10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number: 001-33881

MEDASSETS, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	51-0391128
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
100 North Point Center East, Suite 200 Alpharetta, Georgia	30022
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (678) 323-2500

(Former name, former address and former fiscal year, if changed since last report)

N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of July 24, 2015, the registrant had 60,002,181 shares of common stock, par value $0.01 per share, outstanding.

MEDASSETS, INC.

FORM 10-Q

INDEX

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014		3
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014		4
Condensed Consolidated Statement of Stockholders’ Equity for the six months ended June 30, 2015		5
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014		6
Notes to Condensed Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosures About Market Risk		36
Item 4. Controls and Procedures		36
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		37
Item 1A. Risk Factors		37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		37
Item 3. Defaults Upon Senior Securities		37
Item 4. Mine Safety Disclosures		37
Item 5. Other Information		37
Item 6. Exhibits		39
Signatures

2

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

MedAssets, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

	June 30,         2015			December 31, 2014
	(In thousands, except share and per share amounts)
ASSETS
Current assets
Cash and cash equivalents	$	10,273		$	12,100
Accounts receivable, net of allowances of $2,654 and $2,641 as of June 30, 2015 and December 31, 2014, respectively		129,212			127,741
Deferred tax asset, current portion		6,021			5,782
Prepaid expenses and other current assets		24,497			30,557
Total current assets		170,003			176,180
Property and equipment, net		164,686			170,318
Other long term assets
Goodwill		1,058,414			1,058,414
Intangible assets, net		246,420			276,407
Other		34,437			37,477
Other long term assets		1,339,271			1,372,298
Total assets	$	1,673,960		$	1,718,796
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	17,254		$	26,910
Accrued revenue share obligation and rebates		100,927			91,864
Accrued payroll and benefits		34,402			32,784
Other accrued expenses		9,972			9,040
Deferred revenue, current portion		75,677			76,034
Current portion of notes payable		24,875			29,583
Current portion of finance obligation		308			294
Total current liabilities		263,415			266,509
Notes payable, less current portion		482,417			526,417
Bonds payable		325,000			325,000
Finance obligation, less current portion		8,318			8,475
Deferred revenue, less current portion		15,988			15,418
Deferred tax liability		109,326			116,607
Other long term liabilities		14,168			13,883
Total liabilities		1,218,632			1,272,309
Commitments and contingencies
Stockholders’ equity
Common stock, $0.01 par value, 150,000,000 shares authorized; 59,998,000 and 60,199,000 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively		600			602
Additional paid-in capital		693,411			694,235
Accumulated deficit		(238,683	)		(248,350	)
Total stockholders’ equity		455,328			446,487
Total liabilities and stockholders’ equity	$	1,673,960		$	1,718,796

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

3

MedAssets, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(In thousands, except per share amounts)
Revenue:
Administrative fees, net	$	69,723		$	70,091		$	147,484		$	146,337
Other service fees		120,701			105,324			228,521			199,945
Total net revenue		190,424			175,415			376,005			346,282
Operating expenses:
Cost of revenue (inclusive of depreciation expense of $989 and $648 for the three months ended June 30, 2015 and 2014, respectively; and $1,967 and $1,072 for the six months ended June 30, 2015 and 2014, respectively)		47,124			40,361			90,057			77,792
Product development expenses		7,451			6,642			15,851			14,039
Selling and marketing expenses		23,849			20,721			43,360			35,914
General and administrative expenses		59,399			59,529			123,884			118,332
Restructuring, acquisition and integration-related expenses		556			—			4,995			1,697
Depreciation		13,551			11,862			26,898			23,402
Amortization of intangibles		14,931			14,027			29,987			28,053
Total operating expenses		166,861			153,142			335,032			299,229
Operating income		23,563			22,273			40,973			47,053
Other income (expense):
Interest (expense)		(11,810	)		(11,114	)		(23,679	)		(22,287	)
Other (expense) income		(110	)		31			(48	)		89
Income before income taxes		11,643			11,190			17,246			24,855
Income tax expense		5,329			4,594			7,579			10,581
Net income	$	6,314		$	6,596		$	9,667		$	14,274
Basic and diluted income per share:
Basic net income per share	$	0.11		$	0.11		$	0.16		$	0.24
Diluted net income per share	$	0.10		$	0.11		$	0.16		$	0.23
Weighted average shares — basic		59,865			59,752			59,801			60,189
Weighted average shares — diluted		61,056			60,946			60,832			61,419

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

4

MedAssets, Inc.

Condensed Consolidated Statement of Stockholders’ Equity (Unaudited)

Six Months Ended June 30, 2015

	Common Stock						Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity
	Shares			Par Value
	(In thousands)
Balances at December 31, 2014		60,199		$	602		$	694,235		$	(248,350	)	$	446,487
Issuance of common stock from stock option and SSAR exercises and restricted stock issuances, net		413			4			941			—			945
Shares surrendered to pay taxes on vesting of restricted stock		(199	)		(2	)		(3,834	)		—			(3,836	)
Stock compensation expense		—			—			11,131			—			11,131
Repurchase of common stock		(415	)		(4	)		(8,584	)		—			(8,588	)
Tax deficit from equity award exercises, net		—			—			(478	)		—			(478	)
Net income											9,667			9,667
Balances at June 30, 2015		59,998		$	600		$	693,411		$	(238,683	)	$	455,328

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

5

MedAssets, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
	2015			2014
	(In thousands)
Operating activities
Net income	$	9,667		$	14,274
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Bad debt expense		—			100
Depreciation		28,865			24,474
Amortization of intangibles		29,987			28,053
Loss on sale of assets		237			16
Noncash stock compensation expense		11,131			9,894
Excess tax benefit from exercise of equity awards		(438	)		(1,557	)
Amortization of debt issuance costs		1,949			1,880
Noncash interest expense, net		195			208
Deferred income tax benefit		(7,613	)		(4,837	)
Changes in assets and liabilities:
Accounts receivable		(1,471	)		(10,365	)
Prepaid expenses and other assets		6,060			(2,736	)
Other long-term assets		(63	)		477
Accounts payable		(9,374	)		(6,889	)
Accrued revenue share obligations and rebates		9,063			299
Accrued payroll and benefits		1,618			(12,077	)
Other accrued expenses and long-term liabilities		1,217			(411	)
Deferred revenue		213			9,986
Cash provided by operating activities		81,243			50,789
Investing activities
Purchases of property, equipment and software, net		(3,135	)		(7,201	)
Capitalized software development costs		(19,848	)		(20,878	)
Cash used in investing activities		(22,983	)		(28,079	)
Financing activities
Borrowings from revolving credit facility		—			74,080
Repayment of notes payable		(18,708	)		(17,750	)
Repayment of revolving credit facility		(30,000	)		(34,080	)
Repayment of finance obligation		(338	)		(338	)
Excess tax benefit from exercise of equity awards		438			1,557
Issuance of common stock, net		945			2,559
Purchase of treasury shares, including shares surrendered for tax withholdings		(12,424	)		(45,524	)
Cash used in financing activities		(60,087	)		(19,496	)
Net (decrease) increase in cash and cash equivalents		(1,827	)		3,214
Cash and cash equivalents, beginning of period		12,100			2,790
Cash and cash equivalents, end of period	$	10,273		$	6,004

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

6

MedAssets, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands, except share and per share amounts)

Unless the context indicates otherwise, references in this Quarterly Report to “MedAssets,” the “Company,” “we,” “our” and “us” mean MedAssets, Inc., and its subsidiaries and predecessor entities.

1. BUSINESS DESCRIPTION AND BASIS OF PRESENTATION

We provide technology-enabled products and services that, together, deliver solutions designed to reduce total cost of care, enhance operational efficiency, align clinical delivery with advance care coordination and improve revenue performance for hospitals, health systems and other ancillary healthcare providers. Our customer-specific solutions are designed to efficiently analyze detailed information across the spectrum of cost, operations, clinical delivery and reimbursement. Our solutions integrate with our customers’ existing operations and enterprise software systems and provide financial improvement with minimal upfront costs or capital expenditures. Our operations and customers are primarily located throughout the United States and to a limited extent, Canada.

The accompanying unaudited condensed consolidated financial statements, and condensed consolidated balance sheet as of December 31, 2014, derived from audited financial statements, have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting and as required by Regulation S-X, Rule 10-01 of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. In the opinion of management, all adjustments considered necessary for a fair presentation of the interim financial information, consisting of normal recurring adjustments, have been included. When preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the date of the condensed consolidated financial statements. Actual results may differ materially from those estimates. Operating results for the three and six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2015.

The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2014 included in our annual report on Form 10-K as filed with the SEC on March 2, 2015 in addition to our quarterly reports filed on Form 10-Q for the periods after December 31, 2014. These financial statements include the accounts of MedAssets, Inc. and our wholly owned subsidiaries. All significant intercompany accounts have been eliminated in consolidation.

Use of Estimates

The preparation of the condensed consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the SEC, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from those estimates. We believe that the estimates, assumptions and judgments involved in revenue recognition, allowances for doubtful accounts and returns, product development costs, share-based payments, business combinations, impairment of goodwill, intangible assets and long-lived assets and accounting for income taxes have the greatest potential impact on our condensed consolidated financial statements.

Cash and Cash Equivalents

All of our highly liquid investments with original maturities of three months or less at the date of purchase are carried at cost (which approximates fair value) and are considered to be cash equivalents. Currently, our excess cash is voluntarily used to repay our swing line credit facility, if any, on a daily basis and applied against our revolving credit facility on a routine basis when our swing line credit facility is undrawn. In addition, we may periodically make voluntary repayments on our term loans.

Cash and cash equivalents were $10,273 and $12,100 as of June 30, 2015 and December 31, 2014, respectively. We had $122,000 and $152,000 outstanding on our revolving credit facility as of June 30, 2015 and December 31, 2014, respectively. In the event our cash balance is zero at the end of a period, any outstanding checks are recorded as accrued expenses. See Note 5 for immediately available cash under our revolving credit facility.

Additionally, we have a concentration of credit risk arising from cash deposits held in excess of federally insured amounts totaling $9,773 as of June 30, 2015.

7

MedAssets, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) – (continued)

(In thousands, except share and per share amounts)

2. RECENT ACCOUNTING PRONOUNCEMENTS

Debt Issuance Costs

In April 2015, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update relating to simplifying the presentation of debt issuance costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The update will be effective on January 1, 2016.

Going Concern

In August 2014, the FASB issued an accounting standard update relating to disclosure of uncertainties about an entity’s ability to continue as a going concern. The update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures in the event that there is such substantial doubt. The update will be effective on January 1, 2016.

Share-Based Compensation

In June 2014, the FASB issued an accounting standard update relating to reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. This update requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The update will be effective on January 1, 2016.

Revenue Recognition

In May 2014, the FASB issued an accounting standard update relating to revenue from contracts with customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The update will replace most existing revenue recognition guidance under GAAP when it becomes effective. The update is effective for us on January 1, 2017. Early application is not permitted. The update permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that the update will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

3. RESTRUCTURING, ACQUISITION AND INTEGRATION-RELATED EXPENSES

Restructuring Activities

Restructuring charges consist of exit costs and other costs associated with the reorganization of our operations, including employee termination costs, lease contract termination costs, impairment of assets, and any other qualifying exit costs. Costs associated with exit or disposal activities are generally recorded when the liability is incurred.

In the first half of 2015, our management approved and initiated a plan to restructure our operations that resulted in certain workforce reductions within the Company and changes in senior management. During the three months ended June 30, 2015 and 2014, we expensed total restructuring, acquisition and integration-related costs of $556 (inclusive of $48 of acquisition-related expenses) and zero, respectively. During the six months ended June 30, 2015 and 2014, we expensed total restructuring, acquisition and integration-related costs of $4,995 (inclusive of $352 of acquisition-related expenses) and $1,697, respectively. These costs are included within the restructuring, acquisition and integration-related expenses line on the accompanying condensed consolidated statements of operations. During the first half of 2015, cash payments related to restructuring and acquisition-related activities were approximately $5,005. As of June 30, 2015, we had $2,063 in accrued liabilities for these costs of which $999 is expected to be paid over the next twelve months.

4. DEFERRED REVENUE

Deferred revenue consists of unrecognized revenue related to advanced customer billing or customer payments received prior to revenue being realized and earned. Substantially all of our deferred revenue consists of: (i) deferred administrative fees, net; (ii) deferred service fees; (iii) deferred software and implementation fees; and (iv) other deferred fees, including receipts for our annual customer and vendor meeting prior to the event.

8

MedAssets, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) – (continued)

(In thousands, except share and per share amounts)

The following table summarizes the deferred revenue categories and balances as of:

	June 30, 2015			December 31, 2014
Software and SaaS implementation fees	$	53,570		$	55,152
Service fees		21,987			19,241
Administrative fees		13,660			15,715
Other fees		2,448			1,344
Deferred revenue, total		91,665			91,452
Less: Deferred revenue, current portion		(75,677	)		(76,034	)
Deferred revenue, non-current portion	$	15,988		$	15,418

As of June 30, 2015 and December 31, 2014, deferred revenue included in our condensed consolidated balance sheets that was contingent upon meeting performance targets was $5,137 and $8,441, respectively. Advance billings on arrangements that include contingent performance targets are recorded in accounts receivable and deferred revenue when billed. Only certain contingent performance targets are billed in advance of meeting the target as determined by the customer arrangement.

5. NOTES AND BONDS PAYABLE

The balances of our notes and bonds payable are summarized as follows as of:

	June 30, 2015			December 31, 2014
Term A facility	$	211,263		$	225,000
Term B facility		174,029			179,000
Revolving credit facility		122,000			152,000
Total notes payable		507,292			556,000
Bonds payable		325,000			325,000
Total notes and bonds payable		832,292			881,000
Less: current portions		(24,875	)		(29,583	)
Total long-term notes and bonds payable	$	807,417		$	851,417

Notes Payable

As of June 30, 2015, our long-term notes payable consists of a Term A Facility, a Term B Facility and a revolving credit facility under a credit agreement with JP Morgan Chase Bank, N.A and other financial institutions named therein, dated December 13, 2012 (as amended from time to time, the “Credit Agreement”), each with an outstanding balance of $211,263, $174,029 and $122,000, respectively. We have classified the $122,000 outstanding balance on our revolving credit facility as a long term liability given the maturity date of December 13, 2017. No amounts were drawn on our swing line loan and we made voluntary payments of $30,000 on our revolving credit facility, which resulted in $177,000 of availability under our revolving credit facility (after giving effect to $1,000 of outstanding but undrawn letters of credit on such date and the increase in the revolving credit facility as discussed below) as of June 30, 2015. During the six months ended June 30, 2015, we made scheduled principal payments of $10,875 on our Term A Facility and Term B Facility in addition to payments of $7,833 relating to our 2014 excess cash flow payment ($4,362 on the Term A Facility and $3,471 on the Term B Facility). The applicable weighted average interest rates (inclusive of the applicable bank margin) on our Term A Facility, Term B Facility and revolving credit facility at June 30, 2015 were 2.52%, 4.00% and 2.51%, respectively. On September 8, 2014, the Company entered into a First Increase Joinder to the Credit Agreement (the “First Increase Joinder”). The First Increase Joinder increased the revolving commitment amount under the Credit Agreement by $100,000 to $300,000. In connection with the First Increase Joinder, we incurred and capitalized approximately $615 of debt issuance costs which will be amortized into interest expense ratably over the remaining term of the revolving credit facility.

The Credit Agreement contains certain customary negative covenants, including but not limited to, limitations on the incurrence of debt, limitations on liens, limitations on fundamental changes, limitations on asset sales and sale leasebacks, limitations on investments, limitations on dividends or distributions on, or redemptions of, equity interests, limitations on prepayments or redemptions of unsecured or subordinated debt, limitations on negative pledge clauses, limitations on transactions with affiliates and limitations on changes to the Company’s fiscal year. The Credit Agreement also includes maintenance covenants of maximum ratios of consolidated total indebtedness (subject to certain adjustments) to consolidated EBITDA (subject to certain adjustments) and minimum cash interest coverage ratios. The Credit Agreement contains certain customary representations and warranties, affirmative covenants and events of default, including but not limited to, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of insolvency or bankruptcy, material

9

MedAssets, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) – (continued)

(In thousands, except share and per share amounts)

judgments, certain events under ERISA, actual or asserted failures of any guaranty or security document supporting the credit agreement to be in full force and effect and changes of control. The Company was in compliance with these covenants as of June 30, 2015. We are also required to prepay our debt obligations based on an excess cash flow calculation for the applicable fiscal year which is determined in accordance with the terms of the Credit Agreement. Our current portion of notes payable does not include an amount with respect to any 2015 excess cash flow payment. We will reclassify a portion of our long-term notes payable to a current classification at such time that any 2015 excess cash flow payment becomes estimable. We will be required to make any necessary cash flow payment within the first quarter of 2016.

All of the Company’s obligations under the Credit Agreement are unconditionally guaranteed by each of the Company’s existing and subsequently acquired or organized wholly owned restricted subsidiaries, except that the following subsidiaries do not and will not provide guarantees: (a) unrestricted subsidiaries, (b) subsidiaries with tangible assets and revenues each having a value of less than 2.5% of the consolidated tangible assets and consolidated revenues of the Company (provided that all such immaterial subsidiaries, on a consolidated basis, shall not account for more than 5.0% of the consolidated EBITDA of the Company), (c) any subsidiary prohibited by applicable law, rule or regulation from providing a guarantee or which would require governmental (including regulatory) consent or approval or which would result in adverse tax consequences and (d) not-for-profit subsidiaries.

All of the Company’s obligations under the Credit Agreement are secured by substantially all of the Company’s assets and the assets of each guarantor (subject to certain exceptions), including but not limited to, (1) a perfected pledge of all of the equity securities of each direct wholly owned restricted subsidiary of the Company and of each subsidiary guarantor (which pledge, in the case of any foreign subsidiary, is limited to 65% of the equity securities of such foreign subsidiary) and (2) perfected security interests in, and mortgages on, substantially all tangible and intangible personal property and material fee-owned real property of the Company and each subsidiary guarantor (including but not limited to, accounts receivable, inventory, equipment, general intangibles (including contract rights), investment property, intellectual property, material intercompany notes and proceeds of the foregoing).

Loans under the Credit Agreement must be prepaid under certain circumstances, including with proceeds from certain future debt issuances, asset sales and a portion of excess cash flow for the applicable fiscal year. Loans under the Credit Agreement may be voluntarily prepaid at any time, subject to customary LIBOR breakage costs.

Bonds Payable

The Company has an aggregate principal amount of $325,000 of 8% senior notes due 2018 (the “Notes”) outstanding that have been registered under the Securities Act of 1933, as amended. The Notes are guaranteed on a senior unsecured basis by each of our existing domestic subsidiaries and each of our future domestic restricted subsidiaries in each case that guarantees our obligations under the Credit Agreement. Each of the subsidiary guarantors is 100% owned by us. The guarantees by the subsidiary guarantors are full and unconditional and joint and several. We have no independent assets or operations, and any subsidiaries of ours other than the subsidiary guarantors are minor. The Notes and the guarantees are senior unsecured obligations of the Company and the subsidiary guarantors, respectively.

The Notes were issued pursuant to an indenture dated as of November 16, 2010 (the “Indenture”) among the Company, its subsidiary guarantors and Wells Fargo Bank, N.A., as trustee. Pursuant to the Indenture, the Notes will mature on November 15, 2018 and bear 8% annual interest. Interest on the Notes is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2011.

The Indenture contains certain customary negative covenants, including but not limited to, limitations on the incurrence of debt, limitations on liens, limitations on consolidations or mergers, limitations on asset sales, limitations on certain restricted payments and limitations on transactions with affiliates. The Indenture does not contain any significant restrictions on the ability of the Company or any subsidiary guarantor to obtain funds from the Company or any other subsidiary guarantor by dividend or loan. The Indenture also contains customary events of default. The Company was in compliance with these covenants as of June 30, 2015.

The Company has the option to redeem all or a part of the Notes, at the following redemption prices:

Year	Percentage
2015		102	%
2016 and thereafter		100	%

The Notes also contain a redemption feature that would require the repurchase of 101% of the aggregate principal amount plus accrued and unpaid interest at the option of the holders upon a change in control.

As of June 30, 2015, the Notes were trading at 103.3% of par value (Level 1).

10

MedAssets, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) – (continued)

(In thousands, except share and per share amounts)

Debt Issuance Costs

As of June 30, 2015, we had approximately $12,126 of debt issuance costs related to the Credit Agreement and Notes which will be amortized into interest expense generally using the effective interest method until the applicable maturity date. For the three months ended June 30, 2015 and 2014, we recognized $971 and $937, respectively, in interest expense related to the amortization of debt issuance costs. For the six months ended June 30, 2015 and 2014, we recognized $1,949 and $1,880, respectively, in interest expense related to the amortization of debt issuance costs.

Debt Maturity Table

The following table summarizes our stated debt maturities and scheduled principal repayments as of June 30, 2015:

Year	Term A Facility		Term B Facility(2)		Revolving Credit Facility		Senior Unsecured Notes		Total
2015(1)	$	9,375	$	1,500	$	—	$	—	$	10,875
2016		25,000		3,000		—		—		28,000
2017		176,888		3,000		122,000		—		301,888
2018		—		3,000		—		325,000		328,000
2019		—		163,529		—		—		163,529
	$	211,263	$	174,029	$	122,000	$	325,000	$	832,292

(1) Represents the remaining quarterly principal payments due during the fiscal year ending December 31, 2015 and the balance of the swing line component of our revolving credit facility, if any.

(2) The Term B Facility matures on December 13, 2019; however, the facility will mature in full on May 15, 2018 if our outstanding senior notes have not been repaid or refinanced in full by such date.

Total interest paid (net of amounts capitalized) on our notes and bonds payable during the six months ended June 30, 2015 and 2014 was approximately $21,554 and $20,058, respectively.

