Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2019 | Nov. 11, 2019 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Change Healthcare Inc. | |
Entity Central Index Key | 0001756497 | |
Current Fiscal Year End Date | --03-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 124,948,388 | |
Common Stock [Member] | ||
Title of 12(b) Security | Common Stock, par value $.001 per share | |
Trading Symbol | CHNG | |
Security Exchange Name | NASDAQ | |
Tangible Equity Units [Member] | ||
Title of 12(b) Security | 6.00% Tangible Equity Units | |
Trading Symbol | CHNGU | |
Security Exchange Name | NASDAQ |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Statements of Operations [Abstract] | ||||
Revenue | ||||
Operating expenses | ||||
General and administrative | 1,138 | 31 | 1,389 | 62 |
Accretion Expense | 48,363 | 48,363 | ||
Total operating expenses | 49,501 | 31 | 49,752 | 62 |
Operating income (loss) | (49,501) | (31) | (49,752) | (62) |
Non-operating (income) expense | ||||
Loss from Equity Method Investment in the Joint Venture | 56,179 | 25,571 | 95,732 | 48,337 |
(Gain) Loss on Sale of Interests in the Joint Venture | (197) | (661) | ||
Management fee income | (772) | (31) | (876) | (62) |
Interest expense | 644 | 644 | ||
Interest income | (644) | (644) | ||
Amortization of debt discount and issuance costs | 212 | 212 | ||
Unrealized gain (loss) on forward purchase contract | 2,435 | 2,435 | ||
Total non-operating (income) expense | 58,054 | 25,343 | 97,503 | 47,614 |
Income (loss) before income tax provision (benefit) | (107,555) | (25,374) | (147,255) | (47,676) |
Income tax provision (benefit) | (13,620) | (6,783) | (15,804) | (11,584) |
Net income (loss) | $ (93,935) | $ (18,591) | $ (131,451) | $ (36,092) |
Net income (loss) per share: | ||||
Basic | $ (0.66) | $ (0.25) | $ (1.20) | $ (0.48) |
Diluted | $ (0.66) | $ (0.25) | $ (1.20) | $ (0.48) |
Weighted average shares (see Note 5): | ||||
Basic | 142,223,836 | 75,506,552 | 109,111,853 | 75,555,700 |
Diluted | 142,223,836 | 75,506,552 | 109,111,853 | 75,555,700 |
Condensed Statements of Compreh
Condensed Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Statements of Comprehensive Income (Loss) [Abstract] | ||||
Net income (loss) | $ (93,935) | $ (18,591) | $ (131,451) | $ (36,092) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on available for sale debt securities of the Joint Venture, net of taxes | 1,173 | 1,173 | ||
Changes in fair value of interest rate swap, net of taxes | (1,310) | 1,478 | (6,741) | 2,260 |
Change associated with foreign currency translation | 1,583 | 566 | 1,809 | (2,027) |
Other comprehensive income (loss) | 1,446 | 2,044 | (3,759) | 233 |
Total comprehensive income (loss) | $ (92,489) | $ (16,547) | $ (135,210) | $ (35,859) |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Mar. 31, 2019 |
Current Assets: | ||
Cash | $ 3,409 | $ 3,409 |
Prepaid expenses | 2,315 | |
Due from the Joint Venture | 1,345 | 373 |
Investment in Joint Venture tangible equity units, current | 15,154 | |
Income taxes receivable | 1,602 | 1,781 |
Total current assets | 23,825 | 5,563 |
Dividend receivable | 34,547 | 81,264 |
Investment in Joint Venture | 1,826,887 | 1,211,996 |
Investment in Joint Venture tangible equity units | 259,237 | |
Total assets | 2,144,496 | 1,298,823 |
Current liabilities: | ||
Accounts payable and accrued expenses | 453 | 176 |
Due to the Joint Venture | 9,513 | 6,167 |
Current portion of long-term debt | 15,154 | |
Total current liabilities | 25,120 | 6,343 |
Long-term debt | 27,384 | |
Due to McKesson | 48,363 | |
Deferred income tax liabilities | 156,770 | 159,993 |
Other liabilities | 752 | |
Commitments and contingencies (see Note 4) | ||
Stockholders' Equity: | ||
Common Stock | 124 | 75 |
Preferred stock (par value, $.001), 900,000,000 and 0 shares authorized and no shares issued and outstanding at September 30, 2019 and March 31, 2019, respectively | ||
Additional paid-in capital | 2,006,494 | 1,153,509 |
Accumulated other comprehensive income (loss) | (6,593) | (3,256) |
Retained earnings (deficit) | (113,918) | (17,841) |
Total stockholders' equity | 1,886,107 | 1,132,487 |
Total liabilities and stockholders' equity | 2,144,496 | 1,298,823 |
Common Class X [Member] | ||
Stockholders' Equity: | ||
Common Stock |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Mar. 31, 2019 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 9,000,000,000 | 252,800,000 |
Common Stock, shares issued | 124,935,806 | 75,474,654 |
Common Stock, shares outstanding | 124,935,806 | 75,474,654 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 900,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Class X [Member] | ||
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 1 | 1 |
Common Stock, shares issued | 0 | 0 |
Common Stock, shares outstanding | 0 | 0 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Deficit) [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Cumulative effect of accounting change of the Joint Venture | ASU 2017-12 [Member] | $ (490) | $ 490 | |||
Balance at Mar. 31, 2018 | $ 75 | $ 1,139,300 | 34,661 | 2,536 | $ 1,176,572 |
Balance, shares at Mar. 31, 2018 | 75,749,118 | ||||
Equity compensation expense | 5,300 | 5,300 | |||
Repurchase of Change Healthcare Inc. common stock | (4,782) | (4,782) | |||
Repurchase of Change Healthcare Inc. common stock, shares | (251,789) | ||||
Issuance of Change Healthcare Inc. common stock upon exercise of equity awards, shares | 4,045 | ||||
Net income (loss) | (17,501) | (17,501) | |||
Foreign currency translation adjustment of the Joint Venture | (2,593) | (2,593) | |||
Changes in fair value of interest rate swap, net of taxes | 782 | 782 | |||
Balance at Jun. 30, 2018 | $ 75 | 1,139,818 | 16,670 | 1,215 | 1,157,778 |
Balance, shares at Jun. 30, 2018 | 75,501,374 | ||||
Balance at Mar. 31, 2018 | $ 75 | 1,139,300 | 34,661 | 2,536 | 1,176,572 |
Balance, shares at Mar. 31, 2018 | 75,749,118 | ||||
Net income (loss) | (36,092) | ||||
Foreign currency translation adjustment of the Joint Venture | (2,027) | ||||
Changes in fair value of interest rate swap, net of taxes | 2,260 | ||||
Balance at Sep. 30, 2018 | $ 75 | 1,141,067 | (1,921) | 3,259 | 1,142,480 |
Balance, shares at Sep. 30, 2018 | 75,445,885 | ||||
Balance at Jun. 30, 2018 | $ 75 | 1,139,818 | 16,670 | 1,215 | 1,157,778 |
Balance, shares at Jun. 30, 2018 | 75,501,374 | ||||
Equity compensation expense | 2,969 | 2,969 | |||
Repurchase of Change Healthcare Inc. common stock | (1,720) | (1,720) | |||
Repurchase of Change Healthcare Inc. common stock, shares | (90,629) | ||||
Issuance of Change Healthcare Inc. common stock upon exercise of equity awards, shares | 35,139 | ||||
Net income (loss) | (18,591) | (18,591) | |||
Foreign currency translation adjustment of the Joint Venture | 566 | 566 | |||
Changes in fair value of interest rate swap, net of taxes | 1,478 | 1,478 | |||
Balance at Sep. 30, 2018 | $ 75 | 1,141,067 | (1,921) | 3,259 | 1,142,480 |
Balance, shares at Sep. 30, 2018 | 75,445,885 | ||||
Cumulative effect of accounting change of the Joint Venture | ASC 606 [Member] | 35,797 | 35,797 | |||
Cumulative effect of accounting change of the Joint Venture | ASU 2018-02 [Member] | (422) | 422 | |||
Balance at Mar. 31, 2019 | $ 75 | 1,153,509 | (17,841) | (3,256) | 1,132,487 |
Balance, shares at Mar. 31, 2019 | 75,474,654 | ||||
Equity compensation expense | 5,862 | 5,862 | |||
Net income (loss) | (37,517) | (37,517) | |||
Foreign currency translation adjustment of the Joint Venture | 226 | 226 | |||
Changes in fair value of interest rate swap, net of taxes | (5,431) | (5,431) | |||
Balance at Jun. 30, 2019 | $ 75 | 1,159,371 | (19,983) | (8,039) | 1,131,424 |
Balance, shares at Jun. 30, 2019 | 75,474,654 | ||||
Balance at Mar. 31, 2019 | $ 75 | 1,153,509 | (17,841) | (3,256) | 1,132,487 |
Balance, shares at Mar. 31, 2019 | 75,474,654 | ||||
Net income (loss) | (131,451) | ||||
Unrealized gain (loss) on available for sale debt securities of the Joint Venture | 1,173 | ||||
Foreign currency translation adjustment of the Joint Venture | 1,809 | ||||
Changes in fair value of interest rate swap, net of taxes | (6,741) | ||||
Balance at Sep. 30, 2019 | $ 124 | 2,006,494 | (113,918) | (6,593) | 1,886,107 |
Balance, shares at Sep. 30, 2019 | 124,935,806 | ||||
Balance at Jun. 30, 2019 | $ 75 | 1,159,371 | (19,983) | (8,039) | 1,131,424 |
Balance, shares at Jun. 30, 2019 | 75,474,654 | ||||
Issuance of Change Healthcare Inc. common stock upon initial public offering | $ 49 | 608,630 | 608,679 | ||
Issuance of Change Healthcare Inc. common stock upon initial public offering, shares | 49,285,713 | ||||
Effect of initial public offering issuance costs on Joint Venture equity | (4,160) | (4,160) | |||
Issuance of tangible equity units | 232,929 | 232,929 | |||
Equity compensation expense | 8,585 | 8,585 | |||
Issuance of Change Healthcare Inc. common stock upon exercise of equity awards | 1,139 | 1,139 | |||
Issuance of Change Healthcare Inc. common stock upon exercise of equity awards, shares | 175,439 | ||||
Net income (loss) | (93,935) | (93,935) | |||
Unrealized gain (loss) on available for sale debt securities of the Joint Venture | 1,173 | 1,173 | |||
Foreign currency translation adjustment of the Joint Venture | 1,583 | 1,583 | |||
Changes in fair value of interest rate swap, net of taxes | (1,310) | (1,310) | |||
Balance at Sep. 30, 2019 | $ 124 | $ 2,006,494 | $ (113,918) | $ (6,593) | $ 1,886,107 |
Balance, shares at Sep. 30, 2019 | 124,935,806 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (93,935) | $ (131,451) | $ (36,092) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Loss from Equity Method Investment in the Joint Venture | 56,179 | 95,732 | 48,337 |
Deferred income tax expense (benefit) | (15,806) | (11,584) | |
(Gain) loss on Sale of Interests in the Joint Venture | (661) | ||
(Gain) loss on available for sale debt securities | 2,435 | ||
Amortization of debt discount and issuance costs | 212 | 212 | |
Changes in operating assets and liabilities: | |||
Prepaid expenses | (2,315) | ||
Due from the Joint Venture | (972) | (62) | |
Income taxes receivable | 179 | 13,292 | |
Accounts payable and accrued expenses | 277 | 64 | |
Due to McKesson | 48,363 | ||
Due to the Joint Venture | 3,346 | (9,663) | |
Net cash provided by (used in) operating activities | 3,631 | ||
Cash flows from investing activities: | |||
Proceeds from sale of interests in Joint Venture | 4,782 | ||
Investment in debt and equity securities of the Joint Venture | (278,875) | ||
Proceeds from investment in debt and equity securities of the Joint Venture | 3,621 | ||
Investment in the Joint Venture | (609,818) | ||
Net cash provided by (used in) investing activities | (885,072) | 4,782 | |
