Stockholders' Equity

12 Months Ended

Dec. 31, 2015

Stockholders Equity Note [Abstract]

Stockholders' Equity

10.Stockholders’ Equity

Stock Repurchase Program. We currently have a stock repurchase program, approved by our Board, authorizing us to repurchase shares of our common stock from time-to-time as market and business conditions warrant (the “Stock Repurchase Program”). In February 2015, our Board approved a 7.5 million share increase in the number of shares authorized for repurchase under the Stock Repurchase Program, bringing the total number of shares authorized to 42.5 million.  During 2015, 2014, and 2013, we repurchased 0.3 million shares of our common stock for $6.9 million (weighted–average price of $27.06 per share), 0.7 million shares of our common stock for $19.1 million (weighted-average price of $26.05 per share), and 0.5 million shares of our common stock for $10.1 million (weighted-average price of $20.23 per share), respectively, under a Securities and Exchange Commission (“SEC”) Rule 10b5-1 Plan.

In March 2015, we entered into an accelerated share repurchase transaction agreement (the “ASR Agreement”) with a counterparty to repurchase $50 million of our common stock.  We paid $50 million to the counterparty and received an initial delivery of 1.3 million shares of our outstanding common stock for an aggregate value of approximately $40 million.  The $10 million forward equity contract was settled in December 2015.  Total shares purchased under the ASR Agreement in 2015 were 1.6 million shares at an average purchase price of $31.64 per share.  The shares were reflected as treasury stock in the periods the shares were delivered.  The ASR Agreement met all the applicable criteria for equity classification, and, therefore, was not accounted for as a derivative instrument.

As of December 31, 2015, the total remaining number of shares available for repurchase under the Stock Repurchase Program totaled approximately 7.1 million shares.  

In addition to the above mentioned stock repurchases, during 2015, 2014, and 2013, we repurchased and then cancelled approximately 265,000 shares, 252,000 shares, and 264,000 shares for $8.1 million, $6.9 million, and $5.4 million, respectively, of common stock from our employees in connection with minimum tax withholding requirements resulting from the vesting of restricted stock under our stock incentive plans.

Cash Dividend.  In 2013, our Board approved the initiation of a quarterly cash dividend to be paid to our stockholders.  During 2015 and 2014, the Board approved total cash dividends of $0.70 per share and $0.6225 per share of common stock, totaling $22.9 million and $21.3 million, respectively.

Warrants.  In 2014, we entered into an amendment to our current agreement with Comcast (the “Amended Agreement”).  The Amended Agreement provides the framework for Comcast to consolidate its residential customer accounts onto our ACP customer care and billing solution.  As an additional incentive for Comcast to migrate new customer accounts to ACP, the Amended Agreement includes the issuance of stock warrants (the “Warrant Agreement”) for the right to purchase up to approximately 2.9 million shares of our common stock (the “Stock Warrants”), 1.9 million warrants relate to Comcast’s existing residential business and the remaining 1.0 million warrants relate to additional residential customer accounts that Comcast may acquire and migrate onto ACP in the future.  The Stock Warrants have a 10-year term and an exercise price of $26.68 per warrant.  

The 1.9 million of the Stock Warrants relate to Comcast’s existing residential business and vest(ed) as follows:

• The first 25% of these Stock Warrants (approximately 0.5 million) vested upon the successful migration of the first 0.5 million customer accounts, which occurred during the fourth quarter of 2014 upon the successful migration of two million new Comcast customer accounts.

• The next 25% of these Stock Warrants had a time-based vesting provision, and vested in January 2015.

• The next 25% of these Stock Warrants vest only after a cumulative total of 5.5 million customer accounts are migrated onto ACP.

• The last 25% of these Stock Warrants vest proportionately based on the number of customer accounts migrated above 5.5 million accounts, with full vesting based on a target of 5.7 million customer accounts above the 5.5 million account level (i.e., a total target of 11.2 million customer account migrations).

The remaining 1.0 million Stock Warrants that relate to additional residential accounts that Comcast may acquire and migrate onto ACP in the future only vest proportionately with acquired customer accounts migrated onto ACP from other providers’ billing platforms, with full vesting based on a target of 5 million newly migrated customer accounts.

Fifty percent of the unvested Stock Warrants become fully vested upon a fundamental change (including a change in control) of the Company, as defined, proportionally reducing the number of Stock Warrants eligible for vesting based on future performance conditions.

Once vested, Comcast may exercise the Stock Warrants and elect either physical delivery of common shares or net share settlement (cashless exercise).  Alternatively, the exercise of the Stock Warrants may be settled with cash based solely on our approval, or if Comcast were to beneficially own or control in excess of 19.99% of the common stock or voting of the Company.

The fair value of the 0.5 million Stock Warrants that vested in the fourth quarter of 2014 was $3.6 million, as determined using the Black-Scholes option-pricing model.  Upon vesting, this amount was recorded as a client incentive asset with the corresponding offset to stockholders’ equity.  

The fair value of the 0.5 million Stock Warrants that vested in January 2015 was $3.7 million at the grant date, as determined using the Black-Scholes option-pricing model.  This amount is being recorded ratably over the vesting period as a client incentive asset with the corresponding offset to stockholders’ equity.  

The client incentive asset related to the Stock Warrants is being amortized as a reduction in processing and related services revenues over the remaining term of the Comcast amended agreement.  As of December 31, 2015, we recorded a client incentive asset related to these Stock Warrants of $7.3 million and have amortized $2.0 million as a reduction in processing and related services revenues.  

The remaining unvested Stock Warrants will be accounted for as client incentive assets in the period the performance conditions necessary for vesting have been met.  As of December 31, 2015, none of the Stock Warrants had been exercised.

Convertible Debt Securities. Under GAAP, convertible debt securities that may be settled in cash upon conversion (including partial cash settlement) must be separated into their liability and equity components at initial recognition by: (i) recording the liability component at the fair value of a similar liability that does not have an associated equity component; and (ii) attributing the remaining proceeds from the issuance to the equity component. The carrying amount of the equity component related to our convertible debt securities outstanding, included within additional paid-in capital, net of tax, as of December 31, 2015 and 2014 was $22.9 million.