three Months Ended For the Six Months Ended June 30, June 30, June 30, June 30, 2015 2014 2015 2014 (in millions) Membership products $ 102.1 $ 113.4 $ 205.0 $ 229.5 Insurance and package products 67.3 57.3 135.6 128.2 Global loyalty products 42.1 42.8 87.4 84.2 International products 83.9 90.8 170.0 184.3 Eliminations (0.4 ) (0.5 ) (0.7 ) (1.0 ) $ 295.0 $ 303.8 $ 597.3 $ 625.2 Segment EBITDA For the Three Months Ended For the Six Months Ended June 30, June 30, June 30, June 30, 2015 2014 2015 2014 (in millions) Membership products $ 15.7 $ 18.2 $ 19.7 $ 32.5 Insurance and package products 20.7 6.7 41.2 28.0 Global loyalty products 14.7 17.1 30.2 32.1 International products 6.8 3.0 14.0 (4.0 ) Total products 57.9 45.0 105.1 88.6 Corporate (2.8 ) (9.4 ) (2.5 ) (15.1 ) $ 55.1 $ 35.6 $ 102.6 $ 73.5 For the Three Months Ended For the Six Months Ended June 30, June 30, June 30, June 30, 2015 2014 2015 2014 (in millions) Segment EBITDA $ 55.1 $ 35.6 $ 102.6 $ 73.5 Depreciation and amortization (23.8 ) (29.1 ) (48.0 ) (54.1 ) Income from operations $ 31.3 $ 6.5 $ 54.6 $ 19.4 |
Basis of Presentation and Bus26
Basis of Presentation and Business Description - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Oct. 17, 2005 | |
Business Description And Basis Of Presentation [Line Items] | ||||
Reduction in other noncurrent assets | $ 8.9 | $ 4.1 | ||
Reduction in long term debt | (4.7) | $ (0.9) | ||
New Accounting Pronouncement, Early Adoption, Effect | ||||
Business Description And Basis Of Presentation [Line Items] | ||||
Reduction in other noncurrent assets | 25.5 | $ 29.5 | ||
Reduction in long term debt | $ (25.5) | $ (29.5) | ||
Cendant Marketing Services Division | ||||
Business Description And Basis Of Presentation [Line Items] | ||||
Sale pursuant to a purchase agreement | $ 1,800 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - SkyMall Ventures, LLC - USD ($) $ in Millions | Sep. 09, 2014 | Jun. 30, 2015 |
Business Acquisition [Line Items] | ||
Upfront cash payment | $ 18.4 | |
Working Capital Adjustment | 0.4 | |
Purchase price allocation | 19.1 | |
Acquisition present value | 0.3 | |
Acquisition costs | $ 0.8 | |
Affinity relationships | ||
Business Acquisition [Line Items] | ||
Weighted-average useful life of intangible assets | 8 years | |
Maximum | ||
Business Acquisition [Line Items] | ||
Contingent consideration payable | $ 3.9 |
Acquisitions - Assets Acquired
Acquisitions - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 09, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 318.9 | $ 322.2 | $ 606.3 | |
SkyMall Ventures, LLC | ||||
Business Acquisition [Line Items] | ||||
Trade receivables | $ 3.8 | |||
Other current assets, including gift card inventory | 37.7 | |||
Intangible assets | 11.9 | |||
Goodwill | 14.6 | |||
Accounts payable and accrued liabilities | (48.8) | |||
Other current liabilities | (0.1) | |||
Consideration transferred | $ 19.1 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Amortizable Intangible Assets (Details) - Other intangibles, net - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,724.2 | $ 1,732.7 |
Accumulated Amortization | (1,647.7) | (1,629.4) |
Net Carrying Amount | 76.5 | 103.3 |
Member relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 938.6 | 939.8 |
Accumulated Amortization | (933.3) | (932) |
Net Carrying Amount | 5.3 | 7.8 |
Affinity relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 642.9 | 649.1 |
Accumulated Amortization | (589) | (574.4) |
Net Carrying Amount | 53.9 | 74.7 |
Proprietary databases and systems | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 59.7 | 59.9 |
Accumulated Amortization | (57.5) | (57.4) |
Net Carrying Amount | 2.2 | 2.5 |
Trademarks and Trade names | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 32.7 | 33.5 |
Accumulated Amortization | (19.8) | (18.8) |
Net Carrying Amount | 12.9 | 14.7 |
Patents and technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 47.7 | 47.8 |
Accumulated Amortization | (45.8) | (44.6) |
Net Carrying Amount | 1.9 | 3.2 |
Covenants not-to-compete | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2.6 | 2.6 |
Accumulated Amortization | (2.3) | (2.2) |
Net Carrying Amount | $ 0.3 | $ 0.4 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | Jan. 01, 2015 | |
Finite Lived Intangible Assets [Line Items] | |||
Decrease in intangible assets | $ (8.5) | ||
Decrease in accumulated amortization | (6.6) | ||
Goodwill, gross | 658.3 | $ 661.6 | |
Accumulated impairment loss | 339.4 | $ 339.4 | |
Goodwill impairment loss | $ 292.4 | ||
Global Loyalty Products | |||
Finite Lived Intangible Assets [Line Items] | |||
Accumulated impairment loss | 15.5 | ||
Membership Products | |||
Finite Lived Intangible Assets [Line Items] | |||
Goodwill impairment loss | 292.4 | $ 292.4 | |
Prospectiv | Membership Products | |||
Finite Lived Intangible Assets [Line Items] | |||
Accumulated impairment loss | 31.5 | ||
Other intangibles, net | |||
Finite Lived Intangible Assets [Line Items] | |||
Expected amortization expense in 2015 | 42.1 | ||
Expected amortization expense in 2016 | 13.4 | ||
Expected amortization expense in 2017 | 9.1 | ||
Expected amortization expense in 2018 | 8.2 | ||
Expected amortization expense in 2019 | $ 7 |
Intangible Assets - Schedule 31
Intangible Assets - Schedule of Amortization Expense Relating to Intangible Assets (Details) - Other intangibles, net - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Finite Lived Intangible Assets [Line Items] | ||||
Amortization expenses | $ 12.1 | $ 15 | $ 24.9 | $ 30.3 |
Member relationships | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Amortization expenses | 0.9 | 3.5 | 2 | 7.2 |
