Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 31, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | Cotiviti Holdings, Inc. | ||
Entity Central Index Key | 1,657,197 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 343.2 | ||
Entity Common Stock, Shares Outstanding | 90,870,825 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 110,635 | $ 149,365 |
Restricted cash | 9,103 | 10,741 |
Accounts receivable, net of allowance for doubtful accounts of $851 and $1,053 at December 31, 2016 and 2015, respectively; and net of estimated allowance for refunds and appeals of $36,903 and $33,406 at December 31, 2016 and 2015, respectively | 67,735 | 78,856 |
Prepaid expenses and other current assets | 14,957 | 24,044 |
Total current assets | 202,430 | 263,006 |
Property and equipment, net | 67,640 | 57,452 |
Goodwill | 1,196,024 | 1,197,044 |
Intangible assets, net | 533,305 | 594,410 |
Other long-term assets | 2,864 | 2,176 |
TOTAL ASSETS | 2,002,263 | 2,114,088 |
Current liabilities: | ||
Current maturities of long-term debt | 18,000 | 21,099 |
Customer deposits | 9,103 | 10,741 |
Accounts payable and accrued other expenses | 23,162 | 29,521 |
Accrued compensation costs | 58,589 | 42,902 |
Estimated liability for refunds and appeals | 62,539 | 67,775 |
Total current liabilities | 171,393 | 172,038 |
Long-term liabilities: | ||
Long-term debt | 762,202 | 1,012,971 |
Other long-term liabilities | 8,799 | 12,199 |
Deferred tax liabilities | 120,533 | 129,284 |
Total long-term liabilities | 891,534 | 1,154,454 |
Total liabilities | 1,062,927 | 1,326,492 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Common stock ($0.001 par value; 600,000,000 and 122,000,000 shares authorized, 90,748,740 and 77,237,711 issued, and 90,741,340 and 77,230,311 outstanding at December 31, 2016 and 2015, respectively) | 91 | 77 |
Additional paid-in capital | 911,582 | 807,419 |
Retained earnings (deficit) | 33,917 | (14,935) |
Accumulated other comprehensive loss | (6,156) | (4,867) |
Treasury stock, at cost (7,400 shares at December 31, 2016 and 2015) | (98) | (98) |
Total stockholders' equity | 939,336 | 787,596 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,002,263 | $ 2,114,088 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets | ||
Allowance for doubtful accounts | $ 851 | $ 1,053 |
Estimated allowance for refunds and appeals | $ 41,020 | $ 33,406 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 600,000,000 | 122,000,000 |
Common stock, shares issued | 90,748,740 | 77,237,711 |
Common stock, shares outstanding | 90,741,340 | 77,230,311 |
Treasury stock, shares | 7,400 | 7,400 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements of Comprehensive Income (Loss) | |||
Net revenue | $ 625,162 | $ 541,343 | $ 441,372 |
Cost of revenue (exclusive of depreciation and amortization, stated separately below): | |||
Compensation | 229,601 | 183,817 | 164,552 |
Other costs of revenue | 22,167 | 20,800 | 14,536 |
Total cost of revenue | 251,768 | 204,617 | 179,088 |
Selling, general and administrative expenses (exclusive of depreciation and amortization, stated separately below): | |||
Compensation | 97,123 | 70,802 | 49,777 |
Other selling, general and administrative expenses | 59,561 | 65,943 | 42,760 |
Total selling, general and administrative expenses | 156,684 | 136,745 | 92,537 |
Depreciation and amortization of property and equipment | 20,151 | 12,695 | 7,416 |
Amortization of intangible assets | 60,818 | 61,467 | 52,355 |
Transaction-related expenses | 1,788 | 1,469 | 5,745 |
Impairment of intangible assets | 27,826 | 74,034 | |
Total operating expenses | 491,209 | 444,819 | 411,175 |
Operating income | 133,953 | 96,524 | 30,197 |
Other expense (income): | |||
Interest expense | 48,653 | 65,561 | 51,717 |
Loss on extinguishment of debt | 16,417 | 4,084 | 21,524 |
Other non-operating (income) expense | (939) | (826) | (415) |
Total other expense (income) | 64,131 | 68,819 | 72,826 |
Income (loss) from continuing operations before income taxes | 69,822 | 27,705 | (42,629) |
Income tax expense (benefit) | 20,970 | 14,401 | (16,804) |
Income (loss) from continuing operations | 48,852 | 13,304 | (25,825) |
Gain on discontinued operations, net of tax | 559 | ||
Net income (loss) | 48,852 | 13,863 | (25,825) |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (923) | (667) | (1,293) |
Change in available-for-sale securities | 3 | ||
Change in fair value of derivative instruments | (366) | (2,345) | (623) |
Total other comprehensive (loss) income | (1,289) | (3,009) | (1,916) |
Comprehensive income (loss) | $ 47,563 | $ 10,854 | $ (27,741) |
Earnings (loss) per share from continuing operations: | |||
Basic (in dollars per share) | $ 0.57 | $ 0.17 | $ (0.40) |
Diluted (in dollars per share) | 0.55 | 0.17 | (0.40) |
Earnings per share from discontinued operations: | |||
Basic (in dollars per share) | 0.01 | ||
Diluted (in dollars per share) | 0.01 | ||
Total earnings (loss) per share: | |||
Basic (in dollars per share) | 0.57 | 0.18 | (0.40) |
Diluted (in dollars per share) | $ 0.55 | $ 0.18 | $ (0.40) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income/(Loss) | Treasury Stock | Total |
Balance at beginning of period at Dec. 31, 2013 | $ 44 | $ 366,094 | $ (2,973) | $ 58 | $ 363,223 | |
Balance at beginning of period (in shares) at Dec. 31, 2013 | 44,408,008 | |||||
Change in Stockholders' Equity | ||||||
Net income (loss) | (25,825) | (25,825) | ||||
Proceeds from issuance of common stock | $ 33 | 435,111 | 435,144 | |||
Proceeds from issuance of common stock (in shares) | 32,790,321 | |||||
Stock-based compensation expense | 2,492 | 2,492 | ||||
Exercise of stock options | 113 | $ (98) | 15 | |||
Exercise of stock options (in shares) | 6,362 | 7,400 | ||||
Other comprehensive loss, net | (1,916) | (1,916) | ||||
Balance at end of period at Dec. 31, 2014 | $ 77 | 803,810 | (28,798) | (1,858) | $ (98) | 773,133 |
Balance at end of period (in shares) at Dec. 31, 2014 | 77,204,691 | 7,400 | ||||
Change in Stockholders' Equity | ||||||
Net income (loss) | 13,863 | 13,863 | ||||
Stock-based compensation expense | 3,399 | 3,399 | ||||
Exercise of stock options | 210 | 210 | ||||
Exercise of stock options (in shares) | 25,620 | |||||
Other comprehensive loss, net | (3,009) | (3,009) | ||||
Balance at end of period at Dec. 31, 2015 | $ 77 | 807,419 | (14,935) | (4,867) | $ (98) | $ 787,596 |
Balance at end of period (in shares) at Dec. 31, 2015 | 77,230,311 | 7,400 | 77,230,311 | |||
Change in Stockholders' Equity | ||||||
Net income (loss) | 48,852 | $ 48,852 | ||||
Proceeds from issuance of common stock | $ 13 | 226,950 | 226,963 | |||
Proceeds from issuance of common stock (in shares) | 12,936,038 | |||||
Dividend | (150,000) | (150,000) | ||||
Stock-based compensation expense | 22,954 | 22,954 | ||||
Exercise of stock options | $ 1 | 4,259 | 4,260 | |||
Exercise of stock options (in shares) | 574,991 | |||||
Other comprehensive loss, net | (1,289) | (1,289) | ||||
Balance at end of period at Dec. 31, 2016 | $ 91 | $ 911,582 | $ 33,917 | $ (6,156) | $ (98) | $ 939,336 |
Balance at end of period (in shares) at Dec. 31, 2016 | 90,741,340 | 7,400 | 90,741,340 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 48,852 | $ 13,863 | $ (25,825) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Deferred income taxes | (7,735) | (11,832) | (46,873) |
Depreciation and amortization | 80,969 | 74,162 | 59,771 |
Stock-based compensation expense | 22,954 | 3,399 | 2,492 |
Amortization of debt issuance costs | 4,278 | 5,565 | 4,398 |
Accretion of asset retirement obligations | 186 | 166 | 131 |
Loss on impairment of intangible assets | 27,826 | 74,034 | |
Loss on extinguishment of debt | 16,417 | 4,084 | 21,524 |
Gain on discontinued operations | (900) | ||
Changes in operating assets and liabilities: | |||
Restricted cash | 1,638 | 9,486 | (6,020) |
Accounts receivable | 11,121 | (18,641) | 6,709 |
Other current assets | 7,905 | (12,265) | (1,167) |
Other long-term assets | (688) | 98 | 160 |
Customer deposits | (1,638) | (9,486) | 6,020 |
Accrued compensation | 15,687 | 263 | (38,844) |
Accounts payable and accrued other expenses | (4,821) | (14,831) | 5,694 |
Estimated liability for refunds and appeals | (5,236) | (7,166) | 33,303 |
Other long-term liabilities | 109 | (115) | 105 |
Other | (827) | (522) | 116 |
Net cash provided by operating activities | 189,171 | 63,154 | 95,728 |
Cash flows from investing activities: | |||
Expenditures for property and equipment | (35,213) | (22,982) | (19,014) |
Business combinations, net of cash acquired | (1,072,614) | ||
Other investing activities | 1,181 | 401 | 108 |
Net cash used in investing activities | (34,032) | (22,581) | (1,091,520) |
Cash flows from financing activities: | |||
Net proceeds from issuance of common stock | 226,963 | 365,187 | |
Proceeds from exercise of stock options | 4,243 | 210 | 32 |
Proceeds from issuance of debt | 800,000 | 1,395,000 | |
Dividends paid | (150,000) | ||
Purchase of treasury shares | (18) | ||
Payment of contingent consideration | (750) | ||
Payment of debt issuance costs | (7,131) | (1,086) | (49,635) |
Repayment of debt | (1,067,350) | (8,100) | (683,944) |
Net cash (used in) provided by financing activities | (193,275) | (8,976) | 1,025,872 |
Effect of foreign exchanges on cash and cash equivalents | (594) | (844) | (530) |
Net (decrease) increase in cash and cash equivalents | (38,730) | 30,753 | 29,550 |
Cash and cash equivalents at beginning of period | 149,365 | 118,612 | 89,062 |
Cash and cash equivalents at end of the period | 110,635 | 149,365 | 118,612 |
Supplemental disclosures of cash flow information: | |||
Cash paid for income taxes | 25,359 | 41,119 | 27,433 |
Cash paid for interest | 43,227 | 60,238 | 46,530 |
Noncash investing activities (accrued property and equipment purchases) | $ 8,163 | $ 12,949 | 947 |
Noncash acquisition of treasury stock | 98 | ||
Noncash financing activities (accrued debt issuance costs) | $ 69,957 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2016 | |
Description of Business | |
Description of Business | Note 1. Description of Business Cotiviti Holdings, Inc. (collectively with its subsidiaries, “we,” “our,” “Cotiviti” or the “Company”) is a leading provider of analytics‑driven payment accuracy solutions, focused primarily on the healthcare sector. Our integrated solutions help clients enhance payment accuracy in an increasingly complex healthcare environment. We leverage our robust technology platform, configurable analytics, proprietary information assets and expertise in healthcare reimbursement to help our clients enhance their claims payment accuracy. We help our healthcare clients identify and correct payment inaccuracies. We work with over 40 healthcare organizations, including 20 of the 25 largest U.S. commercial, Medicaid and Medicare managed health plans, as well as CMS. We are also a leading provider of payment accuracy solutions to over 35 retail clients, including eight of the ten largest retailers in the United States. We were founded as Connolly in 1979 as a provider of payment accuracy solutions to the retail industry and launched our retrospective claims accuracy solutions to the healthcare industry in 1998. Connolly was acquired by the funds managed by Advent in 2012. In May 2014, Connolly merged with iHealth Technologies which was founded in 2001. At the time of the merger, Connolly was a leading provider of retrospective claims accuracy solutions to U.S. healthcare providers and retailers and iHealth Technologies was a leading provider of prospective claims accuracy solutions to U.S. healthcare providers. As a result of the Connolly iHealth Merger, iHT and all of its wholly owned subsidiaries became our wholly owned subsidiaries. The results of operations for iHT are included in our consolidated financial statements as of and since May 14, 2014. Accordingly, comparability to other periods presented is impacted by the timing of the Connolly iHealth Merger. We have adopted a holding company structure and our primary domestic operations are performed through our wholly owned operating subsidiaries. We have international operations in Canada, the United Kingdom and India. We rebranded our company as “Cotiviti” in September 2015. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include our accounts and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions affecting the reported amounts in our consolidated financial statements and accompanying notes. These estimates are based on information available as of the date of the Consolidated Financial Statements; therefore, actual results could differ from those estimates. Foreign Currency Translation Assets and liabilities of our foreign subsidiaries with a functional currency other than the U.S. Dollar are translated into U.S. Dollars using applicable exchange rates at the balance sheet date. Revenue and expenses are translated at average exchange rates effective during the year. The resulting foreign currency translation gains and losses are included as a component of accumulated other comprehensive (loss) income within stockholders’ equity on our Consolidated Balance Sheets. Assets and liabilities of our foreign subsidiaries for which the functional currency is the U.S. Dollar are re-measured into U.S. Dollars using applicable exchange rates at the balance sheet date, except nonmonetary assets and liabilities, which are re-measured at the historical exchange rates prevailing when acquired. Revenue and expenses are re-measured at average exchange rates effective during the year. Foreign currency translation gains and losses from re-measurement are included in other non-operating (income) expense in the accompanying Consolidated Statements of Comprehensive Income (Loss). The amounts of net gain (loss) on foreign currency re-measurement recognized were immaterial for all periods presented. Revenue Recognition, Unbilled Receivables and Estimated Liability for Refunds and Appeals We provide services under contracts that contain various fee structures, including performance fee‑based contracts and fixed fee arrangements. Revenue is recognized when a contract exists, services have been provided to the client, the fee is fixed and determinable and collectability is reasonably assured. We recognize revenue on performance fee-based contracts based upon the specific terms of the underlying contract. The contract terms generally specify: (a) time periods covered by the work to be performed; (b) nature and extent of services we are to provide; (c) the client’s duties in assisting and cooperating with us; and (d) fees payable to us. Our fees are most often expressed as a percentage of our findings. Generally, our services are rendered when our clients realize the economic benefits from our services. Our clients realize economic benefits when they take credits against their existing accounts payable based on when we identify cost savings, when they receive refund checks based on overpayments, or when they acknowledge payment reductions based on cost savings. We derive a relatively small portion of revenue on contracts with fixed fee arrangements. We recognize revenue on these contracts ratably over the contract term and once all of the above criteria have been satisfied. Historically, there has been a certain amount of revenue with respect to which, even though we had met the requirements of our revenue recognition policy, the claim is ultimately rejected. In such cases, our clients may request a refund or offset if their providers or vendors ultimately reject the payment inaccuracies we find or if our clients determine not to pursue reimbursement from their providers or vendors even though we may have collected fees. We record any such refund as a reduction of revenue. We record an estimate for refund liabilities at any given time based on actual historical refund data by client type. We satisfy such refund liabilities either by offsets to accounts receivable or by cash payments to clients. In addition to the refund liabilities, we calculate client specific reserves when we determine an additional reserve may be necessary. The estimated liability for refunds and appeals representing our estimate of claims that may be overturned related to revenue which had already been received was $62,539 and $67,775 at December 31, 2016 and December 31, 2015, respectively. The estimated allowance for refunds and appeals representing our estimate of claims that may be overturned related to amounts in accounts receivable was $41,020 and $33,406 at December 31, 2016 and December 31, 2015, respectively. Under the Medicare Recovery Audit Program, in which we are one of the four Medicare RACs for CMS, healthcare providers have the right to appeal a claim and may pursue additional appeals if the initial appeal is found in favor of CMS. We accrue an estimated liability for appeals based on the amount of fees that are subject to appeals, closures or other adjustments and those which we estimate are probable of being returned to CMS following a successful appeal by the providers. Our estimates are based on our historical experience with the Medicare RAC appeal process. This estimated liability for Medicare RAC appeals is an offset to revenue in our Consolidated Statements of Comprehensive Income (Loss). The liability is included in the estimated liability for refunds and appeals on our Consolidated Balance Sheets. See Note 8 for further information regarding the estimated liability for appeals related to the Medicare RAC program. Unbilled receivables represent revenue recognized related to claims for which clients have received economic value that were not invoiced at the balance sheet date. Unbilled receivables were approximately $51,643 and $51,799 as of December 31, 2016 and December 31, 2015, respectively and are included in accounts receivable on our Consolidated Balance Sheets. Certain unbilled receivables arise when a portion of our earned fee is deferred at the time of the initial invoice. At a later date (which can be up to a year after original invoice, and at other times during the year after completion of the audit period based on contractual terms or as agreed with our client), we invoice the unbilled receivable amount. Notwithstanding the deferred due date, our clients acknowledge we have earned this unbilled receivable at the time of the original invoice, but we have agreed to defer billing the client for the related services. Unbilled receivables of this nature were approximately $6,137 and $6,431 as of December 31, 2016 and December 31, 2015, respectively, and are included in accounts receivable on our Consolidated Balance Sheets. We record periodic changes in unbilled receivables and refund liabilities as adjustments to revenue. Cost of Revenue Cost of revenue is a direct cost associated with generating revenue. Cost of revenue related to compensation includes the total cost of payroll, related benefits and stock compensation expense for employees in roles that serve to provide direct revenue generating services to clients. Other cost of revenue primarily includes expenses related to the use of certain subcontractors and professional service firms, costs associated with the retrieval of medical records and facilities related costs associated with locations that are used strictly for revenue generating activities. Cost of revenue does not include depreciation and amortization, which is stated separately in our Consolidated Statements of Comprehensive Income (Loss). Selling, General and Administrative (“SG&A”) Compensation within SG&A includes the total cost of payroll, related benefits and stock compensation expense for employees who do not have a direct role associated with revenue generation including those involved with developing new service offerings. Other SG&A expenses include all general operating costs. These costs include, but are not limited to, rent and occupancy costs for facilities associated with locations that are used for employees not serving in revenue generating roles, telecommunications costs, information technology infrastructure costs, software licensing costs, advertising and marketing expenses, costs associated with developing new service offerings and expenses related to the use of certain subcontractors and professional services firms. Selling, general and administrative expenses do not include depreciation and amortization, which is stated separately in our Consolidated Statements of Comprehensive Income (Loss). Advertising Costs Advertising costs are expensed as incurred and included in other selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income (Loss). Advertising expense was $1,345, $1,241 and $1,294 for the years ended December 31, 2016, 2015 and 2014, respectively. Cash and Cash Equivalents Cash and cash equivalents include all cash balances and highly liquid investments with an original maturity of 90 days or less from the date of purchase. Restricted Cash In connection with providing services to certain clients, we maintain a series of lockbox accounts with certain financial institutions. These lockbox accounts exist to receive funds we collect on behalf of our clients resulting from services provided. When client funds are received and deposited into the lockbox accounts, we record a corresponding customer deposit liability. These funds are included as both restricted cash in current assets and customer deposits in current liabilities on our Consolidated Balance Sheets. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. We accrue an allowance against accounts receivable related to fees yet to be collected, based on historical losses adjusted for current market conditions, our clients’ financial condition, the amount of any receivables in dispute, the current receivables aging and current payment patterns. We record changes in our estimate to the allowance for doubtful accounts through bad debt expense and relieve the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Write offs for all periods presented have not been significant. We do not have any off balance sheet credit exposure related to our clients. Investments Investments, which were historically purchased on behalf of our nonqualified profit sharing incentive compensation plan (See Note 19), consisted of money market securities and were classified as available-for-sale securities. Available-for-sale securities are reported at fair values (based primarily on quoted prices and market observable inputs) using the specific identification method, with the unrealized gains and losses included in accumulated other comprehensive (loss) income on our Consolidated Balance Sheets. Investments are included in prepaid expenses and other current assets on our Consolidated Balance Sheets (See Note 3). Realized gains and losses and interest and dividends on available-for-sale securities are included in other non-operating (income) expense on the Consolidated Statements of Comprehensive Income (Loss). Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets and is included in depreciation and amortization of property and equipment in our Consolidated Statements of Comprehensive Income (Loss). The estimated useful lives of our property and equipment are as follows: Computer equipment - years Software - years Furniture and fixtures years Leasehold improvements Lesser of remaining lease term or expected service life of improvement We have asset retirement obligations (“AROs”) arising from contractual requirements to perform specified activities at the time of disposition of certain leasehold improvements and equipment at some of our facilities. We record a liability for the estimated costs of these AROs. The liabilities are included in other long-term liabilities on our Consolidated Balance Sheets and are initially measured at fair value and subsequently are adjusted for accretion expense and any changes in the amount or timing of the estimated cash flows. Internally Developed Software Costs Capitalization of costs incurred in connection with software developed for internal use commences when both the preliminary project stage is completed and management has authorized further funding for the project, based on a determination that it is probable the project will be completed and used to perform the function intended. Capitalized costs are limited to (i) external direct costs of materials and services consumed in developing or obtaining internal use software and (ii) payroll and payroll related costs for employees who are directly associated with and devote time to the internal use software project. Capitalization of such costs ceases no later than the point at which the project is substantially complete and ready for its intended use. All other costs to develop software for internal use are expensed as incurred. We capitalized approximately $21,580 and $7,239 for the years ended December 31, 2016 and 2015, respectively. Amortization of software and software development costs is calculated on a straight-line basis over the expected economic life of the software, generally estimated to be five years and is included in depreciation and amortization of property and equipment on our Consolidated Statements of Comprehensive Income (Loss). Amortization expense for internal use software was $2,992, $2,287 and $722 for the years ended December 31, 2016, 2015 and 2014, respectively. Amortization expense for the year ended December 31, 2015 includes the write off of approximately $975 related to software that is no longer being used. Intangible Assets Our intangible assets with definite lives include customer relationships and acquired software. Intangible assets with indefinite lives include a trademark, which is not being amortized and is tested for impairment on an annual basis or when events or changes in circumstances necessitate an evaluation for impairment. Intangible assets with definite lives are initially recorded at fair value and are amortized on a basis consistent with the timing and pattern of expected cash flows used to value the intangibles, generally on a straight-line basis over useful lives ranging from 6 to 14 years. Amortization expense is included in amortization of intangible assets in our Consolidated Statements of Comprehensive Income (Loss). Impairment of Long-Lived Assets Long-lived assets, including property and equipment and intangible assets with definite lives, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If circumstances require the asset or asset group be tested for possible impairment, we first compare undiscounted cash flows expected to be generated by the asset or asset group to its carrying value. If the carrying value of the asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment loss is recognized to the extent the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third party independent appraisals, as necessary. Intangible assets with indefinite lives are tested for impairment on an annual basis as of October 1, of each year or more frequently whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future discounted cash flows the assets are expected to generate. We recognized a $27,826 impairment charge on our trademark assets during the year ended December 31, 2015 due to a change in the estimated fair value of the trademark. We recognized a $74,034 impairment charge for the year ended December 31, 2014 due to the change in the estimated fair value of our CMS customer relationship intangible asset associated with the Medicare RAC. See Note 6 for further detail. Goodwill Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination which are not individually identified and separately recognized. We do not amortize goodwill. Goodwill is reviewed for impairment on an annual basis as of October 1, of each year or more frequently if a triggering event occurs. These tests are performed at the reporting unit level. We have two reporting units, Healthcare and Global Retail and Other. We are permitted to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two step impairment test as required in ASC 350, Intangibles—Goodwill and Other . If we can support the conclusion that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then we would not need to perform the two step impairment test. If we cannot support such a conclusion, or we do not elect to perform the qualitative assessment, then the first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The fair value of each reporting unit is determined using a discounted cash flow analysis. Acquisitions We account for acquisitions using the accounting for business combinations. The purchase price is allocated to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on estimated fair values at the date of the acquisition. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, including the selection of valuation methodologies, estimates of future revenue and cash flows and discount rates. Under the acquisition method of accounting for business combinations, any changes to acquired balances in tax accounts, including adjustments to deferred tax asset valuation allowances or liabilities related to uncertain tax positions, which are recorded during the measurement period, and are determined to be attributable to facts and circumstances that existed as of the acquisition date, are considered a measurement period adjustment and will result in an offsetting increase or decrease to goodwill. All other changes to deferred tax asset valuation allowances and liabilities related to uncertain tax positions will result in an increase or decrease to income tax expense. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for tax attributes such as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We recognize net deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. In the event we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we reduce the deferred tax asset valuation allowance and record a benefit in our provision for income taxes in our Consolidated Statements of Comprehensive Income (Loss). We record liabilities related to uncertain tax positions in accordance with ASC 740, Income Taxes (“ASC 740”), on the basis of a two step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. We recognize interest and penalties related to unrecognized tax benefits within the income tax provision in the accompanying Consolidated Statements of Comprehensive Income (Loss). Accrued interest and penalties are included within accounts payable and accrued other expenses in the Consolidated Balance Sheets. Derivative Instruments Our derivative instruments consist entirely of interest rate cap agreements, are stated at fair value and are included in accounts payable and accrued other expenses and other long-term liabilities on our Consolidated Balance Sheets. Changes in the fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other comprehensive loss (income) on our Consolidated Balance Sheets until the underlying hedged transactions are recognized in earnings, at which time any deferred hedging gains or losses are also recorded in earnings. See Note 10 for more information. Stock-Based Compensation Our policy is to issue new shares for purchases under our equity incentive plans as described in Note 15. Stock-based compensation expense is estimated at the grant date based on an award’s fair value. The determination of the stock-based compensation expense related to stock options is calculated using a Black-Scholes-Merton option pricing model and is affected by our stock price, expected stock price volatility over the term of the awards, expected term, risk free interest rate and expected dividends. We record forfeitures as they occur. We recognize stock-based compensation expense for service-based equity awards using the straight-line attribution method over the requisite service period. We have awarded performance-based equity awards to certain employees and directors. Performance-based awards vested in accordance with the specific performance criteria espoused in the executed award agreements. Consistent with the service-based equity awards, the vesting of performance-based equity awards was dependent upon the participant’s continued employment through the date the performance criteria were achieved. The criteria associated with our outstanding performance-based stock options as defined in the terms of the award agreements, was satisfied as of September 30, 2016 and therefore these stock options all became vested and exercisable. As such, we recorded stock-based compensation expense during the year ended December 31, 2016 based on the grant date fair value of the performance-based awards. Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. See Note 8 for further detail on loss contingency related to the Medicare RAC. Fair Value of Financial Instruments The carrying values for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and other accrued liabilities reasonably approximate fair market value due to their nature and the short term maturity of these financial instruments. We measure assets and liabilities at fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, we use a consistent fair value hierarchy framework as defined in ASC 820, Fair Value Measurement . Refer to Note 11 for more information regarding management’s fair value estimates. Recently Issued Accounting Standards In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which is intended to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of the goodwill. Instead, an entity should compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value and should not exceed the total amount of goodwill allocated to that reporting unit. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted. We are evaluating this new guidance and do not believe it will have a material impact on our consolidated financial statements and related disclosures as the fair values of our reporting units exceed their carrying values. In November 2016, the FASB issued ASU 2016-18, Restricted Cash (“ASU 2016-18”), which requires that restricted cash be included with cash and cash equivalents when reconciling the beginning and end of period total amounts shown on the statement of cash flows. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. We are evaluating this guidance and its impact on our consolidated financial statements and related disclosures and expect the adoption of this ASU could impact the disclosure of our cash flows from operations. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which addresses eight specific cash flow issues in order to reduce diversity in practice. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. We are evaluating this guidance and its impact on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which simplifies several aspects of the accounting for share based compensation. ASU 2016-09 changes several aspects of the accounting for share based payment award transactions, including 1) accounting for income taxes, 2) classification of excess tax benefits on the statement of cash flows, 3) forfeitures, 4) minimum statutory tax withholding requirements and 5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. We early adopted ASU 2016-09 during the third quarter of 2016, which did not result in any significant changes to our current or prior period consolidated financial statements. As a result of this adoption, we recorded an excess tax benefit of approximately $4,000 during the fourth quarter of 2016 related to stock option exercises. In conjunction with adopting ASU 2016-09, we also made an accounting policy election to account for forfeitures as they occur. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which changes the accounting recognition, measurement and disclosure for leases in order to increase transparency. ASU 2016-02 requires lease assets and liabilities to be recognized on the balance sheet and key information about leasing arrangements to be disclosed. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. We are evaluating this new guidance and its impact on our consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which changes the current financial instruments model primarily impacting the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We are evaluating this new guidance and do not believe it will have a material impact on our consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU 2015‑17, Balance Sheet Classification of Deferred Taxes , (“ASU 2015‑17”), which requires entities with a classified balance sheet to present all deferred tax assets and liabilities as noncurrent. The guidance is effective for public companies with annual and interim periods beginning after December 15, 2016. We early adopted the provisions of ASU 2015-17 as of December 31, 2016 and prior period amounts have been reclassified to conform to the current period presentation. As of December 31, 2015, $32,919 of current deferred tax assets have been reclassified to long-term deferred tax liabilities in the consolidated balance sheet. The adoption of ASU 2015-17 did not materially impact our consolidated financial position, results of operations or cash flows, but did reduce our calculation of working capital. In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (“ASU 2015-05”), which established guidance regarding the accounting for software licenses. ASU 2015-05 was effective for annual reporting periods, including interim periods, beginning after December 15, 2015. We prospectively adopted the provisions of ASU 2015-05 as of January 1, 2016 and have not yet had any material contracts that were impacted by this new guidance. In April 2015, the FASB issued ASU 2015‑03, Simplifying the Presentation of Debt and Issuance Costs (“ASU 2015‑03”), which establishes guidance to simplify the presentation of debt issuance costs by requiring debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that liability, consistent with debt discounts. Prior to the issuance of ASU 2015-03, debt issuance costs were required to be presented as an asset in the balance sheet. The guidance is effective for annual reporting periods beginning after December 15, 2015, and interim periods within that reporting period. We adopted the provisions of ASU 2015-03 as of January 1, 2016 and prior period amounts have been reclassified to conform to the current period presentation. As of December 31, 2015, $20,975 of debt issuance costs were reclassified in the consolidated balance sheet from debt issuance costs, net to long-term debt. The adoption of ASU 2015-03 did not materially impact our consolidated financial position, results of operations or cash flows. In May 2014, the FASB issued ASU 2014‑09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014‑09”), which supersedes existing revenue recognition guidance and provides clarification of principles for recognizing revenue from contracts with customers. ASU 2014-09 sets forth a five-step model for determining when and how revenue is recognized. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Additional disclosures will be required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The two permitted transition methods under ASU 2014-09 are the full retrospective me |
Investments
Investments | 12 Months Ended |
Dec. 31, 2016 | |
Investments | |
Investments | Note 3. Investments Investments in marketable securities, all of which were classified as available-for-sale and included in prepaid expenses and other current assets, were as follows: December 31, 2015 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Money market securities $ $ $ — $ There were no investments in marketable securities as of December 31, 2016. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2016 | |
Acquisition | |
Acquisition | Note 4. Acquisition On May 14, 2014, we acquired the stock of iHealth Technologies resulting in the Connolly iHealth Merger. The Connolly iHealth Merger brought two market leaders together to offer clients a broad suite of claims accuracy solutions. This merger and related transaction expenses were funded through a cash investment by us and our stockholders as well as by additional borrowings. In addition to the cash funding related to the Connolly iHealth Merger, certain members of management received $69,957 in equity by rolling over a portion of their former equity interests in iHealth Technologies or incentive compensation that was owed to them as of the date of the merger. As part of the Connolly iHealth Merger, we allocated the purchase price to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on the estimated fair values at the date of acquisition. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities was recorded as goodwill. Goodwill represents the value of the acquired assembled workforce, specialized processes and procedures and operating synergies, none of which qualify as separate intangible assets. We believe these specialized processes and procedures and operating synergies will enhance our long history of innovation in improving our existing solutions, developing new solutions and expanding the scope of our services at both legacy companies. As a result of the Connolly iHealth Merger, we have cross sell opportunities across more than half of our healthcare client base and are actively engaging with existing clients to cross sell our solutions. We determined the estimated fair values of intangible assets acquired using estimates of future discounted cash flows to be generated by the business over the estimated duration of those cash flows. We based the estimated cash flows on our projections of future revenue, operating expenses, capital expenditures, working capital needs and tax rates. We estimated the duration of the cash flows based on the projected useful lives of the assets acquired. The discount rate was determined based on specific business risk, cost of capital and other factors. The estimated fair values of the assets acquired and liabilities assumed, after the effect of final adjustments related to the accounting for business combinations within the measurement period as described below, at the date of the Connolly iHealth Merger were as follows: May 14, 2014 Cash $ Accounts receivable Prepaid expenses and other assets Other long-term assets Property and equipment Intangible assets Total identifiable assets acquired Accounts payable and accrued liabilities Deferred tax liabilities Other long-term liabilities Total liabilities assumed Net identifiable assets acquired Goodwill Net assets acquired $ The $543,200 of acquired intangible assets are subject to a weighted average useful life of approximately 13.3 years. These definite lived intangible assets include a registered trademark of $8,600 (11 year useful life), customer relationships of $486,700 (14 year useful life) and acquired software of $47,900 (7 year useful life). For federal income tax purposes, the Connolly iHealth Merger was treated as a stock acquisition. The goodwill recognized is not deductible for income tax purposes. In connection with the acquisition, a preliminary liability of $21,291 was recorded in accounts payable and accrued other expenses on the Consolidated Balance Sheets as of December 31, 2014 for payments due to the former stockholders of iHealth Technologies These amounts were finalized and no other adjustments were made to the estimated fair values of the assets acquired and liabilities assumed during the measurement period in 2015 as additional information was received by management resulting in a total liability due to the former stockholders of iHealth Technologies of $22,270 and a corresponding increase to goodwill of $979. The payment in full was made to the former stockholders during the year ended December 31, 2015. We recorded $5,745 of transaction costs primarily related to professional services associated with the Connolly iHealth Merger as transaction-related expenses within our Consolidated Statements of Comprehensive Income (Loss) during the year ended December 31, 2014. We consolidated the results of operations of the acquired business as of and from May 14, 2014. The following are unaudited pro forma results of operations for the year ended December 31, 2014 as if the acquisition had occurred on January 1, 2014, and does not give effect to any estimated and potential cost savings or other operating efficiencies that may result from the Connolly iHealth Merger. These unaudited pro forma results are for comparative purposes only and may not be indicative of the results that would have occurred had this acquisition been completed on January 1, 2014 or the results that would be attained in the future. Year Ended December 31, 2014 (unaudited) Net revenue $ Operating income Net loss Basic loss per share $ Diluted loss per share $ |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment | |
Property and Equipment | Note 5. Property and Equipment Property and equipment by major asset class for the periods presented consisted of the following: December 31, 2016 2015 Computer equipment $ $ Software Furniture and fixtures Leasehold improvements Projects in progress Property and equipment, gross $ $ Less: Accumulated depreciation and amortization Property and equipment, net $ $ In December 2015, we purchased a perpetual software license, which is included in the software total above. We are paying for this software over a two year period ending in January 2018. As such, there is approximately $3,351 and $2,952 included in accounts payable and accrued other expenses and $3,225 and $6,340 included in other long-term liabilities on our Consolidated Balance Sheets as of December 31, 2016 and 2015, respectively. The amounts included in other long-term liabilities represents the present value of payments that will ultimately be made. Total depreciation and amortization expense related to property and equipment, including capitalized software costs, was $20,151 , $12,695 and $7,416 for the years ended December 31, 2016, 2015 and 2014, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Intangible Assets | |
Intangible Assets | Note 6. Intangible Assets Intangible asset balances by major asset class for the periods presented were as follows: Weighted Gross Net Average Carrying Accumulated Carrying Amortization Amount Amortization Impairment Amount Period December 31, 2016: Customer relationships $ $ $ — $ years Acquired software — years Connolly trademark — — indefinite-lived Total $ $ $ — $ years December 31, 2015: Customer relationships $ $ $ — $ years Acquired software — years Connolly trademark — indefinite-lived iHealth trademark — years Total $ $ $ $ years Amortization expense was $60,818 , $61,467 and $52,355 for the years ended December 31, 2016, 2015 and 2014, respectively. As a result of our rebranding in September 2015, we recorded an impairment of intangible assets of $27,826 related to our legacy trademarks during the year ended December 31, 2015. The remaining trademark value as of December 31, 2016 of $4,200 is related to our retail business that we continue to operate as Connolly, a division of Cotiviti. As of December 31, 2016 amortization expense for the next 5 years is expected to be: 2017 $ 2018 2019 2020 2021 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill | |
Goodwill | Note 7. Goodwill Total goodwill in our Consolidated Balance Sheets was $1,196,024 and $1,197,044 as of December 31, 2016 and December 31, 2015, respectively. Changes in the carrying amount of goodwill for the years ended December 31, 2016 and 2015 as allocated to each of our Healthcare and Global Retail and Other segments was as follows: December 31, 2016 December 31, 2015 Global Retail Global Retail Healthcare and Other Healthcare and Other Beginning balance $ $ $ $ Purchase price adjustments — — — Foreign currency translation and other — Ending balance $ $ $ $ There was no impairment related to goodwill for any period presented. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 8. Commitments and Contingencies Operating Leases We are obligated under non cancellable lease agreements for certain facilities and equipment, which frequently include renewal options and escalation clauses. For leases that contain predetermined fixed escalations, we recognize the related rent expense on a straight-line basis and record the difference between the recognized rent expense and amounts payable under the lease as lease obligations. Lease obligations due within one year are included in accounts payable and accrued other expenses on our Consolidated Balance Sheets. We lease certain facilities and equipment under non cancelable leases that expire at various points through 2029. Rent expense was $10,529, $8,826 and $7,202 for the years ended December 31, 2016, 2015 and 2014, respectively. Future minimum payments under non cancelable operating lease agreements as of December 31, 2016 were as follows: Year ending December 31: 2017 $ 2018 2019 2020 2021 2022 - 2029 Total minimum lease payments $ Legal and Other Matters We may be involved in various legal proceedings and litigation arising in the ordinary course of business. While any legal proceeding or litigation has an element of uncertainty, management believes the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial position, results of operations, or liquidity. Medicare RAC Contract Contingency In August 2014, CMS announced it would allow providers to remove all eligible claims currently pending in the appeals process by offering to pay hospitals 68% of the original claim amount. This settlement was offered to the providers and it was unknown what, if any, impact there would be for the Medicare RACs. On July 1, 2015, CMS issued a Technical Direction Letter to the Medicare RACs, including us, indicating that Medicare RACs will only be entitled to the contract contingency fee on the settled amounts of the claims, or 32% of the original inpatient claim amounts. Based on the initial lists of finalized settlements provided by CMS, we would be required to refund CMS approximately $22,308 due to the related adjustments in Medicare RAC contingency fees. CMS further advised that as the hospital settlement project continues, additional settlement lists will be matched to Medicare RAC claims which may result in updated refund amounts to those initially provided. While there are uncertainties in any dispute resolution and results are uncertain, we have disputed CMS’s findings based on our interpretation of the terms of the Medicare RAC contract and our belief that the backup data provided by CMS is inaccurate and/or incomplete. Our liability for estimated refunds and appeals includes amounts for these settled claims based on our best estimates of the amount we believe will be ultimately payable to CMS based on our interpretation of the terms of the Medicare RAC contract. We believe that it is possible that we could be required to pay an additional amount up to approximately $13,000 in excess of the amount we accrued as of December 31, 2016 based on the claims data we have received from CMS to date. As CMS completes its settlement process with the providers and updated files are provided to us, the potential amount owed by us may change. On September 28, 2016, CMS announced a second settlement process to allow eligible providers to settle their inpatient claims currently under appeal beginning December 1, 2016. This second settlement process could result in additional amounts owed to CMS. The amount of any such additional claims cannot presently be determined. Asset Retirement Obligations We have AROs arising from contractual requirements to perform specified activities at the time of disposition of certain leasehold improvements and equipment at some of our facilities. Changes in the carrying amount of AROs were as follows: Year ended December 31, 2016 2015 Balance beginning of period $ $ Additional ARO liability Accretion expense Balance at end of period $ $ |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Long-term Debt | |
