Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 31, 2018 | Jun. 30, 2017 | |
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, 2017 | ||
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 | Large Accelerated Filer | ||
Entity Public Float | $ 979 | ||
Entity Common Stock, Shares Outstanding | 92,421,924 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 165,518 | $ 110,635 |
Restricted cash | 11,383 | 9,103 |
Accounts receivable, net of allowance for doubtful accounts of $176 and $851 at December 31, 2017 and 2016, respectively; and net of estimated allowance for refunds and appeals of $35,434 and $41,020 at December 31, 2017 and 2016, respectively | 83,756 | 67,735 |
Prepaid expenses and other current assets | 15,314 | 14,957 |
Total current assets | 275,971 | 202,430 |
Property and equipment, net | 77,340 | 67,640 |
Goodwill | 1,251,364 | 1,196,024 |
Intangible assets, net | 492,040 | 533,305 |
Other long-term assets | 2,514 | 2,864 |
TOTAL ASSETS | 2,099,229 | 2,002,263 |
Current liabilities: | ||
Current maturities of long-term debt | 18,000 | 18,000 |
Customer deposits | 11,383 | 9,103 |
Accounts payable and accrued other expenses | 25,906 | 23,162 |
Accrued compensation costs | 42,725 | 58,589 |
Estimated liability for refunds and appeals | 61,607 | 62,539 |
Total current liabilities | 159,621 | 171,393 |
Long-term liabilities: | ||
Long-term debt | 749,618 | 762,202 |
Other long-term liabilities | 5,474 | 8,799 |
Deferred tax liabilities | 83,048 | 120,533 |
Total long-term liabilities | 838,140 | 891,534 |
Total liabilities | 997,761 | 1,062,927 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity: | ||
Common stock ($0.001 par value; 600,000,000 shares authorized, 92,299,294 and 90,748,740 issued, and 92,299,294 and 90,741,340 outstanding at December 31, 2017 and 2016, respectively) | 92 | 91 |
Additional paid-in capital | 933,710 | 911,582 |
Retained earnings | 172,120 | 33,917 |
Accumulated other comprehensive loss | (4,454) | (6,156) |
Treasury stock, at cost (7,400 shares at December 31, 2016) | (98) | |
Total stockholders' equity | 1,101,468 | 939,336 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,099,229 | $ 2,002,263 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets | ||
Allowance for doubtful accounts | $ 176 | $ 851 |
Estimated allowance for refunds and appeals | $ 35,434 | $ 41,020 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 92,299,294 | 90,748,740 |
Common stock, shares outstanding | 92,299,294 | 90,741,340 |
Treasury stock, shares | 7,400 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Comprehensive Income | |||
Net revenue | $ 678,661 | $ 625,162 | $ 541,343 |
Cost of revenue (exclusive of depreciation and amortization, stated separately below): | |||
Compensation | 226,439 | 229,601 | 183,817 |
Other costs of revenue | 24,688 | 22,167 | 20,800 |
Total cost of revenue | 251,127 | 251,768 | 204,617 |
Selling, general and administrative expenses (exclusive of depreciation and amortization, stated separately below): | |||
Compensation | 108,151 | 97,123 | 70,802 |
Other selling, general and administrative expenses | 68,361 | 59,561 | 65,943 |
Total selling, general and administrative expenses | 176,512 | 156,684 | 136,745 |
Depreciation and amortization of property and equipment | 25,577 | 20,151 | 12,695 |
Amortization of intangible assets | 59,606 | 60,818 | 61,467 |
Transaction-related expenses | 2,219 | 1,788 | 1,469 |
Impairment of intangible assets | 1,322 | 27,826 | |
Total operating expenses | 516,363 | 491,209 | 444,819 |
Operating income | 162,298 | 133,953 | 96,524 |
Other expense (income): | |||
Interest expense | 34,876 | 48,653 | 65,561 |
Loss on extinguishment of debt | 3,183 | 16,417 | 4,084 |
Other non-operating (income) expense | (2,191) | (939) | (826) |
Total other expense (income) | 35,868 | 64,131 | 68,819 |
Income before income taxes | 126,430 | 69,822 | 27,705 |
Income tax (benefit) expense | (11,773) | 20,970 | 14,401 |
Income from continuing operations | 138,203 | 48,852 | 13,304 |
Gain on discontinued operations, net of tax | 559 | ||
Net income | 138,203 | 48,852 | 13,863 |
Other comprehensive income, net of tax: | |||
Foreign currency translation adjustments | 924 | (923) | (664) |
Change in fair value of derivative instruments | 778 | (366) | (2,345) |
Total other comprehensive income (loss) | 1,702 | (1,289) | (3,009) |
Comprehensive income | $ 139,905 | $ 47,563 | $ 10,854 |
Earnings per share from continuing operations: | |||
Basic (in dollars per share) | $ 1.50 | $ 0.57 | $ 0.17 |
Diluted (in dollars per share) | 1.45 | 0.55 | 0.17 |
Earnings per share from discontinued operations: | |||
Basic (in dollars per share) | 0.01 | ||
Diluted (in dollars per share) | 0.01 | ||
Earnings per share | |||
Basic (in dollars per share) | 1.50 | 0.57 | 0.18 |
Diluted (in dollars per share) | $ 1.45 | $ 0.55 | $ 0.18 |
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, 2014 | $ 77 | $ 803,810 | $ (28,798) | $ (1,858) | $ (98) | $ 773,133 |
Balance at beginning of period (in shares) at Dec. 31, 2014 | 77,204,691 | 7,400 | ||||
Change in Stockholders' Equity | ||||||
Net income | 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 | ||||
Change in Stockholders' Equity | ||||||
Net income | 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 | |||||
Dividends paid | (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 | |||
Change in Stockholders' Equity | ||||||
Net income | 138,203 | $ 138,203 | ||||
Stock-based compensation expense | 16,873 | 16,873 | ||||
Exercise of stock options | $ 2 | 13,530 | $ 13,532 | |||
Exercise of stock options (in shares) | 1,778,104 | 1,778,104 | ||||
Release of RSUs | (124) | $ (3) | $ (127) | |||
Release of RSUs (shares) | 35,056 | 77 | ||||
Retirement of treasury shares | (101) | $ 101 | ||||
Retirement of treasury shares (shares) | (7,477) | |||||
Stock issued under ESPP | 1,949 | 1,949 | ||||
Stock issued under ESPP (shares) | 62,694 | |||||
Repurchase of common stock | $ (1) | (9,999) | (10,000) | |||
Repurchase of common stock (shares) | (317,900) | |||||
Other comprehensive loss, net | 1,702 | 1,702 | ||||
Balance at end of period at Dec. 31, 2017 | $ 92 | $ 933,710 | $ 172,120 | $ (4,454) | $ 1,101,468 | |
Balance at end of period (in shares) at Dec. 31, 2017 | 92,299,294 | 92,299,294 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 138,203 | $ 48,852 | $ 13,863 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Deferred income taxes | (41,641) | (7,735) | (11,832) |
Depreciation and amortization of property and equipment | 85,183 | 80,969 | 74,162 |
Stock-based compensation expense | 16,873 | 22,954 | 3,399 |
Amortization of debt issuance costs | 2,893 | 4,278 | 5,565 |
Accretion of asset retirement obligations | 194 | 186 | 166 |
Loss on impairment of intangible assets | 1,322 | 27,826 | |
Loss on extinguishment of debt | 3,183 | 16,417 | 4,084 |
Gain on discontinued operations | (900) | ||
Changes in operating assets and liabilities: | |||
Restricted cash | (2,280) | 1,638 | 9,486 |
Accounts receivable | (13,494) | 11,121 | (18,641) |
Other assets | 1,232 | 7,217 | (12,167) |
Customer deposits | 2,280 | (1,638) | (9,486) |
Accrued compensation | (16,072) | 15,687 | 263 |
Accounts payable and accrued other expenses | (2,402) | (4,821) | (14,831) |
Estimated liability for refunds and appeals | (932) | (5,236) | (7,166) |
Other long-term liabilities | 413 | 109 | (115) |
Other | 148 | (827) | (522) |
Net cash provided by operating activities | 175,103 | 189,171 | 63,154 |
Cash flows from investing activities: | |||
Expenditures for property and equipment | (37,274) | (35,213) | (22,982) |
Business combinations, net of cash acquired | (69,992) | ||
Other investing activities | 1,181 | 401 | |
Net cash used in investing activities | (107,266) | (34,032) | (22,581) |
Cash flows from financing activities: | |||
Net proceeds from issuance of common stock | 226,963 | ||
Proceeds from issuance of common stock under equity plans | 15,340 | 4,243 | 210 |
Proceeds from issuance of debt | 800,000 | ||
Dividends paid | (150,000) | ||
Repurchase of common stock | (10,000) | ||
Payment of debt issuance costs | (661) | (7,131) | (1,086) |
Repayment of debt | (18,000) | (1,067,350) | (8,100) |
Net cash used in financing activities | (13,321) | (193,275) | (8,976) |
Effect of foreign exchanges on cash and cash equivalents | 367 | (594) | (844) |
Net increase (decrease) in cash and cash equivalents | 54,883 | (38,730) | 30,753 |
Cash and cash equivalents at beginning of period | 110,635 | 149,365 | 118,612 |
Cash and cash equivalents at end of the period | 165,518 | 110,635 | 149,365 |
Supplemental disclosures of cash flow information: | |||
Cash paid for income taxes | 28,452 | 25,359 | 41,119 |
Cash paid for interest | 29,601 | 43,227 | 60,238 |
Noncash investing activities (accrued property and equipment purchases) | $ 5,912 | $ 8,163 | $ 12,949 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
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 and spend management 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 60 healthcare organizations, including a majority 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 approximately 30 retail clients, including a majority of the ten largest retailers in the United States. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
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 income (loss) 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. 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. As discussed below under Recently Issued Accounting Standards, we will adopt the updated FASB revenue recognition guidance ASC 606 on January 1, 2018. ASC 606 is an update to ASC 605, which was the revenue recognition standard in effect for each of the three years in the period ended December 31, 2017. 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 these estimated 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 $61,607 and $62,539 at December 31, 2017 and December 31, 2016, respectively. The estimated allowance for refunds and appeals representing our estimate of claims that may be overturned related to amounts in accounts receivable was $35,434 and $41,020 at December 31, 2017 and December 31, 2016, respectively. Under the Medicare Recovery Audit Program, in which we are one of the 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. The liability is included in the estimated liability for refunds and appeals on our Consolidated Balance Sheets. See Note 7 and Note 20 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 $62,294 and $51,643 as of December 31, 2017 and December 31, 2016, 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 $4,958 and $6,137 as of December 31, 2017 and December 31, 2016, 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-based 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. Selling, General and Administrative Compensation within SG&A includes the total cost of payroll, related benefits and stock-based 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. SG&A expenses do not include depreciation and amortization, which is stated separately in our Consolidated Statements of Comprehensive Income. Advertising Costs Advertising costs are expensed as incurred and included in other SG&A expenses on our Consolidated Statements of Comprehensive Income. Advertising expense was $1,439, $1,345 and $1,241 for the years ended December 31, 2017, 2016 and 2015, 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. 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. 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 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 $14,765, $21,580 and $7,239 for the years ended December 31, 2017, 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. Amortization expense for internal use software was $7,745, $2,992 and $2,287 for the years ended December 31, 2017, 2016 and 2015, 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. 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 events or circumstances indicate the carrying amount may not be recoverable. These tests are performed at the reporting unit level. We have two reporting units, Healthcare and Global Retail and Other. Application of the goodwill impairment test requires judgment, including: the identification of reporting units; assignment of assets and liabilities to reporting units; determination of the fair value of each reporting unit; and an assumption as to the form of the transaction in which the reporting unit would be acquired by a market participant (either a taxable or nontaxable transaction). Under ASC 350, Intangibles—Goodwill 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. 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 quantitative impairment test. If we cannot support such a conclusion, or we do not elect to perform the qualitative assessment, then a quantitative test for goodwill 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 a reporting unit is determined using a discounted cash flow analysis based on assumptions regarding our future business outlook. While we continue to review and analyze many factors that can impact our business prospects in the future, our analyses are subjective and are based on conditions existing at and trends leading up to the time the assumptions are made. Actual results could differ materially from these assumptions. 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 as of October 1 of each year or when events or changes in circumstances necessitate an evaluation for impairment. 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. 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 5 to 14 years. Amortization expense is included in amortization of intangible assets in our Consolidated Statements of Comprehensive Income. 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. See Note 5 for further detail. Long-Lived Assets Long-lived assets, including property and equipment, 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. Business Combinations We account for acquisitions of businesses using the acquisition method of accounting. 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. We record liabilities related to uncertain tax positions in accordance with ASC 740, Income Taxes , 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% 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. Accrued interest and penalties are included within accounts payable and accrued other expenses in the Consolidated Balance Sheets. The Tax Act, which was enacted on December 22, 2017, resulted in a substantial impact on our income tax benefit for the year ended December 31, 2017. See Note 11 for additional information. 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 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 9 for more information. Stock-Based Compensation Our policy is to issue new shares for purchases under our equity incentive plans as described in Note 14. 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. The determination of the stock-based compensation expense related to RSUs is calculated based on the closing price of our stock on the grant date. 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 vest in accordance with the specific performance criteria outlined in the executed award agreements. The vesting of performance-based equity awards is also dependent upon the participant’s continued employment. 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. As part of the RowdMap Acquisition, we issued restricted stock to certain employees. We recognized the related expense for these awards ratably over the applicable vesting period or as achievement of performance criteria become probable. See Note 14 for additional information. 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 7 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 . See Note 10 for more information regarding management’s fair value estimates. Recently Issued Accounting Standards New accounting rules and disclosure requirements can impact our financial results and the comparability of our financial statements. The authoritative literature which has recently been issued and that we believe will most impact our consolidated financial statements is described below. There are also several new proposals under development. If and when enacted, these proposals may have a significant impact on our financial statements. 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 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. In 2016, we 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 completed our contract review and policy drafting. Based on our review, we believe the timing of revenue recognition will not materially change from current practice. We will adopt as of January 1, 2018 using the modified retrospective method. Adoption of this standard will require changes to our business processes, systems and controls to support the additional required disclosures. Our identification and design of such changes is ongoing. We will provide additional information about the impact of this new guidance, including enhanced disclosure requirements, in future filings. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2017 | |
Acquisition | |