Affinity relationships | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Amortization expenses | 9.8 | 9.9 | 19.7 | 19.8 |
Proprietary databases and systems | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Amortization expenses | 0.1 | 0.1 | 0.2 | 0.2 |
Trademarks and Trade names | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Amortization expenses | 0.6 | 0.6 | 1.3 | 1.3 |
Patents and technology | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Amortization expenses | $ 0.7 | 0.8 | 1.6 | 1.6 |
Covenants not-to-compete | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Amortization expenses | $ 0.1 | $ 0.1 | $ 0.2 |
Intangible Assets - Schedule 32
Intangible Assets - Schedule of Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | $ 322.2 | $ 606.3 |
Acquisition | 15.8 | |
Impairment | (292.4) | |
Currency Translation | (3.3) | (7.5) |
Goodwill, Ending Balance | 318.9 | 322.2 |
Membership Products | ||
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | 89.6 | 382 |
Impairment | (292.4) | (292.4) |
Goodwill, Ending Balance | 89.6 | 89.6 |
Insurance and Package Products | ||
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | 58.3 | 58.3 |
Goodwill, Ending Balance | 58.3 | 58.3 |
Global Loyalty Products | ||
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | 97.5 | 81.7 |
Acquisition | 15.8 | |
Goodwill, Ending Balance | 97.5 | 97.5 |
International Products | ||
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | 76.8 | 84.3 |
Currency Translation | (3.3) | (7.5) |
Goodwill, Ending Balance | $ 73.5 | $ 76.8 |
Contract Rights and List Fees33
Contract Rights and List Fees, Net - Components of Contract Rights and List Fees (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Contract rights | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 59.7 | $ 59.1 |
Accumulated Amortization | (59.4) | (58.7) |
Net Carrying Amount | 0.3 | 0.4 |
List fees | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 55.4 | 51.7 |
Accumulated Amortization | (38) | (35.4) |
Net Carrying Amount | 17.4 | 16.3 |
Contract rights and list fees, net | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 115.1 | 110.8 |
Accumulated Amortization | (97.4) | (94.1) |
Net Carrying Amount | $ 17.7 | $ 16.7 |
Contract Rights and List Fees34
Contract Rights and List Fees, Net - Additional information (Details) - Contract rights and list fees, net - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Finite Lived Intangible Assets [Line Items] | ||||
Amortization expenses | $ 1.4 | $ 1.4 | $ 2.7 | $ 2.9 |
Amortization expenses included in marketing expense | 1.3 | 1.3 | 2.5 | 2.7 |
Amortization expenses | 0.1 | $ 0.1 | 0.2 | $ 0.2 |
Expected amortization expense in 2015 | 5.3 | 5.3 | ||
Expected amortization expense in 2016 | 4.4 | 4.4 | ||
Expected amortization expense in 2017 | 3.2 | 3.2 | ||
Expected amortization expense in 2018 | 2.5 | 2.5 | ||
Expected amortization expense in 2019 | $ 1.9 | $ 1.9 |
Long-Term Debt - Components of
Long-Term Debt - Components of Long-Term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Capital lease obligations | $ 0.6 | $ 0.8 |
Total debt | 2,341.4 | 2,272.7 |
Less: current portion of long-term debt | (43) | (43.1) |
Long-term debt | 2,298.4 | 2,229.6 |
First lien term loan due 2018 | ||
Debt Instrument [Line Items] | ||
Carrying value of debt | 765.3 | 769.2 |
Second lien term loan due 2018 | ||
Debt Instrument [Line Items] | ||
Carrying value of debt | 425 | 425 |
Revolving credit facility expiring in 2018 | ||
Debt Instrument [Line Items] | ||
Carrying value of debt | 59 | 5 |
7.875% senior notes due 2018 | ||
Debt Instrument [Line Items] | ||
Carrying value of debt | 473.5 | 473.3 |
13.50% senior subordinated notes due 2018 | ||
Debt Instrument [Line Items] | ||
Carrying value of debt | 354 | 353.3 |
11 1/2% senior subordinated notes due 2015 | ||
Debt Instrument [Line Items] | ||
Carrying value of debt | 2.6 | 2.6 |
13.75%/14.50% senior PIK toggle notes due 2018 | ||
Debt Instrument [Line Items] | ||
Carrying value of debt | 229.2 | 211.3 |
11.625% senior notes due 2015 | ||
Debt Instrument [Line Items] | ||
Carrying value of debt | $ 32.2 | $ 32.2 |
Long-Term Debt - Components o36
Long-Term Debt - Components of Long-Term Debt (Parenthetical) (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
7.875% senior notes due 2018 | ||
Debt Instrument [Line Items] | ||
Effective interest rate on notes | 8.31% | 8.31% |
Debt Instruments, unamortized discount | $ 1.5 | $ 1.7 |
13.50% senior subordinated notes due 2018 | ||
Debt Instrument [Line Items] | ||
Effective interest rate on notes | 14.31% | 14.31% |
Debt Instruments, unamortized discount | $ 6 | $ 6.7 |
11 1/2% senior subordinated notes due 2015 | ||
Debt Instrument [Line Items] | ||
Effective interest rate on notes | 12.25% | 12.25% |
13.75%/14.50% senior PIK toggle notes due 2018 | ||
Debt Instrument [Line Items] | ||
Effective interest rate on notes | 17.69% | 17.69% |
Debt Instruments, unamortized discount | $ 13.6 | $ 15.1 |
11.625% senior notes due 2015 | ||
Debt Instrument [Line Items] | ||
Effective interest rate on notes | 11.63% | 11.63% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | Nov. 20, 2012 | Apr. 09, 2010 | Jun. 30, 2014 | May. 20, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | May. 20, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2013 |
First lien term loan due 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount on term loans | $ 775,000,000 | $ 775,000,000 | ||||||||
Debt instrument amortization percentage | 1.00% | |||||||||
Interest rate under line of credit facility | 6.75% | 6.75% | ||||||||
Second lien term loan due 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount on term loans | 377,900,000 | 377,900,000 | ||||||||
