DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - Jun. 30, 2015 - shares | Total |
Document and Entity Information [Line Items] | |
Entity Registrant Name | Vantiv, Inc. |
Entity Central Index Key | 1,533,932 |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2015 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | Q2 |
Class A Common Stock | |
Document and Entity Information [Line Items] | |
Entity Common Stock, Shares Outstanding (in shares) | 146,178,993 |
Class B Common Stock | |
Document and Entity Information [Line Items] | |
Entity Common Stock, Shares Outstanding (in shares) | 43,042,826 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenue: | ||||
External customers | $ 765,564 | $ 588,109 | $ 1,451,940 | $ 1,106,421 |
Related party revenues | 20,431 | 20,622 | 39,666 | 39,888 |
Total revenue | 785,995 | 608,731 | 1,491,606 | 1,146,309 |
Network fees and other costs | 362,349 | 277,392 | 693,495 | 526,438 |
Sales and marketing | 122,925 | 90,507 | 238,980 | 168,951 |
Other operating costs | 76,551 | 56,754 | 145,290 | 117,123 |
General and administrative | 47,060 | 48,552 | 94,903 | 81,158 |
Depreciation and amortization | 67,659 | 89,041 | 135,461 | 138,887 |
Income from operations | 109,451 | 46,485 | 183,477 | 113,752 |
Interest expense—net | (25,714) | (13,496) | (51,725) | (24,050) |
Non-operating expenses | (6,725) | (27,656) | (15,491) | (27,656) |
Income before applicable income taxes | 77,012 | 5,333 | 116,261 | 62,046 |
Income tax expense | 24,319 | 2,020 | 36,572 | 17,642 |
Net income | 52,693 | 3,313 | 79,689 | 44,404 |
Less: Net income attributable to non-controlling interests | (16,157) | (4,722) | (24,164) | (17,677) |
Net income (loss) attributable to Vantiv, Inc. | $ 36,536 | $ (1,409) | $ 55,525 | $ 26,727 |
Class A Common Stock | ||||
Net income (loss) per share attributable to Vantiv, Inc. Class A common stock: | ||||
Basic (in dollars per share) | $ 0.25 | $ (0.01) | $ 0.38 | $ 0.19 |
Diluted (in dollars per share) | $ 0.24 | $ (0.01) | $ 0.37 | $ 0.18 |
Shares used in computing net income (loss) per share of Class A common stock: | ||||
Basic (in shares) | 145,566,899 | 140,451,466 | 145,051,664 | 139,346,292 |
Diluted (in shares) | 201,831,467 | 140,451,466 | 201,276,166 | 150,831,855 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 52,693 | $ 3,313 | $ 79,689 | $ 44,404 |
Other comprehensive income (loss), net of tax: | ||||
Loss on cash flow hedges and other | (330) | (4,166) | (7,700) | (5,819) |
Comprehensive income (loss) | 52,363 | (853) | 71,989 | 38,585 |
Less: Comprehensive income attributable to non-controlling interests | (16,051) | (3,201) | (21,683) | (15,580) |
Comprehensive income (loss) attributable to Vantiv, Inc. | $ 36,312 | $ (4,054) | $ 50,306 | $ 23,005 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 400,782 | $ 411,568 |
Accounts receivable—net | 576,568 | 607,674 |
Related party receivable | 6,922 | 6,164 |
Settlement assets | 115,626 | 135,422 |
Prepaid expenses | 25,353 | 26,906 |
Other | 31,805 | 27,002 |
Total current assets | 1,157,056 | 1,214,736 |
Customer incentives | 49,074 | 39,210 |
Property, equipment and software—net | 305,853 | 281,715 |
Intangible assets—net | 959,937 | 1,034,692 |
Goodwill | 3,366,528 | 3,291,366 |
Deferred taxes | 422,094 | 429,623 |
Other assets | 39,588 | 44,741 |
Total assets | 6,300,130 | 6,336,083 |
Current liabilities: | ||
Accounts payable and accrued expenses | 305,536 | 299,771 |
Related party payable | 2,630 | 2,035 |
Settlement obligations | 522,626 | 501,042 |
Current portion of note payable to related party | 10,353 | 10,353 |
Current portion of note payable | 106,148 | 106,148 |
Current portion of tax receivable agreement obligations to related parties | 33,650 | 22,789 |
Current portion of tax receivable agreement obligations | 19,170 | 0 |
Deferred income | 8,835 | 5,480 |
Current maturities of capital lease obligations | 17,262 | 8,158 |
Other | 9,991 | 7,557 |
Total current liabilities | 1,036,201 | 963,333 |
Long-term liabilities: | ||
Note payable to related party | 186,345 | 191,521 |
Note payable | 2,834,135 | 3,085,716 |
Tax receivable agreement obligations to related parties | 563,607 | 597,273 |
Tax receivable agreement obligations | 201,630 | 152,420 |
Capital lease obligations | 36,297 | 14,779 |
Deferred taxes | 9,969 | 24,380 |
Other | 38,269 | 6,075 |
Total long-term liabilities | 3,870,252 | 4,072,164 |
Total liabilities | $ 4,906,453 | $ 5,035,497 |
Commitments and contingencies (See Note 7 - Commitments, Contingencies and Guarantees) | ||
Equity: | ||
Preferred stock, $0.00001 par value; 10,000,000 shares authorized; no shares issued and outstanding | $ 0 | $ 0 |
Paid-in capital | 668,378 | 629,353 |
Retained earnings | 383,883 | 328,358 |
Accumulated other comprehensive loss | (8,987) | (3,768) |
Treasury stock, at cost; 2,579,154 shares at June 30, 2015 and 2,173,793 shares at December 31, 2014 | (66,798) | (50,931) |
Total Vantiv, Inc. equity | 976,477 | 903,013 |
Non-controlling interests | 417,200 | 397,573 |
Total equity | 1,393,677 | 1,300,586 |
Total liabilities and equity | 6,300,130 | 6,336,083 |
Class A Common Stock | ||
Equity: | ||
Class A common stock, $0.00001 par value; 890,000,000 shares authorized; 146,178,993 shares outstanding at June 30, 2015; 145,455,008 shares outstanding at December 31, 2014, Class B common stock, no par value; 100,000,000 shares authorized; 43,042,826 shares issued and outstanding at June 30, 2015 and December 31, 2014 | 1 | 1 |
Class B Common Stock | ||
Equity: | ||
Class A common stock, $0.00001 par value; 890,000,000 shares authorized; 146,178,993 shares outstanding at June 30, 2015; 145,455,008 shares outstanding at December 31, 2014, Class B common stock, no par value; 100,000,000 shares authorized; 43,042,826 shares issued and outstanding at June 30, 2015 and December 31, 2014 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF FIN5
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Treasury stock, shares (in shares) | 2,579,154 | 2,173,793 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 890,000,000 | 890,000,000 |
Common stock, shares outstanding (in shares) | 146,178,993 | 145,455,008 |
Class B Common Stock | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 43,042,826 | 43,042,826 |
Common stock, shares outstanding (in shares) | 43,042,826 | 43,042,826 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating Activities: | ||
Net income | $ 79,689 | $ 44,404 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 135,461 | 104,620 |
Write-off of intangible asset | 0 | 34,267 |
Amortization of customer incentives | 8,183 | 4,883 |
Amortization and write-off of debt issuance costs | 5,196 | 28,878 |
Share-based compensation expense | 16,720 | 20,044 |
Excess tax benefit from share-based compensation | (13,753) | (9,299) |
Tax receivable agreements non-cash items | 13,733 | 1,500 |
Change in operating assets and liabilities: | ||
Accounts receivable and related party receivable | 30,348 | (11,865) |
Net settlement assets and obligations | 41,380 | 28,423 |
Customer incentives | (13,342) | (9,850) |
Prepaid and other assets | (2,163) | (9,724) |
Accounts payable and accrued expenses | 46,748 | 30,179 |
Payable to related party | 595 | (310) |
Other liabilities | 3,582 | 310 |
Net cash provided by operating activities | 352,377 | 256,460 |
Investing Activities: | ||
Purchases of property and equipment | (42,013) | (48,850) |
Acquisition of customer portfolios and related assets | (37,154) | (27,068) |
Purchase of investments | 0 | (7,487) |
Cash used in acquisitions, net of cash acquired | 0 | (1,658,694) |
Net cash used in investing activities | (79,167) | (1,742,099) |
Financing Activities: | ||
Proceeds from issuance of long-term debt | 0 | 3,443,000 |
Repayment of debt and capital lease obligations | (262,946) | (1,806,241) |
Payment of debt issuance cost | 0 | (38,059) |
Proceeds from exercise of Class A common stock options | 9,628 | 321 |
Repurchase of Class A common stock | 0 | (34,366) |
Repurchase of Class A common stock (to satisfy tax withholding obligations) | (15,867) | (14,978) |
Payments under tax receivable agreements | (22,805) | (8,639) |
Excess tax benefit from share-based compensation | 13,753 | 9,299 |
Distributions to non-controlling interests | (3,132) | (5,470) |
Decrease in cash overdraft | (2,627) | 0 |
Net cash (used in) provided by financing activities | (283,996) | 1,544,867 |
Net (decrease) increase in cash and cash equivalents | (10,786) | 59,228 |
Cash and cash equivalents—Beginning of period | 411,568 | 171,427 |
Cash and cash equivalents—End of period | 400,782 | 230,655 |
Cash Payments: | ||
Interest | 48,502 | 17,445 |
Income taxes | 5,054 | 17,888 |
Non-cash Items: | ||
Issuance of tax receivable agreements to related parties | 0 | 109,400 |
Contingent consideration for issuance of tax receivable agreement | $ 0 | $ 137,120 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Treasury Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Non-Controlling Interests | Class A Common Stock | Class A Common StockCommon Stock | Class B Common Stock | Class B Common StockCommon Stock |
Balance at Dec. 31, 2013 | $ 1,176,322 | $ (33,130) | $ 597,730 | $ 203,066 | $ 264 | $ 408,391 | $ 1 | $ 0 | ||
Balance (in shares) at Dec. 31, 2013 | 1,607,000 | 141,759,000 | 48,823,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net income | 44,404 | 26,727 | 17,677 | |||||||
Stock Issued During Period, Value, Stock Options Exercised | 321 | 321 | ||||||||
Issuance of Class A common stock under employee stock plans, net of forfeitures | 44,000 | |||||||||
Tax benefit from employee share-based compensation | 9,299 | 9,299 | ||||||||
Repurchase of Class A common stock (to satisfy tax withholding obligation) | (14,978) | $ (14,978) | ||||||||
Repurchase of Class A common stock (to satisfy tax withholding obligation) (in shares) | (472,000) | (472,000) | ||||||||
Issuance of Class A common stock and cancellation of Class B common stock in connection with secondary offering | 5,780,000 | (5,780,000) | ||||||||
Stock Repurchased and Retired During Period, Value | (34,366) | (34,366) | ||||||||
Stock Repurchased and Retired During Period, Shares | (1,109,000) | |||||||||
Adjustment to Additional Paid in Capital Tax Receivable Agreements | (17,400) | (17,400) | ||||||||
Loss on cash flow hedges and other | (5,819) | (3,722) | (2,097) | |||||||
Formation of joint venture | 18,839 | 18,839 | ||||||||
Distributions to non-controlling interests | (5,470) | (5,470) | ||||||||
Share-based compensation | 20,044 | 15,017 | 5,027 | |||||||
Reallocation of non-controlling interests of Vantiv Holding due to change in ownership | 52,834 | (52,834) | ||||||||
Balance at Jun. 30, 2014 | 1,191,196 | $ (48,108) | 623,435 | 229,793 | (3,458) | 389,533 | $ 1 | $ 0 | ||
Balance (in shares) at Jun. 30, 2014 | 2,079,000 | 146,002,000 | 43,042,826 | 43,043,000 | ||||||
Balance at Dec. 31, 2014 | 1,300,586 | $ (50,931) | 629,353 | 328,358 | (3,768) | 397,573 | $ 1 | $ 0 | ||
Balance (in shares) at Dec. 31, 2014 | 2,174,000 | 145,455,008 | 145,455,000 | 43,042,826 | 43,043,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net income | 79,689 | 55,525 | 24,164 | |||||||
Stock Issued During Period, Value, Stock Options Exercised | 9,628 | 9,628 | ||||||||
Issuance of Class A common stock under employee stock plans, net of forfeitures | 1,129,000 | |||||||||
Tax benefit from employee share-based compensation | 13,753 | 13,753 | ||||||||
Repurchase of Class A common stock (to satisfy tax withholding obligation) | (15,867) | $ (15,867) | ||||||||
Repurchase of Class A common stock (to satisfy tax withholding obligation) (in shares) | (405,000) | (405,000) | ||||||||
Loss on cash flow hedges and other | (7,700) | (5,219) | (2,481) | |||||||
Distributions to non-controlling interests | (3,132) | (3,132) | ||||||||
Share-based compensation | 16,720 | 12,912 | 3,808 | |||||||
Reallocation of non-controlling interests of Vantiv Holding due to change in ownership | 2,732 | (2,732) | ||||||||
Balance at Jun. 30, 2015 | $ 1,393,677 | $ (66,798) | $ 668,378 | $ 383,883 | $ (8,987) | $ 417,200 | $ 1 | $ 0 | ||
Balance (in shares) at Jun. 30, 2015 | 2,579,000 | 146,178,993 | 146,179,000 | 43,042,826 | 43,043,000 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Vantiv, Inc., a Delaware corporation, is a holding company that conducts its operations through its majority-owned subsidiary, Vantiv Holding, LLC ("Vantiv Holding"). Vantiv, Inc. and Vantiv Holding are referred to collectively as the "Company," "Vantiv," "we," "us" or "our," unless the context requires otherwise. The Company provides electronic payment processing services to merchants and financial institutions throughout the United States of America. The Company markets its services through diverse distribution channels, including national, regional and mid-market sales teams, third-party reseller clients and a telesales operation. The Company also has relationships with a broad range of referral partners that include merchant banks, independent software vendors ("ISVs"), value-added resellers ("VARs"), payment facilitators, independent sales organizations ("ISOs") and trade associations as well as arrangements with core processors. Segments The Company’s segments consist of the Merchant Services segment and the Financial Institution Services segment. The Company’s Chief Executive Officer ("CEO"), who is the chief operating decision maker ("CODM"), evaluates the performance and allocates resources based on the operating results of each segment. Below is a summary of each segment: • Merchant Services —Provides merchant acquiring and payment processing services to large national merchants, regional and small-to-mid sized businesses. Merchant services are sold to small to large businesses through diverse distribution channels. Merchant Services includes all aspects of card processing including authorization and settlement, customer service, chargeback and retrieval processing and interchange management. • Financial Institution Services —Provides card issuer processing, payment network processing, fraud protection, card production, prepaid program management, automated teller machine ("ATM") driving and network gateway and switching services that utilize the Company’s proprietary Jeanie debit payment network to a diverse set of financial institutions, including regional banks, community banks, credit unions and regional personal identification number ("PIN") networks. Financial Institution Services also provides statement production, collections and inbound/outbound call centers for credit transactions, and other services such as credit card portfolio analytics, program strategy and support, fraud and security management and chargeback and dispute services. Basis of Presentation and Consolidation The accompanying consolidated financial statements include those of Vantiv, Inc. and all subsidiaries thereof, including its majority-owned subsidiary, Vantiv Holding, LLC. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and should be read in connection with the Company's 2014 audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K. The accompanying consolidated financial statements are unaudited; however, in the opinion of management they include all normal and recurring adjustments necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the periods presented. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. All intercompany balances and transactions have been eliminated. As of June 30, 2015 , Vantiv, Inc. and Fifth Third Bank ("Fifth Third") owned interests in Vantiv Holding of 77.25% and 22.75% , respectively (see Note 6 - Controlling and Non-controlling Interests for changes in non-controlling interests). The Company accounts for non-controlling interests in accordance with Accounting Standards Codification ("ASC") 810, Consolidation . Non-controlling interests primarily represent Fifth Third's minority share of net income or loss of and equity in Vantiv Holding. Net income attributable to non-controlling interests does not include expenses incurred directly by Vantiv, Inc., including income tax expense attributable to Vantiv, Inc. All of the Company’s non-controlling interests are presented after Vantiv Holding income tax expense in the accompanying consolidated statements of income as "Net income attributable to non-controlling interests." Non-controlling interests are presented as a component of equity in the accompanying consolidated statements of financial position. Share Repurchase Program In February 2014, our board of directors authorized a program to repurchase up to $300 million of our Class A common stock. We have approximately $275 million of share repurchase authority remaining as of June 30, 2015 under this authorization. Purchases under the repurchase program are allowed from time to time in the open market, in privately negotiated transactions, or otherwise. The manner, timing, and amount of any purchases are determined by management based on an evaluation of market conditions, stock price, and other factors. The share repurchase program has no expiration date and the Company may discontinue purchases at any time that management determines additional purchases are not warranted. Sponsorship In order to provide electronic payment processing services, Visa, MasterCard and other payment networks require sponsorship of non-financial institutions by a member clearing bank. In June 2009, the Company entered into a ten -year agreement with Fifth Third (the "Sponsoring Member") to provide sponsorship services to the Company. The Company also has agreements with certain other banks that provide sponsorship into the card networks. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES | Revenue Recognition The Company has contractual agreements with its clients that set forth the general terms and conditions of the relationship including line item pricing, payment terms and contract duration. Revenues are recognized as earned (i.e., for transaction based fees, when the underlying transaction is processed) in conjunction with ASC 605, Revenue Recognition . ASC 605, Revenue Recognition , establishes guidance as to when revenue is realized or realizable and earned by using the following criteria: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the seller’s price is fixed or determinable; and (4) collectibility is reasonably assured. The Company follows guidance provided in ASC 605-45, Principal Agent Considerations . ASC 605-45, Principal Agent Considerations, which states that whether a company should recognize revenue based on the gross amount billed to a customer or the net amount retained is a matter of judgment that depends on the facts and circumstances of the arrangement and that certain factors should be considered in the evaluation. The Company recognizes processing revenues net of interchange fees, which are assessed to the Company’s merchant customers on all processed transactions. Interchange rates are not controlled by the Company, which effectively acts as a clearing house collecting and remitting interchange fee settlement on behalf of issuing banks, debit networks, credit card associations and its processing customers. All other revenue is reported on a gross basis, as the Company contracts directly with the end customer, assumes the risk of loss and has pricing flexibility. The Company generates revenue primarily by processing electronic payment transactions. Set forth below is a description of the Company’s revenue by segment. Merchant Services The Company’s Merchant Services segment revenue is primarily derived from processing credit and debit card transactions. Merchant Services revenue is primarily comprised of fees charged to businesses, net of interchange fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. The fees charged consist of either a percentage of the dollar volume of the transaction or a fixed fee, or both, and are recognized at the time of the transaction. Merchant Services revenue also includes a number of revenue items that are incurred by the Company and are reimbursable as the costs are passed through to and paid by the Company’s clients. These items primarily consist of Visa, MasterCard and other payment network fees. In addition, for sales through ISOs and certain other referral sources in which the Company is the primary party to the contract with the merchant, the Company records the full amount of the fees collected from the merchant as revenue. Merchant Services segment revenue also includes revenue from ancillary services such as fraud management, equipment sales and terminal rent. Merchant Services revenue is recognized as services are performed. Financial Institution Services The Company’s Financial Institution Services segment revenues are primarily derived from debit, credit and ATM card transaction processing, ATM driving and support, and PIN debit processing services. Financial Institution Services revenue associated with processing transactions includes per transaction and account related fees, card production fees and fees generated from the Company’s Jeanie network. Financial Institution Services revenue related to card transaction processing is recognized when consumers use their client-issued cards to make purchases. Financial Institution Services also generates revenue through other services, including statement production, collections and inbound/outbound call centers for credit transactions and other services such as credit card portfolio analytics, program strategy and support, fraud and security management and chargeback and dispute services. Financial Institution Services revenue is recognized as services are performed. Financial Institution Services provides certain services to Fifth Third. Revenues related to these services are included in the accompanying statements of income as related party revenues. Expenses Set forth below is a brief description of the components of the Company’s expenses: • Network fees and other costs primarily consist of certain expenses incurred by the Company in connection with providing processing services to its clients which are passed through to its clients, including Visa and MasterCard network association fees, payment network fees, third party processing fees, telecommunication charges, postage and card production costs. • Sales and marketing expense primarily consists of salaries and benefits paid to sales personnel, sales management and other sales and marketing personnel, residual payments made to ISOs and referral partners, and advertising and promotional costs. • Other operating costs primarily consist of salaries and benefits paid to operational and IT personnel, costs associated with operating the Company’s technology platform and data centers, information technology costs for processing transactions, product development costs, software consulting fees and maintenance costs. • General and administrative expenses primarily consist of salaries and benefits paid to executive management and administrative employees, including finance, human resources, product development, legal and risk management, share-based compensation costs, equipment and occupancy costs and consulting costs. • Non-operating expenses during the three months and six months ended June 30, 2015 primarily relate to the change in fair value of a tax receivable agreement ("TRA") entered into in June 2014 (see Note 8 - Fair Value Measurements). The amounts for the three months and six months ended June 30, 2014 relate to the refinancing of the Company's senior secured credit facilities in June 2014 and the change in fair value of a TRA entered into in June 2014. Share-Based Compensation The Company expenses employee share-based payments under ASC 718, Compensation—Stock Compensation , which requires compensation cost for the grant-date fair value of share-based payments to be recognized over the requisite service period. The Company estimates the grant date fair value of the share-based awards issued in the form of options using the Black-Scholes option pricing model. The fair value of restricted stock awards and performance awards is measured based on the market price of the Company’s stock on the grant date. For the six months ended June 30, 2015 and 2014 total share-based compensation expense was $16.7 million and $20.0 million , respectively. Earnings Per Share Basic earnings per share is computed by dividing net income attributable to Vantiv, Inc. by the weighted average shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to Vantiv, Inc., adjusted as necessary for the impact of potentially dilutive securities, by the weighted-average shares outstanding during the period and the impact of securities that would have a dilutive effect on earnings per share. See Note 9 - Net Income Per Share for further discussion. Dividend Restrictions The Company does not intend to pay cash dividends on its Class A common stock in the foreseeable future. Vantiv, Inc. is a holding company that does not conduct any business operations of its own. As a result, Vantiv, Inc.’s ability to pay cash dividends on its common stock, if any, is dependent upon cash dividends and distributions and other transfers from Vantiv Holding, which are subject to certain Fifth Third consent rights in the Amended and Restated Vantiv Holding Limited Liability Company Agreement. These consent rights require the approval of Fifth Third for certain significant matters, including the payment of all distributions by Vantiv Holding other than certain permitted distributions, which relate primarily to the payment of tax distributions and tax-related obligations. The amounts available to Vantiv, Inc. to pay cash dividends are also subject to the covenants and distribution restrictions in its subsidiaries’ loan agreements. As a result of the restrictions on distributions from Vantiv Holding and its subsidiaries, essentially all of the Company's consolidated net assets are held at the subsidiary level and are restricted as of June 30, 2015. Income Taxes Vantiv, Inc. is taxed as a C corporation for U.S. income tax purposes and is therefore subject to both federal and state taxation at a corporate level. Income taxes are computed in accordance with ASC 740, Income Taxes , and reflect the net tax effects of temporary differences between the financial reporting carrying amounts of assets and liabilities and the corresponding income tax amounts. The Company has deferred tax assets and liabilities and maintains valuation allowances where it is more likely than not that all or a portion of deferred tax assets will not be realized. To the extent the Company determines that it will not realize the benefit of some or all of its deferred tax assets, such deferred tax assets will be adjusted through the Company’s provision for income taxes in the period in which this determination is made. As of June 30, 2015 and December 31, 2014 , the Company had recorded no valuation allowances against deferred tax assets. The Company's consolidated interim effective tax rate is based upon expected annual income from operations, statutory tax rates and tax laws in the various jurisdictions in which the Company operates. Significant or unusual items, including adjustments to accruals for tax uncertainties, are recognized in the quarter in which the related event occurs. The Company's effective tax rates were 31.5% and 28.4% , respectively, for the six months ended June 30, 2015 and 2014. The effective tax rate for each period reflects the impact of the Company's non-controlling interests. Cash and Cash Equivalents Cash on hand and investments with original maturities of three months or less (that are readily convertible to cash) are considered to be cash equivalents. Cash equivalents consist primarily of overnight EuroDollar sweep accounts which are maintained at reputable financial institutions with high credit quality and therefore are considered to bear minimal credit risk. Accounts Receivable—net Accounts receivable primarily represent processing revenues earned but not collected. For a majority of its customers, the Company has the authority to debit the client’s bank accounts through the Federal Reserve’s Automated Clearing House; as such, collectibility is reasonably assured. The Company records a reserve for doubtful accounts when it is probable that the accounts receivable will not be collected. The Company reviews historical loss experience and the financial position of its customers when estimating the allowance. As of June 30, 2015 and December 31, 2014 , the allowance for doubtful accounts was not material to the Company’s statements of financial position. Customer Incentives Customer incentives represent signing bonuses paid to customers. Customer incentives are paid in connection with the acquisition or renewal of customer contracts, and are therefore deferred and amortized using the straight-line method based on the contractual agreement. Related amortization is recorded as contra-revenue. Property, Equipment and Software—net Property, equipment and software consists of the Company’s facilities, furniture and equipment, software, land and leasehold improvements. These assets are depreciated on a straight-line basis over their respective useful lives, which are 15 to 40 years for the Company’s facilities and related improvements, 2 to 10 years for furniture and equipment, 3 to 5 years for software and 3 to 10 years for leasehold improvements or the lesser of the estimated useful life of the improvement or the term of lease. Also included in property, equipment and software is work in progress consisting of costs associated with software developed for internal use which has not yet been placed in service. Accumulated depreciation as of June 30, 2015 and December 31, 2014 was $224.5 million and $202.8 million , respectively. The Company capitalizes certain costs related to computer software developed for internal use and amortizes such costs on a straight-line basis over an estimated useful life of 3 to 5 years. Research and development costs incurred prior to establishing technological feasibility are charged to operations as such costs are incurred. Once technological feasibility has been established, costs are capitalized until the software is placed in service. Goodwill and Intangible Assets In accordance with ASC 350, Intangibles—Goodwill and Other , the Company tests goodwill for impairment for each reporting unit on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that fair value of the goodwill within the reporting unit is less than its carrying value. The Company performed its most recent annual goodwill impairment test for all reporting units as of July 31, 2014 using market data and discounted cash flow analyses. Based on this analysis, it was determined that the fair value of all reporting units were substantially in excess of the carrying value. There have been no other events or changes in circumstances subsequent to the testing date that would indicate impairment of these reporting units as of June 30, 2015 . Intangible assets consist of acquired customer relationships, trade names and customer portfolios and related assets that are amortized over their estimated useful lives. The Company reviews finite lived intangible assets for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. As of June 30, 2015 , there have been no such events or circumstances that would indicate potential impairment of finite lived intangible assets. Subsequent to the Mercury acquisition in June 2014, the Company decided to phase out an existing trade name used in the ISO channel within the Merchant Services segment. As a result of this decision, the remaining useful life was changed from indefinite to definite which resulted in the Company recording a charge to amortization expense of $34.3 million during the quarter ended June 30, 2014. Settlement Assets and Obligations Settlement assets and obligations result from Financial Institution Services when funds are transferred from or received by the Company prior to receiving or paying funds to a different entity. This timing difference results in a settlement asset or obligation. The amounts are generally collected or paid the following business day. The settlement assets and obligations recorded by Merchant Services represent intermediary balances due to differences between the amount the Sponsoring Member receives from the card associations and the amount funded to the merchants. Such differences arise from timing differences, interchange expenses, merchant reserves and exception items. In addition, certain card associations limit the Company from accessing or controlling merchant settlement funds and, instead, require that these funds be controlled by the Sponsoring Member. The Company follows a net settlement process whereby, if the settlement received from the card associations precedes the funding obligation to the merchant, the Company temporarily records a corresponding liability. Conversely, if the funding obligation to the merchant precedes the settlement from the card associations, the amount of the net receivable position is recorded by the Company, or in some cases, the Sponsoring Member may cover the position with its own funds in which case a receivable position is not recorded by the Company. Derivatives The Company accounts for derivatives in accordance with ASC 815, Derivatives and Hedging . This guidance establishes accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. All derivatives, whether designated in hedging relationships or not, are required to be recorded on the statement of financial position at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and the hedged item will be recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portion of the change in the fair value of the derivative will be recorded in accumulated other comprehensive income ("AOCI") and will be recognized in the statement of income when the hedged item affects earnings. The Company does not enter into derivative financial instruments for speculative purposes. Tax Receivable Agreements As of June 30, 2015, the Company is party to tax receivable agreements ("TRAs") with Fifth Third, which were executed in connection with its initial public offering ("IPO"). One provides for the payment by the Company to Fifth Third of 85% of the amount of cash savings, if any, in U.S. federal, state, local and foreign income tax that the Company actually realizes as a result of the increases in tax basis that may result from the purchase of Vantiv Holding units from Fifth Third or from the future exchange of units by Fifth Third for cash or shares of the Company's Class A common stock, as well as the tax benefits attributable to payments made under such tax receivable agreement. Any actual increase in tax basis, as well as the amount and timing of any payments under the agreement, will vary depending upon a number of factors, including the timing of exchanges, the price of shares of our Class A common stock at the time of the exchange, the extent to which such exchanges are taxable, and the amount and timing of the Company's income. The other tax receivable agreement provides for the payment by the Company to Fifth Third of 85% of the amount of cash savings according to Fifth Third's respective ownership interests in Vantiv Holding immediately prior to our initial public offering, if any, in U.S. federal, state, local and foreign income tax that National Processing Company ("NPC") actually realizes as a result of its use of its net operating losses ("NOLs") and other tax attributes. Simultaneously and in connection with the completion of the acquisition of Mercury Payment Systems, LLC ("Mercury"), the Company entered into a TRA (the "Mercury TRA") with pre-acquisition owners of Mercury (the "Mercury TRA Holders"). The Mercury TRA generally provides for the payment by the Company to the Mercury TRA Holders of 85% of the value of the amount of cash savings, if any, in U.S. federal, state, local and foreign income tax that the Company actually realizes as a result of the increase in tax basis of the assets of Mercury and the use of the NOLs and other tax attributes of Mercury. The Mercury TRA is considered contingent consideration under ASC 805, Business Combinations ("ASC 805") as it is part of the consideration payable to the former owners of Mercury. In accordance with ASC 805, the contingent consideration is initially measured at fair value at the acquisition date and recorded as a liability. The Mercury TRA liability is therefore recorded at fair value based on estimates of discounted future cash flows associated with estimated payments to the Mercury TRA Holders. The liability recorded by the Company for the Mercury TRA obligations will be re-measured at fair value at each reporting date with the change in fair value recognized in earnings as a non-operating expense. All TRA obligations are recorded based on the full and undiscounted amount of the expected future payments, except for the Mercury TRA which represents contingent consideration relating to an acquired business, and is recorded at fair value for financial reporting purposes (See Note 8 - Fair Value Measurements). Payments under each of the TRAs discussed above are required to the extent the Company realizes cash savings as a result of the underlying tax attributes. The cash savings realized by the Company are computed by comparing the Company's actual income tax liability to the amount of such taxes the Company would have been required to pay had there been no deductions related to the tax attributes discussed above. The Company retains the benefit of the remaining 15% of these tax savings. The timing and/or amount of aggregate payments due under the TRAs may vary based on a number of factors, including the amount and timing of the taxable income the Company generates in the future and the tax rate then applicable, the use of loss carryovers and amortizable basis. Payments under the TRAs, if necessary, are required to be made no later than January 5th of the second year immediately following the current taxable year. A payment under the TRA obligations of approximately $22.8 million was paid during January 2015. The term of the TRAs will continue until all such tax benefits have been utilized or expired, unless we exercise our right to terminate the TRAs for an amount based on the agreed payments remaining to be made under the agreements. See Note 12 - Subsequent Event for discussion of the Repurchase Addendum to the Mercury TRA executed as of July 24, 2015. New Accounting Pronouncements In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Amortization of the costs will continue to be reported as interest expense. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted for financial statements that have not been previously issued. The Company does not expect the new guidance to have a material impact on the Company's consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, "Revenue From Contracts With Customers." The ASU supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . The amendment provides a five-step analysis of transactions to determine when and how revenue is recognized, based upon the core principal that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment also requires additional disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption prohibited. The amendment allows companies to use either a full retrospective or a modified retrospective approach to adopt this ASU. In July 2015, the FASB confirmed its decision to defer the effective date of this standard by one year, which makes the standard effective beginning after December 15, 2017. The Company is currently evaluating which transition approach to use and assessing the impact of the adoption of this principle on the Company's consolidated financial statements. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS Acquisition of Mercury Payment Systems, LLC On June 13, 2014, the Company completed the acquisition of Mercury, acquiring all of the outstanding voting interest. Mercury was a payment technology and service leader whose solutions are integrated into point-of-sale software applications and brought to market through dealer and developer partners. This acquisition helps to accelerate the Company's growth in the integrated payments channel. During the second quarter of 2015, the Company recorded measurement period adjustments to the trade name and to the Mercury TRA. The adjustment to the trade name, which is included in intangible assets below, is based on a change in the underlying assumptions used to value the trade name due to the refinement of estimates. The trade name was initially assigned a value of $59.1 million and a weighted average estimated useful life of 9.5 years utilizing the relief from royalty method. As a result of a change in the underlying assumptions due to the refinement of estimates, the Company is assigning the trade name a value of $15 million based on a weighted average estimated useful life of 2.5 years . The adjustment to the Mercury TRA is due to a change in the inputs used in determining the fair value of the TRA as a result of refining estimates. Both measurement period adjustments are reflected in the table below and have no effect on the accompanying statement of income. The following is the final fair value of the purchase price for Mercury (in thousands): Cash purchase price paid at closing $ 1,681,179 Fair value of contingent consideration related to a TRA 192,507 Total purchase price $ 1,873,686 The acquisition was accounted for as a business combination under ASC 805. The purchase price was allocated to the assets acquired and the liabilities assumed based on the estimated fair value at the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, a significant portion of which is deductible for tax purposes. Goodwill, assigned to Merchant Services, consists primarily of the acquired workforce and growth opportunities, none of which qualify as an intangible asset. The final purchase price allocation is as follows (in thousands): Cash acquired $ 22,485 Current assets 47,421 Property, equipment and software 32,257 Intangible assets 347,000 Goodwill 1,422,916 Deferred tax assets 43,054 Other non-current assets 767 Current and non-current liabilities (42,214 ) Total purchase price $ 1,873,686 The following pro forma information shows the Company’s results of operations for the three months and six months ended June 30, 2014 as if the Mercury acquisition had occurred January 1, 2013. The pro forma information is presented for informational purposes only and is not necessarily indicative of what would have occurred if the acquisition had been made as of that date, nor is it intended to be indicative of future operating results. Three Months Ended Six Months Ended (Pro forma) (Pro forma) (in thousands, except share data) Total revenue $ 689,861 $ 1,306,129 Income from operations 55,565 121,807 Net income including non-controlling interests 18,811 50,211 Net income attributable to Vantiv, Inc. 10,125 31,065 Net income per share attributable to Vantiv, Inc. Class A common stock: Basic $ 0.07 $ 0.22 Diluted $ 0.07 $ 0.21 Shares used in computing net income per share of Class A common stock: Basic 140,451,466 139,346,292 Diluted 151,524,278 150,831,855 The pro forma results include certain pro forma adjustments that were directly attributable to the business combination as follows: • additional amortization expense that would have been recognized relating to the acquired intangible assets, • an adjustment of interest expense to reflect the additional borrowings of the Company in conjunction with the acquisition and removal of Mercury historical debt, and • a reduction in non-operating expenses in the three and six months ended June 30, 2014 for acquisition-related transaction costs and debt refinancing costs incurred by the Company. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill, by business segment, are as follows (in thousands): Merchant Services Financial Institution Services Total Balance as of December 31, 2014 $ 2,716,516 $ 574,850 $ 3,291,366 Goodwill attributable to acquisition of Mercury (1) 75,162 — 75,162 Balance as of June 30, 2015 $ 2,791,678 $ 574,850 $ 3,366,528 (1) Amount represents adjustments to goodwill associated with the acquisition of Mercury as a result of the finalization of purchase accounting. Intangible assets consist of acquired customer relationships, trade names and customer portfolios and related assets. The useful lives of customer relationships are determined based on forecasted cash flows, which include estimates for customer attrition associated with the underlying portfolio of customers acquired. The customer relationships acquired in conjunction with acquisitions are amortized based on the pattern of cash flows expected to be realized taking into consideration expected revenues and customer attrition, which are based on historical data and the Company's estimates of future performance. These estimates result in accelerated amortization on certain acquired intangible assets. Indefinite lived trade names are reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Subsequent to the Mercury acquisition in June 2014, the Company decided to phase out an existing trade name used in the ISO channel. The trade name was originally expected to remain in use for the foreseeable future and therefore was deemed an indefinite lived intangible asset not subject to amortization. As a result of this decision, the remaining useful life was changed from indefinite to definite which resulted in the Company recording a charge to amortization expense of $34.3 million during the quarter ended June 30, 2014. The trade name was revalued utilizing an income approach using the relief-from-royalty method. The revised fair value of $6.7 million is being amortized on a straight-line basis over the remaining estimated useful life of two years. The Company reviews finite lived intangible assets for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. As of June 30, 2015 and December 31, 2014 , the Company's intangible assets consisted of the following (in thousands): June 30, December 31, Customer relationship intangible assets $ 1,596,581 $ 1,596,581 Trade names - finite lived 21,733 65,833 Customer portfolios and related assets 125,507 57,383 1,743,821 1,719,797 Less accumulated amortization on: Customer relationship intangible assets 739,860 655,017 Trade names - finite lived 9,667 5,105 Customer portfolios and related assets 34,357 24,983 783,884 685,105 $ 959,937 $ 1,034,692 Customer portfolios and related assets acquired during the six months ended June 30, 2015 have a weighted-average amortization period of 4.9 years . Amortization expense on intangible assets for the three months ended June 30, 2015 and 2014 was $49.6 million and $71.6 million , respectively. Amortization expense on intangible assets for the six months ended June 30, 2015 and 2014 was $98.8 million and $105.0 million , respectively. For the three and six months ended June 30, 2014, intangible amortization expense included a $34.3 million charge related to the phasing out of a trade name. The estimated amortization expense of intangible assets for the next five years is as follows (in thousands): Six months ending December 31, 2015 $ 100,755 2016 190,415 2017 170,202 2018 161,472 2019 153,530 2020 81,470 |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT As of June 30, 2015 and December 31, 2014 , the Company’s debt consisted of the following: June 30, December 31, (in thousands) $2,050.0 million term A loan, maturing on June 13, 2019, and bearing interest at a variable base rate (LIBOR) plus a spread rate (200 basis points) (total rate of 2.19% at June 30, 2015) and amortizing on a basis of 1.25% per quarter during each of the first twelve quarters, 1.875% per quarter during the next four quarters and 2.50% during the next three quarters with a balloon payment due at maturity $ 1,947,500 $ 1,998,750 $1,400.0 million term B loan, maturing on June 13, 2021, and bearing interest at a variable base rate (LIBOR) with a floor of 75 basis points plus a spread rate (300 basis points) (total rate of 3.75% at June 30, 2015) and amortizing on a basis of 0.25% per quarter, with a balloon payment due at maturity 1,186,000 1,393,000 $10.1 million leasehold mortgage, expiring on August 10, 2021 and bearing interest payable monthly at a fixed rate (rate of 6.22% at June 30, 2015) 10,131 10,131 Less: Current portion of note payable and current portion of note payable to related party (116,501 ) (116,501 ) Less: Original issue discount (6,650 ) (8,143 ) Note payable and note payable to related party $ 3,020,480 $ 3,277,237 2014 Debt Refinancing On June 13, 2014, Vantiv, LLC completed a debt refinancing by entering into an amended and restated loan agreement ("Amended Loan Agreement"). The Amended Loan Agreement provides for senior secured credit facilities comprised of a $2.05 billion term A loan, a $1.4 billion term B loan and a $425 million revolving credit facility. Proceeds from the refinancing were primarily used to fund the Mercury acquisition and repay the prior term A loan with an outstanding balance of approximately $1.8 billion as of the date of refinancing. The prior revolving credit facility was also terminated. The maturity date and debt service requirements relating to the new term A and term B loans are listed in the table above. The new revolving credit facility matures in June 2019 and includes a $100 million swing line facility and a $40 million letter of credit facility. The commitment fee rate for the unused portion of the revolving credit facility is 0.375% per year. There were no outstanding borrowings on the revolving credit facility at June 30, 2015 . As of June 30, 2015 and December 31, 2014, Fifth Third held $196.7 million and $201.9 million , respectively, of the term A loans. On January 6, 2015, the Company made an early principal payment of $200 million on the term B loan. The Company expensed approximately $1.8 million in non-operating expenses related to the write-off of deferred financing fees and OID in connection with the early principal payment. Guarantees and Security The Company's debt obligations at June 30, 2015 are unconditional and are guaranteed by Vantiv Holding and certain of Vantiv Holding’s existing and subsequently acquired or organized domestic subsidiaries. The refinanced debt and related guarantees are secured on a first-priority basis (subject to liens permitted under the Amended Loan Agreement) by substantially all the capital stock (subject to a 65% limitation on pledges of capital stock of foreign subsidiaries and domestic holding companies of foreign subsidiaries) and personal property of Vantiv Holding and any obligors as well as any real property in excess of $10 million in the aggregate held by Vantiv Holding or any obligors (other than Vantiv Holding), subject to certain exceptions. Covenants There are certain financial and non-financial covenants contained in the Amended Loan Agreement for the refinanced debt, which are tested on a quarterly basis. The financial covenants require maintenance of certain leverage and interest coverage ratios. At June 30, 2015 , the Company was in compliance with these financial covenants. |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITIES | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITIES | DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives The Company enters into derivative financial instruments to manage differences in the amount, timing and duration of its known or expected cash payments related to its variable-rate debt. As of June 30, 2015 and December 31, 2014 , the Company’s derivative instruments consisted of interest rate swaps, which hedged the variable rate debt by converting floating-rate payments to fixed-rate payments. These swaps are designated as cash flow hedges for accounting purposes. Accounting for Derivative Instruments The Company recognizes derivatives in other current and non-current assets or liabilities in the accompanying consolidated statements of financial position at their fair values. Refer to Note 8 - Fair Value Measurements for a detailed discussion of the fair value of its derivatives. The Company designates its interest rate swaps as cash flow hedges of forecasted interest rate payments related to its variable-rate debt. The Company formally documents all relationships between hedging instruments and underlying hedged transactions, as well as its risk management objective and strategy for undertaking hedge transactions. This process includes linking all derivatives that are designated as cash flow hedges to forecasted transactions. A formal assessment of hedge effectiveness is performed both at inception of the hedge and on an ongoing basis to determine whether the hedge is highly effective in offsetting changes in cash flows of the underlying hedged item. Hedge effectiveness is assessed using a regression analysis. If it is determined that a derivative ceases to be highly effective during the term of the hedge, the Company will discontinue hedge accounting for such derivative. The Company’s interest rate swaps qualify for hedge accounting under ASC 815, Derivatives and Hedging . Therefore, the effective portion of changes in fair value were recorded in AOCI and will be reclassified into earnings in the same period during which the hedged transactions affected earnings. Cash Flow Hedges of Interest Rate Risk The Company's objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company uses interest rate swaps as part of its interest rate risk management strategy. As of June 30, 2015 , the Company had a total of 14 outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk. Of the 14 outstanding interest rate swaps, 8 of them cover an exposure period from June 2015 through June 2017 and have a combined notional balance of $1.2 billion (amortizing to $1.1 billion ). The remaining 6 interest rate swaps cover an exposure period from January 2016 through January 2019 and have a combined notional balance of $500 million . Fifth Third is the counterparty to 5 of the 14 outstanding interest rate swaps with notional balances ranging from $293.8 million to $250.0 million . The Company does not offset derivative positions in the accompanying consolidated financial statements. The table below presents the fair value of the Company’s derivative financial instruments designated as cash flow hedges included within the accompanying consolidated statements of financial position (in thousands): Consolidated Statement of June 30, 2015 December 31, 2014 Interest rate swaps Other long-term assets $ — $ 104 Interest rate swaps Other current liabilities 8,062 5,205 Interest rate swaps Other long-term liabilities 10,180 2,283 Any ineffectiveness associated with such derivative instruments will be recorded immediately as interest expense in the accompanying consolidated statements of income. As of June 30, 2015 , the Company estimates that $8.6 million will be reclassified from accumulated other comprehensive income as an increase to interest expense during the next 12 months. The table below presents the effect of the Company’s interest rate swaps on the accompanying consolidated statements of income for the three months and six months ended June 30, 2015 and 2014 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Derivatives in cash flow hedging relationships: Amount of gain (loss) recognized in OCI (effective portion) (1) $ (1,717 ) $ (6,234 ) $ (13,152 ) $ (8,833 ) Amount of gain (loss) reclassified from accumulated OCI into earnings (effective portion) (1,252 ) (483 ) (2,293 ) (818 ) Amount of gain (loss) recognized in earnings (2) 1 156 — (2 ) (1) "OCI" represents other comprehensive income. (2) Amount represents hedge ineffectiveness and is recorded as a component of interest expense-net in the accompanying consolidated statement of income. Credit Risk Related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of June 30, 2015 , the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $19.6 million . As of June 30, 2015 , the Company has not posted any collateral related to these agreements. If the Company had breached any of these provisions at June 30, 2015 , it could have been required to settle its obligations under the agreements at their termination value of $19.6 million . |