6. COMMITMENTS AND CONTINGENCIES

Performance Targets

In the ordinary course of contracting with our customers, we may agree to make some or all of our fees contingent upon the customer’s achievement of financial improvement targets from the use of our services and software. These contingent fees are not recognized as revenue until the customer confirms achievement of the performance targets. We generally receive customer acceptance as and when the performance targets are achieved. If we invoice contingent fees prior to customer confirmation that a performance target has been achieved, we record invoiced contingent fees as deferred revenue on our condensed consolidated balance sheet. Often, recognition of this revenue occurs in periods subsequent to the recognition of the associated costs.

Legal Proceedings

From time to time, we become involved in legal proceedings arising in the ordinary course of business. As of June 30, 2015, we are not presently involved in any legal proceedings, the outcome of which, if determined adversely to us, would have a material adverse effect on our business, operating results or financial condition.

11

MedAssets, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) – (continued)

(In thousands, except share and per share amounts)

7. STOCKHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

Common Stock

During the six months ended June 30, 2015, we issued approximately 437,000 shares of common stock in connection with employee stock option exercises, stock-settled stock appreciation rights (“SSARs”) exercises and the vesting of restricted stock units (“RSUs”) for net exercise proceeds of $945.

During the six months ended June 30, 2015, approximately 24,000 shares of restricted common stock were forfeited.

During the six months ended June 30, 2015, we received approximately 199,000 restricted shares that were surrendered from equity awards holders to settle their associated minimum statutory tax liability of $3,836 from shares that vested during the year.

Repurchase of Common Stock

In February 2015, our Board of Directors authorized an extension to our existing share repurchase program until February 29, 2016 and increased the total dollar amount available for the repurchase of shares of our common stock to $100,000 subject to certain restrictions under our Credit Agreement and Indenture. The following table shows the amount and cost of shares of common stock we repurchased for the three and six months ended June 30, 2015 and 2014 under the share repurchase program. The repurchased shares have not been retired and constitute authorized shares that are issued but not outstanding.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Number of shares repurchased		415,236		1,144,145		415,236		1,784,145
Cost of shares repurchased	$	8,588	$	26,699	$	8,588	$	42,759

Share-Based Compensation

As of June 30, 2015, we had restricted common stock, RSUs, SSARs and common stock option equity awards outstanding under three share-based compensation plans. As of June 30, 2015, we had approximately 3,942,000 shares reserved (inclusive of equity award forfeitures) and available for grant under the 2008 MedAssets, Inc. Long-Term Performance Incentive Plan (“LTPIP”).

The total share-based compensation expense related to equity awards was $5,399 and $5,592 for the three months ended June 30, 2015 and 2014, respectively. The total income tax benefit recognized in the condensed consolidated statements of operations for share-based compensation arrangements related to equity awards was $2,018 and $2,083 for the three months ended June 30, 2015 and 2014, respectively.

The total share-based compensation expense related to equity awards was $11,131 and $9,894 for the six months ended June 30, 2015 and 2014, respectively. The total income tax benefit recognized in the condensed consolidated statements of operations for share-based compensation arrangements related to equity awards was $4,160 and $3,686 for the six months ended June 30, 2015 and 2014, respectively. There were no capitalized share-based compensation expenses during the three and six months ended June 30, 2015.

Total share-based compensation expense (inclusive of restricted common stock, RSUs, SSARs and common stock options) for the three and six months ended June 30, 2015 and 2014 as reflected in our condensed consolidated statements of operations is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Cost of revenue	$	1,419	$	1,863	$	3,150	$	3,029
Product development		338		391		773		635
Selling and marketing		873		845		1,907		1,372
General and administrative		2,769		2,493		5,301		4,858
Total share-based compensation expense	$	5,399	$	5,592	$	11,131	$	9,894

12

MedAssets, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) – (continued)

(In thousands, except share and per share amounts)

Employee Stock Purchase Plan

In 2010, we established the MedAssets, Inc. Employee Stock Purchase Plan (the “Plan”). Under the Plan, eligible employees may purchase shares of our common stock at a discounted price through payroll deductions. The price per share of the common stock sold to participating employees will be 95% of the fair market value of our common stock on the applicable purchase date. The Plan requires that all stock purchased be held by participants for a period of 18 months from the purchase date. A total of 500,000 shares of our common stock are authorized for purchase under the Plan. For the six months ended June 30, 2015 and 2014, we purchased approximately 15,000 shares and 11,000 shares of our common stock under the Plan which amounted to approximately $275 and $253, respectively.

Equity Award Grants

Information regarding equity awards for the six months ended June 30, 2015 is as follows:

Restricted Stock Unit Equity Awards

During the first half of 2015, our Compensation Committee of our Board of Directors (the “Compensation Committee”) approved equity grants for certain eligible employees consisting of service-based and performance-based RSUs. The purpose of the equity grants are to assist the Company in attracting, retaining, motivating, and rewarding certain individuals of the Company. The equity grants are intended to promote the creation of long-term value for stockholders of the Company by closely aligning the interests of such individuals with those of the stockholders. A summary of the total approved equity grants during the six months ended June 30, 2015 is as follows:

	Total RSUs		Range of Grant Date Fair Values
RSUs — Service		796,636	$	18.44 – $20.32	(1)
RSUs — Performance		1,011,144	$	18.44 – $20.32	(2)
Total RSUs granted		1,807,780

(1) Service-based RSUs vest annually over three years of continuous service with the exception of certain equity awards granted to our Board that vest ratably each month through December 31, 2015; and

(2) Performance-based RSUs generally vest annually over three years of continuous service provided the performance metric is achieved and consist of a net revenue and a non-GAAP adjusted earnings per share (“EPS”) performance metric. The Company must achieve a minimum net revenue and non-GAAP adjusted EPS threshold before any performance-based RSUs begin vesting. If the minimum threshold is not met, the equity award holders will forfeit those awards.

8. INCOME TAXES

Income tax expense recorded during the three and six months ended June 30, 2015 reflected an effective income tax rate of 45.8% and 43.9%, respectively. Income tax expense recorded during the three and six months ended June 30, 2014 reflected an effective income tax rate of 41.1% and 42.6%, respectively.

9. INCOME PER SHARE

We calculate earnings per share (or “EPS”) in accordance with GAAP relating to earnings per share. Basic EPS is calculated by dividing reported net income by the weighted-average number of common shares outstanding for the reported period. Diluted EPS reflects the potential dilution that could occur if our stock options, SSARs, unvested restricted stock, RSUs and shares that were purchasable pursuant to our employee stock purchase plan were exercised and converted into our common shares during the reporting periods.

13

MedAssets, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) – (continued)

(In thousands, except share and per share amounts)

A reconciliation of basic and diluted weighted average shares outstanding for basic and diluted EPS for the three and six months ended June 30, 2015 and 2014 is as follows:

	Three Months Ended June 30,
	2015		2014
Numerator for Basic and Diluted Income Per Share:
Net income	$	6,314	$	6,596
Denominator for basic income per share weighted average shares		59,865,000		59,752,000
Effect of dilutive securities:
Stock options		128,000		222,000
SSARs		203,000		343,000
Restricted stock and RSUs		860,000		629,000
Denominator for diluted income per share — adjusted weighted average shares and assumed conversions		61,056,000		60,946,000
Basic income per share:
Basic net income from continuing operations	$	0.11	$	0.11
Diluted net income per share:
Diluted net income from continuing operations	$	0.10	$	0.11

	Six Months Ended June 30,
	2015		2014
Numerator for Basic and Diluted Income Per Share:
Net income	$	9,667	$	14,274
Denominator for basic income per share weighted average shares		59,801,000		60,189,000
Effect of dilutive securities:
Stock options		132,000		282,000
SSARs		181,000		330,000
Restricted stock and RSUs		718,000		618,000
Denominator for diluted income per share — adjusted weighted average shares and assumed conversions		60,832,000		61,419,000
Basic income per share:
Basic net income from continuing operations	$	0.16	$	0.24
Diluted net income per share:
Diluted net income from continuing operations	$	0.16	$	0.23

During the three and six months ended June 30, 2015 and 2014, the effect of certain dilutive securities have been excluded because the impact is anti-dilutive as a result of certain securities being “out of the money” with strike prices greater than the average market price during the periods presented. The following table provides a summary of those potentially dilutive securities that have been excluded from the above calculation of diluted EPS:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
SSARs		16,000		5,000		27,000		8,000

10. SEGMENT INFORMATION

We manage our business through two reportable business segments, Spend and Clinical Resource Management (or “SCM”) and Revenue Cycle Management (or “RCM”).

• Spend and Clinical Resource Management. Our SCM segment provides a comprehensive suite of technology-enabled services that help our customers manage their expense categories. Our solutions lower supply and medical device pricing and utilization by managing the procurement process through our group purchasing organization (“GPO”) portfolio of contracts, consulting services and business intelligence tools.

• Revenue Cycle Management. Our RCM segment provides a comprehensive suite of products and services spanning the hospital revenue cycle workflow — from patient access and financial responsibility, charge capture and integrity, pricing analysis, claims processing and denials management, payor contract management, revenue recovery and accounts receivable services. Our workflow solutions, together with our data management, compliance and audit tools, increase revenue capture and cash collections, reduce accounts receivable balances and increase regulatory compliance.

14

MedAssets, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) – (continued)

(In thousands, except share and per share amounts)

GAAP relating to segment reporting defines reportable segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing financial performance. The guidance indicates that financial information about segments should be reported on the same basis as that which is used by the chief operating decision maker in the analysis of performance and allocation of resources. Management of the Company, including our chief operating decision maker, uses what we refer to as Segment Adjusted EBITDA as its primary measure of profit or loss to assess segment performance and to determine the allocation of resources. We define Segment Adjusted EBITDA as segment net income (loss) before net interest expense, income tax expense (benefit), depreciation and amortization (“EBITDA”) as adjusted for other non-recurring, non-cash or non-operating items. Our chief operating decision maker uses Segment Adjusted EBITDA to facilitate a comparison of our operating performance on a consistent basis from period to period. Segment Adjusted EBITDA includes expenses associated with sales and marketing, general and administrative and product development activities specific to the operation of the segment. General and administrative corporate expenses that are not specific to the segments are not included in the calculation of Segment Adjusted EBITDA. These expenses include the costs to manage our corporate offices, interest expense on our credit facilities and expenses related to being a publicly-held company. All reportable segment revenues are presented net of inter-segment eliminations and represent revenues from external customers.

The following tables present Segment Adjusted EBITDA and financial position information as utilized by our chief operating decision maker. A reconciliation of Segment Adjusted EBITDA to consolidated net income is included. General corporate expenses are included in the “Corporate” line item. “RCM” represents the Revenue Cycle Management segment and “SCM” represents the Spend and Clinical Resource Management segment. Other assets and liabilities are included to provide a reconciliation to total assets and total liabilities.

15

MedAssets, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) – (continued)

(In thousands, except share and per share amounts)

The following tables represent our results of operations, by segment, for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Revenue:
SCM
Net administrative fees	$	69,723		$	70,091		$	147,484		$	146,337
Other service fees(1)		50,215			35,816			91,862			68,187
Total SCM net revenue		119,938			105,907			239,346			214,524
RCM
Revenue cycle technology		47,521			47,507			93,502			91,700
Revenue cycle services		22,965			22,001			43,157			40,058
Total RCM net revenue		70,486			69,508			136,659			131,758
Total net revenue		190,424			175,415			376,005			346,282
Operating expenses:
SCM		94,428			81,813			191,182			158,256
RCM		57,803			58,243			113,529			115,218
Corporate		14,630			13,086			30,321			25,755
Total operating expenses		166,861			153,142			335,032			299,229
Operating income (loss):
SCM		25,510			24,094			48,164			56,268
RCM		12,683			11,265			23,130			16,540
Corporate		(14,630	)		(13,086	)		(30,321	)		(25,755	)
Total operating income		23,563			22,273			40,973			47,053
Interest (expense)		(11,810	)		(11,114	)		(23,679	)		(22,287	)
Other (expense) income		(110	)		31			(48	)		89
Income before income taxes		11,643			11,190			17,246			24,855
Income tax expense		5,329			4,594			7,579			10,581
Net income	$	6,314		$	6,596		$	9,667		$	14,274
Segment Adjusted EBITDA
SCM	$	46,478		$	42,300		$	91,466		$	92,250
RCM		20,631			19,613			39,381			33,014
Total Segment Adjusted EBITDA	$	67,109		$	61,913		$	130,847		$	125,264
Corporate		(7,972	)		(7,589	)		(14,337	)		(14,223	)
Total Adjusted EBITDA(2)	$	59,137		$	54,324		$	116,510		$	111,041

(1) Other service fees primarily consists of consulting, services and technology fees.

(2) These are non-GAAP measures. See “Use of Non-GAAP Financial Measures” section for additional information.

	Six Months Ended June 30,
	2015		2014
Capital expenditures(1):
SCM	$	8,480	$	11,002
RCM		12,513		15,417
Corporate		1,990		1,660
Total	$	22,983	$	28,079

(1) Capital expenditures consist of purchases of property and equipment and capitalized software development costs (internal and external use).

16

MedAssets, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) – (continued)

(In thousands, except share and per share amounts)

	June 30, 2015		December 31, 2014
Financial Position:
Accounts receivable, net
SCM	$	67,434	$	74,337
RCM		61,778		53,129
Corporate		—		275
Total accounts receivable, net		129,212		127,741
Other assets
SCM		1,040,051		1,067,039
RCM		437,636		439,333
Corporate		67,061		84,683
Total other assets		1,544,748		1,591,055
Total assets	$	1,673,960	$	1,718,796
SCM accrued revenue share obligation	$	100,927	$	91,864
Deferred revenue
SCM		50,010		51,958
RCM		41,655		39,494
Total deferred revenue		91,665		91,452
Notes payable		507,292		556,000
Bonds payable		325,000		325,000
Other liabilities
SCM		29,019		36,938
RCM		18,373		23,952
Corporate		146,356		147,103
Total other liabilities		193,748		207,993
Total liabilities	$	1,218,632	$	1,272,309

GAAP for segment reporting requires that the total of the reportable segments’ measures of profit or loss be reconciled to the Company’s consolidated operating results. The following table reconciles Segment Adjusted EBITDA to consolidated net income for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
SCM Adjusted EBITDA	$	46,478		$	42,300		$	91,466		$	92,250
RCM Adjusted EBITDA		20,631			19,613			39,381			33,014
Total Segment Adjusted EBITDA		67,109			61,913			130,847			125,264
Depreciation		(9,713	)		(8,696	)		(19,237	)		(16,958	)
Depreciation (included in cost of revenue)		(989	)		(648	)		(1,967	)		(1,072	)
Amortization of intangibles		(14,931	)		(14,027	)		(29,987	)		(28,053	)
Income tax expense		(18,650	)		(14,562	)		(32,845	)		(30,952	)
Share-based compensation expense(1)		(2,518	)		(3,243	)		(5,609	)		(5,341	)
Purchase accounting adjustments(2)		(367	)		—			(828	)		—
Restructuring, acquisition and integration-related expenses(3)		(461	)		—			(2,126	)		(1,131	)
Total reportable segment net income		19,480			20,737			38,248			41,757
Corporate net loss		(13,166	)		(14,141	)		(28,581	)		(27,483	)
Consolidated net income	$	6,314		$	6,596		$	9,667		$	14,274

(1) Represents non-cash share-based compensation to both employees and directors. We believe excluding this non-cash expense allows us to compare our operating performance without regard to the impact of share-based compensation, which varies from period to period based on amount and timing of grants.

(2) Represents the effect on revenue of adjusting Sg2’s acquired deferred revenue balance to fair value at the acquisition date.

(3) Represents the amount attributable to restructuring, acquisition and integration-related costs which may include costs such as severance, retention, salaries relating to redundant positions, certain performance-related salary-based compensation, operating infrastructure costs and facility consolidation costs.

17

MedAssets, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) – (continued)

(In thousands, except share and per share amounts)

11. FAIR VALUE MEASUREMENTS

We measure fair value for financial instruments when a valuation is necessary, such as for impairment of long-lived and indefinite-lived assets when indicators of impairment exist in accordance with GAAP for fair value measurements and disclosures. This defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measures required under other accounting pronouncements, but does not change existing guidance as to whether or not an instrument is carried at fair value.

In estimating our fair value disclosures for financial instruments, we use the following methods and assumptions:

• Cash and cash equivalents. The carrying value reported in the condensed consolidated balance sheets for these items approximates fair value due to the high credit standing of the financial institutions holding these items and their liquid nature;

• Accounts receivable, net. The carrying value reported in the condensed consolidated balance sheets is net of allowances for doubtful accounts which includes a degree of counterparty non-performance risk;

• Accounts payable and current liabilities. The carrying value reported in the condensed consolidated balance sheets for these items approximates fair value, which is the likely amount for which the liability with short settlement periods would be transferred to a market participant with a similar credit standing as the Company;

• Notes payable. The carrying value of our long-term notes payable reported in the condensed consolidated balance sheets approximates fair value since they bear interest at variable rates. Refer to Note 5 for further information; and

• Bonds payable. The carrying value of our long-term bonds payable reported in the condensed consolidated balance sheets reflects par value. As of June 30, 2015, the Notes were trading at 103.3% of par value (Level 1). Refer to Note 5 for further information.

12. RELATED PARTY TRANSACTION

We had an agreement with John Bardis, formerly our chief executive officer, for the use of an airplane owned by JJB Aviation, LLC, a limited liability company owned by Mr. Bardis. We paid Mr. Bardis at market-based rates for the use of the airplane for business purposes. The audit committee of the board of directors reviews such usage of the airplane annually. During the six months ended June 30, 2015 and 2014, we incurred charges of zero and $756, respectively, related to transactions with Mr. Bardis. On February 17, 2015, the Company entered into a Transition and Consulting Agreement (the “Transition Agreement”) with Mr. Bardis in connection with Mr. Bardis’s resignation from his positions with the Company. Pursuant to the Transition Agreement, the Company’s agreement to use the airplane owned by JJB Aviation, LLC was terminated effective as of January 1, 2015.

13. SUBSEQUENT EVENTS

We have evaluated subsequent events for recognition or disclosure in the condensed consolidated financial statements filed on Form 10-Q with the SEC and no events have occurred that require disclosure, except for the following:

On August 4, 2015, the Company received written notification from Tenet Healthcare Corporation (“Tenet”) that the Company’s supply chain solutions agreement (“SCS Agreement”) with Tenet will not be renewed following its scheduled expiration on January 31, 2016. The SCS Agreement includes the provision of group purchasing and outsourced procurement services, and related supply chain technology products.

The net revenue from products and services under the SCS Agreement for the six-month period ended June 30, 2015 represents approximately $21,400, or approximately 5.7% of the Company’s net revenue during the same period. The Company estimates that the SCS Agreement contributed approximately $10,500 to operating income, before the allocation of segment and corporate indirect expenses, in the Spend and Clinical Resource Management segment during the six month period ended June 30, 2015.

18

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

NOTE ON FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain “forward-looking statements” (as defined in Section 27A of the U.S. Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that reflect our expectations regarding our future growth, results of operations, performance and business prospects and opportunities. Words such as “anticipates,” “believes,” “plans,” “expects,” “intends,” “estimates,” “projects,” “targets,” “can,” “could,” “may,” “should,” “will,” “would,” and similar expressions have been used to identify these forward-looking statements, but are not the exclusive means of identifying these statements. For purposes of this Quarterly Report on Form 10-Q, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. These statements reflect our current beliefs and expectations and are based on information currently available to us. As such, no assurance can be given that our future growth, results of operations, performance and business prospects and opportunities covered by such forward-looking statements will be achieved. We have no intention or obligation to update or revise these forward-looking statements to reflect new events, information or circumstances.

A number of important factors could cause our actual results to differ materially from those indicated by such forward-looking statements, including those described herein and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 as filed with the SEC on March 2, 2015.

Overview

We are a financial and performance improvement company providing technology-enabled products and services which together help mitigate the increasing financial challenges faced by hospitals, health systems and other non-acute healthcare providers. Our solutions are designed to reduce the total cost of care delivery, enhance operational efficiency, align clinical delivery of physicians and staff to advance care coordination and improve revenue performance primarily for hospitals and health systems. We believe implementation of our full suite of solutions has the potential to decrease supply costs, improve clinical resource utilization and increase revenue capture and cash flow. Our operations and customers are primarily located throughout the United States and, to a limited extent, Canada.

Management’s primary metrics to measure the consolidated financial performance of the business are net revenue, non-GAAP adjusted EBITDA, non-GAAP adjusted EBITDA margin and non-GAAP diluted adjusted EPS.

The table below highlights our primary results of operations for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,												Six Months Ended June 30,
	2015			2014			Change						2015			2014			Change
	Amount			Amount			Amount			%			Amount			Amount			Amount			%
	(Unaudited, in millions, except per share amounts)
Total net revenue	$	190.4		$	175.4		$	15.0			8.6	%	$	376.0		$	346.3		$	29.7			8.6	%
Operating income		23.6			22.3			1.3			5.8			41.0			47.1			(6.1	)		(13.0	)
Net income	$	6.3		$	6.6		$	(0.3	)		(4.3	%)	$	9.7		$	14.3		$	(4.6	)		(32.3	)%
Adjusted EBITDA(1)	$	59.1		$	54.3		$	4.8			8.9	%	$	116.5		$	111.0		$	5.5			4.9	%
Adjusted EBITDA margin(1)		31.1	%		31.0	%								31.0	%		32.1	%
Adjusted EPS(1)	$	0.31		$	0.30		$	0.01			3.3	%	$	0.62		$	0.62		$	—			0.0	%

(1) These are non-GAAP measures. See “Use of Non-GAAP Financial Measures” section for additional information.

The increase in total net revenue during the three months ended June 30, 2015 compared to the three months ended June 30, 2014 was primarily attributable to:

• growth in our SCM segment primarily driven by the contribution from Sg2 and higher advisory services revenue; and

• growth in our RCM segment primarily from an increase in our revenue cycle services.