Interest rate under line of credit facility | 8.50% | 6.75% | 6.75% | |||||||
Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Secured credit facility with lenders | $ 80,000,000 | $ 80,000,000 | ||||||||
Maturity date of term loan facility | Jan. 29, 2018 | |||||||||
Reduction amount of revolving credit facility | $ (85,000,000) | |||||||||
Revolving Credit Facility | Option Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest margin of loans | 4.25% | |||||||||
Term Loan Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate under line of credit facility | 6.75% | 6.75% | ||||||||
Affinion Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Secured credit facility with lenders | $ 1,000,000,000 | |||||||||
Amended Affinion Credit Facility | Option One | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest margin of loans | 5.25% | |||||||||
Amended Affinion Credit Facility | First lien term loan due 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maturity date of term loan facility | Apr. 30, 2014 | |||||||||
Amended Affinion Credit Facility | Second lien term loan due 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maturity date of term loan facility | Oct. 31, 2018 | |||||||||
Interest rate under line of credit facility | 1.50% | |||||||||
Amended Affinion Credit Facility | Second Lien Term Loan Including Additional Borrowing Due Twenty Eighteen | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount on term loans | $ 425,000,000 | $ 425,000,000 | ||||||||
Amended Affinion Credit Facility | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate under line of credit facility | 7.10% | 7.10% | 7.20% | 7.10% | ||||||
LIBOR Loans | Affinion Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest margin of loans | 3.50% | |||||||||
LIBOR Loans | Amended Affinion Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest margin of loans | 5.00% | 5.25% | ||||||||
LIBOR Loans | Amended Affinion Credit Facility | Option Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest margin of loans | 7.00% | |||||||||
LIBOR Loans | Amended Affinion Credit Facility | First lien term loan due 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate under line of credit facility | 1.50% | |||||||||
LIBOR Loans | Amended Affinion Credit Facility | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate under line of credit facility | 1.50% | |||||||||
Maximum Required Ratio For Financial Maintenance Covenants | 4.25% | 4.25% | ||||||||
Base Rate | Affinion Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest margin of loans | 2.50% | |||||||||
Base Rate | Amended Affinion Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest margin of loans | 4.00% | 4.25% | ||||||||
Base Rate | Amended Affinion Credit Facility | Option Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest margin of loans | 6.00% | |||||||||
Federal Funds Effective Rate | First lien term loan due 2018 | Option Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest margin of loans | 0.50% | |||||||||
Federal Funds Effective Rate | Second lien term loan due 2018 | Option Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest margin of loans | 0.50% | |||||||||
Federal Funds Effective Rate | Revolving Credit Facility | Option Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest margin of loans | 0.50% | |||||||||
Alternate Base Rate | First lien term loan due 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate under line of credit facility | 2.50% | |||||||||
Alternate Base Rate | Second lien term loan due 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate under line of credit facility | 2.50% | |||||||||
Alternate Base Rate | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate under line of credit facility | 2.50% | |||||||||
Eleven Point Five Percent Senior Notes Due Two Thousand Fifteen | Affinion Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate of notes | 11.50% | 11.50% | ||||||||
Eleven Point Six Two Five Percent Senior Notes | Affinion Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate of notes | 11.625% | 11.625% | ||||||||
Thirteen Point Five Zero Percent Senior Subordinated Note Due Twenty Eighteen | Amended Affinion Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Incremental percentage on interest rate margins | 0.25% |
Long-Term Debt - Additional I38
Long-Term Debt - Additional Information 1 (Details) - USD ($) | Jun. 09, 2014 | Dec. 12, 2013 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 15, 2014 | Oct. 05, 2010 |
Debt Instrument [Line Items] | ||||||||||
Outstanding borrowings | $ 59,000,000 | $ 5,000,000 | ||||||||
Borrowings under revolving credit facility | 74,000,000 | $ 83,000,000 | ||||||||
Repayments under revolving credit facility | 20,000,000 | 129,000,000 | ||||||||
Available for borrowings under revolving credit facility | 7,100,000 | |||||||||
Letters of credit issued | $ 15,900,000 | |||||||||
Aggregate principal amount of notes tendered | $ 352,900,000 | |||||||||
Investment warrants, exercise price | $ 0.01 | |||||||||
Amortization of debt discount and financing costs | $ 6,500,000 | 7,500,000 | ||||||||
Payments of financing costs | 20,000,000 | |||||||||
Cash proceeds from debt exchange | 3,800,000 | |||||||||
Loss on extinguishment of debt | $ (14,600,000) | $ (14,600,000) | ||||||||
Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Leverage ratio | 5.00% | |||||||||
Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Leverage ratio | 1.00% | |||||||||
11.625% senior notes due 2015 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount of notes tendered | $ 292,800,000 | $ 325,000,000 | ||||||||
Interest rate of notes | 11.625% | |||||||||
13.50% senior subordinated notes due 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount of notes tendered | $ 360,000,000 | 360,000,000 | ||||||||