CONTROLLING AND NON-CONTROLLING
CONTROLLING AND NON-CONTROLLING INTERESTS | 6 Months Ended |
Jun. 30, 2015 | |
Noncontrolling Interest [Abstract] | |
CONTROLLING AND NON-CONTROLLING INTERESTS | CONTROLLING AND NON-CONTROLLING INTERESTS The Company has various non-controlling interests that are accounted for in accordance with ASC 810, Consolidation ("ASC 810") . As discussed in Note 1 - Basis of Presentation and Summary of Significant Accounting Policies, Vantiv, Inc. owns a controlling interest in Vantiv Holding, and therefore consolidates the financial results of Vantiv Holding and its subsidiaries and records non-controlling interest for the economic interests in Vantiv Holding held by Fifth Third. In addition, the Company and People's United Bank (“PUB”) formed People’s United Merchant Services (“PUMS”) during May 2014, which represents a joint venture that provides customers a comprehensive suite of payment solutions. Vantiv Holding owns 51% of PUMS and PUB owns 49% . PUMS is consolidated by the Company in accordance with ASC 810 and records non-controlling interest for the economic interests in PUMS held by PUB. As of June 30, 2015 , Vantiv, Inc.’s interest in Vantiv Holding was 77.25% . Changes in units and related ownership interest in Vantiv Holding are summarized as follows: Vantiv, Inc. Fifth Third Total As of December 31, 2014 145,455,008 43,042,826 188,497,834 % of ownership 77.17 % 22.83 % Equity plan activity (a) 723,985 — 723,985 As of June 30, 2015 146,178,993 43,042,826 189,221,819 % of ownership 77.25 % 22.75 % (a) Includes stock issued under the equity plans less Class A common stock withheld to satisfy employee tax withholding obligations upon vesting or exercise of employee equity awards and forfeitures of restricted Class A common stock awards. As a result of changes in ownership interests in Vantiv Holding, adjustments of $2.7 million and $52.8 million were recognized during the six months ended June 30, 2015 and June 30, 2014, respectively, in order to reflect the portion of net assets of Vantiv Holding attributable to non-controlling unit holders based on changes in the proportionate ownership interests in Vantiv Holding during those periods. The table below provides a reconciliation of net income attributable to non-controlling interests based on relative ownership interests as discussed above (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net income $ 52,693 $ 3,313 $ 79,689 $ 44,404 Items not allocable to non-controlling interests: Vantiv, Inc. expenses (a) 12,587 10,621 20,397 19,814 Vantiv Holding net income $ 65,280 $ 13,934 $ 100,086 $ 64,218 Net income attributable to non-controlling interests of Fifth Third (b) $ 14,468 $ 4,421 $ 22,371 $ 17,376 Net income attributable to PUMS non-controlling interest (c) 1,689 301 1,793 301 Total net income attributable to non-controlling interests $ 16,157 $ 4,722 $ 24,164 $ 17,677 (a) Primarily represents income tax expense related to Vantiv, Inc. (b) Net income attributable to non-controlling interests of Fifth Third reflects the allocation of Vantiv Holding’s net income based on the proportionate ownership interests in Vantiv Holding held by the non-controlling unit holders. The net income attributable to non-controlling unit holders reflects the changes in ownership interests summarized in the table above. (c) Reflects net income attributable to the non-controlling interest of PUMS. In connection with the separation from Fifth Third, Fifth Third received a warrant that allows for the purchase of up to 20.4 million Class C Non-Voting Units of Vantiv Holding. The warrant is exercisable, in whole or in part, and from time to time, but not during a restricted period. A restricted period means a period during which Vantiv Holding (or any successor thereto) is treated as a partnership for U.S. federal income tax purposes; provided that the restricted period shall terminate upon the earlier of (i) a change of control, and (ii) in the event Vantiv, Inc. is no longer a public company owning Vantiv Holding, both as defined in the warrant agreement. The warrant expires upon the earliest to occur of the 20th anniversary of the issue date or a change of control where the price paid per unit in such change of control minus the exercise price of the warrant is less than zero . Fifth Third is entitled to purchase the underlying Units of the warrant at a price of $15.98 per unit. The warrant was valued at approximately $65.4 million at June 30, 2009, the issuance date, using a Black-Scholes option valuation model using probability weighted scenarios. The warrant is recorded as a component of the non-controlling interest on the accompanying statements of financial position as of June 30, 2015 and December 31, 2014 . |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND GUARANTEES | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES AND GUARANTEES | COMMITMENTS, CONTINGENCIES AND GUARANTEES Legal Reserve From time to time, the Company is involved in various litigation matters arising in the ordinary course of its business. While it is impossible to ascertain the ultimate resolution or range of financial liability with respect to these contingent matters, management believes none of these matters, either individually or in the aggregate, would have a material effect upon the Company’s consolidated financial statements. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses the hierarchy prescribed in ASC 820, Fair Value Measurement , based upon the available inputs to the valuation and the degree to which they are observable or not observable in the market. The three levels in the hierarchy are as follows: • Level 1 Inputs —Quoted prices (unadjusted) for identical assets or liabilities in active markets that are accessible as of the measurement date. • Level 2 Inputs —Inputs other than quoted prices within Level 1 that are observable either directly or indirectly, including but not limited to quoted prices in markets that are not active, quoted prices in active markets for similar assets or liabilities and observable inputs other than quoted prices such as interest rates or yield curves. • Level 3 Inputs —Unobservable inputs reflecting the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. The following table summarizes assets and liabilities measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014 (in thousands): June 30, 2015 December 31, 2014 Fair Value Measurements Using Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets: Interest rate swaps $ — $ — $ — $ — $ 104 $ — Liabilities: Interest rate swaps $ — $ 18,242 $ — $ — $ 7,488 $ — Mercury TRA — — 220,800 — — 152,420 The following table summarizes carrying amounts and estimated fair values for financial assets and liabilities, excluding assets and liabilities measured at fair value on a recurring basis, as of June 30, 2015 and December 31, 2014 (in thousands): June 30, 2015 December 31, 2014 Carrying Fair Value Carrying Fair Value Liabilities: Note payable $ 3,136,981 $ 3,130,440 $ 3,393,738 $ 3,310,181 We consider that the carrying value of cash and cash equivalents, receivables, accounts payable and accrued expenses approximates fair value (Level 1) given the short-term nature of these items. The fair value of the Company’s note payable was estimated based on rates currently available to the Company for bank loans with similar terms and maturities and is classified in Level 2 of the fair value hierarchy. Interest Rate Swaps The Company uses interest rate swaps to manage interest rate risk. The fair value of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves. In addition, to comply with the provisions of ASC 820, Fair Value Measurements , credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair values to account for potential nonperformance risk. In adjusting the fair value of its interest rate swaps for the effect of nonperformance risk, the Company has considered any applicable credit enhancements such as collateral postings, thresholds, mutual puts, and guarantees. Although the Company determined that the majority of the inputs used to value its interest rate swaps fell within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its interest rate swaps utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of June 30, 2015 and December 31, 2014 , the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its interest rate swaps and determined that the credit valuation adjustment was not significant to the overall valuation of its interest rate swaps. As a result, the Company classified its interest rate swap valuations in Level 2 of the fair value hierarchy. See Note 5 - Derivatives and Hedging Activities for further discussion of the Company’s interest rate swaps. Mercury TRA The Mercury TRA is considered contingent consideration as it is part of the consideration payable to the former owners of Mercury. Such contingent consideration is measured at fair value and is based on significant inputs not observable in the market, which is classified in Level 3 of the fair value hierarchy. The Mercury TRA is recorded at fair value based on estimates of discounted future cash flows associated with the estimated payments to the Mercury TRA Holders. The significant unobservable inputs used in the fair value measurement of the Mercury TRA are the discount rate, projections of Mercury taxable income and effective tax rates for Mercury. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement. The liability recorded is re-measured at fair value at each reporting period with the change in fair value recognized in earnings as a non-operating expense. The Company recorded non-operating expenses of $6.7 million and $1.2 million related to the change in fair value during the three months ended June 30, 2015 and 2014, respectively. The Company recorded non-operating expenses of $13.7 million and $1.2 million related to the change in fair value during the six months ended June 30, 2015 and 2014, respectively. See Note 12 - Subsequent Event for discussion of the Repurchase Addendum to the Mercury TRA executed as of July 24, 2015 and Note 1 - Basis of Presentation and Summary of Significant Accounting Policies for further discussion of the Mercury TRA. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Basic net income per share is calculated by dividing net income attributable to Vantiv, Inc. by the weighted-average shares of Class A common stock outstanding during the period. Diluted net income per share is calculated assuming that Vantiv Holding is a wholly-owned subsidiary of Vantiv, Inc., therefore eliminating the impact of Fifth Third's non-controlling interest. Pursuant to the Exchange Agreement, the Class B units of Vantiv Holding ("Class B units"), which are held by Fifth Third and represent the non-controlling interest in Vantiv Holding, are convertible into shares of Class A common stock on a one -for-one basis. Based on this conversion feature, diluted net income per share is calculated assuming the conversion of the Class B units on an "if-converted" basis. Due to the Company's structure as a C corporation and Vantiv Holding's structure as a pass-through entity for tax purposes, the numerator in the calculation of diluted net income per share is adjusted accordingly to reflect the Company's income tax expense assuming the conversion of the Fifth Third non-controlling interest into Class A common stock. The adjusted effective tax rate used in the calculation was 36.0% for 2015 and 36.5% for 2014. As of June 30, 2015 and 2014, there were approximately 43.0 million Class B units outstanding. During the three and six months ended June 30, 2014, approximately 47.0 million and 47.9 million Class B units, respectively, of Vantiv Holding were excluded in computing diluted net income per share because including them would have an antidilutive effect. As the Class B units of Vantiv Holding were not included, the numerator used in the calculation of diluted net income per share was equal to the numerator used in the calculation of basic net income per share. Additionally, due to the net loss for the three months ended June 30, 2014, any remaining potentially dilutive securities were also excluded from the denominator in computing diluted net income per share. In addition to the Class B units discussed above, potentially dilutive securities during the three and six months ended June 30, 2015 and 2014 included restricted stock awards, the warrant held by Fifth Third which allows for the purchase of Class C units of Vantiv Holding, stock options and performance share awards. The shares of Class B common stock do not share in the earnings or losses of the Company and are therefore not participating securities. Accordingly, basic and diluted net income per share of Class B common stock has not been presented. The following table sets forth the computation of basic and diluted net income per share (in thousands, except share data): Three Months Ended Six Months Ended 2015 2014 2015 2014 Basic: Net income (loss) attributable to Vantiv, Inc. $ 36,536 $ (1,409 ) $ 55,525 $ 26,727 Shares used in computing basic net income (loss) per share: Weighted-average Class A common shares 145,566,899 140,451,466 145,051,664 139,346,292 Basic net income (loss) per share $ 0.25 $ (0.01 ) $ 0.38 $ 0.19 Diluted: Consolidated income before applicable income taxes $ 77,012 $ — $ 116,261 $ — Income tax expense excluding impact of non-controlling interest 27,724 — 41,854 — Net income (loss) attributable to Vantiv, Inc. $ 49,288 $ (1,409 ) $ 74,407 $ 26,727 Shares used in computing diluted net income (loss) per share: 0 Weighted-average Class A common shares 145,566,899 140,451,466 145,051,664 139,346,292 Weighted-average Class B units of Vantiv Holding 43,042,826 — 43,042,826 — Warrant 12,171,352 — 11,774,401 9,912,517 Restricted stock awards 506,059 — 856,272 1,459,091 Stock options 544,331 — 551,003 113,955 Diluted weighted-average shares outstanding 201,831,467 140,451,466 201,276,166 150,831,855 Diluted net income (loss) per share $ 0.24 $ (0.01 ) $ 0.37 $ 0.18 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The activity of the components of accumulated other comprehensive income (loss) related to cash flow hedging and other activities for the three months and six months ended June 30, 2015 and 2014 is presented below (in thousands): Total Other Comprehensive Income (Loss) AOCI Beginning Balance Pretax Activity Tax Effect Net Activity Attributable to non-controlling interests Attributable to Vantiv, Inc. AOCI Ending Balance Three months ended June 30, 2015 Net change in fair value recorded in accumulated OCI $ (10,782 ) $ (1,717 ) $ 502 $ (1,215 ) $ 391 $ (824 ) $ (11,606 ) Net realized loss reclassified into earnings (a) 2,231 1,252 (367 ) 885 (285 ) 600 2,831 Other (212 ) — — — — — (212 ) Net change $ (8,763 ) $ (465 ) $ 135 $ (330 ) $ 106 $ (224 ) $ (8,987 ) Three months ended June 30, 2014 Net change in fair value recorded in accumulated OCI $ (1,237 ) $ (6,234 ) $ 1,720 $ (4,514 ) $ 1,631 $ (2,883 ) $ (4,120 ) Net realized loss reclassified into earnings (a) 424 483 (139 ) 344 (110 ) 234 658 Other — 4 — 4 — 4 4 Net change $ (813 ) $ (5,747 ) $ 1,581 $ (4,166 ) $ 1,521 $ (2,645 ) $ (3,458 ) Six months ended June 30, 2015 Net change in fair value recorded in accumulated OCI $ (5,288 ) $ (13,152 ) $ 3,831 $ (9,321 ) $ 3,003 $ (6,318 ) $ (11,606 ) Net realized loss reclassified into earnings (a) 1,732 2,293 (672 ) 1,621 (522 ) 1,099 2,831 Other (212 ) — — — — — (212 ) Net change $ (3,768 ) $ (10,859 ) $ 3,159 $ (7,700 ) $ 2,481 $ (5,219 ) $ (8,987 ) Six months ended June 30, 2014 Net change in fair value recorded in accumulated OCI $ (5 ) $ (8,833 ) $ 2,425 $ (6,408 ) $ 2,293 $ (4,115 ) $ (4,120 ) Net realized loss reclassified into earnings (a) 269 818 (233 ) 585 (196 ) 389 658 Other — 4 — 4 — 4 4 Net change $ 264 $ (8,011 ) $ 2,192 $ (5,819 ) $ 2,097 $ (3,722 ) $ (3,458 ) (a) The reclassification adjustment on cash flow hedge derivatives affected the following lines in the accompanying consolidated statements of income: OCI Component Affected line in the accompanying consolidated statements of income Pretax activity(1) Interest expense-net Tax effect Income tax expense OCI Attributable to non-controlling interests Net income attributable to non-controlling interests (1) The three months and six months ended June 30, 2015 and 2014 reflect amounts of losses reclassified from AOCI into earnings, representing the effective portion of the hedging relationships, and is recorded in interest expense-net. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Segment operating results are presented below (in thousands). The results reflect revenues and expenses directly related to each segment. The Company does not evaluate performance or allocate resources based on segment asset data, and therefore such information is not presented. Segment profit reflects total revenue less network fees and other costs and sales and marketing costs of the segment. The Company’s CODM evaluates this metric in analyzing the results of operations for each segment. Three Months Ended June 30, 2015 Merchant Services Financial Institution Services Total Total revenue $ 661,258 $ 124,737 $ 785,995 Network fees and other costs 324,166 38,183 362,349 Sales and marketing 116,860 6,065 122,925 Segment profit $ 220,232 $ 80,489 $ 300,721 Three Months Ended June 30, 2014 Merchant Services Financial Institution Total Total revenue $ 488,143 $ 120,588 $ 608,731 Network fees and other costs 242,569 34,823 277,392 Sales and marketing 84,014 6,493 90,507 Segment profit $ 161,560 $ 79,272 $ 240,832 Six Months Ended June 30, 2015 Merchant Services Financial Institution Total Total revenue $ 1,247,970 $ 243,636 $ 1,491,606 Network fees and other costs 620,196 73,299 693,495 Sales and marketing 227,035 11,945 238,980 Segment profit $ 400,739 $ 158,392 $ 559,131 Six Months Ended June 30, 2014 Merchant Services Financial Institution Services Total Total revenue $ 906,909 $ 239,400 $ 1,146,309 Network fees and other costs 456,009 70,429 526,438 Sales and marketing 155,765 13,186 168,951 Segment profit $ 295,135 $ 155,785 $ 450,920 A reconciliation of total segment profit to the Company’s income before applicable income taxes is as follows (in thousands): Three Months Ended Six Months Ended 2015 2014 2015 2014 Total segment profit $ 300,721 $ 240,832 $ 559,131 $ 450,920 Less: Other operating costs (76,551 ) (56,754 ) (145,290 ) (117,123 ) Less: General and administrative (47,060 ) (48,552 ) (94,903 ) (81,158 ) Less: Depreciation and amortization (67,659 ) (89,041 ) (135,461 ) (138,887 ) Less: Interest expense—net (25,714 ) (13,496 ) (51,725 ) (24,050 ) Less: Non-operating expenses (6,725 ) (27,656 ) (15,491 ) (27,656 ) Income before applicable income taxes $ 77,012 $ 5,333 $ 116,261 $ 62,046 |
