UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 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 1-34435
CHANGE HEALTHCARE HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware | 20-5799664 | |
(State or Other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) | Identification No.) | |
3055 Lebanon Pike, Suite 1000 Nashville, TN |
37214 | |
(Address of Principal Executive Offices) | (Zip Code) |
(615) 932-3000
(Registrants Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
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 ☐ 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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒
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 |
☐ |
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 Act). Yes ☐ No ☒
As of December 31, 2015, there were issued and outstanding 100 shares of common stock, par value $.01 per share. The registrant is a wholly owned subsidiary of Change Healthcare Intermediate Holdings, Inc., which is a wholly owned subsidiary of Change Healthcare, Inc.
* | The registrant is a voluntary filer of certain reports required to be filed by companies under Section 13 or 15(d) of the Securities and Exchange Act of 1934 and has filed all reports that would have been required to have been filed by the registrant during the preceding 12 months had it been subject to such filing requirements during the entirety of such period. |
DOCUMENTS INCORPORATED BY REFERENCE
None.
EXPLANATORY NOTE
Change Healthcare Holdings, Inc. (the Company) is filing this Amendment No. 1 to its Annual Report on Form 10-K (this Amendment) to restate and amend the Companys previously issued audited consolidated financial statements and related financial information as of and for the years ended December 31, 2015 and 2014 previously included in its Annual Report on Form 10-K for the year ended December 31, 2015 (the Original Filing), which was previously filed with the Securities and Exchange Commission (the SEC) on March 14, 2016 (the Original Filing Date). This Amendment amends the following items in the Original Filing: Item 6 of Part II Selected Financial Data; Item 7 of Part II Managements Discussion and Analysis of Financial Condition and Results of Operations; Item 8 of Part II Financial Statements and Supplementary Data; Item 9A of Part II Controls and Procedures; and Item 15 of Part IV Exhibits and Financial Statement Schedules.
As described in the Companys Current Report on Form 8-K filed January 24, 2017, on January 22, 2017, the Audit Committee of our Board of Directors (the Audit Committee) and the full Board of Directors, after discussion with Company management and Ernst & Young LLP, our independent registered public accounting firm, determined that the audited consolidated financial statements as of and for the years ended December 31, 2015 and 2014 included in our Annual Report on Form 10-K for the year ended December 31, 2015 and the unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2016 and 2015 included in the Companys Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016 previously filed with the SEC should be amended to reflect the adjustments described herein.
Except as described below, this Amendment does not amend, update or change any other items or disclosures in the Original Filing and does not purport to reflect any information or events subsequent to the Original Filing Date. As such, this Amendment speaks only as of the Original Filing Date, and the Company has not undertaken to amend, supplement or update any information contained in the Original Filing to give effect to any subsequent events. Accordingly, this Amendment should be read in conjunction with the Companys filings made with the SEC subsequent to the filing of the Original Filing, including any amendment to those filings.
Background
In connection with a planned contribution of substantially all of the net assets of the Company to a joint venture (the Transaction), prior conclusions regarding the Companys accounting for certain historical transactions have been re-evaluated. As part of this re-evaluation, the Company has determined that a restatement of its audited consolidated financial statements as of and for the years ended December 31, 2015 and 2014 and the unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2016 and 2015 is appropriate. The restatement relates to the accounting treatment of certain items and results in an increase of our net income and reduction of balance sheet liabilities. There is no impact on cash flows for the related periods and EBITDA calculations under our credit agreement and indentures are not affected by the restatement.
In January 2014, the Company effected a change in the tax status of EBS Master LLC (EBS Master), one of its wholly-owned subsidiaries, from a partnership to a corporation. Prior to the tax status change, the Company recognized a deferred tax liability for the difference in the book and tax basis of its investment in EBS Master (i.e. outside basis). Following the tax status change, the Companys deferred tax balances were required to reflect the differences in the book and tax bases of the individual assets and liabilities included in the corporation (i.e. inside basis).
In January 2017, following the re-evaluation in connection with the Transaction, the Company determined that a portion of the deferred tax liability previously related to the outside basis was attributable to the excess of book over tax basis goodwill for which no deferred tax liability would be permitted under generally accepted accounting principles when calculated using the inside basis. Because the Companys consolidated financial statements for the year ended December 31, 2014 included such a deferred tax liability, the Company has restated its consolidated financial statements as of and for the year ended December 31, 2014 to reflect the removal of this deferred tax liability and restated its consolidated financial statements as of and for the year ended December 31, 2015 and as of and for the three and nine months ended September 30, 2016 and 2015 to adjust for the effect of this 2014 adjustment on the subsequent periods. In addition, the Company will also revise the financial statements for other adjustments related to deferred tax liabilities. The impact of those adjustments is immaterial to all periods presented.
For the year ended December 31, 2014, the elimination of this tax liability increased the Companys income tax benefit (and net income) and decreased the Companys deferred income tax liabilities by $190.7 million. This change had no impact on cash flows, EBITDA calculations under our credit agreement and indentures or compliance with our covenants thereunder. Please refer to Adjustment of Previously Issued Financial Statements within Note 1 to our audited consolidated financial statements and notes thereto in this Amendment for more information regarding the adjustment.
Along with restating our financial statements for the correction discussed above, we are making adjustments for certain immaterial items with respect to each of the three years in the period ended December 31, 2015. We have assessed the impact of these adjustments and concluded that they were not material individually, or in the aggregate, to our financial statements as of the balance sheet dates for any of the respective periods. However, in conjunction with the restatement, we have determined it would be appropriate within this Amendment to record these adjustments for the respective periods. Please refer to Adjustment of Previously Issued Financial Statements within Note 1 to our audited consolidated financial statements and notes thereto in this Amendment for more information regarding the effect of these adjustments.
Restatement of Conclusion Regarding Disclosure Controls and Procedures and Internal Control over Financial Reporting
At the time of the Original Filing, our chief executive officer (CEO) (principal executive officer) and the chief financial officer (CFO) (principal financial officer), concluded that our disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2015 and 2014. Subsequent to that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures and internal control over financial reporting were not effective as of December 31, 2015 and 2014 because of a material weakness in internal control over financial reporting as described in Item 9A of Part II Controls and Procedures. As a result, we have restated Item 9A of Part II Controls and Procedures to include disclosure of the material weakness.
CHANGE HEALTHCARE HOLDINGS, INC.
Page Number |
||||||
PART II | ||||||
Item 6. |
2 | |||||
Item 7. |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
3 | ||||
Item 8. |
22 | |||||
Item 9A. |
22 | |||||
PART IV | ||||||
Item 15. |
23 | |||||
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (the Annual Report) of Change Healthcare Holdings, Inc. (Change Healthcare or the Company) includes certain forward-looking statements within the meaning of the federal securities laws regarding, among other things, our or our managements intentions, plans, beliefs, expectations or predictions of future events. These statements often include words such as may, will, should, believe, expect, anticipate, intend, plan, estimate or similar expressions. Forward-looking statements also may include information concerning our possible or assumed future results of operations, including descriptions of our revenues, profitability and outlook and our overall business strategy. These statements are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Although we believe that these forward-looking statements are based on reasonable assumptions, readers should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements.
Other factors that may cause actual results to differ materially include those set forth in the risks discussed in Part I, Item 1A, Risk Factors, and Part II, Item 7,Managements Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. Readers should keep in mind that any forward-looking statement made by us in this Annual Report, or elsewhere, speaks only as of the date on which made. We caution against any undue reliance on these statements and expressly disclaim any intent, obligation or undertaking to update or revise any forward-looking statements made herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
Unless stated otherwise or the context otherwise requires, references in this Annual Report to we, us, our, Change Healthcare and the Company refer to Change Healthcare Holdings, Inc. and its subsidiaries.
1
ITEM 6. | SELECTED FINANCIAL DATA |
The selected historical consolidated financial data set forth below should be read in conjunction with, and are qualified by reference to, Managements Discussion and Analysis of Financial Condition and Results of Operations and our historical consolidated financial statements and related notes included in this Annual Report.
The following table sets forth our selected historical consolidated financial data at the dates and for the periods indicated. The selected historical consolidated financial data as of December 31, 2015 and 2014, and for the years ended December 31, 2015, 2014 and 2013 presented in this table, have been derived from the historical audited consolidated financial statements included in this Annual Report. The selected historical consolidated financial data as of December 31, 2013, 2012 and 2011, for the year ended December 31, 2012 and for the periods from November 2, 2011 to December 31, 2011 and January 1, 2011 to November 1, 2011 presented in this table have been derived from our historical audited consolidated financial statements not included in this Annual Report.
On November 2, 2011, Merger Sub merged with and into Change Healthcare, which resulted in a change in basis of the Companys assets and liabilities. Periods prior to the 2011 Merger and this change in basis are referred to as Predecessor and periods after the 2011 Merger are referred to as Successor. As a result of the 2011 Merger and the resulting change in basis of the Companys assets and liabilities, the Predecessor and Successor period financial data is not comparable.
Successor | Predecessor | |||||||||||||||||||||||
Fiscal Year Ended December 31, 2015 |
Fiscal Year Ended December 31, 2014 |
Fiscal Year Ended December 31, 2013 |
Fiscal Year Ended December 31, 2012 |
November 2, 2011 through December 31, 2011 |
January 1, 2011 through November 1, 2011 |
|||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Statement of Operations Data:(1),(2) |
||||||||||||||||||||||||
Revenue: |
||||||||||||||||||||||||
Solutions revenue |
$ | 1,124,188 | $ | 1,006,949 | $ | 930,713 | $ | 843,394 | $ | 136,291 | $ | 658,226 | ||||||||||||
Postage revenue |
352,895 | 343,464 | 311,854 | 308,919 | 50,825 | 255,553 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenue |
1,477,083 | 1,350,413 | 1,242,567 | 1,152,313 | 187,116 | 913,779 | ||||||||||||||||||
Costs and expenses: |
||||||||||||||||||||||||
Cost of operations |
507,358 | 462,332 | 447,324 | 388,480 | 61,080 | 288,854 | ||||||||||||||||||
Development and engineering |
45,489 | 32,956 | 31,426 | 33,271 | 5,268 | 26,828 | ||||||||||||||||||
Sales, marketing, general and administrative |
217,716 | 198,379 | 170,051 | 147,012 | 23,910 | 123,361 | ||||||||||||||||||
Customer postage |
352,895 | 343,464 | 311,854 | 308,919 | 50,825 | 255,553 | ||||||||||||||||||
Depreciation and amortization |
342,303 | 189,218 | 183,839 | 187,225 | 29,094 | 128,761 | ||||||||||||||||||
Accretion |
10,496 | 14,446 | 26,470 | 8,666 | 2,459 | | ||||||||||||||||||
Impairment of long-lived assets |
8,552 | 83,169 | 10,619 | 1,865 | | | ||||||||||||||||||
Transaction related costs |
| | | | 17,857 | 66,625 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total costs and expenses |
1,484,809 | 1,323,964 | 1,181,583 | 1,075,438 | 190,493 | 889,982 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating income (loss) |
(7,726 | ) | 26,449 | 60,984 | 76,875 | (3,377 | ) | 23,797 | ||||||||||||||||
Interest expense, net |
168,252 | 146,829 | 153,169 | 172,253 | 29,343 | 43,202 | ||||||||||||||||||
Loss on extinguishment of debt |
| | 23,160 | 21,853 | | | ||||||||||||||||||
Contingent consideration |
(4,825 | ) | 1,307 | (69 | ) | | (5,843 | ) | (8,036 | ) | ||||||||||||||
Other |
(741 | ) | (3,968 | ) | (4,133 | ) | 1,250 | | 13 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) before income taxes |
(170,412 | ) | (117,719 | ) | (111,143 | ) | (118,481 | ) | (26,877 | ) | (11,382 | ) | ||||||||||||
Income tax provision (benefit) |
(82,579 | ) | (232,562 | ) | (37,163 | ) | (40,737 | ) | (9,639 | ) | 8,201 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) |
(87,833 | ) | 114,843 | (73,980 | ) | (77,744 | ) | (17,238 | ) | (19,583 | ) | |||||||||||||
Net income attributable to noncontrolling interest |
| | | | | 5,109 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) attributable to Change Healthcare |
$ | (87,833 | ) | $ | 114,843 | $ | (73,980 | ) | $ | (77,744 | ) | $ | (17,238 | ) | $ | (24,692 | ) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
2
As of December 31, | ||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Balance Sheet Data:(1),(2) |
||||||||||||||||||||
Cash and cash equivalents |
$ | 66,655 | $ | 82,306 | $ | 76,538 | $ | 31,763 | $ | 37,925 | ||||||||||
Total assets |
4,557,204 | 3,824,312 | 3,714,196 | 3,728,169 | 3,779,368 | |||||||||||||||
Total debt(3) |
2,773,953 | 2,162,776 | 2,019,317 | 1,996,575 | 1,930,353 | |||||||||||||||
Tax receivable obligations to related parties |
173,493 | 163,983 | 150,496 | 125,003 | 117,810 | |||||||||||||||
Total equity |
$ | 1,175,145 | $ | 1,093,285 | $ | 969,069 | $ | 1,032,196 | $ | 1,103,243 |
(1) | As a result of our history of business combinations, our financial position and results of operations may not be comparable for each of the periods presented. |
(2) | As described in Note 1 to the consolidated financial statements and related notes included in this Annual Report, certain of the selected financial data has been restated. |
(3) | Our debt at December 31, 2015, 2014, 2013, 2012 and 2011 is reflected net of unamortized debt discount of approximately $47.8 million, $41.6 million, $44.1 million, $71.8 million and $89.9 million, respectively, related to original loan fees and purchase accounting adjustments to discount the debt to fair value. Total debt as of December 31, 2015, 2014, 2013, 2012 and 2011 includes an obligation of approximately $18.2 million, $29.4 million, $35.1 million, $27.2 million and $31.3 million, respectively, related to our data sublicense agreement and other financing arrangements. |
ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
You should read the following discussion in conjunction with Selected Financial Data and our consolidated financial statements and related notes included elsewhere in this Annual Report. Some of the statements in the following discussion are forward-looking statements. See Cautionary Statement Regarding Forward-Looking Statements elsewhere in this Annual Report.
Overview
We are a leading provider of software and analytics, network solutions and technology-enabled services that optimize communications, payments and actionable insights designed to enable smarter healthcare. Our integrated capabilities enable our customers to exchange mission-critical information, optimize revenue opportunities, control costs, increase cash flow and efficiently manage complex healthcare workflows. The foundation of our solutions is embedded in our Change Healthcare Intelligent Healthcare NetworkTM, which facilitates the capture and standardization of healthcare data seamlessly in our customers workflow. Our intelligent healthcare platform underpins the United States healthcare system, benefiting all major healthcare stakeholders: commercial and governmental payers, employers, hospitals, physician practices, dentists, laboratories, pharmacies and consumers.
We deliver our solutions and operate our business in three reportable segments: (i) software and analytics, which provides payment and reimbursement optimization and decision support solution for our customers; (ii) network solutions, which leverages our healthcare information network to optimize information exchange and workflows among healthcare system participants; and (iii) technology-enabled services, which provides payment and communication, workflow, advisory and other administrative solutions to optimize payment and reimbursement efficiencies. Through our software and analytics segment, we provide revenue cycle technology, revenue optimization, payment integrity, electronic payment, risk adjustment, quality reporting, data and analytics and engagement solutions. Through our network solutions segment, we provide financial and administrative information exchange solutions for medical, pharmacy and dental claims management and other standardized healthcare transactions, including clinical information exchange capabilities. Through our technology-enabled services segment, we provide payment and communication, eligibility and enrollment, healthcare consulting, payment automation and pharmacy benefits administration solutions. We generally provide our solutions to payer, provider and pharmacy customers, including commercial insurance companies, third party administrators, governmental payers, self-insured employers, hospitals, physician practices, dentists, laboratories, pharmacies, pharmacy benefit management companies and government agencies.
There are a number of company-specific initiatives and industry trends that may affect our business volumes, revenues, cost of operations and margins. As part of our strategy, we encourage our customers to migrate from paper-based claim, communication, payment and other transaction processing to electronic, automated processing in order to improve efficiency. Our business is aligned with our customers to support this transition, and as they migrate from paper-based processing to electronic processing, even though our revenues for an applicable customer generally will decline, our margins and profitability will typically increase.
Part of our strategy also includes the development and introduction of new and updated solutions. Our new and updated solutions are likely to require us to incur development and engineering expenditures, both operating and capital, and related sales and marketing costs at increased levels in order to successfully develop and achieve market acceptance of such solutions. We also may acquire, or enter into agreements with third parties to assist us in providing, new solutions. For example, we offer our electronic payment solutions through banks or vendors who contract with banks and other financial service firms. The costs of these initiatives or the failure to achieve broad penetration in target markets with respect to new or updated solutions may negatively affect our results of operations, margins and cash flow. Because newly introduced solutions generally will have lower margins initially as compared to our existing and more mature solutions, our margins and margin growth may be adversely affected on a percentage basis until these new solutions achieve scale and maturity. In addition, we continue to improve the scalability and performance of our network and platform. Any improvements in our current network or platform, the development of new networks or platforms, including those leveraging cloud-based environments, may result in more operating costs and less capital expenditures as compared to prior periods.
3
In addition to our internal development efforts, we actively evaluate opportunities to improve and expand our solutions through strategic acquisitions. Our acquisition strategy focuses on identifying acquisitions that improve and streamline the business and administrative functions of healthcare. We believe our broad customer footprint allows us to deploy acquired solutions into our installed base, which, in turn, can help accelerate the growth of our acquired businesses. We also believe our management teams ability to identify acquisition opportunities that are complementary and synergistic to our business, and to integrate them into our existing operations with minimal disruption, will continue to play an important role in the expansion of our business and growth. Our success in acquiring and integrating acquired businesses into our existing operations, the associated costs of such acquisitions, including integration costs, and the operating characteristics of the acquired businesses also may impact our results of operations and margins. Because the businesses we acquire sometimes have lower margins than our existing businesses, primarily as a result of their lack of scale and maturity, our margins on a percentage basis may be adversely affected in the periods subsequent to an acquisition from revenue mix changes and integration activities associated with these acquisitions.
We also expect to continue to be affected by general economic, regulatory and demographic factors affecting the healthcare industry. Significant changes in regulatory schemes, such as the updated HIPAA, ARRA, ACA and other federal healthcare policy initiatives, impact our customers healthcare activities. In particular, we believe the ACA has significantly affected the regulatory environment in which we and our customers operate by changing how healthcare services are covered, delivered and reimbursed through expanded coverage of uninsured individuals, reduced federal healthcare program spending, increased efforts to link federal healthcare program payments to quality and efficiency and insurance market reforms.
While we believe the ACA, through an increased number of people with health insurance coverage, has contributed increasing transaction volumes in our network solutions segment, we believe ACA has negatively impacted our eligibility and enrollment solutions within our technology-enabled services segment as a result of expanded coverage of uninsured individuals, particularly in opt-in states, and changes in federal and state reimbursement patterns and rates. We are seeking to mitigate the impact of ACA on the market for eligibility and enrollment services by offering additional value-added solutions to our customers. In addition, we are unable to predict how providers, payers, pharmacies and other healthcare market participants will continue to respond to the various other reform provisions of the ACA, and we cannot be sure that the markets for our solutions will continue to exist at current levels or that we will have adequate technical, financial and marketing resources to react to changes in those markets.
Demographic trends affecting the healthcare industry, such as population growth and aging or unemployment rates, also could affect the frequency and nature of our customers healthcare transactional activity. The impact of such changes could impact our revenues, cost of operations and infrastructure expenses and thereby affect our results of operations and the way we operate our business. For example, an increase in the United States population, if such increase is accompanied by an increase in the United States population that has health insurance benefits, or the aging of the United States population, which requires an overall increased need for healthcare services, may result in an increase in our business volumes which, in turn, may increase our revenues and cost of operations. Alternatively, a general economic downturn, which reduces the number of discretionary health procedures by patients, or a persistent high unemployment rate, which lessens healthcare utilization, may decrease or offset other growth in our volumes, which, in turn, may adversely impact our revenues and cost of operations.
Recent Developments
In January 2015, we reorganized our reportable segments as software and analytics, network solutions and technology-enabled services. This discussion and analysis related to prior periods has been restated to reflect our current organizational structure.
In January 2015, in order to clarify the nature of customer related postage activities, we created separate captions on the statement of operations within revenue and costs and expenses, respectively. This discussion and analysis related to prior periods has been restated to reflect our current presentation.
In August 2015, we acquired Altegra Health, Inc. (Altegra Health), a technology-enabled provider that assists payers and risk bearing providers with analytics and reporting capabilities for risk adjustment, member engagement and quality analysis to achieve actionable insights and improved management for value-based healthcare, for initial cash consideration and the assumption of certain liabilities.
In September 2015, we announced our plan to rebrand as Change Healthcare effective in the fourth quarter of 2015. As a result of this plan, we revised the remaining useful life of our existing tradename asset. During the year ended December 31, 2015, we accelerated amortization expense of approximately $126.1 million related to our previous tradename asset.
Our Revenues and Expenses
We generate virtually all of our revenue by using technology solutions to provide our customers services that automate and simplify business and administrative functions for payers, providers and pharmacies generally on either a per transaction, per document, per communication, per member per month, per provider per month, monthly flat-fee, contingent fee or hourly basis.
Cost of operations consists primarily of costs related to services we provide to customers and costs associated with the operation and maintenance of our networks. These costs primarily include materials costs related to our payment and communication solutions, rebates paid to our channel partners (net of rebates to certain customers that offset revenue) and data communications costs, all of which generally vary with our revenues and/or volumes. Cost of operations also includes personnel costs associated with production, network operations, customer support and other personnel, facilities expenses and equipment maintenance, all of which vary less directly with our revenue and/or volumes due to the fixed or semi-fixed nature of these expenses.
4
Rebates are paid to channel partners for electronic and other volumes delivered through our network to certain payers and can be impacted by the number of comprehensive management services agreements we execute with payers, the associated rate structure with our payer customers, the success of our direct sales efforts to providers and the extent to which direct connections to payers are developed by our channel partners. While these rebates are generally a component of our cost of operations, in cases where the channel partners are also our customers, these rebates generally are recognized as an offset to revenue.
Our data communication expense consists of telecommunication and transaction processing charges.
Our material costs relate primarily to our payment and communication solutions volumes, and consist primarily of paper and printing costs.
Development and engineering expense consists primarily of personnel costs related to the development, management and maintenance of our current and future solutions. We may invest more in this area in the future as we develop new and enhance existing solutions.
Sales, marketing, general and administrative expense consists primarily of personnel costs associated with our sales, account management and marketing functions, as well as management, administrative and other shared corporate services related to the operations of our operating segments and overall business operations.
Our development and engineering expense, sales, marketing, general and administrative expense and corporate expense, while related to our current operations, also are affected and influenced by our future plans including the development of new solutions, business strategies and enhancement and maintenance of our infrastructure.
Postage, which is generally billed as a pass-through cost to our customers, is the most significant cost incurred in the delivery of our payment and communication solutions. Our postage costs and related revenues increase as our payment and communication solutions volumes increase and also when the USPS increases postage rates. Although the USPS historically has increased postage rates annually in most recent years, including in January 2014 and May 2015, the frequency and nature of such annual increases may not occur as regularly in the future.
Our depreciation and amortization expense is related to depreciation of our property and equipment, including technology assets, and amortization of intangible assets. The amount of depreciation and amortization expense is affected by the level of our recent investment in property and equipment, acquisition activity and asset impairments or certain changes in estimates.
Our interest expense consists principally of cash interest associated with our long-term debt obligations and non-cash interest associated with the amortization of borrowing costs and discounts related to debt issuance. If market interest rates on the variable portion of our long-term debt increase in the future, our interest expense may increase.
Our income taxes consist of federal and state income taxes. These amounts include current income taxes payable, as well as income taxes for which the payment is deferred to future periods and dependent on the occurrence of future events. Our income taxes are affected by the recognition of valuation allowances, our tax status and other items. For additional information, see the discussion of income taxes in the section Significant Items Affecting Comparability-Income Taxes.
Significant Items Affecting Comparability
Certain significant items or events should be considered to better understand differences in our results of operations from period to period. We believe that the following items or events have had a significant impact on our results of operations for the periods discussed below or may have a significant impact on our results of operations in future periods:
5
Acquisitions and Divestitures
We actively evaluate opportunities to improve and expand our business through targeted acquisitions that are consistent with our strategy. On occasion, we also may dispose of certain components of our business that no longer fit within our overall strategy. Because of our acquisition and divestiture activity as well as the shifting revenue mix of our business due to this activity, our results of operations may not be directly comparable among periods. The following summarizes our significant acquisition transactions since January 1, 2013 and affected segments:
Date |
Business |
Description |
Affected Segment | |||
June 2013 | Goold Health Systems (Goold) | Technology-enabled provider of pharmacy benefit and related services primarily to state Medicaid agencies | Technology-enabled Services | |||
July 2014 | Capario Corp. (Capario) | Technology-enabled provider of revenue cycle management solutions | Software and Analytics; Network Solutions | |||
November 2014 | Change Healthcare Corporation (Engagement Solutions) | Technology-enabled provider of healthcare consumer engagement solutions | Software and Analytics | |||
December 2014 | Adminisource Communications, Inc. (Adminisource) | Technology-enabled provider of payment and communication solutions | Technology-enabled Services | |||
August 2015 | Altegra Health | Technology-enabled provider of analytical and reporting solutions for risk adjustment, member engagement and quality analysis | Software and Analytics; Technology-enabled Services |
For certain of our acquisitions, we agreed to transfer additional consideration to the sellers of the acquired businesses in the event that specified performance measures are achieved, including Goold and Engagement Solutions. United States generally accepted accounting principles generally require us to recognize the initial fair value of the expected amount to be paid under such contingent consideration arrangements as a component of the total consideration transferred. Subsequent changes in the fair value of the amounts expected to be paid, however, are generally required to be recognized as a component of net income. Such changes in fair value may occur based on changes in the expected timing or amount of payments or the effect of discounting the liability for the time value of money.
Efficiency Measures
We evaluate and implement efficiency measures and other cost savings initiatives on an ongoing basis to improve our financial and operating performance through reorganization, cost savings, productivity improvements, product development and other process improvements. For instance, we continue to evaluate measures to consolidate our data centers, operations and networks, to outsource certain information technology and operations functions and to streamline product development. The implementation of these measures often involves upfront cash costs related to severance, professional fees, contractor costs and/or capital expenditures, with the cost savings or other improvements not realized until the measures are successfully completed. Additionally, we may recognize impairment charges as a result of such initiatives.