Cash flows from financing activities: | |||
Proceeds from initial public offering, net of issuance costs | 608,679 | ||
Proceeds from issuance of equity component of tangible equity units, net of issuance costs | 232,929 | ||
Proceeds from issuance of debt component of tangible equity units | 47,367 | ||
Payment of loan costs | (1,421) | ||
Repayment of senior amortizing notes | (3,621) | ||
Proceeds from exercise of equity awards | 1,139 | ||
Payments to acquire common stock | (4,782) | ||
Net cash provided by (used in) financing activities | 885,072 | (4,782) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 3,631 | ||
Cash, cash equivalents and restricted cash at beginning of period | 3,409 | ||
Cash, cash equivalents and restricted cash at end of period | $ 3,409 | $ 3,409 | $ 3,631 |
Nature of Business and Organiza
Nature of Business and Organization | 6 Months Ended |
Sep. 30, 2019 | |
Nature of Business and Organization [Abstract] | |
Nature of Business and Organization | 1. Nature of Business and Organization Organization Change Healthcare Inc. (the “Company”), a Delaware corporation, was formed on June 22, 2016 to hold an equity investment in Change Healthcare LLC (the “Joint Venture”), a joint venture between the Company and McKesson Corporation (“McKesson”). As of September 30, 2019, the Company and McKesson each owned approximately 41% and 59% , respectively, of the membership interest in the Joint Venture, subject to adjustment based on exercise of equity-based awards or other changes in the number of the Joint Venture’s membership units outstanding. The Transactions In June 2016, the Company, the Joint Venture, Change Healthcare Holdings, LLC, Change Healthcare Intermediate Holdings, LLC, Change Healthcare Performance, Inc. (“Legacy CHC”) and its stockholders—including affiliates of The Blackstone Group, Inc. (formerly known as the Blackstone Group L.P.) (“Blackstone”) and Hellman & Friedman LLC entered into an Agreement of Contribution and Sale (the “Contribution Agreement”) with McKesson (together with the Company, the “Members”). Under the terms of the Contribution Agreement, the parties agreed to form the Joint Venture, a joint venture that combined the majority of the McKesson Technology Solutions businesses, excluding McKesson’s Enterprise Information Solutions business and RelayHealth Pharmacy Network (such contributed businesses, “Core MTS”), with substantially all of the assets and operations of Legacy CHC, but excluding Legacy CHC’s pharmacy claims switching and prescription routing businesses (such excluded business, the “eRx Network” and the businesses contributed by Legacy CHC, together with Core MTS, the “Contributed Businesses”). The creation of the Joint Venture, including the contribution of the Contributed Businesses and related transactions, is collectively referred to as the “Transactions”. The Transactions closed on March 1, 2017. Amendment of Certificate of Incorporation Effective June 26, 2019 and in contemplation of its initial public offering of common stock, the Company amended its certificate of incorporation to effect a 126.4 for 1 stock split for all previously issued shares of common stock, to increase the authorized number of common stock, and to authorize shares of preferred stock. Following this amendment, the authorized shares include 9,000,000,000 shares of common stock (par value $.001 per share), 1 share of Class X stock (par value $.001 per share), and 900,000,000 shares of preferred stock (par value $.001 per share). All issued or outstanding shares or related share-based payment arrangement disclosures included herein have been retrospectively adjusted for the stock split. Initial Public Offering Effective July 1, 2019, the Company completed its initial public offering of 49,285,713 shares of common stock and a concurrent offering of 5,750,000 of tangible equity units (“TEUs”) for net proceeds of $608,679 and $278,875 , respectively . The proceeds of the offering of common stock were subsequently contributed to the Joint Venture in exchange for 49,285,713 additional units of the Joint Venture, which together with the Company’s existing holdings represents an approximately 41% interest in the Joint Venture. The proceeds of the offering of TEUs were used to acquire TEUs of the Joint Venture that substantially mirror the terms of the TEUs included in the offering. The Joint Venture, in turn, used the proceeds received from the Company to repay $805,000 of its indebtedness under the Term Loan Facility without penalty in July 2019. The Joint Venture repaid an additional $85,000 of its indebtedness under the Term Loan Facility without penalty during the three months ended September 30, 2019 for a total paydown of $890,000 . |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Sep. 30, 2019 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 2. Basis of Presentation Principles of Consolidation The accompanying unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (“SEC”) Guidelines, Rules and Regulations and, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of results for the unaudited interim periods presented. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. The results of operations for the interim period are not necessarily indicative of the results to be obtained for the full fiscal year. All intercompany accounts and transactions have been eliminated in the unaudited condensed financial statements. Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates on historical experience, current business factors and various other assumptions that the Company believes are necessary to consider in order to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of expenses and disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic, environmental and political factors and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in the reported results of operations; and if material, the effects of changes in estimates are disclosed in the notes to the financial statements. Estimates and assumptions by management affect: the carrying value of the Company’s investments; the provision and benefit for income taxes and related deferred tax accounts; contingencies; and the value attributed to equity awards. Additionally, the Company’s financial statements are impacted by estimates and assumptions made by management that affect the financial statements of the Joint Venture, including: the allowance for doubtful accounts; the fair value assigned to assets acquired and liabilities assumed in business combinations; tax receivable agreement obligations; the fair value of interest rate cap agreement obligations; measurement of the components of tangible equity units; contingent consideration; loss accruals; the carrying value of long-lived assets (including goodwill and intangible assets); the classification and measurement of assets held for sale; the amortization period of long-lived assets (excluding goodwill); the carrying value, capitalization and amortization of software development costs; the provision and benefit for income taxes and related deferred tax accounts; certain accrued expenses; revenue recognition; contingencies; and the value attributed to equity awards. Tangible Equity Units In connection with the initial public offering, the Company completed an offering of tangible equity units (TEUs). Each TEU comprises an amortizing note and purchase contract, both of which are freestanding instruments and separate units of account. The amortizing notes were issued at par and are classified as debt on the accompanying condensed consolidated balance sheet, with scheduled principal payments over the next twelve months reflected in current maturities of long-term debt. The purchase contracts are accounted for as prepaid forward contracts and classified as equity. The TEU proceeds and issuance costs were allocated to the amortizing notes and purchase contracts on a relative fair value basis. See Note 10 for further discussion. Other Investments The Company holds investments in tangible equity units issued by the Joint Venture with terms that substantially mirror the TEUs issued by the Company. Each TEU comprises an amortizing note and forward purchase contract, both of which are freestanding instruments and separate units of account. The Company accounts for its investment in each component at fair value. Unrealized gains and losses resulting from changes in the fair value of the investment in debt securities are included as a component of other comprehensive income. Unrealized gains and losses resulting from changes in the fair value of the investment in the equity purchase contracts are recorded in current period earnings, in accordance with ASU 2016-01. See Note 11 for further discussion. Recently Adopted Accounting Pronouncements In April 2019, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2018-07 on a modified retrospective basis, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Among other provisions, the measurement date for awards to nonemployees was changed from the earlier of the date at which a commitment for performance by the counterparty was reached or the date at which performance was complete under the previous guidance to the grant date under this update. Because the Company’s equity-based compensation was previously subject to remeasurement at fair value each quarter under previous authoritative literature, the adoption of this update had no material direct effect on the Company’s consolidated financial statements. As described in Note 7, however, the adoption of this update changed the relationship between the equity-based compensation and the accounting for the freestanding option (i.e. the Dividend receivable). In April 2019, the Joint Venture adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , which replaces most prior general and industry specific revenue recognition guidance with a principles-based comprehensive revenue recognition framework on a modified retrospective basis. Under this revised framework, a company will recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. As the Company’s operations consist principally of an investment in the Joint Venture, its financial statements reflect no revenue and, accordingly, the Company recognized no direct impact on its financial statements from the adoption of this update. However, upon adoption, the Joint Venture recognized a cumulative effect adjustment to its Members’ deficit. As a result of the impact of the adoption of ASC 606 to the Joint Venture’s Members’ equity ( deficit ) , the Company was required to recognize a proportionate amount of this cumulative effect adjustment to its April 1, 2019 retained earnings as well. The effect is disclosed within a separate caption of the accompanying condensed statement of stockholders’ equity. Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, as amended by ASU No. 2018-19, which requires that a financial asset (or group of financial assets) measured at amortized cost be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. This update is scheduled to be effective for the Company beginning April 1, 2021, with early adoption permitted beginning April 1, 2019. The Company is currently assessing the potential effects this update may have on its condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, which modifies the disclosure requirements for fair value measurements. ASU 2018-13 is effective for public companies for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for either the entire standard or only the provisions that eliminate or modify requirements. The Company is currently assessing the potential effects this update may have on its financial statement disclosures. |