Acquisition | Note 3. Acquisition On July 14, 2017, we acquired all of the outstanding equity of RowdMap. Based in Louisville, Kentucky, RowdMap is a payer-provider, value-based analytics company that helps health plans and providers identify and reduce low-value care from inefficient and unnecessary services. We paid approximately $74,000 in cash, subject to certain adjustments and funded entirely with available liquidity. We also issued an aggregate of 768,021 shares of restricted common stock to certain employees of RowdMap in connection with their continued employment with us. Half of these shares are subject to continued employment and performance-based vesting requirements. The other half are subject to continued employment, with one-third vesting on each of the first three anniversaries of the closing of the acquisition. We record stock-based compensation expense related to this restricted stock ratably over the vesting period or to the extent it is probable the performance criteria will be achieved. This stock-based compensation expense is not deductible for income tax purposes. As part of the RowdMap Acquisition, 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 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 will enhance our long history of innovation and help expand our solution offerings. 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 purchase price allocation is preliminary and subject to change up to one year after the date of acquisition and could result in changes to the amounts recorded below. The preliminary allocation of the purchase price to the fair values of the assets acquired and liabilities assumed at the date of the acquisition was as follows: July 14, 2017 Cash $ 4,107 Accounts receivable 2,526 Prepaid expenses and other assets 1,212 Other long-term assets 12 Property and equipment 263 Intangible assets 19,510 Total identifiable assets acquired 27,630 Accounts payable and accrued liabilities 4,491 Deferred tax liabilities 3,688 Total liabilities assumed 8,179 Net identifiable assets acquired 19,451 Goodwill 54,673 Net assets acquired $ 74,124 The $19,510 of acquired intangible assets include acquired software of $6,310 (5 year useful life) and customer relationships of $13,200 (5 year useful life). For federal income tax purposes, the RowdMap Acquisition was treated as a stock acquisition. The goodwill and the intangible assets recognized are not deductible for income tax purposes. In connection with the RowdMap Acquisition, a preliminary liability of $1,068 was recorded in accounts payable and accrued other expenses on the Consolidated Balance Sheets as of December 31, 2017, for payments due to the former stockholders of RowdMap, some of whom are now our employees. We recorded approximately $700 of transaction costs primarily related to professional services associated with the acquisition as transaction-related expenses within our Consolidated Statements of Comprehensive Income during the year ended December 31, 2017. The acquisition was not significant to our consolidated financial statements, therefore, pro forma results of operations related to this business acquisition have not been presented. The financial results of RowdMap have been included in our consolidated financial statements since the date of the acquisition. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment | |
Property and Equipment | Note 4. Property and Equipment Property and equipment by major asset class for the periods presented consisted of the following: December 31, 2017 2016 Computer equipment $ 46,731 $ 40,349 Software 67,511 42,614 Furniture and fixtures 9,199 8,652 Leasehold improvements 5,256 4,392 Projects in progress 10,295 12,001 Property and equipment, gross $ 138,992 $ 108,008 Less: accumulated depreciation and amortization 61,652 40,368 Property and equipment, net $ 77,340 $ 67,640 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 included in accounts payable and accrued other expenses on our Consolidated Balance Sheets as of December 31, 2017 and 2016 and $3,225 included in other long-term liabilities on our Consolidated Balance Sheets as of December 31, 2016. The amount included in other long-term liabilities as of December 31, 2016 represented the then present value of payments that will ultimately be made. Total depreciation and amortization expense related to property and equipment, including capitalized software costs, was $25,577 , $20,151 and $12,695 for the years ended December 31, 2017, 2016 and 2015, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Intangible Assets | |
Intangible Assets | Note 5. 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, 2017: Customer relationships $ 650,954 $ 190,572 $ 1,322 $ 459,060 years Acquired software 54,210 25,430 — 28,780 years Connolly trademark 4,200 — — 4,200 indefinite-lived Total $ 709,364 $ 216,002 $ 1,322 $ 492,040 years December 31, 2016: Customer relationships $ 640,052 $ 144,768 $ — $ 495,284 years Acquired software 82,400 48,579 — 33,821 years Connolly trademark 4,200 — — 4,200 indefinite-lived Total $ 726,652 $ 193,347 $ — $ 533,305 years As of December 31, 2017, $34,500 of the acquired software intangible asset that became fully amortized during 2017 has been removed from the gross carrying amount and accumulated amortization. Amortization expense was $59,606 , $60,818 and $61,467 for the years ended December 31, 2017, 2016 and 2015, respectively. As a result of the loss of a retail client in the United Kingdom, we recorded an impairment of intangible assets of $1,322 related to our customer relationships during the year ended December 31, 2017. 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, 2017 of $4,200 is related to our retail business that continues to operate as Connolly, a division of Cotiviti. As of December 31, 2017 amortization expense for the next 5 years is expected to be: 2018 $ 57,588 2019 57,588 2020 57,588 2021 53,264 2022 48,956 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill | |
Goodwill | Note 6. Goodwill Total goodwill in our Consolidated Balance Sheets was $1,251,364 and $1,196,024 as of December 31, 2017 and December 31, 2016, respectively. Changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 as allocated to each of our Healthcare and Global Retail and Other segments was as follows: December 31, 2017 December 31, 2016 Global Retail Global Retail Healthcare and Other Healthcare and Other Beginning balance $ 1,147,771 $ 48,253 $ 1,147,771 $ 49,273 RowdMap Acquisition 54,673 — — — Foreign currency translation — 667 — (1,020) Ending balance $ 1,202,444 $ 48,920 $ 1,147,771 $ 48,253 There was no impairment related to goodwill for any period presented. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 7. 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. These leases expire at various points through 2029. Rent expense related to these leases was $10,719, $10,529 and $8,826 for the years ended December 31, 2017, 2016 and 2015, respectively. Future minimum payments under non cancelable operating lease agreements as of December 31, 2017 were as follows: Year ending December 31: 2018 $ 8,640 2019 9,588 2020 8,882 2021 8,173 2022 8,363 2023 - 2029 44,308 Total minimum lease payments $ 87,954 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. In 2016, CMS announced a second settlement process to allow eligible providers to settle their inpatient status claims currently under appeal beginning on December 1, 2016. These additional settlements could result in CMS claims that it is entitled to additional refunds, however, CMS has not asserted any such claims since its initial communication and the amount of additional claims, if any, cannot be determined at this time. 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. As of December 31, 2017, we believed that it was 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, 2017 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. Our original Medicare RAC contract with CMS expired on January 31, 2018. In connection with the expiration of the contract, we determined that we have no obligation to CMS with respect to any appeals resolved in the providers favor after the expiration date and, in addition, we believe that we have no obligation to CMS in connection with the hospital settlement processes described above. See Note 20 for further information. 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, 2017 2016 Balance beginning of period $ 2,725 $ 2,415 Additional ARO liability — 133 Accretion expense 183 177 Settled ARO liability (64) — Balance at end of period $ 2,844 $ 2,725 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Long-term Debt | |
Long-term Debt | Note 8. Long‑term Debt In April 2017, we entered into and executed the First Amendment Agreement to the Restated Credit Agreement, which, among other things, provided for a 25 basis point reduction in applicable interest rate spread over LIBOR associated with the First Lien Term B Loans. As a result, we recognized a loss on extinguishment of $3,183 during the year ended December 31, 2017, which is included in our Consolidated Statements of Comprehensive Income. 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 Loans in the amount of $250,000, (b) the First Lien Term B Loans 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. 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. 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 recognized 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. Long‑term debt for the periods presented was as follows: December 31, 2017 2016 First Lien Term A Loans (a) $ 234,237 $ 246,694 First Lien Term B Loans (b) 540,585 544,345 Revolver (c) — — Total debt 774,822 791,039 Less: debt issuance costs 7,204 10,837 Less: current portion 18,000 18,000 Total long-term debt $ 749,618 $ 762,202 (a) The First Lien Term A Loans mature on September 28, 2021 and requires quarterly principal payments of $3,125 per quarter in 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 Loans 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 Loans 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 3.95% and 3.75% at December 31, 2017 and 2016, respectively. (b) The First Lien Term B Loans mature 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 Loans bear interest at either (a) the ABR plus 1.75% for ABR loans or (b) LIBOR plus 2.50% 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’ duration been applicable to such borrowing. The interest rate in effect was 4.20% and 3.75% at December 31, 2017 and 2016, respectively. (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, 2017 and 2016. The interest rate in effect was 3.95% and 3.75% at December 31, 2017 and 2016, respectively. 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 64% of the subsidiary net assets are deemed restricted as of December 31, 2017. Refer to Schedule I Condensed Financial Information of Parent. There is a required financial covenant applicable only to the Revolver and the First Lien Term A Loans, 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, 2017 and December 31, 2016. The Restated Credit Agreement requires mandatory prepayments based upon our leverage ratio at the time payment is required and an annual excess cash flows commencing with the year ended December 31, 2017. The mandatory prepayment is contingently payable in the second quarter of each year based on an annual excess cash flow calculation for the preceding year as defined within the Restated Credit Agreement. As of December 31, 2017 we do not expect to be required to make a mandatory prepayment during 2018. As of December 31, 2017, the expected aggregate maturities of long‑term debt for each of the next five years are as follows: December 31, 2017 2018 $ 18,000 2019 24,250 2020 30,500 2021 183,625 2022 5,500 Thereafter 515,625 Total $ 777,500 |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments | |
Derivative Instruments | Note 9. 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, 2017 and December 31, 2016, we had $435,000 and $540,000, 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. See Note 8 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 income (loss) 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 8 and the related derivative contract settles, any effective portion of realized interest rate hedging derivative gains and losses previously recorded in accumulated other comprehensive income (loss) is recognized in interest expense. We recognized interest expense of $1,789, $283 and $105 during the years ended December 31, 2017, 2016 and 2015, respectively, associated with the interest rate cap agreements. 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, 2017, 2016, and 2015, 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, 2017 2016 Liability fair value recorded in other long-term liabilities $ 951 $ 1,729 Liability fair value recorded in accounts payable and accrued other expenses 979 1,065 Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months (2,440) (1,783) We record deferred hedge premiums which are being paid over the life of the hedge in accumulated other comprehensive income (loss) until the related hedge ultimately settles and interest payments are made on the underlying debt. As of December 31, 2017, we have made payments of $4,021 related to these deferred premiums. We expect to pay an additional $2,374 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 income includes changes in the fair value of our interest rate cap agreements which qualify for hedge accounting. Changes in other comprehensive income (loss) for the periods presented related to derivative instruments classified as cash flow hedges were as follows: Balance, January 1, 2015 $ (623) Reclassifications in earnings, net of tax benefit of $40 65 Change in fair value of derivative instrument, net of tax of $1,360 (2,410) Balance, December 31, 2015 (2,968) Reclassifications in earnings, net of tax benefit of $107 176 Change in fair value of derivative instrument, net of tax of $319 (542) Balance, December 31, 2016 (3,334) Reclassifications in earnings, net of tax benefit of $675 1,114 Change in fair value of derivative instrument, net of tax of $215 (336) Balance, December 31, 2017 $ (2,556) |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | Note 10. 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, 2017 December 31, 2016 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Liabilities: Long-term debt $ — $ — $ 774,822 $ — $ — $ 791,039 Interest rate cap agreements — 1,930 — — 2,794 — Total $ — $ 1,930 $ 774,822 $ — $ 2,794 $ 791,039 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, 2017 | |
Income Taxes | |
Income Taxes | Note 11. Income Taxes On December 22, 2017, the U.S. government enacted the Tax Act, reducing the federal tax rate on U.S. earnings to 21%, effective January 1, 2018, and moves from a global taxation regime to a modified territorial regime. Given the significant complexity of the Tax Act, anticipated guidance from the U.S. Treasury about implementing the Tax Act, and the potential for additional guidance from the Securities and Exchange Commission or the Financial Accounting Standards Board related to the Tax Act, we will continue to evaluate the accounting for the tax effects related to the enactment of the Tax Act. As of December 31, 2017, we have made a reasonable estimate of the effects of the Tax Act on our existing deferred tax balances and the one-time transition tax as described below. We recognized a net income tax benefit of $45,019 in the year ended December 31, 2017 associated with the revaluation of our net deferred tax liabilities based on a U.S. federal tax rate of 21% of $46,600 offset by the one-time transition tax expense of $1,581 on our unremitted foreign earnings and profits which we have elected to pay in the current year. As part of our analysis, a tax credit carryforward of $1,174 was identified and a full valuation allowance was established. Although we believe this represents a reasonable estimate of the impact of the income tax effects of the Tax Act, it should be considered provisional as of December 31, 2017. Upon completion of our 2017 U.S. tax return, we will be able to conclude whether any further adjustments are required to our deferred tax liabilities, as well as the liability associated with the one-time mandatory tax. Any adjustments to these provisional amounts will be reported as a component of tax (benefit) expense in the reporting period in which any such adjustments are determined, which will be no later than the fourth quarter of 2018. While the Tax Act provides for a modified territorial regime, effective January 1, 2018, it includes a new U.S. tax base erosion provision, the global intangible low-taxed income (“GILTI”) tax. Although we do not expect that we will be subject to any material incremental U.S. tax on GILTI income in 2018, we have elected to account for any potential GILTI tax in the period in which it is incurred, and therefore have not provided any deferred income tax impacts of GILTI for the year ended December 31, 2017. Total income tax (benefit) expense for the years ended December 31, 2017, 2016, and 2015 was as follows: Year ended December 31, 2017 2016 2015 Income tax (benefit) expense from continuing operations $ (11,773) $ 20,970 $ 14,401 Income tax expense from discontinued operations — — 341 Total income tax (benefit) expense $ (11,773) $ 20,970 $ 14,742 For the years ended December 31, 2017, 2016, and 2015, income from continuing operations before income taxes includes the following components: Year ended December 31, 2017 2016 2015 U.S. operations $ 122,952 $ 66,838 $ 27,605 Foreign operations 3,478 2,984 100 Income before income taxes $ 126,430 $ 69,822 $ 27,705 The income tax (benefit) expense that is attributable to income from continuing operations before income taxes included in our Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016, and 2015 consisted of the following: Year ended December 31, 2017 2016 2015 Current: U.S. federal $ 26,509 $ 26,734 $ 20,382 State and local 1,679 613 4,822 Foreign 1,680 1,358 1,029 Current income tax expense 29,868 28,705 26,233 Deferred U.S. federal (42,430) (5,858) (12,584) State and local (304) (1,825) 798 Foreign 1,093 (52) (46) Deferred income tax benefit (41,641) (7,735) (11,832) Total income tax (benefit) expense $ (11,773) $ 20,970 $ 14,401 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, 2017, 2016, and 2015 were as follows: Year ended December 31, 2017 2016 2015 Federal income tax expense at the statutory rate $ 44,250 $ 24,438 $ 9,697 State and local taxes, net of federal benefit 1,657 556 3,922 Non-deductible costs 1,197 779 1,070 Stock-based compensation (11,985) (4,000) — Unrecognized tax positions (532) (1,397) 508 U.S. Tax Act benefit, net (45,019) — — Other (1,341) 594 (796) Total income tax (benefit) expense $ (11,773) $ 20,970 $ 14,401 Our effective income tax rate from continuing operations was (9.3%), 30.0% and 52.0% for the years ended December 31, 2017, 2016, and 2015, respectively. The decrease in the effective tax rate for the year ended December 31, 2017 compared to December 31, 2016 is primarily due to a $45,019 tax benefit as a result of the remeasurement of deferred tax liabilities of $46,600, offset by a $1,581 estimated repatriation tax charge. In addition, for the year ended December 31, 2017, we recorded a $11,985 net tax benefit consisting of $15,017 of federal excess tax benefits associated with the exercise of stock options offset by $3,032 of income tax expense associated with the nondeductible restricted stock issued in connection with the RowdMap Acquisition. 