Income Taxes
Our blended statutory federal and state income tax rate generally ranges from 37% to 40%. Our effective income tax rate, however, is affected by several factors. The following table and subsequent commentary reconciles our federal statutory rate to our effective income tax rate and the subsequent commentary describes the more significant of the reconciling factors:
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Statutory U.S. federal tax rate |
35.00 | % | 35.00 | % | 35.00 | % | ||||||
State income taxes (net of federal benefit) |
13.11 | 25.86 | (1.39 | ) | ||||||||
Tax receivable agreements |
(0.41 | ) | (1.89 | ) | (1.00 | ) | ||||||
Other |
0.76 | (0.33 | ) | 0.82 | ||||||||
Change in tax status |
| 138.92 | | |||||||||
|
|
|
|
|
|
|||||||
Effective income tax rate |
48.46 | % | 197.56 | % | 33.43 | % | ||||||
|
|
|
|
|
|
6
State Income TaxesOur effective tax rate for state income taxes is generally impacted by changes in our apportionment. In addition, our effective rate for state income taxes was affected by the following discrete matters:
In January 2014, we effected a change in the tax status of one of our subsidiaries from a partnership to a corporation.
In May 2015, the state of Tennessee enacted the Tennessee Revenue Modernization Act, which changed the manner in which our Tennessee apportionment is determined. This change in our Tennessee apportionment, along with routine changes in apportionment that arose following the filing of the Companys annual tax returns during 2015, resulted in an increase in our effective state income tax rate.
In December 2015, we simplified our legal organizational structure for which the primary economic effect was to enable us to realize deferred tax assets for state income tax purposes that we previously had concluded were not likely to be realized. This legal organizational simplification resulted in a decrease to the Companys effective state income tax rate.
Tax Receivable AgreementIn connection with our tax receivable agreements, we are required to accrete the present value of the obligations to the amount of the total expected payments. This accretion, though recognized as an expense for book purposes, results in no tax deduction.
Change in Tax StatusPrior to the change in the tax status of one of our subsidiaries from a partnership to a corporation, we recognized a deferred tax liability for the difference between the book and tax basis of our investment in this subsidiary (i.e. outside basis). The outside tax basis of the investment in this subsidiary excluded consideration of goodwill within that subsidiary that otherwise would have no tax basis. Following the tax status change, our deferred tax balances reflect only the difference in the book and tax bases of the individual assets and liabilities included in the corporation.
Amendments of the Senior Credit Agreement and New Senior Notes
Our interest expense primarily is affected by the amount of debt funding and the applicable variable interest rates, including a fixed spread, under our Senior Credit Agreement. In April 2012, we amended the Senior Credit Agreement to reprice the Senior Credit Facilities and borrow $80.0 million of additional term loans for general corporate purposes, including acquisitions. As a result of these amendments, the LIBOR-based interest rate applicable to our Senior Credit Facilities was generally reduced by 175 basis points. The Senior Credit Agreement was also amended in April 2013 to further reduce the LIBOR-based interest rate by an additional 125 basis points, and to modify certain financial covenants. In December 2014 and August 2015, we borrowed an additional $160.0 million and $395.0 million, respectively, under incremental term loan facilities through amendments to our Senior Credit Agreement.
In August 2015, we borrowed $250.0 million by issuing the 2021 Notes.
Impairment of Long-lived Assets
During the year ended December 31, 2015, we determined, as a result of technology challenges, slower than expected customer adoption, and management attrition, that one of our recently developed products in the network solutions segment was impaired. We recognized a $5.0 million impairment charge to adjust the carrying value of the asset group to its fair value. In addition, throughout 2015, the Company abandoned certain hardware and software in connection with the continued migration of software development to a cloud-based environment. Among this abandoned hardware and software was a complete redevelopment of an existing software and analytics solution in this cloud-based environment. We recognized impairment charges of $3.6 million related to this migration.
During the year ended December 31, 2014, our technology-enabled services segment received notice that its existing contract with a customer would not be renewed in full upon its expiration. As a result, we abandoned a customer related project that was under development and assessed the recoverability of the net assets included in the relevant asset group. We recognized a $73.2 million impairment charge to write off the abandoned project and to adjust the carrying value of the asset group to its fair value. Additionally, we abandoned certain network solutions and technology-enabled services segment development projects in connection with execution of certain strategic initiatives. We recognized impairment charges of $10.0 million during the year ended December 31, 2014 related to these abandoned projects.
Critical Accounting Estimates
The preparation of financial statements in accordance with United States generally accepted accounting principles requires us to make estimates and assumptions that affect reported amounts and related disclosures. We consider an accounting estimate to be critical if:
| it requires assumptions to be made that were uncertain at the time the estimate was made; and |
| changes in the estimate or different estimates that could have been made could have a material impact on our consolidated results of operations and financial condition. |
The following discussion of critical accounting estimates is not intended to be a comprehensive list of all of our accounting policies that require estimates and highlights only those policies that involve estimates that we believe entail a higher degree of judgment and complexity. We believe the current assumptions and other considerations used to estimate amounts reflected in our consolidated financial statements are appropriate. However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our consolidated financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations and financial condition.
7
The discussion that follows presents information about our critical accounting estimates, as well as the effects of hypothetical changes in the material assumptions used to develop each estimate:
Revenue Recognition
We generate most of our revenue by using technology solutions to provide services to our customers that automate and simplify business and administrative functions for payers, providers and pharmacies, generally on either a per transaction, per document, per communication, per member per month, per provider per month, monthly flat-fee, contingent fee or hourly basis.
Revenue for financial and administrative information exchange, payment and communication, risk adjustment, quality reporting and healthcare consulting solutions are recognized as the services are provided. Postage fees related to our payment and communication solutions volumes are recorded on a gross basis. Revenue for our eligibility and enrollment and revenue optimization solutions generally are recognized at the time that our provider customer receives notice from the payer of a pending payment. Revenue for payment integrity solutions are recognized at the time that notice of customer acceptance is received.
Cash receipts or billings in advance of revenue recognition are recorded as deferred revenues in our consolidated balance sheets.
We exclude sales and use tax from revenue in our consolidated statements of operations.
Business Combinations
We recognize the consideration transferred (i.e. purchase price) in a business combination as well as the acquired business identifiable assets, liabilities and noncontrolling interests at their acquisition date fair value. The excess of the consideration transferred over the fair value of the identifiable assets, liabilities and noncontrolling interest, if any, is recorded as goodwill. Any excess of the fair value of the identifiable assets acquired and liabilities assumed over the consideration transferred, if any, is generally recognized within earnings as of the acquisition date. To the extent that our initial accounting for a business combination is incomplete at the end of a reporting period, provisional amounts are reported for those items which are incomplete. Following the adoption of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2015-16, we adjust such provisional amounts in the reporting period in which the adjustment amounts are determined.
The fair value of the consideration transferred, assets, liabilities and noncontrolling interests is estimated based on one or a combination of income, cost or market approaches as determined based on the nature of the asset or liability and the level of inputs available to us (i.e., quoted prices in an active market, other observable inputs or unobservable inputs). With respect to assets, liabilities and noncontrolling interest, the determination of fair value requires management to make subjective judgments as to projections of future operating performance, the appropriate discount rate to apply, long-term growth rates, etc. The effect of these judgments then impacts the amount of the goodwill that is recorded and the amount of depreciation and amortization expense to be recognized in future periods related to tangible and intangible assets acquired.
With respect to the consideration transferred, certain of our acquisitions include contingent consideration, the fair value of which is generally required to be measured each quarter until resolution of the contingency. In addition to the judgments applicable to valuing tangible and intangible assets, the determination of the fair value of the attainment of certain specified financial performance measures requires management to make subjective judgments as to the probability and timing of the attainment of certain specified financial performance measures. The determination of the fair value of the contingent consideration is particularly sensitive to judgments relative to the probability of achieving the specified financial performance measures.
Goodwill and Intangible Assets
Goodwill and intangible assets from our acquisitions are accounted for using the acquisition method of accounting. Intangible assets with definite lives are amortized on a straight-line basis over the estimated useful lives of the related assets generally as follows:
Customer relationships |
5-20 years | |
Tradenames |
3-20 years | |
Data sublicense agreement |
6 years | |
Non-compete agreements |
2-5 years | |
Premise-based software |
1-3 years |
With respect to intangible assets (excluding goodwill), we review for impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. For those assets that are held and used, we recognize an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measure the impairment loss based on the difference between the carrying amount and fair value. Assets held for sale are reported at the lower of cost or fair value less costs to sell.
8
We assess our goodwill for impairment annually (as of October 1 of each year) or whenever significant indicators of impairment are present. We first assess whether we can reach a more likely than not conclusion that goodwill is not impaired via qualitative analysis alone. To the extent, such a conclusion cannot be reached based solely on a qualitative assessment, we (using the assistance of a valuation specialist as appropriate) compare the fair value of each reporting unit to its associated carrying value. If the fair value of the reporting unit is less than the carrying value, then a hypothetical acquisition method allocation is performed to determine the amount of the goodwill impairment to recognize.
During 2015, we identified software and analytics, network solutions and technology-enabled services as our operating segments. Our reporting units are comprised of the network solutions and technology-enabled services, each of which are operating segments, as well as the components of the software and analytics operating segment (Engagement Solutions and the aggregate of all other components (All Other) of this operating segment).
We estimated the fair value of our reporting units using a methodology that considers both income and market approaches. Specifically, for 2015, we estimated fair value of our reporting units based on the weighted average of fair value measures estimated under the income and market approaches.
Each approach requires the use of certain assumptions. The income approach requires management to exercise judgment in making assumptions regarding the reporting units future income stream, a discount rate and a constant rate of growth after the initial forecast period utilized. These assumptions are subject to change based on business and economic conditions and could materially affect the indicated values of our reporting units. For example, a 100 basis point increase in our selected discount rate would have resulted in a decrease in the indicated value of our network solutions, technology-enabled services, Engagement Solutions and All Other reporting units of approximately $137.6 million, $121.5 million, $20.2 million and $128.8 million, respectively. The indicated fair value of each reporting unit exceeded their respective carrying values in the most recent annual impairment test by approximately $1,019.4 million, $682.6 million, $8.6 million and $134.8 million, respectively. Because the Engagement Solutions reporting unit was recently acquired and represents a stand-alone reporting unit, it is inherently more susceptible to potential impairment than the other reporting units. A significant downturn in operating performance or market conditions may result in a future impairment of this reporting unit. Goodwill of the Engagement Solutions reporting unit totaled $110.0 million as of December 31, 2015.
The market approach requires management to exercise judgment in its selection of guideline companies, as well in its selection of the most relevant transaction multiple. Guideline companies selected are comparable to us in terms of product or service offerings, markets and/or customers, among other characteristics.
Income Taxes
We record deferred income taxes for the tax effect of differences between book and tax bases of our assets and liabilities, as well as differences related to the timing of recognition of income and expenses.
Deferred income taxes reflect the available net operating losses and the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of the future tax benefits related to deferred tax assets is dependent on many factors, including our past earnings history, expected future earnings, the character and jurisdiction of such earnings, reversing taxable temporary differences, unsettled circumstances that, if unfavorably resolved would adversely affect utilization of our deferred tax assets, carryback and carryforward periods and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset.
We recognize tax benefits for uncertain tax positions at the time that we conclude the tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. The benefit, if any, is measured as the largest amount of benefit, determined on a cumulative probability basis that is more likely than not to be realized upon ultimate settlement. Tax positions failing to qualify for initial recognition are recognized in the first subsequent interim period that they meet the more likely than not standard, are resolved through negotiation or litigation with the taxing authority or on expiration of the statute of limitations.
Tax Receivable Agreement Obligations
The Company is a party to tax receivable agreements which obligate us to make payments to the TRA Members, equal to 85% of the applicable cash savings that the Company realizes as a result of tax attributes arising from certain previous transactions, including the 2011 Merger.
Prior to the 2011 Merger, the Companys balance sheet reflected these obligations at the amount that was both probable and reasonably estimable. In connection with the 2011Merger, the tax receivable agreement obligations were adjusted to their fair value. The determination of the fair value required management to make assumptions as to the timing of the realization of net operating losses, the timing of payments to the TRA Members and the tax rates in effect during the life of the agreements. Changes in any of these or other factors are expected to impact the timing and amount of gross payments.
9
The fair value of these obligations at the time of the 2011 Merger is being accreted to the amount of the gross expected obligation using the interest method. Changes in the amount of these obligations resulting from changes to either the timing or amount of cash flows are recognized in the period of change and measured using the discount rate inherent in the initial fair value of the obligations. The accretion of these obligations is classified as a separate caption in our consolidated statements of operations.
10
Results of Operations
The following table summarizes our consolidated results of operations for the years ended December 31, 2015, 2014 and 2013, respectively (amounts in thousands).
Year Ended | Year Ended | Year Ended | ||||||||||||||||||||||
December 31, 2015 | December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||
% of | % of | % of | ||||||||||||||||||||||
Amount | Revenue(1) | Amount | Revenue(1) | Amount | Revenue(1) | |||||||||||||||||||
Revenue: |
||||||||||||||||||||||||
Solutions revenue |
$ | 1,124,188 | 76.1 | % | $ | 1,006,949 | 74.6 | % | $ | 930,713 | 74.9 | % | ||||||||||||
Postage revenue |
352,895 | 23.9 | 343,464 | 25.4 | 311,854 | 25.1 | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total revenue |
1,477,083 | 100.0 | 1,350,413 | 100.0 | 1,242,567 | 100.0 | ||||||||||||||||||
Cost and expenses: |
||||||||||||||||||||||||
Cost of operations (exclusive of depreciation and amortization below) |
507,358 | 45.1 | 462,332 | 45.9 | 447,324 | 48.1 | ||||||||||||||||||
Development and engineering |
45,489 | 4.0 | 32,956 | 3.3 | 31,426 | 3.4 | ||||||||||||||||||
Sales, marketing, general and administrative |
217,716 | 19.4 | 198,379 | 19.7 | 170,051 | 18.3 | ||||||||||||||||||
Customer postage |
352,895 | 23.9 | 343,464 | 25.4 | 311,854 | 25.1 | ||||||||||||||||||
Depreciation and amortization |
342,303 | 23.2 | 189,218 | 14.0 | 183,839 | 14.8 | ||||||||||||||||||
Accretion |
10,496 | 0.7 | 14,446 | 1.1 | 26,470 | 2.1 | ||||||||||||||||||
Impairment of long-lived assets |
8,552 | 0.6 | 83,169 | 6.2 | 10,619 | 0.9 | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Operating income |
(7,726 | ) | (0.5 | ) | 26,449 | 2.0 | 60,984 | 4.9 | ||||||||||||||||
Interest expense, net |
168,252 | 11.4 | 146,829 | 10.9 | 153,169 | 12.3 | ||||||||||||||||||
Loss on extinguishment of debt |
| | | | 23,160 | 1.9 | ||||||||||||||||||
Contingent consideration |
(4,825 | ) | 1,307 | (69 | ) | |||||||||||||||||||
Other |
(741 | ) | (0.1 | ) | (3,968 | ) | (0.3 | ) | (4,133 | ) | (0.3 | ) | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Income (loss) before income tax provision (benefit) |
(170,412 | ) | (11.5 | ) | (117,719 | ) | (8.7 | ) | (111,143 | ) | (8.9 | ) | ||||||||||||
Income tax provision (benefit)(2) |
(82,579 | ) | (5.6 | ) | (232,562 | ) | (17.2 | ) | (37,163 | ) | (3.0 | ) | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Net income (loss)(2) |
$ | (87,833 | ) | (5.9 | )% | $ | 114,843 | 8.5 | % | $ | (73,980 | ) | (6.0 | )% | ||||||||||
|
|
|
|
|
|
(1) | Percentages of revenue for cost of operations, development and engineering and sales, marketing, general and administrative line items are based on solutions revenue. |
(2) | As described in Note 1 to the consolidated financial statements and related notes included in this Annual Report, certain of this data has been restated. |
11
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Solutions Revenues
Our solutions revenues were $1,124.2 million for the year ended December 31, 2015 as compared to $1,006.9 million for the year ended December 31, 2014, an increase of $117.2 million, or 11.6%. Factors affecting our solutions revenues are described in the various segment discussions below.
Cost of Operations
Our total cost of operations was $507.4 million for the year ended December 31, 2015 as compared to $462.3 million for the year ended December 31, 2014, an increase of $45.0 million, or 9.7%. The increase in our cost of operations is primarily due to business growth, the impact of acquired businesses and increased labor and strategic growth initiative costs. As a percentage of solutions revenue, our cost of operations was 45.1% for the year ended December 31, 2015 as compared to 45.9% for the year ended December 31, 2014. The decrease in our cost of operations as a percentage of revenue is primarily due to changes in revenue mix, the impact of acquired businesses and increased productivity.
Development and Engineering Expense
Our total development and engineering expense was $45.5 million for the year ended December 31, 2015 as compared to $33.0 million for the year ended December 31, 2014, an increase of $12.5 million, or 38.0%. The increase in our development and engineering expense is primarily due to increased research and development and the impact of acquired businesses.
Sales, Marketing, General and Administrative Expense
Our total sales, marketing, general and administrative expense was $217.7 million for the year ended December 31, 2015 as compared to $198.4 million for the year ended December 31, 2014, an increase of $19.3 million, or 9.7%. The increase in our sales, marketing, general and administrative expense was primarily due to business growth, including the impact of acquired businesses and increased strategic initiatives, partially offset by productivity improvements and efficiency measures.
Postage
Our postage revenue and customer postage expense was $352.9 million for the year ended December 31, 2015 as compared to $343.5 million for the year ended December 31, 2014, an increase of $9.4 million, or 2.7%. This increase in postage revenue and corresponding expense was due to the impact of acquired businesses and the United States postage rate increase effective in May 2015, partially offset by customer attrition.
Depreciation and Amortization Expense
Our depreciation and amortization expense was $342.3 million for the year ended December 31, 2015 as compared to $189.2 million for the year ended December 31, 2014, an increase of $153.1 million, or 80.9%. This increase was primarily due to the acceleration of amortization of our previous tradename as a result of our rebranding to Change Healthcare and the impact of acquired businesses.
Accretion Expense
Our accretion expense was $10.5 million for the year ended December 31, 2015 as compared to $14.4 million for the year ended December 31, 2014. The amount recognized as accretion expense can vary significantly from period to period due to changes in estimates related to the amount or timing of our tax receivable agreement obligation payments. Such changes can result from a variety of factors, including changes in tax rates and the expected timing of prior net operating loss utilization, which can be affected by business combinations, changes in leverage, operations or other factors.
Interest Expense
Our interest expense was $168.3 million for the year ended December 31, 2015 as compared to $146.8 million for the year ended December 31, 2014, an increase of $21.4 million, or 14.6%. This increase was primarily due to the impact of the December 2014 and August 2015 incremental term loans and the 2021 Notes, partially offset by scheduled principal payments of term loans under the Senior Credit Facilities.
12
Income Taxes
Our income tax benefit was $82.6 million for the year ended December 31, 2015 as compared to $232.6 million for the year ended December 31, 2014. Our effective tax rate was 48.5% for the year ended December 31, 2015 as compared to 197.6% for the year ended December 31, 2014. The effective tax rate for the year ended December 31, 2015 was primarily affected by changes in state tax apportionment resulting from the Tennessee Revenue Modernization Act and changes in state income tax valuation allowances resulting from the simplification of our legal organizational structure.
Segment Revenues and Adjusted EBITDA
We operate our business in three reportable segments: software and analytics, network solutions and technology-enabled services. We also maintain a corporate function which includes pass-through postage costs, management, administrative and certain other shared corporate services functions such as legal, finance, human resources and marketing, as well as eliminations to remove inter-segment revenue and expenses.
The segment profit measure primarily utilized by management is adjusted EBITDA which is defined as EBITDA (defined as net income (loss) before net interest expense, income tax provision (benefit) and depreciation and amortization), plus certain other non-cash or non-operating items. The non-cash or other non-operating items affecting the segment profit measure generally include equity compensation; acquisition accounting adjustments; acquisition-related costs; strategic initiatives, duplicative and transition costs; impairment of long lived assets; and contingent consideration adjustments. Adjusted EBITDA for the respective segments excludes all costs and adjustments associated with the above-referenced corporate functions. Financial information, including details of our adjustments to EBITDA, for each of our segments is set forth in Note 18 to the consolidated financial statements included in Item 15 of this Annual Report.
Software and Analytics
Our software and analytics solutions segment revenue and adjusted EBITDA is summarized in the following table (in thousands):
December 31, | December 31, | |||||||||||
2015 | 2014 | $ Change | ||||||||||
Solutions Revenue |
$ | 353,526 | $ | 249,489 | $ | 104,037 | ||||||
Adjusted EBITDA |
$ | 121,860 | $ | 89,528 | $ | 32,332 |
Software and analytics revenue for the year ended December 31, 2015 increased by $104.0 million, or 41.7%, as compared to the prior year period. This increase was primarily driven by $94.2 million related to the impact of acquired businesses, including the August 2015 acquisition of Altegra Health, and new sales and implementations, partially offset by customer attrition.
Software and analytics adjusted EBITDA for the year ended December 31, 2015 increased by $32.3 million, or 36.1% as compared to the prior year period. As a percentage of solutions revenue, software and analytics adjusted EBITDA was 34.5% for the year ended December 31, 2015 as compared to 35.9% for the year ended December 31, 2014. The increase in our software and analytics adjusted EBITDA was primarily due to the impact of the revenue items described above and increased productivity. The decrease in our software and analytics adjusted EBITDA as a percentage of revenue is primarily due to changes in revenue mix, partially offset by increased productivity.
Network Solutions
Our network solutions segment revenue and adjusted EBITDA is summarized in the following table (in thousands):
December 31, | December 31, | |||||||||||
2015 | 2014 | $ Change | ||||||||||
Solutions Revenue |
$ | 375,582 | $ | 349,061 | $ | 26,521 | ||||||
Adjusted EBITDA |
$ | 203,737 | $ | 179,539 | $ | 24,198 |
Network solutions revenue for the year ended December 31, 2015 increased by $26.5 million, or 7.6%, as compared to the prior year period primarily due to increased volumes, new sales and implementations and $10.9 million related to the impact of acquired businesses, partially offset by customer attrition.
Network solutions adjusted EBITDA for the year ended December 31, 2015 increased by $24.2 million, or 13.5%, as compared to the prior year period. As a percentage of solutions revenue, network solutions adjusted EBITDA was 54.2% for the year ended December 31, 2015 as compared to 51.4% for the year ended December 31, 2014. The increase in network solutions adjusted EBITDA and as a percentage of solutions revenue was primarily due to the impact of the revenue items described above, pricing initiatives and other efficiency measures.
13
Technology-enabled Services
Our technology-enabled services segment revenue and adjusted EBITDA is summarized in the following table (in thousands):
December 31, | December 31, | |||||||||||
2015 | 2014 | $ Change | ||||||||||
Solutions Revenue |
$ | 421,455 | $ | 431,674 | $ | (10,219 | ) | |||||
Adjusted EBITDA |
$ | 152,770 | $ | 161,497 | $ | (8,727 | ) |
Technology-enabled services revenue for the year ended December 31, 2015 decreased by $10.2 million, or 2.4%, as compared to the prior year period. This decrease was primarily due to the effects of changing reimbursement patterns and rates of federal and state payers related to our government program eligibility and enrollment services, the previously disclosed partial loss of a customer contract which occurred in June 2015 and decreased volumes in our payment and communication solutions, partially offset by $16.2 million related to the impact of acquired businesses and new sales and implementations.
Technology-enabled services adjusted EBITDA for the year ended December 31, 2015 decreased by $8.7 million, or 5.4%, as compared to the prior year period. As a percentage of revenue, technology-enabled services adjusted EBITDA was 36.2% for the year ended December 31, 2015 as compared to 37.4% for the year ended December 31, 2014. The decrease in technology-enabled services adjusted EBITDA and as a percentage of revenue was primarily due to the impact of the revenue items described above and changes in revenue mix, partially offset by productivity improvements and other efficiency measures.
14
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Solutions Revenues
Our solutions revenues were $1,006.9 million for the year ended December 31, 2014 as compared to $930.7 million for the year ended December 31, 2013, an increase of $76.2 million, or 8.2%. Factors affecting our solutions revenues are described in the various segment discussions below.
Cost of Operations
Our total cost of operations was $462.3 million for the year ended December 31, 2014 as compared to $447.3 million for the year ended December 31, 2013, an increase of $15.0 million, or 3.4%. The increase in our cost of operations is primarily due to business growth, including the impact of acquired businesses and increased labor and strategic growth initiative costs. As a percentage of solutions revenue, our cost of operations was 45.9% for the year ended December 31, 2014 as compared to 48.1% for the year ended December 31, 2013. The decrease in our cost of operations as a percentage of revenue is primarily due to changes in revenue mix and increased productivity.
Development and Engineering Expense
Our total development and engineering expense was $33.0 million for the year ended December 31, 2014 as compared to $31.4 million for the year ended December 31, 2013, an increase of $1.5 million, or 4.9%. The increase in our development and engineering expense is primarily due to business growth, including the impact of acquired businesses, partially offset by cost reductions resulting from efficiency measures.
Sales, Marketing, General and Administrative Expense
Our total sales, marketing, general and administrative expense was $198.4 million for the year ended December 31, 2014 as compared to $170.1 million for the year ended December 31, 2013, an increase of $28.3 million, or 16.7%. The increase in our sales, marketing, general and administrative expense was primarily due to business growth, including the impact of acquired businesses and increased strategic growth initiatives and acquisition-related costs, partially offset by productivity improvements.
Postage
Our postage revenue and customer postage expense was $343.5 million for the year ended December 31, 2014 as compared to $311.9 million for the year ended December 31, 2013, an increase of $31.6 million, or 10.1%. This increase in postage revenue and corresponding expense was due to increased volumes in our payment and communication solutions business and approximately $9.5 million related to the impact of the United States postage rate increase effective January 2014.
Depreciation and Amortization Expense
Our depreciation and amortization expense was $189.2 million for the year ended December 31, 2014 as compared to $183.8 million for the year ended December 31, 2013, an increase of $5.4 million, or 2.9%. This increase was primarily due to capital expenditures and acquisition activity, partially offset by the effects of the impairment charge related to the pending partial loss of a customer contract.