SUBSEQUENT EVENT (Notes)
SUBSEQUENT EVENT (Notes) | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENT As of July 24, 2015, the Company entered into a Repurchase Addendum to Tax Receivable Agreement (the “TRA Addendum”) with each of the Mercury TRA Holders. Pursuant to the terms of the TRA Addendum, the Company has terminated and settled in full a portion of its obligations under the Mercury TRA, in consideration for a cash payment of $44.8 million that was paid on a pro rata basis to the Mercury TRA Holders. Under the terms of the TRA Addendum, beginning December 1st of each of 2015, 2016, 2017, and 2018, and ending June 30th of 2016, 2017, 2018, and 2019, respectively, the Company is granted call options (collectively, the “Call Options”) pursuant to which certain additional obligations of the Company under the Mercury TRA would be terminated in consideration for cash payments of $41.4 million , $38.1 million , $38.0 million , and $43.0 million , respectively. Under the terms of the TRA Addendum, if the Company does not exercise the relevant Call Option, the Mercury TRA Holders are granted put options beginning July 10th and ending July 25th of each of 2016, 2017, 2018, and 2019, respectively (collectively, the “Put Options”), pursuant to which certain additional obligations of the Company would be terminated in consideration for cash payments with similar amounts to the Call Options. Except to the extent the Company’s obligations under the Mercury TRA have been terminated and settled in full in accordance with the terms of the TRA Addendum, the Mercury TRA will remain in effect, and the parties thereto will continue to have all rights and obligations thereunder. The Company’s President, Integrated Payments, is a Mercury TRA Holder. Pursuant to the initial payment under the TRA Addendum, this individual is entitled to receive an aggregate of $0.6 million , and could receive as much as an additional $2.2 million with respect to payments made pursuant to the TRA Addendum. |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Segments | Segments The Company’s segments consist of the Merchant Services segment and the Financial Institution Services segment. The Company’s Chief Executive Officer ("CEO"), who is the chief operating decision maker ("CODM"), evaluates the performance and allocates resources based on the operating results of each segment. Below is a summary of each segment: • Merchant Services —Provides merchant acquiring and payment processing services to large national merchants, regional and small-to-mid sized businesses. Merchant services are sold to small to large businesses through diverse distribution channels. Merchant Services includes all aspects of card processing including authorization and settlement, customer service, chargeback and retrieval processing and interchange management. • Financial Institution Services —Provides card issuer processing, payment network processing, fraud protection, card production, prepaid program management, automated teller machine ("ATM") driving and network gateway and switching services that utilize the Company’s proprietary Jeanie debit payment network to a diverse set of financial institutions, including regional banks, community banks, credit unions and regional personal identification number ("PIN") networks. Financial Institution Services also provides statement production, collections and inbound/outbound call centers for credit transactions, and other services such as credit card portfolio analytics, program strategy and support, fraud and security management and chargeback and dispute services. |
Principles of Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements include those of Vantiv, Inc. and all subsidiaries thereof, including its majority-owned subsidiary, Vantiv Holding, LLC. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and should be read in connection with the Company's 2014 audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K. The accompanying consolidated financial statements are unaudited; however, in the opinion of management they include all normal and recurring adjustments necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the periods presented. Results of operations reported for interim periods are not necessarily indicative of results for the entire year. All intercompany balances and transactions have been eliminated. As of June 30, 2015 , Vantiv, Inc. and Fifth Third Bank ("Fifth Third") owned interests in Vantiv Holding of 77.25% and 22.75% , respectively (see Note 6 - Controlling and Non-controlling Interests for changes in non-controlling interests). The Company accounts for non-controlling interests in accordance with Accounting Standards Codification ("ASC") 810, Consolidation . Non-controlling interests primarily represent Fifth Third's minority share of net income or loss of and equity in Vantiv Holding. Net income attributable to non-controlling interests does not include expenses incurred directly by Vantiv, Inc., including income tax expense attributable to Vantiv, Inc. All of the Company’s non-controlling interests are presented after Vantiv Holding income tax expense in the accompanying consolidated statements of income as "Net income attributable to non-controlling interests." Non-controlling interests are presented as a component of equity in the accompanying consolidated statements of financial position. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company has contractual agreements with its clients that set forth the general terms and conditions of the relationship including line item pricing, payment terms and contract duration. Revenues are recognized as earned (i.e., for transaction based fees, when the underlying transaction is processed) in conjunction with ASC 605, Revenue Recognition . ASC 605, Revenue Recognition , establishes guidance as to when revenue is realized or realizable and earned by using the following criteria: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the seller’s price is fixed or determinable; and (4) collectibility is reasonably assured. The Company follows guidance provided in ASC 605-45, Principal Agent Considerations . ASC 605-45, Principal Agent Considerations, which states that whether a company should recognize revenue based on the gross amount billed to a customer or the net amount retained is a matter of judgment that depends on the facts and circumstances of the arrangement and that certain factors should be considered in the evaluation. The Company recognizes processing revenues net of interchange fees, which are assessed to the Company’s merchant customers on all processed transactions. Interchange rates are not controlled by the Company, which effectively acts as a clearing house collecting and remitting interchange fee settlement on behalf of issuing banks, debit networks, credit card associations and its processing customers. All other revenue is reported on a gross basis, as the Company contracts directly with the end customer, assumes the risk of loss and has pricing flexibility. The Company generates revenue primarily by processing electronic payment transactions. Set forth below is a description of the Company’s revenue by segment. Merchant Services The Company’s Merchant Services segment revenue is primarily derived from processing credit and debit card transactions. Merchant Services revenue is primarily comprised of fees charged to businesses, net of interchange fees, for payment processing services, including authorization, capture, clearing, settlement and information reporting of electronic transactions. The fees charged consist of either a percentage of the dollar volume of the transaction or a fixed fee, or both, and are recognized at the time of the transaction. Merchant Services revenue also includes a number of revenue items that are incurred by the Company and are reimbursable as the costs are passed through to and paid by the Company’s clients. These items primarily consist of Visa, MasterCard and other payment network fees. In addition, for sales through ISOs and certain other referral sources in which the Company is the primary party to the contract with the merchant, the Company records the full amount of the fees collected from the merchant as revenue. Merchant Services segment revenue also includes revenue from ancillary services such as fraud management, equipment sales and terminal rent. Merchant Services revenue is recognized as services are performed. Financial Institution Services The Company’s Financial Institution Services segment revenues are primarily derived from debit, credit and ATM card transaction processing, ATM driving and support, and PIN debit processing services. Financial Institution Services revenue associated with processing transactions includes per transaction and account related fees, card production fees and fees generated from the Company’s Jeanie network. Financial Institution Services revenue related to card transaction processing is recognized when consumers use their client-issued cards to make purchases. Financial Institution Services also generates revenue through other services, including statement production, collections and inbound/outbound call centers for credit transactions and other services such as credit card portfolio analytics, program strategy and support, fraud and security management and chargeback and dispute services. Financial Institution Services revenue is recognized as services are performed. Financial Institution Services provides certain services to Fifth Third. Revenues related to these services are included in the accompanying statements of income as related party revenues. |
Expenses | Expenses Set forth below is a brief description of the components of the Company’s expenses: • Network fees and other costs primarily consist of certain expenses incurred by the Company in connection with providing processing services to its clients which are passed through to its clients, including Visa and MasterCard network association fees, payment network fees, third party processing fees, telecommunication charges, postage and card production costs. • Sales and marketing expense primarily consists of salaries and benefits paid to sales personnel, sales management and other sales and marketing personnel, residual payments made to ISOs and referral partners, and advertising and promotional costs. • Other operating costs primarily consist of salaries and benefits paid to operational and IT personnel, costs associated with operating the Company’s technology platform and data centers, information technology costs for processing transactions, product development costs, software consulting fees and maintenance costs. • General and administrative expenses primarily consist of salaries and benefits paid to executive management and administrative employees, including finance, human resources, product development, legal and risk management, share-based compensation costs, equipment and occupancy costs and consulting costs. • Non-operating expenses during the three months and six months ended June 30, 2015 primarily relate to the change in fair value of a tax receivable agreement ("TRA") entered into in June 2014 (see Note 8 - Fair Value Measurements). The amounts for the three months and six months ended June 30, 2014 relate to the refinancing of the Company's senior secured credit facilities in June 2014 and the change in fair value of a TRA entered into in June 2014. |
Share-Based Compensation | Share-Based Compensation The Company expenses employee share-based payments under ASC 718, Compensation—Stock Compensation , which requires compensation cost for the grant-date fair value of share-based payments to be recognized over the requisite service period. The Company estimates the grant date fair value of the share-based awards issued in the form of options using the Black-Scholes option pricing model. The fair value of restricted stock awards and performance awards is measured based on the market price of the Company’s stock on the grant date. For the six months ended June 30, 2015 and 2014 total share-based compensation expense was $16.7 million and $20.0 million , respectively. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income attributable to Vantiv, Inc. by the weighted average shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to Vantiv, Inc., adjusted as necessary for the impact of potentially dilutive securities, by the weighted-average shares outstanding during the period and the impact of securities that would have a dilutive effect on earnings per share. See Note 9 - Net Income Per Share for further discussion. |
Stockholders' Equity, Policy [Policy Text Block] | Dividend Restrictions The Company does not intend to pay cash dividends on its Class A common stock in the foreseeable future. Vantiv, Inc. is a holding company that does not conduct any business operations of its own. As a result, Vantiv, Inc.’s ability to pay cash dividends on its common stock, if any, is dependent upon cash dividends and distributions and other transfers from Vantiv Holding, which are subject to certain Fifth Third consent rights in the Amended and Restated Vantiv Holding Limited Liability Company Agreement. These consent rights require the approval of Fifth Third for certain significant matters, including the payment of all distributions by Vantiv Holding other than certain permitted distributions, which relate primarily to the payment of tax distributions and tax-related obligations. The amounts available to Vantiv, Inc. to pay cash dividends are also subject to the covenants and distribution restrictions in its subsidiaries’ loan agreements. As a result of the restrictions on distributions from Vantiv Holding and its subsidiaries, essentially all of the Company's consolidated net assets are held at the subsidiary level and are restricted as of June 30, 2015. |
Income Taxes | Income Taxes Vantiv, Inc. is taxed as a C corporation for U.S. income tax purposes and is therefore subject to both federal and state taxation at a corporate level. Income taxes are computed in accordance with ASC 740, Income Taxes , and reflect the net tax effects of temporary differences between the financial reporting carrying amounts of assets and liabilities and the corresponding income tax amounts. The Company has deferred tax assets and liabilities and maintains valuation allowances where it is more likely than not that all or a portion of deferred tax assets will not be realized. To the extent the Company determines that it will not realize the benefit of some or all of its deferred tax assets, such deferred tax assets will be adjusted through the Company’s provision for income taxes in the period in which this determination is made. As of June 30, 2015 and December 31, 2014 , the Company had recorded no valuation allowances against deferred tax assets. The Company's consolidated interim effective tax rate is based upon expected annual income from operations, statutory tax rates and tax laws in the various jurisdictions in which the Company operates. Significant or unusual items, including adjustments to accruals for tax uncertainties, are recognized in the quarter in which the related event occurs. The Company's effective tax rates were 31.5% and 28.4% , respectively, for the six months ended June 30, 2015 and 2014. The effective tax rate for each period reflects the impact of the Company's non-controlling interests. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash on hand and investments with original maturities of three months or less (that are readily convertible to cash) are considered to be cash equivalents. Cash equivalents consist primarily of overnight EuroDollar sweep accounts which are maintained at reputable financial institutions with high credit quality and therefore are considered to bear minimal credit risk. |