Equity Method Investment in Cha
Equity Method Investment in Change Healthcare LLC | 6 Months Ended |
Sep. 30, 2019 | |
Equity Method Investment in Change Healthcare LLC [Abstract] | |
Equity Method Investment in Change Healthcare LLC | 3. Equity Method Investment in Change Healthcare LLC Exchange of Equity Method Investments In connection with the Transactions, the Company exchanged its 45.615% investment in Legacy CHC for 30% of the membership units of the Joint Venture. The Joint Venture used proceeds from the issuance of debt to acquire the remaining 54.385% of Legacy CHC. The Company accounted for this exchange of investments as a non-monetary transaction at their respective carrying values. Prior to the Transactions, the investors of Legacy CHC accounted for their investments at fair value. As a result, the book basis and fair value of the Company’s investment in Legacy CHC were generally the same such that no gain was recognized as a result of the Transactions. The fair value of the Joint Venture was determined at March 1, 2017 using a combination of the income and the market valuation approaches. Under the income approach, a discounted cash flow model (“DCF”) was used in which cash flows anticipated over several periods, plus a terminal value at the end of that time horizon, are discounted to their present value using an appropriate expected rate of return. The discount rate used for cash flows reflects capital market conditions and the specific risks associated with the business. Under the market approach, valuation multiples of reasonably similar publicly traded companies or guideline companies are applied to the operating data of the subject business to derive the estimated fair value. These valuation approaches are considered a Level 3 fair value measurement. Fair value determination requires complex assumptions and judgment by management in projecting future operating results, selecting guideline companies for comparisons, determining appropriate market value multiples, selecting the discount rate to measure the risks inherent in the future cash flows and assessing the business’s life cycle and the competitive trends impacting the business, including considering technical, legal, regulatory, or economic barriers to entry. Any material changes in key assumptions, including failure to meet business plans, deterioration in the financial market, an increase in interest rate or an increase in the cost of equity financing by market participants within the industry or other unanticipated events and circumstances, may affect such estimates. Additional Ownership Interest Following the initial public offering, the Company contributed the proceeds of the offering of common stock to the Joint Venture in exchange for 49,285,713 additional units of the Joint Venture, which represented approximately 11% of additional ownership interest. Resulting from the additional ownership interest acquired, the Company measured additional basis differences at July 1, 2019 based on the fair value of the Joint Venture’s assets and liabilities as of the date of the initial public offering, and using valuation approaches substantially similar to those used as of the date of the Transactions. Equity Method Investment in Change Healthcare LLC The Company accounts for its investment in the Joint Venture using the equity method of accounting. During the three and six months ended September 30, 2019 and 2018 , the Company recorded a proportionate share of the earnings from this investment based on its ownership percentage during each respective period, which included transaction and integration related expenses incurred by the Joint Venture and the Company’s portion of basis adjustments including amortization expenses associated with equity method intangible assets. These amounts are aggregated and recorded under the caption, “Loss from Equity Method Investment in the Joint Venture” in the accompanying condensed statements of operations. Summarized financial information of the Joint Venture is as follows: Three Months Ended Six Months Ended September 30, September 30, 2019 2018 2019 2018 Statement of Operations Data: Total revenue $ 795,811 $ 800,190 $ 1,651,367 $ 1,623,453 Cost of operations (exclusive of depreciation and amortization) $ 331,234 $ 327,563 $ 658,181 $ 664,993 Customer postage $ 57,110 $ 62,404 $ 115,594 $ 127,962 Net income (loss) $ (130) $ 113,440 $ 71,785 $ 125,946 Subsequent to the Company’s initial public offering of common stock, the Company now has a publicly available indication of the value of its investment in the Joint Venture. The fair value that was derived from trading prices of the Company’s common stock at September 30, 2019 indicated a potential impairment to the carrying value of its investment in the Joint Venture. Accordingly, the Company evaluated its equity method investment for an other-than-temporary impairment (“OTTI”). The Company considered various factors in determining whether an OTTI has occurred, including the Company’s ability and intent to hold the investment, the trading history available, the implied EBITDA valuation multiples compared to public guideline companies, the Joint Venture’s ability to achieve milestones and any notable operational and strategic changes by the Joint Venture. After the evaluation, the Company determined that an OTTI had not occurred as of September 30, 2019 nor as of the date of this quarterly report on Form 10-Q. However, the Company may experience declines in the fair value of its investment in the Joint Venture, and it may determine an impairment loss will be required to be recognized in a future reporting period. Such determination will be based on the prevailing facts and circumstances, including those related to the reported results and disclosures of the Joint Venture as well as from changes in the market price of the Company’s common stock. In the event the Company obtains a controlling interest in the Joint Venture, the Company will evaluate its investment under the guidance in ASC 805 for a business combination achieved in stages. Upon such a change in control, the Company will remeasure its investment in the Joint Venture to fair value as of the date that control is obtained and will recognize a gain or loss in its statement of operations for the difference between the carrying value and fair value of its investment. |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Sep. 30, 2019 | |
Legal Proceedings [Abstract] | |
Legal Proceedings | 4. Legal Proceedings In the ordinary course of business, the Company may become subject to various claims and legal proceedings. The Company is not currently a defendant in any pending litigation. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 6 Months Ended |
Sep. 30, 2019 | |
Net Income (Loss) Per Share [Abstract] | |
Net Income (Loss) Per Share | 5. Net Income (Loss) Per Share The following table sets forth the computation of basic net income (loss) per share of common stock for the periods indicated: Three Months Ended Six Months Ended September 30, September 30, 2019 2018 2019 2018 Basic net income (loss) per share: Numerator: Net income (loss) $ (93,935) $ (18,591) $ (131,451) $ (36,092) Denominator: Weighted average common shares outstanding 123,794,511 75,506,552 99,897,191 75,555,700 Minimum shares issuable under purchase contracts 18,429,325 — 9,214,662 — 142,223,836 75,506,552 109,111,853 75,555,700 Basic net income (loss) per share $ (0.66) $ (0.25) $ (1.20) $ (0.48) The calculation of diluted net income (loss) per share has not been presented due to the presence of a net loss for each period. Due to their antidilutive effect, the following securities have been excluded from diluted net income (loss) per share for the periods indicated: Three Months Ended Six Months Ended September 30, September 30, 2019 2018 2019 2018 Incremental shares issuable under purchase contracts 3,685,750 — 1,842,875 — Time-Vesting Options 1,156,510 1,832,196 1,405,556 1,839,878 Restricted Stock Units 908,745 — 454,373 — |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | 6. Income Taxes The income tax benefit for the three months ended September 30, 2019 and 2018 was $13,620 and $6,783 , respectively, which represents an effective tax rate of 12.7% and 26.7% , respectively. The income tax benefit for the six months ended September 30, 2019 and 2018 was $15,804 and $11,584 , respectively, which represents an effective tax rate of 10.7% and 24.3% , respectively. Fluctuations in our reported income tax rates from the statutory rate are primarily due to benefits recognized as a result of certain incentive tax credits resulting from research and experimental expenditures and discrete items recognized in the quarters. McKesson Tax Receivable Agreement In connection with the closing of the Transactions, the Joint Venture, subsidiaries of McKesson that serve as members of the Joint Venture ( the “ McK Members ”) , McKesson and the Company entered into a tax receivable agreement (the “McKesson Tax Receivable Agreement”). The McKesson Tax Receivable Agreement generally provides for the payment by the Joint Venture to the McK Members and it assigns 85% of the net cash tax savings realized (or, in certain circumstances, deemed to be realized) by the Company in periods ending on or after the date on which McKesson ceases to own at least 20% of the outstanding units of the Joint Venture (the “ LLC Units ”) as a result of (i) certain amortizable tax basis in assets transferred to the Joint Venture at the closing of the Transactions and (ii) imputed interest deductions and certain other tax attributes arising from payments under the McKesson Tax Receivable Agreement. Additionally, upon the occurrence of the first exchange of LLC Units by McKesson (or its permitted transferees), if any, the Company has agreed to