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 state tax benefit related to the settlement of an uncertain tax position that was 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 state tax benefit from the implementation of certain tax planning. 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. For the years ended December 31, 2016 and 2015, the amounts considered indefinitely reinvested were $8,065 and $5,910, respectively. If the earnings were not considered indefinitely reinvested under prior law, the tax on such earnings would be approximately $1,891 and $1,386 for the years ended December 31, 2016, and 2015, respectively. In light of the Tax Act, companies are required to pay tax on historical earnings that have not been repatriated to the U.S. For year ended December 31, 2017, the amount considered indefinitely reinvested was provisionally estimated at $8,739, and the foreign taxes on such earnings is provisionally estimated at $1,581. The net deferred taxes below are included on our Consolidated Balance Sheets as a long-term net deferred tax liability of $83,048 at December 31, 2017 and a long-term net deferred tax liability of $120,533 at December 31, 2016. The components of our deferred tax assets and liabilities as of December 31, 2017 and 2016 are as follows: Year ended December 31, 2017 2016 Deferred tax assets: Allowance for doubtful accounts and estimated allowance for refunds and appeals $ 21,829 $ 34,794 Accrued compensation 929 2,185 Deferred rent 194 149 Stock-based compensation 6,045 10,381 Tax credit and net operating loss carryforward 3,420 652 Other deductible temporary differences 2,333 5,077 Gross deferred tax assets 34,750 53,238 Less: valuation allowance (1,847) (199) Total deferred tax assets 32,903 53,039 Deferred tax liabilities: Unbilled receivables and other liabilities (1,206) (2,307) Intangibles and goodwill (103,203) (154,528) Property and equipment (4,738) (10,795) Software development costs (5,868) (2,603) Other taxable temporary differences (936) (3,339) Total gross deferred tax liabilities (115,951) (173,572) Net deferred tax liability $ (83,048) $ (120,533) We have federal net operating loss carryforwards of $1,197 which will expire in 2029. In addition, we have a foreign net operating loss of $3,695 with an unlimited carryforward. All state net operating losses were utilized in the prior year. Additionally, we generated state tax credit carryforwards of $1,322, which are anticipated to be fully utilized before expiration. As of December 31, 2017 and 2016, a valuation allowance of $1,847 and $199, respectively, has been recorded to reflect the portion of the deferred tax asset that is not more likely than not to be realized. The increase in the valuation allowance relates to cumulative foreign net operating losses for 2017, as well as foreign tax credit carryforwards relating to the Tax Act. 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, 2017 and 2016 is as follows: Year ended December 31, 2017 2016 Unrecognized tax benefits — January 1 $ 2,571 $ 4,937 Increase for tax positions taken in prior period 1,186 67 Increase for tax positions taken in current period 385 203 Decrease for tax positions taken in prior period — (508) Decrease for tax positions taken in current period — (43) Decrease related to lapse in statute of limitations (1,836) (96) Decrease related to settlement of positions taken in prior periods (308) (1,989) Unrecognized tax benefits — December 31 $ 1,998 $ 2,571 The majority of the balance of unrecognized tax benefits as of December 31, 2017 and 2016, would affect the effective tax rate if recognized. The total uncertain tax positions expected to reverse in the next 12 months is approximately $81 and $2,301 as of December 31, 2017 and 2016, 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 as well as lapses in statute of limitations, offset by increases of tax positions taken in a prior period. The total penalty and interest incurred, relating to uncertain tax positions, for years ended December 31, 2017, 2016, and 2015, was $103, $424 and $920, respectively. We include interest and penalties as tax expense in the Consolidated Statements of Comprehensive Income. We file income taxes with the U.S. federal government and various states and foreign jurisdictions. 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, May 13, 2014 and December 31, 2014. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | Note 12. Stockholders’ Equity Share Repurchase Program On October 31, 2017, the Board of Directors approved a share repurchase program under which we may repurchase up to $100,000 of common stock. This authorization permits us to repurchase shares from time to time until October 31, 2018 through a variety of methods, including open market repurchases and in privately negotiated transactions subject to debt covenants and other customary legal, contractual, regulatory and market considerations and may be discontinued at any time. All share repurchases will be implemented in accordance with Rule 10b-18 of the Exchange Act with respect to the timing, pricing and volume of such transactions. There can be no assurance as to the amount, timing or prices of repurchases, which may vary based on market conditions and other factors. During the year ended December 31, 2017, we repurchased 317,900 shares of our common stock under this share repurchase program for $10,000, at a weighted average share price of $31.43 per share. Shares repurchased are immediately retired. Secondary Offerings On August 7, 2017, we completed a secondary offering of 10,000,000 shares of our common stock by certain of our stockholders at an offering price of $37.00 per share. All of the shares offered were sold by selling stockholders. Accordingly, we did not receive any proceeds from the sale of shares. In connection with this offering, we incurred approximately $700 in professional services expenses, which are included in transaction-related expenses on our Consolidated Statements of Comprehensive Income for the year ended December 31, 2017. On March 7, 2017, we completed a secondary offering of 9,683,000 shares of our common stock by certain of our stockholders, including 1,263,000 shares sold to the underwriters pursuant to their option to purchase additional shares, at an offering price of $36.00 per share. All of the shares offered were sold by selling stockholders. Accordingly, we did not receive any proceeds from the sale of the shares. In connection with this offering, we incurred approximately $600 in professional services expenses, which are included in transaction-related expenses on our Consolidated Statements of Comprehensive Income for the year ended December 31, 2017. Issuance of Common Stock 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. 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 stockholders are 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 26, 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, 2017 | |
Earnings per Share | |
Earnings per Share | Note 13. Earnings per Share Basic 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 of equity incentive awards. Restricted stock issued in connection with RowdMap was also included in the calculation of dilutive potential common shares for the year ended December 31, 2017. Our potential common shares consist of the incremental common shares issuable upon the exercise of the options or vesting of RSUs and restricted stock. The dilutive effect of outstanding equity incentive 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 per share are computed as follows: Year Ended December 31, 2017 2016 2015 Net income available to common stockholders $ 138,203 $ 48,852 $ 13,863 Weighted average outstanding shares of common stock 91,928,364 85,053,890 77,216,133 Dilutive effect of stock-based awards and restricted stock 3,167,726 3,524,302 425,255 Adjusted weighted average outstanding and assumed conversions for diluted EPS 95,096,090 88,578,192 77,641,388 Earnings per share from continuing operations: Basic $ 1.50 $ 0.57 $ 0.17 Diluted 1.45 0.55 0.17 Earnings per share from discontinued operations: Basic $ — $ — $ 0.01 Diluted — — 0.01 Earnings per share: Basic $ 1.50 $ 0.57 $ 0.18 Diluted 1.45 0.55 0.18 Employee stock options, RSUs and restricted stock 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, 2017 2016 2015 Employee stock options, RSUs and restricted stock 833,670 341,054 2,035,332 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 as of December 31, 2015, were not included in the calculation of diluted earnings per share as the vesting conditions were not probable of occurring. Performance-based restricted stock of 76,546 shares as of December 31, 2017 were not included in the calculation of diluted earnings per share as the vesting conditions were not probable of occurring. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 14. 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, we adopted the 2016 Plan, and issuances under the 2012 Plan were suspended. Awards granted under the 2012 Plan will remain outstanding until the earlier of exercise, forfeiture, cancellation or expiration. There are no shares available for future issuance under the 2012 Plan as it was discontinued upon adoption of the 2016 Plan. Under the 2016 Plan, 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. As of December 31, 2017 the total number of shares available for future issuance under the 2016 Plan is 4,313,279. 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: Weighted Weighted average average remaining Aggregate Outstanding exercise price contractual life Intrinsic Value Options per share (Years) (in thousands) Outstanding at December 31, 2016 5,997,372 $ 10.18 7.30 $ 145,270 Granted 599,153 34.70 Forfeited (240,845) 19.48 Exercised (1,778,104) 7.61 Expired (2,969) 13.92 Outstanding at December 31, 2017 4,574,607 $ 13.89 6.65 $ 85,138 Vested and exercisable at December 31, 2017 3,117,670 $ 10.38 5.95 $ 68,061 Aggregate intrinsic value represents the difference between the fair value of common stock and the exercise price of outstanding in-the-money options. The fair value per share of common stock was $32.21 as of December 31, 2017 based upon the closing price of our common stock on the NYSE. The total intrinsic value of options exercised was $52,828 and $15,521 for the years ended December 31, 2017 and 2016, respectively, and was insignificant for the year ended December 31, 2015. The total fair value of stock options vested was $4,066, $22,453 and $2,450 during the years ended December 31, 2017, 2016 and 2015, 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 other than those issued to members of our Board of Directors. Director RSU grants vest over their one-year annual 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: Weighted average grant date fair value Number of Awards per share Nonvested at December 31, 2016 67,295 $ 25.88 Granted 398,728 34.30 Forfeited (48,447) 31.91 Vested and converted to shares (38,302) 29.88 Nonvested at December 31, 2017 379,274 $ 33.56 Expected to vest at December 31, 2017 379,274 $ 33.56 Restricted Stock We issued an aggregate of 768,021 shares of restricted common stock to certain employees of RowdMap at a fair market value of $43.27 per share. Half of these shares are subject to continued employment and performance-based vesting requirements and, if achieved, will vest on the one year anniversary of the closing date of the RowdMap Acquisition. The other half are subject to continued employment with us, with one-third vesting on each of the first three anniversaries of the closing of the RowdMap Acquisition. Employee Stock Purchase Plan We have an ESPP, which became effective January 1, 2017, for US and non-US employees, both of which have a series of six month offering periods, with a new offering period beginning on the first day of January and July each year. The ESPP was adopted by our Board of Directors in August 2016 and approved by shareholders in May 2017. Employees may contribute up to 10% of their pay towards the purchase of common stock via payroll deductions to a maximum of $10 per year, or $5 per offering period. Purchase dates occur on the last business day of June and December of each year and shares are purchased at a 10% discount off the closing price on the NYSE on the date of purchase. Employees must hold the shares purchased for a minimum of 90 days. The ESPP had 1,260,000 shares of our common stock initially reserved for issuance upon its inception. The reserve automatically increases each January by an amount equal to the lesser of 1,260,000 or approximately 1.5% of total common shares outstanding on the first day of January. A summary of ESPP share reserve activity for the year ended December 31, 2017 is as follows: Shares Weighted average price Available for future purchases, beginning of year 1,260,000 Shares reserved for issuance (a) — Common stock purchased (62,694) $ 31.09 Available for future purchases, end of year 1,197,306 (a) On January 1, 2018, the number of shares reserved for issuance was increased by 1,260,000. Stock-Based 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 has been 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, 2017 2016 2015 Expected term (years) 6.25 6.25 6.25 Expected volatility 40.00 % 50.00 % 50.00 % Expected dividend yield 0.00 % 0.00 % 0.00 % Weighted average risk-free interest rate 1.93 % 1.36 % 1.70 % Weighted average grant date fair value $ 14.57 $ 9.53 $ 7.77 Total fair market value related to the restricted stock issued in connection with the RowdMap Acquisition was $33,232 based on the closing price of our common stock on the date of grant. For the time-based shares, stock-based compensation expense is being recorded ratably over the three year vesting period. For the performance-based shares, stock-based compensation expense will be recorded over the one year vesting period to the extent it is probable the performance criteria will be achieved. For the year ended December 31, 2017, we recorded approximately $6,072 in stock-based compensation expense related to the performance-based awards that we estimate are probable of achieving the performance criteria. We recorded total stock-based compensation expense of $16,873, $22,954 and $3,399 for the years ended December 31, 2017, 2016 and 2015. 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 account for forfeitures as they occur. As of December 31, 2017, we had total unrecognized compensation cost of $43,342 related to 2,526,406 unvested service-based stock options, RSUs and restricted stock which we expect to recognize over the next 2.4 years. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information | |
Segment Information | Note 15. 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 a network efficiency solution to payers and providers as well as, on a limited basis, certain analytics-based solutions unrelated to our healthcare payment accuracy solutions in the United States. Through our Global Retail and Other segment, we provide retrospective claims accuracy solutions to retailers primarily in the United States, with additional clients in 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, 2017 2016 2015 Net Revenue Healthcare $ 605,228 $ 552,041 $ 467,044 Global Retail and Other 73,433 73,121 74,299 Consolidated net revenue $ 678,661 $ 625,162 $ 541,343 Depreciation and amortization Healthcare $ 81,388 $ 77,178 $ 70,479 Global Retail and Other 3,795 3,791 3,683 Consolidated depreciation and amortization $ 85,183 $ 80,969 $ 74,162 Transaction-related expenses Healthcare $ 2,087 $ 1,673 $ 1,332 Global Retail and Other 132 115 137 Consolidated transaction-related expenses $ 2,219 $ 1,788 $ 1,469 Impairment of intangible assets Healthcare $ — $ — $ 26,326 Global Retail and Other 1,322 — 1,500 Consolidated impairment of intangible assets $ 1,322 $ — $ 27,826 Operating Income Healthcare $ 151,340 $ 123,917 $ 84,240 Global Retail and Other 10,958 10,036 12,284 Consolidated operating income $ 162,298 $ 133,953 $ 96,524 Operating segment net revenue by product type for the periods presented was as follows: Year Ended December 31, 2017 % 2016 % 2015 % Healthcare Retrospective claims accuracy $ 351,662 51.8 $ 310,496 49.7 $ 251,288 46.4 Prospective claims accuracy 236,192 34.8 229,491 36.7 201,899 37.3 Other 17,374 2.6 12,054 1.9 13,857 2.6 Total Healthcare 605,228 89.2 552,041 88.3 467,044 86.3 Global Retail and Other Retrospective claims accuracy 71,437 10.5 70,656 11.3 72,060 13.3 Other 1,996 0.3 2,465 0.4 2,239 0.4 Total Global Retail and Other 73,433 10.8 73,121 11.7 74,299 13.7 Consolidated net revenue $ 678,661 100.0 $ 625,162 100.0 $ 541,343 100.0 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 99%, 98% and 98% of total net revenue for the years ended December 31, 2017, 2016 and 2015, 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, 2017 | |
Client Concentration | |