Long-term Debt | Note 9. Long‑term Debt In September 2016, we entered into and executed the Restated Credit Agreement, which replaced our then outstanding Initial Secured Credit Facilities, lowered total debt outstanding by $22,700 and provided for lower applicable interest rates. The Restated Credit Agreement consists of (a) the First Lien Term A Loan in the amount of $250,000, (b) the First Lien Term B Loan in the amount of $550,000 and (c) the Revolver in the amount of up to $100,000. As a result of this refinancing, we recognized a loss on extinguishment of debt of $9,349 during the year ended December 31, 2016, which is included in our Consolidated Statements of Comprehensive Income (Loss). In June 2016, we repaid $223,000 in outstanding principal under our then outstanding Initial Second Lien Credit Facility using proceeds from our IPO. We also made a voluntary prepayment of $13,100 of outstanding principal under the Initial Second Lien Credit Facility. As a result of these repayments, we recognized a loss on extinguishment of debt of $7,068 during the year ended December 31, 2016, which is included in our Consolidated Statements of Comprehensive Income (Loss). In May 2015, we entered into and executed the First and Second Amendments to the then outstanding Initial First Lien Credit Facilities, which, among other things, provided for lower applicable interest rates associated with the Initial First Lien Credit Facilities by 50 basis points. As a result, we recorded a loss on extinguishment of debt of $4,084 during the year ended December 31, 2015, which is included in our Consolidated Statements of Comprehensive Income (Loss). Long‑term debt for the periods presented was as follows: December 31, 2016 2015 First Lien Term A Loan (a) $ $ — First Lien Term B Loan (b) — Revolver (c) — — Initial First Lien Term Loan (d) — Initial Second Lien Credit Facility (e) — Initial First Lien Revolver (f) — — Total debt Less: debt issuance costs Less: current portion Total long-term debt $ $ (a) The First Lien Term A Loan matures on September 28, 2021 and requires quarterly principal payments of $3,125 for the fourth quarter of 2016, $3,125 per quarter in 2017 and 2018, $4,688 per quarter in 2019, $6,250 per quarter in 2020 and $9,375 per quarter for the first two quarters of 2021. The remainder of the outstanding First Lien Term A Loan borrowings are due on September 28, 2021. Any mandatory or voluntary prepayment will be applied against the remaining scheduled installments of principal payments in direct order of maturity, unless other direction of application is provided by us. Based on our periodic election, borrowings under the First Lien Term A Loan bear interest at either (a) the ABR plus, based on our Secured Leverage Ratio (as defined in the Restated Credit Agreement), 1.25% - 2.00% for ABR loans or (b) LIBOR plus, based on our Secured Leverage Ratio, 2.25% to 3.00% for LIBOR loans. The ABR is equal to the highest of (i) the New York Federal Reserve Bank rate in effect on such date plus 0.50%, (ii) the LIBOR plus 1.00% and (iii) the prime commercial lending rate of the administrative agent as in effect on the relevant day. The interest period applicable to any LIBOR borrowing is one, two, three or six months, at the election of the borrower. Interest on LIBOR loans is payable the last day of the applicable interest period and, in the case of an interest period of more than three months’ duration, each day on which interest would have been payable had successive interest periods of three months’s duration been applicable to such borrowing. The interest rate in effect was 3.75% at December 31, 2016. (b) The First Lien Term B Loan matures on September 28, 2023 and requires quarterly principal payments of $1,375 with all remaining borrowings due on September 28, 2023. Based on our periodic election, borrowings under the First Lien Term B Loan bear interest at either (a) the ABR plus 1.75% for ABR loans or (b) LIBOR plus 2.75% for LIBOR loans. The ABR is equal to the highest of (i) the New York Federal Reserve Bank rate in effect on such date plus 0.50%, (ii) LIBOR plus 1.00%, (iii) the prime commercial lending rate of the administrative agent as in effect on the relevant day and (iv) 1.75%. LIBOR is equal to the higher of (a) the published LIBOR or (b) 0.75%. If our corporate credit rating from Moody’s Investor Service, Inc. is Ba3 or better and our corporate family rating from Standard & Poor’s Financial Services, LLC is BB- or better, the margin will be reduced by 0.25% per annum for as long as such ratings are maintained. The interest period applicable to any LIBOR borrowing is one, two, three or six months, at the election of the borrower. Interest on LIBOR loans is payable the last day of the applicable interest period and, in the case of an interest period of more than three months’ duration, each day on which interest would have been payable had successive interest periods of three months’s duration been applicable to such borrowing. The interest rate in effect was 3.75% at December 31, 2016. (c) The Revolver expires on September 28, 2021. Interest for any borrowings under the Revolver is payable over one, two, three or six months at our election. A commitment fee is payable quarterly based on the unused portion of the Revolver commitment which ranges from 0.30% to 0.50% per annum based on certain financial tests. Based on our periodic election, borrowings under the Revolver bear interest at either (a) ABR plus, based on our Secured Leverage Ratio, 1.25% - 2.00% for ABR loans or (b) LIBOR plus, based on our Secured Leverage Ratio, 2.25% to 3.00% for LIBOR loans. The ABR is equal to the highest of (i) the New York Federal Reserve Bank rate in effect on such date plus 0.50%, (ii) LIBOR plus 1.00% and (iii) the prime commercial lending rate of the administrative agent as in effect on the relevant day. There were no borrowings outstanding under the Revolver as of December 31, 2016. The interest rate in effect was 3.75% at December 31, 2016. (d) The Initial First Lien Term Loan, as amended, expired May 2021 and required quarterly principal payments of $2,025. The quarterly principal payment could be reduced by any amounts of mandatory prepayment. Any mandatory prepayment would be applied against the remaining scheduled installments of principal payments in direct order of maturity, unless other direction of application was provided by us. Interest on the Initial First Lien Term Loan was payable over periods of one, two, three or six months at the election of the borrower. Based on our periodic election, borrowings under the Initial First Lien Term Loan bore interest at either (a) ABR plus 2.50% for ABR Loans, or (b) LIBOR plus 3.50% for LIBOR Loans. The ABR was equal to the higher of (a) the Federal Funds Effective Rate plus 0.50%; (b) the published one month LIBOR plus 1.00%; (c) the Prime Rate; or (d) 2.00%. The LIBOR was equal to the higher of (a) LIBOR or (b) 1.00%. The interest rate in effect was 4.50% at December 31, 2015. Following the IPO, borrowings under the Initial First Lien Term Loan bore interest at either (a) ABR plus 2.25%, or (b) LIBOR plus 3.25%. (e) The Initial Second Lien Credit Facility expired May 2022 with the total principal balance due at maturity. Interest on the Initial Second Lien Credit Facility was payable over periods of one, two, three, or six months at the election of the borrower. Based on our periodic election, borrowings under the Initial Second Lien Credit Facility bore interest at either (a) ABR plus 6.00% for ABR Loans or (b) LIBOR plus 7.00% for LIBOR Loans. The ABR was equal to the higher of (a) the Federal Funds Effective Rate plus 0.50% (b) the published one month LIBOR plus 1.00%; (c) the Prime Rate; or (d) 2.00%. The LIBOR was equal to the higher of (a) LIBOR or (b) 1.00%. The interest rate in effect was 8.00% at December 31, 2015. Following the IPO, borrowings under the Initial Second Lien Credit Facility bore interest at either (a) ABR plus 5.75% for ABR Loans, or (b) LIBOR plus 6.75% for LIBOR Loans. (f) The Initial First Lien Revolver expired May 2019 with interest payable over periods of one, two, three or six months at the election of the borrower. A commitment fee was payable quarterly based on the daily unused portion of the Initial First Lien Revolver balance which ranged from an annual rate of 0.375% to 0.50% based on certain financial tests. The commitment fee was 0.375% at December 31, 2015. Based on our periodic election, borrowings under the Initial First Lien Revolver bore interest at either (a) ABR plus 1.75% to 2.25% for ABR Loans based on certain financial tests or (b) LIBOR plus 2.75% to 3.25% for LIBOR Loans based on certain financial tests. The ABR was equal to the higher of (a) the Federal Funds Effective Rate plus 0.50%; (b) the published one month LIBOR plus 1.00%; or (c) the Prime Rate. The LIBOR was equal to the higher of (a) the LIBOR or (b) 1.00%. The interest rate in effect was 4.00% at December 31, 2015. At December 31, 2015 we had $3,526 letters of credit outstanding which reduce the amount available for borrowing. There were no borrowings outstanding under the Initial First Lien Revolver as of December 31, 2015. The Restated Credit Agreement includes certain binding affirmative and negative covenants, including delivery of financial statements and other reports, maintenance of existence and transactions with affiliates. The negative covenants restrict our ability, among other things, to incur indebtedness, grant liens, make investments, sell or otherwise dispose of assets or enter into a merger, pay dividends or repurchase stock. As a result of these restrictions, approximately 80% of the subsidiary net assets are deemed restricted as of December 31, 2016. Refer to Schedule I Condensed Financial Information of Parent. Beginning December 31, 2016, there is a required financial covenant applicable only to the Revolver and the First Lien Term A Loan, pursuant to which we agree not to permit our Secured Leverage Ratio (as defined in the Restated Credit Agreement) to exceed 5.50:1.00 through September 2018, 5.25:1.00 through September 2019 and 5.00:1.00 through June 2021. In addition, the Restated Credit Agreement includes certain events of default including payment defaults, failure to perform affirmative covenants, failure to refrain from actions or omissions prohibited by negative covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults and a change of control default. We were in compliance with all such covenants as of December 31, 2016 and similar affirmative and negative covenants applicable to our then outstanding credit facilities as of December 31, 2015. The Restated Credit Agreement requires mandatory prepayments based upon annual excess cash flows commencing with the year ended December 31, 2017. The mandatory prepayment is contingently payable based on an annual excess cash flow calculation as defined within the Restated Credit Agreement. As of December 31, 2016, the expected aggregate maturities of long‑term debt for each of the next five years are as follows: December 31, 2016 2017 $ 2018 2019 2020 2021 Thereafter Total $ |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments | |
Derivative Instruments | Note 10. Derivative Instruments We are exposed to fluctuations in interest rates on our long‑term debt. We manage our exposure to fluctuations in the 3‑month LIBOR through the use of interest rate cap agreements designated as cash flow hedges. We are meeting our objective by hedging the risk of changes in cash flows related to changes in LIBOR by capping the interest on our floating rate debt linked to LIBOR to approximately 3%. We do not utilize derivatives for speculative or trading purposes. As of December 31, 2016 and December 31, 2015, we had $540,000 and $630,000, respectively, in notional debt outstanding related to these interest rate caps, which cover quarterly interest payments through September 2019. The notional amount decreases over time. Refer to Note 9 for more information regarding the debt outstanding related to these agreements. All of our outstanding interest rate cap contracts qualify for cash flow hedge accounting treatment in accordance with ASC 815, Derivatives and Hedging . Cash flow hedge accounting treatment allows for gains and losses on the effective portion of qualifying hedges to be deferred in accumulated other comprehensive (loss) income until the underlying transaction occurs, rather than recognizing the gains and losses on these instruments in earnings during each period they are outstanding. When the actual interest payments are made on our variable rate debt as described in Note 9 and the related derivative contract settles, any effective portion of realized interest rate hedging derivative gains and losses previously recorded in accumulated other comprehensive (loss) income is recognized in interest expense. We recognized interest expense of $283 and $105 during the years ended December 31, 2016 and 2015, respectively. We did not recognize any interest expense related to interest rate caps during the year ended December 31, 2014. Ineffectiveness results, in certain circumstances, when the change in total fair value of the derivative instrument differs from the change in the fair value of our expected future cash outlays for the related interest payment and is recognized immediately in interest expense. There was no ineffectiveness recorded during the years ended December 31, 2016, 2015 and 2014, respectively. Likewise, if the hedge does not qualify for hedge accounting, the periodic changes in its fair value are recognized in the period of the change in interest expense. All cash flows related to our interest rate cap agreements are classified as operating cash flows. Any outstanding derivative instruments expose us to credit loss in the event of nonperformance by the counterparties to the agreements, but we do not expect that the counterparty will fail to meet their obligations. The amount of such credit exposure is generally the positive fair value of our outstanding contracts. To manage credit risks, we select counterparties based on credit assessments, limit our overall exposure to any single counterparty and monitor the market position of any counterparty. The table below reflects quantitative information related to the fair value of our derivative instruments and where these amounts are recorded in our consolidated financial statements as of the period presented: December 31, 2016 2015 Liability fair value recorded in other long-term liabilities $ $ Liability fair value recorded in accounts payable and accrued other expenses Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months We record deferred hedge premiums which are being paid over the life of the hedge in accumulated other comprehensive (loss) income until the related hedge ultimately settles and interest payments are made on the underlying debt. As of December 31, 2016, we have made payments of $2,581 related to these deferred premiums. We expect to pay an additional $3,813 in deferred premiums through 2019 related to our outstanding interest rate cap agreements which is reflected in the fair value of these derivatives in the table above. Comprehensive (loss) income includes changes in the fair value of our interest rate cap agreements which qualify for hedge accounting. Changes in other comprehensive (loss) income for the periods presented related to derivative instruments classified as cash flow hedges were as follows: Balance, January 1, 2014 $ — Reclassifications in earnings — Change in fair value of derivative instrument, net of tax of $476 Balance, December 31, 2014 Reclassifications in earnings, net of tax benefit of $40 Change in fair value of derivative instrument, net of tax of $1,360 Balance, December 31, 2015 Reclassifications in earnings, net of tax benefit of $107 Change in fair value of derivative instrument, net of tax of $319 Balance, December 31, 2016 $ |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | Note 11. Fair Value Measurements We measure assets and liabilities at fair value based on assumptions market participants would use in pricing an asset or liability in the principal or most advantageous market. Authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value whereby inputs are assigned a hierarchical level. The hierarchical levels are: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2: Observable prices, other than quoted prices included in Level 1 inputs for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Unobservable inputs for the asset or liability used to measure fair value to the extent observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The following table summarizes our financial instruments measured at fair value within the Consolidated Balance Sheets: December 31, 2016 December 31, 2015 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets: Available-for-sale securities $ — $ — $ — $ $ — $ — Liabilities Long-term debt — — — — Interest rate cap agreements — — — — Total $ — $ $ $ $ $ Investments are classified as available‑for‑sale and carried at fair value in the accompanying Consolidated Balance Sheets. As of December 31, 2015, our investments consisted of money market securities valued using quoted market prices for identical assets in active markets. As of December 31, 2016, we did not hold any investments in available-for-sale securities. The fair value of our private debt is determined based on fluctuations in current interest rates, the trends in market yields of debt instruments with similar credit ratings, general economic conditions and other quantitative and qualitative factors. The carrying value of our debt approximates its fair value. The fair value of the interest rate cap agreements is determined using the market standard methodology of discounting the future expected variable cash receipts that would occur if interest rates rose above the strike rate of the caps. The analysis reflects the contractual terms of the derivatives, including period to maturity and remaining deferred premium payments, and uses observable market‑based inputs, including interest rates and implied volatilities. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rates. As such, the estimated fair values of these liabilities are classified as Level 2 in the fair value hierarchy. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | Note 12. Income Taxes Total income tax expense (benefit) for the years ended December 31, 2016, 2015 and 2014 was as follows: Year ended December 31, 2016 2015 2014 Income tax expense (benefit) from continuing operations $ $ $ Income tax expense from discontinued operations — — Total income tax expense (benefit) $ $ $ For the years ended December 31, 2016, 2015 and 2014, income (loss) from continuing operations before income taxes includes the following components: Year ended December 31, 2016 2015 2014 U.S. operations $ $ $ Foreign operations Income (loss) before income taxes $ $ $ The income tax expense (benefit) that is attributable to income (loss) from continuing operations before income taxes included in our Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2016, 2015 and 2014 consisted of the following: Year ended December 31, 2016 2015 2014 Current: U.S. federal $ $ $ State and local Foreign Current income tax expense Deferred U.S. federal State and local Foreign — Deferred income tax benefit Total income tax expense (benefit) $ $ $ The factors accounting for the variation in our overall effective tax rates from continuing operations compared to U.S. statutory income tax rates for the years ended December 31, 2016, 2015 and 2014 were as follows: Year ended December 31, 2016 2015 2014 Federal income tax expense (benefit) at the statutory rate $ $ $ State and local taxes, net of federal benefit Non-deductible costs Stock-based compensation — — Unrecognized tax positions Other Total income tax expense (benefit) $ $ $ Our effective income tax rate from continuing operations was 30.0%, 52.0% and 39.4% for the years ended December 31, 2016, 2015 and 2014, respectively. The decrease in the effective tax rate for the year ended December 31, 2016 compared to December 31, 2015 is primarily due to a $1,300 tax benefit related to the settlement of an uncertain tax position recorded in a prior period, a $4,000 excess tax benefit related to stock option exercises resulting from the early adoption of ASU 2016-09 and a $1,122 tax benefit from the implementation of certain tax planning. The increase in the effective tax rate for the year ended December 31, 2015 compared to December 31, 2014 is primarily due to changes in uncertain tax positions, an increase in non-deductible costs, an increase in the valuation allowance and the impact of a state deferred tax remeasurement as a result of new statutory regulations. In general, it is our practice and intention to reinvest the earnings of our non branch foreign subsidiaries in those operations on an indefinite basis. Such amounts may become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. Due to our intent to reinvest such amounts indefinitely, the taxation of these amounts in the U.S. is not expected to occur in the foreseeable future and therefore no deferred tax liability has been recorded. For the years ended December 31, 2016, 2015 and 2014 the amounts considered indefinitely reinvested were $8,065, $5,910 and $4,610, respectively. If the earnings were not considered indefinitely reinvested under current law, the tax on such earnings would be approximately $1,891, $1,386 and $1,081 for the years ended December 31, 2016, 2015 and 2014, respectively. The net deferred taxes below are included on our Consolidated Balance Sheets as a long-term net deferred tax liability of $120,533 at December 31, 2016 and a long-term net deferred tax liability of $129,284 at December 31, 2015. The components of our deferred tax assets and liabilities as of December 31, 2016 and 2015 are as follows: Year ended December 31, 2016 2015 Deferred tax assets: Allowance for doubtful accounts and estimated allowance for refunds and appeals $ $ Accrued compensation Deferred rent Stock-based compensation Tax credit and net operating loss carryforward Other deductible temporary differences Gross deferred tax assets Less: valuation allowance Total deferred tax assets Deferred tax liabilities: Unbilled receivables and other liabilities Intangibles and goodwill Property and equipment Software development costs Other taxable temporary differences Total gross deferred tax liabilities Net deferred tax liability $ $ We have federal net operating loss carryforwards of $1,297 which will expire in 2029. In addition, we have a foreign net operating loss of $1,183 with an unlimited carryforward. All state net operating losses were utilized in the prior year. As of December 31, 2016 and 2015, a valuation allowance of $199 and $440, respectively, has been recorded to reflect the portion of the deferred tax asset that is not more likely than not to be realized. The decrease in the valuation allowance relates to changes from statutory tax filings for the year ended December 31, 2015. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth. Due to change of ownership provisions in the Internal Revenue Code, use of a portion of our domestic net operating loss and tax credit carryforwards will be limited in future periods. Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities. ASC 740 clarifies the accounting and reporting for uncertainties in income tax law. This interpretation prescribes a comprehensive model for financial statement recognition measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. ASC 740 requires that the tax effects of an uncertain tax position be recognized only if it is “more likely than not” to be sustained by the taxing authority as of the reporting date. A reconciliation of the beginning and ending amount of unrecognized tax benefits at December 31, 2016 and 2015 is as follows: Year ended December 31, 2016 2015 Unrecognized tax benefits — January 1 $ $ Increase for tax positions taken in prior period Increase for tax positions taken in current period Decrease for tax positions taken in prior period — Decrease for tax positions taken in current period Decrease related to lapse in statute of limitations Decrease related to settlement of positions taken in prior periods — Unrecognized tax benefits — December 31 $ $ The majority of the balance of unrecognized tax benefits as of December 31, 2016 and 2015, would affect the effective tax rate if recognized. The total uncertain tax positions expected to reverse in the next 12 months is approximately $2,301 and $194 as of December 31, 2016 and 2015, respectively, due to lapse of statute of limitations. The current year change in uncertain tax positions is primarily the result of the settlement of an uncertain tax position recorded during a prior period. The total penalty and interest incurred, relating to uncertain tax positions, for years ended December 31, 2016, 2015 and 2014, was $424, $920 and $583, respectively. We include interest and penalties as tax expense in the Consolidated Statements of Comprehensive Income (Loss). We file income taxes with the U.S. federal government and various state and foreign jurisdictions. We are currently under audit with the Internal Revenue Service for the tax year ended December 31, 2014. In addition we are currently under audit for iHealth Technologies for the tax years ended December 31, 2012, December 31, 2013 and May 13, 2014. We operate in a number of state and local jurisdictions and as such are subject to state and local income tax examinations based upon various statutes of limitations in each jurisdiction. We are currently under audit by the State of New York for the tax year ended December 31, 2014 and for iHealth Technologies for the tax years ended December 31, 2012, December 31, 2013 and May 13, 2014 . |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity | |
Stockholders' Equity | Note 13. Stockholders’ Equity Issuance of Common Stock On May 13, 2016 our certificate of incorporation was amended and the number of shares of common stock authorized to be issued by Cotiviti Holdings, Inc. was increased from 122,000,000 to 600,000,000. On May 25, 2016 we consummated our IPO in which we issued and sold a total of 12,936,038 shares of common stock, including a portion of the underwriter overallotment, at a public offering price of $19.00 per share. We received net proceeds of approximately $226,963 after deducting underwriting discounts and commissions and other offering expenses of approximately $18,822. In May 2014, a total of 32,790,321 shares of common stock were issued for a total fair value of $435,144 in connection with the Connolly iHealth Merger. Of this amount, $365,187 was received in cash and $69,957 was issued to certain members of the former iHealth Technologies management as they either rolled over a portion of their former equity interests in iHealth Technologies or received equity in lieu of incentive compensation that was owed to them as of the date of the merger. A summary of the current rights and preferences of holders of our common stock are as follows: Voting Common stockholders are entitled to one vote per share of common stock held on all matters on which such common stockholder is entitled to vote. Dividends Common stockholders are eligible to receive dividends on common stock held when funds are available and as approved by the Board. The Restated Credit Agreement contains certain negative covenants that may restrict our ability to pay dividends. In addition, Delaware law may restrict the Board’s ability to declare dividends. Liquidation Rights In the event of liquidation or dissolution, common stockholders are entitled to receive all assets available for distribution to stockholders. Registration Rights The Second Amended and Restated Stockholders Agreement entered into as of June 1, 2016 in connection with our IPO contains (i) demand registration rights for Advent, subject to a cap of two requests in any 12 month period; (ii) piggy-back registration rights for any stockholder holding at least $500 worth of shares (each, a “Holder”), subject to a pro rata reduction if the total amount of shares requested to be included exceeds the amount of securities which in the opinion of the underwriters can be sold; and (iii) shelf registration rights for Holders, subject to a required anticipated aggregate offering price, net of selling expenses, of $5,000 subject to a cap of two requests for shelf registrations, for all Holders in the aggregate, in any 12 month period. Holders that are capable of selling all of their registrable securities pursuant to Rule 144 under the Securities Act in a single transaction without timing or volume limitations do not have piggy-back registration rights. We will be responsible for fees and expenses in connection with the registration rights, other than underwriters’ discounts and brokers’ commissions, if any, relating to any such registration and offering. Common Stock Split On May 13, 2016 we effected a 6.1-for-1 stock split of all outstanding shares of our common stock. All share, option and per share information presented in the accompanying consolidated financial statements and notes thereto have been adjusted to reflect the stock split on a retroactive basis for all periods presented and all share information is rounded up to the nearest whole share after reflecting the stock split. Common Stock Dividends On May 25, 2016 we paid a Special Cash Dividend of $150,000, or $1.94 per share of common stock outstanding prior to the IPO, to holders of record of our common stock on the dividend record date. In connection with the Special Cash Dividend we lowered the exercise price of then outstanding stock options by $1.94 per share in order to preserve the intrinsic value of the options giving effect to the Special Cash Dividend. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings per Share | |