Interest rate of notes | 13.50% | |||||||||
Debt instrument, payment terms | The Investments senior subordinated notes bear interest at 13.50% per annum, payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2014. The Investments senior subordinated notes will mature on August 15, 2018. | |||||||||
Third party beneficiaries | 25.00% | |||||||||
13.50% senior subordinated notes due 2018 | Scenario One | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of senior subordinate notes redeemable | 35.00% | |||||||||
Debt instrument, redemption price, percentage | 113.50% | |||||||||
13.50% senior subordinated notes due 2018 | Scenario Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, redemption price, percentage | 100.00% | |||||||||
13.50% senior subordinated notes due 2018 | At Prior to Consent Period | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount of senior notes holders would receive on exchange | $ 1,020 | |||||||||
Senior notes due 2010 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount of notes tendered | 1,000,000,000 | |||||||||
2013 senior subordinated notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount of notes tendered | 1,000,000,000 | |||||||||
Debt instrument, payment terms | Affinion Holdings’ 2013 senior notes bear interest at 13.75% per annum, payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2014. At Affinion Holdings’ option (subject to certain exceptions), it may elect to pay interest (i) entirely in cash (“Cash Interest”), (ii) entirely by increasing the outstanding principal amount of Affinion Holdings’ 2013 senior notes or by issuing PIK notes (“PIK Interest”), or (iii) 50% as Cash Interest and 50% as PIK Interest; provided that if (i) no Default or Event of Default (each as defined in the Affinion Credit Facility) shall have occurred and be continuing or would result from such interest payment, (ii) immediately after giving effect to such interest payment, on a pro forma basis, the Consolidated Leverage Ratio (as defined in the Affinion Credit Facility) of Affinion is less than or equal to 5.0:1.0 as of the last day of the most recently completed fiscal quarter preceding the interest payment date for which financial statements have been delivered to the agent under the Affinion Credit Facility and (iii) immediately after giving effect to such interest payment, on a pro forma basis, the Adjusted Consolidated Leverage Ratio (as defined in the note agreement governing the Investments senior subordinated notes) of Affinion is less than or equal to 5.0:1.0, then Affinion Holdings shall be required to pay interest on Affinion Holdings’ 2013 senior notes for such interest period in cash. PIK Interest accrues at 13.75% per annum plus 0.75%. For the interest periods ended September 15, 2014 and March 31, 2015, Affinion Holdings paid interest by increasing the principal amount of Affinion Holdings’ 2013 senior notes by $22.4 million and $16.4 million, respectively. Affinion Holdings’ 2013 senior notes will mature on September 15, 2018. | |||||||||
Percentage of senior subordinate notes redeemable | 100.00% | |||||||||
Percentage of net proceeds from equity offerings | 113.75% | |||||||||
Debt instrument, redemption price, percentage | 100.00% | |||||||||
Maturity date of term loan facility | Aug. 15, 2015 | |||||||||
13.75% senior notes due 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount of debt exchanged | $ 88,700,000 | |||||||||
Loss on extinguishment of debt | $ (8,600,000) | |||||||||
13.75% senior notes due 2018 | After Consent Period | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount of senior notes holders would receive on exchange | $ 950 | |||||||||
2013 Affinion Holdings Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount of notes tendered | $ 16,400,000 | $ 22,400,000 | ||||||||
13.50% Senior subordinated notes due 2015 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount of notes tendered | 352,900,000 | $ 1,000 | ||||||||
13.50% Senior subordinated notes due 2015 | After Consent Period | Subsidiary Of Common Parent | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount of senior notes holders would receive on exchange | 1,000 | |||||||||
Series A Warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrants issued | 13,500,000 | |||||||||
Aggregate principal amount of senior notes holders would receive on exchange | 30,300,000 | |||||||||
Series A Warrants | Pre-emptive Rights Offer | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount of senior notes holders would receive on exchange | 1,200,000 | |||||||||
Cash proceeds from debt exchange | $ 3,800,000 | |||||||||
Series A Warrants | Common Class B | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrants issued to purchase shares | 46.1069 | |||||||||
Series A Warrants | Common Class B | After Consent Period | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrants issued to purchase shares | 46.1069 | |||||||||
Series B Warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrants issued | 70,200,000 | |||||||||
Series B Warrants | Common Class B | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrants issued to purchase shares | 239.8612 | |||||||||
Series B Warrants | Common Class B | After Consent Period | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrants issued to purchase shares | 239.8612 | |||||||||
Parent | Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Gain (Loss) on repurchase of debt instrument | 4,600,000 | |||||||||
Amortization of debt discount and financing costs | 2,800,000 | |||||||||
Amortization of debt discount (premium) | $ 1,800,000 | |||||||||
Payments of financing costs | $ 4,700,000 | |||||||||
Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Letters of credit issued | $ 13,900,000 | |||||||||
Maturity date of term loan facility | Jan. 29, 2018 |
Long-Term Debt - Additional I39
Long-Term Debt - Additional Information 2 (Details) - USD ($) | Oct. 05, 2010 | Apr. 26, 2006 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 12, 2013 | Nov. 19, 2010 |
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of notes tendered | $ 352,900,000 | ||||||
Proceeds from issuance of debt | $ 425,000,000 | ||||||
Dividends allowable under debt agreements | $ 13,800,000 | ||||||
Cash dividends paid | $ 0 | $ 0 | |||||
Bridge Loan | |||||||
Debt Instrument [Line Items] | |||||||
Repayments of Debt | $ 349,500,000 | ||||||
Outstanding borrowings | 383,600,000 | ||||||
11.625% senior notes due 2015 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of notes tendered | $ 325,000,000 | 292,800,000 | |||||
Proceeds net of discount | 320,300,000 | ||||||
Related fees and expenses paid | 6,700,000 | ||||||
Interest rate of notes | 11.625% | ||||||
11.625% senior notes due 2015 | Affinion Holdings | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from cash dividend | $ 115,300,000 | ||||||
7.875% senior notes due 2018 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of notes tendered | $ 475,000,000 | ||||||
Interest rate of notes | 7.875% | ||||||
Maturity date of term loan facility | Dec. 15, 2018 | ||||||
11 1/2% senior subordinated notes due 2015 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of notes tendered | $ 355,500,000 | $ 352,900,000 | |||||
Interest rate of notes | 11.50% | ||||||
Maturity date of term loan facility | Oct. 15, 2015 | ||||||
Proceeds from issuance of debt | $ 350,500,000 | ||||||
13.50% senior subordinated notes due 2018 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of notes tendered | $ 360,000,000 | $ 360,000,000 | |||||
Interest rate of notes | 13.50% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Taxes [Line Items] | ||||
Effective income tax rates | (4.00%) | (6.10%) | (5.10%) | (7.50%) |
Income (Loss) before income taxes and non-controlling interest | $ (26.5) | $ (66.2) | $ (59.9) | $ (110.8) |
Income tax expense | 1.1 | 4.1 | $ 3.1 | 8.3 |
Statutory U.S federal income tax rate | 35.00% | |||
Decrease in gross unrecognized tax benefits as a result of tax positions taken during the current period | $ 1.6 | |||
Maximum | ||||
Income Taxes [Line Items] | ||||
Interest in income tax expense related to uncertain tax positions | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | |
Jul. 31, 2015 | Jun. 30, 2015 | |
Commitments And Contingencies [Line Items] | ||
Letters of credit issued | $ 15,900 | |
Surety Bond | ||
Commitments And Contingencies [Line Items] | ||
Surety bonds outstanding | $ 10,800 | |
CFPB | Subsequent Event | ||
Commitments And Contingencies [Line Items] | ||
Penalty payment | $ 1,900 | |
Consumer restitution payment related to billing and retention practices | $ 6,750 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) | Mar. 16, 2015Installments | Mar. 28, 2014$ / sharesshares | Oct. 17, 2005shares | Mar. 31, 2014$ / shares | Nov. 30, 2007shares | Jun. 30, 2015USD ($)shares | Jun. 30, 2014USD ($)shares | Mar. 31, 2014emp | Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2014USD ($)shares | Dec. 31, 2012USD ($)$ / sharesshares | Dec. 31, 2014shares | Apr. 01, 2014Installments |
Board of Directors | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Maximum authorized period for grant of shares | 10 years | ||||||||||||
Employee Stock Option | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Stock-based compensation expense | $ | $ 300,000 | $ 600,000 | $ 900,000 | $ 4,600,000 | |||||||||
Number of employees | emp | 200 | ||||||||||||
Weighted average period of recognition | 1 year 2 months 12 days | ||||||||||||
Stock-based compensation, nonvested awards, total compensation cost not yet recognized | $ | $ 1,300,000 | $ 1,300,000 | |||||||||||
Employee Stock Option | Modification of Stock Options Held by 200 Employees | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Stock-based compensation expense | $ | $ 3,400,000 | ||||||||||||
Modified Stock Option | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Range of exercise price, Minimum | $ / shares | $ 1.14 | ||||||||||||
Modified Stock Option | Board of Directors | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Range of exercise price, Minimum | $ / shares | $ 1.14 | ||||||||||||
Number of stock options granted | 200,000 | 0 | 100,000 | 0 | 100,000 | ||||||||
Restricted Stock Units (RSUs) | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Stock-based compensation expense | $ | $ 100,000 | $ 1,000,000 | $ 200,000 | $ 1,000,000 | |||||||||
Weighted average period of recognition | 3 months 18 days | ||||||||||||
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized | $ | 200,000 | $ 200,000 | |||||||||||
2014 Performance Program | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Range of exercise price, Minimum | $ / shares | $ 1.14 | ||||||||||||
Stock-based compensation expense | $ | 0 | $ 400,000 | 0 | $ 400,000 | |||||||||
Percentage of award value | 50.00% | ||||||||||||
Number of installments vesting | Installments | 3 | ||||||||||||
Award value granted under program | $ | 9,600,000 | 9,600,000 | |||||||||||
Reduction in stock-based compensation expense | $ | 2,200,000 | ||||||||||||
Common stock, value | $ | 1,100,000 | 1,100,000 | |||||||||||
2014 Performance Program | Tranche A | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Vesting period | Mar. 15, 2015 | ||||||||||||
2014 Performance Program | Tranche B | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Vesting period | Mar. 15, 2016 | ||||||||||||