The increase in operating income during the three months ended June 30, 2015 compared to the three months ended June 30, 2014, was attributable to the growth in total net revenue partially offset by higher operating expenses related to increased compensation expense for new and existing personnel, higher cost of revenue attributable to a higher percentage of net revenue being derived from service-based engagements, higher depreciation and amortization and higher restructuring, acquisition and integration-related expenses.

19

For the three months ended June 30, 2015, the increase in consolidated non-GAAP adjusted EBITDA compared to the three months ended June 30, 2014 was primarily attributable to revenue growth and improved operating efficiency in revenue cycle services.

The increase in total net revenue during the six months ended June 30, 2015 compared to the six months ended June 30, 2014 was primarily attributable to:

• growth in our SCM segment primarily driven by the contribution from Sg2 and higher advisory services revenue; and

• growth in our RCM segment from an increase in our revenue cycle services, an increase in our subscription services related to our revenue cycle technology tools.

The decrease in operating income during the six months ended June 30, 2015 compared to the six months ended June 30, 2014, was attributable to higher operating expenses related to increased compensation expense for new and existing personnel, inclusive of share-based compensation expense, higher cost of revenue attributable to a higher percentage of net revenue being derived from service-based engagements, higher depreciation and amortization and higher restructuring, acquisition and integration-related expenses, partially offset by the growth in net revenue discussed above.

For the six months ended June 30, 2015, the increase in consolidated non-GAAP adjusted EBITDA compared to the six months ended June 30, 2014 was primarily attributable to revenue growth including higher performance-related fee revenue earned partially offset by higher operating expenses during the period.

For the six months ended June 30, 2015, the decrease in consolidated non-GAAP adjusted EBITDA margin compared to the six months ended June 30, 2014 was primarily attributable to a higher proportion of lower margin services revenue and higher operating expenses.

Segment Structure and Revenue Streams

We deliver our solutions through two business segments, Spend and Clinical Resource Management (“SCM”) and Revenue Cycle Management (“RCM”). Management’s primary metrics to measure consolidated and segment financial performance are net revenue, non-GAAP adjusted EBITDA, non-GAAP adjusted EBITDA margin, non-GAAP diluted adjusted EPS and Segment Adjusted EBITDA. All of our revenues are from external customers and inter-segment revenues have been eliminated. See Note 10 of the Notes to Condensed Consolidated Financial Statements herein for discussion on Segment Adjusted EBITDA and certain items of our segment results of operations and financial position.

Spend and Clinical Resource Management

Our SCM segment provides a comprehensive suite of technology-enabled services that help our customers manage their expense categories. Our solutions lower supply and medical device pricing and utilization by managing the procurement process through our group purchasing organization (“GPO”) portfolio of contracts, consulting services and business intelligence tools. Our SCM segment revenue consists of the following components:

• Administrative fees and revenue share obligation. We earn administrative fees from manufacturers, distributors and other vendors (collectively referred to as “vendors”) of products and services with whom we have contracts under which our GPO customers may purchase products and services. Administrative fees represent a percentage, which we refer to as our administrative fee ratio, typically ranging from 0.25% to 3.00% of the purchases made by our GPO customers through contracts with our vendors.

Our GPO customers make purchases, and receive shipments, directly from the vendors. Generally on a monthly or quarterly basis, vendors provide us with a report describing the purchases made by our customers through our GPO vendor contracts, including associated administrative fees. We recognize revenue upon the receipt of these reports from vendors.

Some customer contracts require that a portion of our administrative fees be contingent upon achieving certain financial improvements, such as lower supply costs, which we refer to as performance targets. Contingent administrative fees are not recognized as revenue until we receive customer acceptance on the achievement of those contractual performance targets. Prior to receiving customer acceptance of performance targets, we record contingent administrative fees as deferred revenue on our condensed consolidated balance sheets. Often, recognition of this revenue occurs in periods subsequent to the recognition of the associated costs. Should we fail to meet a performance target, we may be contractually obligated to refund some or all of the contingent fees. Additionally, in many cases, we are contractually obligated to pay a portion of the administrative fees to our hospital and health system customers.

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Typically this amount, which we refer to as our revenue share obligation, is calculated as a percentage of administrative fees earned on a particular customer’s purchases from our vendors. Our total net revenue on our consolidated statements of operations is shown net of the revenue share obligation.

• Other service fees. The following items are included as “Other service fees” in our condensed consolidated statements of operations:

• Consulting fees. We consult with our customers regarding the costs and utilization of medical devices and physician preference items (“PPI”) and the efficiency and quality of their key clinical service lines. Our consulting projects are typically fixed fee projects with an average duration of six to nine months, and the related revenues are earned as services are rendered. We generate revenue from consulting contracts that also include performance targets. The performance targets generally relate to committed financial improvement to our customers from the use and implementation of initiatives that result from our consulting services. Performance targets are measured as our strategic initiatives are identified and implemented, and the financial improvement can be quantified by the customer. Prior to receiving customer acceptance of performance targets, we record contingent consulting fees as deferred revenue on our condensed consolidated balance sheets. Often, recognition of this revenue occurs in periods subsequent to the recognition of the associated costs. Should we fail to meet a performance target, we may be contractually obligated to refund some or all of the contingent fees.

• Subscription fees. We also offer technology-enabled services that provide spend management analytics and data services to improve operational efficiency, reduce supply costs, and increase transparency across spend management processes. We earn fixed subscription fees on a monthly basis for these Company-hosted SaaS-based solutions.

Revenue Cycle Management

Our RCM segment provides a comprehensive suite of products and services spanning the hospital revenue cycle workflow — from patient access and financial responsibility, charge capture and integrity, pricing analysis, claims processing and denials management, payor contract management, revenue recovery and accounts receivable services. Our workflow solutions, together with our data management, compliance and audit tools, increase revenue capture and cash collections, reduce accounts receivable balances and increase regulatory compliance. Our RCM segment revenue is listed under the caption “Other service fees” on our condensed consolidated statements of operations and consists of the following components:

• Subscription and implementation fees. We earn fixed subscription fees on a monthly or annual basis on multi-year contracts for customer access to our SaaS-based solutions. We may also charge our customers non-refundable upfront fees for implementation of our SaaS-based services. These non-refundable upfront fees are earned over the subscription period or estimated customer relationship period, whichever is longer.

We defer costs related to implementation services and expense these costs in proportion to the revenue earned over the subscription period or customer relationship period, as applicable.

In addition, we defer upfront sales commissions related to subscription and implementation fees and expense these costs ratably over the related contract term.

• Transaction fees. For certain of our revenue cycle management solutions, we earn fees that vary based on the volume of customer transactions or enrolled members.

• Service fees. For certain of our RCM solutions, we earn fees based on a percentage of cash remittances collected and fixed-fee consulting arrangements. The related revenues are earned as services are rendered.

Operating Expenses

We classify our operating expenses as follows:

• Cost of revenue. Cost of revenue primarily consists of the direct labor costs incurred to generate our revenue. Direct labor costs consist primarily of salaries, benefits, incentive compensation and other direct costs and share-based compensation expenses related to personnel who provide services to implement our solutions for our customers (indirect labor costs for these personnel are included in general and administrative expenses). As the majority of our services are generated internally, our costs to provide these services are primarily labor-driven. A less significant portion of our cost of revenue consists of costs of third-party products and services and customer reimbursed out-of-pocket costs. Cost of revenue does not include certain expenses relating to hosting our services and providing support and related data center capacity (which is included in general and administrative expenses), and allocated amounts for rent,

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depreciation, amortization or other indirect operating costs because we do not consider the inclusion of these items in cost of revenue relevant to our business. However, cost of revenue does include the amortization for the cost of software to be sold, leased, or otherwise marketed. In addition, any changes in revenue mix between our SCM and RCM segments, including changes in revenue mix towards SaaS-based revenue and consulting services, may cause significant fluctuations in our cost of revenue and have a favorable or unfavorable impact on operating income.

• Product development expenses. Product development expenses primarily consist of the salaries, benefits, incentive compensation and share-based compensation expense of the technology professionals who develop, support and maintain our software-related products and services. Product development expenses are net of capitalized software development costs for both internal and external use.

• Selling and marketing expenses. Selling and marketing expenses consist primarily of costs related to marketing programs (including trade shows and brand messaging), personnel-related expenses for sales and marketing employees (including salaries, benefits, incentive compensation and share-based compensation expense), certain meeting costs and travel-related expenses.

• General and administrative expenses. General and administrative expenses consist primarily of personnel-related expenses for administrative employees and indirect time related to operational service-based employees (including salaries, benefits, incentive compensation and share-based compensation expense) and travel-related expenses, occupancy and other indirect costs, insurance costs, professional fees, and other general overhead expenses.

• Restructuring, acquisition and integration-related expenses. Restructuring, acquisition and integration-related expenses may consist of: (i) costs incurred to complete acquisitions including due diligence, consulting and other related fees; (ii) integration type costs relating to our completed acquisitions; (iii) other management restructuring costs; and (iv) acquisition-related fees associated with unsuccessful acquisition attempts.

• Depreciation. Depreciation expense consists primarily of depreciation of fixed assets and the amortization of software, including capitalized costs of software developed for internal use.

• Amortization of intangibles. Amortization of intangibles includes the amortization of all identified intangible assets (with the exception of software), primarily resulting from acquisitions.

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Results of Operations

Consolidated Tables

The following table sets forth our consolidated results of operations grouped by segment for the periods shown:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(Unaudited, in thousands)
Net revenue:
Spend and Clinical Resource Management
Net administrative fees	$	69,723		$	70,091		$	147,484		$	146,337
Other service fees		50,215			35,816			91,862			68,187
Total Spend and Clinical Resource Management		119,938			105,907			239,346			214,524
Revenue Cycle Management		70,486			69,508			136,659			131,758
Total net revenue		190,424			175,415			376,005			346,282
Operating expenses:
Spend and Clinical Resource Management		94,428			81,813			191,182			158,256
Revenue Cycle Management		57,803			58,243			113,529			115,218
Total segment operating expenses		152,231			140,056			304,711			273,474
Operating income
Spend and Clinical Resource Management		25,510			24,094			48,164			56,268
Revenue Cycle Management		12,683			11,265			23,130			16,540
Total segment operating income		38,193			35,359			71,294			72,808
Corporate expenses(1)		14,630			13,086			30,321			25,755
Operating income		23,563			22,273			40,973			47,053
Other income (expense):
Interest expense		(11,810	)		(11,114	)		(23,679	)		(22,287	)
Other (expense) income		(110	)		31			(48	)		89
Income before income taxes		11,643			11,190			17,246			24,855
Income tax expense		5,329			4,594			7,579			10,581
Net income		6,314			6,596			9,667			14,274
Reportable segment adjusted EBITDA(2):
Spend and Clinical Resource Management		46,478			42,300			91,466			92,250
Revenue Cycle Management	$	20,631		$	19,613		$	39,381		$	33,014
Reportable segment adjusted EBITDA margin(3):
Spend and Clinical Resource Management		38.8	%		39.9	%		38.2	%		43.0	%
Revenue Cycle Management		29.3	%		28.2	%		28.8	%		25.1	%

(1) Represents the expenses of corporate office operations.

(2) Management’s primary metric of segment profit or loss is segment adjusted EBITDA. See Note 10 of the Notes to Condensed Consolidated Financial Statements.

(3) Reportable segment adjusted EBITDA margin represents each reportable segment’s adjusted EBITDA as a percentage of each segment’s respective net revenue.

Comparison of the Three Months Ended June 30, 2015 and June 30, 2014

	Three Months Ended June 30,
	2015					2014					Change
	Amount		% of Revenue			Amount		% of Revenue			Amount			%
	(Unaudited, in thousands)
Net revenue:
Spend and Clinical Resource Management
Net administrative fees	$	69,723		36.6	%	$	70,091		40.0	%	$	(368	)		-0.5	%
Other service fees		50,215		26.4			35,816		20.4			14,399			40.2
Total Spend and Clinical Resource Management		119,938		63.0			105,907		60.4			14,031			13.2
Revenue Cycle Management		70,486		37.0			69,508		39.6			978			1.4
Total net revenue	$	190,424		100.0	%	$	175,415		100.0	%	$	15,009			8.6	%

Total net revenue. Total net revenue for the three months ended June 30, 2015 was $190.4 million, an increase of approximately $15.0 million, or 8.6%, from total net revenue of $175.4 million for the three months ended June 30, 2014. The increase in total net revenue was comprised of a $14.0 million increase in SCM revenue and a $1.0 million increase in RCM revenue. For the three months ended June 30, 2015 and 2014, performance-related fee revenue as a percentage of consolidated net revenue amounted to approximately 2.6% and 1.7%, respectively. Revenue may fluctuate materially from period to period based upon a number of factors including achieving, and thereafter receiving, customer acknowledgement of the financial performance targets.

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Spend and Clinical Resource Management net revenue. SCM net revenue for the three months ended June 30, 2015 was $119.9 million, an increase of $14.0 million, or 13.2%, from net revenue of $105.9 million for the three months ended June 30, 2014. The increase was the result of an increase in other service fees of $14.4 million, or 40.2%, primarily related to the revenue contribution by Sg2 and an increase in advisory related services, partially offset by a slight decline in net administrative fees.

We may have fluctuations in our net administrative fee revenue in future periods that are attributable to: (i) the timing and variability of vendor reporting and customer acknowledgement of achieved performance targets; (ii) changes in customer purchase volume under our GPO contracts; and (iii) fluctuations in our revenue share obligation based on the mix of customers who are entitled to a higher revenue share percentage due to increased purchasing volume in addition to an increase in the number of fixed-fee arrangements.

Revenue Cycle Management net revenue. RCM net revenue for the three months ended June 30, 2015 was $70.5 million, an increase of $1.0 million, or 1.4 %, from net revenue of $69.5 million for the three months ended June 30, 2014. The increase was attributable to higher revenue from our comprehensive revenue cycle service engagements, inclusive of performance-related fee revenue. As we engage new customers, renew existing customers and complete existing contracts, we may experience fluctuations in our revenue cycle services financial performance as the business is characterized by a relatively small number of agreements, which each relate to large amounts of revenue.

Total Operating Expenses

	Three Months Ended June 30,
	2015					2014					Change
	Amount		% of Revenue			Amount		% of Revenue			Amount			%
	(Unaudited, in thousands)
Operating expenses:
Cost of revenue	$	47,124		24.7	%	$	40,361		23.0	%	$	6,763			16.8	%
Product development expenses		7,451		3.9			6,642		3.8			809			12.2
Selling and marketing expenses		23,849		12.5			20,721		11.8			3,128			15.1
General and administrative expenses		59,399		31.2			59,529		33.9			(130	)		(0.2	)
Restructuring, acquisition and integration-related expenses		556		0.3			—		0.0			556			100.0
Depreciation		13,551		7.1			11,862		6.8			1,689			14.2
Amortization of intangibles		14,931		7.8			14,027		8.0			904			6.4
Total operating expenses		166,861		87.6			153,142		87.3			13,719			9.0
Operating expenses by segment:
Spend and Clinical Resource Management		94,428		49.6			81,813		46.6			12,615			15.4
Revenue Cycle Management		57,803		30.4			58,243		33.2			(440	)		(0.8	)
Total segment operating expenses		152,231		79.9			140,056		79.8			12,175			8.7
Corporate expenses		14,630		7.7			13,086		7.5			1,544			11.8
Total operating expenses	$	166,861		87.6	%	$	153,142		87.3	%	$	13,719			9.0	%

Cost of revenue. Cost of revenue for the three months ended June 30, 2015 was $47.1 million, or 24.7% of total net revenue, an increase of $6.8 million, or 16.8%, from cost of revenue of $40.3 million, or 23.0% of total net revenue, for the three months ended June 30, 2014. The increase was primarily attributable to the previously discussed revenue contribution of Sg2 resulting in an increase in labor costs associated with service-related engagements in our SCM segment. In addition, for our engagements that include achieving financial performance targets, we recognize revenue based on when the financial performance targets are achieved and such achievement is acknowledged by our customers. There are instances during a reporting period where we incur a higher amount of direct costs with no associated revenue for these types of engagements. Also, we may record revenue in a reporting period where the direct costs have been recorded in a previous period. These events may affect period over period comparability.

Product development expenses. Product development expenses for the three months ended June 30, 2015 were $7.4 million, or 3.9% of total net revenue, an increase of approximately $0.8 million, or 12.2%, from product development expenses of $6.6 million, or 3.8% of total net revenue, for the three months ended June 30, 2014. The increase was attributable to a $1.3 million increase in compensation expense partially offset by a $0.5 million decrease in professional fees. Our product development capitalization rate for the three months ended June 30, 2015 and 2014 was 56.8% and 65.3%, respectively.

Selling and marketing expenses. Selling and marketing expenses for the three months ended June 30, 2015 were $23.8 million, or 12.5% of total net revenue, an increase of $3.1 million, or 15.1%, from selling and marketing expenses of $20.7 million, or 11.8%

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of total net revenue, for the three months ended June 30, 2014. The increase was primarily attributable to an increase in compensation expense. Total expenses related to our customer and vendor meeting amounted to $6.1 million and $6.0 million for the three months ended June 30, 2015 and 2014, respectively.

General and administrative expenses. General and administrative expenses for the three months ended June 30, 2015 were $59.4 million, or 31.2% of total net revenue, a decrease of $0.1 million, or 0.2%, from general and administrative expenses of $59.5 million, or 33.9% of total net revenue, for the three months ended June 30, 2014. The decrease was attributable to a $0.4 million decrease in legal expense; a $0.4 million decrease in transportation expense; and a $0.2 million decrease in professional fees. The decrease was partially offset by a $0.6 million increase in rent expense and a $0.3 million increase in share-based compensation.

Restructuring, acquisition and integration-related expenses. Restructuring, acquisition and integration-related expenses for the three months ended June 30, 2015 were $0.6 million, an increase of $0.6 million from restructuring, acquisition and integration-related expenses of zero for the three months ended June 30, 2014. The increase was attributable to the costs associated with certain workforce reductions within the Company and to senior management changes during the period. Refer to Note 3 of the Notes to Condensed Consolidated Financial Statements for further details.

Depreciation. Depreciation expense for the three months ended June 30, 2015 was $13.6 million, or 7.1% of total net revenue, an increase of $1.7 million, or 14.2%, from depreciation of $11.9 million, or 6.8% of total net revenue, for the three months ended June 30, 2014. The increase was attributable to depreciation resulting from purchases of property and equipment inclusive of increases to capitalized software development. As a result of our capital investments, we expect our depreciation expense to increase in future periods.

Amortization of intangibles. Amortization of intangibles for the three months ended June 30, 2015 was $14.9 million, or 7.8% of total net revenue, an increase of $0.9 million, or 6.4%, from amortization of intangibles of $14.0 million, or 8.0% of total net revenue, for the three months ended June 30, 2014. The increase in amortization expense compared to the prior period was due to incremental amortization expense associated with acquisitions that occurred in the prior year partially offset by certain identified intangible assets that are nearing the end of their useful life under an accelerated method of amortization.

Segment Operating Expenses

Spend and Clinical Resource Management expenses. SCM operating expenses for the three months ended June 30, 2015 were $94.4 million, or 49.6% of total net revenue, an increase of $12.6 million, or 15.4%, from approximately $81.8 million, or 46.6% of total net revenue for the three months ended June 30, 2014. As a percentage of SCM segment net revenue, segment expenses were 78.7% and 77.2% for the three months ended June 30, 2015 and 2014, respectively.

The increase was primarily attributable to a $7.4 million increase in cost of revenue in connection with higher direct labor costs; a $3.1 million increase in compensation expense, mostly related to employees of Sg2 (acquired near the end of the third quarter of 2014) and increased service and sales resources; a $1.5 million increase in the amortization of intangibles; a $0.6 million increase in depreciation expense; a $0.5 million increase in telecommunications expense; a $0.5 million increase in restructuring, acquisition and integration-related costs; a $0.4 million increase in professional fees; and a $0.4 million increase in rent expense. The increase was partially offset by a $1.3 million decrease in marketing expenses and a $0.5 million decrease in share-based compensation expense.

Revenue Cycle Management expenses. RCM operating expenses for the three months ended June 30, 2015 were $57.8 million, or 30.4% of total net revenue, a decrease of $0.4 million, or 0.8%, from $58.2 million, or 33.2% of total net revenue, for the three months ended June 30, 2014. As a percentage of RCM segment net revenue, segment expenses were 82.0% and 83.8% for the three months ended June 30, 2015 and 2014, respectively.

The decrease was attributable to a $1.0 million decrease in professional fees; a $0.7 million decrease in other operating infrastructure expense; a $0.6 million decrease in amortization of intangibles as certain intangible assets reached the end of their useful life; a $0.6 million decrease in telecommunications expense; and a $0.2 million decrease in share-based compensation. The decrease was partially offset by a $1.1 million increase in compensation expense; a $1.0 million increase in marketing expenses; a $0.4 million increase in depreciation expense; and a $0.2 million increase in rent expense.

Corporate expenses. Corporate expenses for the three months ended June 30, 2015 were $14.6 million, an increase of $1.5 million, or 11.8%, from $13.1 million for the three months ended June 30, 2014, or 7.7% and 7.5% of total net revenue, respectively. The increase in corporate expenses was attributable to a $0.7 million increase in depreciation expense; a $0.6 million increase in share-based compensation expense; and a $0.5 million increase in compensation expense. The increase was partially offset by a $0.3 million decrease in transportation expense.

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Non-operating Expenses

Interest expense. Interest expense for the three months ended June 30, 2015 was $11.8 million, an increase of $0.7 million from interest expense of $11.1 million for the three months ended June 30, 2014. The increase in interest expense was primarily due to a higher level of indebtedness compared to the prior year as a result of financing the Sg2 acquisition in September 2014. As of June 30, 2015, we had total indebtedness of $832.2 million compared to $786.8 million as of June 30, 2014. As a result of our higher debt balance, we expect interest expense to increase in future periods. See Note 5 of the Notes to Condensed Consolidated Financial Statements herein for more details.