Earnings per Share | Note 14. Earnings per Share Basic earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. For all periods presented, potentially dilutive outstanding shares consisted solely of our stock-based awards. Our potential common shares consist of the incremental common shares issuable upon the exercise of the options and vesting of restricted stock units. The dilutive effect of outstanding stock-based awards is reflected in diluted earnings per share by application of the treasury stock method. For all periods presented, all outstanding common stock consisted of a single‑class. Basic and diluted earnings (loss) per share are computed as follows: Year Ended December 31, 2016 2015 2014 Net income (loss) available to common stockholders $ $ $ Weighted average outstanding shares of common stock Dilutive effect of stock-based awards — Adjusted weighted average outstanding and assumed conversions for diluted EPS Earnings (loss) per share from continuing operations: Basic $ $ $ Diluted Earnings per share from discontinued operations: Basic $ — $ $ — Diluted — — Total earnings (loss) per share: Basic $ $ $ Diluted Employee stock options and RSUs that were excluded from the calculation of diluted earnings per share because their effect is anti‑dilutive for the periods presented were as follows: Years Ended December 31, 2016 2015 2014 Employee stock-based awards The criteria associated with all of our outstanding performance-based stock options as defined in the terms of the applicable award agreements, were satisfied as of September 30, 2016 and, as a result, outstanding performance-based stock options were included in the calculation of diluted earnings per share for the year ended December 31, 2016. Performance-based stock options of 2,794,910 and 2,487,275 as of December 31, 2015 and 2014, respectively, were not included in the calculation of diluted earnings per share as the vesting conditions had not yet been satisfied. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 15. Stock‑Based Compensation Equity Incentive Plans In 2012, we adopted the 2012 Plan pursuant to which our Board of Directors (or committee as designated by the Board of Directors) may grant options to purchase shares of our stock, restricted stock and certain other equity awards to directors, officers and key employees. We only granted stock options that can be settled in shares of our common stock under the 2012 Plan. The 2012 Plan had a total of 7,243,330 shares authorized for issuance. Upon completion of the IPO in May 2016, issuances under the 2012 Plan were suspended. At that time we adopted the 2016 Plan (collectively with the 2012 Plan, the “Equity Plans”), pursuant to which our Board of Directors (or a committee or sub-committee designated by the Board of Directors) may grant options to purchase shares of our stock, restricted stock and certain other equity awards to directors, officers and key employees. The 2016 Plan was established with the authorization for grants of up to 5,490,000 shares of authorized but unissued shares of common stock. No stock options were granted under the 2012 Plan after December 31, 2015. Awards granted under the 2012 Plan will remain outstanding until the earlier of exercise, forfeiture, cancellation or expiration. To the extent outstanding options under the 2012 Plan are forfeited, cancelled or terminated, the common stock subject to such options will be available for future issuance under the 2016 Plan. As of December 31, 2016, there are no shares available for future issuance under the 2012 Plan as it was discontinued upon adoption of the 2016 Plan. As of December 31, 2016 the total number of shares available for future issuance under the 2016 Plan is 5,277,451. Stock Options Under the terms of the 2016 Plan, we may issue options to purchase shares of our common stock at a price equal to 100% of the market price on the date of grant. Issuances under the 2012 Plan, prior to its suspension, were under terms similar to issuances under the 2016 Plan. Stock options granted are subject to either time of service (service-based awards) or performance (performance-based awards) criteria. Service-based awards typically vest ratably over a five year service period from the date of grant under the 2012 Plan and typically vest ratably over a four year service period from the date of grant under the 2016 Plan. In the event of a change in control, any outstanding, unvested service-based awards will vest immediately. Performance-based awards vest in accordance with the specific performance criteria espoused in the executed award agreements. The term of any stock option shall not exceed ten years from the date of grant. However, an incentive stock option granted to an employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of our stock may not have a term exceeding five years from the date of grant. The following is a summary of stock option activity under the Equity Plans: Year Ended December 31, 2016 2015 Weighted Weighted average average exercise exercise Shares price Shares price Outstanding at beginning of period $ $ Granted Exercised Forfeited Expired — — Outstanding at end of period $ $ Average Weighted Weighted Remaining Service- average Performance- average Contractual Aggregate based exercise based exercise Term Intrinsic Shares price Shares price (in years) Value Stock options outstanding as of December 31, 2016 $ $ $ Stock options vested and exercisable as of December 31, 2016 $ $ $ The criteria associated with 2,746,592 of our outstanding performance-based stock options as defined in the terms of the award agreements, was satisfied as of September 30, 2016 and therefore these stock options all became vested and exercisable. Aggregate intrinsic value represents the difference between our estimated fair value of common stock and the exercise price of outstanding in the money options. The fair value per share of common stock was $34.40 as of December 31, 2016 based upon the closing price of our common stock on the NYSE. The total intrinsic value of options exercised was $15,521 for the year ended December 31, 2016 and was insignificant for the year ended December 31, 2015. The total fair value of stock options vested was $22,453, $2,450 and $2,000 during the years ended December 31, 2016, 2015 and 2014, respectively. Restricted Stock Units RSUs provide participants the right to receive a payment based on the value of a share of common stock. RSUs may be subject to vesting requirements, restrictions and conditions to payment. Such requirements may be based on the continued service for a specified time period or on the attainment of specified performance goals as specified in the award agreements. RSUs are payable in cash or in shares or a combination of both. Under the terms of the Equity Plans, RSUs have a grant date fair value equal to the closing price of our stock on the grant date. The units typically vest ratably over a four year service period. We began issuing RSUs upon adoption of the 2016 Plan; no RSUs were issued under the 2012 Plan. The following is a summary of RSU activity under the 2016 Plan: Year Ended December 31, 2016 Weighted average grant date Shares fair value Nonvested at beginning of period — $ — Granted Vested — — Forfeited — — Nonvested at end of period $ Stock Compensation Expense The fair value of each stock option award is estimated on the date of grant using a Black-Scholes-Merton option pricing model. The expected term of the option represents the period the stock-based awards are expected to be outstanding. We use the simplified method under the provisions of ASC 718, Compensation – Stock Compensation , for estimating the expected term of the options. Since our shares were not publicly traded until May 2016 and were rarely traded privately, at the time of each grant, there was insufficient volatility data available. Accordingly, we calculate expected volatility using comparable peer companies with publicly traded shares over a term similar to the expected term of the options issued. We do not intend to pay dividends on our common shares, therefore, the dividend yield percentage is zero. The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of our stock options. We used the following weighted average assumptions to estimate the fair value of stock options granted for the periods presented as follows: Year Ended December 31, 2016 2015 2014 Expected term (years) Expected volatility % % % Expected dividend yield % % % Weighted average risk-free interest rate % % % Weighted average grant date fair value $ $ $ We recorded total stock-based compensation expense of $22,954, $3,399 and $2,492 for the years ended December 31, 2016, 2015 and 2014, respectively. Stock-based compensation expense during the year ended December 31, 2016 includes $15,898 related to the vesting of all outstanding performance-based stock options. Stock-based compensation expense during the year ended December 31, 2016 also includes $2,257 related to the accelerated vesting of certain stock options as the result of our IPO. We had not previously adjusted stock-based compensation expense for estimated forfeitures as there has been insignificant forfeiture activity to date. Based on the adoption of ASU 2016-09, we will account for forfeitures as they occur. As of December 31, 2016, we had total unrecognized compensation cost related to 1,784,212 unvested service-based stock options and RSUs under the Equity Plans of $13,319 which we expect to recognize over the next 3.1 years. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions | |
Related Party Transactions | Note 16. Related Party Transactions In connection with the Connolly iHealth Merger, a preliminary liability of $21,291 was recorded in accounts payable and accrued other expenses on the Consolidated Balance Sheets as of December 31, 2014 for payments due to the former stockholders of iHealth Technologies. See Note 4 for more information regarding the Connolly iHealth Merger. These amounts were finalized during 2015 and $22,270 was paid to the former stockholders of iHealth Technologies in September 2015. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Segment Information | Note 17. Segment and Geographic Information Operating segments are components of an enterprise for which separate financial information is available that is evaluated regularly by our Chief Operating Decision Maker in deciding how to allocate resources and in assessing financial performance. We conduct our business through two reportable business segments: Healthcare and Global Retail and Other. Through our Healthcare segment, we offer prospective and retrospective claims accuracy solutions to healthcare payers in the United States. We also provide analytics-based solutions unrelated to our healthcare payment accuracy solutions, on a limited basis in the United States. Through our Global Retail and Other segment, we provide retrospective claims accuracy solutions to retailers primarily in the United States, Canada and the United Kingdom, as well as solutions that improve efficiency and effectiveness of payment networks for a limited number of clients. We evaluate the performance of each segment based on segment net revenue and segment operating income. Operating income is calculated as net revenue less operating expenses and is not affected by other expense (income) or by income taxes. Indirect costs are generally allocated to the segments based on the segments’ proportionate share of revenue and expenses directly related to the operation of the segment. We do not allocate interest expense, other non‑operating (income) expense or the provision for income taxes, since these items are not considered in evaluating the segment’s overall operating performance. Our Chief Operating Decision Maker does not receive or utilize asset information to evaluate performance of operating segments. Accordingly, asset‑related information has not been presented. Our operating segment results for the periods presented were as follows: Year Ended December 31, 2016 2015 2014 Net Revenue Healthcare $ $ $ Global Retail and Other Consolidated net revenue $ $ $ Operating Income Healthcare $ $ $ Global Retail and Other Consolidated operating income $ $ $ Operating segment net revenue by product type for the periods presented was as follows: Year Ended December 31, 2016 % 2015 % 2014 % Healthcare Retrospective claims accuracy $ $ $ Prospective claims accuracy Transaction services Total Healthcare Global Retail and Other Retrospective claims accuracy Other Total Global Retail and Other Consolidated net revenue $ $ $ Geographic Information Geographic net revenue and long-lived assets are attributed to the geographic regions based on the geographic location of each of our subsidiaries/locations. Our operations are primarily within the continental United States. We also operate in Canada and the United Kingdom. Net revenue generated in the United States accounted for approximately 98%, 98%, and 95% of total net revenue for the years ended December 31, 2016, 2015 and 2014, respectively. Remaining net revenue was generated in the rest of the world. Long-lived assets are primarily based in the United States with over 99% of total consolidated long-lived assets. Less than 1% of total consolidated long-lived assets are foreign. |
Client Concentration
Client Concentration | 12 Months Ended |
Dec. 31, 2016 | |
Client Concentration | |
Client Concentration | Note 18. Client Concentration The list of our largest clients changes periodically and was further impacted by the Connolly iHealth Merger. Our significant clients accounted for the following percentages of total net revenue: Year Ended December 31, 2016 2015 2014 Customer A % % % Customer B % % % Customer C % % % In many instances, we provide our services pursuant to agreements which have auto renewal clauses and may be periodically subject to a competitive reprocurement process. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Employee Benefit Plans | |
Employee Benefit Plans | Note 19. Employee Benefit Plans Contributions expensed and included in compensation on our Consolidated Statements of Comprehensive Income (Loss) for employee benefit plans are detailed below: Year Ended December 31, 2016 2015 2014 401(k) Plan (a) $ $ $ Profit Share Plan (b) Provident Plan (c) Total $ $ $ (a) We sponsor defined contribution retirement plans in accordance with Section 401(k) of the Internal Revenue Code, which cover substantially all U.S. employees, subject to certain minimum age and service requirements. The plans provide for a contribution based on a percentage of eligible employee contributions. (b) We had a nonqualified profit sharing incentive compensation plan for certain eligible employees. Contributions were made within 90 days following the last day of the plan to a brokerage account in an amount determined at our discretion for employees who had completed 1,000 hours of service and were employed at the time of the contribution. This plan was discontinued after the 2014 plan year, with the final payout occurring in June 2016 and therefore we did not have a liability under the plan as of December 31, 2016. Our liability under the plan was $893 at December 31, 2015, which is included in accrued compensation costs in the accompanying Consolidated Balance Sheets. (c) Eligible employees of our subsidiary located in India are covered by the Provident Fund, contributions which are based on a percentage of eligible employees’ salaries, and the Indian Payment of Gratuity Act, which provides for benefits to be paid to eligible employees upon termination of employment (collectively, the “India Plan”). Benefits under the India Plan are administered by the Indian Government. As of December 31, 2016 and 2015 we had an accrued benefit obligation relating to the India Plan of $763 and $535, respectively. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations | |
Discontinued Operations | Note 20. Discontinued Operations In February 2015, we received payment on a $900 note receivable related to a business that was disposed of in 2012. Since the date of sale, we had elected to fully reserve the note receivable as the collectability was determined to be uncertain. This gain from the collection of the note receivable, net of tax, is reflected as a gain on discontinued operations on our Consolidated Statements of Comprehensive Income (Loss). The estimated impact to diluted EPS as a result of this gain on discontinued operations was $0.01 per diluted share for the year ended December 31, 2015. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Selected Quarterly Financial Data (Unaudited) | |
Selected Quarterly Financial Data (Unaudited) | Note 21. Selected Quarterly Financial Data (Unaudited) Historically, there has been a seasonal pattern to our healthcare revenue with the revenues in the first quarter generally lower than the other quarters and revenues in the fourth quarter generally being higher than the other quarters. Accordingly, the comparison of revenue from quarter to quarter may fluctuate and is dependent on various factors, including, but not limited to, reset of member liability, timing of special projects and timing of inaccurate payments being prevented or recovered as well as the aforementioned seasonal considerations. Consequently, you should not rely on our revenue for any one quarter as an indication of our future performance. The following table summarizes our unaudited quarterly operating results for the last two years: First Second Third Fourth Year Ended December 31, 2016 Quarter Quarter Quarter Quarter Revenue (1) $ $ $ $ Operating income (1)(2) Net income (1)(2)(3) Total earnings per share—Basic $ $ $ $ Total earnings per share—Diluted $ $ $ $ First Second Third Fourth Year Ended December 31, 2015 Quarter Quarter Quarter Quarter Revenue $ $ $ $ Operating income Income (loss) from continuing operations (3)(4) Net income (loss) (3)(4)(5) Earnings (loss) per share from continuing operations—Basic $ $ $ $ Earnings (loss) per share from continuing operations—Diluted $ $ $ $ Earnings per share from discontinued operations (5) $ — — — Total earnings (loss) per share—Basic $ $ $ $ Total earnings (loss) per share—Diluted $ $ $ $ (1) During the second quarter 2016, we generated approximately $5,000 in healthcare revenue from special projects that did not reoccur in the second half of the year. (2) During the second quarter 2016, stock-based compensation expense includes $2,257 related to the accelerated vesting of certain stock options as the result of our IPO. During the third quarter 2016, stock-based compensation expense includes $15,898 related to the vesting of all outstanding performance-based stock options (see Note 15). (3) During the second quarter 2016, we made a voluntary prepayment on our Initial Second Lien Credit Facility which resulted in a $7,068 loss on extinguishment of debt. During the third quarter 2016, as a result of refinancing our long-term debt, we recorded a loss on extinguishment of $9,349 (see Note 9). (4) During the second quarter 2015, as a result of repricing our Initial First Lien Credit Facilities, we recorded a loss on extinguishment of debt of $4,084 (see Note 9). (5) As a result of our rebranding in September 2015, as discussed in Note 1, we recorded an impairment of intangible assets of $27,826 related to our trademarks (see Note 6). (6) During the first quarter 2015, we received payment on a $900 note receivable related to a business that was disposed of in 2012. Since the date of sale, we had elected to fully reserve the note receivable as the collectability was determined to be uncertain. This collection of the note receivable resulted in a gain on discontinued operations, net of tax, of $559 (see Note 20). |
Schedule I - Condensed Financia
Schedule I - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Registrant | |
Schedule I - Condensed Financial Information of Registrant | Cotiviti Holdings, Inc. Schedule I - Condensed Financial Information of Registrant Parent Company Balance Sheets (In thousands, except share amounts) December 31, 2016 2015 ASSETS Non current assets: Investment in subsidiaries TOTAL ASSETS $ $ LIABILITIES AND STOCKHOLDERS' EQUITY Total liabilities $ — $ — Stockholders' equity: Common stock ($0.001 par value; 600,000,000 and 122,000,000 shares authorized, 90,748,740 and 77,237,711 issued, and 90,741,340 and 77,230,311 outstanding at December 31, 2016 and 2015, respectively) Additional paid-in capital Retained earnings (deficit) Accumulated other comprehensive loss Treasury stock, at cost (7,400 shares at December 31, 2016 and 2015) Total stockholders' equity TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ $ Cotiviti Holdings, Inc. Years ended December 31, 2016 2015 2014 Equity in income (loss) of subsidiaries $ $ $ Net income (loss) Equity in other comprehensive loss of subsidiaries Total comprehensive income (loss) $ $ $ Cotiviti Holdings, Inc. Schedule I—Condensed Financial Information of Registrant Parent Company Statements of Cash Flows (In thousands) Year Ended December 31, 2016 2015 2014 Cash flows from operating activities: Net income (loss) $ $ $ Adjustments to reconcile net income (loss) to net cash provided by operating activities: Equity in income (loss) of subsidiaries Net cash provided by operating activities — — — Cash flows from investing activities: Investment in subsidiaries Net cash used in investing activities Cash flows from financing activities: Proceeds from issuance of common stock — Proceeds from exercise of stock options Purchase of treasury shares — — Dividends paid Net cash provided by financing activities Net increase in cash and cash equivalents — — — Cash and cash equivalents at beginning of period — — — Cash and cash equivalents at end of the period $ — $ — $ — Supplemental disclosures of cash flow information: Noncash operating activities (stock-based compensation) $ $ $ Noncash financing activities (noncash capital contribution) — — Noncash financing activities (noncash acquisition of treasury stock ) Cotiviti Holdings, Inc. Schedule I—Condensed Financial Information of Registrant Notes to Parent Company Financial Statements (In thousands, except share amounts) Note 1. Basis of Presentation Cotiviti Holdings, Inc. (collectively with its subsidiaries, "we," "our," or "the Company") is incorporated in the state of Delaware and has adopted a holding company structure. With effect from September 2015, the name of our Company was changed from Connolly Superholdings, Inc. to Cotiviti Holdings, Inc. Our primary domestic operations are performed through Cotiviti, LLC; Cotiviti Services, LLC; and Cotiviti USA, LLC, all are our wholly-owned operating subsidiaries. We have international operations in Canada, the United Kingdom and India. Pursuant to the terms of the Restated Credit Agreement discussed in Note 9 of the Notes to the Cotiviti Holdings, Inc. Consolidated Financial Statements, Cotiviti Corporation and certain of its subsidiaries have restrictions on their ability to, among other things, incur additional indebtedness, pay dividends or make certain intercompany loans and advances. As a result of these restrictions, these parent company financial statements have been prepared in accordance with Rule 12-04 of Regulation S-X, as restricted net assets of the Company's subsidiaries (as defined in Rule 4-08(e)(3) of Regulation S-X) exceed 25% of the Company's consolidated net assets as of December 31, 2016. The Company is a holding company without any operations of its own. These condensed financial statements have been prepared on a "parent-only" basis. Under a parent-only presentation, the Parent Company's investments in subsidiaries are presented under the equity method of accounting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Stock-based compensation expense associated with equity incentive awards issued by the Parent Company and the related tax effects are recorded at the subsidiary level where the employees provide the services. The accompanying condensed financial information should be read in conjunction with the Cotiviti Holdings, Inc. Consolidated Financial Statements and related Notes thereto. Note 2. Stockholders' Equity Issuance of Common Stock On May 13, 2016 our certificate of incorporation was amended and the number of shares of common stock authorized to be issued by the Company was increased from 122,000,000 to 600,000,000. On May 25, 2016 we consummated our IPO in which we issued and sold a total of 12,936,038 shares of common stock, including a portion of the underwriter overallotment, at a public offering price of $19.00 per share. We received net proceeds of approximately $226,963 after deducting underwriting discounts and commissions and other offering expenses of approximately $18,822. In May 2014, a total of 32,790,321 shares of common stock were issued for a total fair value of $435,144 in connection with the Connolly iHealth Merger. Of this amount, $365,187 was received in cash and $69,957 was issued to certain members of the former iHealth Technologies management as they either rolled over a portion of their former equity interests in iHealth Technologies or received equity in lieu of incentive compensation that was owed to them as of the date of the merger. Common Stock Split On May 13, 2016 we effected a 6.1-for-1 stock split of all outstanding shares of our common stock. All share, option and per share information presented in the accompanying consolidated financial statements and notes thereto have been adjusted to reflect the stock split on a retroactive basis for all periods presented and all share information is rounded up to the nearest whole share after reflecting the stock split. Common Stock Dividends On May 25, 2016 we paid a Special Cash Dividend of $150,000, or $1.94 per share of common stock outstanding prior to the IPO, to holders of record of our common stock on the dividend record date. In connection with the Special Cash Dividend we lowered the exercise price of then outstanding stock options by $1.94 per share in order to preserve the intrinsic value of the options giving effect to the Special Cash Dividend. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Schedule II—Valuation and Qualifying Accounts | |
Schedule II—Valuation and Qualifying Accounts | Cotiviti Holdings, Inc. Schedule II—Valuation and Qualifying Accounts (in thousands) Additions Description Balance at Beginning of Period Charged to Operating Expenses Business Combination (1) Provision Charged Against Revenue Deductions (2) Balance at End of Period Year Ended December 31, 2016 Allowance and estimated liability for refunds and appeals (3) $ $ — $ — $ $ $ Allowance for doubtful accounts — — Year Ended December 31, 2015 Allowance and estimated liability for refunds and appeals (3) $ $ — $ — $ $ $ Allowance for doubtful accounts — — Year Ended December 31, 2014 Allowance and estimated liability for refunds and appeals (3) $ $ — $ $ $ $ Allowance for doubtful accounts — — (1) On May 14, 2014 , we acquired the stock of iHealth Technologies, Inc. resulting in the Connolly iHealth Merger. In connection with this business combination, we assumed the liabilities of iHealth Technologies, Inc. (2) Deductions related to the allowance and estimated liability for refunds and appeals represent credits or payments provided to our clients to settle the liability. Deductions related to the allowance for doubtful accounts represent write-offs of bad debt expense. (3) The balance at end of period consists of the estimated allowance for refunds and appeals netted against accounts receivable of $41,020, $33,406 and $23,216 and the estimated liability for refunds and appeals of $62,539, $67,775 and $74,941 as of December 31, 2016, 2015 and 2014, respectively. Refer to the Notes to our Consolidated Financial Statements. |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include our accounts and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions affecting the reported amounts in our consolidated financial statements and accompanying notes. These estimates are based on information available as of the date of the Consolidated Financial Statements; therefore, actual results could differ from those estimates. |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities of our foreign subsidiaries with a functional currency other than the U.S. Dollar are translated into U.S. Dollars using applicable exchange rates at the balance sheet date. Revenue and expenses are translated at average exchange rates effective during the year. The resulting foreign currency translation gains and losses are included as a component of accumulated other comprehensive (loss) income within stockholders’ equity on our Consolidated Balance Sheets. Assets and liabilities of our foreign subsidiaries for which the functional currency is the U.S. Dollar are re-measured into U.S. Dollars using applicable exchange rates at the balance sheet date, except nonmonetary assets and liabilities, which are re-measured at the historical exchange rates prevailing when acquired. Revenue and expenses are re-measured at average exchange rates effective during the year. Foreign currency translation gains and losses from re-measurement are included in other non-operating (income) expense in the accompanying Consolidated Statements of Comprehensive Income (Loss). The amounts of net gain (loss) on foreign currency re-measurement recognized were immaterial for all periods presented. |