Accretion Expense
Our accretion expense was $14.4 million for the year ended December 31, 2014 as compared to $26.5 million for the year ended December 31, 2013. The amount recognized as accretion expense can vary significantly from period to period due to changes in estimates related to the amount or timing of our tax receivable agreement obligation payments. Such changes can result from a variety of factors, including changes in tax rates and the expected timing of prior net operating loss utilization, which can be affected by business combinations, changes in leverage, operations or other factors.
Interest Expense
Our interest expense was $146.8 million for the year ended December 31, 2014 as compared to $153.2 million for the year ended December 31, 2013, a decrease of $6.3 million, or 4.1%. This decrease was primarily due to the effect of lower interest rates on the Senior Credit Facilities as a result of the April 2013 repricing transaction and continued principal amortization, partially offset by the impact of the December 2014 incremental term loan.
Income Taxes
Our income tax benefit was $232.6 million for the year ended December 31, 2014 as compared to $37.2 million for the year ended December 31, 2013. Our effective tax rate was 197.6% for the year ended December 31, 2014 as compared to 33.4% for the year
15
ended December 31, 2013. Differences between the federal statutory rate and the effective income tax rates for these periods principally relate to the change in tax status of a subsidiary from a partnership to a corporation in January 2014, including the effect of the reversal of a deferred tax liability related to the excess of the book basis of goodwill over its tax basis, a decrease in state income tax rates and return to provision adjustments related to the 2013 tax year that we recognized in 2014.
Segment Revenues and Adjusted EBITDA
Software and Analytics
Our software and analytics segment revenue and adjusted EBITDA is summarized in the following table (in thousands):
December 31, | December 31, | |||||||||||
2014 | 2013 | $ Change | ||||||||||
Solutions Revenue |
$ | 249,489 | $ | 206,974 | $ | 42,515 | ||||||
Adjusted EBITDA |
$ | 89,528 | $ | 65,739 | $ | 23,789 |
Software and analytics revenue for the year ended December 31, 2014 increased by $42.5 million, or 20.5%, as compared to the prior year period. This increase was primarily driven by new sales and implementations, particularly within our electronic payment and revenue cycle technology solutions, and $6.4 million related to the impact of acquired businesses.
Software and analytics adjusted EBITDA for the year ended December 31, 2014 increased by $23.8 million, or 36.2% as compared to the prior year period. As a percentage of solutions revenue, software and analytics adjusted EBITDA was 35.9% for the year ended December 31, 2014 as compared to 31.8% for the year ended December 31, 2013. The increase in our software and analytics adjusted EBITDA and as a percentage of solutions revenue was primarily due to the impact of the revenue items described above, as well as revenue mix and increased productivity.
Network Solutions
Our network solutions segment revenue and adjusted EBITDA is summarized in the following table (in thousands):
December 31, | December 31, | |||||||||||
2014 | 2013 | $ Change | ||||||||||
Solutions Revenue |
$ | 349,061 | $ | 331,479 | $ | 17,582 | ||||||
Adjusted EBITDA |
$ | 179,539 | $ | 164,700 | $ | 14,839 |
Network solutions revenue for the year ended December 31, 2014 increased by $17.5 million, or 5.3%, as compared to the prior year period primarily due to increased volumes, new sales and implementations and $9.1 million related to the impact of acquired businesses, partially offset by customer attrition.
Network solutions adjusted EBITDA for the year ended December 31, 2014 increased by $14.8 million, or 9.0%, as compared to the prior year period. As a percentage of solutions revenue, network solutions adjusted EBITDA was 51.4% for the year ended December 31, 2014 as compared to 49.7% for the year ended December 31, 2013. The increase in network solutions adjusted EBITDA and as a percentage of solutions revenue was primarily due to the impact of the revenue items described above, as well as productivity improvements and other efficiency measures.
Technology-enabled Services
Our technology-enabled services revenue and adjusted EBITDA is summarized in the following table (in thousands):
December 31, | December 31, | |||||||||||
2014 | 2013 | $ Change | ||||||||||
Solutions Revenue |
$ | 431,674 | $ | 417,262 | $ | 14,412 | ||||||
Adjusted EBITDA |
$ | 161,497 | $ | 153,729 | $ | 7,768 |
Technology-enabled services revenue for the year ended December 31, 2014 increased by $14.4 million, or 3.5%, as compared to the prior year period. This increase was primarily due to the impact of acquired businesses, improved reimbursement patterns of federal and state payers related to our government eligibility and enrollment services and new sales and implementations, partially offset by customer attrition.
Technology-enabled services adjusted EBITDA for the year ended December 31, 2014 increased by $7.8 million, or 5.1%, as compared to the prior year period. As a percentage of revenue, technology-enabled services adjusted EBITDA was 37.4% for the year ended December 31, 2014 as compared to 36.8% for the year ended December 31, 2013. The increase in technology-enabled services adjusted EBITDA and as a percentage of revenue was primarily due to the impact of the revenue items described above, as well as productivity improvements and other efficiency measures.
16
Liquidity and Capital Resources
General
We are a holding company with no material business operations. Our principal assets are the equity interests we own in our subsidiaries. We conduct all of our business operations through our direct and indirect subsidiaries. Accordingly, our only material sources of cash are borrowings under our Senior Credit Facilities and dividends or other distributions or payments that are derived from earnings and cash flow generated by our subsidiaries.
We anticipate cash generated by operations, the funds available under our Senior Credit Facilities, including the Revolving Facility (which currently expires in November 2016), and existing cash and equivalents will be sufficient to meet working capital requirements, service our debt and finance capital expenditures. There can be no assurance, however, that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our Senior Credit Facilities in amounts sufficient to enable us to repay our indebtedness, or to fund other liquidity needs.
We and our subsidiaries, affiliates or significant stockholders may from time to time seek to retire or purchase our outstanding debt (including our Senior Notes) through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Cash Flows
Operating Activities
Cash provided by operating activities was $166.8 million for the year ended December 31, 2015 as compared to $205.7 million for the year ended December 31, 2014, a decrease of $38.9 million. The decrease in cash provided by operating activities was primarily due to liabilities of Altegra Health that were assumed in connection with the acquisition and paid at closing, the transition of recently acquired payments solutions to our payments platform and higher interest expense related to the Altegra Health financing, partially offset by business growth.
Cash provided by operating activities was $205.7 million for the year ended December 31, 2014 as compared to $150.4 million for the year ended December 31, 2013, an increase of $55.3 million. The increase in cash provided by operating activities was primarily due to business growth, the timing and reduction of interest payments under our Senior Credit Facilities and the timing of collections and disbursements.
Cash provided by operating activities can be significantly impacted by our non-cash working capital assets and liabilities, which may vary based on the timing of cash receipts that fluctuate by day of week and/or month and also may be impacted by cash management decisions.
Investing Activities
Cash used in investing activities was $780.0 million, $308.2 million and $83.6 million for the years ended December 31, 2015, 2014 and 2013, respectively. Cash used in investing activities for all such periods primarily consisted of cash consideration paid for acquisitions and capital expenditures for property and equipment and certain intangible assets.
Financing Activities
Cash provided by financing activities was $597.5 million for the year ended December 31, 2015. Cash provided by financing activities for the year ended December 31, 2015 primarily consisted of borrowings under our Senior Credit Facilities and 2021 Notes and capital contributions to partially finance the Altegra Health acquisition, partially offset by the payment at closing of debt assumed in connection with the Altegra Health acquisition and principal payments under our Senior Credit Facilities and deferred financing arrangements.
Cash provided by financing activities was $108.3 million for the year ended December 31, 2014. Cash provided by financing activities for the year ended December 31, 2014 primarily consisted of borrowings under our Senior Credit Facilities to partially fund acquired businesses, partially offset by principal payments under our Senior Credit Facilities, debt assumed from acquired businesses and deferred financing arrangements.
Cash used in financing activities was $22.1 million for the year ended December 31, 2013. Cash used in financing activities for the year ended December 31, 2013 primarily consisted of principal payments under our Senior Credit Facilities and deferred financing arrangements.
17
Long-term Debt
Our long-term indebtedness is comprised primarily of the Term Loan Facility, the Revolving Facility and the Senior Notes.
Long-term debt as of December 31, 2015 and 2014 consisted of the following (amounts in thousands):
December 31, | December 31, | |||||||
2015 | 2014 | |||||||
Senior Credit Facilities |
||||||||
$1,696 million Senior Secured Term Loan facility, due November 2, 2018, net of unamortized discount of $23,511 and $20,016 at December 31, 2015 and December 31, 2014, respectively (effective interest rate of 4.29%) |
$ | 1,621,981 | $ | 1,245,376 | ||||
$160 million Senior Secured Term Loan facility, due November 2, 2018, net of unamortized discount of $3,334 and $4,438 at December 31, 2015 and December 31, 2014, respectively (effective interest rate of 4.54%) |
154,666 | 155,162 | ||||||
$125 million Senior Secured Revolving Credit facility, expiring on November 2, 2016 and bearing interest at a variable base rate plus a spread rate |
| | ||||||
Senior Notes |
||||||||
$375 million 11% Senior Notes due December 31, 2019, net of unamortized discount of $6,299 and $7,477 at December 31, 2015 and December 31, 2014, respectively (effective interest rate of 11.53%) |
368,701 | 367,523 | ||||||
$375 million 11.25% Senior Notes due December 31, 2020, net of unamortized discount of $8,471 and $9,651 at December 31, 2015 and December 31, 2014, respectively (effective interest rate of 11.85%) |
366,529 | 365,349 | ||||||
$250 million 6% Senior Notes due February 15, 2021, net of unamortized discount of $6,161 and $0 at December 31, 2015 and December 31, 2014, respectively (effective interest rate of 6.57%) |
243,839 | | ||||||
Obligation under data sublicense agreement |
10,810 | 17,237 | ||||||
Other |
7,427 | 12,129 | ||||||
Less current portion |
(32,775 | ) | (27,308 | ) | ||||
|
|
|
|
|||||
Long-term debt |
$ | 2,741,178 | $ | 2,135,468 | ||||
|
|
|
|
Senior Credit Facilities
The Senior Credit Agreement provides that, subject to certain conditions, we may request additional tranches of term loans, increase commitments under the Revolving Facility or the Term Loan Facility or add one or more incremental revolving credit facility tranches (provided that the revolving credit commitments outstanding at any time have no more than three different maturity dates) in an aggregate amount not to exceed (a) $300.0 million plus (b) an unlimited amount at any time, subject to compliance on a pro forma basis with a first lien net leverage ratio of no greater than 4.00 to 1.00. Availability of such additional tranches of term loans or revolving credit facilities and/or increased commitments is subject to, among other conditions, the absence of any default under the Senior Credit Agreement and the receipt of commitments by existing or additional financial institutions. Proceeds of the Revolving Facility, including up to $30.0 million in the form of borrowings on same-day notice, referred to as swingline loans, and up to $50.0 million in the form of letters of credit ($6.7 million outstanding as of December 31, 2015), are available to provide financing for working capital and general corporate purposes.
Borrowings under the Senior Credit Facilities bear interest at an annual rate equal to an applicable margin plus, at our option, either (a) a base rate determined by reference to the highest of (i) the applicable prime rate, (ii) the federal funds rate plus 0.50% and (iii) a LIBOR rate determined by reference to the costs of funds for United States dollar deposits for an interest period of one month, adjusted for certain additional costs, plus 1.00%, which base rate, in the case of the Term Loan Facility only, shall be no less than 2.25%, or (b) a LIBOR rate determined by reference to the costs of funds for United States dollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, which, in the case of the Term Loan Facility only, shall be no less than 1.25%.
In April 2012, we amended the Senior Credit Agreement to reprice the Senior Credit Facilities and borrow $80.0 million of additional term loans. In April 2013, we again amended the Senior Credit Agreement to further reprice, and also to modify certain financial covenants under, the Senior Credit Facilities. Following the April 2013 amendment, the interest rate on both the Term Loan Facility and Revolving Facility is LIBOR plus 2.50%. The Term Loan Facility remains subject to a LIBOR floor of 1.25%, and there continues to be no LIBOR floor on the Revolving Facility. In connection with the April 2013 repricing, the Senior Credit Agreement also was amended to, among other things, eliminate the financial covenant related to the consolidated cash interest coverage ratio and modify the financial covenant related to the net leverage test by maintaining the required first lien net leverage ratio at 5.35 to 1.00 for the remaining term of the Senior Credit Facilities.
18
In December 2014 and August 2015, through further amendments to the Senior Credit Agreement, we borrowed an additional $160.0 million and $395.0 million, respectively, under incremental term loan facilities on identical terms and having the same rights and obligations as the existing term loans under the Senior Credit Agreement.
In addition to paying interest on outstanding principal under the Senior Credit Facilities, we are required to pay customary agency fees, letter of credit fees and a 0.50% commitment fee in respect of the unutilized commitments under the Revolving Facility.
The Senior Credit Agreement requires that we prepay outstanding loans under the Term Loan Facility, subject to certain exceptions, with (a) 100% of the net cash proceeds of any incurrence of debt other than debt permitted under the Senior Credit Agreement, (b) 50% (which percentage will be reduced to 25% and 0% based on our first lien net leverage ratio) of our annual excess cash flow and (c) 100% of the net cash proceeds of certain asset sales and casualty and condemnation events, subject to reinvestment rights and certain other exceptions.
We generally may voluntarily prepay outstanding loans under the Senior Credit Facilities at any time without premium or penalty other than breakage costs with respect to LIBOR loans.
We are required to make quarterly payments equal to 0.25% of the aggregate principal amount of the loans under the Term Loan Facility, with the balance due and payable on November 2, 2018. Any principal amount outstanding under the Revolving Facility is due and payable on November 2, 2016.
Certain of our United States wholly-owned restricted subsidiaries, together with the Company, are co-borrowers and jointly and severally liable for all obligations under the Senior Credit Facilities. Such obligations of the co-borrowers are unconditionally guaranteed by Change Healthcare Intermediate Holdings, Inc., a direct wholly-owned subsidiary of Change Healthcare, Inc., the Company and each of our existing and future United States wholly-owned restricted subsidiaries (with certain exceptions including immaterial subsidiaries). These obligations are secured by a perfected security interest in substantially all of the assets of the co-borrowers and guarantors now owned or later acquired, including a pledge of all of the capital stock of the Company and our United States wholly-owned restricted subsidiaries and 65% of the capital stock of our foreign restricted subsidiaries, subject in each case to the exclusion of certain assets and additional exceptions.
The Senior Credit Agreement requires us to comply with a maximum first lien net leverage ratio financial maintenance covenant, to be tested on the last day of each fiscal quarter. A breach of the first lien net leverage ratio covenant is subject to certain equity cure rights. In addition, the Senior Credit Facilities contain a number of negative covenants that, among other things and subject to certain exceptions, restrict our ability and the ability of our subsidiaries to:
| incur additional indebtedness or guarantees; |
| incur liens; |
| make investments, loans and acquisitions; |
| consolidate or merge; |
| sell assets, including capital stock of subsidiaries; |
| pay dividends on capital stock or redeem, repurchase or retire capital stock of the Company or any restricted subsidiary; |
| alter the business of the Company; |
| amend, prepay, redeem or purchase subordinated debt; |
| engage in transactions with affiliates; and |
| enter into agreements limiting dividends and distributions of certain subsidiaries. |
The Senior Credit Agreement also contains certain customary representations and warranties, affirmative covenants and provisions relating to events of default (including upon change of control).
As of December 31, 2015, we believe we were in compliance with all of the applicable debt covenants under the Senior Credit Agreement.
Senior Notes
The 2019 Notes bear interest at an annual rate of 11.00% with interest payable semi-annually on June 30 and December 31 of each year. The 2019 Notes mature on December 31, 2019. The 2020 Notes bear interest at an annual rate of 11.25% with interest
19
payable quarterly on March 31, June 30, September 30 and December 31 of each year. The 2020 Notes mature on December 31, 2020. The 2021 Notes bear interest at an annual rate of 6.00% with interest payable semi-annually on April 15 and October 15 of each year, commencing on April 15, 2016. The 2021 Notes mature on February 15, 2021.
We may redeem the 2019 Notes, the 2020 Notes or both, in whole or in part, at any time on or after December 31, 2015 at the applicable redemption price, plus accrued and unpaid interest.
We may redeem the 2021 Notes, in whole or in part, at any time on or after August 15, 2017 at the applicable redemption price, plus accrued and unpaid interest. At any time prior to August 15, 2017, we may, at our option and on one or more occasions, redeem up to 40% of the aggregate principal amount of the 2021 Notes at a redemption price equal to 100% of the aggregate principal amount, plus a premium and accrued and unpaid interest with the net cash proceeds of certain equity offerings. At any time prior to August 15, 2017, we may redeem the 2021 Notes, in whole or in part, at its option and on one or more occasions, at a redemption price equal to 100% of the principal amount, plus a make-whole premium and accrued and unpaid interest.
If we experience specific kinds of changes in control, we must offer to purchase the Senior Notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest.
The Senior Notes are senior unsecured obligations and rank equally in right of payment with all of our existing and future indebtedness and senior in right of payment to all of our existing and future subordinated indebtedness. Our obligations under the Senior Notes are guaranteed on a senior basis by all of our existing and subsequently acquired or organized wholly-owned United States restricted subsidiaries that guarantee our Senior Credit Facilities or our other indebtedness or indebtedness of any affiliate guarantor. The Senior Notes and the related guarantees are effectively subordinated to our existing and future secured obligations and that of our affiliate guarantors to the extent of the value of the collateral securing such obligations, and are structurally subordinated to all existing and future indebtedness and other liabilities of any of our subsidiaries that do not guarantee the Senior Notes.
The Indentures contain customary covenants that restrict our ability and the ability of our restricted subsidiaries to:
| pay dividends on our capital stock or redeem, repurchase or retire our capital stock, subject to customary exceptions, including compliance with a fixed charge coverage ratio and subject to limitation based on net income generated during the term of the Indentures; |
| incur additional indebtedness or issue certain capital stock; |
| incur certain liens; |
| make investments, loans, advances and acquisitions; |
| consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries; |
| prepay subordinated debt; |
| engage in certain transactions with our affiliates; and |
| enter into agreements restricting our subsidiaries ability to pay dividends. |
The Indentures also contain certain affirmative covenants and events of default.
As of December 31, 2015, we believe we were in compliance with all of the applicable debt covenants under the Senior Notes.
20
Summary Disclosures about Contractual Obligations and Commercial Commitments
Contractual Obligations
The following table presents certain minimum payments due under contractual obligations with minimum firm commitments as of December 31, 2015:
Payments by Period | ||||||||||||||||||||||||
Total | Less than 1 year |
1-3 years | 3-5 years | After 5 years | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Senior Credit Facilities and other long-term obligations |
(1 | ) | $ | 1,821,729 | $ | 32,775 | $ | 1,788,954 | $ | | $ | | ||||||||||||
2019 Notes |
(2 | ) | 375,000 | | | 375,000 | | |||||||||||||||||
2020 Notes |
(3 | ) | 375,000 | | | 375,000 | | |||||||||||||||||
2021 Notes |
(4 | ) | 250,000 | | | | 250,000 | |||||||||||||||||
Expected interest |
(5 | ) | 646,453 | 168,427 | 320,526 | 155,625 | 1,875 | |||||||||||||||||
Tax receivable agreement obligations to related parties |
(6 | ) | 355,742 | 986 | 63,920 | 131,573 | 159,263 | |||||||||||||||||
Operating lease obligations |
(7 | ) | 70,233 | 14,748 | 24,413 | 12,053 | 19,019 | |||||||||||||||||
Contingent consideration obligation |
(8 | ) | 4,650 | 4,650 | | | | |||||||||||||||||
Purchase obligations and other |
(9 | ) | 102,920 | 54,772 | 19,148 | 12,000 | 17,000 | |||||||||||||||||
Interest rate swap agreements |
(10 | ) | 3,117 | 2,547 | 570 | | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total contractual obligations |
(11 | ) | $ | 4,004,844 | $ | 278,905 | $ | 2,271,531 | $ | 1,061,251 | $ | 447,157 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Represents the principal amount of indebtedness under the Senior Credit Facilities, deferred financing obligations and our data sublicense agreement. |
(2) | Represents the principal amount of indebtedness under the 2019 Notes without reduction for any original issue discount. |
(3) | Represents the principal amount of indebtedness under the 2020 Notes without reduction for any original issue discount. |
(4) | Represents the principal amount of indebtedness under the 2021 Notes without reduction for any original issue discount. |
(5) | Consists of interest payable under the Senior Credit Facilities, Senior Notes and imputed interest payable under our data sublicense and other financing obligation agreements. Interest related to the Senior Credit Facilities is based on our interest rates in effect as of December 31, 2015 and assumes that we make no optional or mandatory prepayments of principal prior to their maturity. Because the interest rates under the Senior Credit Facilities are variable, actual payments may differ. |
(6) | Represents amount due based on facts and circumstances existing as of December 31, 2015 (without reduction for any fair value adjustment recognized in acquisition method accounting). The timing and/or amount of the aggregate payments due may vary based on a number of factors, including the amount and timing of the taxable income the Company generates in the future and the tax rate then applicable, the use of loss carryovers and the portion of payments under the tax receivable agreements constituting imputed interest or amortizable basis. |
(7) | Represents amounts due under existing operating leases related to our offices and other facilities. |
(8) | Contingent consideration transferred in connection with acquisitions includes a contingent obligation to make additional payments based on the achievement of certain future performance objectives. Because the ultimate timing and amount of payments are dependent on the outcome of future events, the timing and/or amount of these additional payments may vary from this estimate. |
(9) | Represents contractual commitments under the transaction and advisory fee agreement we entered into with affiliates of the Investor Group in connection with the 2011 Merger, certain telecommunication and other supply contracts and certain other obligations. Where our purchase commitments are cumulative over a period of time (i.e. no specified annual commitment), the table above assumes such commitments will be fulfilled on a ratable basis over the commitment period. Under the transaction and advisory fee agreement, in connection with or in anticipation of a change in control, sale of all or substantially all of our assets or an initial public offering of our equity, the affiliates of the Investor Group have the option to receive a single lump sum cash payment equal to the then-present value of all the then-current and future annual advisory fees payable, assuming a remaining 12-year payment period from the date of the election. |
(10) | Under our interest rate swap agreements, we receive a three-month LIBOR rate and pay a fixed rate of 1.6485% on a $640.0 million notional amount. The amounts in the above table represent the net amounts we expect to pay (including interest) in the respective periods based upon the three-month LIBOR yield curve in effect as of December 31, 2015. |
(11) | Total contractual obligations exclude liabilities for uncertain tax positions of $0.1 million and commitments of a maximum of $7.0 million potentially due under the Companys long term incentive plans from the above table due to the high degree of uncertainty regarding the ultimate amount, if any, and timing of future cash payments. |
See the notes to our consolidated financial statements included elsewhere in this Annual Report for additional information related to our operating leases and other commitments and contingencies.
21
Off-Balance Sheet Arrangements
As of the filing of this Annual Report, we had no off-balance sheet arrangements or obligations, other than those related to surety bonds of an insignificant amount.
Recent Accounting Pronouncements
Our recent accounting pronouncements are summarized in Note 2 to our consolidated financial statements included elsewhere in this Form 10-K.
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
Information with respect to this Item is contained in our consolidated financial statements beginning on Page F-1 of this Annual Report.
ITEM 9A. | CONTROLS AND PROCEDURES |
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), management evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of December 31, 2015 and 2014. Subsequently, in connection with the restatement described in the Explanatory Note and in Note 1 to our consolidated financial statements, management, including our CEO and CFO, re-assessed the effectiveness of our disclosure controls and concluded that such controls were not effective based on the identification of a material weakness as described below.
Report of Management on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control over financial reporting is a process that is designed under the supervision of our CEO and CFO, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with United States Generally Accepted Accounting Principles (GAAP). Our internal control over financial reporting includes those policies and procedures that:
i. | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
ii. | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures recorded by us are being made only in accordance with authorizations of our management and board of directors; and |
iii. | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Our management, including our CEO and CFO, previously concluded that we maintained effective internal control over financial reporting as of December 31, 2015 and 2014. Because management has subsequently concluded that the material weakness described below existed, we have concluded that we did not maintain effective internal control over financial reporting based on the criteria in Internal Control Integrated Framework (2013) issued by the COSO. Specifically, because of the highly complex nature of the underlying legal entity restructuring, the Companys internal control over financial reporting was not effective due to certain deferred tax positions resulting from purchase accounting and the conversion of a consolidated partnership subsidiary into a corporation for U.S. federal tax purposes. To address this matter, the Company has determined that, for future highly complex transactions for which the determination of the appropriate accounting treatment is unclear, the Company will assess whether to engage an accounting firm with sufficient expertise to properly evaluate and interpret the applicable accounting literature, if any, and to assist management to reach the appropriate accounting conclusion.
Changes in Internal Control Over Financial Reporting
Except as discussed above, there have been no changes in our internal control over financial reporting that occurred during the years ended December 31, 2015 and 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
22
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
(a) | List of Documents Filed | |||
1. | Financial Statements | |||
All financial statements are set forth under Item 8Financial Statements and Supplementary Data of this Annual Report | ||||
2. | Financial Statement Schedules | |||
All financial statement schedules are set forth under Item 8Financial Statements and Supplementary Data of this Annual Report | ||||
3. | Exhibits | |||
The list of exhibits filed as part of this Annual Report is submitted in the Exhibit Index and is incorporated herein by reference. | ||||
(b) | Exhibits | |||
The list of exhibits filed as part of this Annual Report is submitted in the Exhibit Index and is incorporated herein by reference. | ||||
(c) | None. |
23
Index to Consolidated Financial Statements
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholder
Change Healthcare Holdings, Inc.
We have audited the accompanying consolidated balance sheets of Change Healthcare Holdings, Inc. as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedule listed in the index at Item 15(a)(2). These financial statements and schedule are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Companys internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Change Healthcare Holdings, Inc. at December 31, 2015 and 2014, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as whole, presents fairly in all material respects the information set forth therein.
As discussed in Note 1 to the consolidated financial statements, the accompanying financial statements for the periods ending December 31, 2014 and 2015 have been restated to correct errors in the accounting for income taxes.
As discussed in Note 2 to the consolidated financial statements, the Company changed its presentation of debt issuance costs as a result of the adoption of FASB Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, and the Company changed the classification of all deferred tax assets and liabilities to noncurrent on the balance sheet as a result of the adoption of FASB Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes.
/s/ ERNST & YOUNG LLP
Nashville, Tennessee
March 14, 2016, except as to Note 1, as to which the date is January 23, 2017.
F-2
Change Healthcare Holdings, Inc.