Other (expense) income. Other expense for the three months ended June 30, 2015 was $0.1 million comprised of a $0.2 million loss on sale of assets partially offset by $0.1 million of rental income. Other income for the three months ended June 30, 2015 and 2014 was approximately $0.1 million comprised mainly of rental income.

Income tax expense. Income tax expense for the three months ended June 30, 2015 was $5.3 million, an increase of $0.7 million from an income tax expense of $4.6 million for the three months ended June 30, 2014, which was primarily attributable to increased income before taxes. Income tax expense recorded during the three months ended June 30, 2015 and 2014 reflected an effective income tax rate of 45.8% and 41.1%, respectively. The increase in our effective tax rate was primarily driven by an increase in state income tax expense associated with state legislative changes pertaining to tax rates and apportionment of our taxable income.

Comparison of the Six Months Ended June 30, 2015 and June 30, 2014

	Six Months Ended June 30,
	2015					2014					Change
	Amount		% of Revenue			Amount		% of Revenue			Amount		%
	(Unaudited, in thousands)
Net revenue:
Spend and Clinical Resource Management
Net administrative fees	$	147,484		39.2	%	$	146,337		42.3	%	$	1,147		0.8	%
Other service fees		91,862		24.4			68,187		19.7			23,675		34.7
Total Spend and Clinical Resource Management		239,346		63.7			214,524		62.0			24,822		11.6
Revenue Cycle Management		136,659		36.3			131,758		38.0			4,901		3.7
Total net revenue	$	376,005		100.0	%	$	346,282		100.0	%	$	29,723		8.6	%

Total net revenue. Total net revenue for the six months ended June 30, 2015 was $376.0 million, an increase of approximately $29.7 million, or 8.6%, from total net revenue of $346.3 million for the six months ended June 30, 2014. The increase in total net revenue was comprised of a $24.8 million increase in SCM revenue and a $4.9 million increase in RCM revenue. For the six months ended June 30, 2015 and 2014, performance-related fee revenue as a percentage of consolidated net revenue amounted to approximately 3.7% and 2.8%, respectively. Revenue may fluctuate materially from period to period based upon a number of factors including achieving, and thereafter receiving, customer acknowledgement of the financial performance targets.

Spend and Clinical Resource Management net revenue. SCM net revenue for the six months ended June 30, 2015 was $239.3 million, an increase of $24.8 million, or 11.6%, from net revenue of $214.5 million for the six months ended June 30, 2014. The increase was primarily related to the revenue contribution by Sg2, increased advisory services and a slight increase in net administrative fees of $1.1 million.

We may have fluctuations in our net administrative fee revenue in future periods that are attributable to: (i) the timing and variability of vendor reporting and customer acknowledgement of achieved performance targets; (ii) changes in customer purchase volume under our GPO contracts; and (iii) fluctuations in our revenue share obligation based on the mix of customers who are entitled to a higher revenue share percentage due to increased purchasing volume in addition to an increase in the number of fixed-fee arrangements.

Revenue Cycle Management net revenue. RCM net revenue for the six months ended June 30, 2015 was $136.7 million, an increase of $4.9 million, or 3.7%, from net revenue of $131.8 million for the six months ended June 30, 2014. The increase was attributable to a $3.1 million increase in revenue from our comprehensive revenue cycle service engagements, inclusive of performance-related fee revenue, and a $1.8 million increase in revenue from our revenue cycle technology tools. As we engage new customers, renew existing customers and complete existing contracts, we may experience fluctuations in our revenue cycle services financial performance as the business is characterized by a relatively small number of agreements, which each relate to large amounts of revenue.

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Total Operating Expenses

	Six Months Ended June 30,
	2015					2014					Change
	Amount		% of Revenue			Amount		% of Revenue			Amount			%
	(Unaudited, in thousands)
Operating expenses:
Cost of revenue	$	90,057		24.0	%	$	77,792		22.5	%	$	12,265			15.8	%
Product development expenses		15,851		4.2			14,039		4.1			1,812			12.9
Selling and marketing expenses		43,360		11.5			35,914		10.4			7,446			20.7
General and administrative expenses		123,884		32.9			118,332		34.2			5,552			4.7
Restructuring, acquisition and integration-related expenses		4,995		1.3			1,697		0.5			3,298			194.3
Depreciation		26,898		7.2			23,402		6.8			3,496			14.9
Amortization of intangibles		29,987		8.0			28,053		8.1			1,934			6.9
Total operating expenses		335,032		89.1			299,229		86.4			35,803			12.0
Operating expenses by segment:
Spend and Clinical Resource Management		191,182		50.8			158,256		45.7			32,926			20.8
Revenue Cycle Management		113,529		30.2			115,218		33.3			(1,689	)		(1.5	)
Total segment operating expenses		304,711		81.0			273,474		79.0			31,237			11.4
Corporate expenses		30,321		8.1			25,755		7.4			4,566			17.7
Total operating expenses	$	335,032		89.1	%	$	299,229		86.4	%	$	35,803			12.0	%

Cost of revenue. Cost of revenue for the six months ended June 30, 2015 was $90.1 million, or 24.0% of total net revenue, an increase of $12.3 million, or 15.8%, from cost of revenue of $77.8 million, or 22.5% of total net revenue, for the six months ended June 30, 2014. The increase was primarily attributable to the previously discussed revenue contribution of Sg2 resulting in an increase in labor costs associated with service-related engagements in our SCM segment. In addition, for our engagements that include achieving financial performance targets, we recognize revenue based on when the financial performance targets are achieved and such achievement is acknowledged by our customers. There are instances during a reporting period where we incur a higher amount of direct costs with no associated revenue for these types of engagements. Also, we may record revenue in a reporting period where the direct costs have been recorded in a previous period. These events may affect period over period comparability.

Product development expenses. Product development expenses for the six months ended June 30, 2015 were $15.9 million, or 4.2% of total net revenue, an increase of approximately $1.8 million, or 12.9%, from product development expenses of $14.1 million, or 4.1% of total net revenue, for the six months ended June 30, 2014. The increase was attributable to a $2.1 million increase in compensation expense partially offset by a $0.3 million decrease in professional fees. Our product development capitalization rate for the six months ended June 30, 2015 and 2014 was 55.6% and 59.8%, respectively.

Selling and marketing expenses. Selling and marketing expenses for the six months ended June 30, 2015 were $43.3 million, or 11.5% of total net revenue, an increase of $7.4 million, or 20.7%, from selling and marketing expenses of $35.9 million, or 10.4% of total net revenue, for the six months ended June 30, 2014. The increase was attributable to a $6.4 million increase in compensation expense; a $0.5 million increase in share-based compensation; a $0.3 million increase in other operating infrastructure expense; and a $0.2 million increase in advertising expense. Total expenses related to our customer and vendor meeting amounted to $6.1 million and $6.0 million for the six months ended June 30, 2015 and 2014, respectively.

General and administrative expenses. General and administrative expenses for the six months ended June 30, 2015 were $123.9 million, or 32.9% of total net revenue, an increase of $5.6 million, or 4.7%, from general and administrative expenses of $118.3 million, or 34.2% of total net revenue, for the six months ended June 30, 2014. The increase was attributable to a $3.3 million increase in compensation expense; a $2.3 million increase in telecommunications expense; a $1.4 million increase in rent expense; a $0.4 million increase in share-based compensation; and a $0.4 million increase in professional fees. The increase was partially offset by a $1.3 million decrease in transportation expense; a $0.6 million decrease in legal expense; and a $0.3 million decrease in other operating infrastructure expense.

Restructuring, acquisition and integration-related expenses. Restructuring, acquisition and integration-related expenses for the six months ended June 30, 2015 were $5.0 million, or 1.3% of total net revenue, an increase of $3.3 million from restructuring, acquisition and integration-related expenses of $1.7 million, or 0.5% of total net revenue, for the six months ended June 30, 2014. The increase was attributable to the costs associated with certain workforce reductions within the Company and to senior management changes during the period. Refer to Note 3 of the Notes to Condensed Consolidated Financial Statements for further details.

Depreciation. Depreciation expense for the six months ended June 30, 2015 was $26.9 million, or 7.2% of total net revenue, an increase of $3.5 million, or 14.9%, from depreciation of $23.4 million, or 6.8% of total net revenue, for the six months ended June 30, 2014. The increase was attributable to depreciation resulting from purchases of property and equipment inclusive of increases to capitalized software development. As a result of our capital investments, we expect our depreciation expense to increase in future periods.

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Amortization of intangibles. Amortization of intangibles for the six months ended June 30, 2015 was $30.0 million, or 8.0% of total net revenue, an increase of $1.9 million, or 6.9%, from amortization of intangibles of $28.1 million, or 8.1% of total net revenue, for the six months ended June 30, 2014. The increase in amortization expense compared to the prior year was due to incremental amortization expense associated with acquisitions that occurred in the prior year partially offset by certain identified intangible assets that are nearing the end of their useful life under an accelerated method of amortization.

Segment Operating Expenses

Spend and Clinical Resource Management expenses. SCM operating expenses for the six months ended June 30, 2015 were $191.2 million, or 50.8% of total net revenue, an increase of $32.9 million, or 20.8%, from approximately $158.3 million, or 45.7% of total net revenue for the six months ended June 30, 2014. As a percentage of SCM segment net revenue, segment expenses were 79.9% and 73.8% for the six months ended June 30, 2015 and 2014, respectively.

The increase was primarily attributable to: a $14.3 million increase in cost of revenue in connection with higher direct labor costs; a $9.7 million increase in compensation expense, mostly related to employees of Sg2 (acquired near the end of the third quarter of 2014) and increased service and sales resources; a $3.0 million increase in the amortization of intangibles; a $1.8 million increase in telecommunications expense; a $1.4 million increase in professional fees; a $1.2 million increase in restructuring, acquisition and integration-related costs; a $1.2 million increase in depreciation expense; a $0.9 million increase in rent expense; a $0.9 million increase in other operating infrastructure expense; and a $0.3 million increase in share-based compensation expense. The increase was partially offset by a $1.3 million decrease in marketing expenses and $0.5 million decrease in other meetings expense.

Revenue Cycle Management expenses. RCM operating expenses for the six months ended June 30, 2015 were $113.5 million, or 30.2% of total net revenue, a decrease of $1.7 million, or 1.5%, from $115.2 million, or 33.3% of total net revenue, for the six months ended June 30, 2014. As a percentage of RCM segment net revenue, segment expenses were 83.1% and 87.4% for the six months ended June 30, 2015 and 2014, respectively.

The decrease was attributable to: a $2.1 million decrease in cost of revenue primarily within revenue cycle services that was impacted by a large business process outsourcing agreement that ended at the end of 2014; a $1.3 million decrease in professional fees; a $1.1 million decrease in amortization of intangibles as certain intangible assets reached the end of their useful life; a $0.7 million decrease in telecommunications expense; and a $0.3 million decrease in other operating infrastructure expense. The decrease was partially offset by a $1.4 million increase in compensation expense; a $1.1 million increase in depreciation expense; a $1.0 million increase in marketing expenses; and a $0.3 million increase in rent expense.

Corporate expenses. Corporate expenses for the six months ended June 30, 2015 were $30.3 million, an increase of $4.6 million, or 17.7%, from $25.7 million for the six months ended June 30, 2014, or 8.1% and 7.4% of total net revenue, respectively. The increase in corporate expenses was attributable to: a $2.3 million increase in restructuring, acquisition and integration-related costs associated with the reduction in workforce and to certain changes in senior management during the period; a $1.2 million increase in depreciation expense; a $1.0 million increase in share-based compensation expense; a $0.7 million increase in compensation expense; a $0.4 million increase in advertising expense; and a $0.2 million increase in telecommunications expense. The increase was partially offset by a $0.9 million decrease in transportation expense and a $0.3 million decrease in other operating infrastructure expense.

Non-operating Expenses

Interest expense. Interest expense for the six months ended June 30, 2015 was $23.7 million, an increase of $1.4 million from interest expense of $22.3 million for the six months ended June 30, 2014. The increase in interest expense was primarily due to a higher level of indebtedness compared to the prior year as a result of financing the Sg2 acquisition in September 2014. As of June 30, 2015, we had total indebtedness of $832.3 million compared to $786.8 million as of June 30, 2014. As a result of our higher debt balance, we expect interest expense to increase in future periods. See Note 5 of the Notes to Condensed Consolidated Financial Statements herein for more details.

Other (expense) income. Other expense for the six months ended June 30, 2015 was $0.1 million comprised of a $0.2 million loss on sale of assets partially offset by $0.1 million of rental income. Other income for the six months ended June 30, 2015 and 2014 was approximately $0.1 million comprised mainly of rental income.

Income tax expense. Income tax expense for the six months ended June 30, 2015 was $7.6 million, a decrease of $3.0 million from an income tax expense of $10.6 million for the six months ended June 30, 2014, which was primarily attributable to decreased income before taxes. Income tax expense recorded during the six months ended June 30, 2015 and 2014 reflected an effective income tax rate of 43.9% and 42.6%, respectively. The increase in our effective tax rate was primarily driven by an increase in state income tax expense due to state legislative changes pertaining to tax rates and apportionment of our taxable income.

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Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. We base our estimates and judgments on historical experience and other assumptions that we find reasonable under the circumstances. Actual results may differ materially from such estimates under different conditions.

Management considers an accounting policy to be critical if the accounting policy requires management to make particularly difficult, subjective or complex judgments about matters that are inherently uncertain. A summary of our critical accounting policies is included in Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of Part II of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. There have been no material changes to the critical accounting policies disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

Liquidity and Capital Resources

Our primary cash requirements involve payment of ordinary expenses, working capital fluctuations, debt service obligations and capital expenditures. Our capital expenditures typically consist of software purchases, internal product development capitalization and computer hardware purchases. Historically, the acquisition of complementary businesses has resulted in a significant use of cash. Our principal sources of funds have primarily been cash provided by operating activities and borrowings under our credit facilities.

We believe we currently have adequate cash flow from operations, capital resources, available credit facilities and liquidity to meet our cash flow requirements including the following near term obligations (next 12 months): (i) our working capital needs; (ii) our debt service obligations; (iii) planned capital expenditures; (iv) our revenue share obligation and rebate payments; and (v) estimated federal and state income tax payments.

We expect our cash tax liability to increase in 2015 and in the future, primarily attributable to exhausting all of our federal net operating loss and tax credit carryforwards.

We have not historically utilized borrowings available under our credit agreement to fund operations. We implemented an auto-borrowing plan pursuant to which all excess cash on hand is used to repay our swing line credit facility on a daily basis. As a result, any excess cash on hand will be used to repay our swing line balance, if any, on a daily basis. See Note 5 of the Notes to Condensed Consolidated Financial Statements for further details.

As of June 30, 2015, we had $122.0 million drawn on our revolving credit facility resulting in $177.0 million of availability under our revolving credit facility inclusive of the swing line component (after giving effect to $1.0 million of outstanding but undrawn letters of credit on such date). We may observe fluctuations in cash flows provided by operations from period to period. Certain events may cause us to draw additional amounts under our swing line or revolving facility and may include the following:

• changes in working capital due to inconsistent timing of cash receipts and payments for major recurring items such as trade accounts payable, revenue share obligation, incentive compensation, changes in deferred revenue, and other various items;

• acquisitions; and

• unforeseeable events or transactions.

We may continue to pursue other acquisitions or investments in the future. We may also increase our capital expenditures consistent with our anticipated growth in infrastructure, software solutions, and personnel, and as we expand our market presence.

Cash provided by operating activities may not be sufficient to fund such expenditures. Accordingly, in addition to the use of our available revolving credit facility, we may need to engage in additional equity or debt financings to secure additional funds for such purposes. Any debt financing obtained by us in the future could include restrictive covenants relating to our capital raising activities and other financial and operational matters including higher interest costs, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. In addition, we may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain required financing on terms satisfactory to us, our ability to continue to support our business growth and to respond to business challenges could be limited.

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Discussion of Cash Flow

As of June 30, 2015 and December 31, 2014, we had cash and cash equivalents of $10.3 million and $12.1 million, respectively.

Operating Activities.

The following table summarizes the cash provided by operating activities for the six months ended June 30, 2015 and 2014:

	Six Months Ended June 30,
	2015		2014			Change
	Amount		Amount			Amount			%
	(Unaudited, in thousands)
Net income	$	9,667	$	14,274		$	(4,607	)		-32.3	%
Non-cash items		64,313		58,231			6,082			10.4
Net changes in working capital		7,263		(21,716	)		28,979			133.4
Net cash provided by operations	$	81,243	$	50,789		$	30,454			60.0	%

Net income represents the income attained during the periods presented and is inclusive of certain non-cash expenses. These non-cash expenses include bad debt expense, depreciation for fixed assets, amortization of intangible assets, share-based compensation expense, deferred income tax expense, excess tax benefit from the exercise of stock options, loss on sale of assets, amortization of debt issuance costs and non-cash interest expense. Refer to our condensed consolidated statement of cash flows for details regarding these non-cash items. The total for these non-cash expenses was $64.3 million and $58.2 million for the six months ended June 30, 2015 and 2014, respectively. The increase in non-cash expenses for the six months ended June 30, 2015 compared to June 30, 2014 was primarily attributable to: (i) a $4.4 million increase in depreciation expense; (ii) a $1.9 million increase in the amortization of intangibles; (iii) a $1.2 million increase in share-based compensation; and (iv) a $1.1 million decrease in the excess tax benefit from exercise of equity awards. The increase was partially offset by a $2.8 million increase in our deferred income tax benefit. Refer to our Management Discussion and Analysis for more detail.

Working capital is a measure of our liquid assets. Changes in working capital are included in the determination of cash provided by operating activities. For the six months ended June 30, 2015, the working capital changes resulting in an increase to cash flow from operations of $7.2 million primarily consisted of the following:

Increase to cash flow

• a decrease in prepaid expenses and other assets of $6.1 million primarily related to a decrease in prepaid taxes;

• a $9.1 million increase in accrued revenue share obligation and rebates due to the timing of cash payments and customer purchasing volume for our GPO;

• a $1.6 million increase in accrued payroll and benefits due to payroll cycle timing partially offset by our 2014 performance-based compensation expense; and

• a $1.2 million increase in other accrued expenses and long-term liabilities due to the timing of various payment obligations.

The working capital changes resulting in increases to cash flow from operations discussed above were partially offset by the following changes in working capital resulting in decreases to cash flow:

Decrease to cash flow

• an increase in accounts receivable of $1.5 million primarily related to the timing of invoicing and cash collections; and

• a $9.4 million decrease in trade accounts payable due to the timing of various payment obligations.

For the six months ended June 30, 2014, the working capital changes resulting in a decrease to cash flow from operations of $21.7 million primarily consisted of the following:

Decrease to cash flow

• an increase in accounts receivable of $10.4 million primarily related to the timing of invoicing and cash collections;

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• an increase in prepaid expenses and other assets of $2.7 million primarily related to an increase in software maintenance costs of $1.3 million and prepaid taxes of $0.8 million;

• a $6.9 million decrease in trade accounts payable due to the timing of various payment obligations; and

• a $12.1 million decrease in accrued payroll and benefits due to payroll cycle timing and the payment of our 2013 performance-based compensation expense.

The working capital changes resulting in decreases to cash flow from operations discussed above were partially offset by an increase in deferred revenue of $10.0 million for cash receipts not yet recognized as revenue.

Investing Activities.

Investing activities used $22.9 million of cash for the six months ended June 30, 2015 which included $19.8 million for investment in software development and $3.1 million of capital expenditures.

Investing activities used $28.1 million of cash for the six months ended June 30, 2014 which included $20.9 million for investment in software development and $7.2 million of capital expenditures.

We believe that cash used in investing activities will continue to be materially impacted by continued growth in investments in property and equipment and capitalized software. Our property, equipment, and software investments consist primarily of SaaS-based technology infrastructure to provide capacity for expansion of our customer base, including computers and related equipment and software purchased or implemented by outside parties. Our software development investments consist primarily of company-managed design, development, testing and deployment of new application functionality. In addition, cash used in investing activities may be materially impacted by future acquisitions.

Financing Activities.

Financing activities used $60.1 million of cash for the six months ended June 30, 2015. We made payments on our Term Loan Facility of $18.7 million consisting of $10.9 million in scheduled principal payments and $7.8 million relating to our annual excess cash flow payments. We also made voluntary payments of $30.0 million on our revolving credit facility. We made payments of $0.3 million on our finance obligation (discussed below). In addition, we purchased 415,236 shares of common stock under our share repurchase program totaling $8.6 million and also settled the tax liability relating to shares surrendered for tax withholdings totaling $3.8 million. This was partially offset by receipt of $0.9 million from the issuance of common stock and $0.4 million from the excess tax benefit from the exercise of stock options. As of June 30, 2015, the Credit Agreement requires an assessment of excess cash flow for our fiscal year ended December 31, 2015. We would be required to make any excess cash flow payment during the first quarter of 2016.

Financing activities used $19.5 million of cash for the six months ended June 30, 2014. We made payments on our Term Loan Facility of $17.8 million consisting of $7.8 million in scheduled principal payments and a $10.0 million voluntary prepayment and we also made payments of $34.1 million on our swing line and $0.3 million on our finance obligation (discussed below). In addition, we purchased 1,781,074 shares of common stock under our share repurchase program totaling $42.7 million and settled the tax liability relating to shares surrendered for tax withholdings totaling $2.8 million. This was partially offset by $74.1 million received from borrowings on our revolving credit facility (inclusive of our swing line borrowings of $34.1 million); $2.6 million received from the issuance of common stock and $1.5 million from the excess tax benefit from the exercise of stock options.

Off-Balance Sheet Arrangements and Commitments

We have provided a $1.0 million letter of credit to guarantee our performance under the terms of a ten-year lease agreement. The letter of credit is associated with the capital lease of a building located in Cape Girardeau, Missouri under a finance obligation. We do not believe that this letter of credit will be drawn.