Revenue Recognition, Unbilled Receivables and Estimated Liability for Refunds and Appeals | Revenue Recognition, Unbilled Receivables and Estimated Liability for Refunds and Appeals We provide services under contracts that contain various fee structures, including performance fee‑based contracts and fixed fee arrangements. Revenue is recognized when a contract exists, services have been provided to the client, the fee is fixed and determinable and collectability is reasonably assured. We recognize revenue on performance fee-based contracts based upon the specific terms of the underlying contract. The contract terms generally specify: (a) time periods covered by the work to be performed; (b) nature and extent of services we are to provide; (c) the client’s duties in assisting and cooperating with us; and (d) fees payable to us. Our fees are most often expressed as a percentage of our findings. Generally, our services are rendered when our clients realize the economic benefits from our services. Our clients realize economic benefits when they take credits against their existing accounts payable based on when we identify cost savings, when they receive refund checks based on overpayments, or when they acknowledge payment reductions based on cost savings. We derive a relatively small portion of revenue on contracts with fixed fee arrangements. We recognize revenue on these contracts ratably over the contract term and once all of the above criteria have been satisfied. Historically, there has been a certain amount of revenue with respect to which, even though we had met the requirements of our revenue recognition policy, the claim is ultimately rejected. In such cases, our clients may request a refund or offset if their providers or vendors ultimately reject the payment inaccuracies we find or if our clients determine not to pursue reimbursement from their providers or vendors even though we may have collected fees. We record any such refund as a reduction of revenue. We record an estimate for refund liabilities at any given time based on actual historical refund data by client type. We satisfy such refund liabilities either by offsets to accounts receivable or by cash payments to clients. In addition to the refund liabilities, we calculate client specific reserves when we determine an additional reserve may be necessary. The estimated liability for refunds and appeals representing our estimate of claims that may be overturned related to revenue which had already been received was $62,539 and $67,775 at December 31, 2016 and December 31, 2015, respectively. The estimated allowance for refunds and appeals representing our estimate of claims that may be overturned related to amounts in accounts receivable was $41,020 and $33,406 at December 31, 2016 and December 31, 2015, respectively. Under the Medicare Recovery Audit Program, in which we are one of the four Medicare RACs for CMS, healthcare providers have the right to appeal a claim and may pursue additional appeals if the initial appeal is found in favor of CMS. We accrue an estimated liability for appeals based on the amount of fees that are subject to appeals, closures or other adjustments and those which we estimate are probable of being returned to CMS following a successful appeal by the providers. Our estimates are based on our historical experience with the Medicare RAC appeal process. This estimated liability for Medicare RAC appeals is an offset to revenue in our Consolidated Statements of Comprehensive Income (Loss). The liability is included in the estimated liability for refunds and appeals on our Consolidated Balance Sheets. See Note 8 for further information regarding the estimated liability for appeals related to the Medicare RAC program. Unbilled receivables represent revenue recognized related to claims for which clients have received economic value that were not invoiced at the balance sheet date. Unbilled receivables were approximately $51,643 and $51,799 as of December 31, 2016 and December 31, 2015, respectively and are included in accounts receivable on our Consolidated Balance Sheets. Certain unbilled receivables arise when a portion of our earned fee is deferred at the time of the initial invoice. At a later date (which can be up to a year after original invoice, and at other times during the year after completion of the audit period based on contractual terms or as agreed with our client), we invoice the unbilled receivable amount. Notwithstanding the deferred due date, our clients acknowledge we have earned this unbilled receivable at the time of the original invoice, but we have agreed to defer billing the client for the related services. Unbilled receivables of this nature were approximately $6,137 and $6,431 as of December 31, 2016 and December 31, 2015, respectively, and are included in accounts receivable on our Consolidated Balance Sheets. We record periodic changes in unbilled receivables and refund liabilities as adjustments to revenue. |
Cost of Revenue | Cost of Revenue Cost of revenue is a direct cost associated with generating revenue. Cost of revenue related to compensation includes the total cost of payroll, related benefits and stock compensation expense for employees in roles that serve to provide direct revenue generating services to clients. Other cost of revenue primarily includes expenses related to the use of certain subcontractors and professional service firms, costs associated with the retrieval of medical records and facilities related costs associated with locations that are used strictly for revenue generating activities. Cost of revenue does not include depreciation and amortization, which is stated separately in our Consolidated Statements of Comprehensive Income (Loss). |
Selling, General and Administrative ("SG&A") | Selling, General and Administrative (“SG&A”) Compensation within SG&A includes the total cost of payroll, related benefits and stock compensation expense for employees who do not have a direct role associated with revenue generation including those involved with developing new service offerings. Other SG&A expenses include all general operating costs. These costs include, but are not limited to, rent and occupancy costs for facilities associated with locations that are used for employees not serving in revenue generating roles, telecommunications costs, information technology infrastructure costs, software licensing costs, advertising and marketing expenses, costs associated with developing new service offerings and expenses related to the use of certain subcontractors and professional services firms. Selling, general and administrative expenses do not include depreciation and amortization, which is stated separately in our Consolidated Statements of Comprehensive Income (Loss). |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and included in other selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income (Loss). Advertising expense was $1,345, $1,241 and $1,294 for the years ended December 31, 2016, 2015 and 2014, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all cash balances and highly liquid investments with an original maturity of 90 days or less from the date of purchase. |
Restricted Cash | Restricted Cash In connection with providing services to certain clients, we maintain a series of lockbox accounts with certain financial institutions. These lockbox accounts exist to receive funds we collect on behalf of our clients resulting from services provided. When client funds are received and deposited into the lockbox accounts, we record a corresponding customer deposit liability. These funds are included as both restricted cash in current assets and customer deposits in current liabilities on our Consolidated Balance Sheets. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. We accrue an allowance against accounts receivable related to fees yet to be collected, based on historical losses adjusted for current market conditions, our clients’ financial condition, the amount of any receivables in dispute, the current receivables aging and current payment patterns. We record changes in our estimate to the allowance for doubtful accounts through bad debt expense and relieve the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Write offs for all periods presented have not been significant. We do not have any off balance sheet credit exposure related to our clients. |
Investments | Investments Investments, which were historically purchased on behalf of our nonqualified profit sharing incentive compensation plan (See Note 19), consisted of money market securities and were classified as available-for-sale securities. Available-for-sale securities are reported at fair values (based primarily on quoted prices and market observable inputs) using the specific identification method, with the unrealized gains and losses included in accumulated other comprehensive (loss) income on our Consolidated Balance Sheets. Investments are included in prepaid expenses and other current assets on our Consolidated Balance Sheets (See Note 3). Realized gains and losses and interest and dividends on available-for-sale securities are included in other non-operating (income) expense on the Consolidated Statements of Comprehensive Income (Loss). |
Property and Equipment | Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets and is included in depreciation and amortization of property and equipment in our Consolidated Statements of Comprehensive Income (Loss). The estimated useful lives of our property and equipment are as follows: Computer equipment - years Software - years Furniture and fixtures years Leasehold improvements Lesser of remaining lease term or expected service life of improvement We have asset retirement obligations (“AROs”) arising from contractual requirements to perform specified activities at the time of disposition of certain leasehold improvements and equipment at some of our facilities. We record a liability for the estimated costs of these AROs. The liabilities are included in other long-term liabilities on our Consolidated Balance Sheets and are initially measured at fair value and subsequently are adjusted for accretion expense and any changes in the amount or timing of the estimated cash flows. |
Internally Developed Software Costs | Internally Developed Software Costs Capitalization of costs incurred in connection with software developed for internal use commences when both the preliminary project stage is completed and management has authorized further funding for the project, based on a determination that it is probable the project will be completed and used to perform the function intended. Capitalized costs are limited to (i) external direct costs of materials and services consumed in developing or obtaining internal use software and (ii) payroll and payroll related costs for employees who are directly associated with and devote time to the internal use software project. Capitalization of such costs ceases no later than the point at which the project is substantially complete and ready for its intended use. All other costs to develop software for internal use are expensed as incurred. We capitalized approximately $21,580 and $7,239 for the years ended December 31, 2016 and 2015, respectively. Amortization of software and software development costs is calculated on a straight-line basis over the expected economic life of the software, generally estimated to be five years and is included in depreciation and amortization of property and equipment on our Consolidated Statements of Comprehensive Income (Loss). Amortization expense for internal use software was $2,992, $2,287 and $722 for the years ended December 31, 2016, 2015 and 2014, respectively. Amortization expense for the year ended December 31, 2015 includes the write off of approximately $975 related to software that is no longer being used. |
Intangible Assets | Intangible Assets Our intangible assets with definite lives include customer relationships and acquired software. Intangible assets with indefinite lives include a trademark, which is not being amortized and is tested for impairment on an annual basis or when events or changes in circumstances necessitate an evaluation for impairment. Intangible assets with definite lives are initially recorded at fair value and are amortized on a basis consistent with the timing and pattern of expected cash flows used to value the intangibles, generally on a straight-line basis over useful lives ranging from 6 to 14 years. Amortization expense is included in amortization of intangible assets in our Consolidated Statements of Comprehensive Income (Loss). |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including property and equipment and intangible assets with definite lives, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If circumstances require the asset or asset group be tested for possible impairment, we first compare undiscounted cash flows expected to be generated by the asset or asset group to its carrying value. If the carrying value of the asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment loss is recognized to the extent the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third party independent appraisals, as necessary. Intangible assets with indefinite lives are tested for impairment on an annual basis as of October 1, of each year or more frequently whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future discounted cash flows the assets are expected to generate. We recognized a $27,826 impairment charge on our trademark assets during the year ended December 31, 2015 due to a change in the estimated fair value of the trademark. We recognized a $74,034 impairment charge for the year ended December 31, 2014 due to the change in the estimated fair value of our CMS customer relationship intangible asset associated with the Medicare RAC. See Note 6 for further detail. |
Goodwill | Goodwill Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination which are not individually identified and separately recognized. We do not amortize goodwill. Goodwill is reviewed for impairment on an annual basis as of October 1, of each year or more frequently if a triggering event occurs. These tests are performed at the reporting unit level. We have two reporting units, Healthcare and Global Retail and Other. We are permitted to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two step impairment test as required in ASC 350, Intangibles—Goodwill and Other . If we can support the conclusion that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then we would not need to perform the two step impairment test. If we cannot support such a conclusion, or we do not elect to perform the qualitative assessment, then the first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The fair value of each reporting unit is determined using a discounted cash flow analysis. |
Acquisitions | Acquisitions We account for acquisitions using the accounting for business combinations. The purchase price is allocated to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on estimated fair values at the date of the acquisition. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, including the selection of valuation methodologies, estimates of future revenue and cash flows and discount rates. Under the acquisition method of accounting for business combinations, any changes to acquired balances in tax accounts, including adjustments to deferred tax asset valuation allowances or liabilities related to uncertain tax positions, which are recorded during the measurement period, and are determined to be attributable to facts and circumstances that existed as of the acquisition date, are considered a measurement period adjustment and will result in an offsetting increase or decrease to goodwill. All other changes to deferred tax asset valuation allowances and liabilities related to uncertain tax positions will result in an increase or decrease to income tax expense. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for tax attributes such as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We recognize net deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. In the event we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we reduce the deferred tax asset valuation allowance and record a benefit in our provision for income taxes in our Consolidated Statements of Comprehensive Income (Loss). We record liabilities related to uncertain tax positions in accordance with ASC 740, Income Taxes (“ASC 740”), on the basis of a two step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. We recognize interest and penalties related to unrecognized tax benefits within the income tax provision in the accompanying Consolidated Statements of Comprehensive Income (Loss). Accrued interest and penalties are included within accounts payable and accrued other expenses in the Consolidated Balance Sheets. |
Derivative Instruments | Derivative Instruments Our derivative instruments consist entirely of interest rate cap agreements, are stated at fair value and are included in accounts payable and accrued other expenses and other long-term liabilities on our Consolidated Balance Sheets. Changes in the fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other comprehensive loss (income) on our Consolidated Balance Sheets until the underlying hedged transactions are recognized in earnings, at which time any deferred hedging gains or losses are also recorded in earnings. See Note 10 for more information. |
Stock-Based Compensation | Stock-Based Compensation Our policy is to issue new shares for purchases under our equity incentive plans as described in Note 15. Stock-based compensation expense is estimated at the grant date based on an award’s fair value. The determination of the stock-based compensation expense related to stock options is calculated using a Black-Scholes-Merton option pricing model and is affected by our stock price, expected stock price volatility over the term of the awards, expected term, risk free interest rate and expected dividends. We record forfeitures as they occur. We recognize stock-based compensation expense for service-based equity awards using the straight-line attribution method over the requisite service period. We have awarded performance-based equity awards to certain employees and directors. Performance-based awards vested in accordance with the specific performance criteria espoused in the executed award agreements. Consistent with the service-based equity awards, the vesting of performance-based equity awards was dependent upon the participant’s continued employment through the date the performance criteria were achieved. The criteria associated with our outstanding performance-based stock options as defined in the terms of the award agreements, was satisfied as of September 30, 2016 and therefore these stock options all became vested and exercisable. As such, we recorded stock-based compensation expense during the year ended December 31, 2016 based on the grant date fair value of the performance-based awards. |
Commitments and Contingencies | Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. See Note 8 for further detail on loss contingency related to the Medicare RAC. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying values for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and other accrued liabilities reasonably approximate fair market value due to their nature and the short term maturity of these financial instruments. We measure assets and liabilities at fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, we use a consistent fair value hierarchy framework as defined in ASC 820, Fair Value Measurement . Refer to Note 11 for more information regarding management’s fair value estimates. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which is intended to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of the goodwill. Instead, an entity should compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value and should not exceed the total amount of goodwill allocated to that reporting unit. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted. We are evaluating this new guidance and do not believe it will have a material impact on our consolidated financial statements and related disclosures as the fair values of our reporting units exceed their carrying values. In November 2016, the FASB issued ASU 2016-18, Restricted Cash (“ASU 2016-18”), which requires that restricted cash be included with cash and cash equivalents when reconciling the beginning and end of period total amounts shown on the statement of cash flows. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. We are evaluating this guidance and its impact on our consolidated financial statements and related disclosures and expect the adoption of this ASU could impact the disclosure of our cash flows from operations. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which addresses eight specific cash flow issues in order to reduce diversity in practice. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. We are evaluating this guidance and its impact on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which simplifies several aspects of the accounting for share based compensation. ASU 2016-09 changes several aspects of the accounting for share based payment award transactions, including 1) accounting for income taxes, 2) classification of excess tax benefits on the statement of cash flows, 3) forfeitures, 4) minimum statutory tax withholding requirements and 5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. We early adopted ASU 2016-09 during the third quarter of 2016, which did not result in any significant changes to our current or prior period consolidated financial statements. As a result of this adoption, we recorded an excess tax benefit of approximately $4,000 during the fourth quarter of 2016 related to stock option exercises. In conjunction with adopting ASU 2016-09, we also made an accounting policy election to account for forfeitures as they occur. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which changes the accounting recognition, measurement and disclosure for leases in order to increase transparency. ASU 2016-02 requires lease assets and liabilities to be recognized on the balance sheet and key information about leasing arrangements to be disclosed. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. We are evaluating this new guidance and its impact on our consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which changes the current financial instruments model primarily impacting the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We are evaluating this new guidance and do not believe it will have a material impact on our consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU 2015‑17, Balance Sheet Classification of Deferred Taxes , (“ASU 2015‑17”), which requires entities with a classified balance sheet to present all deferred tax assets and liabilities as noncurrent. The guidance is effective for public companies with annual and interim periods beginning after December 15, 2016. We early adopted the provisions of ASU 2015-17 as of December 31, 2016 and prior period amounts have been reclassified to conform to the current period presentation. As of December 31, 2015, $32,919 of current deferred tax assets have been reclassified to long-term deferred tax liabilities in the consolidated balance sheet. The adoption of ASU 2015-17 did not materially impact our consolidated financial position, results of operations or cash flows, but did reduce our calculation of working capital. In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (“ASU 2015-05”), which established guidance regarding the accounting for software licenses. ASU 2015-05 was effective for annual reporting periods, including interim periods, beginning after December 15, 2015. We prospectively adopted the provisions of ASU 2015-05 as of January 1, 2016 and have not yet had any material contracts that were impacted by this new guidance. In April 2015, the FASB issued ASU 2015‑03, Simplifying the Presentation of Debt and Issuance Costs (“ASU 2015‑03”), which establishes guidance to simplify the presentation of debt issuance costs by requiring debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that liability, consistent with debt discounts. Prior to the issuance of ASU 2015-03, debt issuance costs were required to be presented as an asset in the balance sheet. The guidance is effective for annual reporting periods beginning after December 15, 2015, and interim periods within that reporting period. We adopted the provisions of ASU 2015-03 as of January 1, 2016 and prior period amounts have been reclassified to conform to the current period presentation. As of December 31, 2015, $20,975 of debt issuance costs were reclassified in the consolidated balance sheet from debt issuance costs, net to long-term debt. The adoption of ASU 2015-03 did not materially impact our consolidated financial position, results of operations or cash flows. In May 2014, the FASB issued ASU 2014‑09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014‑09”), which supersedes existing revenue recognition guidance and provides clarification of principles for recognizing revenue from contracts with customers. ASU 2014-09 sets forth a five-step model for determining when and how revenue is recognized. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Additional disclosures will be required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The two permitted transition methods under ASU 2014-09 are the full retrospective method, in which case the new guidance would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of the initial application. The guidance is effective for public companies with annual periods beginning after December 15, 2017 and interim periods within that reporting period. The FASB will permit companies to adopt the new standard early, but not before the original effective date of annual reporting periods beginning after December 15, 2016. We have formed an internal team to evaluate and quantify the potential impact of this new revenue guidance. As of the date of this filing, we have made significant progress on our contract reviews and policy drafting. We will continue to evaluate this new guidance and plan to provide additional information about our method of adoption and the impact, if any, on our consolidated financial statements and related disclosures in future filings. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Schedule of useful lives | Computer equipment - years Software - years Furniture and fixtures years Leasehold improvements Lesser of remaining lease term or expected service life of improvement |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments | |
Schedule of reconciliation of available-for-sale securities | December 31, 2015 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Money market securities $ $ $ — $ |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Acquisition | |
Schedule of estimated fair values of the assets acquired and liabilities assumed | May 14, 2014 Cash $ Accounts receivable Prepaid expenses and other assets Other long-term assets Property and equipment Intangible assets Total identifiable assets acquired Accounts payable and accrued liabilities Deferred tax liabilities Other long-term liabilities Total liabilities assumed Net identifiable assets acquired Goodwill Net assets acquired $ |