(amounts in thousands, except share and per share amounts)
December 31, | December 31, | |||||||
2015 | 2014 | |||||||
(Restated) | (Restated) | |||||||
ASSETS | ||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 66,655 | $ | 82,306 | ||||
Accounts receivable, net of allowance for doubtful accounts of $3,379 and $6,377 at December 31, 2015 and December 31, 2014, respectively |
280,858 | 233,791 | ||||||
Prepaid expenses and other current assets |
35,413 | 29,246 | ||||||
|
|
|
|
|||||
Total current assets |
382,926 | 345,343 | ||||||
Property and equipment, net |
244,145 | 244,153 | ||||||
Goodwill |
2,213,770 | 1,686,239 | ||||||
Intangible assets, net |
1,707,863 | 1,539,394 | ||||||
Other assets, net |
8,500 | 9,183 | ||||||
|
|
|
|
|||||
Total assets |
$ | 4,557,204 | $ | 3,824,312 | ||||
|
|
|
|
|||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 27,950 | $ | 16,399 | ||||
Accrued expenses |
167,169 | 175,206 | ||||||
Deferred revenues |
12,943 | 10,518 | ||||||
Current portion of long-term debt |
32,775 | 27,308 | ||||||
|
|
|
|
|||||
Total current liabilities |
240,837 | 229,431 | ||||||
Long-term debt, excluding current portion |
2,741,178 | 2,135,468 | ||||||
Deferred income tax liabilities |
214,597 | 186,784 | ||||||
Tax receivable agreement obligations to related parties |
173,493 | 163,983 | ||||||
Other long-term liabilities |
11,954 | 15,361 | ||||||
Commitments and contingencies |
||||||||
Equity: |
||||||||
Common stock (par value, $.01), 100 shares authorized and outstanding at December 31, 2015 and December 31, 2014, respectively |
| | ||||||
Additional paid-in capital |
1,319,754 | 1,149,360 | ||||||
Accumulated other comprehensive income (loss) |
(2,656 | ) | (1,955 | ) | ||||
Accumulated deficit |
(141,953 | ) | (54,120 | ) | ||||
|
|
|
|
|||||
Total equity |
1,175,145 | 1,093,285 | ||||||
|
|
|
|
|||||
Total liabilities and equity |
$ | 4,557,204 | $ | 3,824,312 | ||||
|
|
|
|
F-3
Change Healthcare Holdings, Inc.
Consolidated Statements of Operations
(amounts in thousands)
Year Ended | Year Ended | Year Ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||||
(Restated) | (Restated) | |||||||||||
Revenue: |
||||||||||||
Solutions revenue |
$ | 1,124,188 | $ | 1,006,949 | $ | 930,713 | ||||||
Postage revenue |
352,895 | 343,464 | 311,854 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue |
1,477,083 | 1,350,413 | 1,242,567 | |||||||||
Costs and expenses: |
||||||||||||
Cost of operations (exclusive of depreciation and amortization below) |
507,358 | 462,332 | 447,324 | |||||||||
Development and engineering |
45,489 | 32,956 | 31,426 | |||||||||
Sales, marketing, general and administrative |
217,716 | 198,379 | 170,051 | |||||||||
Customer postage |
352,895 | 343,464 | 311,854 | |||||||||
Depreciation and amortization |
342,303 | 189,218 | 183,839 | |||||||||
Accretion |
10,496 | 14,446 | 26,470 | |||||||||
Impairment of long-lived assets |
8,552 | 83,169 | 10,619 | |||||||||
|
|
|
|
|
|
|||||||
Operating income (loss) |
(7,726 | ) | 26,449 | 60,984 | ||||||||
Interest expense, net |
168,252 | 146,829 | 153,169 | |||||||||
Loss on extinguishment of debt |
| | 23,160 | |||||||||
Contingent consideration |
(4,825 | ) | 1,307 | (69 | ) | |||||||
Other |
(741 | ) | (3,968 | ) | (4,133 | ) | ||||||
|
|
|
|
|
|
|||||||
Income (loss) before income tax provision (benefit) |
(170,412 | ) | (117,719 | ) | (111,143 | ) | ||||||
Income tax provision (benefit) |
(82,579 | ) | (232,562 | ) | (37,163 | ) | ||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
$ | (87,833 | ) | $ | 114,843 | $ | (73,980 | ) | ||||
|
|
|
|
|
|
F-4
Change Healthcare Holdings, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(amounts in thousands)
Year Ended | Year Ended | Year Ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2015 | 2014 | 2013 | ||||||||||
(Restated) | (Restated) | |||||||||||
Net income (loss) |
$ | (87,833 | ) | $ | 114,843 | $ | (73,980 | ) | ||||
Other comprehensive income (loss): |
||||||||||||
Changes in fair value of interest rate swap, net of taxes |
(47 | ) | (393 | ) | 2,583 | |||||||
Foreign currency translation adjustment |
(654 | ) | (219 | ) | (137 | ) | ||||||
|
|
|
|
|
|
|||||||
Other comprehensive income (loss) |
(701 | ) | (612 | ) | 2,446 | |||||||
|
|
|
|
|
|
|||||||
Total comprehensive income (loss) |
$ | (88,534 | ) | $ | 114,231 | $ | (71,534 | ) | ||||
|
|
|
|
|
|
F-5
Change Healthcare Holdings, Inc.
Consolidated Statements of Equity
(amounts in thousands, except share amounts)
Accumulated | ||||||||||||||||||||||||
Additional | Other | |||||||||||||||||||||||
Common Stock | Paid-in | Accumulated | Comprehensive | Total | ||||||||||||||||||||
Shares | Amount | Capital | Deficit | Income (Loss) | Equity | |||||||||||||||||||
Balance at January 1, 2013 |
100 | $ | | $ | 1,130,968 | $ | (94,983 | ) | $ | (3,789 | ) | $ | 1,032,196 | |||||||||||
Equity compensation expense |
| | 7,021 | | | 7,021 | ||||||||||||||||||
Repurchase of Parent common stock |
| | (613 | ) | | | (613 | ) | ||||||||||||||||
Capital contribution from Parent |
| | 1,999 | | | 1,999 | ||||||||||||||||||
Net income (loss) |
| | | (73,980 | ) | | (73,980 | ) | ||||||||||||||||
Foreign currency translation adjustment |
| | | | (137 | ) | (137 | ) | ||||||||||||||||
Change in fair value of interest rate swap, net of taxes |
| | | | 2,583 | 2,583 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2013 |
100 | $ | | $ | 1,139,375 | $ | (168,963 | ) | $ | (1,343 | ) | $ | 969,069 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Equity compensation expense |
| | 7,334 | | | 7,334 | ||||||||||||||||||
Issuance of shares in connection with equity compensation plans, net of taxes |
| | 1,223 | | | 1,223 | ||||||||||||||||||
Repurchase of Parent common stock |
| | (1,221 | ) | | | (1,221 | ) | ||||||||||||||||
Capital contribution from Parent |
| | 1,999 | | | 1,999 | ||||||||||||||||||
Other |
| | 650 | | | 650 | ||||||||||||||||||
Net income (loss) |
| | | 114,843 | | 114,843 | ||||||||||||||||||
Foreign currency translation adjustment |
| | | | (219 | ) | (219 | ) | ||||||||||||||||
Change in fair value of interest rate swap, net of taxes |
| | | | (393 | ) | (393 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2014 (Restated) |
100 | $ | | $ | 1,149,360 | $ | (54,120 | ) | $ | (1,955 | ) | $ | 1,093,285 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Equity compensation expense |
| | 9,285 | | | 9,285 | ||||||||||||||||||
Issuance of shares in connection with equity compensation plans, net of taxes |
| | 305 | | | 305 | ||||||||||||||||||
Capital contribution from Investor Group and management |
| | 166,576 | | | 166,576 | ||||||||||||||||||
Repurchase of Parent common stock |
| | (5,772 | ) | | | (5,772 | ) | ||||||||||||||||
Net income (loss) |
| | | (87,833 | ) | | (87,833 | ) | ||||||||||||||||
Foreign currency translation adjustment |
| | | | (654 | ) | (654 | ) | ||||||||||||||||
Change in fair value of interest rate swap, net of taxes |
| | | | (47 | ) | (47 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2015 (Restated) |
100 | $ | | $ | 1,319,754 | $ | (141,953 | ) | $ | (2,656 | ) | $ | 1,175,145 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
F-6
Change Healthcare Holdings, Inc.
Consolidated Statements of Cash Flows
(amounts in thousands)
Year Ended December 31, 2015 |
Year Ended December 31, 2014 |
Year Ended December 31, 2013 |
||||||||||
(Restated) | (Restated) | |||||||||||
Operating activities |
||||||||||||
Net income (loss) |
$ | (87,833 | ) | $ | 114,843 | $ | (73,980 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||||||
Depreciation and amortization |
342,303 | 189,218 | 183,839 | |||||||||
Accretion |
10,496 | 14,446 | 26,470 | |||||||||
Equity compensation |
9,285 | 7,334 | 7,021 | |||||||||
Deferred income tax expense (benefit) |
(85,938 | ) | (234,089 | ) | (40,033 | ) | ||||||
Amortization of debt discount and issuance costs |
10,786 | 7,847 | 8,475 | |||||||||
Contingent consideration |
(4,825 | ) | 1,307 | (69 | ) | |||||||
Gain on sale of cost method investment |
| (114 | ) | (2,925 | ) | |||||||
Loss on extinguishment of debt |
| | 22,828 | |||||||||
Impairment of long-lived assets |
8,552 | 83,169 | 10,619 | |||||||||
Other |
(1,820 | ) | (2,255 | ) | (1,962 | ) | ||||||
Changes in operating assets and liabilities: |
||||||||||||
Accounts receivable |
5,078 | (6,824 | ) | (20,791 | ) | |||||||
Prepaid expenses and other |
1,210 | 536 | 1,442 | |||||||||
Accounts payable |
11,391 | 4,591 | 1,335 | |||||||||
Accrued expenses, deferred revenue and other liabilities |
(50,966 | ) | 26,650 | 29,273 | ||||||||
Tax receivable agreement obligations to related parties |
(944 | ) | (988 | ) | (1,142 | ) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities |
166,775 | 205,671 | 150,400 | |||||||||
|
|
|
|
|
|
|||||||
Investing activities |
||||||||||||
Purchases of property and equipment |
(56,963 | ) | (55,926 | ) | (71,086 | ) | ||||||
Payments for acquisitions, net of cash acquired |
(717,669 | ) | (252,772 | ) | (18,291 | ) | ||||||
Other |
(5,325 | ) | 538 | 5,820 | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) investing activities |
(779,957 | ) | (308,160 | ) | (83,557 | ) | ||||||
|
|
|
|
|
|
|||||||
Financing activities |
||||||||||||
Proceeds from Term Loan Facility |
385,411 | 157,600 | | |||||||||
Payments on Term Loan Facility |
(16,500 | ) | (13,279 | ) | (12,912 | ) | ||||||
Proceeds from Senior Notes |
243,453 | | | |||||||||
Proceeds from Revolving Facility |
60,000 | 183,000 | | |||||||||
Payments on Revolving Facility |
(60,000 | ) | (183,000 | ) | | |||||||
Payment of loan costs |
(2,500 | ) | (2,096 | ) | (2,178 | ) | ||||||
Payment of debt assumed from acquisition |
(154,469 | ) | (25,262 | ) | (218 | ) | ||||||
Payment of data sublicense obligation |
(6,433 | ) | (5,300 | ) | (4,321 | ) | ||||||
Payments of deferred financing obligations |
(6,987 | ) | (5,441 | ) | (3,243 | ) | ||||||
Repurchase of Parent common stock |
(5,772 | ) | (1,221 | ) | (613 | ) | ||||||
Capital contribution from Investor Group and management |
166,881 | 3,256 | 1,999 | |||||||||
Payment of contingent consideration |
(5,553 | ) | | | ||||||||
Other |
| | (582 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) financing activities |
597,531 | 108,257 | (22,068 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net increase (decrease) in cash and cash equivalents |
(15,651 | ) | 5,768 | 44,775 | ||||||||
Cash and cash equivalents at beginning of period |
82,306 | 76,538 | 31,763 | |||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents at end of period |
$ | 66,655 | $ | 82,306 | $ | 76,538 | ||||||
|
|
|
|
|
|
|||||||
Supplemental disclosures of cash flow information |
||||||||||||
Cash paid for interest |
$ | 146,521 | $ | 135,582 | $ | 140,771 | ||||||
|
|
|
|
|
|
|||||||
Cash paid for income taxes |
$ | 3,789 | $ | 736 | $ | 847 | ||||||
|
|
|
|
|
|
|||||||
Supplemental disclosures of noncash transactions |
||||||||||||
Deferred financing obligations: |
||||||||||||
Prepaid expenses and other current assets |
$ | 332 | $ | | $ | | ||||||
|
|
|
|
|
|
|||||||
Property and equipment |
$ | 736 | $ | 1,651 | $ | 12,722 | ||||||
|
|
|
|
|
|
|||||||
Intangible assets |
$ | 1,100 | $ | | $ | | ||||||
|
|
|
|
|
|
|||||||
Other assets |
$ | 3,107 | $ | | $ | 2,646 | ||||||
|
|
|
|
|
|
|||||||
Current portion of long-term debt |
$ | (3,982 | ) | $ | (613 | ) | $ | (6,377 | ) | |||
|
|
|
|
|
|
|||||||
Long-term debt |
$ | (1,293 | ) | $ | (1,038 | ) | $ | (8,991 | ) | |||
|
|
|
|
|
|
|||||||
Business combinations: |
||||||||||||
Prepaid expenses and other current assets |
$ | 4,000 | $ | | $ | | ||||||
|
|
|
|
|
|
|||||||
Goodwill |
$ | (4,000 | ) | $ | 11,345 | $ | 5,553 | |||||
|
|
|
|
|
|
|||||||
Accrued expenses |
$ | | (10,695 | ) | $ | (5,553 | ) | |||||
|
|
|
|
|
|
|||||||
Additional paid-in capital |
$ | | $ | (650 | ) | | ||||||
|
|
|
|
|
|
F-7
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
1. Nature of Business and Organization
Nature of Business
Change Healthcare Holdings, Inc. (the Company), through its subsidiaries, is a provider of software and analytics, network solutions and technology-enabled services that optimize communications, payments and actionable insights designed to enable smarter healthcare. The Companys integrated capabilities enable its customers to exchange mission critical information, optimize revenue opportunities, control costs, increase cash flows and efficiently manage complex work flows.
Organization
The Company was formed as a Delaware limited liability company in September 2006 and converted into a Delaware corporation in September 2008 in anticipation of the Companys August 2009 initial public offering (the IPO). On November 2, 2011, pursuant to an Agreement and Plan of Merger among the Company, Change Healthcare, Inc. (Parent) and Beagle Acquisition Corp. (Merger Sub), Merger Sub merged with and into the Company with the Company surviving the merger (the 2011 Merger). Subsequent to the 2011 Merger, the Company became an indirect wholly-owned subsidiary of Parent, which is controlled by affiliates of The Blackstone Group L.P. (Blackstone).
Restatement of Previously Issued Financial Statements
In connection with a planned contribution of substantially all of the net assets of the Company to a joint venture (the Transaction), prior conclusions regarding the Companys accounting for certain historical transactions have been re-evaluated. As part of this re-evaluation, the Company has determined that a restatement of its consolidated financial statements as of and for the years ended December 31, 2015 and 2014 is appropriate. The restatement relates to the accounting treatment of certain items and results in an increase of our net income and reduction of balance sheet liabilities. There is no impact on cash flows for the related periods and EBITDA calculations under our credit agreement and indentures are not affected by the restatement.
In January 2014, the Company effected a change in the tax status of EBS Master LLC (EBS Master), one of its wholly-owned subsidiaries, from a partnership to a corporation. Prior to the tax status change, the Company recognized a deferred tax liability for the difference in the book and tax basis of its investment in EBS Master (i.e. outside basis). Following the tax status change, the Companys deferred tax balances were required to reflect the differences in the book and tax bases of the individual assets and liabilities included in the corporation (i.e. inside basis).
In January 2017, following the re-evaluation in connection with the Transaction, the Company determined that a portion of the deferred tax liability previously related to the outside basis was attributable to the excess of book over tax basis goodwill for which no deferred tax liability would be permitted under generally accepted accounting principles when calculated using the inside basis. Because the Companys consolidated financial statements for the year ended December 31, 2014 and 2015 included such a deferred tax liability, the Company has restated its consolidated financial statements and related notes (including Notes 15 and 20) as of and for the year ended December 31, 2014 to reflect the removal of this deferred tax liability and restated its consolidated financial statements as of and for the year ended December 31, 2015 to adjust for the effect of this 2014 adjustment on the subsequent period.
The Company also corrected immaterial other tax adjustments in the periods presented that impacted reported goodwill and deferred tax accounts.
The following table presents the effect on the Companys consolidated balance sheets and the Companys consolidated statements of operations, comprehensive income (loss) and cash flows for the periods indicated.
Previously Reported |
Restatement Adjustments |
As Restated |
||||||||||
Consolidated Balance Sheets | ||||||||||||
As of December 31, 2015 |
||||||||||||
Goodwill |
$ | 2,230,100 | $ | (16,330 | ) | $ | 2,213,770 | |||||
Deferred income tax liabilities |
$ | 430,383 | $ | (215,786 | ) | $ | 214,597 | |||||
Accumulated deficit |
$ | (341,409 | ) | $ | 199,456 | $ | (141,953 | ) | ||||
As of December 31, 2014 |
||||||||||||
Goodwill |
$ | 1,702,569 | $ | (16,330 | ) | $ | 1,686,239 | |||||
Deferred income tax liabilities |
$ | 394,334 | $ | (207,550 | ) | $ | 186,784 | |||||
Accumulated deficit |
$ | (245,340 | ) | $ | 191,220 | $ | (54,120 | ) | ||||
Consolidated Statements of Operations | ||||||||||||
For the year ended December 31, 2015 |
||||||||||||
Income tax provision (benefit) |
$ | (74,343 | ) | $ | (8,236 | ) | $ | (82,579 | ) | |||
Net income (loss) |
$ | (96,069 | ) | $ | 8,236 | $ | (87,833 | ) | ||||
For the year ended December 31, 2014 |
||||||||||||
Income tax provision (benefit) |
$ | (41,865 | ) | $ | (190,697 | ) | $ | (232,562 | ) | |||
Net income (loss) |
$ | (75,854 | ) | $ | 190,697 | $ | 114,843 | |||||
For the year ended December 31, 2013 |
||||||||||||
Income tax provision (benefit) |
$ | (36,685 | ) | $ | (478 | ) | $ | (37,163 | ) | |||
Net income (loss) |
$ | (74,458 | ) | $ | 478 | $ | (73,980 | ) | ||||
Consolidated Statements of Comprehensive Income (Loss): | ||||||||||||
For the year ended December 31, 2015 |
||||||||||||
Net income (loss) |
$ | (96,069 | ) | $ | 8,236 | $ | (87,833 | ) | ||||
Total comprehensive income (loss) |
$ | (96,770 | ) | $ | 8,236 | $ | (88,534 | ) | ||||
For the year ended December 31, 2014 |
||||||||||||
Net income (loss) |
$ | (75,854 | ) | $ | 190,697 | $ | 114,843 | |||||
Total comprehensive income (loss) |
$ | (76,466 | ) | $ | 190,697 | $ | 114,231 | |||||
For the year ended December 31, 2013 |
||||||||||||
Net income (loss) |
$ | (74,458 | ) | $ | 478 | $ | (73,980 | ) | ||||
Total comprehensive income (loss) |
$ | (72,012 | ) | $ | 478 | $ | (71,534 | ) | ||||
Consolidated Statements of Cash Flows: | ||||||||||||
For the year ended December 31, 2015 |
||||||||||||
Net income (loss) |
$ | (96,069 | ) | $ | 8,236 | $ | (87,833 | ) | ||||
Deferred income tax expense (benefit) |
$ | (77,702 | ) | $ | (8,236 | ) | $ | (85,938 | ) | |||
For the year ended December 31, 2014 |
||||||||||||
Net income (loss) |
$ | (75,854 | ) | $ | 190,697 | $ | 114,843 | |||||
Deferred income tax expense (benefit) |
$ | (43,392 | ) | $ | (190,697 | ) | $ | (234,089 | ) | |||
For the year ended December 31, 2013 |
||||||||||||
Net income (loss) |
$ | (74,458 | ) | $ | 478 | $ | (73,980 | ) | ||||
Deferred income tax expense (benefit) |
$ | (39,555 | ) | $ | (478 | ) | $ | (40,033 | ) |
2. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include all subsidiaries and entities that are controlled by the Company. The results of operations for companies acquired are included in the consolidated financial statements from the effective date of acquisition. All material intercompany accounts and transactions have been eliminated in the consolidated financial statements.
Reclassifications
Certain reclassifications have been made to prior period financial statements to conform to the current period presentation.
Effective January 1, 2015, the Company completed an internal reorganization of its reporting structure which resulted in a change in the composition of its reportable segments to software and analytics, network solutions and technology-enabled services. Segment information has been restated to reflect the current organizational structure.
Effective January 1, 2015, in order to clarify the nature of its customer related postage activities, the Company also created separate captions on the statement of operations within revenue and costs and expenses, respectively. Previously, such amounts were included within revenue and costs of operations. To conform to the current presentation, costs of operations were reduced by $343,464 and $311,854 and reclassified as customer postage for the years ended December 31, 2014 and 2013, respectively.
Accounting Estimates
The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience, current business factors and various other assumptions that the Company believes are necessary to consider in order to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of revenue and expenses and disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic, environmental and political factors and changes in the Companys business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Companys financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Companys operating environment changes. Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in the reported results of operations; and if material, the effects of changes in estimates are disclosed in the notes to the consolidated financial statements. Estimates and assumptions by management affect: the allowance for doubtful accounts; the fair value assigned to assets acquired and liabilities assumed in business combinations; tax receivable agreement obligations; the fair value of interest rate swap obligations; contingent consideration; loss accruals; the carrying value of long-lived assets (including goodwill and intangible assets); the amortization period of long-lived assets (excluding goodwill); the carrying value, capitalization and amortization of software development costs; the provision and benefit for income taxes and related deferred tax accounts; certain accrued expenses; revenue recognition; contingencies; and the value attributed to equity awards.
F-8
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Business Combinations
The Company recognizes the consideration transferred (i.e. purchase price) in a business combination, as well as the acquired business identifiable assets, liabilities and noncontrolling interests at their acquisition date fair value. The excess of the consideration transferred over the fair value of the identifiable assets, liabilities and noncontrolling interest, if any, is recorded as goodwill. Any excess of the fair value of the identifiable assets acquired and liabilities assumed over the consideration transferred, if any, is generally recognized within earnings as of the acquisition date.
The fair value of the consideration transferred, assets, liabilities and noncontrolling interests is estimated based on one or a combination of income, costs or market approaches as determined based on the nature of the asset or liability and the level of inputs available to the Company (i.e. quoted prices in an active market, other observable inputs or unobservable inputs). To the extent that the Companys initial accounting for a business combination is incomplete at the end of a reporting period, provisional amounts are reported for those items which are incomplete. Following the adoption of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2015-16, the Company adjusts such provisional amounts in the reporting period in which the adjustment amounts are determined.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity from the date of purchase of three months or less to be cash equivalents.
Allowance for Doubtful Accounts
The allowance for doubtful accounts reflects the Companys best estimate of losses inherent in the Companys receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available evidence.
Software Development Costs
The Company generally provides services to its customers using software developed for internal use. The costs that are incurred to develop such software are expensed as incurred during the preliminary project stage. Once certain criteria have been met, direct costs incurred in developing or obtaining computer software are capitalized. Training and maintenance costs are expensed as incurred. Capitalized software costs are included in property and equipment in the accompanying consolidated balance sheets and are amortized over a three-year period.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation, including that related to assets under capital lease, is computed using the straight-line method over the estimated useful lives of the related assets. The useful lives for newly acquired assets are generally as follows:
Computer equipment |
3-5 years | |||
Production equipment |
5-7 years | |||
Office equipment, furniture and fixtures |
3-7 years | |||
Internally developed software |
3 years | |||
Technology |
6-9 years | |||
Leasehold improvements |
Shorter of useful life or lease term |
Expenditures for maintenance, repair and renewals of minor items are expensed as incurred. Expenditures for maintenance repair and renewals that extend the useful life of an asset are capitalized.
F-9
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Goodwill and Intangible Assets
Goodwill and intangible assets resulting from the Companys acquisitions are accounted for using the acquisition method of accounting. Intangible assets with definite lives are amortized on a straight-line basis, at their inception, over the estimated useful lives of the related assets generally as follows:
Customer relationships |
5-20 years | |||
Tradenames |
3-20 years | |||
Data sublicense agreement |
6 years | |||
Non-compete agreements |
2-5 years | |||
Premise-based software |
1-3 years |
The Company assesses its goodwill for impairment annually (as of October 1 of each year) or whenever significant indicators of impairment are present. The Company first assesses whether it can reach a more likely than not conclusion that goodwill is not impaired via qualitative analysis alone. To the extent such a conclusion cannot be reached based on a qualitative assessment alone, the Company, using the assistance of a valuation specialist as appropriate, compares the fair value of each reporting unit to its associated carrying value. If the fair value of the reporting unit is less than the carrying value, then a hypothetical acquisition method allocation is performed to determine the amount of the goodwill impairment to recognize. The Company recognized no impairment in conjunction with its most recent goodwill impairment analysis.
Long-Lived Assets
Long-lived assets used in operations are reviewed for impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and fair value. Long-lived assets held for sale are reported at the lower of cost or fair value less costs to sell.
Derivatives
Derivative financial instruments are used to manage the Companys interest rate exposure. The Company does not enter into financial instruments for speculative purposes. Derivative financial instruments are accounted for and measured at fair value and recorded on the balance sheet. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction in the same period or periods during which the hedged transaction affects earnings (for example, in interest expense when the hedged transactions are interest cash flows associated with floating-rate debt). The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized in interest expense in current earnings during the period of change.
Equity Compensation
Compensation expense related to the Companys equity awards is generally recognized on a straight-line basis over the requisite service period. For awards subject to vesting based on market or performance conditions, however, compensation expense is recognized under the accelerated method. The fair value of the equity awards subject only to service conditions is determined by use of a Black-Scholes model. The fair value of the equity awards subject to market or performance conditions is determined by use of a Monte Carlo simulation.