Client Concentration | Note 16. Client Concentration The list of our largest clients changes periodically. Our largest clients, all of which are in our Healthcare segment, accounted for the following percentages of total net revenue: Year Ended December 31, 2017 2016 2015 Customer A 13 % 15 % 14 % Customer B 11 % 11 % 10 % Customer C 10 % 7 % 8 % 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, 2017 | |
Employee Benefit Plans | |
Employee Benefit Plans | Note 17. Employee Benefit Plans Contributions expensed and included in compensation on our Consolidated Statements of Comprehensive Income for employee benefit plans are detailed below: Year Ended December 31, 2017 2016 2015 401(k) Plan (a) $ 5,101 $ 3,860 $ 3,053 Profit Share Plan (b) — 220 539 Provident Plan (c) 712 528 427 Total $ 5,813 $ 4,608 $ 4,019 (a) We sponsor a defined contribution retirement plan 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. (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, 2017 and 2016 we had an accrued benefit obligation relating to the India Plan of $1,008 and $763, respectively. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations | |
Discontinued Operations | Note 18. 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. 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, 2017 | |
Selected Quarterly Financial Data (Unaudited) | |
Selected Quarterly Financial Data (Unaudited) | Note 19. 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, 2017 Quarter Quarter Quarter Quarter Revenue (a) $ 160,133 $ 167,611 $ 174,188 $ 176,729 Operating income ( b ) 34,082 39,996 41,042 47,178 Net income (b)(c) 26,975 21,088 19,472 70,668 Total earnings per share—Basic ( c ) $ 0.30 $ 0.23 $ 0.21 $ 0.77 Total earnings per share—Diluted ( c ) $ 0.28 $ 0.22 $ 0.20 $ 0.74 First Second Third Fourth Year Ended December 31, 2016 Quarter Quarter Quarter Quarter Revenue (d) $ 142,718 $ 158,291 $ 156,241 $ 167,912 Operating income (d)(e) 29,238 38,938 24,155 41,622 Net income (d)(e)(f) 8,084 10,893 4,583 25,292 Total earnings per share—Basic (d)(e)(f) $ 0.10 $ 0.13 $ 0.05 $ 0.28 Total earnings per share—Diluted (d)(e)(f) $ 0.10 $ 0.13 $ 0.05 $ 0.27 (a) During the fourth quarter 2017, healthcare revenue was reduced by approximately $7,000 as a result of an increase in our estimated liability for refunds and appeals. (b) During the second quarter 2017, as a result of the repricing our Term Loan B, we recorded a loss on extinguishment of $3,183 (see Note 8). (c) During the fourth quarter 2017, we recognized a net income tax benefit of $45,019 associated with the impact of the Tax Act enacted on December 22, 2017 (see Note 11). (d) 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. (e) 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 14). (f) 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 8). . |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Event | |
Subsequent Event | Note 20. Subsequent Event Our original Medicare RAC contract with CMS expired on January 31, 2018. As discussed in Note 2, 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. In connection with the expiration of the contract, we determined that we have no obligation to CMS with respect to any appeals resolved in the providers favor after the expiration date and, in addition, we believe that we have no obligation to CMS in connection with the hospital settlement processes as described in Note 7. Accordingly, we expect to release at least $32,000 of the total $56,000 liability during the first quarter 2018. This will increase first quarter 2018 revenue by an amount equal to the total liability released upon contract expiration. We continue to assess the remaining estimated liability for refunds and appeals to determine management’s best estimate of any appeals overturned prior to the expiration of the contract term. |
Schedule I - Condensed Financia
Schedule I - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Registrant | |
Schedule I - Condensed Financial Information of Registrant | Cotiviti Holdings, Inc. Schedule I - Parent Company Balance Sheets (In thousands, except share amounts) December 31, 2017 2016 ASSETS Non current assets: Investment in subsidiaries 1,101,468 939,336 TOTAL ASSETS $ 1,101,468 $ 939,336 LIABILITIES AND STOCKHOLDERS' EQUITY Total liabilities $ — $ — Stockholders' equity: Common stock ($0.001 par value; 600,000,000 shares authorized, 92,299,294 and 90,748,740 issued, and 92,299,294 and 90,741,340 outstanding at December 31, 2017 and 2016, respectively) 92 91 Additional paid-in capital 933,710 911,582 Retained earnings 172,120 33,917 Accumulated other comprehensive loss (4,454) (6,156) Treasury stock, at cost (7,400 shares at December 31, 2016) — (98) Total stockholders' equity 1,101,468 939,336 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,101,468 $ 939,336 Cotiviti Holdings, Inc. Years ended December 31, 2017 2016 2015 Equity in income of subsidiaries $ 138,203 $ 48,852 $ 13,863 Net income 138,203 48,852 13,863 Equity in other comprehensive income (loss) of subsidiaries 1,702 (1,289) (3,009) Total comprehensive income $ 139,905 $ 47,563 $ 10,854 Cotiviti Holdings, Inc. Schedule I—Condensed Financial Information of Registrant Parent Company Statements of Cash Flows (In thousands) Year Ended December 31, 2017 2016 2015 Cash flows from operating activities: Net income $ 138,203 $ 48,852 $ 13,863 Adjustments to reconcile net income to net cash provided by operating activities: Equity in income of subsidiaries (138,203) (48,852) (13,863) Net cash provided by operating activities — — — Cash flows from investing activities: Investment in subsidiaries (5,340) (81,206) (210) Net cash used in investing activities (5,340) (81,206) (210) Cash flows from financing activities: Proceeds from issuance of common stock — 226,963 — Proceeds from issuance of common stock under equity plans 15,340 4,243 210 Dividends paid — (150,000) — Repurchase of common stock (10,000) — — Net cash provided by financing activities 5,340 81,206 210 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) $ 16,873 $ 22,954 $ 3,399 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 and Cotiviti USA, LLC, both of which 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 8 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, 2017. 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 Share Repurchase Program On October 31, 2017, the Board of Directors approved a share repurchase program under which we may repurchase up to $100,000 of common stock. This authorization permits us to repurchase shares from time to time until October 31, 2018 through a variety of methods, including open market repurchases and in privately negotiated transactions subject to debt covenants and other customary legal, contractual, regulatory and market considerations and may be discontinued at any time. All share repurchases will be implemented in accordance with Rule 10b-18 of the Exchange Act with respect to the timing, pricing and volume of such transactions. There can be no assurance as to the amount, timing or prices of repurchases, which may vary based on market conditions and other factors. During the year ended December 31, 2017, we repurchased 317,900 shares of our common stock under this share repurchase program for $10,000, at a weighted average share price of $31.43 per share. Secondary Offerings On August 7, 2017, we completed a secondary offering of 10,000,000 shares of our common stock by certain of our stockholders at an offering price of $37.00 per share. All of the shares offered were sold by selling stockholders. Accordingly, we did not receive any proceeds from the sale of shares. In connection with this offering, we incurred approximately $700 in professional services expenses, which are included in transaction-related expenses on our Consolidated Statements of Comprehensive Income for the year ended December 31, 2017. On March 7, 2017, we completed a secondary offering of 9,683,000 shares of our common stock by certain of our stockholders, including 1,263,000 shares sold to the underwriters pursuant to their option to purchase additional shares, at an offering price of $36.00 per share. All of the shares offered were sold by selling stockholders. Accordingly, we did not receive any proceeds from the sale of the shares. In connection with this offering, we incurred approximately $600 in professional services expenses, which are included in transaction-related expenses on our Consolidated Statements of Comprehensive Income for the year ended December 31, 2017. Issuance of Common Stock 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. 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 26, 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, 2017 | |
Schedule II—Valuation and Qualifying Accounts | |
Schedule II—Valuation and Qualifying Accounts | Cotiviti Holdings, Inc. Schedule II— (in thousands) Additions Description Balance at Beginning of Period Charged to Operating Expenses Provision Charged Against Revenue (a) Deductions (b) Balance at End of Period Year Ended December 31, 2017 Allowance and estimated liability for refunds and appeals (c) $ 103,559 $ — $ 88,874 $ (95,392) $ 97,041 Allowance for doubtful accounts 851 (295) — (380) 176 Year Ended December 31, 2016 Allowance and estimated liability for refunds and appeals (c) $ 101,181 $ — $ 99,472 $ (97,094) $ 103,559 Allowance for doubtful accounts 1,053 (147) — (55) 851 Year Ended December 31, 2015 Allowance and estimated liability for refunds and appeals (c) $ 98,157 $ — $ 67,702 $ (64,678) $ 101,181 Allowance for doubtful accounts 655 804 — (406) 1,053 (a) Provision charged against revenue include estimates for refund and appeals liabilities based on actual historical refunds and appeals data by client type, net of any changes to previously estimated amounts. (b) 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. (c) The balance at end of period consists of the estimated allowance for refunds and appeals netted against accounts receivable of $35,434, $41,020 and $33,406 and the estimated liability for refunds and appeals of $61,607, $62,539 and $67,775 as of December 31, 2017, 2016 and 2015, respectively. Refer to the Notes to our Consolidated Financial Statements. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
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 income (loss) 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. 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. As discussed below under Recently Issued Accounting Standards, we will adopt the updated FASB revenue recognition guidance ASC 606 on January 1, 2018. ASC 606 is an update to ASC 605, which was the revenue recognition standard in effect for each of the three years in the period ended December 31, 2017. 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 these estimated 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 $61,607 and $62,539 at December 31, 2017 and December 31, 2016, respectively. The estimated allowance for refunds and appeals representing our estimate of claims that may be overturned related to amounts in accounts receivable was $35,434 and $41,020 at December 31, 2017 and December 31, 2016, respectively. Under the Medicare Recovery Audit Program, in which we are one of the 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. The liability is included in the estimated liability for refunds and appeals on our Consolidated Balance Sheets. See Note 7 and Note 20 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 $62,294 and $51,643 as of December 31, 2017 and December 31, 2016, 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 $4,958 and $6,137 as of December 31, 2017 and December 31, 2016, 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-based 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. |
Selling, General and Administrative | Selling, General and Administrative Compensation within SG&A includes the total cost of payroll, related benefits and stock-based 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. SG&A expenses do not include depreciation and amortization, which is stated separately in our Consolidated Statements of Comprehensive Income. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and included in other SG&A expenses on our Consolidated Statements of Comprehensive Income. Advertising expense was $1,439, $1,345 and $1,241 for the years ended December 31, 2017, 2016 and 2015, 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. |
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. 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 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 $14,765, $21,580 and $7,239 for the years ended December 31, 2017, 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. Amortization expense for internal use software was $7,745, $2,992 and $2,287 for the years ended December 31, 2017, 2016 and 2015, 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. |
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 events or circumstances indicate the carrying amount may not be recoverable. These tests are performed at the reporting unit level. We have two reporting units, Healthcare and Global Retail and Other. Application of the goodwill impairment test requires judgment, including: the identification of reporting units; assignment of assets and liabilities to reporting units; determination of the fair value of each reporting unit; and an assumption as to the form of the transaction in which the reporting unit would be acquired by a market participant (either a taxable or nontaxable transaction). Under ASC 350, Intangibles—Goodwill 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. 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 quantitative impairment test. If we cannot support such a conclusion, or we do not elect to perform the qualitative assessment, then a quantitative test for goodwill 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 a reporting unit is determined using a discounted cash flow analysis based on assumptions regarding our future business outlook. While we continue to review and analyze many factors that can impact our business prospects in the future, our analyses are subjective and are based on conditions existing at and trends leading up to the time the assumptions are made. Actual results could differ materially from these assumptions. |
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 as of October 1 of each year or when events or changes in circumstances necessitate an evaluation for impairment. 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. 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 5 to 14 years. Amortization expense is included in amortization of intangible assets in our Consolidated Statements of Comprehensive Income. 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. See Note 5 for further detail. |
Long-Lived Assets | Long-Lived Assets Long-lived assets, including property and equipment, 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. |
Business Combinations | Business Combinations We account for acquisitions of businesses using the acquisition method of accounting. 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. We record liabilities related to uncertain tax positions in accordance with ASC 740, Income Taxes , 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% 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. Accrued interest and penalties are included within accounts payable and accrued other expenses in the Consolidated Balance Sheets. The Tax Act, which was enacted on December 22, 2017, resulted in a substantial impact on our income tax benefit for the year ended December 31, 2017. See Note 11 for additional information. |
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 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 9 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 14. 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. The determination of the stock-based compensation expense related to RSUs is calculated based on the closing price of our stock on the grant date. 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 vest in accordance with the specific performance criteria outlined in the executed award agreements. The vesting of performance-based equity awards is also dependent upon the participant’s continued employment. 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. As part of the RowdMap Acquisition, we issued restricted stock to certain employees. We recognized the related expense for these awards ratably over the applicable vesting period or as achievement of performance criteria become probable. See Note 14 for additional information. |
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 7 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 . See Note 10 for more information regarding management’s fair value estimates. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards New accounting rules and disclosure requirements can impact our financial results and the comparability of our financial statements. The authoritative literature which has recently been issued and that we believe will most impact our consolidated financial statements is described below. There are also several new proposals under development. If and when enacted, these proposals may have a significant impact on our financial statements. 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 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. In 2016, we 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 completed our contract review and policy drafting. Based on our review, we believe the timing of revenue recognition will not materially change from current practice. We will adopt as of January 1, 2018 using the modified retrospective method. Adoption of this standard will require changes to our business processes, systems and controls to support the additional required disclosures. Our identification and design of such changes is ongoing. We will provide additional information about the impact of this new guidance, including enhanced disclosure requirements, in future filings. |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Acquisition | |