enter into an additional tax receivable agreement with the McK Members, pursuant to which the Company would be required to pay to the relevant McK Member 85% of the net cash tax savings, if any, arising from the Company’s utilization of (i) certain tax basis increases resulting from the relevant exchange and payments under such additional tax receivable agreement and (ii) imputed interest deductions. The Company may also be required to enter into and make payments under an additional tax receivable agreement with McKesson in certain circumstances. Because payments under the McKesson Tax Receivable Agreement are contingent upon McKesson’s ceasing to own at least 20% of the Joint Venture and such an event was not probable at the inception of the McKesson Tax Receivable Agreement or as of September 30, 2019 , no related obligation has been reflected on the accompanying condensed balance sheet. Letter Agreement The Company, the Joint Venture, McKesson and certain of McKesson’s affiliates have entered into a letter agreement relating to the Contribution Agreement (the “Letter Agreement”). The Letter Agreement addresses miscellaneous tax-related matters, including (i) technical clarifications and modifications to the manner in which the Joint Venture allocates certain items of taxable income, loss and deduction among, and calculates and makes required tax distributions to, its members, (ii) the sharing of certain contingent tax benefits and expenses not addressed by the McKesson Tax Receivable Agreement or the tax matters agreement that the Company will enter into with McKesson in connection with a spin-off or split-off transaction (or a combination of the foregoing) that McKesson may, at its election, initiate and complete that would result, among other things, in the acquisition by the Company of all of McKesson’s LLC Units and the issuance by the Company to McKesson and/or McKesson’s securityholders of an equal number of shares of its common stock and (iii) procedures applicable in the case of certain tax proceedings. In particular, pursuant to the terms of the Letter Agreement, McKesson may adjust the manner in which depreciation or amortization deductions in respect of assets transferred to the Joint Venture at the closing of the Transactions are allocated among the Company, McKesson and certain of McKesson’s affiliates beyond minimum amounts provided in the LLC Agreement. If an amount of deductions is allocated to the Company in excess of a specified minimum threshold, the Company will be required to make cash payments to McKesson equal to 100% of the tax savings of the Company attributable to such excess deductions for any tax period ending prior to the date on which McKesson ceases to own at least 20% of the outstanding LLC Units of the Joint Venture, after which the terms of the McKesson Tax Receivable Agreement will control. At September 30, 2019 , the Company has recorded a liability to McKesson equal to $48,363 , which reflects the amount payable for future tax savings the Company anticipates receiving as a result of deductions that are probable to be allocated by McKesson to the Company for the year ended March 31, 2019 and is reflected as Due to McKesson on the consolidated balance sheet . |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Sep. 30, 2019 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 7. Fair Value Measurements The Company’s assets and liabilities that are measured at fair value on a recurring basis consist of the Company’s Dividend Receivable and Other Investments. The debt component of the tangible equity units issued by the Company is a Level 2 liability measured at fair value on a nonrecurring basis based on available market data and a discounted cash flow analysis (see Note 10). The tables below summarize the Dividend Receivable and Other Investments as of September 30, 2019 and March 31, 2019, aggregated by the level in the fair value hierarchy within which those measurements fall. Quoted in Significant Balance at Markets Significant Other Unobservable September 30, Identical Observable Inputs Inputs Description 2019 (Level 1) (Level 2) (Level 3) Other Investments (see Note 11) $ 274,391 $ — $ 274,391 $ — Dividend Receivable 34,547 — — 34,547 Total $ 308,938 $ — $ 274,391 $ 34,547 Quoted in Significant Balance at Markets Significant Other Unobservable March 31, Identical Observable Inputs Inputs Description 2019 (Level 1) (Level 2) (Level 3) Other Investments (see Note 11) $ — $ — $ — $ — Dividend Receivable 81,264 — — 81,264 Total $ 81,264 $ — $ — $ 81,264 The Company is entitled to receive an additional unit of the Joint Venture for each share of stock issued by the Company. In the case of equity-based awards, the requirement to receive an additional unit of the Joint Venture upon exercise of such awards represents a freestanding derivative. Because the fair value measurement of this derivative involves significant unobservable inputs, the most significant of which is the use of a levered volatility calculation of a peer group of companies , the Company has determined that it represents a Level 3 fair value measurement. Because the freestanding derivative is directly related to the Company’s equity-based compensation awards, the valuation of the derivative is determined to be consistent with the valuation of the underlying equity-based awards (although we use a current period measurement date). As with the equity-based awards, changes in the value of the derivative are generally expected to fluctuate with changes in the value of the Company’s common stock. The following table summarizes the fair value of the freestanding derivative at September 30, 2019 and March 31, 2019 , respectively: Fair Values of Derivative Financial Instruments Asset (Liability) Derivative financial instruments not designated as hedging instruments: Balance Sheet Location September 30, 2019 March 31, 2019 Freestanding Option Dividend receivable $ 34,547 $ 81,264 The following table presents a reconciliation of the fair value of the derivative for which the Company uses significant unobservable inputs: Three Months Ended Six Months Ended September 30, September 30, 2019 2018 2019 2018 Balance at beginning of period $ 48,807 $ 64,338 $ 81,264 $ 59,116 Increase in fair value based on ASC 505 equity-based compensation — 2,969 — 8,269 Settlements due to exercise of awards (1,324) (666) (1,324) (744) Change in fair value of equity-based awards (12,936) — (45,393) — Balance at end of period $ 34,547 $ 66,641 $ 34,547 $ 66,641 Other Investments The Company invested in a unit purchase contract and a debt instrument of the Joint Venture on terms that substantially mirror the economics of the TEUs (see Note 10). At September 30, 2019 and March 31, 2019, the Company’s investment in the Joint Venture’s debt securities were classified as “available-for-sale ” and its investment in the Joint Venture’s purchase contracts were accounted for as equity securities measured at fair value. Changes in unrealized gains and losses for the Company’s investment in the Joint Venture’s debt securities are recognized as adjustments to other comprehensive income (loss) while changes in unrealized gains and losses for the Company’s investment in the Joint Venture’s purchase contracts are recognized as adjustments to pretax income (loss). The fair value measurement of the investments is based on available market data and a discounted cash flow analysis of the Joint Venture’s debt and equity securities for which the Company is investing. Dividend Receivable As the dividend receivable was initially received in connection with the contribution of assets to the Joint Venture, the initial fair value was treated as a component of the Company ’ s contribution of assets and receipt of its Investment in the Joint Venture. During the three and six months ended September 30, 2019 and 2018 , the Company recognized a decrease in the Dividend Receivable which was recorded as a component of Loss from Equity Method Investment in the Joint Venture. The result was that no net equity-based compensation related to employees of the Joint Venture was recognized in the financial statements of the Company for the three and six months ended September 30, 2019 and 2018 . Following the adoption of FASB ASU No. 2018-07, however, the measurement of equity-based compensation generally becomes fixed at the date of grant such that the fair value of the dividend receivable is no longer correlated with the amount of equity compensation recognized. As a result, following the adoption of FASB ASU No. 2018-07, the Loss from Equity Method Investment in the Joint Venture is subject to variability associated with changes in the fair value of the equity-based awards. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 8. Accumulated Other Comprehensive Income (Loss) The following is a summary of the Company’s proportionate share of the Joint Venture’s accumulated other comprehensive income (loss) balances, net of taxes, as of and for the three and six months ended September 30, 2019 and 2018 . Foreign Accumulated Available Currency Other For Sale Translation Cash Flow Comprehensive Debt Security Adjustment Hedge Income (Loss) Balance at March 31, 2018 $ — $ 1,268 $ 1,268 $ 2,536 Cumulative effect of accounting change of the Joint Venture-ASU 2017-12 — — 490 490 Change associated with foreign currency translation — (2,593) — (2,593) Change associated with current period hedging — — 1,206 1,206 Reclassification into earnings — — (424) (424) Balance at June 30, 2018 $ — $ (1,325) $ 2,540 $ 1,215 Change associated with foreign currency translation — 566 — 566 Change associated with current period hedging — — 1,866 1,866 Reclassification into earnings — — (388) (388) Balance at September 30, 2018 $ — $ (759) $ 4,018 $ 3,259 Balance at March 31, 2019 $ — $ (1,565) $ (1,691) $ (3,256) Cumulative effect of accounting change of the Joint Venture-ASU 2018-02 — — 422 422 Change associated with foreign currency translation — 226 — 226 Change associated with current period hedging — — (5,117) (5,117) Reclassification into earnings — — (314) (314) Balance at June 30, 2019 $ — $ (1,339) $ (6,700) $ (8,039) Unrealized gain (loss) on available for sale debt securities of the Joint Venture 1,173 — — 1,173 Change associated with foreign currency translation — 1,583 — 1,583 Change associated with current period hedging — — (1,509) (1,509) Reclassification into earnings — — 199 199 Balance at September 30, 2019 $ 1,173 $ 244 $ (8,010) $ (6,593) Effective April 1, 2018, the Joint Venture adopted FASB ASU No. 2017-12, which significantly changed the framework by which hedge accounting is recognized, presented and disclosed in the Joint Venture’s financial statements. The adoption of this update by the Joint Venture resulted in a reclassification between its accumulated other comprehensive income (loss) and accumulated earnings (deficit). Effective April 1, 2019, the Joint Venture adopted FASB ASU No. 2018-02, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The adoption of this update resulted in a reclassification between accumulative other comprehensive income (loss) and accumulated earnings (deficit). As an investor in the Joint Venture, the Company has recognized its proportionate amount of these reclassifications as presented in the table above. |