We lease office space and equipment under operating leases. Some of these operating leases include rent escalations, rent holidays, and rent concessions and incentives. However, we recognize lease expense on a straight-line basis over the minimum lease term utilizing total future minimum lease payments. Our consolidated future minimum rental payments under our operating leases with initial or remaining non-cancelable lease terms of at least one year are as follows as of June 30, 2015 for each respective year (Unaudited, in thousands):

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	Amount
2015	$	7,749	(1)
2016		8,764
2017		8,986
2018		9,962
2019		8,855
Thereafter		69,796
Total future minimum rental payments	$	114,112

(1) Represents the remaining rental payments due during the fiscal year ending December 31, 2015.

As of June 30, 2015, we did not have any other off-balance sheet arrangements that have or are reasonably likely to have a current or future significant effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Use of Non-GAAP Financial Measures

In order to provide investors with greater insight, promote transparency and allow for a more comprehensive understanding of the information used by management and the Board in its financial and operational decision-making, we supplement our condensed consolidated financial statements presented on a GAAP basis herein with the following non-GAAP financial measures: EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted diluted earnings per share.

These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. We compensate for such limitations by relying primarily on our GAAP results and using non-GAAP financial measures only supplementally. We provide reconciliations of non-GAAP measures to their most directly comparable GAAP measures, where possible. Investors are encouraged to carefully review those reconciliations. In addition, because these non-GAAP measures are not measures of financial performance under GAAP and are susceptible to varying calculations, these measures, as defined by us, may differ from and may not be comparable to similarly titled measures used by other companies.

EBITDA, adjusted EBITDA and adjusted EBITDA margin. We define: (i) EBITDA as net income before net interest expense, income tax expense (benefit), depreciation and amortization; (ii) adjusted EBITDA as net income before net interest expense, income tax expense (benefit), depreciation and amortization and other non-recurring, non-cash or non-operating items; and (iii) adjusted EBITDA margin as adjusted EBITDA as a percentage of net revenue. We use EBITDA, adjusted EBITDA and adjusted EBITDA margin to facilitate a comparison of our operating performance on a consistent basis from period to period and provide for a more complete understanding of factors and trends affecting our business than GAAP measures alone. These measures assist management and the Board and may be useful to investors in comparing our operating performance consistently over time as it removes the impact of our capital structure (primarily interest charges and amortization of debt issuance costs), asset base (primarily depreciation and amortization) and items outside the control of the management team (taxes), as well as other non-cash (purchase accounting adjustments and imputed rental income) and non-recurring items, from our operational results. Adjusted EBITDA also removes the impact of non-cash share-based compensation expense, goodwill impairment, and certain restructuring, acquisition and integration-related charges.

Our Board and management also use these measures as: i) one of the primary methods for planning and forecasting overall expectations and for evaluating, on at least a quarterly and annual basis, actual results against such expectations; and ii) as a performance evaluation metric in determining achievement of certain executive incentive compensation programs, as well as for incentive compensation plans for employees generally.

Additionally, research analysts, investment bankers and lenders may use these measures to assess our operating performance. For example, our credit agreement requires delivery of compliance reports certifying compliance with financial covenants certain of which are, in part, based on an adjusted EBITDA measurement that is similar to the adjusted EBITDA measurement reviewed by our management and our Board. The principal difference is that the measurement of adjusted EBITDA considered by our lenders under our credit agreement allows for certain adjustments (e.g., inclusion of interest income, franchise taxes and other non-cash expenses, offset by the deduction of our capitalized lease payments for one of our office leases) that result in a higher adjusted EBITDA than the adjusted EBITDA measure reviewed by our Board and management and disclosed in our Annual Report on Form 10-K. Additionally, our credit agreement contains provisions that utilize other measures, such as excess cash flow, to measure liquidity.

EBITDA, adjusted EBITDA and adjusted EBITDA margin are not measures of liquidity under GAAP, or otherwise, and are not alternatives to cash flow from continuing operating activities. Despite the advantages regarding the use and analysis of these measures as mentioned above, EBITDA, adjusted EBITDA and adjusted EBITDA margin, as disclosed herein, have limitations as analytical tools, and you should not consider these measures in isolation, or as a substitute for analysis of our results as reported

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under GAAP; nor are these measures intended to be measures of liquidity or free cash flow for our discretionary use. Some of the limitations of EBITDA are:

• EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

• EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• EBITDA does not reflect the interest expense, or the cash requirements to service interest or principal payments under our credit agreement;

• EBITDA does not reflect income tax payments we are required to make; and

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements.

Adjusted EBITDA has all the inherent limitations of EBITDA. To properly and prudently evaluate our business, we encourage you to review the GAAP financial statements included elsewhere herein, and not rely on any single financial measure to evaluate our business. We also strongly urge you to review the reconciliation of net income to adjusted EBITDA in this section, along with our condensed consolidated financial statements included elsewhere herein.

The following table sets forth a reconciliation of EBITDA and adjusted EBITDA to net income, a comparable GAAP-based measure. All of the items included in the reconciliation from net income to EBITDA to adjusted EBITDA are either: (i) non-cash items (e.g., depreciation and amortization, impairment of intangibles and share-based compensation expense) or (ii) items that management does not consider in assessing our on-going operating performance (e.g., income taxes, interest expense and expenses related to the cancellation of an interest rate swap and acquisition and integration-related expenses). In the case of the non-cash items, management believes that investors may find it useful to assess our comparative operating performance because the measures without such items are less susceptible to variances in actual performance resulting from depreciation, amortization and other non-cash charges and more reflective of other factors that affect operating performance. In the case of the other non-recurring items, management believes that investors may find it useful to assess our operating performance if the measures are presented without these items because their financial impact does not reflect ongoing operating performance.

The following table reconciles net income to Adjusted EBITDA for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
Adjusted EBITDA Reconciliation	2015			2014			2015			2014
	(Unaudited, in thousands)
Net income	$	6,314		$	6,596		$	9,667		$	14,274
Depreciation		13,551			11,862			26,898			23,402
Depreciation (included in cost of revenue)		989			648			1,967			1,072
Amortization of intangibles		14,931			14,027			29,987			28,053
Interest expense, net of interest income(1)		11,810			11,114			23,677			22,287
Income tax expense		5,329			4,594			7,579			10,581
EBITDA		52,924			48,841			99,775			99,669
Share-based compensation expense(2)		5,399			5,592			11,131			9,894
Rental income from capitalizing building lease(3)		(109	)		(109	)		(219	)		(219	)
Purchase accounting adjustments(4)		367			—			828			—
Restructuring, acquisition and integration-related expenses(5)		556			—			4,995			1,697
Adjusted EBITDA	$	59,137		$	54,324		$	116,510		$	111,041

(1) Interest income is included in other income (expense) and is not netted against interest expense in our condensed consolidated statements of operations.

(2) Represents non-cash share-based compensation to both employees and directors. We believe excluding this non-cash expense allows us to compare our operating performance without regard to the impact of share-based compensation expense, which varies from period to period based on the amount and timing of grants.

(3) The imputed rental income recognized with respect to a capitalized building lease is deducted from net income (loss) due to its non-cash nature. We believe this income is not a useful measure of continuing operating performance.

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(4) Represents the effect on revenue of adjusting the acquired deferred revenue balance associated with the Sg2 Acquisition to fair value at the acquisition date.

(5) Represents the amount attributable to restructuring, acquisition and integration-related costs which may include costs such as severance, retention, salaries relating to redundant positions, certain performance-related salary-based compensation, operating infrastructure costs and facility consolidation costs.

Adjusted Net Income and Diluted Adjusted Earnings Per Share. The Company defines: i) adjusted net income as net income excluding non-cash acquisition-related intangible amortization and depreciation, and non-recurring expense items on a tax-adjusted basis, non-cash share-based compensation and certain restructuring, acquisition and integration-related expenses on a tax-adjusted basis; purchase accounting adjustments on a tax-adjusted basis; and ii) diluted adjusted EPS as earnings per share excluding non-cash acquisition-related intangible amortization and depreciation, and non-recurring expense items, non-cash share-based compensation and certain restructuring, acquisition and integration-related expenses on a tax-adjusted basis. Adjusted net income and diluted adjusted EPS are not measures of liquidity under GAAP, or otherwise, and are not alternatives to cash flow from continuing operating activities. Diluted adjusted EPS growth has been used historically by the Company as the financial performance metric that determines whether certain equity awards granted pursuant to the Company’s LTPIP will vest. Use of these measures allows management and the Board to analyze the Company’s operating performance on a consistent basis by removing the impact of certain non-cash and non-recurring items from our operations and assess organic growth and accretive business transactions. As a significant portion of senior management’s incentive-based compensation historically has been based on the achievement of certain diluted adjusted EPS growth over time, which is intended to reward them for organic growth and accretive business transactions, investors may find such information useful; however, as non-GAAP financial measures, adjusted net income and diluted adjusted EPS are not the sole measures of the Company’s financial performance and may not be the best measures for investors to gauge such performance.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(Unaudited, in thousands)
Net income	$	6,314		$	6,596		$	9,667		$	14,274
Pre-tax non-cash, acquisition-related intangible amortization		14,931			14,027			29,987			28,053
Pre-tax non-cash, share-based compensation(1)		5,399			5,592			11,131			9,894
Pre-tax restructuring, acquisition and integration related expenses(2)		556			—			4,995			1,697
Pre-tax non-cash, purchase accounting adjustment(3)		367			—			828			—
Tax effect on pre-tax adjustments(4)		(8,501	)		(7,847	)		(18,776	)		(15,857	)
Non-GAAP adjusted net income	$	19,066		$	18,368		$	37,832		$	38,061

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	Three Months Ended June 30,						Six Months Ended June 30,
Per share data	2015			2014			2015			2014
	(Unaudited)
EPS — diluted	$	0.10		$	0.11		$	0.16		$	0.23
Pre-tax non-cash, acquisition-related intangible amortization		0.24			0.23			0.49			0.46
Pre-tax non-cash, share-based compensation(1)		0.09			0.09			0.18			0.16
Pre-tax restructuring, acquisition and integration related expenses(2)		0.01			—			0.08			0.03
Pre-tax non-cash, purchase accounting adjustment(3)		0.01			—			0.02			—
Tax effect on pre-tax adjustments(4)		(0.14	)		(0.13	)		(0.31	)		(0.26	)
Non-GAAP adjusted EPS — diluted	$	0.31		$	0.30		$	0.62		$	0.62
Weighted average shares — diluted (in 000s)		61,056			60,946			60,832			61,419

(1) Represents the amount and the per share impact, on a pre-tax basis, of non-cash share-based compensation to employees and directors. We believe excluding this non-cash expense allows us to compare our operating performance without regard to the impact of share-based compensation expense, which varies from period to period based on the amount and timing of grants.

(2) Represents the amount and the per share impact, on a pre-tax basis, of restructuring, acquisition and integration-related costs which may include costs such as severance, retention, salaries relating to redundant positions, certain performance-related salary-based compensation, operating infrastructure costs and facility consolidation costs. We consider these charges to be non-operating expenses and unrelated to our underlying results of operations.

(3) Represents the amount and the per share impact, on a pre-tax basis, of the effect on revenue of adjusting the acquired deferred revenue balance associated with the Sg2 Acquisition to fair value at the acquisition date.

(4) Reflects the tax impact on the adjustments used to derive Non-GAAP diluted adjusted EPS. We used a tax rate of 40.0% for the three and six months ended June 30, 2015 and 2014 since we believe the 40% will be our normalized long-term tax rate. The effective tax rate for the three months ended June 30, 2015 and 2014 was 45.8% and 41.1%, respectively. The effective tax rate for the six months ended June 30, 2015 and 2014 was 43.9% and 42.6%, respectively.

New Pronouncements

Debt Issuance Costs

In April 2015, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update relating to simplifying the presentation of debt issuance costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The update will be effective on January 1, 2016.

Going Concern

In August 2014, the FASB issued an accounting standard update relating to disclosure of uncertainties about an entity’s ability to continue as a going concern. The update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures in the event that there is such substantial doubt. The update will be effective on January 1, 2016.

Share-Based Compensation

In June 2014, the FASB issued an accounting standard update relating to reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. This update requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The update will be effective on January 1, 2016.

35

Revenue Recognition

In May 2014, the FASB issued an accounting standard update relating to revenue from contracts with customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The update will replace most existing revenue recognition guidance under GAAP when it becomes effective. The update is effective for us on January 1, 2017. Early application is not permitted. The update permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that the update will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign currency exchange risk. Certain of our contracts are denominated in Canadian dollars. As our Canadian sales have not historically been significant to our operations, we do not believe that changes in the Canadian dollar relative to the U.S. dollar will have a significant impact on our financial condition, results of operations or cash flows. We currently do not transact any other business in any currency other than the U.S. dollar. As we continue to grow our operations, we may increase the amount of our sales to foreign customers. Although we do not expect foreign currency exchange risk to have a significant impact on our future operations, we will assess the risk on a case-specific basis to determine whether any forward currency hedge instrument would be warranted.

Interest rate risk. We had outstanding borrowings on our Term Loan Facility and Revolving Credit Facility of $507.3 million as of June 30, 2015. The Term A Facility and the Revolving Credit Facility bear interest at LIBOR plus an applicable margin. The Term B Facility bears interest at LIBOR, subject to a floor of 1.25% plus an applicable margin. We also had an aggregate principal amount of our Notes of $325.0 million outstanding as of June 30, 2015, which bears interest at 8% per annum.

To the extent we do not hedge our variable rate debt, interest rates and interest expense could increase significantly.

A hypothetical 100 basis point increase in LIBOR, which would represent potential interest rate change exposure on our outstanding term loans, would have resulted in an approximate $1.7 million increase to our interest expense for the six months ended June  30, 2015.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating disclosure controls and procedures, management recognizes that any control and procedure, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship regarding the potential utilization of certain controls and procedures. In September 2014, we completed our acquisition of Sg2 (see Note 5 to the 2014 Consolidated Financial Statements filed on Form 10-K). We are not required to include an assessment of the disclosure controls and procedures of a newly acquired entity in our evaluation of disclosure controls and procedures for MedAssets pursuant to guidance supplied by the SEC to companies regarding the treatment of business combinations. In accordance with our integration efforts, we have initiated the process of incorporating Sg2’s operations into our disclosure controls and procedures program and plan to include them in our formal evaluation process in the future within the time period provided by applicable SEC rules and regulations.

As required by Rule 13a-15(b) under the Exchange Act, our management, with the participation of our chief executive officer and chief financial officer, evaluated the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based on such evaluation, our chief executive officer and chief financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective and were operating at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting for the three months ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

36

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we become involved in legal proceedings arising in the ordinary course of our business. We are not presently involved in any legal proceedings, the outcome of which, if determined adversely to us, would have a material adverse effect on our business, operating results or financial condition.

Item 1A. Risk Factors

There have been no material changes in the risk factors as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Stock repurchases during the six months ended June 30, 2015 were as follows:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or		Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(1)
	(In thousands, except share and per share data)
May 1-31, 2015		347,200	$	20.55		347,200	$	50,096
June 1-30, 2015		68,036	$	21.37		415,236		48,642

(1) In February 2015, our Board of Directors authorized an extension to our existing share repurchase program until February 29, 2016 and increased the total dollar amount available for the repurchase of shares of our common stock to $100,000 subject to certain restrictions under our Credit Agreement and Indenture.

Item 3. Defaults Upon Senior Securities

Not applicable

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

Not applicable

Item 6. Exhibits

37

Exhibit No.	Description of Exhibit
31.1*	Sarbanes-Oxley Act of 2002, Section 302 Certification for Chief Executive Officer
31.2*	Sarbanes-Oxley Act of 2002, Section 302 Certification for Chief Financial Officer
32.1*	Sarbanes-Oxley Act of 2002, Section 906 Certification for Chief Executive Officer and Chief Financial Officer
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

38

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Signature	Title	Date
/s/ R. HALSEY WISE Name: R. Halsey Wise	Chairman and Chief Executive Officer (Principal Executive Officer)	August 4, 2015
/s/ ANTHONY COLALUCA, JR. Name: Anthony Colaluca, Jr.	Chief Financial Officer (Principal Financial Officer)	August 4, 2015

39

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
31.1*	Sarbanes-Oxley Act of 2002, Section 302 Certification for Chief Executive Officer
31.2*	Sarbanes-Oxley Act of 2002, Section 302 Certification for Chief Financial Officer
32.1*	Sarbanes-Oxley Act of 2002, Section 906 Certification for Chief Executive Officer and Chief Financial Officer
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

40

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECURITIES

EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, R. Halsey Wise, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MedAssets, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2015

/s/ R. Halsey Wise

R. Halsey Wise

Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECURITIES

EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Anthony Colaluca, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of MedAssets, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2015

/s/ Anthony Colaluca, Jr.

Anthony Colaluca, Jr.

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of MedAssets, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the dates indicated below, each hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ R. Halsey Wise

R. Halsey Wise

Chairman and Chief Executive Officer

August 4, 2015

/s/ Anthony Colaluca, Jr.

Anthony Colaluca, Jr.

Executive Vice President and Chief Financial Officer

August 4, 2015

This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002, and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Income Taxes - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Tax Disclosure [Abstract]
Effective income tax rate	45.80%	41.10%	43.90%	42.60%

XML

Related Party Transaction - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Former Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Charges incurred with respect to transactions with Mr. Bardis	$ 0	$ 756,000

XML

Notes and Bonds Payable - Percentage of Redemption Prices (Detail) - Senior Notes Due 2018 [Member]	6 Months Ended
	Jun. 30, 2015
Debt Instrument, Redemption, Period One [Member]
Debt Instrument [Line Items]
Percentage of redemption prices	102.00%
Debt Instrument, Redemption, Period Two [Member]
Debt Instrument [Line Items]
Percentage of redemption prices	100.00%

XML

Income Per Share (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Reconciliation of Basic and Diluted Weighted Average Shares Outstanding

A reconciliation of basic and diluted weighted average shares outstanding for basic and diluted EPS for the three and six months ended June 30, 2015 and 2014 is as follows:

	Three Months Ended June 30,
	2015		2014
Numerator for Basic and Diluted Income Per Share:
Net income	$	6,314	$	6,596
Denominator for basic income per share weighted average shares		59,865,000		59,752,000
Effect of dilutive securities:
Stock options		128,000		222,000
SSARs		203,000		343,000
Restricted stock and RSUs		860,000		629,000
Denominator for diluted income per share — adjusted weighted average shares and assumed conversions		61,056,000		60,946,000
Basic income per share:
Basic net income from continuing operations	$	0.11	$	0.11
Diluted net income per share:
Diluted net income from continuing operations	$	0.10	$	0.11

	Six Months Ended June 30,
	2015		2014
Numerator for Basic and Diluted Income Per Share:
Net income	$	9,667	$	14,274
Denominator for basic income per share weighted average shares		59,801,000		60,189,000
Effect of dilutive securities:
Stock options		132,000		282,000
SSARs		181,000		330,000
Restricted stock and RSUs		718,000		618,000
Denominator for diluted income per share — adjusted weighted average shares and assumed conversions		60,832,000		61,419,000
Basic income per share:
Basic net income from continuing operations	$	0.16	$	0.24
Diluted net income per share:
Diluted net income from continuing operations	$	0.16	$	0.23

Summary of Potentially Dilutive Securities

The following table provides a summary of those potentially dilutive securities that have been excluded from the above calculation of diluted EPS:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
SSARs		16,000		5,000		27,000		8,000

XML

Segment Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2015 Segment
Segment Reporting [Abstract]
Number of reportable business segments	2

XML

Stockholders' Equity and Share-Based Compensation - Summary of Total Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total share-based compensation expense	$ 5,399	$ 5,592	$ 11,131	$ 9,894
Cost of Revenue [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total share-based compensation expense	1,419	1,863	3,150	3,029
Product Development [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total share-based compensation expense	338	391	773	635
Selling and Marketing [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total share-based compensation expense	873	845	1,907	1,372
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total share-based compensation expense	$ 2,769	$ 2,493	$ 5,301	$ 4,858

XML

Subsequent Events - Additional Information (Detail) - 6 months ended Jun. 30, 2015 - Tenet Healthcare Corporation [Member] - Supply Chain Solutions Agreement [Member] - USD ($) $ in Thousands	Total
Subsequent Event [Line Items]
Agreement expiration date	Jan. 31, 2016
Sales Revenue, Net [Member] | Customer Concentration Risk [Member]
Subsequent Event [Line Items]
Concentration risk, amount	$ 21,400
Concentration risk, percentage	5.70%
Operating Income [Member] | Customer Concentration Risk [Member]
Subsequent Event [Line Items]
Concentration risk, amount	$ 10,500

XML

Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2015

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

2. RECENT ACCOUNTING PRONOUNCEMENTS

Debt Issuance Costs

In April 2015, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update relating to simplifying the presentation of debt issuance costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The update will be effective on January 1, 2016.

Going Concern

In August 2014, the FASB issued an accounting standard update relating to disclosure of uncertainties about an entity’s ability to continue as a going concern. The update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures in the event that there is such substantial doubt. The update will be effective on January 1, 2016.

Share-Based Compensation

In June 2014, the FASB issued an accounting standard update relating to reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. This update requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The update will be effective on January 1, 2016.