Revenue Recognition
The Company generates most of its revenue by using technology solutions to provide services to our customers that automate and simplify business and administrative functions for payers, providers and pharmacies, generally on either a per transaction, per document, per communication, per member per month, per provider per month, monthly flat fee, contingent fee or hourly basis.
Revenue for financial and administrative information exchange, payment and communication, risk adjustment, quality reporting and healthcare consulting solutions are recognized as the services are provided. Postage fees related to our payment and communication solutions volumes are recorded on a gross basis. Revenue for our eligibility and enrollment and revenue optimization solutions generally are recognized at the time that our provider customer receives notice from the payer of a pending payment. Revenue for payment integrity solutions are recognized at the time that notice of customer acceptance is received.
Cash receipts or billings in advance of revenue recognition are recorded as deferred revenues in the accompanying consolidated balance sheets.
F-10
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
The Company excludes sales and use tax from revenue in the accompanying consolidated statements of operations.
Income Taxes
The Company records deferred income taxes for the tax effect of differences between book and tax bases of its assets and liabilities, as well as differences relating to the timing of recognition of income and expenses.
Deferred income taxes reflect the available net operating losses and the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of the future tax benefits related to deferred tax assets is dependent on many factors, including the Companys past earnings history, expected future earnings, the character and jurisdiction of such earnings, reversing taxable temporary differences, unsettled circumstances that, if unfavorably resolved, would adversely affect utilization of its deferred tax assets, carryback and carryforward periods and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset.
The Company recognizes tax benefits for uncertain tax positions at the time the Company concludes that the tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. The benefit, if any, is measured as the largest amount of benefit, determined on a cumulative probability basis that is more likely than not to be realized upon ultimate settlement. Tax positions failing to qualify for initial recognition are recognized in the first subsequent interim period that they meet the more likely than not standard, upon resolution through negotiation or litigation with the taxing authority or on expiration of the statute of limitations.
Tax Receivable Agreement Obligations
In connection with the IPO, the Company entered into tax receivable agreements which obligated the Company to make payments to certain current and former owners of the Company, including affiliates of Hellman & Friedman LLC (Hellman & Friedman) and certain members of management, equal to 85% of the applicable cash savings that the Company realizes as a result of tax attributes arising from certain previous transactions, including the 2011 Merger. In connection with the 2011 Merger, the Companys former majority owner assigned its rights under the tax receivable agreements to affiliates of Blackstone (Blackstone, together with Hellman & Friedman and certain current and former members of management, are hereinafter sometimes referred to collectively as the TRA Members).
Prior to the 2011 Merger, the Companys balance sheet reflected these obligations at the amount that was both probable and reasonably estimable. In connection with the 2011 Merger, the tax receivable agreement obligations were adjusted to their fair value. The fair value of the obligations at the time of the 2011 Merger is being accreted to the amount of the gross expected obligations using the interest method. Changes in the amount of these obligations resulting from changes to either the timing or amount of cash flows are recognized in the period of change and measured using the discount rate inherent in the initial fair value of the obligations. The accretion of these obligations is classified as a separate caption in the accompanying consolidated statements of operations.
Recent Accounting Pronouncements
In May 2014, the FASB issued ASU No. 2014-09, which replaces most prior general and industry specific revenue recognition guidance with a principles-based comprehensive revenue recognition framework. Under this revised framework, a company will recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. This update is currently scheduled to be effective for fiscal years and interim periods beginning in those years after December 15, 2017. Early adoption is permitted in years beginning after December 15, 2016. Upon adoption, a company may elect to either retrospectively restate each prior reporting period or reflect the cumulative effect of initially applying the update with an adjustment to retained earnings. The Company is currently assessing the potential effects this update may have on its consolidated financial statements.
In June 2014, the FASB issued ASU No. 2014-12, which clarifies, in the context of share-based payment awards, that a performance target that affects vesting and could be achieved after the requisite service period has been rendered should be treated as a performance condition. Prior to this update, because there was no explicit guidance, there was diversity in practice among companies. This update is effective for fiscal years and interim periods within those years beginning after December 15, 2015, with early adoption permitted. The Company does not expect the adoption of this update to have a material effect on its consolidated financial statements.
In January 2015, the Company adopted FASB ASU No. 2014-08, which changes the requirements for reporting discontinued operations. Following adoption of this update, discontinued operations generally will be reported for the disposal by sale or otherwise of a component or a group of components that represents a strategic shift that has or will have a major effect on an entitys operations and financial results. Upon adoption, this update had no effect on the Companys consolidated financial statements.
F-11
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
In July 2015, the Company adopted FASB ASU No. 2015-03, which generally requires that debt issue costs related to a debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability. As a result of the adoption of this update, the Company retrospectively adjusted its consolidated balance sheet as of December 31, 2014 to reduce other assets and long-term debt, excluding current portion, by $11,128.
In July 2015, the Company adopted FASB ASU No. 2015-05, which provides guidance to customers about whether a cloud computing arrangement includes a software license and requires that all software licenses utilized in internal use software arrangements be accounted for consistent with other licenses of intangible assets. As a result, following the adoption of this update, the Company began recognizing new or materially modified software licenses within intangible assets on its consolidated balance sheet and began recognizing the related amortization of these intangible assets within amortization expense. The adoption of this update had no material effect on the Companys consolidated financial statements.
In October 2015, the Company adopted FASB ASU No. 2015-16, which simplifies the accounting for measurement period adjustments in connection with business combinations. Following the adoption of this update, the Company will recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The adoption of this update had no material effect on the Companys consolidated financial statements.
In December 2015, the Company adopted FASB ASU No. 2015-17, which requires that deferred tax assets and liabilities be classified as non-current on the classified statement of financial position (i.e. the balance sheet). As a result of the adoption of this update, the Company retrospectively adjusted its consolidated balance sheet as of December 31, 2014 to reduce current deferred income tax assets and long-term deferred income tax liabilities by $18,893.
In February 2016, the FASB issued ASU No. 2016-02, which generally requires that all lease obligations be recognized on the balance sheet at the present value of the remaining lease payments with a corresponding lease asset. This update is scheduled to be effective for fiscal years and interim periods beginning in those years after December 15, 2018. The Company is currently assessing the potential effects this update may have on its consolidated financial statements.
3. Concentration of Credit Risk
The Companys revenue is primarily generated in the United States. Changes in economic conditions, government regulations or demographic trends, among other matters, in the United States could adversely affect the Companys revenue and results of operations.
The Company maintains its cash and cash equivalent balances in either insured depository accounts or money market mutual funds. The money market mutual funds are limited to investments in low-risk securities such as United States or government agency obligations, or repurchase agreements secured by such securities.
4. Business Combinations
In July 2014, the Company acquired all of the equity interests of Capario, Inc. (Capario), a technology-enabled provider of revenue cycle management solutions.
In November 2014, the Company acquired all of the equity interests of Change Healthcare Corporation (Engagement Solutions), a technology-enabled provider of healthcare consumer engagement and transparency solutions.
In December 2014, the Company acquired all of the equity interests of Adminisource Communications, Inc. (Adminisource), a technology-enabled provider of payment and communication solutions.
In August 2015, the Company acquired all of the equity interests of Altegra Health, Inc. (Altegra Health), a technology-enabled provider that assists payers and risk bearing providers with analytics and reporting capabilities for risk adjustment, member engagement and quality analysis to achieve actionable insights and improved management for value-based healthcare.
F-12
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
The following table summarizes certain information related to these acquisitions. The preliminary values of the consideration transferred, assets acquired and liabilities assumed in the Altegra Health acquisition, including the related tax effects, are subject to change upon the resolution of pre-acquisition contingencies ($5,658 of which are included as liabilities in the table below) and the receipt of a final valuation and working capital settlement.
Altegra Health | Adminisource | Engagement Solutions |
Capario | |||||||||||||
Total Consideration Fair Value at Acquisition Date: |
||||||||||||||||
Cash paid at closing |
$ | 735,669 | $ | 34,825 | $ | 138,329 | $ | 89,423 | ||||||||
Contingent consideration |
| | 4,730 | | ||||||||||||
Parent options fair value |
| | 650 | | ||||||||||||
Other |
(4,000 | ) | (925 | ) | 80 | (219 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 731,669 | $ | 33,900 | $ | 143,789 | $ | 89,204 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Allocation of the Consideration Transferred: |
||||||||||||||||
Cash |
$ | 17,176 | $ | | $ | 8,053 | $ | 2,292 | ||||||||
Accounts receivable |
52,977 | 6,474 | 335 | 4,839 | ||||||||||||
Prepaid expenses and other current assets |
7,691 | 466 | 397 | 1,113 | ||||||||||||
Deferred income tax assets |
| 3,797 | 9,170 | | ||||||||||||
Property and equipment |
40,521 | 874 | 7,953 | 9,580 | ||||||||||||
Identifiable intangible assets: |
||||||||||||||||
Tradename |
17,930 | 108 | 5,300 | 900 | ||||||||||||
Noncompetition agreements |
43,040 | | 2,840 | 2,740 | ||||||||||||
Customer relationships |
351,290 | 21,230 | 4,430 | 38,510 | ||||||||||||
Other |
633 | | | | ||||||||||||
Goodwill |
532,276 | 3,223 | 109,994 | 76,279 | ||||||||||||
Accounts payable |
(836 | ) | (279 | ) | (174 | ) | (2,270 | ) | ||||||||
Accrued sales taxes |
(5,380 | ) | | | | |||||||||||
Other accrued expenses |
(51,585 | ) | (1,993 | ) | (2,203 | ) | (8,818 | ) | ||||||||
Deferred revenues |
(5,100 | ) | (306 | ) | (2 | ) | ||||||||||
Current maturities of long-term debt |
| | | (2,600 | ) | |||||||||||
Deferred income tax liabilities |
(114,495 | ) | | | (14,367 | ) | ||||||||||
Long-term debt |
(154,469 | ) | | (2,000 | ) | (18,785 | ) | |||||||||
Other long-term liabilities |
| | | (207 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total consideration transferred |
$ | 731,669 | $ | 33,900 | $ | 143,789 | $ | 89,204 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Acquisition costs in sales, marketing, general and administrative expense: |
||||||||||||||||
For the year ended December 31, 2015 |
$ | 4,685 | $ | | $ | 48 | $ | | ||||||||
For the year ended December 31, 2014 |
$ | | $ | 553 | $ | 732 | $ | 975 | ||||||||
For the year ended December 31, 2013 |
$ | | $ | | $ | | $ | |
F-13
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Altegra Health | Adminisource | Engagement Solutions |
Capario | |||||||||||||
Other Information: |
||||||||||||||||
Gross contractual accounts receivable |
$ | 54,608 | $ | 7,521 | $ | 335 | $ | 5,112 | ||||||||
Amount not expected to be collected |
$ | 1,631 | $ | 1,047 | $ | | $ | 273 | ||||||||
Goodwill expected to be deductible for tax purposes |
$ | | $ | | $ | | $ | | ||||||||
Contingent Consideration Information: |
||||||||||||||||
Contingent consideration range |
N/A | N/A | $ | 0-$50,000 | N/A | |||||||||||
Measurement period |
N/A | N/A |
|
January 1, 2015 to December 31, 2017 |
|
N/A | ||||||||||
Basis of measurement |
N/A | N/A | |
Revenue performance |
|
N/A | ||||||||||
Type of measurement |
N/A | N/A | Level 3 | N/A | ||||||||||||
Key assumptions at the acquisition date: |
||||||||||||||||
Range of annual revenue performance |
N/A | N/A | $ $ |
5,516 - 51,376 |
|
N/A | ||||||||||
Expected payment date(s) |
N/A | N/A | 2016-2018 | N/A | ||||||||||||
Discount rate(s) |
N/A | N/A | |
10.5% to 11.3% |
|
N/A | ||||||||||
Increase (decrease) to net loss: |
||||||||||||||||
For the year ended December 31, 2015 |
N/A | N/A | $ | (4,730 | ) | N/A | ||||||||||
For the year ended December 31, 2014 |
N/A | N/A | $ | | N/A | |||||||||||
For the year ended December 31, 2013 |
N/A | N/A | $ | | N/A |
The Company generally recognizes goodwill attributable to the assembled workforce and expected synergies among the operations of the acquired entities and the Companys existing operations. In the case of the Companys acquisitions of operating companies, synergies generally have resulted from the elimination of duplicative facilities and personnel costs and cross selling opportunities among the Companys existing customer base. Goodwill is generally deductible for federal income tax purposes when a business combination is treated as an asset purchase. Goodwill is generally not deductible for federal income tax purposes when the business combination is treated as a stock purchase.
5. Property and Equipment
Property and equipment as of December 31, 2015 and 2014, consisted of the following:
2015 | 2014 | |||||||
Computer equipment |
$ | 72,628 | $ | 71,700 | ||||
Production equipment |
25,484 | 24,266 | ||||||
Office equipment, furniture and fixtures |
12,766 | 12,019 | ||||||
Software |
177,833 | 147,211 | ||||||
Technology |
192,157 | 171,433 | ||||||
Leasehold improvements |
36,745 | 36,105 | ||||||
Construction in process |
42,774 | 25,077 | ||||||
|
|
|
|
|||||
560,387 | 487,811 | |||||||
Less accumulated depreciation |
(316,242 | ) | (243,658 | ) | ||||
|
|
|
|
|||||
Property and equipment, net |
$ | 244,145 | $ | 244,153 | ||||
|
|
|
|
Depreciation expense was $90,294, $88,068 and $80,538 for the years ended December 31, 2015, 2014 and 2013, respectively.
F-14
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
6. Goodwill and Intangible Assets
The following table presents the changes in the carrying amount of goodwill for the indicated periods.
Software and Analytics |
Network Solutions | Technology-enabled Services |
Total | |||||||||||||
Balance at December 31, 2013 |
$ | 426,964 | $ | 568,323 | $ | 490,817 | $ | 1,486,104 | ||||||||
Acquisitions |
149,866 | 46,511 | 4,025 | 200,402 | ||||||||||||
Other |
| (267 | ) | | (267 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2014 |
576,830 | 614,567 | 494,842 | 1,686,239 | ||||||||||||
Acquisitions |
532,276 | | | 532,276 | ||||||||||||
Other |
(3,943 | ) | | (802 | ) | (4,745 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2015 |
$ | 1,105,163 | $ | 614,567 | $ | 494,040 | $ | 2,213,770 | ||||||||
|
|
|
|
|
|
|
|
Intangible assets subject to amortization as of December 31, 2015 consisted of the following:
Weighted Average Remaining Life |
Gross Carrying Amount |
Accumulated Amortization |
Net | |||||||||||||
Customer relationships |
14.6 | $ | 1,979,182 | $ | (350,846 | ) | $ | 1,628,336 | ||||||||
Tradenames |
5.2 | 24,775 | (2,757 | ) | 22,018 | |||||||||||
Non-compete agreements |
1.7 | 61,852 | (21,529 | ) | 40,323 | |||||||||||
Data sublicense agreement |
1.8 | 31,000 | (21,821 | ) | 9,179 | |||||||||||
Other |
2.6 | 11,654 | (3,647 | ) | 8,007 | |||||||||||
|
|
|
|
|
|
|||||||||||
Total |
$ | 2,108,463 | $ | (400,600 | ) | $ | 1,707,863 | |||||||||
|
|
|
|
|
|
Amortization expense was $252,009, $101,150 and $103,301 for the years ended December 31, 2015, 2014 and 2013, respectively.
Aggregate future amortization expense for intangible assets is estimated to be:
2016 |
$ | 147,658 | ||
2017 |
134,933 | |||
2018 |
120,587 | |||
2019 |
114,614 | |||
2020 |
112,931 | |||
Thereafter |
1,077,140 | |||
|
|
|||
$ | 1,707,863 | |||
|
|
F-15
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
7. Accrued Expenses
Accrued expenses as of December 31, 2015 and 2014 consisted of the following:
2015 | 2014 | |||||||
Customer deposits |
$ | 29,136 | $ | 28,618 | ||||
Accrued compensation |
34,235 | 31,786 | ||||||
Accrued rebates |
7,494 | 10,272 | ||||||
Accrued telecommunications |
4,257 | 5,196 | ||||||
Accrued outside services |
8,387 | 7,722 | ||||||
Accrued insurance |
4,208 | 5,338 | ||||||
Accrued income, sales and other taxes |
9,180 | 3,183 | ||||||
Accrued interest |
7,376 | 1,828 | ||||||
Interest rate swap agreement |
1,870 | 2,567 | ||||||
Accrued liabilities for purchases of property and equipment |
2,883 | 2,833 | ||||||
Current portion of contingent consideration |
4,650 | 11,548 | ||||||
Current portion of tax receivable agreement obligations to related parties |
986 | 945 | ||||||
Pass-through payments |
28,222 | 48,072 | ||||||
Other accrued liabilities |
24,285 | 15,298 | ||||||
|
|
|
|
|||||
$ | 167,169 | $ | 175,206 | |||||
|
|
|
|
F-16
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
8. Long-Term Debt
The Companys long-term indebtedness is comprised of a senior secured term loan facility (as amended, the Term Loan Facility), a revolving credit facility (the Revolving Facility; together with the Term Loan Facility, the Senior Credit Facilities), 11% senior notes due 2019 (the 2019 Notes), 11.25% senior notes due 2020 (the 2020 Notes) and 6% senior notes due 2021 (the 2021 Notes; together with the 2019 Notes and 2020 Notes, the Senior Notes).
Long-term debt as of December 31, 2015 and 2014 consisted of the following:
December 31, | December 31, | |||||||
2015 | 2014 | |||||||
Senior Credit Facilities |
||||||||
$1,696 million Senior Secured Term Loan facility, due November 2, 2018, net of unamortized discount of $23,511 and $20,016 at December 31, 2015 and December 31, 2014, respectively (effective interest rate of 4.29%) |
$ | 1,621,981 | $ | 1,245,376 | ||||
$160 million Senior Secured Term Loan facility, due November 2, 2018, net of unamortized discount of $3,334 and $4,438 at December 31, 2015 and December 31, 2014, respectively (effective interest rate of 4.54%) |
154,666 | 155,162 | ||||||
$125 million Senior Secured Revolving Credit facility, expiring on November 2, 2016 and bearing interest at a variable base rate plus a spread rate |
| | ||||||
Senior Notes |
||||||||
$375 million 11% Senior Notes due December 31, 2019, net of unamortized discount of $6,299 and $7,477 at December 31, 2015 and December 31, 2014, respectively (effective interest rate of 11.53%) |
368,701 | 367,523 | ||||||
$375 million 11.25% Senior Notes due December 31, 2020, net of unamortized discount of $8,471 and $9,651 at December 31, 2015 and December 31, 2014, respectively (effective interest rate of 11.85%) |
366,529 | 365,349 | ||||||
$250 million 6% Senior Notes due February 15, 2021, net of unamortized discount of $6,161 and $0 at December 31, 2015 and December 31, 2014, respectively (effective interest rate of 6.57%) |
243,839 | | ||||||
Obligation under data sublicense agreement |
10,810 | 17,237 | ||||||
Other |
7,427 | 12,129 | ||||||
Less current portion |
(32,775 | ) | (27,308 | ) | ||||
|
|
|
|
|||||
Long-term debt |
$ | 2,741,178 | $ | 2,135,468 | ||||
|
|
|
|
Senior Credit Facilities
The credit agreement governing the Senior Credit Facilities (the Senior Credit Agreement) provides that, subject to certain conditions, the Company may request additional tranches of term loans, increase commitments under the Revolving Facility or the Term Loan Facility or add one or more incremental revolving credit facility tranches (provided that the revolving credit commitments outstanding at any time have no more than three different maturity dates) in an aggregate amount not to exceed (a) $300,000 plus (b) an unlimited amount at any time, subject to compliance on a pro forma basis with a first lien net leverage ratio of no greater than 4.00 to 1.00. Availability of such additional tranches of term loans or revolving credit facilities and/or increased commitments is subject to, among other conditions, the absence of any default under the Senior Credit Agreement and the receipt of commitments by existing or additional financial institutions. Proceeds of the Revolving Facility, including up to $30,000 in the form of borrowings on same-day notice, referred to as swingline loans, and up to $50,000 in the form of letters of credits ($6,745 outstanding as of December 31, 2015), are available to provide financing for working capital and general corporate purposes.
Borrowings under the Senior Credit Facilities bear interest at an annual rate equal to an applicable margin plus, at the Companys option, either (a) a base rate determined by reference to the highest of (i) the applicable prime rate, (ii) the federal funds rate plus 0.50% and (iii) a LIBOR rate determined by reference to the costs of funds for United States dollar deposits for an interest period of one month, adjusted for certain additional costs, plus 1.00%, which base rate, in the case of the Term Loan Facility only, shall be no less than 2.25%, or (b) a LIBOR rate determined by reference to the costs of funds for United States dollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, which, in the case of the Term Loan Facility only, shall be no less than 1.25%.
F-17
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
In April 2012, the Company amended the Senior Credit Agreement to reprice the Senior Credit Facilities and borrow $80,000 of additional term loans. In April 2013, the Company again amended the Senior Credit Agreement to further reprice, and also to modify certain financial covenants under the Senior Credit Facilities. Following the April 2013 amendment, the interest rate on both the Term Loan Facility and Revolving Facility is LIBOR plus 2.50%. The Term Loan Facility remains subject to a LIBOR floor of 1.25%, and there continues to be no LIBOR floor on the Revolving Facility. In connection with the April 2013 repricing, the Senior Credit Agreement also was amended to, among other things, eliminate the financial covenant related to the consolidated cash interest coverage ratio and modify the financial covenant related to the net leverage test by maintaining the required first lien net leverage ratio at 5.35 to 1.00 for the remaining term of the Senior Credit Facilities.
In December 2014 and August 2015, through further amendments to the Senior Credit Agreement, the Company borrowed an additional $160,000 and $395,000, respectively, under incremental term loan facilities on identical terms and having the same rights and obligations as the existing term loans under the Senior Credit Agreement.
In addition to paying interest on outstanding principal under the Senior Credit Facilities, the Company is required to pay customary agency fees, letter of credit fees and a 0.50% commitment fee in respect of the unutilized commitments under the Revolving Facility.
The Senior Credit Agreement requires that the Company prepay outstanding loans under the Term Loan Facility, subject to certain exceptions, with (a) 100% of the net cash proceeds of any incurrence of debt other than debt permitted under the Senior Credit Agreement, (b) 50% (which percentage will be reduced to 25% and 0% based on the Companys first lien net leverage ratio) of the Companys annual excess cash flow and (c) 100% of the net cash proceeds of certain asset sales and casualty and condemnation events, subject to reinvestment rights and certain other exceptions.
The Company generally may voluntarily prepay outstanding loans under the Senior Credit Facilities at any time without premium or penalty other than breakage costs with respect to LIBOR loans.
The Company is required to make quarterly payments equal to 0.25% of the aggregate principal amount of the loans under the Term Loan Facility, with the balance due and payable on November 2, 2018. Any principal amount outstanding under the Revolving Facility is due and payable on November 2, 2016.
Certain of the Companys United States wholly-owned restricted subsidiaries, together with the Company, are co-borrowers and jointly and severally liable for all obligations under the Senior Credit Facilities. Such obligations of the co-borrowers are unconditionally guaranteed by Change Healthcare Intermediate Holdings, Inc. (a direct wholly-owned subsidiary of Parent), the Company and each of its existing and future United States wholly-owned restricted subsidiaries (with certain exceptions including immaterial subsidiaries). These obligations are secured by a perfected security interest in substantially all of the assets of the co-borrowers and guarantors now owned or later acquired, including a pledge of all of the capital stock of the Company and its United States wholly-owned restricted subsidiaries and 65% of the capital stock of its foreign restricted subsidiaries, subject in each case to the exclusion of certain assets and additional exceptions.
The Senior Credit Agreement requires the Company to comply with a maximum first lien net leverage ratio financial maintenance covenant, to be tested on the last day of each fiscal quarter. A breach of the first lien net leverage ratio covenant is subject to certain equity cure rights. In addition, the Senior Credit Facilities contain a number of negative covenants that, among other things and subject to certain exceptions, restrict the Companys ability and the ability of its subsidiaries to:
| incur additional indebtedness or guarantees; |
| incur liens; |
| make investments, loans and acquisitions; |
| consolidate or merge; |
| sell assets, including capital stock of subsidiaries; |
| pay dividends on capital stock or redeem, repurchase or retire capital stock of the Company or any restricted subsidiary; |
| alter the business of the Company; |
| amend, prepay, redeem or purchase subordinated debt; |
| engage in transactions with affiliates; and |
| enter into agreements limiting dividends and distributions of certain subsidiaries. |
F-18
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
The Senior Credit Agreement also contains certain customary representations and warranties, affirmative covenants and provisions relating to events of default (including upon change of control).
As of December 31, 2015, the Company believes it was in compliance with all of the applicable debt covenants under the Senior Credit Agreement.
Senior Notes
The 2019 Notes bear interest at an annual rate of 11.00% with interest payable semi-annually on June 30 and December 31 of each year. The 2019 Notes mature on December 31, 2019. The 2020 Notes bear interest at an annual rate of 11.25% with interest payable quarterly on March 31, June 30, September 30 and December 31 of each year. The 2020 Notes mature on December 31, 2020. The 2021 Notes bear interest at an annual rate of 6.00% with interest payable semi-annually on April 15 and October 15 of each year, commencing on April 15, 2016. The 2021 Notes mature on February 15, 2021.
The Company may redeem the 2019 Notes, the 2020 Notes or both, in whole or in part, at any time on or after December 31, 2015 at the applicable redemption price, plus accrued and unpaid interest.
The Company may redeem the 2021 Notes, in whole or in part, at any time on or after August 15, 2017 at the applicable redemption price, plus accrued and unpaid interest. At any time prior to August 15, 2017, the Company may, at its option and on one or more occasions, redeem up to 40% of the aggregate principal amount of the 2021 Notes at a redemption price equal to 100% of the aggregate principal amount, plus a premium and accrued and unpaid interest with the net cash proceeds of certain equity offerings. At any time prior to August 15, 2017, the Company may redeem the 2021 Notes, in whole or in part, at its option and on one or more occasions, at a redemption price equal to 100% of the principal amount, plus a make-whole premium and accrued and unpaid interest.
If the Company experiences specific kinds of changes in control, it must offer to purchase the Senior Notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest.