Accounts Receivable—net | Accounts Receivable—net Accounts receivable primarily represent processing revenues earned but not collected. For a majority of its customers, the Company has the authority to debit the client’s bank accounts through the Federal Reserve’s Automated Clearing House; as such, collectibility is reasonably assured. The Company records a reserve for doubtful accounts when it is probable that the accounts receivable will not be collected. The Company reviews historical loss experience and the financial position of its customers when estimating the allowance. As of June 30, 2015 and December 31, 2014 , the allowance for doubtful accounts was not material to the Company’s statements of financial position. |
Customer Incentives | Customer Incentives Customer incentives represent signing bonuses paid to customers. Customer incentives are paid in connection with the acquisition or renewal of customer contracts, and are therefore deferred and amortized using the straight-line method based on the contractual agreement. Related amortization is recorded as contra-revenue. |
Property and Equipment—net | Property, Equipment and Software—net Property, equipment and software consists of the Company’s facilities, furniture and equipment, software, land and leasehold improvements. These assets are depreciated on a straight-line basis over their respective useful lives, which are 15 to 40 years for the Company’s facilities and related improvements, 2 to 10 years for furniture and equipment, 3 to 5 years for software and 3 to 10 years for leasehold improvements or the lesser of the estimated useful life of the improvement or the term of lease. Also included in property, equipment and software is work in progress consisting of costs associated with software developed for internal use which has not yet been placed in service. Accumulated depreciation as of June 30, 2015 and December 31, 2014 was $224.5 million and $202.8 million , respectively. The Company capitalizes certain costs related to computer software developed for internal use and amortizes such costs on a straight-line basis over an estimated useful life of 3 to 5 years. Research and development costs incurred prior to establishing technological feasibility are charged to operations as such costs are incurred. Once technological feasibility has been established, costs are capitalized until the software is placed in service. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets In accordance with ASC 350, Intangibles—Goodwill and Other , the Company tests goodwill for impairment for each reporting unit on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that fair value of the goodwill within the reporting unit is less than its carrying value. The Company performed its most recent annual goodwill impairment test for all reporting units as of July 31, 2014 using market data and discounted cash flow analyses. Based on this analysis, it was determined that the fair value of all reporting units were substantially in excess of the carrying value. There have been no other events or changes in circumstances subsequent to the testing date that would indicate impairment of these reporting units as of June 30, 2015 . Intangible assets consist of acquired customer relationships, trade names and customer portfolios and related assets that are amortized over their estimated useful lives. The Company reviews finite lived intangible assets for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. As of June 30, 2015 , there have been no such events or circumstances that would indicate potential impairment of finite lived intangible assets. Subsequent to the Mercury acquisition in June 2014, the Company decided to phase out an existing trade name used in the ISO channel within the Merchant Services segment. As a result of this decision, the remaining useful life was changed from indefinite to definite which resulted in the Company recording a charge to amortization expense of $34.3 million during the quarter ended June 30, 2014. |
Settlement Assets and Obligations | Settlement Assets and Obligations Settlement assets and obligations result from Financial Institution Services when funds are transferred from or received by the Company prior to receiving or paying funds to a different entity. This timing difference results in a settlement asset or obligation. The amounts are generally collected or paid the following business day. The settlement assets and obligations recorded by Merchant Services represent intermediary balances due to differences between the amount the Sponsoring Member receives from the card associations and the amount funded to the merchants. Such differences arise from timing differences, interchange expenses, merchant reserves and exception items. In addition, certain card associations limit the Company from accessing or controlling merchant settlement funds and, instead, require that these funds be controlled by the Sponsoring Member. The Company follows a net settlement process whereby, if the settlement received from the card associations precedes the funding obligation to the merchant, the Company temporarily records a corresponding liability. Conversely, if the funding obligation to the merchant precedes the settlement from the card associations, the amount of the net receivable position is recorded by the Company, or in some cases, the Sponsoring Member may cover the position with its own funds in which case a receivable position is not recorded by the Company. |
Derivatives | Derivatives The Company accounts for derivatives in accordance with ASC 815, Derivatives and Hedging . This guidance establishes accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. All derivatives, whether designated in hedging relationships or not, are required to be recorded on the statement of financial position at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and the hedged item will be recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portion of the change in the fair value of the derivative will be recorded in accumulated other comprehensive income ("AOCI") and will be recognized in the statement of income when the hedged item affects earnings. The Company does not enter into derivative financial instruments for speculative purposes. |
Tax Receivable Agreements, Policy [Policy Text Block] | Tax Receivable Agreements As of June 30, 2015, the Company is party to tax receivable agreements ("TRAs") with Fifth Third, which were executed in connection with its initial public offering ("IPO"). One provides for the payment by the Company to Fifth Third of 85% of the amount of cash savings, if any, in U.S. federal, state, local and foreign income tax that the Company actually realizes as a result of the increases in tax basis that may result from the purchase of Vantiv Holding units from Fifth Third or from the future exchange of units by Fifth Third for cash or shares of the Company's Class A common stock, as well as the tax benefits attributable to payments made under such tax receivable agreement. Any actual increase in tax basis, as well as the amount and timing of any payments under the agreement, will vary depending upon a number of factors, including the timing of exchanges, the price of shares of our Class A common stock at the time of the exchange, the extent to which such exchanges are taxable, and the amount and timing of the Company's income. The other tax receivable agreement provides for the payment by the Company to Fifth Third of 85% of the amount of cash savings according to Fifth Third's respective ownership interests in Vantiv Holding immediately prior to our initial public offering, if any, in U.S. federal, state, local and foreign income tax that National Processing Company ("NPC") actually realizes as a result of its use of its net operating losses ("NOLs") and other tax attributes. Simultaneously and in connection with the completion of the acquisition of Mercury Payment Systems, LLC ("Mercury"), the Company entered into a TRA (the "Mercury TRA") with pre-acquisition owners of Mercury (the "Mercury TRA Holders"). The Mercury TRA generally provides for the payment by the Company to the Mercury TRA Holders of 85% of the value of the amount of cash savings, if any, in U.S. federal, state, local and foreign income tax that the Company actually realizes as a result of the increase in tax basis of the assets of Mercury and the use of the NOLs and other tax attributes of Mercury. The Mercury TRA is considered contingent consideration under ASC 805, Business Combinations ("ASC 805") as it is part of the consideration payable to the former owners of Mercury. In accordance with ASC 805, the contingent consideration is initially measured at fair value at the acquisition date and recorded as a liability. The Mercury TRA liability is therefore recorded at fair value based on estimates of discounted future cash flows associated with estimated payments to the Mercury TRA Holders. The liability recorded by the Company for the Mercury TRA obligations will be re-measured at fair value at each reporting date with the change in fair value recognized in earnings as a non-operating expense. All TRA obligations are recorded based on the full and undiscounted amount of the expected future payments, except for the Mercury TRA which represents contingent consideration relating to an acquired business, and is recorded at fair value for financial reporting purposes (See Note 8 - Fair Value Measurements). Payments under each of the TRAs discussed above are required to the extent the Company realizes cash savings as a result of the underlying tax attributes. The cash savings realized by the Company are computed by comparing the Company's actual income tax liability to the amount of such taxes the Company would have been required to pay had there been no deductions related to the tax attributes discussed above. The Company retains the benefit of the remaining 15% of these tax savings. The timing and/or amount of aggregate payments due under the TRAs may vary based on a number of factors, including the amount and timing of the taxable income the Company generates in the future and the tax rate then applicable, the use of loss carryovers and amortizable basis. Payments under the TRAs, if necessary, are required to be made no later than January 5th of the second year immediately following the current taxable year. A payment under the TRA obligations of approximately $22.8 million was paid during January 2015. The term of the TRAs will continue until all such tax benefits have been utilized or expired, unless we exercise our right to terminate the TRAs for an amount based on the agreed payments remaining to be made under the agreements. See Note 12 - Subsequent Event for discussion of the Repurchase Addendum to the Mercury TRA executed as of July 24, 2015. |
New Accounting Pronouncements | New Accounting Pronouncements In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Amortization of the costs will continue to be reported as interest expense. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted for financial statements that have not been previously issued. The Company does not expect the new guidance to have a material impact on the Company's consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, "Revenue From Contracts With Customers." The ASU supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . The amendment provides a five-step analysis of transactions to determine when and how revenue is recognized, based upon the core principal that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment also requires additional disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption prohibited. The amendment allows companies to use either a full retrospective or a modified retrospective approach to adopt this ASU. In July 2015, the FASB confirmed its decision to defer the effective date of this standard by one year, which makes the standard effective beginning after December 15, 2017. The Company is currently evaluating which transition approach to use and assessing the impact of the adoption of this principle on the Company's consolidated financial statements. |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) - Mercury Payment Systems, LLC | 6 Months Ended |
Jun. 30, 2015 | |
Business Acquisition [Line Items] | |
Schedule of recognized identified assets acquired and liabilities assumed | The final purchase price allocation is as follows (in thousands): Cash acquired $ 22,485 Current assets 47,421 Property, equipment and software 32,257 Intangible assets 347,000 Goodwill 1,422,916 Deferred tax assets 43,054 Other non-current assets 767 Current and non-current liabilities (42,214 ) Total purchase price $ 1,873,686 |
Business Acquisition, Pro Forma Information [Table Text Block] | The following pro forma information shows the Company’s results of operations for the three months and six months ended June 30, 2014 as if the Mercury acquisition had occurred January 1, 2013. The pro forma information is presented for informational purposes only and is not necessarily indicative of what would have occurred if the acquisition had been made as of that date, nor is it intended to be indicative of future operating results. Three Months Ended Six Months Ended (Pro forma) (Pro forma) (in thousands, except share data) Total revenue $ 689,861 $ 1,306,129 Income from operations 55,565 121,807 Net income including non-controlling interests 18,811 50,211 Net income attributable to Vantiv, Inc. 10,125 31,065 Net income per share attributable to Vantiv, Inc. Class A common stock: Basic $ 0.07 $ 0.22 Diluted $ 0.07 $ 0.21 Shares used in computing net income per share of Class A common stock: Basic 140,451,466 139,346,292 Diluted 151,524,278 150,831,855 The pro forma results include certain pro forma adjustments that were directly attributable to the business combination as follows: • additional amortization expense that would have been recognized relating to the acquired intangible assets, • an adjustment of interest expense to reflect the additional borrowings of the Company in conjunction with the acquisition and removal of Mercury historical debt |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Changes in the carrying amount of goodwill, by business segment, are as follows (in thousands): Merchant Services Financial Institution Services Total Balance as of December 31, 2014 $ 2,716,516 $ 574,850 $ 3,291,366 Goodwill attributable to acquisition of Mercury (1) 75,162 — 75,162 Balance as of June 30, 2015 $ 2,791,678 $ 574,850 $ 3,366,528 (1) Amount represents adjustments to goodwill associated with the acquisition of Mercury as a result of the finalization of purchase accounting. |
Schedule of intangible assets | As of June 30, 2015 and December 31, 2014 , the Company's intangible assets consisted of the following (in thousands): June 30, December 31, Customer relationship intangible assets $ 1,596,581 $ 1,596,581 Trade names - finite lived 21,733 65,833 Customer portfolios and related assets 125,507 57,383 1,743,821 1,719,797 Less accumulated amortization on: Customer relationship intangible assets 739,860 655,017 Trade names - finite lived 9,667 5,105 Customer portfolios and related assets 34,357 24,983 783,884 685,105 $ 959,937 $ 1,034,692 |
Schedule of expected amortization expense | The estimated amortization expense of intangible assets for the next five years is as follows (in thousands): Six months ending December 31, 2015 $ 100,755 2016 190,415 2017 170,202 2018 161,472 2019 153,530 2020 81,470 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Company's debt | As of June 30, 2015 and December 31, 2014 , the Company’s debt consisted of the following: June 30, December 31, (in thousands) $2,050.0 million term A loan, maturing on June 13, 2019, and bearing interest at a variable base rate (LIBOR) plus a spread rate (200 basis points) (total rate of 2.19% at June 30, 2015) and amortizing on a basis of 1.25% per quarter during each of the first twelve quarters, 1.875% per quarter during the next four quarters and 2.50% during the next three quarters with a balloon payment due at maturity $ 1,947,500 $ 1,998,750 $1,400.0 million term B loan, maturing on June 13, 2021, and bearing interest at a variable base rate (LIBOR) with a floor of 75 basis points plus a spread rate (300 basis points) (total rate of 3.75% at June 30, 2015) and amortizing on a basis of 0.25% per quarter, with a balloon payment due at maturity 1,186,000 1,393,000 $10.1 million leasehold mortgage, expiring on August 10, 2021 and bearing interest payable monthly at a fixed rate (rate of 6.22% at June 30, 2015) 10,131 10,131 Less: Current portion of note payable and current portion of note payable to related party (116,501 ) (116,501 ) Less: Original issue discount (6,650 ) (8,143 ) Note payable and note payable to related party $ 3,020,480 $ 3,277,237 |
DERIVATIVES AND HEDGING ACTIV25
DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of derivative instruments | The table below presents the fair value of the Company’s derivative financial instruments designated as cash flow hedges included within the accompanying consolidated statements of financial position (in thousands): Consolidated Statement of June 30, 2015 December 31, 2014 Interest rate swaps Other long-term assets $ — $ 104 Interest rate swaps Other current liabilities 8,062 5,205 Interest rate swaps Other long-term liabilities 10,180 2,283 |
Schedule of effect of the Company's interest rate swaps on the consolidated statements of income | The table below presents the effect of the Company’s interest rate swaps on the accompanying consolidated statements of income for the three months and six months ended June 30, 2015 and 2014 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Derivatives in cash flow hedging relationships: Amount of gain (loss) recognized in OCI (effective portion) (1) $ (1,717 ) $ (6,234 ) $ (13,152 ) $ (8,833 ) Amount of gain (loss) reclassified from accumulated OCI into earnings (effective portion) (1,252 ) (483 ) (2,293 ) (818 ) Amount of gain (loss) recognized in earnings (2) 1 156 — (2 ) (1) "OCI" represents other comprehensive income. (2) Amount represents hedge ineffectiveness and is recorded as a component of interest expense-net in the accompanying consolidated statement of income. |