Schedule of unaudited pro forma results | Year Ended December 31, 2014 (unaudited) Net revenue $ Operating income Net loss Basic loss per share $ Diluted loss per share $ |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment | |
Schedule of property and equipment by major asset class | December 31, 2016 2015 Computer equipment $ $ Software Furniture and fixtures Leasehold improvements Projects in progress Property and equipment, gross $ $ Less: Accumulated depreciation and amortization Property and equipment, net $ $ |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Intangible Assets | |
Schedule of intangible asset balances by major asset class | Weighted Gross Net Average Carrying Accumulated Carrying Amortization Amount Amortization Impairment Amount Period December 31, 2016: Customer relationships $ $ $ — $ years Acquired software — years Connolly trademark — — indefinite-lived Total $ $ $ — $ years December 31, 2015: Customer relationships $ $ $ — $ years Acquired software — years Connolly trademark — indefinite-lived iHealth trademark — years Total $ $ $ $ years |
Schedule of intangible asset amortization expense | 2017 $ 2018 2019 2020 2021 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill | |
Schedule of changes in the carrying amount of goodwill by segment | December 31, 2016 December 31, 2015 Global Retail Global Retail Healthcare and Other Healthcare and Other Beginning balance $ $ $ $ Purchase price adjustments — — — Foreign currency translation and other — Ending balance $ $ $ $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Schedule of future minimum payments under non-cancelable operating lease agreements | Year ending December 31: 2017 $ 2018 2019 2020 2021 2022 - 2029 Total minimum lease payments $ |
Schedule of changes in the carrying amount of AROs | Year ended December 31, 2016 2015 Balance beginning of period $ $ Additional ARO liability Accretion expense Balance at end of period $ $ |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Long-term Debt | |
Schedule of long-term debt | December 31, 2016 2015 First Lien Term A Loan (a) $ $ — First Lien Term B Loan (b) — Revolver (c) — — Initial First Lien Term Loan (d) — Initial Second Lien Credit Facility (e) — Initial First Lien Revolver (f) — — Total debt Less: debt issuance costs Less: current portion Total long-term debt $ $ (a) The First Lien Term A Loan matures on September 28, 2021 and requires quarterly principal payments of $3,125 for the fourth quarter of 2016, $3,125 per quarter in 2017 and 2018, $4,688 per quarter in 2019, $6,250 per quarter in 2020 and $9,375 per quarter for the first two quarters of 2021. The remainder of the outstanding First Lien Term A Loan borrowings are due on September 28, 2021. Any mandatory or voluntary prepayment will be applied against the remaining scheduled installments of principal payments in direct order of maturity, unless other direction of application is provided by us. Based on our periodic election, borrowings under the First Lien Term A Loan bear interest at either (a) the ABR plus, based on our Secured Leverage Ratio (as defined in the Restated Credit Agreement), 1.25% - 2.00% for ABR loans or (b) LIBOR plus, based on our Secured Leverage Ratio, 2.25% to 3.00% for LIBOR loans. The ABR is equal to the highest of (i) the New York Federal Reserve Bank rate in effect on such date plus 0.50%, (ii) the LIBOR plus 1.00% and (iii) the prime commercial lending rate of the administrative agent as in effect on the relevant day. The interest period applicable to any LIBOR borrowing is one, two, three or six months, at the election of the borrower. Interest on LIBOR loans is payable the last day of the applicable interest period and, in the case of an interest period of more than three months’ duration, each day on which interest would have been payable had successive interest periods of three months’s duration been applicable to such borrowing. The interest rate in effect was 3.75% at December 31, 2016. (b) The First Lien Term B Loan matures on September 28, 2023 and requires quarterly principal payments of $1,375 with all remaining borrowings due on September 28, 2023. Based on our periodic election, borrowings under the First Lien Term B Loan bear interest at either (a) the ABR plus 1.75% for ABR loans or (b) LIBOR plus 2.75% for LIBOR loans. The ABR is equal to the highest of (i) the New York Federal Reserve Bank rate in effect on such date plus 0.50%, (ii) LIBOR plus 1.00%, (iii) the prime commercial lending rate of the administrative agent as in effect on the relevant day and (iv) 1.75%. LIBOR is equal to the higher of (a) the published LIBOR or (b) 0.75%. If our corporate credit rating from Moody’s Investor Service, Inc. is Ba3 or better and our corporate family rating from Standard & Poor’s Financial Services, LLC is BB- or better, the margin will be reduced by 0.25% per annum for as long as such ratings are maintained. The interest period applicable to any LIBOR borrowing is one, two, three or six months, at the election of the borrower. Interest on LIBOR loans is payable the last day of the applicable interest period and, in the case of an interest period of more than three months’ duration, each day on which interest would have been payable had successive interest periods of three months’s duration been applicable to such borrowing. The interest rate in effect was 3.75% at December 31, 2016. (c) The Revolver expires on September 28, 2021. Interest for any borrowings under the Revolver is payable over one, two, three or six months at our election. A commitment fee is payable quarterly based on the unused portion of the Revolver commitment which ranges from 0.30% to 0.50% per annum based on certain financial tests. Based on our periodic election, borrowings under the Revolver bear interest at either (a) ABR plus, based on our Secured Leverage Ratio, 1.25% - 2.00% for ABR loans or (b) LIBOR plus, based on our Secured Leverage Ratio, 2.25% to 3.00% for LIBOR loans. The ABR is equal to the highest of (i) the New York Federal Reserve Bank rate in effect on such date plus 0.50%, (ii) LIBOR plus 1.00% and (iii) the prime commercial lending rate of the administrative agent as in effect on the relevant day. There were no borrowings outstanding under the Revolver as of December 31, 2016. The interest rate in effect was 3.75% at December 31, 2016. (d) The Initial First Lien Term Loan, as amended, expired May 2021 and required quarterly principal payments of $2,025. The quarterly principal payment could be reduced by any amounts of mandatory prepayment. Any mandatory prepayment would be applied against the remaining scheduled installments of principal payments in direct order of maturity, unless other direction of application was provided by us. Interest on the Initial First Lien Term Loan was payable over periods of one, two, three or six months at the election of the borrower. Based on our periodic election, borrowings under the Initial First Lien Term Loan bore interest at either (a) ABR plus 2.50% for ABR Loans, or (b) LIBOR plus 3.50% for LIBOR Loans. The ABR was equal to the higher of (a) the Federal Funds Effective Rate plus 0.50%; (b) the published one month LIBOR plus 1.00%; (c) the Prime Rate; or (d) 2.00%. The LIBOR was equal to the higher of (a) LIBOR or (b) 1.00%. The interest rate in effect was 4.50% at December 31, 2015. Following the IPO, borrowings under the Initial First Lien Term Loan bore interest at either (a) ABR plus 2.25%, or (b) LIBOR plus 3.25%. (e) The Initial Second Lien Credit Facility expired May 2022 with the total principal balance due at maturity. Interest on the Initial Second Lien Credit Facility was payable over periods of one, two, three, or six months at the election of the borrower. Based on our periodic election, borrowings under the Initial Second Lien Credit Facility bore interest at either (a) ABR plus 6.00% for ABR Loans or (b) LIBOR plus 7.00% for LIBOR Loans. The ABR was equal to the higher of (a) the Federal Funds Effective Rate plus 0.50% (b) the published one month LIBOR plus 1.00%; (c) the Prime Rate; or (d) 2.00%. The LIBOR was equal to the higher of (a) LIBOR or (b) 1.00%. The interest rate in effect was 8.00% at December 31, 2015. Following the IPO, borrowings under the Initial Second Lien Credit Facility bore interest at either (a) ABR plus 5.75% for ABR Loans, or (b) LIBOR plus 6.75% for LIBOR Loans. (f) The Initial First Lien Revolver expired May 2019 with interest payable over periods of one, two, three or six months at the election of the borrower. A commitment fee was payable quarterly based on the daily unused portion of the Initial First Lien Revolver balance which ranged from an annual rate of 0.375% to 0.50% based on certain financial tests. The commitment fee was 0.375% at December 31, 2015. Based on our periodic election, borrowings under the Initial First Lien Revolver bore interest at either (a) ABR plus 1.75% to 2.25% for ABR Loans based on certain financial tests or (b) LIBOR plus 2.75% to 3.25% for LIBOR Loans based on certain financial tests. The ABR was equal to the higher of (a) the Federal Funds Effective Rate plus 0.50%; (b) the published one month LIBOR plus 1.00%; or (c) the Prime Rate. The LIBOR was equal to the higher of (a) the LIBOR or (b) 1.00%. The interest rate in effect was 4.00% at December 31, 2015. At December 31, 2015 we had $3,526 letters of credit outstanding which reduce the amount available for borrowing. There were no borrowings outstanding under the Initial First Lien Revolver as of December 31, 2015. |
Schedule of expected aggregate maturities of long term debt | December 31, 2016 2017 $ 2018 2019 2020 2021 Thereafter Total $ |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments | |
Schedule of fair value and location of derivative instruments | December 31, 2016 2015 Liability fair value recorded in other long-term liabilities $ $ Liability fair value recorded in accounts payable and accrued other expenses Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months |
Schedule of changes in other comprehensive income related to derivative instruments classified as cash flow hedges | Balance, January 1, 2014 $ — Reclassifications in earnings — Change in fair value of derivative instrument, net of tax of $476 Balance, December 31, 2014 Reclassifications in earnings, net of tax benefit of $40 Change in fair value of derivative instrument, net of tax of $1,360 Balance, December 31, 2015 Reclassifications in earnings, net of tax benefit of $107 Change in fair value of derivative instrument, net of tax of $319 Balance, December 31, 2016 $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Summary of financial instruments measured at fair value | December 31, 2016 December 31, 2015 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets: Available-for-sale securities $ — $ — $ — $ $ — $ — Liabilities Long-term debt — — — — Interest rate cap agreements — — — — Total $ — $ $ $ $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of total income tax expense (benefit) | Year ended December 31, 2016 2015 2014 Income tax expense (benefit) from continuing operations $ $ $ Income tax expense from discontinued operations — — Total income tax expense (benefit) $ $ $ |
Schedule of income (loss) from continuing operations before income taxes | Year ended December 31, 2016 2015 2014 U.S. operations $ $ $ Foreign operations Income (loss) before income taxes $ $ $ |
Schedule of income tax expense (benefit) | Year ended December 31, 2016 2015 2014 Current: U.S. federal $ $ $ State and local Foreign Current income tax expense Deferred U.S. federal State and local Foreign — Deferred income tax benefit Total income tax expense (benefit) $ $ $ |
Schedule of factors for variation in effective tax rates from continuing operations compared to U.S. statutory income tax rates | Year ended December 31, 2016 2015 2014 Federal income tax expense (benefit) at the statutory rate $ $ $ State and local taxes, net of federal benefit Non-deductible costs Stock-based compensation — — Unrecognized tax positions Other Total income tax expense (benefit) $ $ $ |
Schedule of components of deferred tax assets and liabilities | Year ended December 31, 2016 2015 Deferred tax assets: Allowance for doubtful accounts and estimated allowance for refunds and appeals $ $ Accrued compensation Deferred rent Stock-based compensation Tax credit and net operating loss carryforward Other deductible temporary differences Gross deferred tax assets Less: valuation allowance Total deferred tax assets Deferred tax liabilities: Unbilled receivables and other liabilities Intangibles and goodwill Property and equipment Software development costs Other taxable temporary differences Total gross deferred tax liabilities Net deferred tax liability $ $ |
Schedule of reconciliation of beginning and ending unrecognized tax benefits | Year ended December 31, 2016 2015 Unrecognized tax benefits — January 1 $ $ Increase for tax positions taken in prior period Increase for tax positions taken in current period Decrease for tax positions taken in prior period — Decrease for tax positions taken in current period Decrease related to lapse in statute of limitations Decrease related to settlement of positions taken in prior periods — Unrecognized tax benefits — December 31 $ $ |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings per Share | |
Schedule of computation of basic and diluted earnings per share | Year Ended December 31, 2016 2015 2014 Net income (loss) available to common stockholders $ $ $ Weighted average outstanding shares of common stock Dilutive effect of stock-based awards — Adjusted weighted average outstanding and assumed conversions for diluted EPS Earnings (loss) per share from continuing operations: Basic $ $ $ Diluted Earnings per share from discontinued operations: Basic $ — $ $ — Diluted — — Total earnings (loss) per share: Basic $ $ $ Diluted |
Schedule of antidilutive securities excluded from earnings per share | Years Ended December 31, 2016 2015 2014 Employee stock-based awards |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation | |
Summary of stock option activity | Year Ended December 31, 2016 2015 Weighted Weighted average average exercise exercise Shares price Shares price Outstanding at beginning of period $ $ Granted Exercised Forfeited Expired — — Outstanding at end of period $ $ |
Summary of stock options outstanding, vested and exercisable | Average Weighted Weighted Remaining Service- average Performance- average Contractual Aggregate based exercise based exercise Term Intrinsic Shares price Shares price (in years) Value Stock options outstanding as of December 31, 2016 $ $ $ Stock options vested and exercisable as of December 31, 2016 $ $ $ |
Summary of restricted stock units activity | Year Ended December 31, 2016 Weighted average grant date Shares fair value Nonvested at beginning of period — $ — Granted Vested — — Forfeited — — Nonvested at end of period $ |
Schedule of weighted average assumptions to estimate the fair value of stock options granted | Year Ended December 31, 2016 2015 2014 Expected term (years) Expected volatility % % % Expected dividend yield % % % Weighted average risk-free interest rate % % % Weighted average grant date fair value $ $ $ |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Schedule of operating segment results | Year Ended December 31, 2016 2015 2014 Net Revenue Healthcare $ $ $ Global Retail and Other Consolidated net revenue $ $ $ Operating Income Healthcare $ $ $ Global Retail and Other Consolidated operating income $ $ $ |
Schedule of operating segment net revenue by product type | Year Ended December 31, 2016 % 2015 % 2014 % Healthcare Retrospective claims accuracy $ $ $ Prospective claims accuracy Transaction services Total Healthcare Global Retail and Other Retrospective claims accuracy Other Total Global Retail and Other Consolidated net revenue $ $ $ |
Client Concentration (Tables)
Client Concentration (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Client Concentration | |
Schedule of significant clients accounted for the following percentages of total net revenue | Year Ended December 31, 2016 2015 2014 Customer A % % % Customer B % % % Customer C % % % |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Employee Benefit Plans | |
Schedule of contributions expensed and included in compensation for employee benefit plans | Year Ended December 31, 2016 2015 2014 401(k) Plan (a) $ $ $ Profit Share Plan (b) Provident Plan (c) Total $ $ $ (a) We sponsor defined contribution retirement plans in accordance with Section 401(k) of the Internal Revenue Code, which cover substantially all U.S. employees, subject to certain minimum age and service requirements. The plans provide for a contribution based on a percentage of eligible employee contributions. (b) We had a nonqualified profit sharing incentive compensation plan for certain eligible employees. Contributions were made within 90 days following the last day of the plan to a brokerage account in an amount determined at our discretion for employees who had completed 1,000 hours of service and were employed at the time of the contribution. This plan was discontinued after the 2014 plan year, with the final payout occurring in June 2016 and therefore we did not have a liability under the plan as of December 31, 2016. Our liability under the plan was $893 at December 31, 2015, which is included in accrued compensation costs in the accompanying Consolidated Balance Sheets. (c) Eligible employees of our subsidiary located in India are covered by the Provident Fund, contributions which are based on a percentage of eligible employees’ salaries, and the Indian Payment of Gratuity Act, which provides for benefits to be paid to eligible employees upon termination of employment (collectively, the “India Plan”). Benefits under the India Plan are administered by the Indian Government. As of December 31, 2016 and 2015 we had an accrued benefit obligation relating to the India Plan of $763 and $535, respectively. |
Selected Quarterly Financial 47
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Selected Quarterly Financial Data (Unaudited) | |
Summary of quarterly operating results | First Second Third Fourth Year Ended December 31, 2016 Quarter Quarter Quarter Quarter Revenue (1) $ $ $ $ Operating income (1)(2) Net income (1)(2)(3) Total earnings per share—Basic $ $ $ $ Total earnings per share—Diluted $ $ $ $ First Second Third Fourth Year Ended December 31, 2015 Quarter Quarter Quarter Quarter Revenue $ $ $ $ Operating income Income (loss) from continuing operations (3)(4) Net income (loss) (3)(4)(5) Earnings (loss) per share from continuing operations—Basic $ $ $ $ Earnings (loss) per share from continuing operations—Diluted $ $ $ $ Earnings per share from discontinued operations (5) $ — — — Total earnings (loss) per share—Basic $ $ $ $ Total earnings (loss) per share—Diluted $ $ $ $ (1) During the second quarter 2016, we generated approximately $5,000 in healthcare revenue from special projects that did not reoccur in the second half of the year. (2) During the second quarter 2016, stock-based compensation expense includes $2,257 related to the accelerated vesting of certain stock options as the result of our IPO. During the third quarter 2016, stock-based compensation expense includes $15,898 related to the vesting of all outstanding performance-based stock options (see Note 15). (3) During the second quarter 2016, we made a voluntary prepayment on our Initial Second Lien Credit Facility which resulted in a $7,068 loss on extinguishment of debt. During the third quarter 2016, as a result of refinancing our long-term debt, we recorded a loss on extinguishment of $9,349 (see Note 9). (4) During the second quarter 2015, as a result of repricing our Initial First Lien Credit Facilities, we recorded a loss on extinguishment of debt of $4,084 (see Note 9). (5) As a result of our rebranding in September 2015, as discussed in Note 1, we recorded an impairment of intangible assets of $27,826 related to our trademarks (see Note 6). During the first quarter 2015, we received payment on a $900 note receivable related to a business that was disposed of in 2012. Since the date of sale, we had elected to fully reserve the note receivable as the collectability was determined to be uncertain. This collection of the note receivable resulted in a gain on discontinued operations, net of tax, of $559 (see Note 20). |
Description of Business (Detail
Description of Business (Details) | Dec. 31, 2016customercompany |
Healthcare | Minimum | |
Description of business | |
Number of clients | 40 |
Commercial, Medicaid and Medicare managed health plans | United States | |
Description of business | |
Number of largest companies in the industry sector that are customers | 20 |
Number of largest companies in the industry sector | company | 25 |
Retail | Minimum | |
Description of business | |
Number of clients | 35 |
Retail | United States | |
Description of business | |
Number of largest companies in the industry sector that are customers | 8 |
Number of largest companies in the industry sector | company | 10 |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Revenue Recognition, Unbilled Receivables, and Estimated Liability for Refunds and Appeals (Details) $ in Thousands | Dec. 31, 2016USD ($)company | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Summary of Significant Accounting Policies | |||
Estimated liability for refunds and appeals | $ 62,539 | $ 67,775 | $ 74,941 |
Estimated allowance for refunds and appeals | $ 41,020 | 33,406 | $ 23,216 |
Number of Recovery Audit Contractors under Medicare Recovery Program | company | 4 | ||
Accounts receivable | |||
Summary of Significant Accounting Policies | |||
Unbilled receivables | $ 51,643 | 51,799 | |
Unbilled receivables arising from deferred billing | $ 6,137 | $ 6,431 |
Summary of Significant Accoun50
Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Selling, general and administrative expenses | |||
Advertising Expense | |||
Advertising expense | $ 1,345 | $ 1,241 | $ 1,294 |
Summary of Significant Accoun51
Summary of Significant Accounting Policies - Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Computer equipment | Minimum | |
Property and equipment | |
Estimated useful life | 3 years |
Computer equipment | Maximum | |
Property and equipment | |
Estimated useful life | 5 years |
Software | Minimum | |
Property and equipment | |
Estimated useful life | 2 years |
Software | Maximum | |
Property and equipment | |
Estimated useful life | 5 years |
Furniture and fixtures | |
Property and equipment | |
Estimated useful life | 7 years |
Summary of Significant Accoun52
Summary of Significant Accounting Policies - Internally Developed Software Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Internally Developed Software Costs | |||
Internally developed software costs capitalized during the period | $ 21,580 | $ 7,239 | |
Amortization expense | $ 2,992 | 2,287 | $ 722 |
Amortization expense | |||
Internally Developed Software Costs | |||
Software written off | $ 975 | ||
Internally Developed Software | |||
Internally Developed Software Costs | |||
Estimated useful life | 5 years |
Summary of Significant Accoun53
Summary of Significant Accounting Policies - Intangible Assets and Impairment (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2015USD ($) | Dec. 31, 2016segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Impairment of Long Lived Assets | ||||
Impairment of intangible assets | $ 27,826 | $ 27,826 | $ 74,034 | |
Goodwill | ||||
Number of reporting units tested for goodwill impairment | segment | 2 | |||
Customer relationships | ||||
Impairment of Long Lived Assets | ||||
Impairment of intangible assets | $ 74,034 | |||
Minimum | ||||
Intangible Assets | ||||
Amortization period | 6 years | |||
Maximum | ||||
Intangible Assets | ||||
Amortization period | 14 years |
Summary of Significant Accoun54
Summary of Significant Accounting Policies - Recently Issued Accounting Standards (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
New accounting pronouncements | |||
Excess tax benefit related to stock option exercises resulting from the early adoption of ASU 2016-09 | $ 4,000 | $ 4,000 | |
Long-term deferred tax liabilities | 120,533 | 120,533 | $ 129,284 |
Debt issuance costs, net | $ 10,837 | $ 10,837 | 20,975 |
ASU 2015-17, Balance Sheet Classification of Deferred Taxes | Early adoption | |||
New accounting pronouncements | |||
Current deferred tax assets | (32,919) | ||
Long-term deferred tax liabilities | (32,919) | ||
ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs | Adjustment | |||
New accounting pronouncements | |||
Debt issuance costs, net | (20,975) | ||
Long-term debt | $ (20,975) |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Investments | ||
Fair Value | $ 0 | |
Money market securities | ||
Investments | ||
Amortized Cost | $ 1,178 | |
Gross Unrealized Gains | 3 | |
Fair Value | $ 1,181 |
Acquisition - Net Assets Acquir
Acquisition - Net Assets Acquired (Details) - USD ($) $ in Thousands | May 14, 2014 | May 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 |
Acquisition | ||||
Noncash financing activities (issuance of common stock) | $ 69,957 | $ 69,957 | ||
Estimated fair values of assets acquired and liabilities assumed | ||||
Goodwill | $ 1,196,024 | $ 1,197,044 | ||
iHealth Technologies | ||||
Estimated fair values of assets acquired and liabilities assumed | ||||
Cash | 62,218 | |||
Accounts receivable | 34,830 | |||
Prepaid expenses and other assets | 5,516 | |||
Other long-term assets | 1,237 | |||
Property and equipment | 7,594 | |||
Intangible assets | 543,200 | |||
Total identifiable assets acquired | 654,595 | |||
Accounts payable and accrued liabilities | 82,095 | |||
Deferred tax liabilities | 195,948 | |||
Other long-term liabilites | 904 | |||
Total liabilities assumed | 278,947 | |||
Net identifiable assets acquired | 375,648 | |||
Goodwill | 829,141 | |||
Net assets acquired | $ 1,204,789 |
Acquisition - Acquired Intangib
Acquisition - Acquired Intangible Assets (Details) - iHealth Technologies $ in Thousands | May 14, 2014USD ($) |
Definite-Lived Intangible Assets | |
Definite-lived intangible assets acquired | $ 543,200 |
Weighted-average useful life of acquired intangible assets | 13 years 3 months 18 days |
Goodwill acquired, tax deductible amount | $ 0 |
Trademark | |
Definite-Lived Intangible Assets | |
Definite-lived intangible assets acquired | $ 8,600 |
Weighted-average useful life of acquired intangible assets | 11 years |
Customer relationships | |
Definite-Lived Intangible Assets | |
Definite-lived intangible assets acquired | $ 486,700 |
Weighted-average useful life of acquired intangible assets | 14 years |
Acquired software | |
Definite-Lived Intangible Assets | |
Definite-lived intangible assets acquired | $ 47,900 |
Weighted-average useful life of acquired intangible assets | 7 years |
Acquisition - Other Acquisition
Acquisition - Other Acquisition Related Disclosures (Details) - iHealth Technologies - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Purchase price adjustments | $ 979 | ||
Transaction costs | $ 5,745 | ||
Former stockholders | |||
Payment to former stockholders | $ 22,270 | $ 22,270 | |
Accounts payable and accrued other expenses | Former stockholders | |||
Payable to related parties | $ 21,291 |
Acquisition - Pro Forma Results
Acquisition - Pro Forma Results (Details) - iHealth Technologies $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($)$ / shares | |