Equity Based Compensation
Equity Based Compensation | 6 Months Ended |
Sep. 30, 2019 | |
Equity Based Compensation [Abstract] | |
Equity Based Compensation | 9. Equity Based Compensation Effective as of the Company’s initial public offering, the Company adopted the Change Healthcare Inc. 2019 Omnibus Incentive Plan (the “Omnibus Incentive Plan”) pursuant to which 25.0 million shares of the Company’s common stock have been reserved for issuance to employees, directors and consultants of the Company, the Joint Venture and its affiliates. In connection with the Omnibus Incentive Plan, the Company, during the three and six months ended September 30, 2019, granted to the Joint Venture’s employees and directors one or a combination of time-vesting restricted stock units (RSUs), time-vesting deferred stock units, performance stock units, and cash settled restricted stock units under vesting terms that generally vary from one to four years from the date of grant. Each of these instruments is described below. Restricted Stock Units (“RSU s ” )—The Company granted 4,436,758 RSUs during the three and six months ended September 30, 2019. The RSUs are subject to either a graded vesting schedule over four years, or a one or four year cliff vesting schedule, depending on the terms of the specific award. Upon vesting, the RSUs are exchanged for shares of the Company’s common stock. Performance Stock Units (“PSU s ” )— The Company granted 1,079,621 PSUs during the three and six months ended September 30, 2019. The PSUs consist of two tranches, one for which the quantity of awards expected to vest varies based on the Joint Venture’s compound annual revenue growth rate over a three year period in comparison to a target percentage and one for which the quantity of awards expected to vest varies based on the Joint Venture’s compound annual Adjusted EBITDA growth rate over a three year period in comparison to a target percentage. The awards earned upon satisfaction of the performance conditions become vested on the fourth anniversary of the vesting commencement date of the award (i.e. continued service is required beyond the satisfaction of the performance condition prior to vesting). The Joint Venture recognizes compensation expense for the PSUs based on the number of awards that are considered probable to vest. Recognition of expense is based on the probability of achievement of performance targets and is periodically reevaluated. Cash Settled Restricted Stock Units (“CSRSU s ” )— The Company granted 597,006 CSRSUs during the three and six months ended September 30, 2019.The CSRSUs are expected to vest ratably over three years. Upon vesting, however, the Company is required to pay cash in settlement of such CSRSUs based on their fair value at the date such CSRSUs vest. Deferred Stock Units (“DSU s ”)— The Company granted 45,704 DSUs during the three and six months ended September 30, 2019. The DSUs vest 100% upon the one -year anniversary of the date of grant. Unlike the RSUs, however, the DSUs are exchanged for shares of the Company’s common stock only following the participant’s separation from service. During the three and six months ended September 30, 2019, the Joint Venture recognized compensation expense of $6,096 related to awards granted under the Omnibus Incentive Plan. At September 30, 2019, aggregate unrecognized compensation expense of the Joint Venture related to the awards granted under the Omnibus Incentive Plan was $87,211 . |
Tangible Equity Units
Tangible Equity Units | 6 Months Ended |
Sep. 30, 2019 | |
Tangible Equity Units [Abstract] | |
Tangible Equity Units | 10. Tangible Equity Units In July 2019, the Company completed its offering of 5,750,000 TEUs. Total proceeds, net of underwriting discounts, were $278,875 . Each TEU, which has a stated amount of $50 , is comprised of a stock purchase contract and a senior amortizing note due June 30, 2022 . The Company allocated the proceeds from the issuance of the TEUs to equity and debt based on the relative fair values of the respective components of each TEU. The value allocated to the stock purchase contracts is reflected net of issuance costs in additional paid in capital. The value allocated to the senior amortizing notes is reflected in debt on the accompanying balance sheet, with payments expected in the next twelve months reflected in current maturities of long-term debt. Issuance costs, reflected as a reduction of the face amount of the amortizing notes, are being accreted to the face amount of the debt under the effective interest method. The aggregate values assigned upon issuance of the TEUs, based on the relative fair value of the respective components of each TEU, were as follows: Equity Component Debt Component Total Price per TEU $ 41.7622 $ 8.2378 $ 50.00 Gross proceeds 240,133 47,367 287,500 Issuance costs (7,204) (1,421) (8,625) Net proceeds $ 232,929 $ 45,946 $ 278,875 Each senior amortizing note has an initial principal amount of $8.2378 and bears interest at 5.5% per year. On each March 30, June 30, September 30 and December 30, the Company pays equal quarterly cash installments of $0.7500 per amortizing note (except for the September 30, 2019 installment payment, which was $0.7417 per amortizing note). Each installment constitutes a payment of interest and partial payment of principal. The carrying value and fair value of the senior amortizing notes as of September 30, 2019 was $42,537 and $43,896 , respectively. Unless settled earlier, each purchase contract will automatically settle on June 30, 2022 . The Company will deliver between a minimum of 18,429,325 shares and a maximum of 22,115,075 shares of the Company’s common stock, subject to adjustment, based on the Applicable Market Value (as defined below) of the Company’s common stock as described below: · If the Applicable Market Value is greater than $15.60 per share, holders will receive 3.2051 shares of common stock per purchase contract. · If the Applicable Market Value is less than or equal to $15.60 per share but greater than or equal to $13.00 per share, the holder will receive a number of shares of the Company’s common stock per purchase contract equal to $50 , divided by the Applicable Market Value; and · If the Applicable Market Value is less than $13.00 per share, the holder will receive 3.8461 shares of common stock per purchase contract. The Applicable Market Value is defined as the arithmetic average of the volume weighted average price per share of the Company’s common stock over the twenty consecutive trading day period immediately preceding the balance sheet date, or June 30, 2022 , for settlement of the stock purchase contracts. The TEUs have a dilutive effect on the Company’s net income (loss) per share. The 18,429,325 minimum shares to be issued are included in the calculation of basic net income (loss) per share. The difference between the minimum shares and the maximum shares are potentially dilutive securities, and accordingly, are included in the Company’s diluted net income (loss) per share on a pro rata basis to the extent the Applicable Market Value is higher than $13.00 but is less than $15.60 at period end. |
Other Investments
Other Investments | 6 Months Ended |
Sep. 30, 2019 | |
Other Investments [Abstract] | |
Other Investments | 11. Other Investments The proceeds of the offering of TEUs were used to acquire TEUs of the Joint Venture that substantially mirror the terms of the TEUs included in the offering. Under these mirrored arrangements, the Joint Venture is required to make cash payments or to transfer LLC Units to the Company concurrent with any cash payments or issuance of shares by the Company pursuant to the terms of its TEUs. The Company accounts for these mirror arrangements as investments in debt and equity securities. At September 30, 2019 and March 31, 2019 , the Company’s investment in debt securities are classified as “available-for-sale” and its investment in forward purchase contracts are considered equity securities measured at fair value. Changes in unrealized gains and losses for the Company’s debt securities are recognized as adjustments to other comprehensive income (loss) while changes in unrealized gains and losses for the Company’s investment in forward purchase contracts are recognized as adjustments to pretax income (loss). A summary of the Company’s other investments at September 30, 2019 and March 31, 2019 is summarized in the tables that follow. September 30, 2019 Unrealized Amounts Amortized Costs Gains Losses Fair Value Debt Securities (Level 2) $ 42,326 $ 1,571 $ — $ 43,897 Forward Purchase Contracts (Level 2) $ 232,929 $ — $ (2,435) 230,494 274,391 Amounts classified within current assets 15,154 Amounts classified within Other investments $ 259,237 March 31, 2019 Unrealized Amounts Amortized Costs Gains Losses Fair Value Debt Securities $ — $ — $ — $ — Forward Purchase Contracts $ — $ — $ — — — Amounts classified within current assets — Amounts classified within Other investments $ — Scheduled maturities of investments in debt securities at September 30, 2019 were as follows: Amortized Cost Fair Value Due in one year or less $ 15,154 $ 15,154 Due after one year through five years 27,172 28,742 Due after five years through ten years — — Due after ten years — — $ 42,326 $ 43,896 The portion of unrealized gains and losses for each period related to equity securities still held at each reporting date is calculated as follows: Three Months Ended Six Months Ended September 30, September 30, 2019 2018 2019 2018 Net gains and losses recognized during the period on equity securities $ (2,435) $ — $ (2,435) $ — Less: Net gains and losses recognized during the period on equity securities sold during the period — — — — Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date $ (2,435) $ — $ (2,435) $ — |
Subsequent Events
Subsequent Events | 6 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events Agreement to Sell Office Property In October 2019, the Joint Venture executed an agreement for the sale of its Alpharetta, GA office property for gross proceeds of approximately $31,500 . The sale is expected to be completed during the third quarter of the Joint Venture’s fiscal year. While the Joint Venture expects to recognize a gain of an immaterial amount as a result of this transaction, the Company expects, as a result of the write-off of basis differences associated with this office property, to recognize a loss within its Loss from equity method investment in the Joint Venture of approximately $14,000 . |