Revenue Recognition

In May 2014, the FASB issued an accounting standard update relating to revenue from contracts with customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The update will replace most existing revenue recognition guidance under GAAP when it becomes effective. The update is effective for us on January 1, 2017. Early application is not permitted. The update permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that the update will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

XML

Segment Information - Financial Information of Business Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Revenue:
Net administrative fees	$ 69,723	$ 70,091	$ 147,484	$ 146,337
Other service fees	120,701	105,324	228,521	199,945
Total net revenue	190,424	175,415	376,005	346,282
Operating expenses:
Total operating expenses	166,861	153,142	335,032	299,229
Operating income (loss):
Total operating income	23,563	22,273	40,973	47,053
Interest (expense)	(11,810)	(11,114)	(23,679)	(22,287)
Other (expense) income	(110)	31	(48)	89
Income before income taxes	11,643	11,190	17,246	24,855
Income tax expense	5,329	4,594	7,579	10,581
Net income	6,314	6,596	9,667	14,274
Segment Adjusted EBITDA
Total Adjusted EBITDA	59,137	54,324	116,510	111,041
Capital expenditures:
Total Capital expenditures			22,983	28,079
Accounts receivable, net
Total accounts receivable, net	129,212		129,212		$ 127,741
Other assets
Total other assets	1,544,748		1,544,748		1,591,055
Total assets	1,673,960		1,673,960		1,718,796
Accrued revenue share obligation and rebates	100,927		100,927		91,864
Deferred revenue
Total deferred revenue	91,665		91,665		91,452
Notes payable	507,292		507,292		556,000
Bonds payable	325,000		325,000		325,000
Other liabilities
Total other liabilities	193,748		193,748		207,993
Total liabilities	1,218,632		1,218,632		1,272,309
Operating Segments [Member]
Operating income (loss):
Net income	19,480	20,737	38,248	41,757
Segment Adjusted EBITDA
Total Adjusted EBITDA	67,109	61,913	130,847	125,264
Deferred revenue
Total deferred revenue	91,665		91,665		91,452
Notes payable	507,292		507,292		556,000
Bonds payable	325,000		325,000		325,000
Corporate, Non-Segment [Member]
Operating expenses:
Total operating expenses	14,630	13,086	30,321	25,755
Operating income (loss):
Total operating income	(14,630)	(13,086)	(30,321)	(25,755)
Net income	(13,166)	(14,141)	(28,581)	(27,483)
Segment Adjusted EBITDA
Total Adjusted EBITDA	(7,972)	(7,589)	(14,337)	(14,223)
Capital expenditures:
Total Capital expenditures			1,990	1,660
Accounts receivable, net
Total accounts receivable, net					275
Other assets
Total other assets	67,061		67,061		84,683
Other liabilities
Total other liabilities	146,356		146,356		147,103
SCM [Member] | Operating Segments [Member]
Revenue:
Net administrative fees	69,723	70,091	147,484	146,337
Other service fees	50,215	35,816	91,862	68,187
Total net revenue	119,938	105,907	239,346	214,524
Operating expenses:
Total operating expenses	94,428	81,813	191,182	158,256
Operating income (loss):
Total operating income	25,510	24,094	48,164	56,268
Segment Adjusted EBITDA
Total Adjusted EBITDA	46,478	42,300	91,466	92,250
Capital expenditures:
Total Capital expenditures			8,480	11,002
Accounts receivable, net
Total accounts receivable, net	67,434		67,434		74,337
Other assets
Total other assets	1,040,051		1,040,051		1,067,039
Accrued revenue share obligation and rebates	100,927		100,927		91,864
Deferred revenue
Total deferred revenue	50,010		50,010		51,958
Other liabilities
Total other liabilities	29,019		29,019		36,938
RCM [Member] | Operating Segments [Member]
Revenue:
Revenue cycle technology	47,521	47,507	93,502	91,700
Revenue cycle services	22,965	22,001	43,157	40,058
Total net revenue	70,486	69,508	136,659	131,758
Operating expenses:
Total operating expenses	57,803	58,243	113,529	115,218
Operating income (loss):
Total operating income	12,683	11,265	23,130	16,540
Segment Adjusted EBITDA
Total Adjusted EBITDA	20,631	$ 19,613	39,381	33,014
Capital expenditures:
Total Capital expenditures			12,513	$ 15,417
Accounts receivable, net
Total accounts receivable, net	61,778		61,778		53,129
Other assets
Total other assets	437,636		437,636		439,333
Deferred revenue
Total deferred revenue	41,655		41,655		39,494
Other liabilities
Total other liabilities	$ 18,373		$ 18,373		$ 23,952

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Deferred Revenue - Summary of Deferred Revenue (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Deferred Revenue Arrangement [Line Items]
Deferred revenue, total	$ 91,665	$ 91,452
Less: Deferred revenue, current portion	(75,677)	(76,034)
Deferred revenue, non-current portion	15,988	15,418
Software and SaaS Implementation Fees [Member]
Deferred Revenue Arrangement [Line Items]
Deferred revenue, total	53,570	55,152
Service Fees [Member]
Deferred Revenue Arrangement [Line Items]
Deferred revenue, total	21,987	19,241
Administrative Fees [Member]
Deferred Revenue Arrangement [Line Items]
Deferred revenue, total	13,660	15,715
Other Fees [Member]
Deferred Revenue Arrangement [Line Items]
Deferred revenue, total	$ 2,448	$ 1,344

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Restructuring, Acquisition and Integration-Related Expenses - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Restructuring And Acquisition Integration Charges [Abstract]
Acquisition related expense	$ 48	$ 48	$ 352	$ 352
Cash payments			5,005
Restructuring reserve accrued liabilities			2,063
Restructuring reserve current	999		999
Restructuring, acquisition and integration-related expenses	$ 556	$ 0	$ 4,995	$ 1,697

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Segment Information - Segment Adjusted Ebitda Consolidated Net Income (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total Segment Adjusted EBITDA	$ 59,137	$ 54,324	$ 116,510	$ 111,041
Depreciation			(28,865)	(24,474)
Net (loss) income	6,314	6,596	9,667	14,274
Depreciation (included in cost of revenue)	(989)	(648)	(1,967)	(1,072)
Amortization of intangibles	(14,931)	(14,027)	(29,987)	(28,053)
Income tax expense	(5,329)	(4,594)	(7,579)	(10,581)
Total share-based compensation expense	(5,399)	(5,592)	(11,131)	(9,894)
Restructuring, acquisition and integration-related expenses	(556)	0	(4,995)	(1,697)
Operating Segments [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total Segment Adjusted EBITDA	67,109	61,913	130,847	125,264
Net (loss) income	19,480	20,737	38,248	41,757
Segment Reporting Reconciling Items [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Depreciation	(9,713)	(8,696)	(19,237)	(16,958)
Depreciation (included in cost of revenue)	(989)	(648)	(1,967)	(1,072)
Amortization of intangibles	(14,931)	(14,027)	(29,987)	(28,053)
Income tax expense	(18,650)	(14,562)	(32,845)	(30,952)
Total share-based compensation expense	(2,518)	(3,243)	(5,609)	(5,341)
Purchase accounting adjustments	(367)		(828)
Restructuring, acquisition and integration-related expenses	(461)		(2,126)	(1,131)
Corporate, Non-Segment [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total Segment Adjusted EBITDA	(7,972)	(7,589)	(14,337)	(14,223)
Net (loss) income	(13,166)	(14,141)	(28,581)	(27,483)
SCM [Member] | Operating Segments [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total Segment Adjusted EBITDA	46,478	42,300	91,466	92,250
RCM [Member] | Operating Segments [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total Segment Adjusted EBITDA	$ 20,631	$ 19,613	$ 39,381	$ 33,014

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Deferred Revenue - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Text Block [Abstract]
Contingent deferred revenue	$ 5,137	$ 8,441

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Notes and Bonds Payable - Summary of Notes and Bonds Payable (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Total notes payable	$ 507,292	$ 556,000
Bonds payable	325,000	325,000
Total notes and bonds payable	832,292	881,000
Total notes and bonds payable	832,292	881,000
Less: current portions	(24,875)	(29,583)
Total long-term notes and bonds payable	807,417	851,417
Term A Facility [Member]
Debt Instrument [Line Items]
Total notes payable	211,263	225,000
Total notes and bonds payable	211,263
Total notes and bonds payable	211,263
Term B Facility [Member]
Debt Instrument [Line Items]
Total notes payable	174,029	179,000
Total notes and bonds payable	174,029
Total notes and bonds payable	174,029
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Total notes payable	122,000	$ 152,000
Total notes and bonds payable	122,000
Total notes and bonds payable	$ 122,000

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Business Description and Basis of Presentation

6 Months Ended

Jun. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Description and Basis of Presentation

1. BUSINESS DESCRIPTION AND BASIS OF PRESENTATION

We provide technology-enabled products and services that, together, deliver solutions designed to reduce total cost of care, enhance operational efficiency, align clinical delivery with advance care coordination and improve revenue performance for hospitals, health systems and other ancillary healthcare providers. Our customer-specific solutions are designed to efficiently analyze detailed information across the spectrum of cost, operations, clinical delivery and reimbursement. Our solutions integrate with our customers’ existing operations and enterprise software systems and provide financial improvement with minimal upfront costs or capital expenditures. Our operations and customers are primarily located throughout the United States and to a limited extent, Canada.

The accompanying unaudited condensed consolidated financial statements, and condensed consolidated balance sheet as of December 31, 2014, derived from audited financial statements, have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting and as required by Regulation S-X, Rule 10-01 of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. In the opinion of management, all adjustments considered necessary for a fair presentation of the interim financial information, consisting of normal recurring adjustments, have been included. When preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the date of the condensed consolidated financial statements. Actual results may differ materially from those estimates. Operating results for the three and six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2015.

The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2014 included in our annual report on Form 10-K as filed with the SEC on March 2, 2015 in addition to our quarterly reports filed on Form 10-Q for the periods after December 31, 2014. These financial statements include the accounts of MedAssets, Inc. and our wholly owned subsidiaries. All significant intercompany accounts have been eliminated in consolidation.

Use of Estimates

The preparation of the condensed consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the SEC, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from those estimates. We believe that the estimates, assumptions and judgments involved in revenue recognition, allowances for doubtful accounts and returns, product development costs, share-based payments, business combinations, impairment of goodwill, intangible assets and long-lived assets and accounting for income taxes have the greatest potential impact on our condensed consolidated financial statements.

Cash and Cash Equivalents

All of our highly liquid investments with original maturities of three months or less at the date of purchase are carried at cost (which approximates fair value) and are considered to be cash equivalents. Currently, our excess cash is voluntarily used to repay our swing line credit facility, if any, on a daily basis and applied against our revolving credit facility on a routine basis when our swing line credit facility is undrawn. In addition, we may periodically make voluntary repayments on our term loans.

Cash and cash equivalents were $10,273 and $12,100 as of June 30, 2015 and December 31, 2014, respectively. We had $122,000 and $152,000 outstanding on our revolving credit facility as of June 30, 2015 and December 31, 2014, respectively. In the event our cash balance is zero at the end of a period, any outstanding checks are recorded as accrued expenses. See Note 5 for immediately available cash under our revolving credit facility.

Additionally, we have a concentration of credit risk arising from cash deposits held in excess of federally insured amounts totaling $9,773 as of June 30, 2015.

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Notes and Bonds Payable - Additional Information (Detail) - USD ($)		3 Months Ended		6 Months Ended
	Sep. 08, 2014	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Debt Instrument [Line Items]
Total notes payable		$ 507,292,000		$ 507,292,000		$ 556,000,000
Outstanding balance on revolving credit facility		482,417,000		482,417,000		526,417,000
Amount drawn on swing line loan		0		0
Outstanding letter of credit under credit facility		177,000,000		177,000,000
Letters of credit outstanding amount		$ 1,000,000		1,000,000
Increase in revolving committed amount under Credit Agreement	$ 100,000,000
Revolving committed amount under Credit Agreement	300,000,000
Debt issuance costs	$ 615,000			$ 12,126,000
Percentage owned by subsidiary guarantor		100.00%		100.00%
Amortization of debt issuance costs		$ 971,000	$ 937,000	$ 1,949,000	$ 1,880,000
Total interest paid, net of amounts capitalized				21,554,000	$ 20,058,000
Term A Facility [Member]
Debt Instrument [Line Items]
Total notes payable		$ 211,263,000		211,263,000		225,000,000
Notes payable current				$ 4,362,000
Weighted average interest rate of senior term loan facility		2.52%		2.52%
Term B Facility [Member]
Debt Instrument [Line Items]
Total notes payable		$ 174,029,000		$ 174,029,000		179,000,000
Notes payable current				$ 3,471,000
Weighted average interest rate of senior term loan facility		4.00%		4.00%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Total notes payable		$ 122,000,000		$ 122,000,000		152,000,000
Outstanding balance on revolving credit facility		$ 122,000,000		122,000,000		$ 152,000,000
Voluntary payments				$ 30,000,000
Weighted average interest rate of senior term loan facility		2.51%		2.51%
Credit Agreement [Member]
Debt Instrument [Line Items]
Notes payable current				$ 7,833,000
Maximum [Member]
Debt Instrument [Line Items]
Percentage of consolidated tangible assets and revenues of subsidiaries not providing guarantees				2.50%
Percentage of consolidated earnings before interest taxes depreciation and amortization on consolidated basis of immaterial subsidiaries not providing guarantees				5.00%
Percentage of pledged equity securities of foreign subsidiary				65.00%
Senior Notes Due 2018 [Member]
Debt Instrument [Line Items]
Principal amount of senior notes		$ 325,000,000		$ 325,000,000
Percentage of interest rate on bonds payable		8.00%		8.00%
Maturity date of debt instrument				Nov. 15, 2018
Repurchase percentage of aggregate principal amount plus accrued and unpaid interest				101.00%
Percentage of par value on senior notes				103.30%
Term Facility [Member]
Debt Instrument [Line Items]
Scheduled principal payments				$ 10,875,000

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Income Per Share - Reconciliation of Basic and Diluted Weighted Average Shares Outstanding (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator for Basic and Diluted Income Per Share:
Net income	$ 6,314	$ 6,596	$ 9,667	$ 14,274
Denominator for basic income per share weighted average shares	59,865,000	59,752,000	59,801,000	60,189,000
Effect of dilutive securities:
Stock options	128,000	222,000	132,000	282,000
SSARs	203,000	343,000	181,000	330,000
Restricted stock and RSUs	860,000	629,000	718,000	618,000
Denominator for diluted income per share - adjusted weighted average shares and assumed conversions	61,056,000	60,946,000	60,832,000	61,419,000
Basic income per share:
Basic net income from continuing operations	$ 0.11	$ 0.11	$ 0.16	$ 0.24
Diluted net income per share:
Diluted net income from continuing operations	$ 0.10	$ 0.11	$ 0.16	$ 0.23

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets
Cash and cash equivalents	$ 10,273	$ 12,100
Accounts receivable, net of allowances of $2,654 and $2,641 as of June 30, 2015 and December 31, 2014, respectively	129,212	127,741
Deferred tax asset, current portion	6,021	5,782
Prepaid expenses and other current assets	24,497	30,557
Total current assets	170,003	176,180
Property and equipment, net	164,686	170,318
Other long term assets
Goodwill	1,058,414	1,058,414
Intangible assets, net	246,420	276,407
Other	34,437	37,477
Other long term assets	1,339,271	1,372,298
Total assets	1,673,960	1,718,796
Current liabilities
Accounts payable	17,254	26,910
Accrued revenue share obligation and rebates	100,927	91,864
Accrued payroll and benefits	34,402	32,784
Other accrued expenses	9,972	9,040
Deferred revenue, current portion	75,677	76,034
Current portion of notes payable	24,875	29,583
Current portion of finance obligation	308	294
Total current liabilities	263,415	266,509
Notes payable, less current portion	482,417	526,417
Bonds payable	325,000	325,000
Finance obligation, less current portion	8,318	8,475
Deferred revenue, less current portion	15,988	15,418
Deferred tax liability	109,326	116,607
Other long term liabilities	14,168	13,883
Total liabilities	$ 1,218,632	$ 1,272,309
Commitments and contingencies
Stockholders' equity
Common stock, $0.01 par value, 150,000,000 shares authorized; 59,998,000 and 60,199,000 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively	$ 600	$ 602
Additional paid-in capital	693,411	694,235
Accumulated deficit	(238,683)	(248,350)
Total stockholders' equity	455,328	446,487
Total liabilities and stockholders' equity	$ 1,673,960	$ 1,718,796

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Fair Value Measurements - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2015
Senior Notes Due 2018 [Member]
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Percentage of par value on senior notes	103.30%

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Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]
Balances at Dec. 31, 2014	$ 446,487	$ 602	$ 694,235	$ (248,350)
Balances, Shares at Dec. 31, 2014	60,199,000	60,199,000
Issuance of common stock from stock option and SSAR exercises and restricted stock issuances, net	$ 945	$ 4	941
Issuance of common stock from stock option and SSAR exercises and restricted stock issuances, net, Shares		413,000
Shares surrendered to pay taxes on vesting of restricted stock	(3,836)	$ (2)	(3,834)
Shares surrendered to pay taxes on vesting of restricted stock, shares		(199,000)
Stock compensation expense	11,131		11,131
Repurchase of common stock	$ (8,588)	$ (4)	(8,584)
Repurchase of common stock, shares	(415,236)	(415,000)
Tax deficit from equity award exercises, net	$ (478)		(478)
Net income	9,667			9,667
Balances at Jun. 30, 2015	$ 455,328	$ 600	$ 693,411	$ (238,683)
Balances, Shares at Jun. 30, 2015	59,998,000	59,998,000

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Stockholders' Equity and Share-Based Compensation - Additional Information (Detail)	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Feb. 28, 2015 USD ($)	Jun. 30, 2015 USD ($) shares	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($) Plans shares	Jun. 30, 2014 USD ($) shares	Dec. 31, 2010
Equity [Line Items]
Aggregate exercise price of stock issued in connection with exercise of stock options				$ 945,000
Associated minimum statutory tax liability, shares surrendered				$ 3,836,000
Expiration date of share repurchase program	Feb. 29, 2016
Stock Repurchase Program, authorized amount	$ 100,000,000
Number of share-based compensation plans | Plans				3
Shares reserved under 2008 equity incentive plan available for grant | shares		3,942,000		3,942,000
Total share-based compensation expense		$ 5,399,000	$ 5,592,000	$ 11,131,000	$ 9,894,000
Income tax benefit recognized from equity awards		2,018,000	$ 2,083,000	4,160,000	3,686,000
Capitalized share-based compensation expenses		$ 0		0
Shares of common stock purchased, amount				$ 275,000	$ 253,000
Restricted Stock [Member]
Equity [Line Items]
Forfeited, Shares | shares				24,000
Restricted shares that were surrendered from equity awards holders | shares				199,000
Associated minimum statutory tax liability, shares surrendered				$ 3,836,000
SSARs Awards [Member]
Equity [Line Items]
Approximate stock issued in connection with exercise of stock options | shares				437,000
Aggregate exercise price of stock issued in connection with exercise of stock options				$ 945,000
Employee Stock Purchase Plan [Member]
Equity [Line Items]
Shares reserved under 2008 equity incentive plan available for grant | shares		500,000		500,000
Percentage of price per share of the common stock sold to participating employees						95.00%
Period required for holding stock purchases as per the plan				18 months
Shares of common stock purchased | shares				15,000	11,000

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Deferred Revenue (Tables)

6 Months Ended

Jun. 30, 2015

Deferred Revenue Disclosure [Abstract]

Summary of Deferred Revenue

The following table summarizes the deferred revenue categories and balances as of:

	June 30, 2015			December 31, 2014
Software and SaaS implementation fees	$	53,570		$	55,152
Service fees		21,987			19,241
Administrative fees		13,660			15,715
Other fees		2,448			1,344
Deferred revenue, total		91,665			91,452
Less: Deferred revenue, current portion		(75,677	)		(76,034	)
Deferred revenue, non-current portion	$	15,988		$	15,418

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Stockholders' Equity and Share-Based Compensation - Summary of Amount and Cost of Common Stock Repurchased (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Equity [Abstract]
Number of shares repurchased	415,236	1,144,145	415,236	1,784,145
Cost of shares repurchased	$ 8,588	$ 26,699	$ 8,588	$ 42,759

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Stockholders' Equity and Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2015

Text Block [Abstract]

Summary of Amount and Cost of Shares of Common Stock Repurchased

The following table shows the amount and cost of shares of common stock we repurchased for the three and six months ended June 30, 2015 and 2014 under the share repurchase program. The repurchased shares have not been retired and constitute authorized shares that are issued but not outstanding.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Number of shares repurchased		415,236		1,144,145		415,236		1,784,145
Cost of shares repurchased	$	8,588	$	26,699	$	8,588	$	42,759

Summary of Total Share-Based Compensation Expense

Total share-based compensation expense (inclusive of restricted common stock, RSUs, SSARs and common stock options) for the three and six months ended June 30, 2015 and 2014 as reflected in our condensed consolidated statements of operations is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Cost of revenue	$	1,419	$	1,863	$	3,150	$	3,029
Product development		338		391		773		635
Selling and marketing		873		845		1,907		1,372
General and administrative		2,769		2,493		5,301		4,858
Total share-based compensation expense	$	5,399	$	5,592	$	11,131	$	9,894

Summary of Total Approved Equity Grants

A summary of the total approved equity grants during the six months ended June 30, 2015 is as follows:

	Total RSUs		Range of Grant Date Fair Values
RSUs — Service		796,636	$	18.44 – $20.32	(1)
RSUs — Performance		1,011,144	$	18.44 – $20.32	(2)
Total RSUs granted		1,807,780

(1) Service-based RSUs vest annually over three years of continuous service with the exception of certain equity awards granted to our Board that vest ratably each month through December 31, 2015; and

(2) Performance-based RSUs generally vest annually over three years of continuous service provided the performance metric is achieved and consist of a net revenue and a non-GAAP adjusted earnings per share (“EPS”) performance metric. The Company must achieve a minimum net revenue and non-GAAP adjusted EPS threshold before any performance-based RSUs begin vesting. If the minimum threshold is not met, the equity award holders will forfeit those awards.