2014 Performance Program | Tranche C | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Vesting period | Mar. 15, 2017 | ||||||||||||
Retention Program | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Number of installments vesting | Installments | 2 | ||||||||||||
Retention Program | Tranche A | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Vesting period | Mar. 15, 2016 | ||||||||||||
Retention Program | Tranche B | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Vesting period | Mar. 15, 2017 | ||||||||||||
2015 Retention Program | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Stock-based compensation expense | $ | 1,000,000 | 1,200,000 | |||||||||||
Award value granted under program | $ | 8,300,000 | 8,300,000 | |||||||||||
Award value granted net of forfeitures under Retention Program | $ | 100,000 | 100,000 | |||||||||||
Common stock, value | $ | $ 500,000 | $ 600,000 | |||||||||||
2005 Plan | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Authorized shares granted | 4,900,000 | ||||||||||||
Number of stock options granted | 0 | 0 | 0 | 0 | |||||||||
2005 Plan | Tranche A | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Number of option outstanding | 1,091,000 | 1,091,000 | 1,109,000 | ||||||||||
2005 Plan | Tranche B | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Number of option outstanding | 544,000 | 544,000 | 554,000 | ||||||||||
2005 Plan | Tranche C | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Number of option outstanding | 544,000 | 544,000 | 554,000 | ||||||||||
2005 Plan | Employee Stock Option | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Maximum authorized period for grant of shares | 10 years | ||||||||||||
2005 Plan | Employee Stock Option | Tranche A | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Maximum authorized period for grant of shares | 10 years | ||||||||||||
2005 Plan | Employee Stock Option | Tranche B | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Maximum authorized period for grant of shares | 10 years | ||||||||||||
2005 Plan | Employee Stock Option | Tranche C | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Maximum authorized period for grant of shares | 10 years | ||||||||||||
2005 Plan | Modified Stock Option | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Number of option outstanding | 1,900,000 | ||||||||||||
2007 Plan | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Authorized shares granted | 10,000,000 | ||||||||||||
Shares available for future grants | 2,200,000 | 2,200,000 | |||||||||||
Number of option outstanding | 3,763,000 | 3,763,000 | 4,003,000 | ||||||||||
Number of stock options granted | 0 | 1,400,000 | 0 | 1,400,000 | |||||||||
2007 Plan | Employee Stock Option | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Maximum authorized period for grant of shares | 10 years | 10 years | |||||||||||
2007 Plan | Modified Stock Option | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Number of option outstanding | 2,400,000 | ||||||||||||
2007 Plan | Restricted Stock Units (RSUs) | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Number of Restricted Stock Units, Granted | 1,400,000 | ||||||||||||
Aggregate value of Restricted Stock Units | $ | $ 11,300,000 | ||||||||||||
Maximum vesting date for Restricted Stock Units | Dec. 31, 2014 | ||||||||||||
Value per share of parent company | $ / shares | $ 8.16 | ||||||||||||
Webloyalty 2005 Plan | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Maximum authorized period for grant of shares | 10 years | ||||||||||||
Number of option outstanding | 500,000 | 500,000 | |||||||||||
Range of exercise price, Minimum | $ / shares | $ 1.14 | ||||||||||||
Range of exercise price, Maximum | $ / shares | $ 7.32 | ||||||||||||
Outstanding options expiration period start month and year | 2016-12 | ||||||||||||
Outstanding options expiration period end month and year | 2024-04 | ||||||||||||
Webloyalty 2005 Plan | Modified Stock Option | |||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||
Number of option outstanding | 500,000 | ||||||||||||
Range of exercise price, Minimum | $ / shares | $ 1.14 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options Granted to Employees (Details) - Employee Stock Option | Oct. 17, 2005 | Nov. 30, 2007 | Jun. 30, 2015 | |
2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Initial option term | 10 years | |||
2007 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting | Ratably over 4 years | |||
Initial option term | 10 years | 10 years | ||
Vesting period | 4 years | |||
Tranche A | 2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting | [1] | Ratably over 5 years | ||
Initial option term | 10 years | |||
Vesting period | 5 years | |||
Tranche B | 2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting | [2] | 100% after 8 years | ||
Initial option term | 10 years | |||
Vesting period | 8 years | |||
Vesting, rate | 100.00% | |||
Tranche C | 2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting | [2] | 100% after 8 years | ||
Initial option term | 10 years | |||
Vesting period | 8 years | |||
Vesting, rate | 100.00% | |||
[1] | In the event of a sale of the Company, vesting for tranche A occurs 18 months after the date of sale. | |||
[2] | Tranche B and C vesting would be accelerated upon specified realized returns to Apollo. |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Fair Value Option Award (Details) - 12 months ended Dec. 31, 2014 - Employee Stock Option | Total |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected volatility | 85.00% |
Expected life (in years) | 6 years 3 months |