Pro Forma Results | |
Net revenue | $ 505,961 |
Operating income | 57,533 |
Net loss | $ (18,752) |
Basic loss per share | $ / shares | $ (0.24) |
Diluted loss per share | $ / shares | $ (0.24) |
Property and Equipment - Balanc
Property and Equipment - Balances by Major Asset Class (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property and equipment | ||
Property and equipment, gross | $ 108,008 | $ 79,746 |
Less: Accumulated depreciation and amortization | 40,368 | 22,294 |
Property and equipment, net | 67,640 | 57,452 |
Computer equipment | ||
Property and equipment | ||
Property and equipment, gross | 40,349 | 31,496 |
Software | ||
Property and equipment | ||
Property and equipment, gross | 42,614 | 26,412 |
Furniture and fixtures | ||
Property and equipment | ||
Property and equipment, gross | 8,652 | 7,916 |
Leasehold improvements | ||
Property and equipment | ||
Property and equipment, gross | 4,392 | 3,488 |
Projects in progress | ||
Property and equipment | ||
Property and equipment, gross | $ 12,001 | $ 10,434 |
Property and Equipment - Perpet
Property and Equipment - Perpetual Software License (Details) - Perpetual software license - USD ($) $ in Thousands | 1 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | |
Recorded obligation | ||
Remaining payment period | 2 years | |
Accounts payable and accrued other expenses | ||
Recorded obligation | ||
Current portion of obligation | $ 2,952 | $ 3,351 |
Other long-term liabilities | ||
Recorded obligation | ||
Long-term portion of obligation | $ 6,340 | $ 3,225 |
Property and Equipment - Deprec
Property and Equipment - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property and Equipment | |||
Depreciation and amortization expense related to property and equipment | $ 20,151 | $ 12,695 | $ 7,416 |
Intangible Assets - Balances by
Intangible Assets - Balances by Major Asset Class and Amortization Expense (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible assets with definite lives | ||||
Accumulated Amortization | $ 193,347 | $ 133,767 | ||
Amortization expense | 60,818 | 61,467 | $ 52,355 | |
Intangible assets | ||||
Gross Carrying Amount | 726,652 | 756,003 | ||
Impairment of intangible assets | $ 27,826 | 27,826 | 74,034 | |
Net Carrying Amount | $ 533,305 | $ 594,410 | ||
Weighted average | ||||
Intangible assets with definite lives | ||||
Amortization period | 12 years 9 months 18 days | 12 years 9 months 18 days | ||
Trademark | ||||
Intangible assets with indefinite lives | ||||
Gross Carrying Amount | $ 4,200 | $ 24,500 | ||
Impairment | 20,300 | |||
Net Carrying Amount | 4,200 | 4,200 | ||
Customer relationships | ||||
Intangible assets with definite lives | ||||
Gross Carrying Amount | 640,052 | 640,503 | ||
Accumulated Amortization | 144,768 | 97,857 | ||
Net Carrying Amount | $ 495,284 | $ 542,646 | ||
Intangible assets | ||||
Impairment of intangible assets | $ 74,034 | |||
Customer relationships | Weighted average | ||||
Intangible assets with definite lives | ||||
Amortization period | 13 years 8 months 12 days | 13 years 8 months 12 days | ||
Acquired software | ||||
Intangible assets with definite lives | ||||
Gross Carrying Amount | $ 82,400 | $ 82,400 | ||
Accumulated Amortization | 48,579 | 34,836 | ||
Net Carrying Amount | $ 33,821 | $ 47,564 | ||
Acquired software | Weighted average | ||||
Intangible assets with definite lives | ||||
Amortization period | 6 years 2 months 12 days | 6 years 2 months 12 days | ||
Trademark | ||||
Intangible assets with definite lives | ||||
Gross Carrying Amount | $ 8,600 | |||
Accumulated Amortization | 1,074 | |||
Impairment | $ 7,526 | |||
Trademark | Weighted average | ||||
Intangible assets with definite lives | ||||
Amortization period | 11 years |
Intangible Assets - Balances 64
Intangible Assets - Balances by Major Asset Class - Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Amortization expense for the next 5 years | |
2,017 | $ 57,824 |
2,018 | 53,894 |
2,019 | 53,894 |
2,020 | 53,894 |
2,021 | $ 49,572 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in the carrying amount of goodwill | |||
Balance | $ 1,197,044 | ||
Balance | 1,196,024 | $ 1,197,044 | |
Impairment related to goodwill | 0 | 0 | $ 0 |
Healthcare | |||
Changes in the carrying amount of goodwill | |||
Balance | 1,147,771 | 1,147,396 | |
Purchase price adjustments | 979 | ||
Foreign currency translation and other | (604) | ||
Balance | 1,147,771 | 1,147,771 | 1,147,396 |
Global Retail and Other | |||
Changes in the carrying amount of goodwill | |||
Balance | 49,273 | 49,957 | |
Foreign currency translation and other | (1,020) | (684) | |
Balance | $ 48,253 | $ 49,273 | $ 49,957 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies | |||
Rental expense relating to operating leases | $ 10,529 | $ 8,826 | $ 7,202 |
Future minimum payments under non cancellable operating leases | |||
2,017 | 9,262 | ||
2,018 | 7,227 | ||
2,019 | 4,038 | ||
2,020 | 2,907 | ||
2,021 | 2,034 | ||
2022 - 2029 | 8,257 | ||
Total minimum lease payments | $ 33,725 |
Commitments and Contingencies67
Commitments and Contingencies - Legal and Other Matters (Details) - Unfavorable action - Centers for Medicare and Medicaid Services (CMS) - USD ($) $ in Thousands | Jul. 01, 2015 | Aug. 31, 2014 | Dec. 31, 2016 |
Loss contingency | |||
Settlement on original claim amount offered by CMS to allow providers to remove eligible claims pending in appeals process (as a percent) | 68.00% | ||
RAC contract contingency fee on original amount of settled claims under CMS July 1, 2015 Technical Direction Letter (as a percent) | 32.00% | ||
Maximum possible additional amount of refund payable in excess of amount accrued | $ 13,000 | ||
Estimated liability for refunds and appeals | |||
Loss contingency | |||
Estimated refund liability on settled claims | $ 22,308 |
Commitments and Contingencies68
Commitments and Contingencies - Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Asset Retirement Obligations | ||
Balance beginning of period | $ 2,415 | $ 2,055 |
Additional ARO Liability | 133 | 207 |
Accretion expense | 177 | 153 |
Balance at end of period | $ 2,725 | $ 2,415 |
Long-term Debt - Summary of Com
Long-term Debt - Summary of Components (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2016 | Jun. 30, 2016 | May 31, 2015 | Sep. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Long-term debt | |||||||||
Decrease in total debt outstanding | $ 22,700 | ||||||||
Loss on extinguishment of debt | $ 16,417 | $ 4,084 | $ 21,524 | ||||||
Long-term debt components | |||||||||
Total debt | 791,039 | 1,055,045 | |||||||
Less: debt issuance costs | 10,837 | 20,975 | |||||||
Less: current portion | 18,000 | 21,099 | |||||||
Total long-term debt | 762,202 | 1,012,971 | |||||||
Initial Secured Credit Facilities | |||||||||
Long-term debt | |||||||||
Loss on extinguishment of debt | $ 9,349 | 9,349 | |||||||
Initial First Lien Credit Facilities | |||||||||
Long-term debt | |||||||||
Decrease in applicable interest rates (as a percent) | 0.50% | ||||||||
Loss on extinguishment of debt | $ 4,084 | 4,084 | |||||||
Initial Second Lien Credit Facilities | |||||||||
Long-term debt | |||||||||
Outstanding borrowings repaid | $ 223,000 | ||||||||
Voluntary prepayment of borrowings | $ 13,100 | ||||||||
Loss on extinguishment of debt | $ 7,068 | 7,068 | |||||||
Term Loan A | Restated Credit Agreement | |||||||||
Long-term debt | |||||||||
Maximum borrowing capacity | 250,000 | 250,000 | |||||||
Long-term debt components | |||||||||
Total debt | 246,694 | ||||||||
Term Loan B | Restated Credit Agreement | |||||||||
Long-term debt | |||||||||
Maximum borrowing capacity | 550,000 | 550,000 | |||||||
Long-term debt components | |||||||||
Total debt | $ 544,345 | ||||||||
Term loan | Initial First Lien Credit Facilities | |||||||||
Long-term debt components | |||||||||
Total debt | 792,167 | ||||||||
Term loan | Initial Second Lien Credit Facilities | |||||||||
Long-term debt components | |||||||||
Total debt | $ 262,878 | ||||||||
Revolver | Restated Credit Agreement | |||||||||
Long-term debt | |||||||||
Maximum borrowing capacity | $ 100,000 | $ 100,000 |
Long-term Debt - Term Loan A (D
Long-term Debt - Term Loan A (Details) - Restated Credit Agreement - Term Loan A $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($)period | |
Debt covenants | |
Interest rate in effect at end of period (as a percent) | 3.75% |
ABR Loans | Alternate Base Rate | Minimum | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 1.25% |
ABR Loans | Alternate Base Rate | Maximum | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 2.00% |
ABR Loans | LIBOR | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 1.00% |
ABR Loans | New York Federal Reserve Bank Rate | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 0.50% |
LIBOR Loans | |
Debt covenants | |
Frequency of interest payments, option one | 1 month |
Frequency of interest payments, option two | 2 months |
Frequency of interest payments, option three | 3 months |
Frequency of interest payments, option four | 6 months |
Interest payable, threshold period | 3 months |
LIBOR Loans | LIBOR | Minimum | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 2.25% |
LIBOR Loans | LIBOR | Maximum | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 3.00% |
2,016 | |
Debt covenants | |
Frequency of payment | quarterly |
Principal payment | $ 3,125 |
2017 and 2018 | |
Debt covenants | |
Frequency of payment | quarter |
Principal payment | $ 3,125 |
2,019 | |
Debt covenants | |
Frequency of payment | quarter |
Principal payment | $ 4,688 |
2,020 | |
Debt covenants | |
Frequency of payment | quarter |
Principal payment | $ 6,250 |
2,021 | |
Debt covenants | |
Frequency of payment | quarter |
Principal payment | $ 9,375 |
Number of quarters in redemption period | period | 2 |
Long-term Debt - Term Loan B (D
Long-term Debt - Term Loan B (Details) - Restated Credit Agreement - Term Loan B $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Debt covenants | |
Frequency of payment | quarterly |
Principal payment | $ 1,375 |
Interest rate in effect at end of period (as a percent) | 3.75% |
ABR Loans | Alternate Base Rate | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 1.75% |
ABR Loans | Alternate Base Rate | Minimum | |
Debt covenants | |
Interest rate (as a percent) | 1.75% |
ABR Loans | LIBOR | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 1.00% |
ABR Loans | New York Federal Reserve Bank Rate | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 0.50% |
LIBOR Loans | |
Debt covenants | |
Frequency of interest payments, option one | 1 month |
Frequency of interest payments, option two | 2 months |
Frequency of interest payments, option three | 3 months |
Frequency of interest payments, option four | 6 months |
Interest payable, threshold period | 3 months |
LIBOR Loans | LIBOR | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 2.75% |
LIBOR Loans | LIBOR | Minimum | |
Debt covenants | |
Interest rate (as a percent) | 0.75% |
Standard & Poor's, BB Rating | Moody's, Ba3 Rating | Minimum | |
Debt covenants | |
Margin reduction per annum if ratings met (as a percent) | 0.25% |
Long-term Debt - Revolver (Deta
Long-term Debt - Revolver (Details) - Restated Credit Agreement - Revolver $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Debt covenants | |
Frequency of interest payments, option one | 1 month |
Frequency of interest payments, option two | 2 months |
Frequency of interest payments, option three | 3 months |
Frequency of interest payments, option four | 6 months |
Borrowings outstanding | $ 0 |
Interest rate in effect at end of period (as a percent) | 3.75% |
Minimum | |
Debt covenants | |
Commitment fee on unused capacity (as a percent) | 0.30% |
Maximum | |
Debt covenants | |
Commitment fee on unused capacity (as a percent) | 0.50% |
ABR Loans | Alternate Base Rate | Minimum | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 1.25% |
ABR Loans | Alternate Base Rate | Maximum | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 2.00% |
ABR Loans | LIBOR | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 1.00% |
ABR Loans | New York Federal Reserve Bank Rate | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 0.50% |
LIBOR Loans | LIBOR | Minimum | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 2.25% |
LIBOR Loans | LIBOR | Maximum | |
Debt covenants | |
Basis spread on variable rate (as a percent) | 3.00% |
Long-term Debt - Initial Secure
Long-term Debt - Initial Secured Credit Facilities (Details) - USD ($) $ in Thousands | May 26, 2016 | Dec. 31, 2015 |
Initial First Lien Credit Facilities | Term loan | ||
Long-term debt | ||
Frequency of periodic payment | quarterly | |
Principal payment | $ 2,025 | |
Frequency of interest payments, option one | 1 month | |
Frequency of interest payments, option two | 2 months | |
Frequency of interest payments, option three | 3 months | |
Frequency of interest payments, option four | 6 months | |
Interest rate in effect at end of period (as a percent) | 4.50% | |
Initial First Lien Credit Facilities | Term loan | ABR Loans | Alternate Base Rate | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 2.25% | 2.50% |
Initial First Lien Credit Facilities | Term loan | ABR Loans | Alternate Base Rate | Minimum | ||
Long-term debt | ||
Interest rate (as a percent) | 2.00% | |
Initial First Lien Credit Facilities | Term loan | ABR Loans | Federal Funds Effective Rate | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 0.50% | |
Initial First Lien Credit Facilities | Term loan | ABR Loans | LIBOR | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 1.00% | |
Initial First Lien Credit Facilities | Term loan | LIBOR Loans | LIBOR | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 3.25% | 3.50% |
Initial First Lien Credit Facilities | Term loan | LIBOR Loans | LIBOR | Minimum | ||
Long-term debt | ||
Interest rate (as a percent) | 1.00% | |
Initial First Lien Credit Facilities | Revolver | ||
Long-term debt | ||
Frequency of interest payments, option one | 1 month | |
Frequency of interest payments, option two | 2 months | |
Frequency of interest payments, option three | 3 months | |
Frequency of interest payments, option four | 6 months | |
Interest rate in effect at end of period (as a percent) | 4.00% | |
Commitment fee on unused capacity (as a percent) | 0.375% | |
Amount outstanding | $ 0 | |
Initial First Lien Credit Facilities | Revolver | Minimum | ||
Long-term debt | ||
Commitment fee on unused capacity (as a percent) | 0.375% | |
Initial First Lien Credit Facilities | Revolver | Maximum | ||
Long-term debt | ||
Commitment fee on unused capacity (as a percent) | 0.50% | |
Initial First Lien Credit Facilities | Revolver | ABR Loans | Alternate Base Rate | Minimum | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 1.75% | |
Initial First Lien Credit Facilities | Revolver | ABR Loans | Alternate Base Rate | Maximum | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 2.25% | |
Initial First Lien Credit Facilities | Revolver | ABR Loans | Federal Funds Effective Rate | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 0.50% | |
Initial First Lien Credit Facilities | Revolver | ABR Loans | LIBOR | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 1.00% | |
Initial First Lien Credit Facilities | Revolver | LIBOR Loans | LIBOR | Minimum | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 2.75% | |
Interest rate (as a percent) | 1.00% | |
Initial First Lien Credit Facilities | Revolver | LIBOR Loans | LIBOR | Maximum | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 3.25% | |
Initial First Lien Credit Facilities | Letters of credit | ||
Long-term debt | ||
Amount outstanding | $ 3,526 | |
Initial Second Lien Credit Facilities | Term loan | ||
Long-term debt | ||
Frequency of interest payments, option one | 1 month | |
Frequency of interest payments, option two | 2 months | |
Frequency of interest payments, option three | 3 months | |
Frequency of interest payments, option four | 6 months | |
Interest rate in effect at end of period (as a percent) | 8.00% | |
Initial Second Lien Credit Facilities | Term loan | ABR Loans | Alternate Base Rate | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 5.75% | 6.00% |
Initial Second Lien Credit Facilities | Term loan | ABR Loans | Alternate Base Rate | Minimum | ||
Long-term debt | ||
Interest rate (as a percent) | 2.00% | |
Initial Second Lien Credit Facilities | Term loan | ABR Loans | Federal Funds Effective Rate | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 0.50% | |
Initial Second Lien Credit Facilities | Term loan | ABR Loans | LIBOR | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 1.00% | |
Initial Second Lien Credit Facilities | Term loan | LIBOR Loans | LIBOR | ||
Long-term debt | ||
Basis spread on variable rate (as a percent) | 6.75% | 7.00% |
Initial Second Lien Credit Facilities | Term loan | LIBOR Loans | LIBOR | Minimum | ||
Long-term debt | ||
Interest rate (as a percent) | 1.00% |
Long-term Debt - Other Covenant
Long-term Debt - Other Covenant Terms (Details) - Restated Credit Agreement - Maximum | 12 Months Ended |
Dec. 31, 2016 | |
Term Loan A | |
Ratio requirements | |
Secured Leverage Ratio covenant, through September 2018 | 5.50 |
Secured Leverage Ratio covenant, through September 2019 | 5.25 |
Secured Leverage Ratio covenant, through June 2021 | 5 |
Revolver | |
Ratio requirements | |
Secured Leverage Ratio covenant, through September 2018 | 5.50 |
Secured Leverage Ratio covenant, through September 2019 | 5.25 |
Secured Leverage Ratio covenant, through June 2021 | 5 |
Long-term Debt - Aggregate Matu
Long-term Debt - Aggregate Maturities (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Aggregate maturities of long term debt | |
2,017 | $ 18,000 |
2,018 | 18,000 |
2,019 | 24,250 |
2,020 | 30,500 |
2,021 | 183,625 |
Thereafter | 521,125 |
Total | $ 795,500 |
Derivative Instruments - Intere
Derivative Instruments - Interest Rate Cap Contracts (Details) - Interest rate cap agreements - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
LIBOR | |||
Interest rate derivatives | |||
Interest rate cap on floating rate debt (as a percent) | 3.00% | ||
Cash flow hedge | Interest expense | |||
Cash flow hedge activity | |||
Expense recognized | $ 283 | $ 105 | $ 0 |
Ineffectiveness recorded | 0 | 0 | $ 0 |
Designated as Hedge | |||
Interest rate derivatives | |||
Notional amount | $ 540,000 | $ 630,000 |
Derivative Instruments - Quanti
Derivative Instruments - Quantitative Information Related to Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Interest rate cash flow hedges | ||
Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months | $ (1,783) | $ (283) |
Interest rate cap agreements | ||
Interest rate cash flow hedges | ||
Deferred hedge premiums paid and recorded in accumulated other comprehensive (loss) income | 2,581 | |
Expected additional payments of deferred premiums | 3,813 | |
Designated as Hedge | Interest rate cap agreements | Other long-term liabilities | ||
Interest rate cash flow hedges | ||
Derivative liability | 1,729 | 2,310 |
Designated as Hedge | Interest rate cap agreements | Accounts payable and accrued other expenses | ||
Interest rate cash flow hedges | ||
Derivative liability | $ 1,065 | $ 1,086 |
Derivative Instruments - Change
Derivative Instruments - Changes in Other Comprehensive Income Related to Cash Flow Hedges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in other comprehensive income related to derivative instruments classified as cash flow hedges | |||
Balance at beginning of period | $ (2,968) | $ (623) | |
Reclassifications in earnings, net of tax of $21 and $76 for the three and nine months ended September 30, 2016, and $9 and $22 for the three and nine months ended September 30, 2015 | 176 | 65 | |
Change in fair value of derivative instrument, net of tax of $45 and $463 for the three and nine months ended September 30, 2016, and $483 and $1,015 for the three and nine months ended September 30, 2015 | (542) | (2,410) | (623) |
Balance at end of period | (3,334) | (2,968) | (623) |
Other comprehensive income, tax effect | |||
Reclassifications in earnings, tax | 107 | 40 | |
Change in fair value of derivative instrument, tax | $ 319 | $ 1,360 | $ 476 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Level 1 | ||
Assets: | ||
Available-for-sale securities | $ 1,181 | |
Total | 1,181 | |
Level 2 | ||
Liabilities | ||
Interest rate cap agreements | $ 2,794 | 3,396 |
Total | 2,794 | 3,396 |
Level 3 | ||
Liabilities | ||
Long-term debt | 791,038 | 1,055,045 |
Total | $ 791,038 | $ 1,055,045 |
Income Taxes - Tax Expense (Ben
Income Taxes - Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes | |||
Income tax expense (benefit) from continuing operations | $ 20,970 | $ 14,401 | $ (16,804) |
Income tax expense from discontinued operations | 341 | ||
Total income tax expense (benefit) | $ 20,970 | $ 14,742 | $ (16,804) |
Income Taxes - Income (Loss) be
Income Taxes - Income (Loss) before Tax from Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Components of income (loss) before income taxes from continuing operations | |||
U.S. operations | $ 66,838 | $ 27,605 | $ (45,203) |
Foreign operations | 2,984 | 100 | 2,574 |
Income (loss) from continuing operations before income taxes | $ 69,822 | $ 27,705 | $ (42,629) |
Income Taxes - Current and Defe
Income Taxes - Current and Deferred Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
U.S. federal | $ 26,734 | $ 20,382 | $ 25,136 |
State and local | 613 | 4,822 | 4,091 |
Foreign | 1,358 | 1,029 | 842 |
Current income tax expense | 28,705 | 26,233 | 30,069 |
Deferred | |||
U.S. federal | (5,858) | (12,584) | (42,047) |
State and local | (1,825) | 798 | (4,826) |
Foreign | (52) | (46) | |
Deferred income tax benefit | (7,735) | (11,832) | (46,873) |
Total income tax expense (benefit) | $ 20,970 | $ 14,401 | $ (16,804) |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of effective tax rates from continuing operations to U.S. statutory rates | ||||
Federal income tax expense (benefit) at the statutory rate | $ 24,438 | $ 9,697 | $ (14,920) | |
State and local taxes, net of federal benefit | 556 | 3,922 | (2,167) | |
Non deductible costs | 779 | 1,070 | 815 | |
Stock-based compensation | (4,000) | |||
Unrecognized tax positions | (1,397) | 508 | (240) | |
Other | 594 | (796) | (292) | |
Total income tax expense (benefit) | $ 20,970 | $ 14,401 | $ (16,804) | |
Effective income tax rate from continuing operations | ||||
Effective income tax rate (as a percent) | 30.00% | 52.00% | 39.40% | |
Tax benefit related to the settlement of an uncertain tax position recorded in a prior period | $ 1,300 | |||
Excess tax benefit related to stock option exercises resulting from the early adoption of ASU 2016-09 | $ 4,000 | 4,000 | ||
Tax benefit from the implementation of certain tax planning | 1,122 | |||
Undistributed earnings of foreign subsidiaries | ||||
Deferred tax liability on earning of non-branch foreign subsidiaries | 0 | 0 | $ 0 | |
Earnings of non-branch foreign subsidiaries considered indefinitely reinvested | $ 8,065 | 8,065 | 5,910 | $ 4,610 |
Tax expense on earnings of non-branch foreign subsidiaries if not considered indefinitely reinvested | $ 1,891 | $ 1,386 | $ 1,081 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Ccomponents of deferred tax assets and liabilities | ||
Deferred tax liabilities | $ 120,533 | $ 129,284 |
Deferred tax assets: | ||
Allowance for doubtful accounts and estimated allowance for refunds and appeals | 34,794 | 35,174 |
Accrued compensation | 2,185 | 540 |
Deferred rent | 149 | 156 |
Stock compensation | 10,381 | 2,960 |
Tax credit and net operating loss carryforward | 652 | 1,652 |
Other deductible temporary differences | 5,077 | 6,353 |
Gross deferred tax assets | 53,238 | 46,835 |
Less: valuation allowance | (199) | (440) |
Total deferred tax assets | 53,039 | 46,395 |
Deferred tax liabilities: | ||
Unbilled receivables and other liabilities | (2,307) | (2,435) |
Intangibles and goodwill | (154,528) | (161,099) |
Property and equipment | (10,795) | (8,706) |
Software development costs | (2,603) | (1,998) |
Other taxable temporary differences | (3,339) | (1,441) |
Total gross deferred tax liabilities | (173,572) | (175,679) |
Net deferred tax liability | $ (120,533) | $ (129,284) |
Income Taxes - NOL and Carryfor
Income Taxes - NOL and Carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Valuation allowance | ||
Deferred tax asset valuation allowance | $ 199 | $ 440 |
Federal | ||
Net operating loss carryforwards | ||
Net operating loss carryforwards | 1,297 | |
Foreign | ||
Net operating loss carryforwards | ||
Net operating loss carryforwards | $ 1,183 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Unrecognized tax benefits - January 1 | $ 4,937 | $ 4,324 |
Increase for tax positions taken in prior period | 67 | 619 |
Increase for tax positions taken in current period | 203 | 694 |
Decrease for tax positions taken in prior period | (508) | |
Decrease for tax positions taken in current period | (43) | (146) |
Decrease related to lapse in statute of limitations | (96) | (554) |
Decrease related to settlement of positions taken in prior periods | (1,989) | |
Unrecognized tax benefits - December 31 | $ 2,571 | $ 4,937 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions and Other (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes | |||
Total uncertain tax positions expected to reverse in the next 12 months | $ 2,301 | $ 194 | |
Total penalty and interest incurred, relating to uncertain tax positions | $ 424 | $ 920 | $ 583 |
Stockholders' Equity - Issuance
Stockholders' Equity - Issuance of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | May 25, 2016 | May 14, 2014 | May 31, 2014 | Dec. 31, 2016 | Dec. 31, 2014 | May 13, 2016 | May 12, 2016 | Dec. 31, 2015 |
Issuance of stock | ||||||||
Common stock, shares authorized | 600,000,000 | 600,000,000 | 122,000,000 | 122,000,000 | ||||
Net IPO proceeds received | $ 226,963 | |||||||
Offering expenses | $ 18,822 | |||||||
Stock issued | $ 226,963 | $ 435,144 | ||||||
Cash received from issuance of stock | $ 365,187 | |||||||
Noncash financing activities (issuance of common stock) | $ 69,957 | 69,957 | ||||||
Common stock | ||||||||
Issuance of stock | ||||||||
Stock issued (in shares) | 12,936,038 | 32,790,321 | ||||||
Stock issued | $ 13 | $ 33 | ||||||
IPO | Common stock | ||||||||
Issuance of stock | ||||||||
Stock issued (in shares) | 12,936,038 | |||||||
Offering price (in dollars per share) | $ 19 | |||||||
Private placement | ||||||||
Issuance of stock | ||||||||
Stock issued | $ 435,144 | |||||||
Private placement | Common stock | ||||||||
Issuance of stock | ||||||||
Stock issued (in shares) | 32,790,321 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stockholder Rights and Preferences (Details) | 12 Months Ended |
Dec. 31, 2016USD ($)VoteRight | |
Registration rights | |
Number of votes a share of common stock entitles the holder | Vote | 1 |
Demand registration rights | |
Registration rights | |
Cap period | 12 months |
Demand registration rights | Maximum | |
Registration rights | |
Number of requests in any 12 month period | Right | 2 |
Piggyback registration rights | Minimum | |
Registration rights | |
Value of shares owned by Holder (in dollars) | $ | $ 500 |
Shelf registration rights | |
Registration rights | |
Cap period | 12 months |
Shelf registration rights | Maximum | |
Registration rights | |
Number of requests in any 12 month period | Right | 2 |
Shelf registration rights | Minimum | |
Registration rights | |
Anticipated aggregate offering price, net of selling expenses (in dollars) | $ | $ 5,000,000,000 |
Stockholders' Equity - Common90
Stockholders' Equity - Common Stock Split and Dividends (Details) $ / shares in Units, $ in Thousands | May 25, 2016USD ($)$ / shares | May 13, 2016 |