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating activities
Net income	$ 9,667	$ 14,274
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Bad debt expense		100
Depreciation	28,865	24,474
Amortization of intangibles	29,987	28,053
Loss on sale of assets	237	16
Noncash stock compensation expense	11,131	9,894
Excess tax benefit from exercise of equity awards	(438)	(1,557)
Amortization of debt issuance costs	1,949	1,880
Noncash interest expense, net	195	208
Deferred income tax benefit	(7,613)	(4,837)
Changes in assets and liabilities:
Accounts receivable	(1,471)	(10,365)
Prepaid expenses and other assets	6,060	(2,736)
Other long-term assets	(63)	477
Accounts payable	(9,374)	(6,889)
Accrued revenue share obligations and rebates	9,063	299
Accrued payroll and benefits	1,618	(12,077)
Other accrued expenses and long-term liabilities	1,217	(411)
Deferred revenue	213	9,986
Cash provided by operating activities	81,243	50,789
Investing activities
Purchases of property, equipment and software, net	(3,135)	(7,201)
Capitalized software development costs	(19,848)	(20,878)
Cash used in investing activities	(22,983)	(28,079)
Financing activities
Borrowings from revolving credit facility		74,080
Repayment of notes payable	(18,708)	(17,750)
Repayment of revolving credit facility	(30,000)	(34,080)
Repayment of finance obligation	(338)	(338)
Excess tax benefit from exercise of equity awards	438	1,557
Issuance of common stock, net	945	2,559
Purchase of treasury shares, including shares surrendered for tax withholdings	(12,424)	(45,524)
Cash used in financing activities	(60,087)	(19,496)
Net (decrease) increase in cash and cash equivalents	(1,827)	3,214
Cash and cash equivalents, beginning of period	12,100	2,790
Cash and cash equivalents, end of period	$ 10,273	$ 6,004

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Allowances on accounts receivable	$ 2,654	$ 2,641
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	59,998,000	60,199,000
Common stock, shares outstanding	59,998,000	60,199,000

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Segment Information

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Information

10. SEGMENT INFORMATION

We manage our business through two reportable business segments, Spend and Clinical Resource Management (or “SCM”) and Revenue Cycle Management (or “RCM”).

• Spend and Clinical Resource Management. Our SCM segment provides a comprehensive suite of technology-enabled services that help our customers manage their expense categories. Our solutions lower supply and medical device pricing and utilization by managing the procurement process through our group purchasing organization (“GPO”) portfolio of contracts, consulting services and business intelligence tools.

• Revenue Cycle Management. Our RCM segment provides a comprehensive suite of products and services spanning the hospital revenue cycle workflow — from patient access and financial responsibility, charge capture and integrity, pricing analysis, claims processing and denials management, payor contract management, revenue recovery and accounts receivable services. Our workflow solutions, together with our data management, compliance and audit tools, increase revenue capture and cash collections, reduce accounts receivable balances and increase regulatory compliance.

GAAP relating to segment reporting defines reportable segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing financial performance. The guidance indicates that financial information about segments should be reported on the same basis as that which is used by the chief operating decision maker in the analysis of performance and allocation of resources. Management of the Company, including our chief operating decision maker, uses what we refer to as Segment Adjusted EBITDA as its primary measure of profit or loss to assess segment performance and to determine the allocation of resources. We define Segment Adjusted EBITDA as segment net income (loss) before net interest expense, income tax expense (benefit), depreciation and amortization (“EBITDA”) as adjusted for other non-recurring, non-cash or non-operating items. Our chief operating decision maker uses Segment Adjusted EBITDA to facilitate a comparison of our operating performance on a consistent basis from period to period. Segment Adjusted EBITDA includes expenses associated with sales and marketing, general and administrative and product development activities specific to the operation of the segment. General and administrative corporate expenses that are not specific to the segments are not included in the calculation of Segment Adjusted EBITDA. These expenses include the costs to manage our corporate offices, interest expense on our credit facilities and expenses related to being a publicly-held company. All reportable segment revenues are presented net of inter-segment eliminations and represent revenues from external customers.

The following tables present Segment Adjusted EBITDA and financial position information as utilized by our chief operating decision maker. A reconciliation of Segment Adjusted EBITDA to consolidated net income is included. General corporate expenses are included in the “Corporate” line item. “RCM” represents the Revenue Cycle Management segment and “SCM” represents the Spend and Clinical Resource Management segment. Other assets and liabilities are included to provide a reconciliation to total assets and total liabilities.

The following tables represent our results of operations, by segment, for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Revenue:
SCM
Net administrative fees	$	69,723		$	70,091		$	147,484		$	146,337
Other service fees(1)		50,215			35,816			91,862			68,187
Total SCM net revenue		119,938			105,907			239,346			214,524
RCM
Revenue cycle technology		47,521			47,507			93,502			91,700
Revenue cycle services		22,965			22,001			43,157			40,058
Total RCM net revenue		70,486			69,508			136,659			131,758
Total net revenue		190,424			175,415			376,005			346,282
Operating expenses:
SCM		94,428			81,813			191,182			158,256
RCM		57,803			58,243			113,529			115,218
Corporate		14,630			13,086			30,321			25,755
Total operating expenses		166,861			153,142			335,032			299,229
Operating income (loss):
SCM		25,510			24,094			48,164			56,268
RCM		12,683			11,265			23,130			16,540
Corporate		(14,630	)		(13,086	)		(30,321	)		(25,755	)
Total operating income		23,563			22,273			40,973			47,053
Interest (expense)		(11,810	)		(11,114	)		(23,679	)		(22,287	)
Other (expense) income		(110	)		31			(48	)		89
Income before income taxes		11,643			11,190			17,246			24,855
Income tax expense		5,329			4,594			7,579			10,581
Net income	$	6,314		$	6,596		$	9,667		$	14,274
Segment Adjusted EBITDA
SCM	$	46,478		$	42,300		$	91,466		$	92,250
RCM		20,631			19,613			39,381			33,014
Total Segment Adjusted EBITDA	$	67,109		$	61,913		$	130,847		$	125,264
Corporate		(7,972	)		(7,589	)		(14,337	)		(14,223	)
Total Adjusted EBITDA(2)	$	59,137		$	54,324		$	116,510		$	111,041

(1) Other service fees primarily consists of consulting, services and technology fees.

(2) These are non-GAAP measures. See “Use of Non-GAAP Financial Measures” section for additional information.

	Six Months Ended June 30,
	2015		2014
Capital expenditures(1):
SCM	$	8,480	$	11,002
RCM		12,513		15,417
Corporate		1,990		1,660
Total	$	22,983	$	28,079

(1) Capital expenditures consist of purchases of property and equipment and capitalized software development costs (internal and external use).

	June 30, 2015		December 31, 2014
Financial Position:
Accounts receivable, net
SCM	$	67,434	$	74,337
RCM		61,778		53,129
Corporate		—		275
Total accounts receivable, net		129,212		127,741
Other assets
SCM		1,040,051		1,067,039
RCM		437,636		439,333
Corporate		67,061		84,683
Total other assets		1,544,748		1,591,055
Total assets	$	1,673,960	$	1,718,796
SCM accrued revenue share obligation	$	100,927	$	91,864
Deferred revenue
SCM		50,010		51,958
RCM		41,655		39,494
Total deferred revenue		91,665		91,452
Notes payable		507,292		556,000
Bonds payable		325,000		325,000
Other liabilities
SCM		29,019		36,938
RCM		18,373		23,952
Corporate		146,356		147,103
Total other liabilities		193,748		207,993
Total liabilities	$	1,218,632	$	1,272,309

GAAP for segment reporting requires that the total of the reportable segments’ measures of profit or loss be reconciled to the Company’s consolidated operating results. The following table reconciles Segment Adjusted EBITDA to consolidated net income for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
SCM Adjusted EBITDA	$	46,478		$	42,300		$	91,466		$	92,250
RCM Adjusted EBITDA		20,631			19,613			39,381			33,014
Total Segment Adjusted EBITDA		67,109			61,913			130,847			125,264
Depreciation		(9,713	)		(8,696	)		(19,237	)		(16,958	)
Depreciation (included in cost of revenue)		(989	)		(648	)		(1,967	)		(1,072	)
Amortization of intangibles		(14,931	)		(14,027	)		(29,987	)		(28,053	)
Income tax expense		(18,650	)		(14,562	)		(32,845	)		(30,952	)
Share-based compensation expense(1)		(2,518	)		(3,243	)		(5,609	)		(5,341	)
Purchase accounting adjustments(2)		(367	)		—			(828	)		—
Restructuring, acquisition and integration-related expenses(3)		(461	)		—			(2,126	)		(1,131	)
Total reportable segment net income		19,480			20,737			38,248			41,757
Corporate net loss		(13,166	)		(14,141	)		(28,581	)		(27,483	)
Consolidated net income	$	6,314		$	6,596		$	9,667		$	14,274

(1) Represents non-cash share-based compensation to both employees and directors. We believe excluding this non-cash expense allows us to compare our operating performance without regard to the impact of share-based compensation, which varies from period to period based on amount and timing of grants.

(2) Represents the effect on revenue of adjusting Sg2’s acquired deferred revenue balance to fair value at the acquisition date.

(3) Represents the amount attributable to restructuring, acquisition and integration-related costs which may include costs such as severance, retention, salaries relating to redundant positions, certain performance-related salary-based compensation, operating infrastructure costs and facility consolidation costs.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 24, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Trading Symbol	MDAS
Entity Registrant Name	MEDASSETS INC
Entity Central Index Key	0001254419
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		60,002,181

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Fair Value Measurements

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

11. FAIR VALUE MEASUREMENTS

We measure fair value for financial instruments when a valuation is necessary, such as for impairment of long-lived and indefinite-lived assets when indicators of impairment exist in accordance with GAAP for fair value measurements and disclosures. This defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measures required under other accounting pronouncements, but does not change existing guidance as to whether or not an instrument is carried at fair value.

In estimating our fair value disclosures for financial instruments, we use the following methods and assumptions:

• Cash and cash equivalents. The carrying value reported in the condensed consolidated balance sheets for these items approximates fair value due to the high credit standing of the financial institutions holding these items and their liquid nature;

• Accounts receivable, net. The carrying value reported in the condensed consolidated balance sheets is net of allowances for doubtful accounts which includes a degree of counterparty non-performance risk;

• Accounts payable and current liabilities. The carrying value reported in the condensed consolidated balance sheets for these items approximates fair value, which is the likely amount for which the liability with short settlement periods would be transferred to a market participant with a similar credit standing as the Company;

• Notes payable. The carrying value of our long-term notes payable reported in the condensed consolidated balance sheets approximates fair value since they bear interest at variable rates. Refer to Note 5 for further information; and

• Bonds payable. The carrying value of our long-term bonds payable reported in the condensed consolidated balance sheets reflects par value. As of June 30, 2015, the Notes were trading at 103.3% of par value (Level 1). Refer to Note 5 for further information.

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenue:
Administrative fees, net	$ 69,723	$ 70,091	$ 147,484	$ 146,337
Other service fees	120,701	105,324	228,521	199,945
Total net revenue	190,424	175,415	376,005	346,282
Operating expenses:
Cost of revenue (inclusive of depreciation expense of $989 and $648 for the three months ended June 30, 2015 and 2014, respectively; and $1,967 and $1,072 for the six months ended June 30, 2015 and 2014, respectively)	47,124	40,361	90,057	77,792
Product development expenses	7,451	6,642	15,851	14,039
Selling and marketing expenses	23,849	20,721	43,360	35,914
General and administrative expenses	59,399	59,529	123,884	118,332
Restructuring, acquisition and integration-related expenses	556	0	4,995	1,697
Depreciation	13,551	11,862	26,898	23,402
Amortization of intangibles	14,931	14,027	29,987	28,053
Total operating expenses	166,861	153,142	335,032	299,229
Operating income	23,563	22,273	40,973	47,053
Other income (expense):
Interest (expense)	(11,810)	(11,114)	(23,679)	(22,287)
Other (expense) income	(110)	31	(48)	89
Income before income taxes	11,643	11,190	17,246	24,855
Income tax expense	5,329	4,594	7,579	10,581
Net income	$ 6,314	$ 6,596	$ 9,667	$ 14,274
Basic and diluted income per share:
Basic net income per share	$ 0.11	$ 0.11	$ 0.16	$ 0.24
Diluted net income per share	$ 0.10	$ 0.11	$ 0.16	$ 0.23
Weighted average shares - basic	59,865	59,752	59,801	60,189
Weighted average shares - diluted	61,056	60,946	60,832	61,419

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Notes and Bonds Payable

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Notes and Bonds Payable

5. NOTES AND BONDS PAYABLE

The balances of our notes and bonds payable are summarized as follows as of:

	June 30, 2015			December 31, 2014
Term A facility	$	211,263		$	225,000
Term B facility		174,029			179,000
Revolving credit facility		122,000			152,000
Total notes payable		507,292			556,000
Bonds payable		325,000			325,000
Total notes and bonds payable		832,292			881,000
Less: current portions		(24,875	)		(29,583	)
Total long-term notes and bonds payable	$	807,417		$	851,417

Notes Payable

As of June 30, 2015, our long-term notes payable consists of a Term A Facility, a Term B Facility and a revolving credit facility under a credit agreement with JP Morgan Chase Bank, N.A and other financial institutions named therein, dated December 13, 2012 (as amended from time to time, the “Credit Agreement”), each with an outstanding balance of $211,263, $174,029 and $122,000, respectively. We have classified the $122,000 outstanding balance on our revolving credit facility as a long term liability given the maturity date of December 13, 2017. No amounts were drawn on our swing line loan and we made voluntary payments of $30,000 on our revolving credit facility, which resulted in $177,000 of availability under our revolving credit facility (after giving effect to $1,000 of outstanding but undrawn letters of credit on such date and the increase in the revolving credit facility as discussed below) as of June 30, 2015. During the six months ended June 30, 2015, we made scheduled principal payments of $10,875 on our Term A Facility and Term B Facility in addition to payments of $7,833 relating to our 2014 excess cash flow payment ($4,362 on the Term A Facility and $3,471 on the Term B Facility). The applicable weighted average interest rates (inclusive of the applicable bank margin) on our Term A Facility, Term B Facility and revolving credit facility at June 30, 2015 were 2.52%, 4.00% and 2.51%, respectively. On September 8, 2014, the Company entered into a First Increase Joinder to the Credit Agreement (the “First Increase Joinder”). The First Increase Joinder increased the revolving commitment amount under the Credit Agreement by $100,000 to $300,000. In connection with the First Increase Joinder, we incurred and capitalized approximately $615 of debt issuance costs which will be amortized into interest expense ratably over the remaining term of the revolving credit facility.

The Credit Agreement contains certain customary negative covenants, including but not limited to, limitations on the incurrence of debt, limitations on liens, limitations on fundamental changes, limitations on asset sales and sale leasebacks, limitations on investments, limitations on dividends or distributions on, or redemptions of, equity interests, limitations on prepayments or redemptions of unsecured or subordinated debt, limitations on negative pledge clauses, limitations on transactions with affiliates and limitations on changes to the Company’s fiscal year. The Credit Agreement also includes maintenance covenants of maximum ratios of consolidated total indebtedness (subject to certain adjustments) to consolidated EBITDA (subject to certain adjustments) and minimum cash interest coverage ratios. The Credit Agreement contains certain customary representations and warranties, affirmative covenants and events of default, including but not limited to, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of insolvency or bankruptcy, material judgments, certain events under ERISA, actual or asserted failures of any guaranty or security document supporting the credit agreement to be in full force and effect and changes of control. The Company was in compliance with these covenants as of June 30, 2015. We are also required to prepay our debt obligations based on an excess cash flow calculation for the applicable fiscal year which is determined in accordance with the terms of the Credit Agreement. Our current portion of notes payable does not include an amount with respect to any 2015 excess cash flow payment. We will reclassify a portion of our long-term notes payable to a current classification at such time that any 2015 excess cash flow payment becomes estimable. We will be required to make any necessary cash flow payment within the first quarter of 2016.

All of the Company’s obligations under the Credit Agreement are unconditionally guaranteed by each of the Company’s existing and subsequently acquired or organized wholly owned restricted subsidiaries, except that the following subsidiaries do not and will not provide guarantees: (a) unrestricted subsidiaries, (b) subsidiaries with tangible assets and revenues each having a value of less than 2.5% of the consolidated tangible assets and consolidated revenues of the Company (provided that all such immaterial subsidiaries, on a consolidated basis, shall not account for more than 5.0% of the consolidated EBITDA of the Company), (c) any subsidiary prohibited by applicable law, rule or regulation from providing a guarantee or which would require governmental (including regulatory) consent or approval or which would result in adverse tax consequences and (d) not-for-profit subsidiaries.

All of the Company’s obligations under the Credit Agreement are secured by substantially all of the Company’s assets and the assets of each guarantor (subject to certain exceptions), including but not limited to, (1) a perfected pledge of all of the equity securities of each direct wholly owned restricted subsidiary of the Company and of each subsidiary guarantor (which pledge, in the case of any foreign subsidiary, is limited to 65% of the equity securities of such foreign subsidiary) and (2) perfected security interests in, and mortgages on, substantially all tangible and intangible personal property and material fee-owned real property of the Company and each subsidiary guarantor (including but not limited to, accounts receivable, inventory, equipment, general intangibles (including contract rights), investment property, intellectual property, material intercompany notes and proceeds of the foregoing).

Loans under the Credit Agreement must be prepaid under certain circumstances, including with proceeds from certain future debt issuances, asset sales and a portion of excess cash flow for the applicable fiscal year. Loans under the Credit Agreement may be voluntarily prepaid at any time, subject to customary LIBOR breakage costs.

Bonds Payable

The Company has an aggregate principal amount of $325,000 of 8% senior notes due 2018 (the “Notes”) outstanding that have been registered under the Securities Act of 1933, as amended. The Notes are guaranteed on a senior unsecured basis by each of our existing domestic subsidiaries and each of our future domestic restricted subsidiaries in each case that guarantees our obligations under the Credit Agreement. Each of the subsidiary guarantors is 100% owned by us. The guarantees by the subsidiary guarantors are full and unconditional and joint and several. We have no independent assets or operations, and any subsidiaries of ours other than the subsidiary guarantors are minor. The Notes and the guarantees are senior unsecured obligations of the Company and the subsidiary guarantors, respectively.

The Notes were issued pursuant to an indenture dated as of November 16, 2010 (the “Indenture”) among the Company, its subsidiary guarantors and Wells Fargo Bank, N.A., as trustee. Pursuant to the Indenture, the Notes will mature on November 15, 2018 and bear 8% annual interest. Interest on the Notes is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2011.

The Indenture contains certain customary negative covenants, including but not limited to, limitations on the incurrence of debt, limitations on liens, limitations on consolidations or mergers, limitations on asset sales, limitations on certain restricted payments and limitations on transactions with affiliates. The Indenture does not contain any significant restrictions on the ability of the Company or any subsidiary guarantor to obtain funds from the Company or any other subsidiary guarantor by dividend or loan. The Indenture also contains customary events of default. The Company was in compliance with these covenants as of June 30, 2015.

The Company has the option to redeem all or a part of the Notes, at the following redemption prices:

Year	Percentage
2015		102	%
2016 and thereafter		100	%

The Notes also contain a redemption feature that would require the repurchase of 101% of the aggregate principal amount plus accrued and unpaid interest at the option of the holders upon a change in control.

As of June 30, 2015, the Notes were trading at 103.3% of par value (Level 1).

Debt Issuance Costs

As of June 30, 2015, we had approximately $12,126 of debt issuance costs related to the Credit Agreement and Notes which will be amortized into interest expense generally using the effective interest method until the applicable maturity date. For the three months ended June 30, 2015 and 2014, we recognized $971 and $937, respectively, in interest expense related to the amortization of debt issuance costs. For the six months ended June 30, 2015 and 2014, we recognized $1,949 and $1,880, respectively, in interest expense related to the amortization of debt issuance costs.

Debt Maturity Table

The following table summarizes our stated debt maturities and scheduled principal repayments as of June 30, 2015:

Year	Term A Facility		Term B Facility(2)		Revolving Credit Facility		Senior Unsecured Notes		Total
2015(1)	$	9,375	$	1,500	$	—	$	—	$	10,875
2016		25,000		3,000		—		—		28,000
2017		176,888		3,000		122,000		—		301,888
2018		—		3,000		—		325,000		328,000
2019		—		163,529		—		—		163,529
	$	211,263	$	174,029	$	122,000	$	325,000	$	832,292

(1) Represents the remaining quarterly principal payments due during the fiscal year ending December 31, 2015 and the balance of the swing line component of our revolving credit facility, if any.

(2) The Term B Facility matures on December 13, 2019; however, the facility will mature in full on May 15, 2018 if our outstanding senior notes have not been repaid or refinanced in full by such date.

Total interest paid (net of amounts capitalized) on our notes and bonds payable during the six months ended June 30, 2015 and 2014 was approximately $21,554 and $20,058, respectively.

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Deferred Revenue

6 Months Ended

Jun. 30, 2015

Deferred Revenue Disclosure [Abstract]

Deferred Revenue

4. DEFERRED REVENUE

Deferred revenue consists of unrecognized revenue related to advanced customer billing or customer payments received prior to revenue being realized and earned. Substantially all of our deferred revenue consists of: (i) deferred administrative fees, net; (ii) deferred service fees; (iii) deferred software and implementation fees; and (iv) other deferred fees, including receipts for our annual customer and vendor meeting prior to the event.

The following table summarizes the deferred revenue categories and balances as of:

	June 30, 2015			December 31, 2014
Software and SaaS implementation fees	$	53,570		$	55,152
Service fees		21,987			19,241
Administrative fees		13,660			15,715
Other fees		2,448			1,344
Deferred revenue, total		91,665			91,452
Less: Deferred revenue, current portion		(75,677	)		(76,034	)
Deferred revenue, non-current portion	$	15,988		$	15,418

As of June 30, 2015 and December 31, 2014, deferred revenue included in our condensed consolidated balance sheets that was contingent upon meeting performance targets was $5,137 and $8,441, respectively. Advance billings on arrangements that include contingent performance targets are recorded in accounts receivable and deferred revenue when billed. Only certain contingent performance targets are billed in advance of meeting the target as determined by the customer arrangement.