The Senior Notes are senior unsecured obligations and rank equally in right of payment with all of the Companys existing and future indebtedness and senior in right of payment to all of its existing and future subordinated indebtedness. The Companys obligations under the Senior Notes are guaranteed on a senior basis by all of its existing and subsequently acquired or organized wholly-owned United States restricted subsidiaries that guarantee the Senior Credit Facilities or its other indebtedness or indebtedness of any affiliate guarantor. The Senior Notes and the related guarantees are effectively subordinated to the Companys existing and future secured obligations and that of its affiliate guarantors to the extent of the value of the collateral securing such obligations, and are structurally subordinated to all existing and future indebtedness and other liabilities of any of the Companys subsidiaries that do not guarantee the Senior Notes.
The indentures governing the Senior Notes (the Indentures) contain customary covenants that restrict the ability of the Company and its restricted subsidiaries to:
| pay dividends on capital stock or redeem, repurchase or retire capital stock of the Company, subject to customary exceptions, including compliance with a fixed charge coverage ratio and subject to limitation based on net income generated during the term of the Indentures; |
| incur additional indebtedness or issue certain capital stock; |
| incur certain liens; |
| make investments, loans, advances and acquisitions; |
| consolidate, merge or transfer all or substantially all of their assets and the assets of their subsidiaries; |
| prepay subordinated debt; |
| engage in certain transactions with affiliates; and |
| enter into agreements restricting the subsidiaries ability to pay dividends. |
The Indentures also contain certain customary affirmative covenants and events of default.
As of December 31, 2015, the Company believes it was in compliance with all of the applicable debt covenants under the Senior Notes.
F-19
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Obligation Under Data Sublicense Agreement
In 2009 and 2010, the Company acquired certain additional rights to specified uses of its data from the former owner of the Companys business in order to broaden the Companys ability to pursue business intelligence and data analytics solutions for payers and providers. The Company previously licensed exclusive rights to this data to the former owner of the Companys business. In connection with these data rights acquisitions, the Company recorded amortizable intangible assets and corresponding obligations at inception based on the present value of the scheduled annual payments through 2018, which totaled $65,000 in the aggregate (approximately $12,700 remained payable at December 31, 2015). In connection with the 2011 Merger, the Company was required to adjust this obligation to its fair value.
Other
From time to time, the Company enters into deferred financing arrangements with certain vendors. The obligations under such arrangements are recorded at the present value of the scheduled payments. Such future payments totaled approximately $7,500 at December 31, 2015.
Aggregate Future Maturities
The aggregate amounts of future maturities under long-term debt arrangements are as follows:
Years Ending December 31, |
||||
2016 |
$ | 32,775 | ||
2017 |
22,311 | |||
2018 |
1,766,643 | |||
2019 |
375,000 | |||
2020 |
375,000 | |||
Thereafter |
250,000 | |||
|
|
|||
$ | 2,821,729 | |||
|
|
9. Interest Rate Swap
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Companys derivative financial instruments are used to manage differences in the amount, timing and duration of the Companys known or expected cash receipts and its known or expected cash payments principally related to the Companys borrowings.
Cash Flow Hedges of Interest Rate Risk
The Companys objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. In January 2012, the Company executed three interest rate swap agreements to hedge the variable cash flows associated with existing variable-rate debt pursuant to the Term Loan Facility. As of December 31, 2015, the Company had outstanding interest rate derivatives with a combined notional amount of $640,000 that were designated as cash flow hedges of interest rate risk.
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Companys variable-rate debt. During the next twelve months, the Company estimates that an additional $2,562 will be reclassified as an increase to interest expense.
F-20
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
The following table summarizes the fair value of the Companys derivative instruments at December 31, 2015 and 2014, respectively:
Fair Values of Derivative Instruments | ||||||||||||
Asset (Liability) Derivatives | ||||||||||||
December 31, | December 31, | |||||||||||
Balance Sheet Location | 2015 | 2014 | ||||||||||
Derivatives designated as hedging instruments: |
||||||||||||
Interest rate swaps |
Other assets | $ | | $ | 222 | |||||||
Interest rate swaps |
Accrued expenses | (1,870 | ) | (2,567 | ) | |||||||
Interest rate swaps |
Other long-term liabilities | (556 | ) | | ||||||||
|
|
|
|
|||||||||
$ | (2,426 | ) | $ | (2,345 | ) | |||||||
|
|
|
|
Tabular Disclosure of the Effect of Derivative Instruments on the Statement of Operations
The effect of the derivative instruments on the accompanying consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013, respectively, is summarized in the following table:
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Derivatives in Cash Flow Hedging Relationships |
||||||||||||
Gain/ (loss) related to effective portion of derivative recognized in other comprehensive loss |
$ | (2,668 | ) | $ | (3,255 | ) | $ | (1,559 | ) | |||
|
|
|
|
|
|
|||||||
Gain/ (loss) related to effective portion of derivative reclassified from accumulated other comprehensive loss to interest expense |
$ | (2,587 | ) | $ | (2,587 | ) | $ | (2,586 | ) | |||
|
|
|
|
|
|
Credit Risk-related Contingent Features
The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company also could be declared in default on its derivative obligations.
As of December 31, 2015, the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $3,117. If the Company had breached any of these provisions at December 31, 2015, the Company could have been required to settle its obligations under the agreements at this termination value. The Company does not offset any derivative instruments and the derivative instruments are not subject to collateral posting requirements.
F-21
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
10. Fair Value Measurements
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Companys assets and liabilities that are measured at fair value on a recurring basis consist of the Companys derivative financial instruments and contingent consideration associated with business combinations. The table below summarizes these items as of December 31, 2015, aggregated by the level in the fair value hierarchy within which those measurements fall.
Description |
Balance at December 31, 2015 |
Quoted in Markets Identical (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
Interest rate swaps |
$ | (2,426 | ) | $ | | $ | (2,426 | ) | $ | | ||||||
Contingent consideration obligations |
(4,650 | ) | | | (4,650 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | (7,076 | ) | $ | | $ | (2,426 | ) | $ | (4,650 | ) | |||||
|
|
|
|
|
|
|
|
The valuation of the Companys derivative financial instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivative, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair value of the interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments) using the overnight index swap rate as the discount rate.
The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterpartys nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements and measures the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs to evaluate the likelihood of default by itself and by its counterparties. As of December 31, 2015, the Company determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.
The valuation of the Companys contingent consideration obligations was estimated as the present value of total expected contingent consideration payments which were determined using a Monte Carlo simulation. This analysis reflects the contractual terms of the purchase agreement and utilized assumptions with regard to future sales, probabilities of achieving such future sales, the timing of the expected payments and a discount rate. Significant increases with respect to assumptions as to future sales and probabilities of achieving such future sales would have resulted in a higher fair value measurement while an increase in the discount rate would have resulted in a lower fair value measurement.
The table below presents a reconciliation of the fair value of the liabilities that use significant unobservable inputs (Level 3).
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Fiscal Year Ended | ||||||||||||
December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Balance at beginning of period |
$ | (17,486 | ) | $ | (5,484 | ) | $ | (296 | ) | |||
Adjustment of provisional amounts |
(50 | ) | | | ||||||||
Issuance of contingent consideration |
| (10,695 | ) | (5,553 | ) | |||||||
Settlement of contingent consideration |
8,061 | | 296 | |||||||||
Total changes included in contingent consideration |
4,825 | (1,307 | ) | 69 | ||||||||
|
|
|
|
|
|
|||||||
Balance at end of period |
$ | (4,650 | ) | $ | (17,486 | ) | $ | (5,484 | ) | |||
|
|
|
|
|
|
In January 2015, the Company paid approximately $8,057 to the former stockholders of Goold Health Systems in full satisfaction of its contingent consideration liability.
F-22
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
In April 2015, the Company exercised its option to terminate all future obligations under the Vieosoft Inc. (Vieosoft) stock purchase agreement in exchange for a future cash payment of $4,650 to the former stockholders of Vieosoft. This termination payment was not accepted and the former stockholders of Vieosoft have filed a lawsuit against the Company.
In September 2015, the Company concluded that Engagement Solutions will not achieve the performance requirements necessary to earn future contingent consideration payments. As a result, the Company recognized a gain of $4,730 to eliminate the contingent consideration obligation.
Assets and Liabilities Measured at Fair Value on a Non-recurring Basis
During the year ended December 31, 2015, the Company determined, as a result of technology challenges, slower than expected customer adoption, and management attrition, that one of its recently developed products in the network solutions segment may be impaired. As a result, the Company was required to assess the recoverability of the net assets included in the relevant asset group. The Company recognized an impairment charge, measured as of December 31, 2015, to adjust the carrying value of the asset group to its fair value. This impairment charge was allocated to the affected-long-lived assets on a pro rata basis. In addition, throughout 2015 the Company abandoned certain hardware and software in connection with the continued migration of software development to a cloud-based environment. Among this abandoned hardware and software was a complete redevelopment of an existing software and analytics solution in this cloud-based environment.
During the year ended December 31, 2014, the Companys technology-enabled services segment received notice that its existing contract with a customer would not be renewed in full upon its expiration. As a result, the Company abandoned a customer related project that was under development and assessed the recoverability of the net assets included in the relevant asset group. The Company recognized an impairment charge, measured as of April 30, 2014, to write off the abandoned project and to adjust the carrying value of the asset group to its fair value. This latter impairment charge was generally allocated to the affected long-lived assets on a pro rata basis. Additionally, the Company abandoned certain network solutions and technology-enabled services segment development projects in connection with execution of certain strategic initiatives during the year ended December 31, 2014.
The following table summarizes the affected financial statement captions, the allocation of the impairment charges among those captions and provides certain quantitative information associated with the required fair value measurements.
Range of Inputs | Fair Value | Impairment | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Long-lived assets to be held and used (Level 3) |
||||||||||||||||||||||||
Relevant asset group |
N/A | N/A | $ | 786 | $ | 13,066 | $ | 4,995 | $ | 73,220 | ||||||||||||||
Balance sheet account: |
||||||||||||||||||||||||
Customer relationships |
N/A | N/A | N/A | N/A | N/A | $ | 72,290 | |||||||||||||||||
Non-compete agreements |
N/A | N/A | N/A | N/A | $ | 672 | N/A | |||||||||||||||||
Other intangible assets |
N/A | N/A | N/A | N/A | 1,464 | N/A | ||||||||||||||||||
Property and equipment |
N/A | N/A | N/A | N/A | 2,859 | $ | 930 | |||||||||||||||||
Unobservable inputs (discounted cash flow method): |
||||||||||||||||||||||||
Probability of contract extension |
N/A | 80% | N/A | N/A | N/A | N/A | ||||||||||||||||||
Probability of new contract execution |
N/A | 20%-90% | N/A | N/A | N/A | N/A | ||||||||||||||||||
Expected annual revenue range |
$ | 101-$5,443 | $ | 3,080-$3,590 | N/A | N/A | N/A | N/A | ||||||||||||||||
Remaining life of the asset group |
7 years | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||
Discount rate |
14.9% | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||
Risk free interest rate |
N/A | 1.6% | N/A | N/A | N/A | N/A | ||||||||||||||||||
Long-lived assets to be disposed of |
||||||||||||||||||||||||
Property and Equipment |
N/A | N/A | $ | $ | $ | 3,557 | $ | 9,949 |
F-23
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Assets and Liabilities Measured at Fair Value upon Initial Recognition
The carrying amount and the estimated fair value of financial instruments held by the Company as of December 31, 2015 were:
Carrying Amount |
Fair Value | |||||||
Cash and cash equivalents |
$ | 66,655 | $ | 66,655 | ||||
Accounts receivable |
$ | 280,858 | $ | 280,858 | ||||
Senior Credit Facilities (Level 1) |
$ | 1,776,647 | $ | 1,774,860 | ||||
Senior Notes (Level 2) |
$ | 979,069 | $ | 1,026,250 |
The carrying amounts of cash equivalents and accounts receivable approximate fair value because of their short-term maturities. The fair value of long-term debt is based upon market quotes and trades by investors in partial interests of these instruments.
11. Commitments
Lease Commitments
The Company recognizes lease expense on a straight-line basis, including predetermined fixed escalations, over the initial lease term including reasonably assured renewal periods from the time that the Company controls the leased property.
The Company leases its offices and other facilities under operating lease agreements that expire at various dates through 2027. Future minimum lease commitments under these non-cancellable lease agreements as of December 31, 2015 were as follows:
Years Ending December 31: |
||||
2016 |
$ | 14,748 | ||
2017 |
12,947 | |||
2018 |
11,466 | |||
2019 |
6,646 | |||
2020 |
5,407 | |||
Thereafter |
19,019 | |||
|
|
|||
Total minimum lease payments |
$ | 70,233 | ||
|
|
Total rent expense for all operating leases was $14,806, $12,991 and $12,625 for the years ended December 31, 2015, 2014 and 2013, respectively.
Post-employment Benefits
The Company generally offers post-employment benefits to its employees in the case of certain employee termination events consisting of severance and outplacement services. The extent of such benefits vary based on employee title and, in some cases, accumulate based on the respective employees years of service to the Company. Due to the episodic nature of the Companys severance benefit history and the inability to reasonably predict future termination events, no accrual for accumulating severance benefits is accrued until the point that the payment of a severance benefit is probable and can be reasonably estimated.
12. Legal Proceedings
The Company finalized and paid $8,000 related to the settlement of a vendor fee dispute in 2014, with $3,000 and $5,000 of this amount recognized within sales, marketing, general and administrative expense during the years ended December 31, 2014 and 2013, respectively.
Additionally, in the normal course of business, the Company is involved in various claims and legal proceedings. While the ultimate resolution of these matters has yet to be determined, the Company does not believe that their outcomes will have a material adverse effect on the Companys consolidated financial position, results of operations or liquidity.
F-24
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
13. Incentive Compensation Plans
Equity Compensation Plans
In connection with the 2011 Merger, Parent assumed the Change Healthcare, Inc. Amended and Restated 2009 Equity Incentive Plan (the Parent Equity Plan). Pursuant to the Parent Equity Plan, 180,950 shares of Parent common stock have been reserved for the issuance of equity awards to employees, directors and consultants of Parent and its affiliates.
Equity Awards
Parent grants equity-based awards of Parent common stock to certain employees and directors under the Parent Equity Plan. Grants under the Parent Equity Plan consist of one, or a combination of, time-vested awards and/or performance-based awards. In each case, the equity awards are subject to certain call rights by Parent in the event of termination of service by the award holder and put rights by the award holder or his/her beneficiaries in the event of death or disability. The Companys practice is to repurchase shares of Parent common stock held by former employees no earlier than six months following issuance of such shares of Parent common stock. As of December 31, 2015, the Company expects to repurchase 205 such shares of Parent common stock.
Rollover Awards: In connection with the 2011 Merger, certain outstanding grants for members of senior management under the Parent Equity Plan were exchanged for new options of Parent common stock (the Rollover Awards).
Time Vested Awards: The time-vested awards consist of the following:
(i) Tier I Time Awards were granted with an exercise price equal to the fair value of Parent common stock on the date of grant and generally vest in equal 20% installments on the first through fifth anniversary of the 2011 Merger or the grant date, subject to the award holders continued employment through each vesting date. The Company estimates the fair value of the Tier I Time Awards using the Black-Scholes option pricing model. As of December 31, 2015, unrecognized compensation expense related to Tier I Time Awards was $29,960. This expense is expected to be recognized over a weighted average period of 2.24 years.
(ii) Tier II Time Awards were granted with an exercise price greater than the fair value of Parent common stock on the date of grant and generally vest in equal 20% installments on the first through fifth anniversary of the 2011 Merger or grant date, subject to the award holders continued employment through each vesting date. As the Tier II Time Awards were granted with an exercise price that was significantly out of the money as of the grant date, the Tier II Time Awards contain an implied market condition. As a result, the requisite service period is the longer of the explicit and derived service periods. The Company estimates the fair value of the Tier II Time Awards using a Monte Carlo simulation. As of December 31, 2015, unrecognized compensation expense related to the Tier II Time Awards was $1,250. This expense is expected to be recognized over a weighted average period of 1.87 years.
Performance Awards: The performance awards were granted with an exercise price equal to the fair value of Parent common stock on the date of grant and vest, subject to the employees continued employment through the vesting date, on the date when Blackstone has sold at least 25% of the maximum number of Parent shares held by it (i.e. a liquidity event) and achieved a specified rate of return. The Company values the performance awards using a Monte Carlo simulation. Because vesting of the performance awards is contingent upon the occurrence of a liquidity event, no compensation expense has been recorded related to the performance awards. In the event that a sale by Blackstone of at least 25% of its stock occurs, the Company will record all related compensation expense at that time. As of December 31, 2015, unrecognized compensation expense related to the performance awards was $28,718.
Restricted Stock Units: During 2014, the Company granted 1,500 restricted stock units with a grant date fair value of $1,020 to vest in 20% equal installments on the first through fifth anniversary of the grant date, subject to the employees continued employment through each vesting date. As of December 31, 2015, 300 stock units were vested with an intrinsic value of $440 at the time of vesting and unrecognized compensation expense related to the restricted stock units was $998. This expense is expected to be recognized over a weighted average period of 1.94 years.
Modification of Awards
In September 2013, awards granted to the Companys former chief executive officer were modified to accelerate vesting and extend the period to exercise a portion of the Tier I Time Awards and Performance Awards for three years following his termination. In November 2014, awards granted to a former executive were modified to extend the period to exercise vested options following his termination. The former executives exercise period for the Tier I Time Awards was extended to fourteen months following his termination, and total incremental compensation cost recognized as a result of these modifications to the Tier I Time Awards was $167 and $970 for the years ended December 31, 2014 and 2013, respectively.
F-25
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Activity Summary
A summary of award activity under the Parent Equity Plan for the year ended December 31, 2015, is presented separately below for awards valued using the Black Scholes option pricing model and a Monte Carlo simulation.
Awards Valued Using the Black Scholes Option Pricing Model
Weighted Average | ||||||||||||||||||||||||||||||||
Weighted Average | Remaining | Aggregate | ||||||||||||||||||||||||||||||
Awards | Exercise Price | Contractual Term | Intrinsic Value | |||||||||||||||||||||||||||||
Tier I Time | Rollover | Tier I Time | Rollover | Tier I Time | Rollover | Tier I Time | Rollover | |||||||||||||||||||||||||
Awards | Awards | Awards | Awards | Awards | Awards | Awards | Awards | |||||||||||||||||||||||||
Outstanding at January 1, 2015 |
61,370.0 | 2,582.0 | $ | 1,074 | $ | 220 | 8.4 | 7.4 | $ | 24,005 | $ | 3,215 | ||||||||||||||||||||
Granted |
18,182.5 | | 1,682 | | ||||||||||||||||||||||||||||
Exercised |
(1,586.2 | ) | (240.0 | ) | 1,003 | 250 | 1,035 | 292 | ||||||||||||||||||||||||
Expired |
| | | | ||||||||||||||||||||||||||||
Forfeited |
(3,850.8 | ) | | 1,117 | | |||||||||||||||||||||||||||
Outstanding at December 31, 2015 |
74,115.5 | 2,342.0 | $ | 1,218 | $ | 217 | 7.9 | 6.5 | $ | 40,942 | $ | 3,637 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Exercisable at December 31, 2015 |
29,295.2 | 2,342.0 | $ | 1,030 | $ | 217 | 7.0 | 6.5 | $ | 21,685 | $ | 3,637 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards Valued Using a Monte Carlo Simulation
Weighted Average | ||||||||||||||||||||||||||||||||
Weighted Average | Remaining | Aggregate | ||||||||||||||||||||||||||||||
Awards | Exercise Price | Contractual Term | Intrinsic Value | |||||||||||||||||||||||||||||
Tier II Time | Performance | Tier II Time | Performance | Tier II Time | Performance | Tier II Time | Performance | |||||||||||||||||||||||||
Awards | Awards | Awards | Awards | Awards | Awards | Awards | Awards | |||||||||||||||||||||||||
Outstanding at January 1, 2015 |
14,250.0 | 59,572.5 | $ | 2,500 | $ | 1,074 | 8.2 | 8.4 | $ | | $ | | ||||||||||||||||||||
Granted |
| 18,182.5 | | 1,681 | ||||||||||||||||||||||||||||
Exercised |
| | | | ||||||||||||||||||||||||||||
Expired |
| | | | ||||||||||||||||||||||||||||
Forfeited |
| (10,182.5 | ) | | 1,084 | |||||||||||||||||||||||||||
Outstanding at December 31, 2015 |
14,250.0 | 67,572.5 | $ | 2,500 | $ | 1,237 | 7.2 | 8.0 | $ | | $ | | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Exercisable at December 31, 2015 |
7,990.0 | | $ | 2,500 | $ | | 6.9 | | $ | | $ | | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units
Restricted | ||||
Stock Units | ||||
Unvested at December 31, 2014 |
1,500 | |||
Granted |
| |||
Canceled |
| |||
Vested |
300 | |||
|
|
|||
Unvested at December 31, 2015 |
1,200 | |||
|
|
Black-Scholes and Monte Carlo Simulation Option Pricing Model Assumptions
The following table summarizes the weighted average grant date fair values of awards valued using the Black-Scholes and Monte Carlo Simulation option pricing models, as appropriate, and the weighted average assumptions used to develop the fair value estimates under each of the valuation models for the years ended December 31, 2015, 2014 and 2013, respectively:
F-26
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Tier I | Tier II | Performance | ||||||||||
Time Awards | Time Awards | Awards | ||||||||||
Year Ended December 31, 2015: |
||||||||||||
Weighted average grant date fair value |
$ | 864.02 | N/A | $ | 465.06 | |||||||
Expected volatility |
51.24 | % | N/A | 50.70 | % | |||||||
Risk-free interest rate |
1.76 | % | N/A | 1.70 | % | |||||||
Expected term (years) |
6.49 | N/A | N/A | |||||||||
Year Ended December 31, 2014: |
||||||||||||
Weighted average grant date fair value |
$ | 721.62 | $ | 399.07 | $ | 409.74 | ||||||
Expected volatility |
59.22 | % | 55.87 | % | 54.01 | % | ||||||
Risk-free interest rate |
1.93 | % | 2.76 | % | 2.35 | % | ||||||
Expected term (years) |
6.50 | N/A | N/A | |||||||||
Year Ended December 31, 2013: |
||||||||||||
Weighted average grant date fair value |
$ | 606.70 | $ | 399.07 | $ | 371.61 | ||||||
Expected volatility |
62.05 | % | 55.87 | % | 55.87 | % | ||||||
Risk-free interest rate |
1.77 | % | 2.76 | % | 2.76 | % | ||||||
Expected term (years) |
6.48 | N/A | N/A |
Expected dividend yield The Company is subject to limitations on the payment of dividends under its Senior Credit Facilities as further discussed in Note 8 above to these consolidated financial statements. An increase in the dividend yield will decrease compensation expense.
Expected volatility This is a measure of the amount by which the price of the equity instrument has fluctuated or is expected to fluctuate. The expected volatility was based upon the levered median historical volatility of a group of guideline companies. An increase in the expected volatility will increase compensation expense.
Risk-free interest rate This is the U.S. Treasury rate for the week of the grant having a term approximating the expected life of the award. An increase in the risk-free interest rate will increase compensation expense.
Expected term This is the period of time over which the awards are expected to remain outstanding. The Company estimates the expected term as the mid-point between the actual or expected vesting date and the contractual term. An increase in the expected term will increase compensation expense.
Summary of Equity Compensation Expense
For the years ended December 31, 2015, 2014 and 2013, the Company recognized expense of $9,285, $7,334 and $7,021, and an income tax benefit of $550, $733 and $59, respectively, in the aggregate related to its equity compensation arrangements.
Long Term Cash Incentive Plan
During 2013, the Company adopted the Change Healthcare Holdings, Inc. Long Term Cash Incentive Plan (the LTIP). Under the terms of the LTIP, each participant has the opportunity to accrue a specified percentage of their respective annual base salary during each year of the 2013 to 2017 performance period based on the amount by which earnings before interest, taxes, depreciation and amortization of the participants designated business unit exceed a specified threshold. Aggregate payments under the LTIP will occur only in connection with a change in control of the Company and generally require the continued service of the respective participants through the date of the change in control.
At December 31, 2015, based on current participants, the maximum amount of cash payments that could be payable under the LTIP in the event of a change in control are $7,011. As of December 31, 2015, an estimated $3,517 of this maximum amount has been earned by the participants and would be payable in the event of a change in control. Because any payments under the LTIP are contingent upon a change in control, no amounts under the LTIP have been accrued in the accompanying consolidated balance sheets.
14. Retirement Plans
Employees of the Company may participate in a 401k plan, which provides for matching contributions from the Company. Expenses related to this 401k plan were $6,322, $5,174 and $4,942 for the years ended December 31, 2015, 2014 and 2013, respectively.
F-27
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
15. Income Taxes (Restated)
The income tax provision (benefit) for the years ended December 31, 2015, 2014 and 2013, respectively, was as follows:
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Current: |
||||||||||||
Federal |
$ | | $ | (1,063 | ) | $ | 349 | |||||
State |
3,359 | 2,590 | 2,521 | |||||||||
|
|
|
|
|
|
|||||||
Current income tax provision (benefit) |
3,359 | 1,527 | 2,870 | |||||||||
|
|
|
|
|
|
|||||||
Deferred: |
||||||||||||
Federal |
(61,349 | ) | (203,812 | ) | (41,506 | ) | ||||||
State |
(24,589 | ) | (30,277 | ) | 1,473 | |||||||
|
|
|
|
|
|
|||||||
Deferred income tax provision (benefit) |
(85,938 | ) | (234,089 | ) | (40,033 | ) | ||||||
|
|
|
|
|
|
|||||||
Total income tax provision (benefit) |
$ | (82,579 | ) | $ | (232,562 | ) | $ | (37,163 | ) | |||
|
|
|
|
|
|
The differences between the federal statutory rate and the effective income tax rate principally relate to the impact of valuation allowances and uncertain tax positions related to state income taxes, changes in the Companys Tennessee apportionment resulting from the enactment of the Tennessee Revenue Modernization Act in May 2015, book versus tax basis differences in the Companys investment in subsidiary prior to the change in tax status of such subsidiary from a partnership to a corporation in January 2014 and stock compensation expense recorded for book purposes but not deductible for tax. The reconciliation between the federal statutory rate and the effective income tax rate is as follows:
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Statutory U.S. federal tax rate |
35.00 | % | 35.00 | % | 35.00 | % | ||||||
State income taxes (net of federal benefit) |
13.11 | 25.86 | (1.39 | ) | ||||||||
Tax receivable agreements |
(0.41 | ) | (1.89 | ) | (1.00 | ) | ||||||
Other |
0.76 | (0.33 | ) | 0.82 | ||||||||
Change in tax status |
| 138.92 | | |||||||||
|
|
|
|
|
|
|||||||
Effective income tax rate |
48.46 | % | 197.56 | % | 33.43 | % | ||||||
|
|
|
|
|
|
At December 31, 2015, the Company had net operating loss carryforwards (tax effected) for federal and state income tax purposes of approximately $191,406 and $43,680, respectively, which expire from 2026 through 2035 and 2016 through 2035, respectively. A portion of net operating loss carryforwards may be subject to an annual limitation regarding their utilization against taxable income in future periods due to the change of ownership related to a legal entity simplification provisions of the Internal Revenue Code and similar state provisions.