CONTROLLING AND NON-CONTROLLI26
CONTROLLING AND NON-CONTROLLING INTERESTS IN VANTIV HOLDING (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Noncontrolling Interest [Abstract] | |
Schedule of changes in units and related ownership interest | Changes in units and related ownership interest in Vantiv Holding are summarized as follows: Vantiv, Inc. Fifth Third Total As of December 31, 2014 145,455,008 43,042,826 188,497,834 % of ownership 77.17 % 22.83 % Equity plan activity (a) 723,985 — 723,985 As of June 30, 2015 146,178,993 43,042,826 189,221,819 % of ownership 77.25 % 22.75 % (a) Includes stock issued under the equity plans less Class A common stock withheld to satisfy employee tax withholding obligations upon vesting or exercise of employee equity awards and forfeitures of restricted Class A common stock awards. |
Schedule of reconciliation of net income (loss) attributable to non-controlling interest | The table below provides a reconciliation of net income attributable to non-controlling interests based on relative ownership interests as discussed above (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net income $ 52,693 $ 3,313 $ 79,689 $ 44,404 Items not allocable to non-controlling interests: Vantiv, Inc. expenses (a) 12,587 10,621 20,397 19,814 Vantiv Holding net income $ 65,280 $ 13,934 $ 100,086 $ 64,218 Net income attributable to non-controlling interests of Fifth Third (b) $ 14,468 $ 4,421 $ 22,371 $ 17,376 Net income attributable to PUMS non-controlling interest (c) 1,689 301 1,793 301 Total net income attributable to non-controlling interests $ 16,157 $ 4,722 $ 24,164 $ 17,677 (a) Primarily represents income tax expense related to Vantiv, Inc. (b) Net income attributable to non-controlling interests of Fifth Third reflects the allocation of Vantiv Holding’s net income based on the proportionate ownership interests in Vantiv Holding held by the non-controlling unit holders. The net income attributable to non-controlling unit holders reflects the changes in ownership interests summarized in the table above. (c) Reflects net income attributable to the non-controlling interest of PUMS. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on recurring basis | The following table summarizes assets and liabilities measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014 (in thousands): June 30, 2015 December 31, 2014 Fair Value Measurements Using Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets: Interest rate swaps $ — $ — $ — $ — $ 104 $ — Liabilities: Interest rate swaps $ — $ 18,242 $ — $ — $ 7,488 $ — Mercury TRA — — 220,800 — — 152,420 |
Schedule of carrying amounts and estimated fair values for assets and liabilities, excluding assets and liabilities measured at fair value on a recurring basis | The following table summarizes carrying amounts and estimated fair values for financial assets and liabilities, excluding assets and liabilities measured at fair value on a recurring basis, as of June 30, 2015 and December 31, 2014 (in thousands): June 30, 2015 December 31, 2014 Carrying Fair Value Carrying Fair Value Liabilities: Note payable $ 3,136,981 $ 3,130,440 $ 3,393,738 $ 3,310,181 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted net income per share | The following table sets forth the computation of basic and diluted net income per share (in thousands, except share data): Three Months Ended Six Months Ended 2015 2014 2015 2014 Basic: Net income (loss) attributable to Vantiv, Inc. $ 36,536 $ (1,409 ) $ 55,525 $ 26,727 Shares used in computing basic net income (loss) per share: Weighted-average Class A common shares 145,566,899 140,451,466 145,051,664 139,346,292 Basic net income (loss) per share $ 0.25 $ (0.01 ) $ 0.38 $ 0.19 Diluted: Consolidated income before applicable income taxes $ 77,012 $ — $ 116,261 $ — Income tax expense excluding impact of non-controlling interest 27,724 — 41,854 — Net income (loss) attributable to Vantiv, Inc. $ 49,288 $ (1,409 ) $ 74,407 $ 26,727 Shares used in computing diluted net income (loss) per share: 0 Weighted-average Class A common shares 145,566,899 140,451,466 145,051,664 139,346,292 Weighted-average Class B units of Vantiv Holding 43,042,826 — 43,042,826 — Warrant 12,171,352 — 11,774,401 9,912,517 Restricted stock awards 506,059 — 856,272 1,459,091 Stock options 544,331 — 551,003 113,955 Diluted weighted-average shares outstanding 201,831,467 140,451,466 201,276,166 150,831,855 Diluted net income (loss) per share $ 0.24 $ (0.01 ) $ 0.37 $ 0.18 |
ACCUMULATED OTHER COMPREHENSI29
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of activity of the components of accumulated other comprehensive income (loss) | The activity of the components of accumulated other comprehensive income (loss) related to cash flow hedging and other activities for the three months and six months ended June 30, 2015 and 2014 is presented below (in thousands): Total Other Comprehensive Income (Loss) AOCI Beginning Balance Pretax Activity Tax Effect Net Activity Attributable to non-controlling interests Attributable to Vantiv, Inc. AOCI Ending Balance Three months ended June 30, 2015 Net change in fair value recorded in accumulated OCI $ (10,782 ) $ (1,717 ) $ 502 $ (1,215 ) $ 391 $ (824 ) $ (11,606 ) Net realized loss reclassified into earnings (a) 2,231 1,252 (367 ) 885 (285 ) 600 2,831 Other (212 ) — — — — — (212 ) Net change $ (8,763 ) $ (465 ) $ 135 $ (330 ) $ 106 $ (224 ) $ (8,987 ) Three months ended June 30, 2014 Net change in fair value recorded in accumulated OCI $ (1,237 ) $ (6,234 ) $ 1,720 $ (4,514 ) $ 1,631 $ (2,883 ) $ (4,120 ) Net realized loss reclassified into earnings (a) 424 483 (139 ) 344 (110 ) 234 658 Other — 4 — 4 — 4 4 Net change $ (813 ) $ (5,747 ) $ 1,581 $ (4,166 ) $ 1,521 $ (2,645 ) $ (3,458 ) Six months ended June 30, 2015 Net change in fair value recorded in accumulated OCI $ (5,288 ) $ (13,152 ) $ 3,831 $ (9,321 ) $ 3,003 $ (6,318 ) $ (11,606 ) Net realized loss reclassified into earnings (a) 1,732 2,293 (672 ) 1,621 (522 ) 1,099 2,831 Other (212 ) — — — — — (212 ) Net change $ (3,768 ) $ (10,859 ) $ 3,159 $ (7,700 ) $ 2,481 $ (5,219 ) $ (8,987 ) Six months ended June 30, 2014 Net change in fair value recorded in accumulated OCI $ (5 ) $ (8,833 ) $ 2,425 $ (6,408 ) $ 2,293 $ (4,115 ) $ (4,120 ) Net realized loss reclassified into earnings (a) 269 818 (233 ) 585 (196 ) 389 658 Other — 4 — 4 — 4 4 Net change $ 264 $ (8,011 ) $ 2,192 $ (5,819 ) $ 2,097 $ (3,722 ) $ (3,458 ) (a) The reclassification adjustment on cash flow hedge derivatives affected the following lines in the accompanying consolidated statements of income: OCI Component Affected line in the accompanying consolidated statements of income Pretax activity(1) Interest expense-net Tax effect Income tax expense OCI Attributable to non-controlling interests Net income attributable to non-controlling interests (1) The three months and six months ended June 30, 2015 and 2014 reflect amounts of losses reclassified from AOCI into earnings, representing the effective portion of the hedging relationships, and is recorded in interest expense-net. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of results of operations for each segment | Segment profit reflects total revenue less network fees and other costs and sales and marketing costs of the segment. The Company’s CODM evaluates this metric in analyzing the results of operations for each segment. Three Months Ended June 30, 2015 Merchant Services Financial Institution Services Total Total revenue $ 661,258 $ 124,737 $ 785,995 Network fees and other costs 324,166 38,183 362,349 Sales and marketing 116,860 6,065 122,925 Segment profit $ 220,232 $ 80,489 $ 300,721 Three Months Ended June 30, 2014 Merchant Services Financial Institution Total Total revenue $ 488,143 $ 120,588 $ 608,731 Network fees and other costs 242,569 34,823 277,392 Sales and marketing 84,014 6,493 90,507 Segment profit $ 161,560 $ 79,272 $ 240,832 Six Months Ended June 30, 2015 Merchant Services Financial Institution Total Total revenue $ 1,247,970 $ 243,636 $ 1,491,606 Network fees and other costs 620,196 73,299 693,495 Sales and marketing 227,035 11,945 238,980 Segment profit $ 400,739 $ 158,392 $ 559,131 Six Months Ended June 30, 2014 Merchant Services Financial Institution Services Total Total revenue $ 906,909 $ 239,400 $ 1,146,309 Network fees and other costs 456,009 70,429 526,438 Sales and marketing 155,765 13,186 168,951 Segment profit $ 295,135 $ 155,785 $ 450,920 |
Schedule of reconciliation of total segment profit to the company's income before applicable income taxes | A reconciliation of total segment profit to the Company’s income before applicable income taxes is as follows (in thousands): Three Months Ended Six Months Ended 2015 2014 2015 2014 Total segment profit $ 300,721 $ 240,832 $ 559,131 $ 450,920 Less: Other operating costs (76,551 ) (56,754 ) (145,290 ) (117,123 ) Less: General and administrative (47,060 ) (48,552 ) (94,903 ) (81,158 ) Less: Depreciation and amortization (67,659 ) (89,041 ) (135,461 ) (138,887 ) Less: Interest expense—net (25,714 ) (13,496 ) (51,725 ) (24,050 ) Less: Non-operating expenses (6,725 ) (27,656 ) (15,491 ) (27,656 ) Income before applicable income taxes $ 77,012 $ 5,333 $ 116,261 $ 62,046 |
BASIS OF PRESENTATION AND SUM31
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Jun. 30, 2009 | Jun. 30, 2015 | Dec. 31, 2014 | Feb. 12, 2014 | |
Sponsorship agreement | ||||
Sponsorship agreement term | 10 years | |||
Vantiv Holding | ||||
Nature of Business [Line Items] | ||||
Ownership percentage by parent | 77.25% | 77.17% | ||
Fifth Third | Vantiv Holding | ||||
Nature of Business [Line Items] | ||||
Ownership percentage by noncontrolling owners | 22.75% | 22.83% | ||
February 2014 Authorized Share Repurchase Program [Member] | ||||
Nature of Business [Line Items] | ||||
Stock Repurchase Program, Authorized Amount | $ 300 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 275 |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES Share-Based Compensation (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation [Abstract] | ||
Allocated Share-based Compensation Expense | $ 16.7 | $ 20 |
SUMMARY OF SIGNIFICANT ACCOUN33
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES Income Taxes (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Income Taxes [Abstract] | |||
Deferred Tax Assets, Valuation Allowance | $ 0 | $ 0 | |
Effective Income Tax Rate Reconciliation, Percent | 31.50% | 28.40% |
SUMMARY OF SIGNIFICANT ACCOUN34
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES Property, Equipment and Software- net (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 224.5 | $ 202.8 |
Building and improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 15 years | |
Building and improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 40 years | |
Furniture and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 2 years | |
Furniture and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 10 years | |
Software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 10 years | |
Software development | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Software development | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN35
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Goodwill and Intangible Assets [Abstract] | ||
Write-off of intangible asset | $ 0 | $ 34,267 |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES Tax Receivable Agreements (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Tax receivable agreement | ||
Tax Receivable Agreement, Cash Savings Percent | 15.00% | |
Payments Under Tax Receivable Agreements | $ 22,805 | $ 8,639 |
Fifth Third | ||
Tax receivable agreement | ||
Payments to pre-IPO investors as percentage of cash saving in income tax | 85.00% | |
Mercury Payment Systems, LLC | ||
Tax receivable agreement | ||
Tax Receivable Agreement Payments as Percentage of Cash Savings in Tax | 85.00% |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands | Jun. 13, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 |
Business Acquisition [Line Items] | ||||
Contingent consideration for issuance of tax receivable agreement | $ 0 | $ 137,120 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Goodwill | $ 3,366,528 | $ 3,291,366 | ||
Mercury Payment Systems, LLC | ||||
Business Acquisition [Line Items] | ||||
Payments to Acquire Businesses, Gross | $ 1,681,179 | |||
Contingent consideration for issuance of tax receivable agreement | 192,507 | |||
Business Combination, Consideration Transferred | 1,873,686 | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Cash acquired | 22,485 | |||
Current assets | 47,421 | |||
Property and equipment | 32,257 | |||
Intangible assets | 347,000 | |||
Goodwill | 1,422,916 | |||
Deferred tax assets | 43,054 | |||
Non-current assets | 767 | |||
Current and non-current liabilities | (42,214) | |||
Total purchase price | $ 1,873,686 | |||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |||
Trade names - finite lived | Mercury Payment Systems, LLC | ||||
Business Acquisition [Line Items] | ||||
Finite-lived Intangible Assets Acquired | $ 15,000 | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years 6 months | |||
Trade names - finite lived | Previously Reported | Mercury Payment Systems, LLC | ||||
Business Acquisition [Line Items] | ||||
Finite-lived Intangible Assets Acquired | $ 59,100 | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years 6 months |
BUSINESS COMBINATIONS Pro Forma
BUSINESS COMBINATIONS Pro Forma (Details) - Jun. 30, 2014 - USD ($) $ / shares in Units, $ in Thousands | Total | Total |
Business Acquisition [Line Items] | ||
Business Acquisition, Pro Forma Revenue | $ 689,861 | $ 1,306,129 |
Business Acquisition, Pro Forma Income (Loss) from Continuing Operations before Changes in Accounting and Extraordinary Items, Net of Tax | 55,565 | 121,807 |
Business Acquisition Pro forma Net Income Loss Including Portion Attributable To Noncontrolling Interest | 18,811 | 50,211 |
Business Acquisition, Pro Forma Net Income (Loss) | $ 10,125 | $ 31,065 |
Net income per share attributable to Vantiv, Inc. Class A common stock [Abstract] | ||
Business Acquisition, Pro Forma Earnings Per Share, Basic (in dollars per share) | $ 0.07 | $ 0.22 |
Business Acquisition, Pro Forma Earnings Per Share, Diluted (in dollars per share) | $ 0.07 | $ 0.21 |
Shares used in computing net income per share of Class A common stock [Abstract] | ||
Pro Forma Weighted Average Shares Outstanding, Basic (in shares) | 140,451,466 | 139,346,292 |
Pro Forma Weighted Average Shares Outstanding, Diluted (in shares) | 151,524,278 | 150,831,855 |
GOODWILL AND INTANGIBLE ASSET39
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Goodwill [Roll Forward] | |
Goodwill at beginning of period | $ 3,291,366 |
Goodwill at end of period | 3,366,528 |
Merchant Services | |
Goodwill [Roll Forward] | |
Goodwill at beginning of period | 2,716,516 |
Goodwill at end of period | 2,791,678 |
Financial Institution Services | |
Goodwill [Roll Forward] | |
Goodwill at beginning of period | 574,850 |
Goodwill at end of period | 574,850 |
Mercury Payment Systems, LLC | |
Goodwill [Roll Forward] | |
Goodwill attributable to acquisition | 75,162 |
Mercury Payment Systems, LLC | Merchant Services | |
Goodwill [Roll Forward] | |
Goodwill attributable to acquisition | 75,162 |
Mercury Payment Systems, LLC | Financial Institution Services | |
Goodwill [Roll Forward] | |
Goodwill attributable to acquisition | $ 0 |
GOODWILL AND INTANGIBLE ASSET40
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||||||
Finite-Lived Intangible Assets, Gross | $ 1,743,821 | $ 1,743,821 | $ 1,719,797 | |||
Finite-Lived Intangible Assets, Accumulated Amortization | 783,884 | 783,884 | 685,105 | |||
Intangible assets—net | 959,937 | 959,937 | 1,034,692 | |||
Write-off of intangible asset | 0 | $ 34,267 | ||||
Finite-Lived Trade Names, Gross | $ 6,700 | $ 6,700 | 6,700 | |||
Finite-Lived Intangible Assets, Remaining Amortization Period | 2 years | |||||
Amortization expense on intangible assets | 49,600 | $ 71,600 | 98,800 | $ 105,000 | ||
Estimated amortization expense of intangible assets for the next five years | ||||||
Six months ending December 31, 2015 | 100,755 | 100,755 | ||||
2,016 | 190,415 | 190,415 | ||||
2,017 | 170,202 | 170,202 | ||||
2,018 | 161,472 | 161,472 | ||||
2,019 | 153,530 | 153,530 | ||||
2,020 | 81,470 | 81,470 | ||||
Customer relationship intangible assets | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Finite-Lived Intangible Assets, Gross | 1,596,581 | 1,596,581 | 1,596,581 | |||
Finite-Lived Intangible Assets, Accumulated Amortization | 739,860 | 739,860 | 655,017 | |||
Trade names - finite lived | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Finite-Lived Intangible Assets, Gross | 21,733 | 21,733 | 65,833 | |||
Finite-Lived Intangible Assets, Accumulated Amortization | 9,667 | 9,667 | 5,105 | |||
Customer portfolios and related assets | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Finite-Lived Intangible Assets, Gross | 125,507 | 125,507 | 57,383 | |||
Finite-Lived Intangible Assets, Accumulated Amortization | $ 34,357 | $ 34,357 | $ 24,983 | |||
Estimated remaining weighted-average lives of intangible assets | 4 years 10 months 15 days |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) | Jan. 06, 2015 | Jun. 13, 2014 | Jun. 30, 2015 | Dec. 31, 2014 |
Long-term debt | ||||
Less: Current portion of note payable and current portion of note payable to related party | $ (116,501,000) | $ (116,501,000) | ||
Less: Original issue discount | (6,650,000) | (8,143,000) | ||
Note payable and note payable to related party | 3,020,480,000 | 3,277,237,000 | ||
Revolving credit facility | ||||
Long-term debt | ||||
Long-term Line of Credit | 0 | |||
Term loan for corporate headquarters | ||||