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Notes and Bonds Payable (Tables)

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Summary of Notes and Bonds Payable

The balances of our notes and bonds payable are summarized as follows as of:

	June 30, 2015			December 31, 2014
Term A facility	$	211,263		$	225,000
Term B facility		174,029			179,000
Revolving credit facility		122,000			152,000
Total notes payable		507,292			556,000
Bonds payable		325,000			325,000
Total notes and bonds payable		832,292			881,000
Less: current portions		(24,875	)		(29,583	)
Total long-term notes and bonds payable	$	807,417		$	851,417

Percentage of Redemption Prices

The Company has the option to redeem all or a part of the Notes, at the following redemption prices:

Year	Percentage
2015		102	%
2016 and thereafter		100	%

Debt Maturities and Scheduled Principal Repayments

The following table summarizes our stated debt maturities and scheduled principal repayments as of June 30, 2015:

Year	Term A Facility		Term B Facility(2)		Revolving Credit Facility		Senior Unsecured Notes		Total
2015(1)	$	9,375	$	1,500	$	—	$	—	$	10,875
2016		25,000		3,000		—		—		28,000
2017		176,888		3,000		122,000		—		301,888
2018		—		3,000		—		325,000		328,000
2019		—		163,529		—		—		163,529
	$	211,263	$	174,029	$	122,000	$	325,000	$	832,292

(1) Represents the remaining quarterly principal payments due during the fiscal year ending December 31, 2015 and the balance of the swing line component of our revolving credit facility, if any.

(2) The Term B Facility matures on December 13, 2019; however, the facility will mature in full on May 15, 2018 if our outstanding senior notes have not been repaid or refinanced in full by such date.

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Related Party Transaction

6 Months Ended

Jun. 30, 2015

Related Party Transactions [Abstract]

Related Party Transaction

12. RELATED PARTY TRANSACTION

We had an agreement with John Bardis, formerly our chief executive officer, for the use of an airplane owned by JJB Aviation, LLC, a limited liability company owned by Mr. Bardis. We paid Mr. Bardis at market-based rates for the use of the airplane for business purposes. The audit committee of the board of directors reviews such usage of the airplane annually. During the six months ended June 30, 2015 and 2014, we incurred charges of zero and $756, respectively, related to transactions with Mr. Bardis. On February 17, 2015, the Company entered into a Transition and Consulting Agreement (the “Transition Agreement”) with Mr. Bardis in connection with Mr. Bardis’s resignation from his positions with the Company. Pursuant to the Transition Agreement, the Company’s agreement to use the airplane owned by JJB Aviation, LLC was terminated effective as of January 1, 2015.

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Income Taxes

6 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

8. INCOME TAXES

Income tax expense recorded during the three and six months ended June 30, 2015 reflected an effective income tax rate of 45.8% and 43.9%, respectively. Income tax expense recorded during the three and six months ended June 30, 2014 reflected an effective income tax rate of 41.1% and 42.6%, respectively.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

6. COMMITMENTS AND CONTINGENCIES

Performance Targets

In the ordinary course of contracting with our customers, we may agree to make some or all of our fees contingent upon the customer’s achievement of financial improvement targets from the use of our services and software. These contingent fees are not recognized as revenue until the customer confirms achievement of the performance targets. We generally receive customer acceptance as and when the performance targets are achieved. If we invoice contingent fees prior to customer confirmation that a performance target has been achieved, we record invoiced contingent fees as deferred revenue on our condensed consolidated balance sheet. Often, recognition of this revenue occurs in periods subsequent to the recognition of the associated costs.

Legal Proceedings

From time to time, we become involved in legal proceedings arising in the ordinary course of business. As of June 30, 2015, we are not presently involved in any legal proceedings, the outcome of which, if determined adversely to us, would have a material adverse effect on our business, operating results or financial condition.

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Stockholders' Equity and Share-Based Compensation

6 Months Ended

Jun. 30, 2015

Text Block [Abstract]

Stockholders' Equity and Share-Based Compensation

7. STOCKHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

Common Stock

During the six months ended June 30, 2015, we issued approximately 437,000 shares of common stock in connection with employee stock option exercises, stock-settled stock appreciation rights (“SSARs”) exercises and the vesting of restricted stock units (“RSUs”) for net exercise proceeds of $945.

During the six months ended June 30, 2015, approximately 24,000 shares of restricted common stock were forfeited.

During the six months ended June 30, 2015, we received approximately 199,000 restricted shares that were surrendered from equity awards holders to settle their associated minimum statutory tax liability of $3,836 from shares that vested during the year.

Repurchase of Common Stock

In February 2015, our Board of Directors authorized an extension to our existing share repurchase program until February 29, 2016 and increased the total dollar amount available for the repurchase of shares of our common stock to $100,000 subject to certain restrictions under our Credit Agreement and Indenture. The following table shows the amount and cost of shares of common stock we repurchased for the three and six months ended June 30, 2015 and 2014 under the share repurchase program. The repurchased shares have not been retired and constitute authorized shares that are issued but not outstanding.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Number of shares repurchased		415,236		1,144,145		415,236		1,784,145
Cost of shares repurchased	$	8,588	$	26,699	$	8,588	$	42,759

Share-Based Compensation

As of June 30, 2015, we had restricted common stock, RSUs, SSARs and common stock option equity awards outstanding under three share-based compensation plans. As of June 30, 2015, we had approximately 3,942,000 shares reserved (inclusive of equity award forfeitures) and available for grant under the 2008 MedAssets, Inc. Long-Term Performance Incentive Plan (“LTPIP”).

The total share-based compensation expense related to equity awards was $5,399 and $5,592 for the three months ended June 30, 2015 and 2014, respectively. The total income tax benefit recognized in the condensed consolidated statements of operations for share-based compensation arrangements related to equity awards was $2,018 and $2,083 for the three months ended June 30, 2015 and 2014, respectively.

The total share-based compensation expense related to equity awards was $11,131 and $9,894 for the six months ended June 30, 2015 and 2014, respectively. The total income tax benefit recognized in the condensed consolidated statements of operations for share-based compensation arrangements related to equity awards was $4,160 and $3,686 for the six months ended June 30, 2015 and 2014, respectively. There were no capitalized share-based compensation expenses during the three and six months ended June 30, 2015.

Total share-based compensation expense (inclusive of restricted common stock, RSUs, SSARs and common stock options) for the three and six months ended June 30, 2015 and 2014 as reflected in our condensed consolidated statements of operations is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Cost of revenue	$	1,419	$	1,863	$	3,150	$	3,029
Product development		338		391		773		635
Selling and marketing		873		845		1,907		1,372
General and administrative		2,769		2,493		5,301		4,858
Total share-based compensation expense	$	5,399	$	5,592	$	11,131	$	9,894

Employee Stock Purchase Plan

In 2010, we established the MedAssets, Inc. Employee Stock Purchase Plan (the “Plan”). Under the Plan, eligible employees may purchase shares of our common stock at a discounted price through payroll deductions. The price per share of the common stock sold to participating employees will be 95% of the fair market value of our common stock on the applicable purchase date. The Plan requires that all stock purchased be held by participants for a period of 18 months from the purchase date. A total of 500,000 shares of our common stock are authorized for purchase under the Plan. For the six months ended June 30, 2015 and 2014, we purchased approximately 15,000 shares and 11,000 shares of our common stock under the Plan which amounted to approximately $275 and $253, respectively.

Equity Award Grants

Information regarding equity awards for the six months ended June 30, 2015 is as follows:

Restricted Stock Unit Equity Awards

During the first half of 2015, our Compensation Committee of our Board of Directors (the “Compensation Committee”) approved equity grants for certain eligible employees consisting of service-based and performance-based RSUs. The purpose of the equity grants are to assist the Company in attracting, retaining, motivating, and rewarding certain individuals of the Company. The equity grants are intended to promote the creation of long-term value for stockholders of the Company by closely aligning the interests of such individuals with those of the stockholders. A summary of the total approved equity grants during the six months ended June 30, 2015 is as follows:

	Total RSUs		Range of Grant Date Fair Values
RSUs — Service		796,636	$	18.44 – $20.32	(1)
RSUs — Performance		1,011,144	$	18.44 – $20.32	(2)
Total RSUs granted		1,807,780

(1) Service-based RSUs vest annually over three years of continuous service with the exception of certain equity awards granted to our Board that vest ratably each month through December 31, 2015; and

(2) Performance-based RSUs generally vest annually over three years of continuous service provided the performance metric is achieved and consist of a net revenue and a non-GAAP adjusted earnings per share (“EPS”) performance metric. The Company must achieve a minimum net revenue and non-GAAP adjusted EPS threshold before any performance-based RSUs begin vesting. If the minimum threshold is not met, the equity award holders will forfeit those awards.

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Income Per Share

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Income Per Share

9. INCOME PER SHARE

We calculate earnings per share (or “EPS”) in accordance with GAAP relating to earnings per share. Basic EPS is calculated by dividing reported net income by the weighted-average number of common shares outstanding for the reported period. Diluted EPS reflects the potential dilution that could occur if our stock options, SSARs, unvested restricted stock, RSUs and shares that were purchasable pursuant to our employee stock purchase plan were exercised and converted into our common shares during the reporting periods.

A reconciliation of basic and diluted weighted average shares outstanding for basic and diluted EPS for the three and six months ended June 30, 2015 and 2014 is as follows:

	Three Months Ended June 30,
	2015		2014
Numerator for Basic and Diluted Income Per Share:
Net income	$	6,314	$	6,596
Denominator for basic income per share weighted average shares		59,865,000		59,752,000
Effect of dilutive securities:
Stock options		128,000		222,000
SSARs		203,000		343,000
Restricted stock and RSUs		860,000		629,000
Denominator for diluted income per share — adjusted weighted average shares and assumed conversions		61,056,000		60,946,000
Basic income per share:
Basic net income from continuing operations	$	0.11	$	0.11
Diluted net income per share:
Diluted net income from continuing operations	$	0.10	$	0.11

	Six Months Ended June 30,
	2015		2014
Numerator for Basic and Diluted Income Per Share:
Net income	$	9,667	$	14,274
Denominator for basic income per share weighted average shares		59,801,000		60,189,000
Effect of dilutive securities:
Stock options		132,000		282,000
SSARs		181,000		330,000
Restricted stock and RSUs		718,000		618,000
Denominator for diluted income per share — adjusted weighted average shares and assumed conversions		60,832,000		61,419,000
Basic income per share:
Basic net income from continuing operations	$	0.16	$	0.24
Diluted net income per share:
Diluted net income from continuing operations	$	0.16	$	0.23

During the three and six months ended June 30, 2015 and 2014, the effect of certain dilutive securities have been excluded because the impact is anti-dilutive as a result of certain securities being “out of the money” with strike prices greater than the average market price during the periods presented. The following table provides a summary of those potentially dilutive securities that have been excluded from the above calculation of diluted EPS:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
SSARs		16,000		5,000		27,000		8,000

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Notes and Bonds Payable - Debt Maturities and Scheduled Principal Repayments (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Principal Payment in 2015	$ 10,875
Principal Payment in 2016	28,000
Principal Payment in 2017	301,888
Principal Payment in 2018	328,000
Principal Payment in 2019	163,529
Total notes and bonds payable	832,292	$ 881,000
Term A Facility [Member]
Debt Instrument [Line Items]
Principal Payment in 2015	9,375
Principal Payment in 2016	25,000
Principal Payment in 2017	176,888
Total notes and bonds payable	211,263
Term B Facility [Member]
Debt Instrument [Line Items]
Principal Payment in 2015	1,500
Principal Payment in 2016	3,000
Principal Payment in 2017	3,000
Principal Payment in 2018	3,000
Principal Payment in 2019	163,529
Total notes and bonds payable	174,029
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Principal Payment in 2017	122,000
Total notes and bonds payable	122,000
Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Principal Payment in 2018	325,000
Total notes and bonds payable	$ 325,000

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Business Description and Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Use of Estimates

Use of Estimates

The preparation of the condensed consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the SEC, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from those estimates. We believe that the estimates, assumptions and judgments involved in revenue recognition, allowances for doubtful accounts and returns, product development costs, share-based payments, business combinations, impairment of goodwill, intangible assets and long-lived assets and accounting for income taxes have the greatest potential impact on our condensed consolidated financial statements.

Cash and Cash Equivalents

Cash and Cash Equivalents

All of our highly liquid investments with original maturities of three months or less at the date of purchase are carried at cost (which approximates fair value) and are considered to be cash equivalents. Currently, our excess cash is voluntarily used to repay our swing line credit facility, if any, on a daily basis and applied against our revolving credit facility on a routine basis when our swing line credit facility is undrawn. In addition, we may periodically make voluntary repayments on our term loans.

Cash and cash equivalents were $10,273 and $12,100 as of June 30, 2015 and December 31, 2014, respectively. We had $122,000 and $152,000 outstanding on our revolving credit facility as of June 30, 2015 and December 31, 2014, respectively. In the event our cash balance is zero at the end of a period, any outstanding checks are recorded as accrued expenses. See Note 5 for immediately available cash under our revolving credit facility.

Additionally, we have a concentration of credit risk arising from cash deposits held in excess of federally insured amounts totaling $9,773 as of June 30, 2015.

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Financial Information of Business Segments

The following tables represent our results of operations, by segment, for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Revenue:
SCM
Net administrative fees	$	69,723		$	70,091		$	147,484		$	146,337
Other service fees(1)		50,215			35,816			91,862			68,187
Total SCM net revenue		119,938			105,907			239,346			214,524
RCM
Revenue cycle technology		47,521			47,507			93,502			91,700
Revenue cycle services		22,965			22,001			43,157			40,058
Total RCM net revenue		70,486			69,508			136,659			131,758
Total net revenue		190,424			175,415			376,005			346,282
Operating expenses:
SCM		94,428			81,813			191,182			158,256
RCM		57,803			58,243			113,529			115,218
Corporate		14,630			13,086			30,321			25,755
Total operating expenses		166,861			153,142			335,032			299,229
Operating income (loss):
SCM		25,510			24,094			48,164			56,268
RCM		12,683			11,265			23,130			16,540
Corporate		(14,630	)		(13,086	)		(30,321	)		(25,755	)
Total operating income		23,563			22,273			40,973			47,053
Interest (expense)		(11,810	)		(11,114	)		(23,679	)		(22,287	)
Other (expense) income		(110	)		31			(48	)		89
Income before income taxes		11,643			11,190			17,246			24,855
Income tax expense		5,329			4,594			7,579			10,581
Net income	$	6,314		$	6,596		$	9,667		$	14,274
Segment Adjusted EBITDA
SCM	$	46,478		$	42,300		$	91,466		$	92,250
RCM		20,631			19,613			39,381			33,014
Total Segment Adjusted EBITDA	$	67,109		$	61,913		$	130,847		$	125,264
Corporate		(7,972	)		(7,589	)		(14,337	)		(14,223	)
Total Adjusted EBITDA(2)	$	59,137		$	54,324		$	116,510		$	111,041

(1) Other service fees primarily consists of consulting, services and technology fees.

(2) These are non-GAAP measures. See “Use of Non-GAAP Financial Measures” section for additional information.

	Six Months Ended June 30,
	2015		2014
Capital expenditures(1):
SCM	$	8,480	$	11,002
RCM		12,513		15,417
Corporate		1,990		1,660
Total	$	22,983	$	28,079

(1) Capital expenditures consist of purchases of property and equipment and capitalized software development costs (internal and external use).

	June 30, 2015		December 31, 2014
Financial Position:
Accounts receivable, net
SCM	$	67,434	$	74,337
RCM		61,778		53,129
Corporate		—		275
Total accounts receivable, net		129,212		127,741
Other assets
SCM		1,040,051		1,067,039
RCM		437,636		439,333
Corporate		67,061		84,683
Total other assets		1,544,748		1,591,055
Total assets	$	1,673,960	$	1,718,796
SCM accrued revenue share obligation	$	100,927	$	91,864
Deferred revenue
SCM		50,010		51,958
RCM		41,655		39,494
Total deferred revenue		91,665		91,452
Notes payable		507,292		556,000
Bonds payable		325,000		325,000
Other liabilities
SCM		29,019		36,938
RCM		18,373		23,952
Corporate		146,356		147,103
Total other liabilities		193,748		207,993
Total liabilities	$	1,218,632	$	1,272,309

Segment Adjusted EBITDA to Consolidated Net Income

The following table reconciles Segment Adjusted EBITDA to consolidated net income for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
SCM Adjusted EBITDA	$	46,478		$	42,300		$	91,466		$	92,250
RCM Adjusted EBITDA		20,631			19,613			39,381			33,014
Total Segment Adjusted EBITDA		67,109			61,913			130,847			125,264
Depreciation		(9,713	)		(8,696	)		(19,237	)		(16,958	)
Depreciation (included in cost of revenue)		(989	)		(648	)		(1,967	)		(1,072	)
Amortization of intangibles		(14,931	)		(14,027	)		(29,987	)		(28,053	)
Income tax expense		(18,650	)		(14,562	)		(32,845	)		(30,952	)
Share-based compensation expense(1)		(2,518	)		(3,243	)		(5,609	)		(5,341	)
Purchase accounting adjustments(2)		(367	)		—			(828	)		—
Restructuring, acquisition and integration-related expenses(3)		(461	)		—			(2,126	)		(1,131	)
Total reportable segment net income		19,480			20,737			38,248			41,757
Corporate net loss		(13,166	)		(14,141	)		(28,581	)		(27,483	)
Consolidated net income	$	6,314		$	6,596		$	9,667		$	14,274

(1) Represents non-cash share-based compensation to both employees and directors. We believe excluding this non-cash expense allows us to compare our operating performance without regard to the impact of share-based compensation, which varies from period to period based on amount and timing of grants.

(2) Represents the effect on revenue of adjusting Sg2’s acquired deferred revenue balance to fair value at the acquisition date.

(3) Represents the amount attributable to restructuring, acquisition and integration-related costs which may include costs such as severance, retention, salaries relating to redundant positions, certain performance-related salary-based compensation, operating infrastructure costs and facility consolidation costs.

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Income Per Share - Summary of Potentially Dilutive Securities (Detail) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
SSARs [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities excluded from calculation of diluted EPS	16,000	5,000	27,000	8,000

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Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Statement [Abstract]
Depreciation expense	$ 989	$ 648	$ 1,967	$ 1,072

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Restructuring, Acquisition and Integration-Related Expenses

6 Months Ended

Jun. 30, 2015

Text Block [Abstract]

Restructuring, Acquisition and Integration-Related Expenses

3. RESTRUCTURING, ACQUISITION AND INTEGRATION-RELATED EXPENSES

Restructuring Activities

Restructuring charges consist of exit costs and other costs associated with the reorganization of our operations, including employee termination costs, lease contract termination costs, impairment of assets, and any other qualifying exit costs. Costs associated with exit or disposal activities are generally recorded when the liability is incurred.

In the first half of 2015, our management approved and initiated a plan to restructure our operations that resulted in certain workforce reductions within the Company and changes in senior management. During the three months ended June 30, 2015 and 2014, we expensed total restructuring, acquisition and integration-related costs of $556 (inclusive of $48 of acquisition-related expenses) and zero, respectively. During the six months ended June 30, 2015 and 2014, we expensed total restructuring, acquisition and integration-related costs of $4,995 (inclusive of $352 of acquisition-related expenses) and $1,697, respectively. These costs are included within the restructuring, acquisition and integration-related expenses line on the accompanying condensed consolidated statements of operations. During the first half of 2015, cash payments related to restructuring and acquisition-related activities were approximately $5,005. As of June 30, 2015, we had $2,063 in accrued liabilities for these costs of which $999 is expected to be paid over the next twelve months.

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Business Description and Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Dec. 31, 2013
Change in Accounting Estimate [Line Items]
Cash and cash equivalents	$ 10,273	$ 12,100	$ 6,004	$ 2,790
Outstanding balance on revolving credit facility	482,417	526,417
Cash deposit held in excess of federally insured amounts	9,773
Revolving Credit Facility [Member]
Change in Accounting Estimate [Line Items]
Outstanding balance on revolving credit facility	$ 122,000	$ 152,000

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Stockholders' Equity and Share-Based Compensation - Summary of Total Approved Equity Grants (Detail) - 6 months ended Jun. 30, 2015 - $ / shares	Total
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total RSUs	1,807,780
RSUs - Service [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total RSUs	796,636
Vesting period	3 years
RSUs - Performance [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total RSUs	1,011,144
Vesting period	3 years
Minimum [Member] | RSUs - Service [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Grant Date Fair Values	$ 18.44
Minimum [Member] | RSUs - Performance [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Grant Date Fair Values	18.44
Maximum [Member] | RSUs - Service [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Grant Date Fair Values	20.32
Maximum [Member] | RSUs - Performance [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Grant Date Fair Values	$ 20.32

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Subsequent Events

6 Months Ended

Jun. 30, 2015

Subsequent Events [Abstract]

Subsequent Events

13. SUBSEQUENT EVENTS

We have evaluated subsequent events for recognition or disclosure in the condensed consolidated financial statements filed on Form 10-Q with the SEC and no events have occurred that require disclosure, except for the following:

On August 4, 2015, the Company received written notification from Tenet Healthcare Corporation (“Tenet”) that the Company’s supply chain solutions agreement (“SCS Agreement”) with Tenet will not be renewed following its scheduled expiration on January 31, 2016. The SCS Agreement includes the provision of group purchasing and outsourced procurement services, and related supply chain technology products.

The net revenue from products and services under the SCS Agreement for the six-month period ended June 30, 2015 represents approximately $21,400, or approximately 5.7% of the Company’s net revenue during the same period. The Company estimates that the SCS Agreement contributed approximately $10,500 to operating income, before the allocation of segment and corporate indirect expenses, in the Spend and Clinical Resource Management segment during the six month period ended June 30, 2015.