Basis of Presentation (Policy)
Basis of Presentation (Policy) | 6 Months Ended |
Sep. 30, 2019 | |
Basis of Presentation [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (“SEC”) Guidelines, Rules and Regulations and, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of results for the unaudited interim periods presented. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. The results of operations for the interim period are not necessarily indicative of the results to be obtained for the full fiscal year. All intercompany accounts and transactions have been eliminated in the unaudited condensed financial statements. |
Accounting Estimates | Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates on historical experience, current business factors and various other assumptions that the Company believes are necessary to consider in order to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of expenses and disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic, environmental and political factors and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in the reported results of operations; and if material, the effects of changes in estimates are disclosed in the notes to the financial statements. Estimates and assumptions by management affect: the carrying value of the Company’s investments; the provision and benefit for income taxes and related deferred tax accounts; contingencies; and the value attributed to equity awards. Additionally, the Company’s financial statements are impacted by estimates and assumptions made by management that affect the financial statements of the Joint Venture, including: the allowance for doubtful accounts; the fair value assigned to assets acquired and liabilities assumed in business combinations; tax receivable agreement obligations; the fair value of interest rate cap agreement obligations; measurement of the components of tangible equity units; contingent consideration; loss accruals; the carrying value of long-lived assets (including goodwill and intangible assets); the classification and measurement of assets held for sale; the amortization period of long-lived assets (excluding goodwill); the carrying value, capitalization and amortization of software development costs; the provision and benefit for income taxes and related deferred tax accounts; certain accrued expenses; revenue recognition; contingencies; and the value attributed to equity awards. |
Tangible Equity Units | Tangible Equity Units In connection with the initial public offering, the Company completed an offering of tangible equity units (TEUs). Each TEU comprises an amortizing note and purchase contract, both of which are freestanding instruments and separate units of account. The amortizing notes were issued at par and are classified as debt on the accompanying condensed consolidated balance sheet, with scheduled principal payments over the next twelve months reflected in current maturities of long-term debt. The purchase contracts are accounted for as prepaid forward contracts and classified as equity. The TEU proceeds and issuance costs were allocated to the amortizing notes and purchase contracts on a relative fair value basis. See Note 10 for further discussion. |
Other Investments | Other Investments The Company holds investments in tangible equity units issued by the Joint Venture with terms that substantially mirror the TEUs issued by the Company. Each TEU comprises an amortizing note and forward purchase contract, both of which are freestanding instruments and separate units of account. The Company accounts for its investment in each component at fair value. Unrealized gains and losses resulting from changes in the fair value of the investment in debt securities are included as a component of other comprehensive income. Unrealized gains and losses resulting from changes in the fair value of the investment in the equity purchase contracts are recorded in current period earnings, in accordance with ASU 2016-01. See Note 11 for further discussion. |
Recently Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In April 2019, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2018-07 on a modified retrospective basis, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Among other provisions, the measurement date for awards to nonemployees was changed from the earlier of the date at which a commitment for performance by the counterparty was reached or the date at which performance was complete under the previous guidance to the grant date under this update. Because the Company’s equity-based compensation was previously subject to remeasurement at fair value each quarter under previous authoritative literature, the adoption of this update had no material direct effect on the Company’s consolidated financial statements. As described in Note 7, however, the adoption of this update changed the relationship between the equity-based compensation and the accounting for the freestanding option (i.e. the Dividend receivable). In April 2019, the Joint Venture adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , which replaces most prior general and industry specific revenue recognition guidance with a principles-based comprehensive revenue recognition framework on a modified retrospective basis. Under this revised framework, a company will recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. As the Company’s operations consist principally of an investment in the Joint Venture, its financial statements reflect no revenue and, accordingly, the Company recognized no direct impact on its financial statements from the adoption of this update. However, upon adoption, the Joint Venture recognized a cumulative effect adjustment to its Members’ deficit. As a result of the impact of the adoption of ASC 606 to the Joint Venture’s Members’ equity ( deficit ) , the Company was required to recognize a proportionate amount of this cumulative effect adjustment to its April 1, 2019 retained earnings as well. The effect is disclosed within a separate caption of the accompanying condensed statement of stockholders’ equity. Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, as amended by ASU No. 2018-19, which requires that a financial asset (or group of financial assets) measured at amortized cost be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. This update is scheduled to be effective for the Company beginning April 1, 2021, with early adoption permitted beginning April 1, 2019. The Company is currently assessing the potential effects this update may have on its condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, which modifies the disclosure requirements for fair value measurements. ASU 2018-13 is effective for public companies for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for either the entire standard or only the provisions that eliminate or modify requirements. The Company is currently assessing the potential effects this update may have on its financial statement disclosures. |
Equity Method Investment in C_2
Equity Method Investment in Change Healthcare LLC (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Equity Method Investment in Change Healthcare LLC [Abstract] | |
Summarized Financial Information of the Joint Venture | Three Months Ended Six Months Ended September 30, September 30, 2019 2018 2019 2018 Statement of Operations Data: Total revenue $ 795,811 $ 800,190 $ 1,651,367 $ 1,623,453 Cost of operations (exclusive of depreciation and amortization) $ 331,234 $ 327,563 $ 658,181 $ 664,993 Customer postage $ 57,110 $ 62,404 $ 115,594 $ 127,962 Net income (loss) $ (130) $ 113,440 $ 71,785 $ 125,946 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Net Income (Loss) Per Share [Abstract] | |
Computation of Basic Net Income (Loss) Per Share of Common Stock | Three Months Ended Six Months Ended September 30, September 30, 2019 2018 2019 2018 Basic net income (loss) per share: Numerator: Net income (loss) $ (93,935) $ (18,591) $ (131,451) $ (36,092) Denominator: Weighted average common shares outstanding 123,794,511 75,506,552 99,897,191 75,555,700 Minimum shares issuable under purchase contracts 18,429,325 — 9,214,662 — 142,223,836 75,506,552 109,111,853 75,555,700 Basic net income (loss) per share $ (0.66) $ (0.25) $ (1.20) $ (0.48) |
Antidilutive Securities Excluded from Diluted Net Income (Loss) Per Share | Three Months Ended Six Months Ended September 30, September 30, 2019 2018 2019 2018 Incremental shares issuable under purchase contracts 3,685,750 — 1,842,875 — Time-Vesting Options 1,156,510 1,832,196 1,405,556 1,839,878 Restricted Stock Units 908,745 — 454,373 — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Fair Value Measurements [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | Quoted in Significant Balance at Markets Significant Other Unobservable September 30, Identical Observable Inputs Inputs Description 2019 (Level 1) (Level 2) (Level 3) Other Investments (see Note 11) $ 274,391 $ — $ 274,391 $ — Dividend Receivable 34,547 — — 34,547 Total $ 308,938 $ — $ 274,391 $ 34,547 Quoted in Significant Balance at Markets Significant Other Unobservable March 31, Identical Observable Inputs Inputs Description 2019 (Level 1) (Level 2) (Level 3) Other Investments (see Note 11) $ — $ — $ — $ — Dividend Receivable 81,264 — — 81,264 Total $ 81,264 $ — $ — $ 81,264 |
Summary of Fair Value of Freestanding Derivative | Fair Values of Derivative Financial Instruments Asset (Liability) Derivative financial instruments not designated as hedging instruments: Balance Sheet Location September 30, 2019 March 31, 2019 Freestanding Option Dividend receivable $ 34,547 $ 81,264 |