The Company and certain of its subsidiaries are included in Parents consolidated filing group for U.S. federal income tax purposes, as well as in certain state income tax returns that include Parent. With respect to tax returns for any taxable period in which the Company or any of its subsidiaries are included in a tax return filing with Parent, the amount of taxes to be paid by the Company is determined, subject to certain adjustments, as if it and its subsidiaries filed their own tax returns excluding Parent.
F-28
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Significant components of the Companys deferred tax assets (liabilities) as of December 31, 2015 and 2014 were as follows:
2015 | 2014 | |||||||
Deferred tax assets and (liabilities): |
||||||||
Depreciation and amortization |
$ | (522,281 | ) | $ | (444,830 | ) | ||
Accounts receivable |
2,129 | 2,503 | ||||||
Fair value of interest rate swap |
1,009 | 967 | ||||||
Accruals and reserves |
14,340 | 17,756 | ||||||
Capital and net operating losses |
235,934 | 203,962 | ||||||
Debt discount and interest |
14 | 451 | ||||||
Equity compensation |
11,839 | 8,675 | ||||||
Valuation allowance |
(1,670 | ) | (15,468 | ) | ||||
Tax receivable agreement obligation to related parties |
40,981 | 37,211 | ||||||
Other |
3,108 | 1,989 | ||||||
|
|
|
|
|||||
Net deferred tax assets and (liabilities) |
$ | (214,597 | ) | $ | (186,784 | ) | ||
|
|
|
|
|||||
Reported as: |
||||||||
Non-current deferred tax assets |
$ | | $ | | ||||
Non-current deferred tax liabilities |
(214,597 | ) | (186,784 | ) | ||||
|
|
|
|
|||||
Net deferred tax assets and (liabilities) |
$ | (214,597 | ) | $ | (186,784 | ) | ||
|
|
|
|
In January 2014, the Company effected a change in the tax status of a subsidiary from a partnership to a corporation. Prior to the tax status change, the Company recognized a deferred tax liability for the difference in the book and tax basis of its investment in such subsidiary (i.e. outside basis). Following the tax status change, the Companys deferred tax balances reflect differences in the book and tax bases of the individual assets and liabilities included in the corporation.
A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Unrecognized benefit from prior years |
$ | 10,312 | $ | 11,366 | $ | 11,021 | ||||||
Decreases from prior period tax positions |
| (38 | ) | (216 | ) | |||||||
Increases from current period tax positions |
| 331 | 561 | |||||||||
Decreases from settlements with taxing authorities |
| (1,347 | ) | | ||||||||
|
|
|
|
|
|
|||||||
Ending unrecognized benefit |
$ | 10,312 | $ | 10,312 | $ | 11,366 | ||||||
|
|
|
|
|
|
The Company had unrecognized tax benefits of $752 as of December 31, 2015 and 2014, which if recognized, would affect the effective income tax rate.
The Company recognizes interest income and expense (if any) related to income taxes as a component of income tax expense. The Company recognized no interest and penalties for the years ended December 31, 2015, 2014 and 2013, respectively.
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Companys U.S. federal and state income tax returns for the tax years 2012 and beyond remain subject to examination by the Internal Revenue Service. With respect to state and local jurisdictions and countries outside of the United States, the Company and its subsidiaries are typically subject to examination for a number of years after the income tax returns have been filed. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties have been provided for in the accompanying consolidated financial statements for any adjustments that may be incurred due to state, local or foreign audits.
16. Tax Receivable Agreement Obligations to Related Parties
The Company is a party to tax receivable agreements which obligate it to make payments to certain current and former owners of the Company, including affiliates of Blackstone, Hellman & Friedman and certain members of management (collectively, the TRA Members), equal to 85% of the applicable cash savings that the Company realizes as a result of tax attributes arising from certain previous transactions, including the 2011 Merger. The Company will retain the benefit of the remaining 15% of these tax savings.
F-29
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
The Company expects cumulative remaining payments under the tax receivable agreements of $355,742. $174,480 of this amount, which reflected the initial fair value of the tax receivable agreement obligations plus recognized accretion, was reflected as an obligation on the accompanying consolidated balance sheet at December 31, 2015. The accompanying consolidated statement of operations for the years ended December 31, 2015, 2014 and 2013 include accretion expense of $10,496, $14,446 and $26,470, respectively, related to this obligation.
During 2015, the Company changed its estimate of the timing and amount of future cash flows attributable to the tax receivable agreements as a result of a change in the Companys effective tax rate, acquisitions consummated during the year and routine updates to financial projections. These revised estimates resulted in a decrease to loss before income tax benefit of $11,648 for the year ended December 31, 2015.
Based on current facts and circumstances, the Company estimates the aggregate payments due under the tax receivable agreements to be as follows:
Years Ending December 31: |
||||
2016 |
$ | 986 | ||
2017 |
6,212 | |||
2018 |
57,708 | |||
2019 |
89,678 | |||
2020 |
41,895 | |||
|
|
|||
Thereafter |
159,263 | |||
Gross expected payments |
355,742 | |||
Less: Amounts representing discount |
(181,263 | ) | ||
|
|
|||
Total tax receivable agreement obligations due to related parties |
174,479 | |||
Less: Current portion due (included in accrued expenses) |
(986 | ) | ||
|
|
|||
Tax receivable agreement obligations due to related parties |
$ | 173,493 | ||
|
|
The timing and/or amount of aggregate payments due may vary based on a number of factors, including the amount and timing of the taxable income the Company generates in the future and the tax rate then applicable, the use of loss carryovers and the portion of payments under the tax receivable agreements constituting imputed interest or amortizable basis.
17. Other Related Party Transactions
Transaction and Advisory Fee Agreement
In connection with the 2011 Merger, the Company entered into a transaction and advisory fee agreement with Blackstone Management Partners L.L.C., an affiliate of Blackstone (BMP), and Hellman & Friedman, L.P., an affiliate of Hellman & Friedman (HFLP, and, together with BMP, the Managers), for a term of twelve years. Pursuant to the agreement, in consideration for certain advisory services, the Company is obligated to pay the Managers at the beginning of each fiscal year an aggregate advisory fee of $6,000 or an agreed upon amount not to exceed 2% of consolidated EBITDA (as defined in the Senior Credit Agreement) for such fiscal year. Pursuant to the agreement, the Managers are also entitled to receive transaction fees equal to 1% of the aggregate transaction value upon the consummation of any acquisition, divestiture, disposition, merger, consolidation, restructuring or recapitalization, issuance of private or public debt or equity securities (including an initial public offering of equity securities), financing or similar transaction involving the Company.
Pursuant to the agreement, in connection with or in anticipation of a change in control of the Company, sale of all or substantially all of the assets of the Company or an initial public offering of the equity of the Company or parent entity of the Company or their successors, the Managers have the option to receive, in consideration of such Managers role in facilitating such transaction and in settlement of the termination of the services, a single lump sum cash payment equal to the then-present value of all the then-current and future annual advisory fees payable under the agreement, assuming a remaining twelve-year payment period. To the extent that the Company does not pay the lump sum fee when due, the obligation will accrue interest at an annual rate of 10%, compounded quarterly.
During the years ended December 31, 2015, 2014 and 2013, the Company paid $6,000 ($4,350 to BMP and $1,650 to HFLP) in advisory fees for each year and approximately $700, $400 and $200, respectively, as reimbursement to BMP for their out of pocket expenses. The advisory fees are reflected within sales, marketing, general and administrative expense in the accompanying consolidated statements of operations.
F-30
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Term Loans Held by Related Party
During the years ended December 31, 2015, 2014 and 2013, certain investment funds managed by GSO Capital Partners LP (the GSO-managed funds) held a portion of the term loans under the Senior Credit Facilities. GSO Advisor Holdings LLC (GSO Advisor) is the general partner of GSO Capital Partners LP. Blackstone, indirectly through its subsidiaries, holds all of the issued and outstanding equity interests of GSO Advisor. As of December 31, 2015 and 2014, the GSO-managed funds held $55,247 and $68,588 in principal amount of the Senior Credit Facilities ($552 and $686 of which is classified within current portion of long-term debt), respectively.
Transactions with Blackstone Portfolio Companies
The Company provides various services to certain Blackstone portfolio companies under contracts that were executed in the normal course of business. The Company recognized revenue of $3,167, $3,230 and $6,959 related to services provided to Blackstone portfolio companies for the years ended December 31, 2015, 2014 and 2013, respectively.
Transactions with Hellman & Friedman Portfolio Companies
The Company both provides various services to, and purchases from, certain Hellman & Friedman portfolio companies under contracts that were executed in the normal course of business. The Company recognized revenue of $5,751, $6,028 and $2,029 related to services provided to Hellman & Friedman portfolio companies for the years ended December 31, 2015, 2014 and 2013, respectively. The Company paid Hellman & Friedman portfolio companies $233, $116 and $695 related to services provided to the Company for the years ended December 31, 2015, 2014 and 2013, respectively.
Other
During 2015, the Company executed agreements with a vendor and its affiliate in which a director of the Company is the president and chief executive officer to provide certain software related services. Under these agreements, the Company paid the vendor approximately $681 in the aggregate for the year ended December 31, 2015.
18. Segment Reporting
Effective January 1, 2015, the Company completed an internal reorganization of its reporting structure which resulted in a change in the composition of its operating segments. Additionally, the Company periodically makes other changes to the composition of its operating segments. Prior period segment information throughout the notes to these consolidated financial statements is restated to reflect the organizational structure and any other changes made.
Management views the Companys operating results in three reportable segments: (a) software and analytics, (b) network solutions and (c) technology-enabled services. Listed below are the results of operations for each of the reportable segments. This information is reflected in the manner utilized by management to make operating decisions, assess performance and allocate resources. Such amounts include allocations of corporate shared services functions that are essential to the core operations of the reportable segments such as information technology, operations and product development functions. Segment assets and related depreciation expenses are not presented to management for purposes of operational decision making, and therefore are not included in the accompanying tables. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies in Note 2 to these consolidated financial statements.
Software and Analytics
The software and analytics segment provides revenue cycle technology, revenue optimization, payment integrity, electronic payment, risk adjustment, quality reporting, data and analytics and engagement solutions.
Network Solutions
The network solutions segment provides financial and administrative information exchange solutions for medical, pharmacy and dental claims management and other standardized healthcare transactions, including clinical information exchange capabilities.
Technology-enabled Services
The technology-enabled services segment provides payment and communication, eligibility and enrollment, healthcare consulting, payment automation and pharmacy benefits administration solutions.
F-31
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Corporate and Eliminations
Inter-segment revenue and expenses primarily represent claims management and payment and communication solutions provided between segments.
Corporate and eliminations includes pass-through postage costs, management, administrative and certain other shared corporate services functions such as legal, finance, human resources and marketing, as well as eliminations to remove inter-segment revenue and expenses. These administrative costs are excluded from the adjusted EBITDA measure for each respective operating segment.
F-32
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
The revenue and adjusted EBITDA for the operating segments are as follows:
Year Ended December 31, 2015 | ||||||||||||||||||||
Technology- | ||||||||||||||||||||
Software and | Network | enabled | Corporate and | |||||||||||||||||
Analytics | Solutions | Services | Eliminations | Consolidated | ||||||||||||||||
Revenue from external customers: |
||||||||||||||||||||
Solutions revenue |
$ | 353,526 | $ | 375,582 | $ | 421,455 | $ | (26,375 | ) | $ | 1,124,188 | |||||||||
Postage revenue |
| | | 352,895 | 352,895 | |||||||||||||||
Inter-segment revenue |
1,190 | 383 | 4,478 | (6,051 | ) | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net revenue |
$ | 354,716 | $ | 375,965 | $ | 425,933 | $ | 320,469 | $ | 1,477,083 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) before income taxes |
115,721 | 194,166 | 144,776 | (625,075 | ) | (170,412 | ) | |||||||||||||
Interest expense |
| | | 168,252 | 168,252 | |||||||||||||||
Depreciation and amortization |
| | | 342,303 | 342,303 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
EBITDA |
115,721 | 194,166 | 144,776 | (114,520 | ) | 340,143 | ||||||||||||||
Equity compensation |
1,972 | 820 | 701 | 5,792 | 9,285 | |||||||||||||||
Acquisition accounting adjustments |
1,165 | 5 | 636 | | 1,806 | |||||||||||||||
Acquisition-related costs |
395 | 93 | 1,012 | 6,943 | 8,443 | |||||||||||||||
Transaction-related costs and advisory fees |
| | | 6,703 | 6,703 | |||||||||||||||
Strategic initiatives, duplicative and transition costs |
2,101 | 1,333 | 1,784 | 5,672 | 10,890 | |||||||||||||||
Severance costs |
2,209 | 846 | 2,748 | 1,192 | 6,995 | |||||||||||||||
Accretion |
| | | 10,496 | 10,496 | |||||||||||||||
Impairment of long-lived assets |
2,178 | 5,953 | 999 | (578 | ) | 8,552 | ||||||||||||||
Contingent consideration |
(4,825 | ) | | | | (4,825 | ) | |||||||||||||
Other non-routine, net |
944 | 521 | 114 | 3,538 | 5,117 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
EBITDA Adjustments |
6,139 | 9,571 | 7,994 | 39,758 | 63,462 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Adjusted EBITDA |
$ | 121,860 | $ | 203,737 | $ | 152,770 | $ | (74,762 | ) | $ | 403,605 | |||||||||
|
|
|
|
|
|
|
|
|
|
F-33
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Year Ended December 31, 2014 | ||||||||||||||||||||
Technology- | ||||||||||||||||||||
Software and | Network | enabled | Corporate and | |||||||||||||||||
Analytics | Solutions | Services | Eliminations | Consolidated | ||||||||||||||||
Revenue from external customers: |
||||||||||||||||||||
Solutions revenue |
$ | 249,489 | $ | 349,061 | $ | 431,674 | $ | (23,275 | ) | $ | 1,006,949 | |||||||||
Postage revenue |
| | | 343,464 | 343,464 | |||||||||||||||
Inter-segment revenue |
1,030 | 352 | 7,693 | (9,075 | ) | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net revenue |
$ | 250,519 | $ | 349,413 | $ | 439,367 | $ | 311,114 | $ | 1,350,413 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) before income taxes |
84,897 | 173,586 | 74,047 | (450,249 | ) | (117,719 | ) | |||||||||||||
Interest expense |
| | | 146,829 | 146,829 | |||||||||||||||
Depreciation and amortization |
| | | 189,218 | 189,218 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
EBITDA |
84,897 | 173,586 | 74,047 | (114,202 | ) | 218,328 | ||||||||||||||
Equity compensation |
567 | 567 | 1,049 | 5,151 | 7,334 | |||||||||||||||
Acquisition accounting adjustments |
305 | 6 | 780 | (56 | ) | 1,035 | ||||||||||||||
Acquisition-related costs |
88 | 110 | 2,268 | 4,461 | 6,927 | |||||||||||||||
Transaction-related costs and advisory fees |
| | | 6,448 | 6,448 | |||||||||||||||
Strategic initiatives, duplicative and transition costs |
828 | 237 | 179 | 11,620 | 12,864 | |||||||||||||||
Severance costs |
1,389 | 1,592 | 2,134 | 2,890 | 8,005 | |||||||||||||||
Accretion |
| | | 14,446 | 14,446 | |||||||||||||||
Impairment of long-lived assets |
219 | 2,036 | 76,909 | 4,005 | 83,169 | |||||||||||||||
Contingent consideration |
| 1,071 | | 236 | 1,307 | |||||||||||||||
Other non-routine, net |
1,235 | 334 | 4,131 | (1,216 | ) | 4,484 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
EBITDA Adjustments |
4,631 | 5,953 | 87,450 | 47,985 | 146,019 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Adjusted EBITDA |
$ | 89,528 | $ | 179,539 | $ | 161,497 | $ | (66,217 | ) | $ | 364,347 | |||||||||
|
|
|
|
|
|
|
|
|
|
F-34
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Year Ended December 31, 2013 | ||||||||||||||||||||
Technology- | ||||||||||||||||||||
Software and | Network | enabled | Corporate and | |||||||||||||||||
Analytics | Solutions | Services | Eliminations | Consolidated | ||||||||||||||||
Revenue from external customers: |
||||||||||||||||||||
Solutions revenue |
$ | 206,974 | $ | 331,479 | $ | 417,262 | $ | (25,002 | ) | $ | 930,713 | |||||||||
Postage revenue |
| | | 311,854 | 311,854 | |||||||||||||||
Inter-segment revenue |
2,173 | 334 | 3,834 | (6,341 | ) | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net revenue |
$ | 209,147 | $ | 331,813 | $ | 421,096 | $ | 280,511 | $ | 1,242,567 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) before income taxes |
56,203 | 158,061 | 140,836 | (466,243 | ) | (111,143 | ) | |||||||||||||
Interest expense |
| | | 153,169 | 153,169 | |||||||||||||||
Depreciation and amortization |
| | | 183,839 | 183,839 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
EBITDA |
56,203 | 158,061 | 140,836 | (129,235 | ) | 225,865 | ||||||||||||||
Equity compensation |
735 | 1,540 | 1,210 | 3,536 | 7,021 | |||||||||||||||
Acquisition accounting adjustments |
517 | 116 | 295 | (34 | ) | 894 | ||||||||||||||
Acquisition-related costs |
200 | 141 | 1,850 | 1,054 | 3,245 | |||||||||||||||
Transaction-related costs and advisory fees |
| | | 6,948 | 6,948 | |||||||||||||||
Strategic initiatives, duplicative and transition costs |
892 | 1,596 | 587 | 5,326 | 8,401 | |||||||||||||||
Severance costs |
810 | 1,207 | 791 | 4,712 | 7,520 | |||||||||||||||
Loss on extinguishment of debt and other related costs |
| | | 24,311 | 24,311 | |||||||||||||||
Accretion |
| | | 26,470 | 26,470 | |||||||||||||||
Impairment of long-lived assets |
5,782 | 1,831 | 2,688 | 318 | 10,619 | |||||||||||||||
Contingent consideration |
| (69 | ) | | | (69 | ) | |||||||||||||
Other non-routine, net |
600 | 277 | 5,472 | (3,584 | ) | 2,765 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
EBITDA Adjustments |
9,536 | 6,639 | 12,893 | 69,057 | 98,125 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Adjusted EBITDA |
$ | 65,739 | $ | 164,700 | $ | 153,729 | $ | (60,178 | ) | $ | 323,990 | |||||||||
|
|
|
|
|
|
|
|
|
|
19. Accumulated Other Comprehensive Income (Loss)
The following is a summary of the accumulated other comprehensive income (loss) balances, net of taxes, as of and for the year ended December 31, 2015.
Foreign | Accumulated | |||||||||||
Currency | Other | |||||||||||
Translation | Cash Flow | Comprehensive | ||||||||||
Adjustment | Hedge | Income (Loss) | ||||||||||
Balance at January 1, 2015 |
$ | (483 | ) | $ | (1,472 | ) | $ | (1,955 | ) | |||
Change associated with foreign currency translation |
(654 | ) | | (654 | ) | |||||||
Change associated with current period hedging |
| 2,540 | 2,540 | |||||||||
Reclassification into earnings |
| (2,587 | ) | (2,587 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2015 |
$ | (1,137 | ) | $ | (1,519 | ) | $ | (2,656 | ) | |||
|
|
|
|
|
|
20. Supplemental Condensed Consolidating Financial Information (Restated)
In lieu of providing separate annual and interim financial statements for each guarantor of debt securities to be registered, Regulation S-X of SEC Guidelines, Rules and Regulations (Regulation S-X) provides companies, if certain criteria are satisfied, with the option to instead provide condensed consolidating financial information for its issuers, guarantors and non-guarantors. In the case of the Company, the applicable criteria include the following: (i) the Senior Notes are fully and unconditionally guaranteed on a joint and several basis (subject to customary release provisions), (ii) each of the guarantors of the Senior Notes is a direct or indirect 100%-owned subsidiary of the Company and (iii) any non-guarantors are considered minor as that term is defined in Regulation S-X. Because each of these criteria has been satisfied by the Company, summarized condensed consolidating balance sheets at December 31, 2015 and 2014, condensed consolidating statements of operations, comprehensive income (loss) and cash flows for each of the years ended December 31, 2015, 2014 and 2013, respectively, for the Company, segregating the issuer, the subsidiary guarantors and consolidating adjustments, are reflected below. Prior year amounts have been reclassified to conform to the current year presentation.