Risk-free interest rate | 2.04% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Option Activity (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Granted | 0 | 0 | 0 | 0 |
2007 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Outstanding options, beginning of year | 4,003,000 | |||
Granted | 0 | 1,400,000 | 0 | 1,400,000 |
Forfeited or expired | (240,000) | |||
Outstanding options, end of period | 3,763,000 | 3,763,000 | ||
Vested or expected to vest at June 30, 2015 | 3,763,000 | 3,763,000 | ||
Exercisable options at June 30, 2015 | 2,521,000 | 2,521,000 | ||
Weighted average remaining contractual term (in years) | 8 years 8 months 12 days | |||
Weighted average exercise price of exercisable options at June 30, 2015 | $ 2.52 | $ 2.52 | ||
Weighted average exercise price of outstanding options at June 30, 2015 | $ 2.09 | $ 2.09 | ||
Grants to Board of Directors | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Outstanding options, beginning of year | 383,000 | |||
Outstanding options, end of period | 383,000 | 383,000 | ||
Vested or expected to vest at June 30, 2015 | 383,000 | 383,000 | ||
Exercisable options at June 30, 2015 | 383,000 | 383,000 | ||
Weighted average remaining contractual term (in years) | 5 years 9 months 18 days | |||
Weighted average exercise price of exercisable options at June 30, 2015 | $ 1.57 | $ 1.57 | ||
Weighted average exercise price of outstanding options at June 30, 2015 | $ 1.57 | $ 1.57 | ||
Tranche A | 2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Outstanding options, beginning of year | 1,109,000 | |||
Forfeited or expired | (18,000) | |||
Outstanding options, end of period | 1,091,000 | 1,091,000 | ||
Vested or expected to vest at June 30, 2015 | 1,091,000 | 1,091,000 | ||
Exercisable options at June 30, 2015 | 1,091,000 | 1,091,000 | ||
Weighted average remaining contractual term (in years) | 7 years 6 months | |||
Weighted average exercise price of exercisable options at June 30, 2015 | $ 1.18 | $ 1.18 | ||
Weighted average exercise price of outstanding options at June 30, 2015 | $ 1.18 | $ 1.18 | ||
Tranche B | 2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Outstanding options, beginning of year | 554,000 | |||
Forfeited or expired | (10,000) | |||
Outstanding options, end of period | 544,000 | 544,000 | ||
Vested or expected to vest at June 30, 2015 | 544,000 | 544,000 | ||
Exercisable options at June 30, 2015 | 544,000 | 544,000 | ||
Weighted average remaining contractual term (in years) | 7 years 6 months | |||
Weighted average exercise price of exercisable options at June 30, 2015 | $ 1.18 | $ 1.18 | ||
Weighted average exercise price of outstanding options at June 30, 2015 | $ 1.18 | $ 1.18 | ||
Tranche C | 2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Outstanding options, beginning of year | 554,000 | |||
Forfeited or expired | (10,000) | |||
Outstanding options, end of period | 544,000 | 544,000 | ||
Vested or expected to vest at June 30, 2015 | 544,000 | 544,000 | ||
Exercisable options at June 30, 2015 | 544,000 | 544,000 | ||
Weighted average remaining contractual term (in years) | 7 years 6 months | |||
Weighted average exercise price of exercisable options at June 30, 2015 | $ 1.18 | $ 1.18 | ||
Weighted average exercise price of outstanding options at June 30, 2015 | $ 1.18 | $ 1.18 |
Stock-Based Compensation - Su46
Stock-Based Compensation - Summary of Restricted Stock Unit Activity (Details) - 6 months ended Jun. 30, 2015 - Restricted Stock Units (RSUs) - $ / shares shares in Thousands | Total |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Outstanding restricted unvested units Beginning Balance, shares | 522 |
Number of Restricted Stock Units, Vested | (261) |
Outstanding restricted unvested units Ending Balance, shares | 261 |
Weighted average remaining contractual term (in years) | 7 months 6 days |
Outstanding restricted unvested awards, Weighted Average Grant Date Fair Value, Beginning Balance | $ 1.14 |
Weighted Average Grant Date Fair Value, Vested | 1.14 |
Outstanding restricted unvested awards, Weighted Average Grant Date Fair Value, Ending Balance | $ 1.14 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | Jan. 28, 2010 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2011 |
Cendant Subsidiaries | ||||||
Related Party Transaction [Line Items] | ||||||
Indemnification obligation occurrence threshold | $ 100,000 | $ 100,000 | ||||
Aggregate amount of losses | 15,000,000 | |||||
Indemnification obligation, recovery limit | 275,100,000 | |||||
Cendant And Affinion | ||||||
Related Party Transaction [Line Items] | ||||||
Loss agreed for indemnification | $ 15,000,000 | |||||
Apollo | ||||||
Related Party Transaction [Line Items] | ||||||
Period of advisory services | 12 years | |||||
Beneficial economic interest | 5.00% | |||||
Annual Consulting fee | $ 2,000,000 | |||||
Consulting fee expensed during period | 600,000 | $ 600,000 | 1,300,000 | $ 1,300,000 | $ 600,000 | |
Apollo | SkyMall Ventures, LLC | Fulfillment Services, Merchandise and Gift Cards | ||||||
Related Party Transaction [Line Items] | ||||||
Cost of merchandise purchased | 400,000 | 800,000 | ||||
Apollo | Consulting Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Annual Consulting fee | 2,000,000 | |||||
Apollo | Amended and Restated Consulting Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Annual Consulting fee | 2,600,000 | |||||
Novitex Enterprise Solutions | ||||||
Related Party Transaction [Line Items] | ||||||
Consulting fee expensed during period | 300,000 | 600,000 | ||||
Reduction of operating expense | 200,000 | 200,000 | ||||
Assets sold | 100,000 | |||||
Novitex Enterprise Solutions | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Gain on sale of assets | 100,000 | |||||
Alclear | ||||||
Related Party Transaction [Line Items] | ||||||