Schedule of estimated fair values of the assets acquired and liabilities assumed | July 14, 2017 Cash $ 4,107 Accounts receivable 2,526 Prepaid expenses and other assets 1,212 Other long-term assets 12 Property and equipment 263 Intangible assets 19,510 Total identifiable assets acquired 27,630 Accounts payable and accrued liabilities 4,491 Deferred tax liabilities 3,688 Total liabilities assumed 8,179 Net identifiable assets acquired 19,451 Goodwill 54,673 Net assets acquired $ 74,124 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment | |
Schedule of property and equipment by major asset class | December 31, 2017 2016 Computer equipment $ 46,731 $ 40,349 Software 67,511 42,614 Furniture and fixtures 9,199 8,652 Leasehold improvements 5,256 4,392 Projects in progress 10,295 12,001 Property and equipment, gross $ 138,992 $ 108,008 Less: accumulated depreciation and amortization 61,652 40,368 Property and equipment, net $ 77,340 $ 67,640 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Intangible Assets | |
Schedule of finite-lived intangible asset balances by major asset class | 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, 2017: Customer relationships $ 650,954 $ 190,572 $ 1,322 $ 459,060 years Acquired software 54,210 25,430 — 28,780 years Connolly trademark 4,200 — — 4,200 indefinite-lived Total $ 709,364 $ 216,002 $ 1,322 $ 492,040 years December 31, 2016: Customer relationships $ 640,052 $ 144,768 $ — $ 495,284 years Acquired software 82,400 48,579 — 33,821 years Connolly trademark 4,200 — — 4,200 indefinite-lived Total $ 726,652 $ 193,347 $ — $ 533,305 years |
Schedule of indefinite-lived intangible asset balances by major asset class | 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, 2017: Customer relationships $ 650,954 $ 190,572 $ 1,322 $ 459,060 years Acquired software 54,210 25,430 — 28,780 years Connolly trademark 4,200 — — 4,200 indefinite-lived Total $ 709,364 $ 216,002 $ 1,322 $ 492,040 years December 31, 2016: Customer relationships $ 640,052 $ 144,768 $ — $ 495,284 years Acquired software 82,400 48,579 — 33,821 years Connolly trademark 4,200 — — 4,200 indefinite-lived Total $ 726,652 $ 193,347 $ — $ 533,305 years |
Schedule of intangible asset amortization expense | 2018 $ 57,588 2019 57,588 2020 57,588 2021 53,264 2022 48,956 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill | |
Schedule of changes in the carrying amount of goodwill by segment | December 31, 2017 December 31, 2016 Global Retail Global Retail Healthcare and Other Healthcare and Other Beginning balance $ 1,147,771 $ 48,253 $ 1,147,771 $ 49,273 RowdMap Acquisition 54,673 — — — Foreign currency translation — 667 — (1,020) Ending balance $ 1,202,444 $ 48,920 $ 1,147,771 $ 48,253 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Schedule of future minimum payments under non-cancelable operating lease agreements | Year ending December 31: 2018 $ 8,640 2019 9,588 2020 8,882 2021 8,173 2022 8,363 2023 - 2029 44,308 Total minimum lease payments $ 87,954 |
Schedule of changes in the carrying amount of AROs | Year ended December 31, 2017 2016 Balance beginning of period $ 2,725 $ 2,415 Additional ARO liability — 133 Accretion expense 183 177 Settled ARO liability (64) — Balance at end of period $ 2,844 $ 2,725 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Long-term Debt | |
Schedule of long-term debt | December 31, 2017 2016 First Lien Term A Loans (a) $ 234,237 $ 246,694 First Lien Term B Loans (b) 540,585 544,345 Revolver (c) — — Total debt 774,822 791,039 Less: debt issuance costs 7,204 10,837 Less: current portion 18,000 18,000 Total long-term debt $ 749,618 $ 762,202 (a) The First Lien Term A Loans mature on September 28, 2021 and requires quarterly principal payments of $3,125 per quarter in 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 Loans 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 Loans 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 3.95% and 3.75% at December 31, 2017 and 2016, respectively. (b) The First Lien Term B Loans mature 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 Loans bear interest at either (a) the ABR plus 1.75% for ABR loans or (b) LIBOR plus 2.50% 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’ duration been applicable to such borrowing. The interest rate in effect was 4.20% and 3.75% at December 31, 2017 and 2016, respectively. (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, 2017 and 2016. The interest rate in effect was 3.95% and 3.75% at December 31, 2017 and 2016, respectively. |
Schedule of expected aggregate maturities of long term debt | December 31, 2017 2018 $ 18,000 2019 24,250 2020 30,500 2021 183,625 2022 5,500 Thereafter 515,625 Total $ 777,500 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments | |
Schedule of fair value and location of derivative instruments | December 31, 2017 2016 Liability fair value recorded in other long-term liabilities $ 951 $ 1,729 Liability fair value recorded in accounts payable and accrued other expenses 979 1,065 Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months (2,440) (1,783) |
Schedule of changes in other comprehensive income related to derivative instruments classified as cash flow hedges | Balance, January 1, 2015 $ (623) Reclassifications in earnings, net of tax benefit of $40 65 Change in fair value of derivative instrument, net of tax of $1,360 (2,410) Balance, December 31, 2015 (2,968) Reclassifications in earnings, net of tax benefit of $107 176 Change in fair value of derivative instrument, net of tax of $319 (542) Balance, December 31, 2016 (3,334) Reclassifications in earnings, net of tax benefit of $675 1,114 Change in fair value of derivative instrument, net of tax of $215 (336) Balance, December 31, 2017 $ (2,556) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Summary of financial instruments measured at fair value | December 31, 2017 December 31, 2016 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Liabilities: Long-term debt $ — $ — $ 774,822 $ — $ — $ 791,039 Interest rate cap agreements — 1,930 — — 2,794 — Total $ — $ 1,930 $ 774,822 $ — $ 2,794 $ 791,039 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Schedule of total income tax (benefit) expense | Year ended December 31, 2017 2016 2015 Income tax (benefit) expense from continuing operations $ (11,773) $ 20,970 $ 14,401 Income tax expense from discontinued operations — — 341 Total income tax (benefit) expense $ (11,773) $ 20,970 $ 14,742 |
Schedule of income (loss) from continuing operations before income taxes | Year ended December 31, 2017 2016 2015 U.S. operations $ 122,952 $ 66,838 $ 27,605 Foreign operations 3,478 2,984 100 Income before income taxes $ 126,430 $ 69,822 $ 27,705 |
Schedule of income tax (benefit) expense from continuing operations | Year ended December 31, 2017 2016 2015 Current: U.S. federal $ 26,509 $ 26,734 $ 20,382 State and local 1,679 613 4,822 Foreign 1,680 1,358 1,029 Current income tax expense 29,868 28,705 26,233 Deferred U.S. federal (42,430) (5,858) (12,584) State and local (304) (1,825) 798 Foreign 1,093 (52) (46) Deferred income tax benefit (41,641) (7,735) (11,832) Total income tax (benefit) expense $ (11,773) $ 20,970 $ 14,401 |
Schedule of factors for variation in effective tax rates from continuing operations compared to U.S. statutory income tax rates | Year ended December 31, 2017 2016 2015 Federal income tax expense at the statutory rate $ 44,250 $ 24,438 $ 9,697 State and local taxes, net of federal benefit 1,657 556 3,922 Non-deductible costs 1,197 779 1,070 Stock-based compensation (11,985) (4,000) — Unrecognized tax positions (532) (1,397) 508 U.S. Tax Act benefit, net (45,019) — — Other (1,341) 594 (796) Total income tax (benefit) expense $ (11,773) $ 20,970 $ 14,401 |
Schedule of components of deferred tax assets and liabilities | Year ended December 31, 2017 2016 Deferred tax assets: Allowance for doubtful accounts and estimated allowance for refunds and appeals $ 21,829 $ 34,794 Accrued compensation 929 2,185 Deferred rent 194 149 Stock-based compensation 6,045 10,381 Tax credit and net operating loss carryforward 3,420 652 Other deductible temporary differences 2,333 5,077 Gross deferred tax assets 34,750 53,238 Less: valuation allowance (1,847) (199) Total deferred tax assets 32,903 53,039 Deferred tax liabilities: Unbilled receivables and other liabilities (1,206) (2,307) Intangibles and goodwill (103,203) (154,528) Property and equipment (4,738) (10,795) Software development costs (5,868) (2,603) Other taxable temporary differences (936) (3,339) Total gross deferred tax liabilities (115,951) (173,572) Net deferred tax liability $ (83,048) $ (120,533) |
Schedule of reconciliation of beginning and ending unrecognized tax benefits | Year ended December 31, 2017 2016 Unrecognized tax benefits — January 1 $ 2,571 $ 4,937 Increase for tax positions taken in prior period 1,186 67 Increase for tax positions taken in current period 385 203 Decrease for tax positions taken in prior period — (508) Decrease for tax positions taken in current period — (43) Decrease related to lapse in statute of limitations (1,836) (96) Decrease related to settlement of positions taken in prior periods (308) (1,989) Unrecognized tax benefits — December 31 $ 1,998 $ 2,571 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings per Share | |
Schedule of computation of basic and diluted earnings per share | Year Ended December 31, 2017 2016 2015 Net income available to common stockholders $ 138,203 $ 48,852 $ 13,863 Weighted average outstanding shares of common stock 91,928,364 85,053,890 77,216,133 Dilutive effect of stock-based awards and restricted stock 3,167,726 3,524,302 425,255 Adjusted weighted average outstanding and assumed conversions for diluted EPS 95,096,090 88,578,192 77,641,388 Earnings per share from continuing operations: Basic $ 1.50 $ 0.57 $ 0.17 Diluted 1.45 0.55 0.17 Earnings per share from discontinued operations: Basic $ — $ — $ 0.01 Diluted — — 0.01 Earnings per share: Basic $ 1.50 $ 0.57 $ 0.18 Diluted 1.45 0.55 0.18 |
Schedule of antidilutive securities excluded from earnings per share | Years Ended December 31, 2017 2016 2015 Employee stock options, RSUs and restricted stock 833,670 341,054 2,035,332 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation | |
Summary of stock option activity | Weighted Weighted average average remaining Aggregate Outstanding exercise price contractual life Intrinsic Value Options per share (Years) (in thousands) Outstanding at December 31, 2016 5,997,372 $ 10.18 7.30 $ 145,270 Granted 599,153 34.70 Forfeited (240,845) 19.48 Exercised (1,778,104) 7.61 Expired (2,969) 13.92 Outstanding at December 31, 2017 4,574,607 $ 13.89 6.65 $ 85,138 Vested and exercisable at December 31, 2017 3,117,670 $ 10.38 5.95 $ 68,061 |
Summary of restricted stock units activity | Weighted average grant date fair value Number of Awards per share Nonvested at December 31, 2016 67,295 $ 25.88 Granted 398,728 34.30 Forfeited (48,447) 31.91 Vested and converted to shares (38,302) 29.88 Nonvested at December 31, 2017 379,274 $ 33.56 Expected to vest at December 31, 2017 379,274 $ 33.56 |
Summary of ESPP share reserve activity | Shares Weighted average price Available for future purchases, beginning of year 1,260,000 Shares reserved for issuance (a) — Common stock purchased (62,694) $ 31.09 Available for future purchases, end of year 1,197,306 (a) On January 1, 2018, the number of shares reserved for issuance was increased by 1,260,000. |
Schedule of weighted average assumptions to estimate the fair value of stock options granted | Year Ended December 31, 2017 2016 2015 Expected term (years) 6.25 6.25 6.25 Expected volatility 40.00 % 50.00 % 50.00 % Expected dividend yield 0.00 % 0.00 % 0.00 % Weighted average risk-free interest rate 1.93 % 1.36 % 1.70 % Weighted average grant date fair value $ 14.57 $ 9.53 $ 7.77 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information | |
Schedule of operating segment results | Year Ended December 31, 2017 2016 2015 Net Revenue Healthcare $ 605,228 $ 552,041 $ 467,044 Global Retail and Other 73,433 73,121 74,299 Consolidated net revenue $ 678,661 $ 625,162 $ 541,343 Depreciation and amortization Healthcare $ 81,388 $ 77,178 $ 70,479 Global Retail and Other 3,795 3,791 3,683 Consolidated depreciation and amortization $ 85,183 $ 80,969 $ 74,162 Transaction-related expenses Healthcare $ 2,087 $ 1,673 $ 1,332 Global Retail and Other 132 115 137 Consolidated transaction-related expenses $ 2,219 $ 1,788 $ 1,469 Impairment of intangible assets Healthcare $ — $ — $ 26,326 Global Retail and Other 1,322 — 1,500 Consolidated impairment of intangible assets $ 1,322 $ — $ 27,826 Operating Income Healthcare $ 151,340 $ 123,917 $ 84,240 Global Retail and Other 10,958 10,036 12,284 Consolidated operating income $ 162,298 $ 133,953 $ 96,524 |
Schedule of operating segment net revenue by product type | Year Ended December 31, 2017 % 2016 % 2015 % Healthcare Retrospective claims accuracy $ 351,662 51.8 $ 310,496 49.7 $ 251,288 46.4 Prospective claims accuracy 236,192 34.8 229,491 36.7 201,899 37.3 Other 17,374 2.6 12,054 1.9 13,857 2.6 Total Healthcare 605,228 89.2 552,041 88.3 467,044 86.3 Global Retail and Other Retrospective claims accuracy 71,437 10.5 70,656 11.3 72,060 13.3 Other 1,996 0.3 2,465 0.4 2,239 0.4 Total Global Retail and Other 73,433 10.8 73,121 11.7 74,299 13.7 Consolidated net revenue $ 678,661 100.0 $ 625,162 100.0 $ 541,343 100.0 |
Client Concentration (Tables)
Client Concentration (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Client Concentration | |
Schedule of significant clients accounted for the following percentages of total net revenue | Year Ended December 31, 2017 2016 2015 Customer A 13 % 15 % 14 % Customer B 11 % 11 % 10 % Customer C 10 % 7 % 8 % |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefit Plans | |
Schedule of contributions expensed and included in compensation for employee benefit plans | Year Ended December 31, 2017 2016 2015 401(k) Plan (a) $ 5,101 $ 3,860 $ 3,053 Profit Share Plan (b) — 220 539 Provident Plan (c) 712 528 427 Total $ 5,813 $ 4,608 $ 4,019 (a) We sponsor a defined contribution retirement plan 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. (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, 2017 and 2016 we had an accrued benefit obligation relating to the India Plan of $1,008 and $763, respectively. |
Selected Quarterly Financial 45
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Selected Quarterly Financial Data (Unaudited) | |
Summary of quarterly operating results | First Second Third Fourth Year Ended December 31, 2017 Quarter Quarter Quarter Quarter Revenue (a) $ 160,133 $ 167,611 $ 174,188 $ 176,729 Operating income ( b ) 34,082 39,996 41,042 47,178 Net income (b)(c) 26,975 21,088 19,472 70,668 Total earnings per share—Basic ( c ) $ 0.30 $ 0.23 $ 0.21 $ 0.77 Total earnings per share—Diluted ( c ) $ 0.28 $ 0.22 $ 0.20 $ 0.74 First Second Third Fourth Year Ended December 31, 2016 Quarter Quarter Quarter Quarter Revenue (d) $ 142,718 $ 158,291 $ 156,241 $ 167,912 Operating income (d)(e) 29,238 38,938 24,155 41,622 Net income (d)(e)(f) 8,084 10,893 4,583 25,292 Total earnings per share—Basic (d)(e)(f) $ 0.10 $ 0.13 $ 0.05 $ 0.28 Total earnings per share—Diluted (d)(e)(f) $ 0.10 $ 0.13 $ 0.05 $ 0.27 (a) During the fourth quarter 2017, healthcare revenue was reduced by approximately $7,000 as a result of an increase in our estimated liability for refunds and appeals. (b) During the second quarter 2017, as a result of the repricing our Term Loan B, we recorded a loss on extinguishment of $3,183 (see Note 8). (c) During the fourth quarter 2017, we recognized a net income tax benefit of $45,019 associated with the impact of the Tax Act enacted on December 22, 2017 (see Note 11). (d) 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. (e) 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 14). (f) 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 $9,349 (see Note 8). |
Description of Business (Detail
Description of Business (Details) | Dec. 31, 2017customercompany |
Healthcare | Minimum | |
Description of business | |
Number of clients | customer | 60 |
Commercial, Medicaid and Medicare managed health plans | United States | |
Description of business | |
Number of largest companies in the industry sector | company | 25 |
Retail | |
Description of business | |
Number of clients | customer | 30 |
Retail | United States | |
Description of business | |
Number of largest companies in the industry sector | company | 10 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Revenue Recognition, Unbilled Receivables, and Estimated Liability for Refunds and Appeals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |||
Period of time previous revenue standard was in effect | 3 years | ||
Estimated liability for refunds and appeals | $ 61,607 | $ 62,539 | $ 67,775 |
Estimated allowance for refunds and appeals | 35,434 | 41,020 | $ 33,406 |
Accounts receivable | |||
Summary of Significant Accounting Policies | |||
Unbilled receivables | 62,294 | 51,643 | |
Unbilled receivables arising from deferred billing | $ 4,958 | $ 6,137 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Selling, general and administrative expenses | |||
Advertising Expense | |||
Advertising expense | $ 1,439 | $ 1,345 | $ 1,241 |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2017 | |
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 Accoun50
Summary of Significant Accounting Policies - Internally Developed Software Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Internally Developed Software Costs | |||