Reconciliation of Fair Value Derivative Using Unobservable Inputs | Three Months Ended Six Months Ended September 30, September 30, 2019 2018 2019 2018 Balance at beginning of period $ 48,807 $ 64,338 $ 81,264 $ 59,116 Increase in fair value based on ASC 505 equity-based compensation — 2,969 — 8,269 Settlements due to exercise of awards (1,324) (666) (1,324) (744) Change in fair value of equity-based awards (12,936) — (45,393) — Balance at end of period $ 34,547 $ 66,641 $ 34,547 $ 66,641 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Summary of Accumulated Other Comprehensive Income (Loss) | Foreign Accumulated Available Currency Other For Sale Translation Cash Flow Comprehensive Debt Security Adjustment Hedge Income (Loss) Balance at March 31, 2018 $ — $ 1,268 $ 1,268 $ 2,536 Cumulative effect of accounting change of the Joint Venture-ASU 2017-12 — — 490 490 Change associated with foreign currency translation — (2,593) — (2,593) Change associated with current period hedging — — 1,206 1,206 Reclassification into earnings — — (424) (424) Balance at June 30, 2018 $ — $ (1,325) $ 2,540 $ 1,215 Change associated with foreign currency translation — 566 — 566 Change associated with current period hedging — — 1,866 1,866 Reclassification into earnings — — (388) (388) Balance at September 30, 2018 $ — $ (759) $ 4,018 $ 3,259 Balance at March 31, 2019 $ — $ (1,565) $ (1,691) $ (3,256) Cumulative effect of accounting change of the Joint Venture-ASU 2018-02 — — 422 422 Change associated with foreign currency translation — 226 — 226 Change associated with current period hedging — — (5,117) (5,117) Reclassification into earnings — — (314) (314) Balance at June 30, 2019 $ — $ (1,339) $ (6,700) $ (8,039) Unrealized gain (loss) on available for sale debt securities of the Joint Venture 1,173 — — 1,173 Change associated with foreign currency translation — 1,583 — 1,583 Change associated with current period hedging — — (1,509) (1,509) Reclassification into earnings — — 199 199 Balance at September 30, 2019 $ 1,173 $ 244 $ (8,010) $ (6,593) |
Tangible Equity Units (Tables)
Tangible Equity Units (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Tangible Equity Units [Abstract] | |
Schedule of Aggregate Values Assigned upon Issuance of Tangible Equity Units | Equity Component Debt Component Total Price per TEU $ 41.7622 $ 8.2378 $ 50.00 Gross proceeds 240,133 47,367 287,500 Issuance costs (7,204) (1,421) (8,625) Net proceeds $ 232,929 $ 45,946 $ 278,875 |
Other Investments (Tables)
Other Investments (Tables) | 6 Months Ended |
Sep. 30, 2019 | |
Other Investments [Abstract] | |
Summary of Other Invesments | September 30, 2019 Unrealized Amounts Amortized Costs Gains Losses Fair Value Debt Securities (Level 2) $ 42,326 $ 1,571 $ — $ 43,897 Forward Purchase Contracts (Level 2) $ 232,929 $ — $ (2,435) 230,494 274,391 Amounts classified within current assets 15,154 Amounts classified within Other investments $ 259,237 March 31, 2019 Unrealized Amounts Amortized Costs Gains Losses Fair Value Debt Securities $ — $ — $ — $ — Forward Purchase Contracts $ — $ — $ — — — Amounts classified within current assets — Amounts classified within Other investments $ — |
Schedule of Maturities of Investments in Debt Securities | Amortized Cost Fair Value Due in one year or less $ 15,154 $ 15,154 Due after one year through five years 27,172 28,742 Due after five years through ten years — — Due after ten years — — $ 42,326 $ 43,896 |
Schedule of Unrealized Gains and Losses Related to Equity Securities | Three Months Ended Six Months Ended September 30, September 30, 2019 2018 2019 2018 Net gains and losses recognized during the period on equity securities $ (2,435) $ — $ (2,435) $ — Less: Net gains and losses recognized during the period on equity securities sold during the period — — — — Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date $ (2,435) $ — $ (2,435) $ — |
Nature of Business and Organi_2
Nature of Business and Organization (Narrative) (Details) | Jul. 01, 2019USD ($)shares | Jun. 26, 2019$ / sharesshares | Jul. 31, 2019USD ($)shares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Mar. 31, 2019$ / sharesshares |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||
Ownership percentage in Joint Venture | 41.00% | 41.00% | ||||
Stock split conversion ratio | 126.4 | |||||
Common Stock, shares authorized | 9,000,000,000 | 9,000,000,000 | 9,000,000,000 | 252,800,000 | ||
Common Stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock, shares authorized | 900,000,000 | 900,000,000 | 900,000,000 | 0 | ||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Proceeds from initial public offering | $ | $ 608,679,000 | |||||
Proceeds from tangible equity units | $ | $ 278,875,000 | $ 278,875,000 | ||||
Shares received from Joint Venture | 49,285,713 | |||||
McKesson Corporation [Member] | ||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||
Ownership percentage in Joint Venture | 59.00% | |||||
Common Class X [Member] | ||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||
Common Stock, shares authorized | 1 | 1 | 1 | 1 | ||
Common Stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common Stock [Member] | ||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||
Share offering | 49,285,713 | |||||
Proceeds from initial public offering | $ | $ 608,679 | |||||
Tangible Equity Units [Member] | ||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||
Tangible equity unit offering | 5,750,000 | 5,750,000 | ||||
Proceeds from tangible equity units | $ | $ 278,875 | |||||
Joint Venture [Member] | ||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||
Repayment of debt | $ | $ 805,000 | $ 85,000 | $ 890,000 |
Equity Method Investment in C_3
Equity Method Investment in Change Healthcare LLC (Narrative) (Details) - shares | Jul. 01, 2019 | Sep. 30, 2019 |
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage acquired in exchange | 30.00% | |
Ownership percentage in Joint Venture | 41.00% | 41.00% |
Shares received from Joint Venture | 49,285,713 | |
Additional ownership percentage acquired | 11.00% | |
Legacy CHC [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Percentage investment exchanged for membership interest in Joint Venture | 45.615% | |
Joint Venture [Member] | Legacy CHC [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage in Joint Venture | 54.385% |
Equity Method Investment in C_4
Equity Method Investment in Change Healthcare LLC (Summarized Financial Information of the Joint Venture) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Equity Method Investment in Change Healthcare LLC [Abstract] | ||||
Total revenue | $ 795,811 | $ 800,190 | $ 1,651,367 | $ 1,623,453 |
Cost of operations (exclusive of depreciation and amortization) | 331,234 | 327,563 | 658,181 | 664,993 |
Customer postage | 57,110 | 62,404 | 115,594 | 127,962 |
Net income (loss) | $ (130) | $ 113,440 | $ 71,785 | $ 125,946 |
Net Income (Loss) Per Share (Co
Net Income (Loss) Per Share (Computation of Basic Net Income (Loss) Per Share of Common Stock) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net Income (Loss) Per Share [Abstract] | ||||||
Net income (loss) | $ (93,935) | $ (37,517) | $ (18,591) | $ (17,501) | $ (131,451) | $ (36,092) |
Weighted average common shares outstanding | 123,794,511 | 75,506,552 | 99,897,191 | 75,555,700 | ||
Minimum shares issuable under purchase contracts | 18,429,325 | 9,214,662 | ||||
Weighted average common shares outstanding | 142,223,836 | 75,506,552 | 109,111,853 | 75,555,700 | ||
Basic net income (loss) per share | $ (0.66) | $ (0.25) | $ (1.20) | $ (0.48) |
Net Income (Loss) Per Share (An
Net Income (Loss) Per Share (Antidilutive Securities Excluded from Diluted Net Income (Loss) Per Share) (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Purchase Contracts [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from diluted net income (loss) per share | 3,685,750 | 1,842,875 | ||
Time-Vesting Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from diluted net income (loss) per share | 1,156,510 | 1,832,196 | 1,405,556 | 1,839,878 |
Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from diluted net income (loss) per share | 908,745 | 454,373 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Taxes [Abstract] | ||||
Income tax benefit | $ 13,620,000 | $ 6,783,000 | $ 15,804,000 | $ 11,584,000 |
Effective income tax rate | 12.70% | 26.70% | 10.70% | 24.30% |
Tax receivable agreement, percentage of net cash saving realized assigned | 85.00% | |||
Tax receivable agreement, minimum percentage of the Joint Venture outstanding units required to be owned | 20.00% | |||
Additional tax receivable agreement, percentage net cash tax savings Company required to pay arising from certain tax basis increases and imputed interest deductions | 85.00% | |||
Net cash tax savings, obligation | $ 0 | $ 0 | ||
Letter agreement, percentage of tax savings required to pay if amount of deductions allocated to Company are in excess of specified minimum threshold | 100.00% | |||
Due to McKesson | $ 48,363,000 | $ 48,363,000 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Mar. 31, 2019 |
Derivatives Fair Value [Line Items] | ||
Fair value, asset (liability) | $ 308,938 | $ 81,264 |
Significant Other Observable Inputs (Level 1) | ||
Derivatives Fair Value [Line Items] | ||
Fair value, asset (liability) | ||
Significant Other Observable Inputs (Level 2) | ||
Derivatives Fair Value [Line Items] | ||
Fair value, asset (liability) | 274,391 | |
Significant Unobservable Inputs (Level 3) | ||
Derivatives Fair Value [Line Items] | ||
Fair value, asset (liability) | 34,547 | 81,264 |
Other Investments [Member] | ||
Derivatives Fair Value [Line Items] | ||
Fair value, asset (liability) | 274,391 | |
Other Investments [Member] | Significant Other Observable Inputs (Level 1) | ||
Derivatives Fair Value [Line Items] | ||
Fair value, asset (liability) | ||
Other Investments [Member] | Significant Other Observable Inputs (Level 2) | ||
Derivatives Fair Value [Line Items] | ||
Fair value, asset (liability) | 274,391 | |
Other Investments [Member] | Significant Unobservable Inputs (Level 3) | ||
Derivatives Fair Value [Line Items] | ||
Fair value, asset (liability) | ||
Dividend Receivable [Member] | ||
Derivatives Fair Value [Line Items] | ||
Fair value, asset (liability) | 34,547 | 81,264 |
Dividend Receivable [Member] | Significant Other Observable Inputs (Level 1) | ||
Derivatives Fair Value [Line Items] | ||
Fair value, asset (liability) | ||
Dividend Receivable [Member] | Significant Other Observable Inputs (Level 2) | ||
Derivatives Fair Value [Line Items] | ||
Fair value, asset (liability) | ||
Dividend Receivable [Member] | Significant Unobservable Inputs (Level 3) | ||
Derivatives Fair Value [Line Items] | ||
Fair value, asset (liability) | $ 34,547 | $ 81,264 |
Fair Value Measurements (Summar
Fair Value Measurements (Summary of Fair Value of Freestanding Derivative) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Mar. 31, 2019 |
Not Designated as Hedging Instrument [Member] | Dividend Receivable [Member] | ||
Derivatives Fair Value [Line Items] | ||
Fair Values of Derivative Financial Instruments Asset (Liability) | $ 34,547 | $ 81,264 |
Fair Value Measurements (Reconc
Fair Value Measurements (Reconciliation of Fair Value Derivative Using Unobservable Inputs) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value Measurements [Abstract] | ||||
Balance at beginning of period | $ 48,807 | $ 64,338 | $ 81,264 | $ 59,116 |
Increase in fair value based on ASC 505 equity-based compensation | 2,969 | 8,269 | ||