Cost method investment, percentage | 5.00% | |||||
Revised cost method investment, percentage | 2.90% | |||||
Revenue earned for services | $ 100,000 | $ 200,000 | 200,000 | $ 300,000 | ||
Sale of ownership interest | 1,500,000 | |||||
Gain on sale of ownership interest | 500,000 | |||||
Cost method investment, acquisition price | $ 1,000,000 | |||||
Trilegiant Corporation | ||||||
Related Party Transaction [Line Items] | ||||||
Consulting fees paid per month | $ 7,500 |
Financial Instruments, Deriva48
Financial Instruments, Derivatives and Fair Value Measures - Principal Cash Flows and Related Weighted-Average Interest Rates by Expected Maturity (Details) - Jun. 30, 2015 - USD ($) $ in Millions | Total | |
Long Term Debt Percentage Bearing Fixed Interest Rate | ||
Debt Instrument [Line Items] | ||
2,015 | $ 35.1 | |
2,016 | 0.3 | |
2,018 | 1,206.9 | |
Total | 1,242.3 | |
Fair Value At June 30, 2015 | $ 649.9 | |
Long Term Debt Percentage Bearing Fixed Interest Rate | Year One | ||
Debt Instrument [Line Items] | ||
Average interest rate | 11.26% | |
Long Term Debt Percentage Bearing Fixed Interest Rate | Year Two | ||
Debt Instrument [Line Items] | ||
Average interest rate | 11.36% | |
Long Term Debt Percentage Bearing Fixed Interest Rate | Year Three | ||
Debt Instrument [Line Items] | ||
Average interest rate | 11.47% | |
Long Term Debt Percentage Bearing Fixed Interest Rate | Year Four | ||
Debt Instrument [Line Items] | ||
Average interest rate | 11.05% | |
Long Term Debt Percentage Bearing Variable Interest Rate | ||
Debt Instrument [Line Items] | ||
2,015 | $ 3.9 | |
2,016 | 7.8 | |
2,017 | 7.7 | |
2,018 | 1,229.9 | |
Total | 1,249.3 | |
Fair Value At June 30, 2015 | $ 1,172.8 | |
Long Term Debt Percentage Bearing Variable Interest Rate | Year One | ||
Debt Instrument [Line Items] | ||
Average interest rate | [1] | 7.37% |
Long Term Debt Percentage Bearing Variable Interest Rate | Year Two | ||
Debt Instrument [Line Items] | ||
Average interest rate | [1] | 7.37% |
Long Term Debt Percentage Bearing Variable Interest Rate | Year Three | ||
Debt Instrument [Line Items] | ||
Average interest rate | [1] | 7.37% |
Long Term Debt Percentage Bearing Variable Interest Rate | Year Four | ||
Debt Instrument [Line Items] | ||
Average interest rate | [1] | 7.84% |
[1] | Average interest rate is based on rates in effect at June 30, 2015. |
Financial Instruments, Deriva49
Financial Instruments, Derivatives and Fair Value Measures - Additional Information (Details) - Foreign Exchange Forward € in Millions, £ in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015EUR (€) | Jun. 30, 2015GBP (£) | |
Derivative Instruments Gain Loss [Line Items] | ||||||
Derivative contract period | 30 days | |||||
Foreign currency contracts, realized gain (loss) | $ (1.6) | $ (0.4) | $ 2.7 | $ (0.7) | ||
Buy USD Sell EUR | ||||||
Derivative Instruments Gain Loss [Line Items] | ||||||
Notional amount of foreign currency derivative sale contracts | 11.2 | 11.2 | € 10 | |||
Buy USD Sell GBP | ||||||
Derivative Instruments Gain Loss [Line Items] | ||||||
Notional amount of foreign currency derivative sale contracts | $ 21.9 | $ 21.9 | £ 13.9 |
Financial Instruments, Deriva50
Financial Instruments, Derivatives and Fair Value Measures - Schedule of Fair Value Measured on Nonrecurring Basis (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Impairment | $ (292.4) | |
Membership Products | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Impairment | $ (292.4) | (292.4) |
Fair Value, Measurements, Nonrecurring | Membership Products | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Goodwill | 89.6 | |
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | Membership Products | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Goodwill | $ 89.6 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2015Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 4 |
Segment Information - Schedule
Segment Information - Schedule of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 295 | $ 303.8 | $ 597.3 | $ 625.2 |
Operating income loss before depreciation and amortization | 55.1 | 35.6 | 102.6 | 73.5 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income loss before depreciation and amortization | 57.9 | 45 | 105.1 | 88.6 |
Operating Segments | Membership Products | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 102.1 | 113.4 | 205 | 229.5 |
Operating income loss before depreciation and amortization | 15.7 | 18.2 | 19.7 | 32.5 |
Operating Segments | Insurance and Package Products | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 67.3 | 57.3 | 135.6 | 128.2 |
Operating income loss before depreciation and amortization | 20.7 | 6.7 | 41.2 | 28 |
Operating Segments | Global Loyalty Products | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 42.1 | 42.8 | 87.4 | 84.2 |
Operating income loss before depreciation and amortization | 14.7 | 17.1 | 30.2 | 32.1 |
Operating Segments | International Products | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 83.9 | 90.8 | 170 | 184.3 |
Operating income loss before depreciation and amortization | 6.8 | 3 | 14 | (4) |
Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | (0.4) | (0.5) | (0.7) | (1) |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Operating income loss before depreciation and amortization | $ (2.8) | $ (9.4) | $ (2.5) | $ (15.1) |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Ebitda to Income from Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting [Abstract] | ||||
Operating income loss before depreciation and amortization | $ 55.1 | $ 35.6 | $ 102.6 | $ 73.5 |
Depreciation and amortization | (23.8) | (29.1) | (48) | (54.1) |
Income from operations | $ 31.3 | $ 6.5 | $ 54.6 | $ 19.4 |