Internally developed software costs capitalized during the period | $ 14,765 | $ 21,580 | $ 7,239 |
Amortization expense | $ 7,745 | $ 2,992 | 2,287 |
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 Accoun51
Summary of Significant Accounting Policies - Intangible Assets and Impairment (Details) | 12 Months Ended |
Dec. 31, 2017segment | |
Goodwill | |
Number of reporting units | 2 |
Minimum | |
Intangible assets, gross | |
Amortization period | 5 years |
Maximum | |
Intangible assets, gross | |
Amortization period | 14 years |
Summary of Significant Accoun52
Summary of Significant Accounting Policies - Recently Issued Accounting Standards - ASU 2014-09 (Details) | 12 Months Ended |
Dec. 31, 2017approach | |
Summary of Significant Accounting Policies | |
Number of permitted transition methods under ASU 2014-09 | 2 |
Acquisition - Consideration Tra
Acquisition - Consideration Transferred (Details) - RowdMap $ in Thousands | Jul. 14, 2017USD ($)shares |
Consideration transferred | |
Cash paid | $ | $ 74,000 |
Common stock | Restricted Stock | |
Consideration transferred | |
Shares issued (in shares) | shares | 768,021 |
Common stock | Restricted stock, performance-based | |
Consideration transferred | |
Percentage of total shares awarded | 50.00% |
Vesting period (in years) | 1 year |
Common stock | Restricted stock, time-based | |
Consideration transferred | |
Percentage of total shares awarded | 50.00% |
Percentage vesting each anniversary | 33.30% |
Vesting period (in years) | 3 years |
Acquisition - Net Assets Acquir
Acquisition - Net Assets Acquired (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jul. 14, 2017 | Dec. 31, 2016 |
Preliminary allocation of the purchase price | |||
Goodwill | $ 1,251,364 | $ 1,196,024 | |
RowdMap | |||
Preliminary allocation of the purchase price | |||
Cash | $ 4,107 | ||
Accounts receivable | 2,526 | ||
Prepaid expenses and other assets | 1,212 | ||
Other long-term assets | 12 | ||
Property and equipment | 263 | ||
Intangible assets | 19,510 | ||
Total identifiable assets acquired | 27,630 | ||
Accounts payable and accrued liabilities | 4,491 | ||
Deferred tax liabilities | 3,688 | ||
Total liabilities assumed | 8,179 | ||
Net identifiable assets acquired | 19,451 | ||
Goodwill | 54,673 | ||
Net assets acquired | $ 74,124 |
Acquisition - Acquired Intangib
Acquisition - Acquired Intangible Assets (Details) - RowdMap - USD ($) $ in Thousands | Jul. 14, 2017 | Dec. 31, 2017 |
Finite-Lived Intangible Assets | ||
Finite-lived intangible assets acquired | $ 19,510 | |
Goodwill acquired, tax deductible amount | $ 0 | |
Acquired software | ||
Finite-Lived Intangible Assets | ||
Finite-lived intangible assets acquired | $ 6,310 | |
Weighted-average useful life of acquired intangible assets | 5 years | |
Customer relationships | ||
Finite-Lived Intangible Assets | ||
Finite-lived intangible assets acquired | $ 13,200 | |
Weighted-average useful life of acquired intangible assets | 5 years |
Acquisition - Other Acquisition
Acquisition - Other Acquisition Related Disclosures (Details) - RowdMap $ in Thousands | Dec. 31, 2017USD ($) |
Acquisition | |
Transaction costs | $ 700 |
Accounts payable and accrued other expenses | Former stockholders | |
Acquisition | |
Payable to related parties | $ 1,068 |
Property and Equipment - Balanc
Property and Equipment - Balances by Major Asset Class (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property and equipment | ||
Property and equipment, gross | $ 138,992 | $ 108,008 |
Less: Accumulated depreciation and amortization | 61,652 | 40,368 |
Property and equipment, net | 77,340 | 67,640 |
Computer equipment | ||
Property and equipment | ||
Property and equipment, gross | 46,731 | 40,349 |
Software | ||
Property and equipment | ||
Property and equipment, gross | 67,511 | 42,614 |
Furniture and fixtures | ||
Property and equipment | ||
Property and equipment, gross | 9,199 | 8,652 |
Leasehold improvements | ||
Property and equipment | ||
Property and equipment, gross | 5,256 | 4,392 |
Projects in progress | ||
Property and equipment | ||
Property and equipment, gross | $ 10,295 | $ 12,001 |
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, 2017 | Dec. 31, 2016 | |
Recorded obligation | |||
Remaining payment period | 2 years | ||
Accounts payable and accrued other expenses | |||
Recorded obligation | |||
Current portion of obligation | $ 3,351 | $ 3,351 | |
Other long-term liabilities | |||
Recorded obligation | |||
Long-term portion of obligation | $ 3,225 |
Property and Equipment - Deprec
Property and Equipment - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and Equipment | |||
Depreciation and amortization expense related to property and equipment | $ 25,577 | $ 20,151 | $ 12,695 |
Intangible Assets - Finite-Live
Intangible Assets - Finite-Lived (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible assets with finite lives | ||||
Accumulated Amortization | $ 216,002 | $ 193,347 | ||
Impairment | $ 27,826 | $ 1,322 | $ 27,826 | |
Weighted average | ||||
Intangible assets with finite lives | ||||
Amortization period | 13 years | 12 years 9 months 18 days | ||
Customer relationships | ||||
Intangible assets with finite lives | ||||
Gross Carrying Amount | $ 650,954 | $ 640,052 | ||
Accumulated Amortization | 190,572 | 144,768 | ||
Impairment | 1,322 | |||
Net carrying amount | $ 459,060 | $ 495,284 | ||
Customer relationships | Weighted average | ||||
Intangible assets with finite lives | ||||
Amortization period | 13 years 6 months | 13 years 8 months 12 days | ||
Acquired software | ||||
Intangible assets with finite lives | ||||
Gross Carrying Amount | $ 54,210 | $ 82,400 | ||
Accumulated Amortization | 25,430 | 48,579 | ||
Net carrying amount | $ 28,780 | $ 33,821 | ||
Acquired software | Weighted average | ||||
Intangible assets with finite lives | ||||
Amortization period | 6 years 9 months 18 days | 6 years 2 months 12 days |
Intangible Assets - Indefinite-
Intangible Assets - Indefinite-lived (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Connolly Trademark | ||
Intangible assets with indefinite lives | ||
Net Carrying Amount | $ 4,200 | $ 4,200 |
Intangible Assets - Total by Ma
Intangible Assets - Total by Major Asset Class (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Intangible assets | ||
Gross carrying amount | $ 709,364 | $ 726,652 |
Accumulated Amortization | 216,002 | 193,347 |
Net carrying amount | 492,040 | 533,305 |
Intangible assets, gross | ||
Total intangible assets, gross | 709,364 | 726,652 |
Intangible assets, net | ||
Net carrying amount | $ 492,040 | $ 533,305 |
Weighted average | ||
Intangible assets | ||
Amortization period | 13 years | 12 years 9 months 18 days |
Intangible Assets - Amortizatio
Intangible Assets - Amortization and Impairment (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible assets, net | ||||
Accumulated Amortization | $ 216,002 | $ 193,347 | ||
Amortization expense | 59,606 | 60,818 | $ 61,467 | |
Impairment of intangible assets | $ 27,826 | 1,322 | $ 27,826 | |
Connolly Trademark | ||||
Intangible assets, net | ||||
Net carrying amount, indefinite-lived | 4,200 | 4,200 | ||
Acquired software | ||||
Intangible assets, net | ||||
Gross Carrying Amount | 54,210 | 82,400 | ||
Accumulated Amortization | 25,430 | 48,579 | ||
Acquired software | Adjustment | ||||
Intangible assets, net | ||||
Gross Carrying Amount | (34,500) | |||
Accumulated Amortization | (34,500) | |||
Customer relationships | ||||
Intangible assets, net | ||||
Gross Carrying Amount | 650,954 | 640,052 | ||
Accumulated Amortization | 190,572 | $ 144,768 | ||
Impairment of intangible assets | $ 1,322 |
Intangible Assets - Future Amor
Intangible Assets - Future Amortization (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Amortization expense for the next 5 years | |
2,018 | $ 57,588 |
2,019 | 57,588 |
2,020 | 57,588 |
2,021 | 53,264 |
2,022 | $ 48,956 |
Goodwill - Changes in carrying
Goodwill - Changes in carrying amount (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in the carrying amount of goodwill | ||
Beginning balance | $ 1,196,024 | |
Ending balance | 1,251,364 | $ 1,196,024 |
Healthcare | ||
Changes in the carrying amount of goodwill | ||
Beginning balance | 1,147,771 | 1,147,771 |
Acquisition | 54,673 | 0 |
Foreign currency translation and other | 0 | 0 |
Ending balance | 1,202,444 | 1,147,771 |
Global Retail and Other | ||
Changes in the carrying amount of goodwill | ||
Beginning balance | 48,253 | 49,273 |
Foreign currency translation and other | 667 | (1,020) |
Ending balance | $ 48,920 | $ 48,253 |
Goodwill - Impairment (Details)
Goodwill - Impairment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill | |||
Impairment related to goodwill | $ 0 | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Leases | |||
Rental expense relating to operating leases | $ 10,719 | $ 10,529 | $ 8,826 |
Future minimum payments under non cancellable operating leases | |||
2,018 | 8,640 | ||
2,019 | 9,588 | ||
2,020 | 8,882 | ||
2,021 | 8,173 | ||
2,022 | 8,363 | ||
2023 - 2029 | 44,308 | ||
Total minimum lease payments | $ 87,954 |
Commitments and Contingencies68
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, 2017 |
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 Contingencies69
Commitments and Contingencies - Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Asset Retirement Obligations | ||
Balance beginning of period | $ 2,725 | $ 2,415 |
Additional ARO Liability | 133 | |
Accretion expense | 183 | 177 |
Settled ARO liability | (64) | |
Balance at end of period | $ 2,844 | $ 2,725 |
Long-term Debt - New Agreements
Long-term Debt - New Agreements (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Apr. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | May 31, 2015 | Jun. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Long-term debt | ||||||||||
Loss on extinguishment of debt | $ 3,183 | $ 16,417 | $ 4,084 | |||||||
Restated Credit Agreement | ||||||||||
Long-term debt | ||||||||||
Decrease in total debt outstanding | $ 22,700 | |||||||||
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 | |||||||||
Initial Second Lien Credit Facilities | ||||||||||
Long-term debt | ||||||||||
Loss on extinguishment of debt | $ 7,068 | $ 7,068 | ||||||||
Outstanding borrowings repaid | $ 223,000 | |||||||||
Voluntary prepayment of borrowings | $ 13,100 | |||||||||
First Lien Term A Loan | Restated Credit Agreement | ||||||||||
Long-term debt | ||||||||||
Maximum borrowing capacity | 250,000 | 250,000 | ||||||||
First Lien Term B Loan | First Amendment Agreement | ||||||||||
Long-term debt | ||||||||||
Loss on extinguishment of debt | $ 3,183 | |||||||||
First Lien Term B Loan | First Amendment Agreement | LIBOR | ||||||||||
Long-term debt | ||||||||||
Decrease in applicable interest rates (as a percent) | 0.25% | |||||||||
First Lien Term B Loan | Restated Credit Agreement | ||||||||||
Long-term debt | ||||||||||
Loss on extinguishment of debt | $ 3,183 | |||||||||
Maximum borrowing capacity | 550,000 | 550,000 | ||||||||
Revolver | Restated Credit Agreement | ||||||||||
Long-term debt | ||||||||||
Maximum borrowing capacity | $ 100,000 | $ 100,000 |
Long-term Debt - Summary of Com
Long-term Debt - Summary of Components (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term debt components | ||
Total debt | $ 774,822 | $ 791,039 |
Less: debt issuance costs | 7,204 | 10,837 |
Less: current portion | 18,000 | 18,000 |
Total long-term debt | 749,618 | 762,202 |
First Lien Term A Loan | Restated Credit Agreement | ||
Long-term debt components | ||
Total debt | 234,237 | 246,694 |
First Lien Term B Loan | Restated Credit Agreement | ||
Long-term debt components | ||
Total debt | $ 540,585 | $ 544,345 |
Long-term Debt - Term Loan A (D
Long-term Debt - Term Loan A (Details) - Restated Credit Agreement - First Lien Term A Loan $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)period | Dec. 31, 2016 | |
Debt covenants | ||
Interest rate in effect at end of period (as a percent) | 3.95% | 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 | ||
Interest period, option one | 1 month | |
Interest period, option two | 2 months | |
Interest period, option three | 3 months | |
Interest period, option four | 6 months | |
Interest period, 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% | |
2,018 | ||
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 - First Lien Term B Loan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Debt covenants | ||
Frequency of payment | quarterly | |
Principal payment | $ 1,375 | |
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 | ||
Interest period, option one | 1 month | |
Interest period, option two | 2 months | |
Interest period, option three | 3 months | |
Interest period, option four | 6 months | |
Interest period, threshold period | 3 months | |
Interest rate in effect at end of period (as a percent) | 4.20% | 3.75% |
LIBOR Loans | LIBOR | ||
Debt covenants | ||
Basis spread on variable rate (as a percent) | 2.50% | |
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 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Debt covenants | ||
Interest period, option one | 1 month | |
Interest period, option two | 2 months | |
Interest period, option three | 3 months | |
Interest period, option four | 6 months | |
Borrowings outstanding | $ 0 | $ 0 |
Interest rate in effect at end of period (as a percent) | 3.95% | 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 - Other Covenant
Long-term Debt - Other Covenant Terms (Details) - Restated Credit Agreement | 12 Months Ended |
Dec. 31, 2017 | |
Ratio requirements | |
Percent of subsidiary net assets deemed restricted | 64.00% |
First Lien Term A Loan | Maximum | |
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 | Maximum | |
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, 2017USD ($) |
Aggregate maturities of long term debt | |
2,018 | $ 18,000 |
2,019 | 24,250 |
2,020 | 30,500 |
2,021 | 183,625 |
2,022 | 5,500 |
Thereafter | 515,625 |
Total | $ 777,500 |
Derivative Instruments - Intere
Derivative Instruments - Interest Rate Cap Contracts (Details) - Interest rate cap agreements - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flow hedge | |||
Cash flow hedge activity | |||
Notional amount | $ 435,000 | $ 540,000 | |
Cash flow hedge | Interest expense | |||
Cash flow hedge activity | |||
Expense recognized | 1,789 | 283 | $ 105 |
Ineffectiveness recorded | $ 0 | $ 0 | $ 0 |
LIBOR | |||
Cash flow hedge activity | |||
Interest rate cap on floating rate debt (as a percent) | 3.00% |
Derivative Instruments - Quanti
Derivative Instruments - Quantitative Information Related to Fair Value (Details) - Interest rate cap agreements - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Interest rate cash flow hedges | ||
Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months | $ (2,440) | $ (1,783) |
Deferred hedge premiums paid and recorded in accumulated other comprehensive (loss) income | 4,021 | |
Expected additional payments of deferred premiums | 2,374 | |
Designated as Hedge | Other long-term liabilities | ||
Interest rate cash flow hedges | ||
Derivative liability | 951 | 1,729 |
Designated as Hedge | Accounts payable and accrued other expenses | ||
Interest rate cash flow hedges | ||
Derivative liability | $ 979 | $ 1,065 |
Derivative Instruments - Change
Derivative Instruments - Changes in Other Comprehensive Income Related to Cash Flow Hedges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in other comprehensive income related to derivative instruments classified as cash flow hedges | |||
Balance at beginning of period | $ 939,336 | $ 787,596 | $ 773,133 |
Balance at end of period | 1,101,468 | 939,336 | 787,596 |
Derivative instruments classified as cash flow hedges | |||
Changes in other comprehensive income related to derivative instruments classified as cash flow hedges | |||
Balance at beginning of period | (3,334) | (2,968) | (623) |
Reclassifications in earnings, net of tax of $675, $107, and $40 for the years ended December 31, 2017, 2016 and 2015, respectively | 1,114 | 176 | 65 |
Change in fair value of derivative instrument, net of tax of $215, $319 and $1,360 for the years ended December 31, 2017, 2016 and 2015, respectively | (336) | (542) | (2,410) |
Balance at end of period | (2,556) | (3,334) | (2,968) |
Other comprehensive income, tax effect | |||
Reclassifications in earnings, tax | 675 | 107 | 40 |
Change in fair value of derivative instrument, tax | $ 215 | $ 319 | $ 1,360 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Level 2 | ||
Liabilities | ||
Interest rate cap agreements | $ 1,930 | $ 2,794 |
Total | 1,930 | 2,794 |
Level 3 | ||
Liabilities | ||
Long-term debt | 774,822 | 791,039 |
Total | $ 774,822 | $ 791,039 |
Income Taxes - 2018 Tax Act (De
Income Taxes - 2018 Tax Act (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2017 |
Tax Act | |||
Net income tax benefit | $ 45,019 | $ 45,019 | |
Revaluation of net deferred tax liabilities | 46,600 | ||
Transition tax | 1,581 | ||
Provisional liability, current | $ 1,581 | 1,581 | |
Tax credit carryforward, provisional estimate | $ 1,174 | ||
Forecast | |||
Tax Act | |||
Federal tax rate (as a percent) | 21.00% |
Income Taxes - Tax Expense (Ben
Income Taxes - Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes | |||
Income tax expense (benefit) from continuing operations | $ (11,773) | $ 20,970 | $ 14,401 |
Income tax expense from discontinued operations | 341 | ||
Total income tax (benefit) expense | $ (11,773) | $ 20,970 | $ 14,742 |
Income Taxes - Income (Loss) be
Income Taxes - Income (Loss) before Tax from Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of income (loss) before income taxes from continuing operations | |||
U.S. operations | $ 122,952 | $ 66,838 | $ 27,605 |
Foreign operations | 3,478 | 2,984 | 100 |
Income before income taxes | $ 126,430 | $ 69,822 | $ 27,705 |
Income Taxes - Current and Defe
Income Taxes - Current and Deferred Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