Common stock | ||
Common stock dividends paid (in dollars) | $ | $ 150,000 | |
Common stock dividends paid (in dollars per share) | $ 1.94 | |
Reduction in stock option exercise price (in dollars per share) | $ 1.94 | |
Common stock | ||
Common stock | ||
Stock split ratio | 6.1 |
Earnings per Share - Basic and
Earnings per Share - Basic and Diluted Computation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Basic and diluted earnings per share computation | |||||||||||
Net income available to common stockholders | $ 25,292 | $ 4,583 | $ 10,893 | $ 8,084 | $ 9,183 | $ (7,294) | $ 7,780 | $ 4,194 | $ 48,852 | $ 13,863 | $ (25,825) |
Weighted average outstanding shares of common stock | 85,053,890 | 77,216,133 | 65,253,954 | ||||||||
Dilutive effect of stock-based awards | 3,524,302 | 425,255 | |||||||||
Adjusted weighted average outstanding and assumed conversions for diluted EPS | 88,578,192 | 77,641,388 | 65,253,954 | ||||||||
Earnings (loss) per share from continuing operations: | |||||||||||
Basic (in dollars per share) | $ 0.12 | $ (0.09) | $ 0.10 | $ 0.04 | $ 0.57 | $ 0.17 | $ (0.40) | ||||
Diluted (in dollars per share) | 0.12 | (0.09) | 0.10 | 0.04 | 0.55 | 0.17 | (0.40) | ||||
Earnings per share from discontinued operations: | |||||||||||
Basic (in dollars per share) | 0.01 | ||||||||||
Diluted (in dollars per share) | 0.01 | ||||||||||
Total earnings (loss) per share: | |||||||||||
Basic (in dollars per share) | $ 0.28 | $ 0.05 | $ 0.13 | $ 0.10 | 0.12 | (0.09) | 0.10 | 0.05 | 0.57 | 0.18 | (0.40) |
Diluted (in dollars per share) | $ 0.27 | $ 0.05 | $ 0.13 | $ 0.10 | $ 0.12 | $ (0.09) | $ 0.10 | $ 0.05 | $ 0.55 | $ 0.18 | $ (0.40) |
Earnings per Share - Awards Exc
Earnings per Share - Awards Excluded from Diluted Calculation (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Anti-dilutive securities and other information | |||
Stock-based awards excluded from calculation of diluted earnings per share (in shares) | 341,054 | 2,035,332 | 2,536,960 |
Dilutive effect of stock-based awards | 3,524,302 | 425,255 | |
Performance-based stock options | |||
Anti-dilutive securities and other information | |||
Share-based awards excluded because vesting conditions not satisfied | 2,794,910 | 2,487,275 |
Stock-Based Compensation - Equi
Stock-Based Compensation - Equity Incentive Plans (Details) - shares | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | May 25, 2016 | May 24, 2016 | |
Stock options | ||||
Equity Incentive Plans | ||||
Granted (in shares) | 273,759 | 1,997,964 | ||
Amended 2012 Equity Incentive Plan | ||||
Equity Incentive Plans | ||||
Shares authorized for issuance | 7,243,330 | |||
Shares available for future issuance | 0 | |||
Amended 2012 Equity Incentive Plan | Stock options | ||||
Equity Incentive Plans | ||||
Granted (in shares) | 0 | |||
2016 Equity Incentive Plan | ||||
Equity Incentive Plans | ||||
Shares authorized for issuance | 5,490,000 | |||
Shares available for future issuance | 5,277,451 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Terms (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Stock options | Maximum | |
Stock Options | |
Term of award | 10 years |
Stock options | Owner of more than 10 percent of voting stock | Maximum | |
Stock Options | |
Term of award | 5 years |
Amended 2012 Equity Incentive Plan | Service-based stock options | |
Stock Options | |
Vesting period | 5 years |
2016 Equity Incentive Plan | Stock options | |
Stock Options | |
Percentage of market price to purchase shares of common stock (as a percent) | 100.00% |
2016 Equity Incentive Plan | Service-based stock options | |
Stock Options | |
Vesting period | 4 years |
Stock-Based Compensation - St95
Stock-Based Compensation - Stock Option Activity (Details) - Stock options - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Shares | ||
Outstanding at beginning of period (in shares) | 6,441,527 | 5,024,234 |
Granted (in shares) | 273,759 | 1,997,964 |
Exercised (in shares) | (574,991) | (25,620) |
Forfeited (in shares) | (127,233) | (555,051) |
Expired (in shares) | (15,690) | |
Outstanding at end of period (in shares) | 5,997,372 | 6,441,527 |
Weighted average exercise price | ||
Outstanding at beginning of period (in dollars per share) | $ 9.59 | $ 7.98 |
Granted (in dollars per share) | 19.59 | 13.76 |
Exercised (in dollars per share) | 7.41 | 6.26 |
Forfeited (in dollars per share) | 12.92 | 10.16 |
Expired (in dollars per share) | (13.60) | |
Outstanding at end of period (in dollars per share) | $ 10.18 | $ 9.59 |
Stock-Based Compensation - St96
Stock-Based Compensation - Stock Options Outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Stock options | ||||
Shares | ||||
Outstanding (in shares) | 5,997,372 | 6,441,527 | 5,024,234 | |
Weighted average exercise price | ||||
Outstanding (in dollars per share) | $ 10.18 | $ 9.59 | $ 7.98 | |
Average Remaining Contractual Term | ||||
Outstanding | 7 years 3 months 18 days | |||
Vested and exercisable | 7 years | |||
Aggregate Intrinsic Value | ||||
Outstanding | $ 145,270 | |||
Vested and exercisable | 107,617 | |||
Total intrinsic value of options exercised | 15,521 | |||
Total fair value of options vested | $ 22,453 | $ 2,450 | $ 2,000 | |
Service-based stock options | ||||
Shares | ||||
Outstanding (in shares) | 3,609,485 | |||
Vested and exercisable (in shares) | 1,878,538 | |||
Weighted average exercise price | ||||
Outstanding (in dollars per share) | $ 10.77 | |||
Vested and exercisable (in dollars per share) | $ 9.04 | |||
Performance-based stock options | ||||
Shares | ||||
Outstanding (in shares) | 2,387,887 | |||
Vested and exercisable (in shares) | 2,387,887 | |||
Vested and exercisable upon satisfaction of criteria (in shares) | 2,746,592 | |||
Weighted average exercise price | ||||
Outstanding (in dollars per share) | $ 9.28 | |||
Vested and exercisable (in dollars per share) | 9.28 | |||
Common stock | ||||
Aggregate Intrinsic Value | ||||
Fair value of stock (in dollars per share) | $ 34.40 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units Vesting and Activity (Details) - Restricted stock units - $ / shares | 12 Months Ended | 53 Months Ended |
Dec. 31, 2016 | May 24, 2016 | |
Equity Incentive Plans | ||
Vesting period | 4 years | |
Amended 2012 Equity Incentive Plan | ||
Shares | ||
Granted (in shares) | 0 | |
2016 Equity Incentive Plan | ||
Shares | ||
Nonvested at beginning of period (in shares) | 0 | |
Granted (in shares) | 67,295 | |
Nonvested at end of period (in shares) | 67,295 | |
Weighted average grant date fair value | ||
Nonvested at beginning of period (in dollars per share) | $ 0 | |
Granted (in dollars per share) | 25.88 | |
Nonvested at end of period (in dollars per share) | $ 25.88 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Assumptions to Estimate Fair Value of Stock Options (Details) - Stock options - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Assumptions used to estimate fair value of stock options granted | |||
Expected term | 6 years 3 months | 6 years 3 months | 6 years 3 months |
Expected volatility (as a percent) | 50.00% | 50.00% | 50.00% |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Weighted average grant date fair value (in dollars per share) | $ 9.53 | $ 7.77 | $ 5.70 |
Weighted average | |||
Assumptions used to estimate fair value of stock options granted | |||
Risk-free interest rate (as a percent) | 1.36% | 1.70% | 1.80% |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense Recorded (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock-based compensation expense | |||||
Stock-based compensation expense | $ 22,954 | $ 3,399 | $ 2,492 | ||
Stock options | |||||
Stock-based compensation expense | |||||
Stock-based compensation expense related to accelerated vesting | $ 2,257 | 2,257 | |||
Performance-based stock options | |||||
Stock-based compensation expense | |||||
Stock-based compensation expense | $ 15,898 | $ 15,898 | |||
Service based stock options and RSUs | |||||
Stock-based compensation expense | |||||
Unvested service-based stock options and RSU awards (in shares) | 1,784,212 | ||||
Unrecognized compensation cost | $ 13,319 | ||||
Period of recognition of unrecognized compensation cost | 3 years 1 month 6 days |
Related Party Transactions (Det
Related Party Transactions (Details) - Former stockholders - iHealth Technologies - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related party transactions | |||
Payment to former stockholders | $ 22,270 | $ 22,270 | |
Accounts payable and accrued other expenses | |||
Related party transactions | |||
Payable to related parties | $ 21,291 |
Segment Information - Operating
Segment Information - Operating Segment Results (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment information | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Net Revenue | $ 167,912 | $ 156,241 | $ 158,291 | $ 142,718 | $ 151,463 | $ 136,936 | $ 133,306 | $ 119,638 | $ 625,162 | $ 541,343 | $ 441,372 |
Operating Income | $ 41,622 | $ 24,155 | $ 38,938 | $ 29,238 | $ 34,916 | $ 4,128 | $ 33,773 | $ 23,707 | 133,953 | 96,524 | 30,197 |
Healthcare | |||||||||||
Segment information | |||||||||||
Net Revenue | 552,041 | 467,044 | 359,842 | ||||||||
Operating Income | 123,917 | 84,240 | 23,713 | ||||||||
Global Retail and Other | |||||||||||
Segment information | |||||||||||
Net Revenue | 73,121 | 74,299 | 81,530 | ||||||||
Operating Income | $ 10,036 | $ 12,284 | $ 6,484 |
Segment Information - Operat102
Segment Information - Operating Segment Net Revenue by Product Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net revenue by product type | |||||||||||
Net revenue | $ 167,912 | $ 156,241 | $ 158,291 | $ 142,718 | $ 151,463 | $ 136,936 | $ 133,306 | $ 119,638 | $ 625,162 | $ 541,343 | $ 441,372 |
Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 625,162 | $ 541,343 | $ 441,372 | ||||||||
Proportionate share of total (as a percent) | 100.00% | 100.00% | 100.00% | ||||||||
Healthcare | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 552,041 | $ 467,044 | $ 359,842 | ||||||||
Healthcare | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 552,041 | $ 467,044 | $ 359,842 | ||||||||
Proportionate share of total (as a percent) | 88.30% | 86.30% | 81.60% | ||||||||
Healthcare | Retrospective claims accuracy | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 310,496 | $ 251,288 | $ 240,544 | ||||||||
Proportionate share of total (as a percent) | 49.70% | 46.40% | 54.50% | ||||||||
Healthcare | Prospective claims accuracy | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 229,491 | $ 201,899 | $ 108,828 | ||||||||
Proportionate share of total (as a percent) | 36.70% | 37.30% | 24.70% | ||||||||
Healthcare | Transaction services | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 12,054 | $ 13,857 | $ 10,470 | ||||||||
Proportionate share of total (as a percent) | 1.90% | 2.60% | 2.40% | ||||||||
Global Retail and Other | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 73,121 | $ 74,299 | $ 81,530 | ||||||||
Global Retail and Other | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 73,121 | $ 74,299 | $ 81,530 | ||||||||
Proportionate share of total (as a percent) | 11.70% | 13.70% | 18.40% | ||||||||
Global Retail and Other | Retrospective claims accuracy | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 70,656 | $ 72,060 | $ 80,075 | ||||||||
Proportionate share of total (as a percent) | 11.30% | 13.30% | 18.10% | ||||||||
Global Retail and Other | Other | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 2,465 | $ 2,239 | $ 1,455 | ||||||||
Proportionate share of total (as a percent) | 0.40% | 0.40% | 0.30% |
Segment and Geographic Infor103
Segment and Geographic Information - Geographic Information (Details) - Geographic | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Total net revenue | United States | |||
Geographic net revenue and long lived assets | |||
Proportionate share of total (as a percent) | 98.00% | 98.00% | 95.00% |
Long-lived assets | Minimum | United States | |||
Geographic net revenue and long lived assets | |||
Proportionate share of total (as a percent) | 99.00% | 99.00% | |
Long-lived assets | Maximum | Foreign | |||
Geographic net revenue and long lived assets | |||
Proportionate share of total (as a percent) | 1.00% | 1.00% |
Client Concentration (Details)
Client Concentration (Details) - Total net revenue - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Customer A | |||
Client Concentration | |||
Concentration percentage | 15.00% | 14.00% | 15.00% |
Customer B | |||
Client Concentration | |||
Concentration percentage | 11.00% | 10.00% | 10.00% |
Customer C | |||
Client Concentration | |||
Concentration percentage | 2.00% | 3.00% | 10.00% |
Employee Benefit Plans - Contri
Employee Benefit Plans - Contributions Expensed (Details) - Compensation - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee benefit plans | |||
Contributions expensed | $ 4,608 | $ 4,019 | $ 2,199 |
401(k) Plan | |||
Employee benefit plans | |||
Contributions expensed | 3,860 | 3,053 | 1,604 |
Profit Share Plan | |||
Employee benefit plans | |||
Contributions expensed | 220 | 539 | 416 |
Provident Plan | |||
Employee benefit plans | |||
Contributions expensed | $ 528 | $ 427 | $ 179 |
Employee Benefit Plans - Nonqua
Employee Benefit Plans - Nonqualified Profit Sharing Incentive Compensation Plan (Details) - Profit Share Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Maximum | |||
Employee benefit plans | |||
Period following last day of plan year that contributions are made | 90 days | ||
Minimum | |||
Employee benefit plans | |||
Service period required for eligibility | 1000 hours | ||
Accrued compensation costs | |||
Employee benefit plans | |||
Accrued employee benefits | $ 0 | $ 893 |
Employee Benefit Plans - India
Employee Benefit Plans - India Plan (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Subsidiary | India | ||
Employee benefit plans | ||
Accrued benefit obligation | $ 763 | $ 535 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Feb. 28, 2015 | Mar. 31, 2015 | Dec. 31, 2015 | |
Discontinued operations | |||
Gain from collection of fully reserved note receivable | $ 900 | ||
Estimated impact to diluted EPS as a result of gain on discontinued operations (in dollars per share) | $ 0.01 | ||
Discontinued operations sold | Business disposed of in 2012 | |||
Discontinued operations | |||
Gain from collection of fully reserved note receivable | $ 900 | $ 900 | |
Estimated impact to diluted EPS as a result of gain on discontinued operations (in dollars per share) | $ 0.01 |
Selected Quarterly Financial109
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Selected Quarterly Financial Data (Unaudited) | |||||||||||
Net Revenue | $ 167,912 | $ 156,241 | $ 158,291 | $ 142,718 | $ 151,463 | $ 136,936 | $ 133,306 | $ 119,638 | $ 625,162 | $ 541,343 | $ 441,372 |
Operating income | 41,622 | 24,155 | 38,938 | 29,238 | 34,916 | 4,128 | 33,773 | 23,707 | 133,953 | 96,524 | 30,197 |
Income (loss) from continuing operations | 9,183 | (7,294) | 7,780 | 3,635 | 48,852 | 13,304 | (25,825) | ||||
Net income (loss) | $ 25,292 | $ 4,583 | $ 10,893 | $ 8,084 | $ 9,183 | $ (7,294) | $ 7,780 | $ 4,194 | $ 48,852 | $ 13,863 | $ (25,825) |
Earnings (loss) per share from continuing operations-Basic (in dollars per share) | $ 0.12 | $ (0.09) | $ 0.10 | $ 0.04 | $ 0.57 | $ 0.17 | $ (0.40) | ||||
Earnings (loss) per share from continuing operations-Diluted (in dollars per share) | 0.12 | (0.09) | 0.10 | 0.04 | 0.55 | 0.17 | (0.40) | ||||
Earnings per share from discontinued operations (in dollars per share) | 0.01 | ||||||||||
Total earnings (loss) per share - Basic (in dollars per share) | $ 0.28 | $ 0.05 | $ 0.13 | $ 0.10 | 0.12 | (0.09) | 0.10 | 0.05 | 0.57 | 0.18 | (0.40) |
Total earnings (loss) per share-Diluted (in dollars per share) | $ 0.27 | $ 0.05 | $ 0.13 | $ 0.10 | $ 0.12 | $ (0.09) | $ 0.10 | $ 0.05 | $ 0.55 | $ 0.18 | $ (0.40) |
Selected Quarterly Financial110
Selected Quarterly Financial Data (Unaudited) Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2015 | Feb. 28, 2015 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly operating results | |||||||||||||
Revenues | $ 167,912 | $ 156,241 | $ 158,291 | $ 142,718 | $ 151,463 | $ 136,936 | $ 133,306 | $ 119,638 | $ 625,162 | $ 541,343 | $ 441,372 | ||
Stock-based compensation expense | 22,954 | 3,399 | 2,492 | ||||||||||
Loss on extinguishment of debt | 16,417 | 4,084 | 21,524 | ||||||||||
Impairment of intangible assets | $ 27,826 | 27,826 | 74,034 | ||||||||||
Gain from collection of fully reserved note receivable | 900 | ||||||||||||
Gain on discontinued operations, net of tax | 559 | ||||||||||||
Customer relationships | |||||||||||||
Quarterly operating results | |||||||||||||
Impairment of intangible assets | 74,034 | ||||||||||||
Discontinued operations sold | Business disposed of in 2012 | |||||||||||||
Quarterly operating results | |||||||||||||
Gain from collection of fully reserved note receivable | $ 900 | 900 | |||||||||||
Gain on discontinued operations, net of tax | $ 559 | ||||||||||||
Initial Second Lien Credit Facilities | |||||||||||||
Quarterly operating results | |||||||||||||
Loss on extinguishment of debt | 7,068 | 7,068 | |||||||||||
Initial Secured Credit Facilities | |||||||||||||
Quarterly operating results | |||||||||||||
Loss on extinguishment of debt | 9,349 | 9,349 | |||||||||||
Initial First Lien Credit Facilities | |||||||||||||
Quarterly operating results | |||||||||||||
Loss on extinguishment of debt | $ 4,084 | 4,084 | |||||||||||
Healthcare | |||||||||||||
Quarterly operating results | |||||||||||||
Revenues | 552,041 | $ 467,044 | $ 359,842 | ||||||||||
Healthcare | Special projects | |||||||||||||
Quarterly operating results | |||||||||||||
Revenues | 5,000 | ||||||||||||
Stock options | |||||||||||||
Quarterly operating results | |||||||||||||
Stock-based compensation expense related to accelerated vesting | $ 2,257 | 2,257 | |||||||||||
Performance-based stock options | |||||||||||||
Quarterly operating results | |||||||||||||
Stock-based compensation expense | $ 15,898 | $ 15,898 |
Schedule I - Condensed Finan111
Schedule I - Condensed Financial Information of Registrant - Parent Company Balance Sheets (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2016 | May 13, 2016 | May 12, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Non current assets: | ||||||
TOTAL ASSETS | $ 2,002,263 | $ 2,114,088 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Total liabilities | 1,062,927 | 1,326,492 | ||||
Stockholders' equity: | ||||||
Common stock ($0.001 par value; 600,000,000 and 122,000,000 shares authorized, 90,748,740 and 77,237,711 issued, and 90,741,340 and 77,230,311 outstanding at December 31, 2016 and 2015, respectively) | 91 | 77 | ||||
Additional paid-in capital | 911,582 | 807,419 | ||||
Retained earnings (deficit) | 33,917 | (14,935) | ||||
Accumulated other comprehensive loss | (6,156) | (4,867) | ||||
Treasury stock, at cost (7,400 shares at December 31, 2016 and 2015) | (98) | (98) | ||||
Total stockholders' equity | 939,336 | 787,596 | $ 773,133 | $ 363,223 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,002,263 | $ 2,114,088 | ||||
Stockholders' equity parenthetical | ||||||
Common stock, par value per share | $ 0.001 | $ 0.001 | ||||
Common stock, shares authorized | 600,000,000 | 600,000,000 | 122,000,000 | 122,000,000 | ||
Common stock, shares issued | 90,748,740 | 77,237,711 | ||||
Common stock, shares outstanding | 90,741,340 | 77,230,311 | ||||
Treasury stock, shares | 7,400 | 7,400 | ||||
Parent Company | ||||||
Non current assets: | ||||||
Investment in subsidiaries | $ 939,336 | $ 787,596 | ||||
TOTAL ASSETS | 939,336 | 787,596 | ||||
Stockholders' equity: | ||||||
Common stock ($0.001 par value; 600,000,000 and 122,000,000 shares authorized, 90,748,740 and 77,237,711 issued, and 90,741,340 and 77,230,311 outstanding at December 31, 2016 and 2015, respectively) | 91 | 77 | ||||
Additional paid-in capital | 911,582 | 807,419 | ||||
Retained earnings (deficit) | 33,917 | (14,935) | ||||
Accumulated other comprehensive loss | (6,156) | (4,867) | ||||
Treasury stock, at cost (7,400 shares at December 31, 2016 and 2015) | (98) | (98) | ||||
Total stockholders' equity | 939,336 | 787,596 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 939,336 | $ 787,596 | ||||
Stockholders' equity parenthetical | ||||||
Common stock, par value per share | $ 0.001 | $ 0.001 | ||||
Common stock, shares authorized | 600,000,000 | 600,000,000 | 122,000,000 | 122,000,000 | ||
Common stock, shares issued | 90,748,740 | 77,237,711 | ||||
Common stock, shares outstanding | 90,741,340 | 77,230,311 | ||||
Treasury stock, shares | 7,400 | 7,400 |
Schedule I - Condensed Finan112
Schedule I - Condensed Financial Information of Registrant - Parent Company Statements of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Parent Company Statements of Comprehensive Income (Loss | |||
Net income (loss) | $ 48,852 | $ 13,863 | $ (25,825) |
Comprehensive income (loss) | 47,563 | 10,854 | (27,741) |
Parent Company | |||
Parent Company Statements of Comprehensive Income (Loss | |||
Equity in income (loss) of subsidiaries | 48,852 | 13,863 | (25,825) |
Net income (loss) | 48,852 | 13,863 | (25,825) |
Equity in other comprehensive loss of subsidiaries | (1,289) | (3,009) | (1,916) |
Comprehensive income (loss) | $ 47,563 | $ 10,854 | $ (27,741) |
Schedule I - Condensed Finan113
Schedule I - Condensed Financial Information of Registrant - Parent Company Statements of Cash Flows) (Details) - USD ($) $ in Thousands | May 14, 2014 | May 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Cash flows from operating activities: | |||||
Net income (loss) | $ 48,852 | $ 13,863 | $ (25,825) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||
Net cash provided by operating activities | 189,171 | 63,154 | 95,728 | ||
Cash flows from investing activities: | |||||
Net cash used in investing activities | (34,032) | (22,581) | (1,091,520) | ||
Cash flows from financing activities: | |||||
Proceeds from issuance of common stock | 226,963 | 365,187 | |||
Proceeds from exercise of stock options | 4,243 | 210 | 32 | ||
Purchase of treasury shares | (18) | ||||
Dividends Paid | (150,000) | ||||
Net cash (used in) provided by financing activities | (193,275) | (8,976) | 1,025,872 | ||
Net (decrease) increase in cash and cash equivalents | (38,730) | 30,753 | 29,550 | ||
Cash and cash equivalents at beginning of period | 149,365 | 118,612 | 89,062 | ||
Cash and cash equivalents at end of the period | 110,635 | 149,365 | 118,612 | ||
Supplemental disclosures of cash flow information: | |||||
Noncash financing activities (noncash capital contribution) | $ 69,957 | $ 69,957 | |||
Noncash acquisition of treasury stock | 98 | ||||
Parent Company | |||||
Cash flows from operating activities: | |||||
Net income (loss) | 48,852 | 13,863 | (25,825) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||
Equity in income (loss) of subsidiaries | (48,852) | (13,863) | 25,825 | ||
Cash flows from investing activities: | |||||
Investment in subsidiaries | (81,206) | (210) | (365,201) | ||
Net cash used in investing activities | (81,206) | (210) | (365,201) | ||
Cash flows from financing activities: | |||||
Proceeds from issuance of common stock | 226,963 | 365,187 | |||
Proceeds from exercise of stock options | 4,243 | 210 | 32 | ||
Purchase of treasury shares | (18) | ||||
Dividends Paid | (150,000) | ||||
Net cash (used in) provided by financing activities | 81,206 | 210 | 365,201 | ||
Supplemental disclosures of cash flow information: | |||||
Noncash operating activities (stock-based compensation) | $ 22,954 | $ 3,399 | 2,492 | ||
Noncash financing activities (noncash capital contribution) | $ 69,957 | 69,957 | |||
Noncash acquisition of treasury stock | $ (98) |
Schedule I - Condensed Finan114
Schedule I - Condensed Financial Information of Registrant - Stockholders' Equity - Issuance of Common Stock (Details) - USD ($) | May 25, 2016 | May 14, 2014 | May 31, 2014 | Dec. 31, 2016 | Dec. 31, 2014 | May 13, 2016 | May 12, 2016 | Dec. 31, 2015 |
Issuance of stock | ||||||||
Common stock, shares authorized | 600,000,000 | 600,000,000 | 122,000,000 | 122,000,000 | ||||
Net IPO proceeds received | $ 226,963,000 | |||||||
Offering expenses | 18,822,000 | |||||||
Stock issued | $ 226,963,000 | $ 435,144,000 | ||||||
Cash received from issuance of stock | $ 365,187,000 | |||||||
Noncash financing activities (issuance of common stock) | $ 69,957,000 | 69,957,000 | ||||||
Parent Company | ||||||||
Issuance of stock | ||||||||
Common stock, shares authorized | 600,000,000 | 600,000,000 | 122,000,000 | 122,000,000 | ||||
Net IPO proceeds received | 226,963,000 | |||||||
Offering expenses | $ 18,822,000 | |||||||
Cash received from issuance of stock | 365,187,000 | |||||||
Noncash financing activities (issuance of common stock) | 69,957,000 | $ 69,957,000 | ||||||
Common stock | ||||||||
Issuance of stock | ||||||||
Stock issued (in shares) | 12,936,038 | 32,790,321 | ||||||
Stock issued | $ 13,000 | $ 33,000 | ||||||
IPO | Common stock | ||||||||
Issuance of stock | ||||||||
Stock issued (in shares) | 12,936,038 | |||||||
Offering price (in dollars per share) | $ 19 | |||||||
IPO | Common stock | Parent Company | ||||||||
Issuance of stock | ||||||||
Stock issued (in shares) | 12,936,038 | |||||||
Offering price (in dollars per share) | $ 19 | |||||||
Private placement | ||||||||
Issuance of stock | ||||||||
Stock issued | 435,144,000 | |||||||
Private placement | Parent Company | ||||||||
Issuance of stock | ||||||||
Stock issued | $ 435,144 | |||||||
Private placement | Common stock | ||||||||
Issuance of stock | ||||||||
Stock issued (in shares) | 32,790,321 | |||||||
Private placement | Common stock | Parent Company | ||||||||
Issuance of stock | ||||||||
Stock issued (in shares) | 32,790,321 |
Schedule I - Condensed Finan115
Schedule I - Condensed Financial Information of Registrant - Stockholders' Equity - Common Stock Split and Dividends (Details) $ / shares in Units, $ in Thousands | May 25, 2016USD ($)$ / shares | May 13, 2016 |
Common stock | ||
Common stock dividends paid (in dollars) | $ | $ 150,000 | |
Common stock dividends paid (in dollars per share) | $ 1.94 | |
Reduction in stock option exercise price (in dollars per share) | $ 1.94 | |
Common stock | ||
Common stock | ||
Stock split ratio | 6.1 | |
Parent Company | ||
Common stock | ||
Common stock dividends paid (in dollars) | $ | $ 150,000 | |
Common stock dividends paid (in dollars per share) | $ 1.94 | |
Reduction in stock option exercise price (in dollars per share) | $ 1.94 | |
Parent Company | Common stock | ||
Common stock | ||
Stock split ratio | 6.1 |
Schedule II - Valuation and 116
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Activity in valuation and qualifying accounts | |||
Estimated allowance for refunds and appeals | $ 41,020 | $ 33,406 | $ 23,216 |
Estimated liability for refunds and appeals | 62,539 | 67,775 | 74,941 |
Allowance and estimated liability for refunds and appeals | |||
Activity in valuation and qualifying accounts | |||
Balance at Beginning of Period | 101,181 | 98,157 | 53,075 |
Business Combination | 14,382 | ||
Provision Charged Against Revenue | 99,472 | 67,702 | 62,166 |
Deductions | (97,094) | (64,678) | (31,466) |
Valuation Allowances and Reserves, Balance, Ending Balance | 103,559 | 101,181 | 98,157 |
Allowance for doubtful accounts | |||
Activity in valuation and qualifying accounts | |||
Balance at Beginning of Period | 1,053 | 655 | 34 |
Charged to Operating Expenses | (147) | 804 | 660 |
Deductions | (55) | (406) | (39) |
Valuation Allowances and Reserves, Balance, Ending Balance | $ 851 | $ 1,053 | $ 655 |