Settlements due to exercise of awards | (1,324) | (666) | (1,324) | (744) |
Change in fair value of equity-based awards | (12,936) | (45,393) | ||
Balance at end of period | $ 34,547 | $ 66,641 | $ 34,547 | $ 66,641 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Summary Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Balance | $ 1,131,424 | $ 1,132,487 | $ 1,157,778 | $ 1,176,572 | $ 1,132,487 | $ 1,176,572 | ||
Unrealized gain (loss) on available for sale debt securities of the Joint Venture, net of taxes | 1,173 | 1,173 | ||||||
Foreign currency translation adjustment of the Joint Venture | (1,583) | (226) | (566) | 2,593 | (1,809) | 2,027 | ||
Balance | 1,886,107 | 1,131,424 | 1,142,480 | 1,157,778 | 1,886,107 | 1,142,480 | ||
Available For Sale Debtr Security [Member] | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Unrealized gain (loss) on available for sale debt securities of the Joint Venture, net of taxes | 1,173 | |||||||
Balance | 1,173 | 1,173 | ||||||
Foreign Currency Translation Adjustment [Member] | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Balance | (1,339) | (1,565) | (1,325) | 1,268 | (1,565) | 1,268 | ||
Foreign currency translation adjustment of the Joint Venture | (1,583) | (226) | (566) | 2,593 | ||||
Balance | 244 | (1,339) | (759) | (1,325) | 244 | (759) | ||
Cash Flow Hedge [Member] | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Balance | (6,700) | (1,691) | 2,540 | 1,268 | (1,691) | 1,268 | ||
Change associated with current period hedging | (1,509) | (5,117) | 1,866 | 1,206 | ||||
Reclassification into earnings | 199 | (314) | (388) | (424) | ||||
Balance | (8,010) | (6,700) | 4,018 | 2,540 | (8,010) | 4,018 | ||
Accumulated Other Comprehensive Income (Loss) [Member] | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Balance | (8,039) | (3,256) | 1,215 | 2,536 | (3,256) | 2,536 | ||
Unrealized gain (loss) on available for sale debt securities of the Joint Venture, net of taxes | 1,173 | |||||||
Foreign currency translation adjustment of the Joint Venture | (1,583) | (226) | (566) | 2,593 | ||||
Change associated with current period hedging | (1,509) | (5,117) | 1,866 | 1,206 | ||||
Reclassification into earnings | 199 | (314) | (388) | (424) | ||||
Balance | $ (6,593) | $ (8,039) | $ 3,259 | $ 1,215 | $ (6,593) | $ 3,259 | ||
ASU 2017-12 [Member] | Cash Flow Hedge [Member] | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Cumulative effect of accounting change of the Joint Venture | $ 490 | |||||||
ASU 2017-12 [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Cumulative effect of accounting change of the Joint Venture | $ 490 | |||||||
ASU 2018-02 [Member] | Cash Flow Hedge [Member] | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Cumulative effect of accounting change of the Joint Venture | $ 422 | |||||||
ASU 2018-02 [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | ||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||
Cumulative effect of accounting change of the Joint Venture | $ 422 |
Equity Based Compensation (Narr
Equity Based Compensation (Narrative) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Sep. 30, 2019USD ($)shares | Sep. 30, 2019USD ($)itemshares | |
Omnibus Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares reserved for future issuance | 25,000,000 | 25,000,000 |
Restricted Stock Units (RSUs) [Member] | Omnibus Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted in period | 4,436,758 | 4,436,758 |
Restricted Stock Units (RSUs) [Member] | Omnibus Incentive Plan [Member] | Graded Vesting Schedule [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Restricted Stock Units (RSUs) [Member] | Omnibus Incentive Plan [Member] | Share-based Payment Arrangement, Tranche One [Member] | Cliff Vesting Schedule [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Restricted Stock Units (RSUs) [Member] | Omnibus Incentive Plan [Member] | Share-based Payment Arrangement, Tranche Two [Member] | Cliff Vesting Schedule [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Performance Stock Units PSU [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted in period | 1,079,621 | 1,079,621 |
Performance Stock Units PSU [Member] | Omnibus Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of tranches | item | 2 | |
Performance Stock Units PSU [Member] | Omnibus Incentive Plan [Member] | Share-based Payment Arrangement, Tranche One [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of tranches based on Joint Venture compound annual revenue growth rate | item | 1 | |
Period of calculation for compound annual revenue growth rate | 3 years | |
Performance Stock Units PSU [Member] | Omnibus Incentive Plan [Member] | Share-based Payment Arrangement, Tranche Two [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of tranches based on Joint Venture compound annual adjusted EBITDA growth rate | item | 1 | |
Period of calculation for compound annual adjusted EBITDA growth rate | 3 years | |
Cash Settled Restricted Stock Units CSRSU [Member] | Omnibus Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Granted in period | 597,006 | 597,006 |
Deferred Stock Units DSU [Member] | Omnibus Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Granted in period | 45,704 | 45,704 |
Vesting percentage | 100.00% | |
Joint Venture [Member] | Omnibus Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ | $ 6,096 | $ 6,096 |
Unrecognized compensation expense | $ | $ 87,211 | $ 87,211 |
Minimum [Member] | Omnibus Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Maximum [Member] | Omnibus Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years |
Tangible Equity Units (Narrativ
Tangible Equity Units (Narrative) (Details) - USD ($) | Jul. 01, 2019 | Jul. 31, 2019 | Sep. 30, 2019 |
Total proceeds, net of issuance costs | $ 278,875,000 | $ 278,875,000 | |
TEU price per share | $ 50 | $ 50 | |
Maturity date | Jun. 30, 2022 | ||
Initial principal amount | $ 8.2378 | ||
Stated interest rate | 5.50% | ||
Settlement date | Jun. 30, 2022 | ||
Carrying value of senior amortizing notes | $ 42,537,000 | ||
Fair value of senior amortizing notes | $ 43,896,000 | ||
Minimum [Member] | |||
Share offering | 18,429,325 | ||
Share price | $ 13 | ||
Maximum [Member] | |||
Share offering | 22,115,075 | ||
Share price | $ 15.60 | ||
March 30 [Member] | |||
Cash installment | 0.7500 | ||
June 30 [Member] | |||
Cash installment | 0.7500 | ||
September 30 [Member] | |||
Cash installment | 0.7417 | ||
December 30 [Member] | |||
Cash installment | 0.7500 | ||
Applicable Market Value is greater than $15.60 per share [Member] | |||
Share price | 15.60 | ||
Conversion to shares | 3.2051 | ||
Applicable Market Value is less than or equal to $15.60 per share but greater than or equal to $13.00 per share [Member] | |||
TEU price per share | 50 | ||
Applicable Market Value is less than or equal to $15.60 per share but greater than or equal to $13.00 per share [Member] | Minimum [Member] | |||
Share price | 13 | ||
Applicable Market Value is less than or equal to $15.60 per share but greater than or equal to $13.00 per share [Member] | Maximum [Member] | |||
Share price | 15.60 | ||
Applicable Market Value is less than $13.00 per share [Member] | |||
Share price | 13 | ||
Conversion to shares | $ 3.8461 | ||
Tangible Equity Units [Member] | |||
Tangible equity unit offering | 5,750,000 | 5,750,000 | |
Total proceeds, net of issuance costs | $ 278,875 |
Tangible Equity Units (Schedule
Tangible Equity Units (Schedule of Aggregate Values Assigned upon Issuance of Tangible Equity Units) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended |
Jul. 31, 2019 | Sep. 30, 2019 | |
Tangible Equity Units [Abstract] | ||
Equity Component, Price per TEU | $ 41.7622 | |
Equity Component, Gross proceeds | $ 240,133 | |
Equity Component, Issuance costs | (7,204) | |
Equity Component, Net proceeds | $ 232,929 | |
Debt Component, Price per TEU | $ 8.2378 | |
Debt Component, Gross proceeds | $ 47,367 | |
Debt Component, Issuance costs | (1,421) | |
Debt Component, Net proceeds | $ 45,946 | |
Total, Price per TEU | $ 50 | $ 50 |
Total, Gross proceeds | $ 287,500 | |
Total, Issuance costs | (8,625) | |
Total, Net proceeds | $ 278,875 | $ 278,875 |
Other Investments (Summary of O
Other Investments (Summary of Other Investments) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Mar. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Amortized Costs | ||
Debt Securities, Unrealized Gains | ||
Debt Securities, Unrealized Losses | ||
Debt Securities, Fair Value | ||
Forward Purchase Contracts, Amortized Costs | ||
Forward Purchase Contracts, Unrealized Gains | ||
Forward Purchase Contracts, Unrealized Losses | ||
Forward Purchase Contracts, Fair Value | ||
Fair Value | $ 274,391 | |
Current Assets [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 15,154 | |
Other Investments [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 259,237 | |
Significant Other Observable Inputs (Level 2) | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Amortized Costs | 42,326 | |
Debt Securities, Unrealized Gains | 1,571 | |
Debt Securities, Fair Value | 43,897 | |
Forward Purchase Contracts, Amortized Costs | 232,929 | |
Forward Purchase Contracts, Unrealized Losses | (2,435) | |
Forward Purchase Contracts, Fair Value | $ 230,494 |
Other Investments (Schedule of
Other Investments (Schedule of Maturities of Investments in Debt Securities) (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Other Investments [Abstract] | |
Amortized Cost, Due in one year or less | $ 15,154 |
Amortized Cost, Due after one through five years | 27,172 |
Amortized Cost, Due after five through ten years | |
Amortized Cost, Due after ten years | |
Amortized Cost | 42,326 |
Fair Value, Due in one year or less | 15,154 |
Fair Value, Due after one through five years | 28,742 |
Fair Value, Due after five through ten years | |
Fair Value, Due after ten years | |
Fair Value | $ 43,896 |
Other Investments (Schedule o_2
Other Investments (Schedule of Unrealized Gains and Losses Related to Equity Securities) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Other Investments [Abstract] | ||||
Net gains and losses recognized during the period on equity securities | $ (2,435) | $ (2,435) | ||
Less: Net gains and losses recognized during the period on equity securities sold during the period | ||||
Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date | $ (2,435) | $ (2,435) |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - Subsequent Event [Member] $ in Thousands | 1 Months Ended |
Oct. 31, 2019USD ($) | |
Subsequent Event [Line Items] | |
Loss on equity method investment | $ 14,000 |
Joint Venture [Member] | |
Subsequent Event [Line Items] | |
Proceeds from sale of office property | $ 31,500 |