U.S. federal | $ 26,509 | $ 26,734 | $ 20,382 |
State and local | 1,679 | 613 | 4,822 |
Foreign | 1,680 | 1,358 | 1,029 |
Current income tax expense | 29,868 | 28,705 | 26,233 |
Deferred | |||
U.S. federal | (42,430) | (5,858) | (12,584) |
State and local | (304) | (1,825) | 798 |
Foreign | 1,093 | (52) | (46) |
Deferred income tax benefit | (41,641) | (7,735) | (11,832) |
Total income tax (benefit) expense | $ (11,773) | $ 20,970 | $ 14,401 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of effective tax rates from continuing operations to U.S. statutory rates | ||||
Federal income tax expense at the statutory rate | $ 44,250 | $ 24,438 | $ 9,697 | |
State and local taxes, net of federal benefit | 1,657 | 556 | 3,922 | |
Non-deductible costs | 1,197 | 779 | 1,070 | |
Stock-based compensation | (11,985) | (4,000) | ||
Unrecognized tax positions | (532) | (1,397) | 508 | |
U.S. Tax Act benefit, net | $ (45,019) | (45,019) | ||
Other | (1,341) | 594 | (796) | |
Total income tax (benefit) expense | $ (11,773) | $ 20,970 | $ 14,401 | |
Effective income tax rate from continuing operations | ||||
Effective income tax rate (as a percent) | (9.30%) | 30.00% | 52.00% | |
Net income tax benefit from impact of Tax Act | 45,019 | $ 45,019 | ||
Revaluation of net deferred tax liabilities | 46,600 | |||
Transition tax | 1,581 | |||
Net tax benefit adjustments | 11,985 | |||
Excess tax benefit related to stock option exercises | 15,017 | $ 4,000 | ||
Tax expense, nondeductible restricted stock | 3,032 | |||
Decrease related to settlement with taxing authorities | 308 | 1,989 | ||
Tax benefit from the implementation of certain tax planning | 1,122 | |||
Undistributed earnings of foreign subsidiaries | ||||
Earnings of non-branch foreign subsidiaries considered indefinitely reinvested | 8,065 | $ 5,910 | ||
Tax expense on earnings of non-branch foreign subsidiaries if not considered indefinitely reinvested | 1,891 | $ 1,386 | ||
Provisional undistributed earnings of foreign subsidiary | 8,739 | 8,739 | ||
Provisional liability, current | $ 1,581 | $ 1,581 | ||
State | ||||
Effective income tax rate from continuing operations | ||||
Decrease related to settlement with taxing authorities | $ 1,300 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Components of deferred tax assets and liabilities | ||
Deferred tax liabilities | $ 83,048 | $ 120,533 |
Deferred tax assets: | ||
Allowance for doubtful accounts and estimated allowance for refunds and appeals | 21,829 | 34,794 |
Accrued compensation | 929 | 2,185 |
Deferred rent | 194 | 149 |
Stock compensation | 6,045 | 10,381 |
Tax credit and net operating loss carryforward | 3,420 | 652 |
Other deductible temporary differences | 2,333 | 5,077 |
Gross deferred tax assets | 34,750 | 53,238 |
Less: valuation allowance | (1,847) | (199) |
Total deferred tax assets | 32,903 | 53,039 |
Deferred tax liabilities: | ||
Unbilled receivables and other liabilities | (1,206) | (2,307) |
Intangibles and goodwill | (103,203) | (154,528) |
Property and equipment | (4,738) | (10,795) |
Software development costs | (5,868) | (2,603) |
Other taxable temporary differences | (936) | (3,339) |
Total gross deferred tax liabilities | 115,951 | 173,572 |
Net deferred tax liability | $ (83,048) | $ (120,533) |
Income Taxes - NOL and Carryfor
Income Taxes - NOL and Carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Valuation allowance | ||
Deferred tax asset valuation allowance | $ 1,847 | $ 199 |
Federal | ||
Net operating loss carryforwards | ||
Net operating loss carryforwards | 1,197 | |
Foreign | ||
Net operating loss carryforwards | ||
Net operating loss carryforwards | 3,695 | |
State | ||
Net operating loss carryforwards | ||
Tax credit carryforwards | $ 1,322 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Unrecognized tax benefits - January 1 | $ 2,571 | $ 4,937 |
Increase for tax positions taken in prior period | 1,186 | 67 |
Increase for tax positions taken in current period | 385 | 203 |
Decrease for tax positions taken in prior period | (508) | |
Decrease for tax positions taken in current period | (43) | |
Decrease related to lapse in statute of limitations | (1,836) | (96) |
Decrease related to settlement of positions taken in prior periods | (308) | (1,989) |
Unrecognized tax benefits - December 31 | $ 1,998 | $ 2,571 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions and Other (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes | |||
Total uncertain tax positions expected to reverse in the next 12 months | $ 81 | $ 2,301 | |
Total penalty and interest incurred, relating to uncertain tax positions | $ 103 | $ 424 | $ 920 |
Stockholders' Equity - Share Re
Stockholders' Equity - Share Repurchase Program (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Oct. 31, 2017 | |
Share Repurchase Program | ||
Repurchase of common stock | $ 10,000,000 | |
Common stock | ||
Share Repurchase Program | ||
Repurchase of common stock (shares) | 317,900 | |
Repurchase of common stock | $ 1,000 | |
Common stock | Share Repurchase Program | ||
Share Repurchase Program | ||
Repurchase of common stock (shares) | 317,900 | |
Repurchase of common stock | $ 10,000,000 | |
Weighted average share price (in dollars per share) | $ 31.43 | |
Common stock | Share Repurchase Program | Maximum | ||
Share Repurchase Program | ||
Share repurchase program, amount authorized | $ 100,000,000 |
Stockholders' Equity - Issuance
Stockholders' Equity - Issuance of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 07, 2017 | Mar. 07, 2017 | May 25, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Issuance of stock | |||||
Proceeds from issuance of common stock | $ 226,963 | $ 226,963 | |||
Common stock, shares authorized | 600,000,000 | 600,000,000 | |||
Common stock | |||||
Issuance of stock | |||||
Stock issued (in shares) | 12,936,038 | ||||
IPO | |||||
Issuance of stock | |||||
Offering expenses | $ 18,822 | ||||
IPO | Common stock | |||||
Issuance of stock | |||||
Stock issued (in shares) | 12,936,038 | ||||
Offering price (in dollars per share) | $ 19 | ||||
August 2017 Secondary Offering | |||||
Issuance of stock | |||||
Proceeds from issuance of common stock | $ 0 | ||||
Offering expenses | $ 700 | ||||
August 2017 Secondary Offering | Common stock | |||||
Issuance of stock | |||||
Stock issued (in shares) | 10,000,000 | ||||
Offering price (in dollars per share) | $ 37 | ||||
March 2017 Secondary Offering | |||||
Issuance of stock | |||||
Proceeds from issuance of common stock | $ 0 | ||||
Offering expenses | $ 600 | ||||
March 2017 Secondary Offering | Common stock | Selling Stockholders | |||||
Issuance of stock | |||||
Stock issued (in shares) | 9,683,000 | ||||
Offering price (in dollars per share) | $ 36 | ||||
Underwriters option | |||||
Issuance of stock | |||||
Stock issued (in shares) | 1,263,000 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stockholder Rights and Preferences (Details) | Jun. 01, 2016USD ($)Right | Dec. 31, 2017Vote |
Registration rights | ||
Number of votes a share of common stock entitles the holder | Vote | 1 | |
Demand registration rights | ||
Registration rights | ||
Cap period | 12 months | |
Shelf registration rights | ||
Registration rights | ||
Cap period | 12 months | |
Maximum | Demand registration rights | ||
Registration rights | ||
Number of requests in any 12 month period | Right | 2 | |
Maximum | Shelf registration rights | ||
Registration rights | ||
Number of requests in any 12 month period | Right | 2 | |
Minimum | Piggyback registration rights | ||
Registration rights | ||
Value of shares owned by Holder (in dollars) | $ | $ 500 | |
Minimum | Shelf registration rights | ||
Registration rights | ||
Anticipated aggregate offering price, net of selling expenses (in dollars) | $ | $ 5,000,000 |
Stockholders' Equity - Common93
Stockholders' Equity - Common Stock Split and Dividends (Details) $ / shares in Units, $ in Thousands | May 26, 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 (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Basic and diluted earnings per share computation | |||||||||||
Net income available to common stockholders | $ 138,203 | $ 48,852 | $ 13,863 | ||||||||
Weighted average outstanding shares of common stock | 91,928,364 | 85,053,890 | 77,216,133 | ||||||||
Dilutive effect of stock-based awards and restricted stock | 3,167,726 | 3,524,302 | 425,255 | ||||||||
Adjusted weighted average outstanding and assumed conversions for diluted EPS | 95,096,090 | 88,578,192 | 77,641,388 | ||||||||
Earnings per share from continuing operations: | |||||||||||
Basic (in dollars per share) | $ 1.50 | $ 0.57 | $ 0.17 | ||||||||
Diluted (in dollars per share) | 1.45 | 0.55 | 0.17 | ||||||||
Earnings per share from discontinued operations: | |||||||||||
Basic (in dollars per share) | 0.01 | ||||||||||
Diluted (in dollars per share) | 0.01 | ||||||||||
Earnings per share | |||||||||||
Basic (in dollars per share) | $ 0.77 | $ 0.21 | $ 0.23 | $ 0.30 | $ 0.28 | $ 0.05 | $ 0.13 | $ 0.10 | 1.50 | 0.57 | 0.18 |
Diluted (in dollars per share) | $ 0.74 | $ 0.20 | $ 0.22 | $ 0.28 | $ 0.27 | $ 0.05 | $ 0.13 | $ 0.10 | $ 1.45 | $ 0.55 | $ 0.18 |
Earnings per Share - Awards Exc
Earnings per Share - Awards Excluded from Diluted Calculation (Details) - Employee stock-based awards and restricted stock - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Anti-dilutive securities and other information | |||
Stock-based awards excluded from calculation of diluted earnings per share (in shares) | 833,670 | 341,054 | 2,035,332 |
Performance-based stock options | |||
Anti-dilutive securities and other information | |||
Share-based awards excluded because vesting conditions not satisfied | 2,794,910 | ||
Restricted stock, performance-based | |||
Anti-dilutive securities and other information | |||
Share-based awards excluded because vesting conditions not satisfied | 76,546 |
Stock-Based Compensation - Equi
Stock-Based Compensation - Equity Incentive Plans (Details) - shares | 12 Months Ended | |||
Dec. 31, 2017 | Jun. 01, 2016 | May 25, 2016 | May 24, 2016 | |
Equity Incentive Plans | ||||
Granted (in shares) | 599,153 | |||
2012 Plan | ||||
Equity Incentive Plans | ||||
Shares authorized for issuance | 7,243,330 | |||
Shares available for future issuance | 0 | |||
2016 Plan | ||||
Equity Incentive Plans | ||||
Shares authorized for issuance | 5,490,000 | |||
Shares available for future issuance | 4,313,279 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Terms (Details) | 12 Months Ended |
Dec. 31, 2017 | |
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 |
2012 Plan | Service-based stock options | |
Stock Options | |
Vesting period | 5 years |
2016 Plan | Stock options | |
Stock Options | |
Percentage of market price to purchase shares of common stock (as a percent) | 100.00% |
2016 Plan | Service-based stock options | |
Stock Options | |
Vesting period | 4 years |
Stock-Based Compensation - St98
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Shares | |||
Outstanding at beginning of period (in shares) | 5,997,372 | ||
Granted (in shares) | 599,153 | ||
Forfeited (in shares) | (240,845) | ||
Exercised (in shares) | (1,778,104) | ||
Expired (in shares) | (2,969) | ||
Outstanding at end of period (in shares) | 4,574,607 | 5,997,372 | |
Vested and exercisable at end of period, vested (in shares) | 3,117,670 | ||
Vested and exercisable at end of period, exercisable (in shares) | 3,117,670 | ||
Weighted average exercise price | |||
Outstanding at beginning of period (in dollars per share) | $ 10.18 | ||
Granted (in dollars per share) | 34.70 | ||
Forfeited (in dollars per share) | 19.48 | ||
Exercised (in dollars per share) | 7.61 | ||
Expired (in dollars per share) | 13.92 | ||
Outstanding at end of period (in dollars per share) | 13.89 | $ 10.18 | |
Vested and exercisable at end of period, vested (in dollars per share) | 10.38 | ||
Vested and exercisable (in dollars per share) | $ 10.38 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding | 6 years 7 months 24 days | 7 years 3 months 18 days | |
Vested and exercisable at end of period, vested (in years) | 5 years 11 months 12 days | ||
Vested and exercisable at end of period, exercisable (in years) | 5 years 11 months 12 days | ||
Aggregate Intrinsic Value | |||
Outstanding | $ 85,138 | $ 145,270 | |
Vested and exercisable at end of period, vested | 68,061 | ||
Vested and exercisable at end of period, exercisable | 68,061 | ||
Total intrinsic value of options exercised | 52,828 | 15,521 | |
Total fair value of options vested | $ 4,066 | $ 22,453 | $ 2,450 |
Common stock | |||
Shares | |||
Exercised (in shares) | (1,778,104) | (574,991) | (25,620) |
Aggregate Intrinsic Value | |||
Fair value per share (in dollars per share) | $ 32.21 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units Vesting and Activity (Details) - $ / shares | 12 Months Ended | 53 Months Ended |
Dec. 31, 2017 | May 24, 2016 | |
Restricted stock units | ||
Equity Incentive Plans | ||
Vesting period | 4 years | |
Director RSU grants | ||
Equity Incentive Plans | ||
Vesting period | 1 year | |
2016 Plan | Restricted stock units | ||
Shares | ||
Nonvested at beginning of period (in shares) | 67,295 | |
Granted (in shares) | 398,728 | |
Forfeited (in shares) | (48,447) | |
Vested and converted to shares (in shares) | (38,302) | |
Nonvested at end of period (in shares) | 379,274 | |
Expected to vest at December 31, 2017 (in shares) | 379,274 | |
Weighted average grant date fair value | ||
Nonvested at beginning of period (in dollars per share) | $ 25.88 | |
Granted (in dollars per share) | 34.30 | |
Forfeited (in dollars per share) | 31.91 | |
Vested and converted to shares (in dollars per share) | 29.88 | |
Nonvested at end of period (in dollars per share) | 33.56 | |
Expected to vest at end of period | $ 33.56 | |
2012 Plan | Restricted stock units | ||
Shares | ||
Granted (in shares) | 0 |
Stock-Based Compensation - R100
Stock-Based Compensation - Restricted Stock (Details) - Common stock - RowdMap | Jul. 14, 2017$ / sharesshares |
Restricted Stock | |
Acquisition | |
Shares issued (in shares) | shares | 768,021 |
Fair market value per share | $ / shares | $ 43.27 |
Restricted stock, performance-based | |
Acquisition | |
Percentage of total shares awarded | 50.00% |
Vesting period (in years) | 1 year |
Restricted stock, time-based | |
Acquisition | |
Percentage of total shares awarded | 50.00% |
Percentage vesting each anniversary | 33.30% |
Vesting period (in years) | 3 years |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - USD ($) | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Employee Stock Purchase Plan | |||
Offering period | 6 months | ||
Contribution maximum percentage of pay | 10.00% | ||
Contribution maximum amount per year | $ 10,000 | ||
Contribution maximum amount per offering period | $ 5,000 | ||
Discount applied to closing price, percentage | 10.00% | ||
Holding period (in days) | 90 days | ||
Available for future purchases, beginning of year (in shares) | 1,197,306 | 1,260,000 | |
Shares reserved for issuance | 1,260,000 | 1,260,000 | |
Common stock purchased | (62,694) | ||
Available for future purchases, end of year (in shares) | 1,197,306 | 1,260,000 | |
Minimum | |||
Employee Stock Purchase Plan | |||
Threshold increase in number of shares reserved for issuance | 1,260,000 | ||
Percentage of total common shares outstanding used as determination of threshold for increase in shares reserved for issuance | 1.50% | ||
Weighted average | |||
Employee Stock Purchase Plan | |||
Price per share (in dollars per share) | $ 31.09 |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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) | 40.00% | 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) | $ 14.57 | $ 9.53 | $ 7.77 |
Weighted average | |||
Assumptions used to estimate fair value of stock options granted | |||
Risk-free interest rate (as a percent) | 1.93% | 1.36% | 1.70% |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense Recorded (Details) - USD ($) $ in Thousands | Jul. 14, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Stock-based compensation expense | ||||||
Stock-based compensation expense | $ 16,873 | $ 22,954 | $ 3,399 | |||
Service based stock options and RSUs | ||||||
Stock-based compensation expense | ||||||
Unvested service-based stock options and RSU awards (in shares) | 2,526,406 | |||||
Unrecognized compensation cost | $ 43,342 | |||||
Period of recognition of unrecognized compensation cost | 2 years 4 months 24 days | |||||
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 | ||||
RowdMap | Restricted Stock | ||||||
Stock-based compensation expense | ||||||
Fair value of equity interests issued | $ 33,232 | |||||
RowdMap | Restricted stock, time-based | ||||||
Stock-based compensation expense | ||||||
Vesting period | 3 years | |||||
RowdMap | Restricted stock, performance-based | ||||||
Stock-based compensation expense | ||||||
Vesting period | 1 year | |||||
Stock-based compensation expense | $ 6,072 |
Segment Information - Operating
Segment Information - Operating Segment Results (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment information | ||||||||||||
Number of reportable segments | segment | 2 | |||||||||||
Net Revenue | $ 176,729 | $ 174,188 | $ 167,611 | $ 160,133 | $ 167,912 | $ 156,241 | $ 158,291 | $ 142,718 | $ 678,661 | $ 625,162 | $ 541,343 | |
Depreciation and amortization | 85,183 | 80,969 | 74,162 | |||||||||
Transaction-related expenses | 2,219 | 1,788 | 1,469 | |||||||||
Impairment of intangible assets | $ 27,826 | 1,322 | 27,826 | |||||||||
Operating Income | $ 47,178 | $ 41,042 | $ 39,996 | $ 34,082 | $ 41,622 | $ 24,155 | $ 38,938 | $ 29,238 | 162,298 | 133,953 | 96,524 | |
Healthcare | ||||||||||||
Segment information | ||||||||||||
Net Revenue | 605,228 | 552,041 | 467,044 | |||||||||
Depreciation and amortization | 81,388 | 77,178 | 70,479 | |||||||||
Transaction-related expenses | 2,087 | 1,673 | 1,332 | |||||||||