Long-term debt | ||||
Long-term Debt, Gross | 10,131,000 | 10,131,000 | ||
Face value of debt | $ 10,100,000 | |||
Interest rate (as a percent) | 6.22% | |||
June 2014 Debt Refinancing | Term A loan | ||||
Long-term debt | ||||
Long-term Debt, Gross | $ 1,947,500,000 | 1,998,750,000 | ||
Face value of debt | $ 2,050,000,000 | |||
Interest rate (as a percent) | 2.19% | |||
Variable base rate | LIBOR | |||
Spread rate (as a percent) | 2.00% | |||
June 2014 Debt Refinancing | Term A loan | First Twelve Quarters | ||||
Long-term debt | ||||
Amortization rate during given period (as a percent) | 1.25% | |||
June 2014 Debt Refinancing | Term A loan | Second Four Quarters | ||||
Long-term debt | ||||
Amortization rate during given period (as a percent) | 1.875% | |||
June 2014 Debt Refinancing | Term A loan | Following three quarters | ||||
Long-term debt | ||||
Amortization rate during given period (as a percent) | 2.50% | |||
June 2014 Debt Refinancing | Term B loan | ||||
Long-term debt | ||||
Long-term Debt, Gross | $ 1,186,000,000 | $ 1,393,000,000 | ||
Face value of debt | $ 1,400,000,000 | |||
Interest rate (as a percent) | 3.75% | |||
Repayments of Debt | $ 200,000,000 | |||
Variable base rate | LIBOR | |||
Spread rate (as a percent) | 3.00% | |||
Unamortized deferred financing cost written off | $ 1,800,000 | |||
June 2014 Debt Refinancing | Term B loan | Quarterly Amortization | ||||
Long-term debt | ||||
Amortization rate during given period (as a percent) | 0.25% | |||
June 2014 Debt Refinancing | Term B loan | Minimum | ||||
Long-term debt | ||||
Spread rate (as a percent) | 0.75% | |||
June 2014 Debt Refinancing | Revolving credit facility | ||||
Long-term debt | ||||
Maximum borrowing capacity | $ 425,000,000 | |||
Commitment fees (as a percent) | 0.375% | |||
June 2014 Debt Refinancing | Letter of credit facility | ||||
Long-term debt | ||||
Maximum borrowing capacity | 40,000,000 | |||
June 2014 Debt Refinancing | Swing line credit facility | ||||
Long-term debt | ||||
Maximum borrowing capacity | 100,000,000 | |||
June 2014 Debt Refinancing | Fifth Third | Term A loan | ||||
Long-term debt | ||||
Loan held by Fifth Third Bank | $ 196,700,000 | $ 201,900,000 | ||
May 2013 Debt Refinancing | Term A loan | ||||
Long-term debt | ||||
Repayments of Debt | $ 1,800,000,000 | |||
New Loan Agreement | ||||
Long-term debt | ||||
Percentage of capital stock of the entity's domestic and foreign subsidiaries pledged as collateral for borrowings | 65.00% | |||
Minimum aggregate value of real property held by obligors provided as security on first priority basis | $ 10,000,000 |
DERIVATIVES AND HEDGING ACTIV42
DERIVATIVES AND HEDGING ACTIVITIES (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015USD ($)swap | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)swap | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Cash Flow Hedges of Interest Rate Risk | |||||
Derivative, Number of Instruments Held | swap | 14 | 14 | |||
Notional Amount of Amortized Interest Rate Cash Flow Hedge Derivatives | $ 1,100,000 | $ 1,100,000 | |||
Fair value of the Company's derivative financial instruments designated as cash flow hedges | |||||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | 8,600 | ||||
Derivatives in cash flow hedging relationships: | |||||
Amount of gain (loss) recognized in OCI (effective portion) | (1,717) | $ (6,234) | (13,152) | $ (8,833) | |
Amount of loss reclassified from accumulated OCI into earnings (effective portion) | (1,252) | (483) | (2,293) | (818) | |
Gain (Loss) on Interest Rate Cash Flow Hedge Ineffectiveness | 1 | $ 156 | 0 | $ (2) | |
Derivative, Net Liability Position, Aggregate Fair Value | $ 19,600 | $ 19,600 | |||
Fifth Third | |||||
Cash Flow Hedges of Interest Rate Risk | |||||
Derivative, Number of Instruments Held | swap | 5 | 5 | |||
Maximum | Fifth Third | |||||
Cash Flow Hedges of Interest Rate Risk | |||||
Notional Amount | $ 293,800 | $ 293,800 | |||
Minimum | Fifth Third | |||||
Cash Flow Hedges of Interest Rate Risk | |||||
Notional Amount | $ 250,000 | $ 250,000 | |||
June 2015 through June 2017 | |||||
Cash Flow Hedges of Interest Rate Risk | |||||
Derivative, Number of Instruments Held | swap | 8 | 8 | |||
Notional Amount | $ 1,200,000 | $ 1,200,000 | |||
January 2016 through January 2019 | |||||
Cash Flow Hedges of Interest Rate Risk | |||||
Derivative, Number of Instruments Held | swap | 6 | 6 | |||
Notional Amount | $ 500,000 | $ 500,000 | |||
Other Noncurrent Assets | |||||
Fair value of the Company's derivative financial instruments designated as cash flow hedges | |||||
Interest Rate Cash Flow Hedge Asset at Fair Value | 0 | 0 | $ 104 | ||
Other Current Liabilities | |||||
Fair value of the Company's derivative financial instruments designated as cash flow hedges | |||||
Interest Rate Cash Flow Hedge Liability at Fair Value | 8,062 | 8,062 | 5,205 | ||
Other Noncurrent Liabilities | |||||
Fair value of the Company's derivative financial instruments designated as cash flow hedges | |||||
Interest Rate Cash Flow Hedge Liability at Fair Value | $ 10,180 | $ 10,180 | $ 2,283 |
CONTROLLING AND NON-CONTROLLI43
CONTROLLING AND NON-CONTROLLING INTERESTS OWNERSHIP INTERESTS IN JOINT VENTURE (Details) - People’s United Merchant Services | May. 31, 2014 |
Noncontrolling Interest [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Vantiv Holding | 51.00% |
Peoples United Bank | |
Noncontrolling Interest [Line Items] | |
Ownership percentage by noncontrolling owners | 49.00% |
CONTROLLING AND NON-CONTROLLI44
CONTROLLING AND NON-CONTROLLING INTERESTS IN VANTIV HOLDING (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2009 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net Income (Loss) Attributable to Noncontrolling Interest [Abstract] | |||||
Net income | $ 52,693 | $ 3,313 | $ 79,689 | $ 44,404 | |
Items not allocable to non-controlling interests: | |||||
Net income attributable to non-controlling interests | $ 16,157 | 4,722 | $ 24,164 | 17,677 | |
Vantiv Holding | |||||
Changes in units and related ownership interest | |||||
Balance (in shares) | 188,497,834 | ||||
Opening percentage of ownership by parent | 77.17% | ||||
Equity Plan Activity, Shares | 723,985 | ||||
Balance (in shares) | 189,221,819 | 189,221,819 | |||
Closing percentage of ownership by parent | 77.25% | 77.25% | |||
Adjustment to net assets attributable to non-controlling interest as a result of change in ownership interest | $ 2,700 | 52,800 | $ 2,700 | 52,800 | |
Vantiv, Inc. | |||||
Items not allocable to non-controlling interests: | |||||
Vantiv, Inc. expenses | $ 12,587 | 10,621 | $ 20,397 | 19,814 | |
Vantiv, Inc. | Vantiv Holding | |||||
Changes in units and related ownership interest | |||||
Balance (in shares) | 145,455,008 | ||||
Equity Plan Activity, Shares | 723,985 | ||||
Balance (in shares) | 146,178,993 | 146,178,993 | |||
Warrant | Fifth Third | |||||
Changes in units and related ownership interest | |||||
Price per unit minus exercise price threshold restriction | $ 0 | ||||
Warrant price (in dollars per share) | $ 15.98 | ||||
Warrant fair value | $ 65,400 | ||||
Vantiv Holding | |||||
Items not allocable to non-controlling interests: | |||||
Net income attributable to Vantiv Holding | $ 65,280 | 13,934 | $ 100,086 | 64,218 | |
Net income attributable to non-controlling interests | 16,157 | 4,722 | 24,164 | 17,677 | |
Vantiv Holding | Peoples United Bank | |||||
Items not allocable to non-controlling interests: | |||||
Net income attributable to non-controlling interests | 1,689 | 301 | 1,793 | 301 | |
Vantiv Holding | Fifth Third | |||||
Items not allocable to non-controlling interests: | |||||
Net income attributable to non-controlling interests | $ 14,468 | $ 4,421 | $ 22,371 | $ 17,376 | |
Fifth Third | Vantiv Holding | |||||
Changes in units and related ownership interest | |||||
Balance (in shares) | 43,042,826 | ||||
Opening percentage of ownership, non-controlling interest | 22.83% | ||||
Balance (in shares) | 43,042,826 | 43,042,826 | |||
Closing percentage of ownership, non-controlling interest | 22.75% | 22.75% | |||
Class C Non-Voting Units | Vantiv Holding | Warrant | Fifth Third | |||||
Changes in units and related ownership interest | |||||
Warrants issued (in shares) | 20,400,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Recurring basis | Level 1 | Interest rate swaps | |||||
Assets: | |||||
Interest Rate Cash Flow Hedge Asset at Fair Value | $ 0 | $ 0 | $ 0 | ||
Liabilities: | |||||
Interest Rate Cash Flow Hedge Liability at Fair Value | 0 | 0 | 0 | ||
Recurring basis | Level 2 | Interest rate swaps | |||||
Assets: | |||||
Interest Rate Cash Flow Hedge Asset at Fair Value | 0 | 0 | 104 | ||
Liabilities: | |||||
Interest Rate Cash Flow Hedge Liability at Fair Value | 18,242 | 18,242 | 7,488 | ||
Recurring basis | Level 3 | Interest rate swaps | |||||
Assets: | |||||
Interest Rate Cash Flow Hedge Asset at Fair Value | 0 | 0 | 0 | ||
Liabilities: | |||||
Interest Rate Cash Flow Hedge Liability at Fair Value | 0 | 0 | 0 | ||
Mercury Payment Systems, LLC | |||||
Assets and liabilities measured at fair value on a recurring basis | |||||
Tax Receivable Agreements Change in Value | 6,700 | $ 1,200 | 13,700 | $ 1,200 | |
Mercury Payment Systems, LLC | Recurring basis | Level 1 | |||||
Liabilities: | |||||
Tax Receivable Agreements Obligation | 0 | 0 | 0 | ||
Mercury Payment Systems, LLC | Recurring basis | Level 2 | |||||
Liabilities: | |||||
Tax Receivable Agreements Obligation | 0 | 0 | 0 | ||
Mercury Payment Systems, LLC | Recurring basis | Level 3 | |||||
Liabilities: | |||||
Tax Receivable Agreements Obligation | $ 220,800 | $ 220,800 | $ 152,420 |
FAIR VALUE MEASUREMENTS (Deta46
FAIR VALUE MEASUREMENTS (Details 2) - Non-recurring basis - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Carrying Amount | ||
Liabilites: | ||
Note payable | $ 3,136,981 | $ 3,393,738 |
Fair Value | ||
Liabilites: | ||
Note payable | $ 3,130,440 | $ 3,310,181 |
NET INCOME PER SHARE (Narrative
NET INCOME PER SHARE (Narrative) (Details) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ||
Adjusted Effective Tax Rate | 36.00% | 36.50% |
NET INCOME PER SHARE Antidiluti
NET INCOME PER SHARE Antidilutive Securities (Details) - Jun. 30, 2014 - shares shares in Millions | Total | Total |
Class B Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 47 | 47.9 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Basic: | |||||
Net income (loss) attributable to Vantiv, Inc. | $ 36,536 | $ (1,409) | $ 55,525 | $ 26,727 | |
Diluted: | |||||
Income before applicable income taxes | 77,012 | $ 5,333 | 116,261 | $ 62,046 | |
Income tax expense excluding impact of non-controlling interest | $ 27,724 | $ 41,854 | |||
Class A Common Stock | |||||
Basic and diluted net income per share | |||||
Common Stock, Shares, Outstanding | 146,178,993 | 146,178,993 | 145,455,008 | ||
Shares used in computing basic net income (loss) per share: | |||||
Weighted-average Class A common shares (in shares) | 145,566,899 | 140,451,466 | 145,051,664 | 139,346,292 | |
Basic net income per share (in dollars per share) | $ 0.25 | $ (0.01) | $ 0.38 | $ 0.19 | |
Diluted: | |||||
Net income (loss) attributable to Vantiv, Inc. | $ 49,288 | $ (1,409) | $ 74,407 | $ 26,727 | |
Shares used in computing diluted net income (loss) per share: | |||||
Weighted-average common shares (in shares) | 145,566,899 | 140,451,466 | 145,051,664 | 139,346,292 | |
Warrant (in shares) | 12,171,352 | 0 | 11,774,401 | 9,912,517 | |
Diluted weighted-average shares outstanding (in shares) | 201,831,467 | 140,451,466 | 201,276,166 | 150,831,855 | |
Diluted net income per share (in dollars per share) | $ 0.24 | $ (0.01) | $ 0.37 | $ 0.18 | |
Class A Common Stock | Restricted Stock | |||||
Shares used in computing diluted net income (loss) per share: | |||||
Class A common stock equivalents included in the computation of diluted net income per share (in shares) | 506,059 | 0 | 856,272 | 1,459,091 | |
Class A Common Stock | Employee Stock Option | |||||
Shares used in computing diluted net income (loss) per share: | |||||
Class A common stock equivalents included in the computation of diluted net income per share (in shares) | 544,331 | 0 | 551,003 | 113,955 | |
Class B Common Stock | |||||
Basic and diluted net income per share | |||||
Common Stock, Shares, Outstanding | 43,042,826 | 43,042,826 | 43,042,826 | 43,042,826 | 43,042,826 |
Shares used in computing diluted net income (loss) per share: | |||||
Weighted-average common shares (in shares) | 43,042,826 | 0 | 43,042,826 | 0 | |
Capital Unit, Class B [Member] | Vantiv Holding | Class A Common Stock | |||||
Shares used in computing diluted net income (loss) per share: | |||||
Conversion ratio for conversion of units into common stock | 1 | 1 |
ACCUMULATED OTHER COMPREHENSI50
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax | $ 0 | $ 4 | $ 0 | $ 4 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | (8,763) | (813) | (3,768) | 264 |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (212) | 0 | (212) | 0 |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | (1,717) | (6,234) | (13,152) | (8,833) |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | 502 | 1,720 | 3,831 | 2,425 |
Unrealized gain (loss) on cash flow hedges | (1,215) | (4,514) | (9,321) | (6,408) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | 1,252 | 483 | 2,293 | 818 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | (367) | (139) | (672) | (233) |
Unrealized gain on hedging activities, net of tax | 885 | 344 | 1,621 | 585 |
Pretax activity | (465) | (5,747) | (10,859) | (8,011) |
Tax effect | 135 | 1,581 | 3,159 | 2,192 |
Net activity | (330) | (4,166) | (7,700) | (5,819) |
Comprehensive (Income) Loss, Net of Tax, Attributable to Noncontrolling Interest | (16,051) | (3,201) | (21,683) | (15,580) |
Comprehensive income (loss) attributable to Vantiv, Inc. | 36,312 | (4,054) | 50,306 | 23,005 |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (212) | 4 | (212) | 4 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | (8,987) | (3,458) | (8,987) | (3,458) |
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 0 | 4 | 0 | 4 |
Non-Controlling Interests | ||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss), Net of Tax | 391 | 1,631 | 3,003 | 2,293 |
Other Comprehensive Income (Loss) Reclassification Adjustment, Net of Tax | (285) | (110) | (522) | (196) |
Net activity | (2,481) | (2,097) | ||
Comprehensive (Income) Loss, Net of Tax, Attributable to Noncontrolling Interest | 106 | 1,521 | 2,481 | 2,097 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Noncontrolling Interest | 0 | 0 | 0 | 0 |
Vantiv, Inc. | ||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss), Net of Tax | (824) | (2,883) | (6,318) | (4,115) |
Other Comprehensive Income (Loss) Reclassification Adjustment, Net of Tax | 600 | 234 | 1,099 | 389 |
Comprehensive income (loss) attributable to Vantiv, Inc. | (224) | (2,645) | (5,219) | (3,722) |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | 0 | 4 | 0 | 4 |
Accumulated Net Gain (Loss) from Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (10,782) | (1,237) | (5,288) | (5) |
Accumulated Other Comprehensive Income (Loss), Net of Tax | (11,606) | (4,120) | (11,606) | (4,120) |
Reclassification out of Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 2,231 | 424 | 1,732 | 269 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 2,831 | $ 658 | $ 2,831 | $ 658 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Result of operation for each segment | ||||
Total revenue | $ 785,995 | $ 608,731 | $ 1,491,606 | $ 1,146,309 |
Network fees and other costs | 362,349 | 277,392 | 693,495 | 526,438 |
Sales and marketing | 122,925 | 90,507 | 238,980 | 168,951 |
Segment profit | 300,721 | 240,832 | 559,131 | 450,920 |
Operating Segments | Merchant Services | ||||
Result of operation for each segment | ||||
Total revenue | 661,258 | 488,143 | 1,247,970 | 906,909 |
Network fees and other costs | 324,166 | 242,569 | 620,196 | 456,009 |
Sales and marketing | 116,860 | 84,014 | 227,035 | 155,765 |
Segment profit | 220,232 | 161,560 | 400,739 | 295,135 |
Operating Segments | Financial Institution Services | ||||
Result of operation for each segment | ||||
Total revenue | 124,737 | 120,588 | 243,636 | 239,400 |
Network fees and other costs | 38,183 | 34,823 | 73,299 | 70,429 |
Sales and marketing | 6,065 | 6,493 | 11,945 | 13,186 |
Segment profit | $ 80,489 | $ 79,272 | $ 158,392 | $ 155,785 |
SEGMENT INFORMATION (Details 2)
SEGMENT INFORMATION (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Reconciliation of total segment profit to the company's (loss) income before applicable income taxes | ||||
Total segment profit | $ 300,721 | $ 240,832 | $ 559,131 | $ 450,920 |
Less: Other operating costs | (76,551) | (56,754) | (145,290) | (117,123) |
Less: General and administrative | (47,060) | (48,552) | (94,903) | (81,158) |
Less: Depreciation and amortization | (67,659) | (89,041) | (135,461) | (138,887) |
Less: Interest expense—net | (25,714) | (13,496) | (51,725) | (24,050) |
Less: Non-operating expenses | (6,725) | (27,656) | (15,491) | (27,656) |
Income before applicable income taxes | $ 77,012 | $ 5,333 | $ 116,261 | $ 62,046 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - Mercury Payment Systems, LLC - Subsequent Event [Member] $ in Millions | 1 Months Ended |
Jul. 24, 2015USD ($) | |
Subsequent Event [Line Items] | |
Tax Receivable Agreement Prepayment | $ 44.8 |
First Call Option [Member] | Call Option [Member] | |
Subsequent Event [Line Items] | |
Tax Receivable Agreement Prepayment | 41.4 |
Second Call Option [Member] | Call Option [Member] | |
Subsequent Event [Line Items] | |
Tax Receivable Agreement Prepayment | 38.1 |
Third Call Option [Member] | Call Option [Member] | |
Subsequent Event [Line Items] | |
Tax Receivable Agreement Prepayment | 38 |
Fourth Call Option [Member] | Call Option [Member] | |
Subsequent Event [Line Items] | |
Tax Receivable Agreement Prepayment | 43 |
Minimum | President [Member] | |
Subsequent Event [Line Items] | |
Tax Receivable Agreement Prepayment | 0.6 |
Maximum | President [Member] | |
Subsequent Event [Line Items] | |
Tax Receivable Agreement Prepayment | $ 2.2 |