Impairment of intangible assets | 26,326 | |||||||||||
Operating Income | 151,340 | 123,917 | 84,240 | |||||||||
Global Retail and Other | ||||||||||||
Segment information | ||||||||||||
Net Revenue | 73,433 | 73,121 | 74,299 | |||||||||
Depreciation and amortization | 3,795 | 3,791 | 3,683 | |||||||||
Transaction-related expenses | 132 | 115 | 137 | |||||||||
Impairment of intangible assets | 1,322 | 1,500 | ||||||||||
Operating Income | $ 10,958 | $ 10,036 | $ 12,284 |
Segment Information - Operat105
Segment Information - Operating Segment Net Revenue by Product Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net revenue by product type | |||||||||||
Net revenue | $ 176,729 | $ 174,188 | $ 167,611 | $ 160,133 | $ 167,912 | $ 156,241 | $ 158,291 | $ 142,718 | $ 678,661 | $ 625,162 | $ 541,343 |
Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 678,661 | $ 625,162 | $ 541,343 | ||||||||
Proportionate share of total (as a percent) | 100.00% | 100.00% | 100.00% | ||||||||
Healthcare | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 605,228 | $ 552,041 | $ 467,044 | ||||||||
Healthcare | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 605,228 | $ 552,041 | $ 467,044 | ||||||||
Proportionate share of total (as a percent) | 89.20% | 88.30% | 86.30% | ||||||||
Healthcare | Retrospective claims accuracy | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 351,662 | $ 310,496 | $ 251,288 | ||||||||
Proportionate share of total (as a percent) | 51.80% | 49.70% | 46.40% | ||||||||
Healthcare | Prospective claims accuracy | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 236,192 | $ 229,491 | $ 201,899 | ||||||||
Proportionate share of total (as a percent) | 34.80% | 36.70% | 37.30% | ||||||||
Healthcare | Other | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 17,374 | $ 12,054 | $ 13,857 | ||||||||
Proportionate share of total (as a percent) | 2.60% | 1.90% | 2.60% | ||||||||
Global Retail and Other | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 73,433 | $ 73,121 | $ 74,299 | ||||||||
Global Retail and Other | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 73,433 | $ 73,121 | $ 74,299 | ||||||||
Proportionate share of total (as a percent) | 10.80% | 11.70% | 13.70% | ||||||||
Global Retail and Other | Retrospective claims accuracy | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 71,437 | $ 70,656 | $ 72,060 | ||||||||
Proportionate share of total (as a percent) | 10.50% | 11.30% | 13.30% | ||||||||
Global Retail and Other | Other | Product | Total net revenue | |||||||||||
Net revenue by product type | |||||||||||
Net revenue | $ 1,996 | $ 2,465 | $ 2,239 | ||||||||
Proportionate share of total (as a percent) | 0.30% | 0.40% | 0.40% |
Segment and Geographic Informat
Segment and Geographic Information - Geographic Information (Details) - Geographic | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Total net revenue | United States | |||
Geographic net revenue and long lived assets | |||
Proportionate share of total (as a percent) | 99.00% | 98.00% | 98.00% |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Customer A | |||
Client Concentration | |||
Concentration percentage | 13.00% | 15.00% | 14.00% |
Customer B | |||
Client Concentration | |||
Concentration percentage | 11.00% | 11.00% | 10.00% |
Customer C | |||
Client Concentration | |||
Concentration percentage | 10.00% | 7.00% | 8.00% |
Employee Benefit Plans - Contri
Employee Benefit Plans - Contributions Expensed (Details) - Compensation - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee benefit plans | |||
Contributions expensed | $ 5,813 | $ 4,608 | $ 4,019 |
401(k) Plan | |||
Employee benefit plans | |||
Contributions expensed | 5,101 | 3,860 | 3,053 |
Profit Share Plan | |||
Employee benefit plans | |||
Contributions expensed | 220 | 539 | |
Provident Plan | |||
Employee benefit plans | |||
Contributions expensed | $ 712 | $ 528 | $ 427 |
Employee Benefit Plans - Nonqua
Employee Benefit Plans - Nonqualified Profit Sharing Incentive Compensation Plan (Details) - Profit Share Plan | 12 Months Ended |
Dec. 31, 2014 | |
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 |
Employee Benefit Plans - India
Employee Benefit Plans - India Plan (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Provident Fund | India | ||
Employee benefit plans | ||
Accrued benefit obligation | $ 1,008 | $ 763 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended |
Feb. 28, 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 | |
Estimated impact to diluted EPS as a result of gain on discontinued operations (in dollars per share) | $ 0.01 |
Selected Quarterly Financial112
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Selected Quarterly Financial Data (Unaudited) | |||||||||||
Net Revenue | $ 176,729 | $ 174,188 | $ 167,611 | $ 160,133 | $ 167,912 | $ 156,241 | $ 158,291 | $ 142,718 | $ 678,661 | $ 625,162 | $ 541,343 |
Operating income | 47,178 | 41,042 | 39,996 | 34,082 | 41,622 | 24,155 | 38,938 | 29,238 | 162,298 | 133,953 | 96,524 |
Income (loss) from continuing operations | 138,203 | 48,852 | 13,304 | ||||||||
Net income (loss) | $ 70,668 | $ 19,472 | $ 21,088 | $ 26,975 | $ 25,292 | $ 4,583 | $ 10,893 | $ 8,084 | $ 138,203 | $ 48,852 | $ 13,863 |
Earnings (loss) per share from continuing operations-Basic (in dollars per share) | $ 1.50 | $ 0.57 | $ 0.17 | ||||||||
Earnings (loss) per share from continuing operations-Diluted (in dollars per share) | 1.45 | 0.55 | 0.17 | ||||||||
Total earnings (loss) per share - Basic (in dollars per share) | $ 0.77 | $ 0.21 | $ 0.23 | $ 0.30 | $ 0.28 | $ 0.05 | $ 0.13 | $ 0.10 | 1.50 | 0.57 | 0.18 |
Total earnings (loss) per share-Diluted (in dollars per share) | $ 0.74 | $ 0.20 | $ 0.22 | $ 0.28 | $ 0.27 | $ 0.05 | $ 0.13 | $ 0.10 | $ 1.45 | $ 0.55 | $ 0.18 |
Selected Quarterly Financial113
Selected Quarterly Financial Data (Unaudited) Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly operating results | |||||||||||
Revenues | $ 176,729 | $ 174,188 | $ 167,611 | $ 160,133 | $ 167,912 | $ 156,241 | $ 158,291 | $ 142,718 | $ 678,661 | $ 625,162 | $ 541,343 |
Loss on extinguishment of debt | 3,183 | 16,417 | 4,084 | ||||||||
Net income tax benefit from impact of Tax Act | 45,019 | 45,019 | |||||||||
Stock-based compensation expense | 16,873 | 22,954 | 3,399 | ||||||||
Restated Credit Agreement | First Lien Term B Loan | |||||||||||
Quarterly operating results | |||||||||||
Loss on extinguishment of debt | $ 3,183 | ||||||||||
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 | |||||||||
Healthcare | |||||||||||
Quarterly operating results | |||||||||||
Revenues | $ 605,228 | 552,041 | $ 467,044 | ||||||||
Healthcare | Increase in estimated liability fo refunds and appeals | |||||||||||
Quarterly operating results | |||||||||||
Revenues | $ (7,000) | ||||||||||
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 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Medicare RAC contract | ||||
Total liability expected to be released | $ 932 | $ 5,236 | $ 7,166 | |
Estimated liability for refunds and appeals | $ 61,607 | $ 62,539 | $ 67,775 | |
Subsequent Events | ||||
Medicare RAC contract | ||||
Estimated liability for refunds and appeals | $ 56,000 | |||
Subsequent Events | Minimum | ||||
Medicare RAC contract | ||||
Total liability expected to be released | $ 32,000 |
Schedule I - Condensed Finan115
Schedule I - Condensed Financial Information of Registrant - Parent Company Balance Sheets (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Non current assets: | ||||
TOTAL ASSETS | $ 2,099,229 | $ 2,002,263 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Total liabilities | 997,761 | 1,062,927 | ||
Stockholders' equity: | ||||
Common stock ($0.001 par value; 600,000,000 shares authorized, 92,299,294 and 90,748,740 issued, and 92,299,294 and 90,741,340 outstanding at December 31, 2017 and 2016, respectively) | 92 | 91 | ||
Additional paid-in capital | 933,710 | 911,582 | ||
Retained earnings | 172,120 | 33,917 | ||
Accumulated other comprehensive loss | (4,454) | (6,156) | ||
Treasury stock, at cost (7,400 shares at December 31, 2016) | (98) | |||
Total stockholders' equity | 1,101,468 | 939,336 | $ 787,596 | $ 773,133 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,099,229 | $ 2,002,263 | ||
Stockholders' equity parenthetical | ||||
Common stock, par value per share | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized | 600,000,000 | 600,000,000 | ||
Common stock, shares issued | 92,299,294 | 90,748,740 | ||
Common stock, shares outstanding | 92,299,294 | 90,741,340 | ||
Treasury stock, shares | 7,400 | |||
Parent Company | ||||
Non current assets: | ||||
Investment in subsidiaries | $ 1,101,468 | $ 939,336 | ||
TOTAL ASSETS | 1,101,468 | 939,336 | ||
Stockholders' equity: | ||||
Common stock ($0.001 par value; 600,000,000 shares authorized, 92,299,294 and 90,748,740 issued, and 92,299,294 and 90,741,340 outstanding at December 31, 2017 and 2016, respectively) | 92 | 91 | ||
Additional paid-in capital | 933,710 | 911,582 | ||
Retained earnings | 172,120 | 33,917 | ||
Accumulated other comprehensive loss | (4,454) | (6,156) | ||
Treasury stock, at cost (7,400 shares at December 31, 2016) | (98) | |||
Total stockholders' equity | 1,101,468 | 939,336 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,101,468 | $ 939,336 | ||
Stockholders' equity parenthetical | ||||
Common stock, par value per share | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized | 600,000,000 | |||
Common stock, shares issued | 92,299,294 | 90,748,740 | ||
Common stock, shares outstanding | 92,299,294 | 90,741,340 | ||
Treasury stock, shares | 7,400 |
Schedule I - Condensed Finan116
Schedule I - Condensed Financial Information of Registrant - Parent Company Statements of Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Parent Company Statements of Comprehensive Income | |||||||||||
Net income | $ 70,668 | $ 19,472 | $ 21,088 | $ 26,975 | $ 25,292 | $ 4,583 | $ 10,893 | $ 8,084 | $ 138,203 | $ 48,852 | $ 13,863 |
Comprehensive income | 139,905 | 47,563 | 10,854 | ||||||||
Parent Company | |||||||||||
Parent Company Statements of Comprehensive Income | |||||||||||
Equity in income of subsidiaries | 138,203 | 48,852 | 13,863 | ||||||||
Net income | 138,203 | 48,852 | 13,863 | ||||||||
Equity in other comprehensive income (loss) of subsidiaries | 1,702 | (1,289) | (3,009) | ||||||||
Comprehensive income | $ 139,905 | $ 47,563 | $ 10,854 |
Schedule I - Condensed Finan117
Schedule I - Condensed Financial Information of Registrant - Parent Company Statements of Cash Flows (Details) - USD ($) $ in Thousands | May 25, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash flows from operating activities: | ||||
Net income | $ 138,203 | $ 48,852 | $ 13,863 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Net cash provided by operating activities | 175,103 | 189,171 | 63,154 | |
Cash flows from investing activities: | ||||
Net cash used in investing activities | (107,266) | (34,032) | (22,581) | |
Cash flows from financing activities: | ||||
Proceeds from issuance of common stock | $ 226,963 | 226,963 | ||
Proceeds from issuance of common stock under equity plans | 15,340 | 4,243 | 210 | |
Dividends Paid | (150,000) | |||
Repurchase of common stock | (10,000) | |||
Net cash used in financing activities | (13,321) | (193,275) | (8,976) | |
Net increase (decrease) in cash and cash equivalents | 54,883 | (38,730) | 30,753 | |
Cash and cash equivalents at beginning of period | 110,635 | 149,365 | 118,612 | |
Cash and cash equivalents at end of the period | 165,518 | 110,635 | 149,365 | |
Parent Company | ||||
Cash flows from operating activities: | ||||
Net income | 138,203 | 48,852 | 13,863 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Equity in income of subsidiaries | (138,203) | (48,852) | (13,863) | |
Cash flows from investing activities: | ||||
Investment in subsidiaries | (5,340) | (81,206) | (210) | |
Net cash used in investing activities | (5,340) | (81,206) | (210) | |
Cash flows from financing activities: | ||||
Proceeds from issuance of common stock | $ 226,963 | 226,963 | ||
Proceeds from issuance of common stock under equity plans | 15,340 | 4,243 | 210 | |
Dividends Paid | (150,000) | |||
Repurchase of common stock | (10,000) | |||
Net cash used in financing activities | 5,340 | 81,206 | 210 | |
Net increase (decrease) in cash and cash equivalents | 0 | 0 | 0 | |
Cash and cash equivalents at beginning of period | 0 | 0 | ||
Cash and cash equivalents at end of the period | 0 | 0 | 0 | |
Supplemental disclosures of cash flow information: | ||||
Noncash operating activities (stock-based compensation) | $ 16,873 | $ 22,954 | $ 3,399 |
Schedule I - Condensed Finan118
Schedule I - Condensed Financial Information of Registrant - Stockholders' Equity - Share Repurchase Program (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Oct. 31, 2017 | |
Share Repurchase Program | ||
Repurchase of common stock | $ 10,000,000 | |
Common stock | ||
Share Repurchase Program | ||
Repurchase of common stock (shares) | 317,900 | |
Repurchase of common stock | $ 1,000 | |
Common stock | Share Repurchase Program | ||
Share Repurchase Program | ||
Repurchase of common stock (shares) | 317,900 | |
Repurchase of common stock | $ 10,000,000 | |
Weighted average share price (in dollars per share) | $ 31.43 | |
Common stock | Share Repurchase Program | Maximum | ||
Share Repurchase Program | ||
Share repurchase program, amount authorized | $ 100,000,000 | |
Parent Company | Common stock | Share Repurchase Program | ||
Share Repurchase Program | ||
Repurchase of common stock (shares) | 317,900 | |
Repurchase of common stock | $ 10,000,000 | |
Weighted average share price (in dollars per share) | $ 31.43 | |
Parent Company | Common stock | Share Repurchase Program | Maximum | ||
Share Repurchase Program | ||
Share repurchase program, amount authorized | $ 100,000,000 |
Schedule I - Condensed Finan119
Schedule I - Condensed Financial Information of Registrant - Stockholders' Equity - Secondary Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 07, 2017 | Mar. 07, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Common stock | ||||
Issuance of stock | ||||
Stock issued (in shares) | 12,936,038 | |||
August 2017 Secondary Offering | ||||
Issuance of stock | ||||
Offering expenses | $ 700 | |||
Proceeds from issuance of common stock | $ 0 | |||
August 2017 Secondary Offering | Common stock | ||||
Issuance of stock | ||||
Stock issued (in shares) | 10,000,000 | |||
Offering price (in dollars per share) | $ 37 | |||
March 2017 Secondary Offering | ||||
Issuance of stock | ||||
Offering expenses | 600 | |||
Proceeds from issuance of common stock | $ 0 | |||
March 2017 Secondary Offering | Common stock | Selling Stockholders | ||||
Issuance of stock | ||||
Stock issued (in shares) | 9,683,000 | |||
Offering price (in dollars per share) | $ 36 | |||
Underwriters option | ||||
Issuance of stock | ||||
Stock issued (in shares) | 1,263,000 | |||
Parent Company | August 2017 Secondary Offering | ||||
Issuance of stock | ||||
Offering expenses | 700 | |||
Proceeds from issuance of common stock | $ 0 | |||
Parent Company | August 2017 Secondary Offering | Common stock | ||||
Issuance of stock | ||||
Stock issued (in shares) | 10,000,000 | |||
Offering price (in dollars per share) | $ 37 | |||
Parent Company | March 2017 Secondary Offering | ||||
Issuance of stock | ||||
Offering expenses | $ 600 | |||
Proceeds from issuance of common stock | $ 0 | |||
Parent Company | March 2017 Secondary Offering | Common stock | Selling Stockholders | ||||
Issuance of stock | ||||
Stock issued (in shares) | 9,683,000 | |||
Offering price (in dollars per share) | $ 36 | |||
Parent Company | Underwriters option | ||||
Issuance of stock | ||||
Stock issued (in shares) | 1,263,000 |
Schedule I - Condensed Finan120
Schedule I - Condensed Financial Information of Registrant - Stockholders' Equity - Issuance of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | May 25, 2016 | Dec. 31, 2016 |
Issuance of stock | ||
Proceeds from issuance of common stock | $ 226,963 | $ 226,963 |
Common stock | ||
Issuance of stock | ||
Stock issued (in shares) | 12,936,038 | |
IPO | ||
Issuance of stock | ||
Offering expenses | $ 18,822 | |
IPO | Common stock | ||
Issuance of stock | ||
Stock issued (in shares) | 12,936,038 | |
Offering price (in dollars per share) | $ 19 | |
Parent Company | ||
Issuance of stock | ||
Proceeds from issuance of common stock | $ 226,963 | $ 226,963 |
Parent Company | IPO | ||
Issuance of stock | ||
Offering expenses | $ 18,822 | |
Parent Company | IPO | Common stock | ||
Issuance of stock | ||
Stock issued (in shares) | 12,936,038 | |
Offering price (in dollars per share) | $ 19 |
Schedule I - Condensed Finan121
Schedule I - Condensed Financial Information of Registrant - Stockholders' Equity - Common Stock Split and Dividends (Details) $ / shares in Units, $ in Thousands | May 26, 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 122
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Activity in valuation and qualifying accounts | |||
Estimated allowance for refunds and appeals | $ 35,434 | $ 41,020 | $ 33,406 |
Estimated liability for refunds and appeals | 61,607 | 62,539 | 67,775 |
Allowance and estimated liability for refunds and appeals | |||
Activity in valuation and qualifying accounts | |||
Balance at Beginning of Period | 103,559 | 101,181 | 98,157 |
Provision Charged Against Revenue | 88,874 | 99,472 | 67,702 |
Deductions | (95,392) | (97,094) | (64,678) |
Valuation Allowances and Reserves, Balance, Ending Balance | 97,041 | 103,559 | 101,181 |
Allowance for doubtful accounts | |||
Activity in valuation and qualifying accounts | |||
Balance at Beginning of Period | 851 | 1,053 | 655 |
Charged to Operating Expenses | (295) | (147) | 804 |
Deductions | (380) | (55) | (406) |
Valuation Allowances and Reserves, Balance, Ending Balance | $ 176 | $ 851 | $ 1,053 |