F-35
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Condensed Consolidating Balance Sheet
As of December 31, 2015 | ||||||||||||||||
Change Healthcare | Guarantor | Consolidating | ||||||||||||||
Holdings, Inc. | Subsidiaries | Adjustments | Consolidated | |||||||||||||
ASSETS |
||||||||||||||||
Current assets: |
||||||||||||||||
Cash and cash equivalents |
$ | 738 | $ | 65,917 | $ | | $ | 66,655 | ||||||||
Accounts receivable, net of allowance for doubtful accounts |
| 280,858 | | 280,858 | ||||||||||||
Prepaid expenses and other current assets |
2,234 | 33,179 | | 35,413 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total current assets |
2,972 | 379,954 | | 382,926 | ||||||||||||
Property and equipment, net |
3 | 244,142 | | 244,145 | ||||||||||||
Due from affiliates |
135,406 | | (135,406 | ) | | |||||||||||
Investment in consolidated subsidiaries |
1,976,243 | | (1,976,243 | ) | | |||||||||||
Goodwill |
| 2,213,770 | | 2,213,770 | ||||||||||||
Intangible assets, net |
1,000 | 1,706,863 | | 1,707,863 | ||||||||||||
Other assets, net |
268,137 | 8,050 | (267,687 | ) | 8,500 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | 2,383,761 | $ | 4,552,779 | $ | (2,379,336 | ) | $ | 4,557,204 | |||||||
|
|
|
|
|
|
|
|
|||||||||
LIABILITIES AND EQUITY |
||||||||||||||||
Current liabilities: |
||||||||||||||||
Accounts payable |
$ | | $ | 27,950 | $ | | $ | 27,950 | ||||||||
Accrued expenses |
10,689 | 156,480 | | 167,169 | ||||||||||||
Deferred revenues |
| 12,943 | | 12,943 | ||||||||||||
Current portion of long-term debt |
8,099 | 24,676 | | 32,775 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total current liabilities |
18,788 | 222,049 | | 240,837 | ||||||||||||
Due to affiliates |
| 135,406 | (135,406 | ) | | |||||||||||
Long-term debt, excluding current portion |
1,015,243 | 1,725,935 | | 2,741,178 | ||||||||||||
Deferred income tax liabilities |
| 482,284 | (267,687 | ) | 214,597 | |||||||||||
Tax receivable agreement obligations to related parties |
173,493 | | | 173,493 | ||||||||||||
Other long-term liabilities |
1,092 | 10,862 | | 11,954 | ||||||||||||
Commitments and contingencies |
||||||||||||||||
Equity |
1,175,145 | 1,976,243 | (1,976,243 | ) | 1,175,145 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities and equity |
$ | 2,383,761 | $ | 4,552,779 | $ | (2,379,336 | ) | $ | 4,557,204 | |||||||
|
|
|
|
|
|
|
|
F-36
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Condensed Consolidating Balance Sheet
As of December 31, 2014 | ||||||||||||||||
Change Healthcare Holdings, Inc. |
Guarantor Subsidiaries |
Consolidating Adjustments |
Consolidated | |||||||||||||
ASSETS |
||||||||||||||||
Current assets: |
||||||||||||||||
Cash and cash equivalents |
$ | 796 | $ | 81,510 | $ | | $ | 82,306 | ||||||||
Accounts receivable, net of allowance for doubtful accounts |
| 233,791 | | 233,791 | ||||||||||||
Prepaid expenses and other current assets |
2,267 | 26,979 | | 29,246 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total current assets |
3,063 | 342,280 | | 345,343 | ||||||||||||
Property and equipment, net |
7 | 244,146 | | 244,153 | ||||||||||||
Due from affiliates |
| 180,610 | (180,610 | ) | | |||||||||||
Investment in subsidiaries |
1,915,452 | | (1,915,452 | ) | | |||||||||||
Goodwill |
| 1,686,239 | | 1,686,239 | ||||||||||||
Intangible assets, net |
133,500 | 1,405,894 | | 1,539,394 | ||||||||||||
Other assets, net |
166,736 | 7,924 | (165,477 | ) | 9,183 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | 2,218,758 | $ | 3,867,093 | $ | (2,261,539 | ) | $ | 3,824,312 | |||||||
|
|
|
|
|
|
|
|
|||||||||
LIABILITIES AND EQUITY |
||||||||||||||||
Current liabilities: |
||||||||||||||||
Accounts payable |
$ | | $ | 16,399 | $ | | $ | 16,399 | ||||||||
Accrued expenses |
4,935 | 170,271 | | 175,206 | ||||||||||||
Deferred revenues |
| 10,518 | | 10,518 | ||||||||||||
Current portion of long-term debt |
6,709 | 20,599 | | 27,308 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total current liabilities |
11,644 | 217,787 | | 229,431 | ||||||||||||
Due to affiliates |
180,610 | | (180,610 | ) | | |||||||||||
Long-term debt, excluding current portion |
769,236 | 1,366,232 | | 2,135,468 | ||||||||||||
Deferred income tax liabilities |
| 352,261 | (165,477 | ) | 186,784 | |||||||||||
Tax receivable agreement obligations to related parties |
163,983 | | | 163,983 | ||||||||||||
Other long-term liabilities |
| 15,361 | | 15,361 | ||||||||||||
Commitments and contingencies |
||||||||||||||||
Equity: |
1,093,285 | 1,915,452 | (1,915,452 | ) | 1,093,285 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities and equity |
$ | 2,218,758 | $ | 3,867,093 | $ | (2,261,539 | ) | $ | 3,824,312 | |||||||
|
|
|
|
|
|
|
|
F-37
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Condensed Consolidating Statement of Operations
Year Ended December 31, 2015 | ||||||||||||||||
Change Healthcare Holdings, Inc. |
Guarantor Subsidiaries |
Consolidating Adjustments |
Consolidated | |||||||||||||
Revenue: |
||||||||||||||||
Solutions revenue |
$ | | $ | 1,124,188 | $ | | $ | 1,124,188 | ||||||||
Postage revenue |
| 352,895 | | 352,895 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
| 1,477,083 | | 1,477,083 | ||||||||||||
Costs and expenses: |
||||||||||||||||
Cost of operations (exclusive of depreciation and amortization below) |
228 | 507,130 | | 507,358 | ||||||||||||
Development and engineering |
| 45,489 | | 45,489 | ||||||||||||
Sales, marketing, general and administrative |
11,447 | 206,269 | | 217,716 | ||||||||||||
Customer postage |
| 352,895 | | 352,895 | ||||||||||||
Depreciation and amortization |
132,509 | 209,794 | | 342,303 | ||||||||||||
Accretion |
10,496 | | | 10,496 | ||||||||||||
Impairment of long-lived assets |
| 8,552 | | 8,552 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss) |
(154,680 | ) | 146,954 | | (7,726 | ) | ||||||||||
Equity in earnings of consolidated subsidiaries |
(56,575 | ) | | 56,575 | | |||||||||||
Interest expense, net |
91,904 | 76,348 | | 168,252 | ||||||||||||
Contingent consideration |
| (4,825 | ) | | (4,825 | ) | ||||||||||
Other |
| (741 | ) | | (741 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) before income tax provision (benefit) |
(190,009 | ) | 76,172 | (56,575 | ) | (170,412 | ) | |||||||||
Income tax provision (benefit) |
(102,176 | ) | 19,597 | | (82,579 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | (87,833 | ) | $ | 56,575 | $ | (56,575 | ) | $ | (87,833 | ) | |||||
|
|
|
|
|
|
|
|
F-38
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Condensed Consolidating Statement of Operations
Year Ended December 31, 2014 | ||||||||||||||||
Change Healthcare | Guarantor | Consolidating | ||||||||||||||
Holdings, Inc. | Subsidiaries | Adjustments | Consolidated | |||||||||||||
Revenue |
||||||||||||||||
Solutions revenue |
$ | | $ | 1,006,949 | $ | | $ | 1,006,949 | ||||||||
Postage revenue |
| 343,464 | | 343,464 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
| 1,350,413 | | 1,350,413 | ||||||||||||
Costs and expenses: |
||||||||||||||||
Cost of operations (exclusive of depreciation and amortization below) |
| 462,332 | | 462,332 | ||||||||||||
Development and engineering |
| 32,956 | | 32,956 | ||||||||||||
Sales, marketing, general and administrative |
17,126 | 181,253 | | 198,379 | ||||||||||||
Customer postage |
| 343,464 | | 343,464 | ||||||||||||
Depreciation and amortization |
9,003 | 180,215 | | 189,218 | ||||||||||||
Accretion |
14,446 | | | 14,446 | ||||||||||||
Impairment of long-lived assets |
| 83,169 | | 83,169 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss) |
(40,575 | ) | 67,024 | | 26,449 | |||||||||||
Equity in earnings of consolidated subsidiaries |
(160,311 | ) | | (160,311 | ) | | ||||||||||
Interest expense, net |
93,471 | 53,358 | | 146,829 | ||||||||||||
Contingent consideration |
| 1,307 | | 1,307 | ||||||||||||
Other |
(111 | ) | (3,857 | ) | | (3,968 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) before income tax provision (benefit) |
26,376 | 16,216 | (160,311 | ) | (117,719 | ) | ||||||||||
Income tax provision (benefit) |
(88,467 | ) | (144,095 | ) | | (232,562 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | 114,843 | $ | 160,311 | $ | (160,311 | ) | $ | 114,843 | |||||||
|
|
|
|
|
|
|
|
F-39
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Condensed Consolidating Statement of Operations
Year Ended December 31, 2013 | ||||||||||||||||
Change Healthcare Holdings, Inc. |
Guarantor Subsidiaries |
Consolidating Adjustments |
Consolidated | |||||||||||||
Revenue |
||||||||||||||||
Solutions revenue |
$ | | $ | 930,713 | $ | | $ | 930,713 | ||||||||
Postage revenue |
| 311,854 | 311,854 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
| 1,242,567 | | 1,242,567 | ||||||||||||
Costs and expenses: |
||||||||||||||||
Cost of operations (exclusive of depreciation and amortization below) |
| 447,324 | | 447,324 | ||||||||||||
Development and engineering |
| 31,426 | | 31,426 | ||||||||||||
Sales, marketing, general and administrative |
12,321 | 157,730 | | 170,051 | ||||||||||||
Customer postage |
| 311,854 | | 311,854 | ||||||||||||
Depreciation and amortization |
9,004 | 174,835 | | 183,839 | ||||||||||||
Accretion |
26,470 | | | 26,470 | ||||||||||||
Impairment of long-lived assets |
| 10,619 | | 10,619 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss) |
(47,795 | ) | 108,779 | | 60,984 | |||||||||||
Equity in earnings of consolidated subsidiaries |
(14,159 | ) | | 14,159 | | |||||||||||
Interest expense, net |
94,021 | 59,148 | | 153,169 | ||||||||||||
Loss on extinguishment of debt |
485 | 22,675 | | 23,160 | ||||||||||||
Contingent consideration |
| (69 | ) | | (69 | ) | ||||||||||
Other |
(2,925 | ) | (1,208 | ) | | (4,133 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) before income tax provision (benefit) |
(125,217 | ) | 28,233 | (14,159 | ) | (111,143 | ) | |||||||||
Income tax provision (benefit) |
(51,237 | ) | 14,074 | | (37,163 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | (73,980 | ) | $ | 14,159 | $ | (14,159 | ) | $ | (73,980 | ) | |||||
|
|
|
|
|
|
|
|
F-40
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Condensed Consolidating Statement of Comprehensive Income (Loss)
Year Ended December 31, 2015 | ||||||||||||||||
Change Healthcare | Guarantor | Consolidating | ||||||||||||||
Holdings, Inc. | Subsidiaries | Adjustments | Consolidated | |||||||||||||
Net income (loss) |
$ | (87,833 | ) | $ | 56,575 | $ | (56,575 | ) | $ | (87,833 | ) | |||||
Other comprehensive income (loss): |
||||||||||||||||
Changes in fair value of interest rate swap, net of taxes |
(47 | ) | | | (47 | ) | ||||||||||
Foreign currency translation adjustment |
| (654 | ) | | (654 | ) | ||||||||||
Equity in other comprehensive earnings |
(654 | ) | | 654 | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss) |
(701 | ) | (654 | ) | 654 | (701 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive income (loss) |
$ | (88,534 | ) | $ | 55,921 | $ | (55,921 | ) | $ | (88,534 | ) | |||||
|
|
|
|
|
|
|
|
F-41
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Condensed Consolidating Statement of Comprehensive Income (Loss)
Year Ended December 31, 2014 | ||||||||||||||||
Change Healthcare | Guarantor | Consolidating | ||||||||||||||
Holdings, Inc. | Subsidiaries | Adjustments | Consolidated | |||||||||||||
Net income (loss) |
$ | 114,843 | $ | 160,311 | $ | (160,311 | ) | $ | 114,843 | |||||||
Other comprehensive income (loss): |
||||||||||||||||
Changes in fair value of interest rate swap, net of taxes |
(393 | ) | | | (393 | ) | ||||||||||
Foreign currency translation adjustment |
| (219 | ) | | (219 | ) | ||||||||||
Equity in other comprehensive earnings |
(219 | ) | | 219 | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss) |
(612 | ) | (219 | ) | 219 | (612 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive income (loss) |
$ | 114,231 | $ | 160,092 | $ | (160,092 | ) | $ | 114,231 | |||||||
|
|
|
|
|
|
|
|
F-42
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Condensed Consolidating Statement of Comprehensive Income (Loss)
Year Ended December 31, 2013 | ||||||||||||||||
Change Healthcare | Guarantor | Consolidating | ||||||||||||||
Holdings, Inc. | Subsidiaries | Adjustments | Consolidated | |||||||||||||
Net income (loss) |
$ | (73,980 | ) | $ | 14,159 | $ | (14,159 | ) | $ | (73,980 | ) | |||||
Other comprehensive income (loss): |
||||||||||||||||
Changes in fair value of interest rate swap, net of taxes |
2,583 | | | 2,583 | ||||||||||||
Foreign currency translation adjustment |
| (137 | ) | | (137 | ) | ||||||||||
Equity in other comprehensive earnings |
(137 | ) | | 137 | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss) |
2,446 | (137 | ) | 137 | 2,446 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive income (loss) |
$ | (71,534 | ) | $ | 14,022 | $ | (14,022 | ) | $ | (71,534 | ) | |||||
|
|
|
|
|
|
|
|
F-43
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Condensed Consolidating Statement of Cash Flows
Year Ended December 31, 2015 | ||||||||||||||||
Change Healthcare Holdings, Inc. |
Guarantor Subsidiaries |
Consolidating Adjustments |
Consolidated | |||||||||||||
Operating activities |
||||||||||||||||
Net income (loss) |
$ | (87,833 | ) | $ | 56,575 | $ | (56,575 | ) | $ | (87,833 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||||||||||
Depreciation and amortization |
132,509 | 209,794 | | 342,303 | ||||||||||||
Accretion |
10,496 | | | 10,496 | ||||||||||||
Equity compensation |
315 | 8,970 | | 9,285 | ||||||||||||
Deferred income tax expense (benefit) |
(24,507 | ) | (61,431 | ) | | (85,938 | ) | |||||||||
Amortization of debt discount and issuance costs |
3,390 | 7,396 | | 10,786 | ||||||||||||
Contingent consideration |
| (4,825 | ) | | (4,825 | ) | ||||||||||
Impairment of long lived assets |
| 8,552 | | 8,552 | ||||||||||||
Equity in earnings of consolidated subsidiaries |
(56,575 | ) | | 56,575 | | |||||||||||
Other |
(1,488 | ) | (332 | ) | | (1,820 | ) | |||||||||
Changes in operating assets and liabilities: |
||||||||||||||||
Accounts receivable |
| 5,078 | | 5,078 | ||||||||||||
Prepaid expenses and other |
(77,416 | ) | 78,626 | | 1,210 | |||||||||||
Accounts payable |
| 11,391 | | 11,391 | ||||||||||||
Accrued expenses, deferred revenue, and other liabilities |
9,464 | (60,430 | ) | | (50,966 | ) | ||||||||||
Tax receivable agreement obligations to related parties |
(944 | ) | | | (944 | ) | ||||||||||
Due to/from affiliates |
(316,014 | ) | 316,014 | | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided (used in) by operating activities |
(408,603 | ) | 575,378 | | 166,775 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Investing activities |
||||||||||||||||
Purchases of property and equipment |
| (56,963 | ) | | (56,963 | ) | ||||||||||
Payments for acquisitions, net of cash acquired |
| (717,669 | ) | | (717,669 | ) | ||||||||||
Other |
| (5,325 | ) | | (5,325 | ) | ||||||||||
Investment in subsidiary |
4,755 | | (4,755 | ) | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by (used in) investing activities |
4,755 | (779,957 | ) | (4,755 | ) | (779,957 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Financing activities |
||||||||||||||||
Distributions from (to) Change Healthcare Holdings, Inc., net |
| (4,755 | ) | 4,755 | | |||||||||||
Proceeds from Term Loan Facility |
8,481 | 376,930 | | 385,411 | ||||||||||||
Payments on Term Loan Facility |
(320 | ) | (16,180 | ) | | (16,500 | ) | |||||||||
Proceeds from Senior Notes |
243,453 | | | 243,453 | ||||||||||||
Proceeds from Revolving Facility |
| 60,000 | | 60,000 | ||||||||||||
Payments on Revolving Facility |
| (60,000 | ) | | (60,000 | ) | ||||||||||
Payment of loan costs |
(2,500 | ) | | | (2,500 | ) | ||||||||||
Payment of debt assumed from acquisition |
| (154,469 | ) | | (154,469 | ) | ||||||||||
Payment of data sublicense obligation |
(6,433 | ) | | | (6,433 | ) | ||||||||||
Payments of deferred financing obligations |
| (6,987 | ) | | (6,987 | ) | ||||||||||
Repurchase of Parent common stock |
(5,772 | ) | | | (5,772 | ) | ||||||||||
Capital contribution from Parent |
166,881 | | | 166,881 | ||||||||||||
Payment of contingent consideration |
| (5,553 | ) | | (5,553 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by (used in) financing activities |
403,790 | 188,986 | 4,755 | 597,531 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net decrease in cash and cash equivalents |
(58 | ) | (15,593 | ) | | (15,651 | ) | |||||||||
Cash and cash equivalents at beginning of period |
796 | 81,510 | | 82,306 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents at end of period |
$ | 738 | $ | 65,917 | $ | | $ | 66,655 | ||||||||
|
|
|
|
|
|
|
|
F-44
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Condensed Consolidating Statement of Cash Flows
Year Ended December 31, 2014 | ||||||||||||||||
Change Healthcare | Guarantor | Consolidating | ||||||||||||||
Holdings, Inc. | Subsidiaries | Adjustments | Consolidated | |||||||||||||
Operating activities |
||||||||||||||||
Net income (loss) |
$ | 114,843 | $ | 160,311 | $ | (160,311 | ) | $ | 114,843 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
||||||||||||||||
Depreciation and amortization |
9,003 | 180,215 | | 189,218 | ||||||||||||
Accretion expense |
14,446 | | | 14,446 | ||||||||||||
Equity compensation expense |
335 | 6,999 | | 7,334 | ||||||||||||
Deferred income tax expense (benefit) |
(88,066 | ) | (146,023 | ) | | (234,089 | ) | |||||||||
Amortization of debt discount and issuance costs |
2,704 | 5,143 | | 7,847 | ||||||||||||
Contingent consideration |
| 1,307 | | 1,307 | ||||||||||||
Gain on sale of cost method investment |
(114 | ) | | | (114 | ) | ||||||||||
Impairment of long lived assets |
| 83,169 | | 83,169 | ||||||||||||
Equity in earnings of consolidated subsidiaries |
(160,311 | ) | | (160,311 | ) | | ||||||||||
Other |
(1,089 | ) | (1,166 | ) | | (2,255 | ) | |||||||||
Changes in operating assets and liabilities: |
||||||||||||||||
Accounts receivable |
| (6,824 | ) | | (6,824 | ) | ||||||||||
Prepaid expenses and other |
773 | (237 | ) | | 536 | |||||||||||
Accounts payable |
| 4,591 | | 4,591 | ||||||||||||
Accrued expenses, deferred revenue, and other liabilities |
(2,608 | ) | 29,258 | | 26,650 | |||||||||||
Tax receivable agreement obligations to related parties |
(988 | ) | | | (988 | ) | ||||||||||
Due to/from affiliates |
111,582 | (111,582 | ) | | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by (used in) operating activities |
510 | 205,161 | | 205,671 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Investing activities |
||||||||||||||||
Purchases of property and equipment |
| (55,926 | ) | | (55,926 | ) | ||||||||||
Payments for acquisitions, net of cash acquired |
| (252,772 | ) | | (252,772 | ) | ||||||||||
Other |
677 | (139 | ) | | 538 | |||||||||||
Investment in subsidiaries, net |
95 | | (95 | ) | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by (used in) investing activities |
772 | (308,837 | ) | (95 | ) | (308,160 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Financing activities |
||||||||||||||||
Distributions from (to) Change Healthcare Holdings, Inc., net |
| (95 | ) | 95 | | |||||||||||
Proceeds from Term Loan Facility |
| 157,600 | | 157,600 | ||||||||||||
Payments on Term Loan Facility |
(276 | ) | (13,003 | ) | | (13,279 | ) | |||||||||
Proceeds from Revolving Facility |
| 183,000 | | 183,000 | ||||||||||||
Payments on Revolving Facility |
| (183,000 | ) | | (183,000 | ) | ||||||||||
Payment of loan costs |
| (2,096 | ) | | (2,096 | ) | ||||||||||
Payment of debt assumed from acquisition |
| (25,262 | ) | | (25,262 | ) | ||||||||||
Payment of data sublicense obligation |
(5,300 | ) | | | (5,300 | ) | ||||||||||
Payments of deferred financing obligations |
| (5,441 | ) | | (5,441 | ) | ||||||||||
Repurchase of Parent common stock |
(960 | ) | (261 | ) | | (1,221 | ) | |||||||||
Capital contribution from Parent |
3,256 | | | 3,256 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by (used in) financing activities |
(3,280 | ) | 111,442 | 95 | 108,257 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in cash and cash equivalents |
(1,998 | ) | 7,766 | | 5,768 | |||||||||||
Cash and cash equivalents at beginning of period |
2,794 | 73,744 | | 76,538 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents at end of period |
$ | 796 | $ | 81,510 | $ | | $ | 82,306 | ||||||||
|
|
|
|
|
|
|
|
F-45
Change Healthcare Holdings, Inc.
Notes to Consolidated Financial Statements
(In Thousands, Except Per Share, Unit and Per Unit Amounts)
Condensed Consolidating Statement of Cash Flows
Year Ended December 31, 2013 | ||||||||||||||||
Change Healthcare | Guarantor | Consolidating | ||||||||||||||
Holdings, Inc. | Subsidiaries | Adjustments | Consolidated | |||||||||||||
Operating activities |
||||||||||||||||
Net income (loss) |
$ | (73,980 | ) | $ | 14,159 | $ | (14,159 | ) | $ | (73,980 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
||||||||||||||||
Depreciation and amortization |
9,004 | 174,835 | | 183,839 | ||||||||||||
Accretion expense |
26,470 | | | 26,470 | ||||||||||||
Equity compensation expense |
240 | 6,781 | | 7,021 | ||||||||||||
Deferred income tax expense (benefit) |
(49,673 | ) | 9,640 | | (40,033 | ) | ||||||||||
Amortization of debt discount and issuance costs |
2,501 | 5,974 | | 8,475 | ||||||||||||
Contingent consideration |
| (69 | ) | | (69 | ) | ||||||||||
Gain on sale of cost method investment |
(2,925 | ) | | | (2,925 | ) | ||||||||||
Loss on extinguishment of debt |
478 | 22,350 | | 22,828 | ||||||||||||
Impairment of long lived assets |
| 10,619 | | 10,619 | ||||||||||||
Equity in earnings of consolidated subsidiaries |
(14,159 | ) | | 14,159 | | |||||||||||
Other |
(822 | ) | (1,140 | ) | | (1,962 | ) | |||||||||
Changes in operating assets and liabilities: |
||||||||||||||||
Accounts receivable |
| (20,791 | ) | | (20,791 | ) | ||||||||||
Prepaid expenses and other |
(2,402 | ) | 3,844 | | 1,442 | |||||||||||
Accounts payable |
| 1,335 | | 1,335 | ||||||||||||
Accrued expenses, deferred revenue, and other liabilities |
3,171 | 26,102 | | 29,273 | ||||||||||||
Tax receivable agreement obligations to related parties |
(1,142 | ) | | | (1,142 | ) | ||||||||||
Due to/from affiliates |
6,209 | (6,209 | ) | | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by (used in) operating activities |
(97,030 | ) | 247,430 | | 150,400 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Investing activities |
||||||||||||||||
Purchases of property and equipment |
(11 | ) | (71,075 | ) | | (71,086 | ) | |||||||||
Payments for acquisitions, net of cash acquired |
| (18,291 | ) | | (18,291 | ) | ||||||||||
Proceeds from sale of cost method investment |
96,475 | (90,655 | ) | | 5,820 | |||||||||||
Investment in subsidiaries, net |
5,821 | | (5,821 | ) | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by (used in) investing activities |
102,285 | (180,021 | ) | (5,821 | ) | (83,557 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Financing activities |
||||||||||||||||
Distributions from (to) Change Healthcare Holdings, Inc., net |
| (5,821 | ) | 5,821 | | |||||||||||
Payments on Term Loan Facility |
(280 | ) | (12,632 | ) | | (12,912 | ) | |||||||||
Payment of loan costs |
| (2,178 | ) | | (2,178 | ) | ||||||||||
Payment of debt assumed from acquisition |
| (218 | ) | | (218 | ) | ||||||||||
Payment of data sublicense obligation |
(4,321 | ) | | | (4,321 | ) | ||||||||||
Payments of deferred financing obligations |
| (3,243 | ) | | (3,243 | ) | ||||||||||
Repurchase of Parent common stock |
(613 | ) | | | (613 | ) | ||||||||||
Capital contribution from Parent |
1,999 | | 1,999 | |||||||||||||
Other |
| (582 | ) | | (582 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by (used in) financing activities |
(3,215 | ) | (24,674 | ) | 5,821 | (22,068 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in cash and cash equivalents |
2,040 | 42,735 | | 44,775 | ||||||||||||
Cash and cash equivalents at beginning of period |
754 | 31,009 | | 31,763 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents at end of period |
$ | 2,794 | $ | 73,744 | $ | | $ | 76,538 | ||||||||
|
|
|
|
|
|
|
|
F-46
Change Healthcare Holdings, Inc.
Schedule IIValuation and Qualifying Accounts
(In Thousands)
Description | Balance at Beginning of Year |
Charged to Costs and Expenses |
Charged to Other Accounts |
Write-offs | Balance at End of Year |
|||||||||||||||
Allowance for doubtful accounts |
||||||||||||||||||||
Year ended December 31, 2015 |
$ | 6,377 | $ | (1,052 | ) | $ | 1,631 | $ | (3,577 | ) | $ | 3,379 | ||||||||
Year ended December 31, 2014 |
$ | 3,856 | $ | 5,027 | $ | 88 | $ | (2,594 | ) | $ | 6,377 | |||||||||
Year ended December 31, 2013 |
$ | 3,585 | $ | 1,982 | $ | 854 | $ | (2,565 | ) | $ | 3,856 |
S-1
Pursuant to the requirements of Section 13 or 15(d) 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 on January 24, 2017.
CHANGE HEALTHCARE HOLDINGS, INC.
By: | /s/ Neil E. de Crescenzo | |
Name: | Neil E. de Crescenzo | |
Title: | Chief Executive Officer and Director |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature |
Title |
Date | ||
/s/ Neil E. de Crescenzo |
Chief Executive Officer and Director | January 24, 2017 | ||
Neil E. de Crescenzo | Principal Executive Officer | |||
/s/ Randy P. Giles |
Chief Financial Officer | January 24, 2017 | ||
Randy P. Giles | (Principal Financial Officer) | |||
/s/ Dennis B. Robbins |
Chief Accounting Officer | January 24, 2017 | ||
Dennis B. Robbins | (Principal Accounting Officer) | |||
/s/ Howard L. Lance |
Chairman of the Board of Directors | January 24, 2017 | ||
Howard L. Lance | ||||
/s/ Philip M. Pead |
Director | January 24, 2017 | ||
Philip M. Pead | ||||
/s/ Hunter Philbrick |
Director | January 24, 2017 | ||
Hunter Philbrick | ||||
/s/ Pamela J. Pure |
Director | January 24, 2017 | ||
Pamela J. Pure | ||||
/s/ Phillip W. Roe |
Director | January 24, 2017 | ||
Phillip W. Roe | ||||
/s/ Neil P. Simpkins |
Director | January 24, 2017 | ||
Neil P. Simpkins | ||||
/s/ Justin Sunshine |
Director | January 24, 2017 | ||
Justin Sunshine |
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE
NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT
The registrant has not sent and, following the filing of this Annual Report with the SEC, does not intend to send to its security holders an annual report to security holders or proxy materials for the year ended December 31, 2015 or with respect to any annual or other meeting of security holders.
Index of Exhibits
Exhibit No. |
Description | |
2.1 | Agreement and Plan of Merger, dated as of August 3, 2011, by and among Beagle Parent Corp., Beagle Acquisition Corp. and the Company (included as Exhibit 2.1 to the Companys Current Report on Form 8-K (File No. 1-34435), filed on August 8, 2011, and incorporated herein by reference). | |
2.2 | Agreement and Plan of Merger, dated July 3, 2015, by and among MediFAX-EDI, LLC, Alto Merger Sub Inc., Altegra Health, Inc. and Parthenon Investors III, L.P., solely in its capacity as the Stockholders Representative (included as Exhibit 2.1 to the Companys Current Report on Form 8-K (File No. 1-34435), filed on July 9, 2015, and incorporated herein by reference). | |
3.1 | Third Restated Certificate of Incorporation of the Company (included as Exhibit 3.2 to the Companys Current Report on Form 8-K (File No. 1-34435), filed on November 12, 2015, and incorporated herein by reference). | |
3.2 | Third Amended and Restated By-laws of the Company (included as Exhibit 3.3 to the Companys Current Report on Form 8-K (File No. 1-34435), filed on November 12, 2015, and incorporated herein by reference). | |
4.1 | 2019 Notes Indenture, dated as of November 2, 2011, among Beagle Acquisition Corp., the guarantors party thereto and Wilmington Trust, National Association, as trustee (included as Exhibit 4.1 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
4.2 | 2019 Notes Supplemental Indenture, dated as of November 2, 2011, among the Company, the guarantors party thereto and Wilmington Trust, National Association, as trustee (included as Exhibit 4.2 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
4.3 | 2019 Notes Supplemental Indenture, dated as of July 10, 2012, between TC3 Health, Inc. and Wilmington Trust, National Association, as trustee (included as Exhibit 4.3 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
4.4 | 2019 Notes Supplemental Indenture, dated as of August 8, 2013, between Goold Health Systems and Wilmington Trust, National Association, as trustee (included as Exhibit 4.1 to the Companys Quarterly Report on Form 10-Q (File No.1-34435), filed on November 8, 2013, and incorporated herein by reference). | |
4.5 | 2019 Notes Supplemental Indenture, dated as of April 8, 2014, between Vieosoft, Inc. and Wilmington Trust, National Association, as trustee (included as Exhibit 4.1 to the Companys Quarterly Report on Form 10-Q (File No. 1-34435), filed on May 13, 2014, and incorporated herein by reference). | |
4.6 | 2019 Notes Supplemental Indenture, dated as of January 16, 2015, between AdminiSource Communications, Inc. (n/k/a Change Healthcare Correspondence Services, Inc.) and Wilmington Trust, National Association, as trustee (included as Exhibit 4.7 to the Companys Annual Report on Form 10-K (File No. 1-34435), filed on March 16, 2015, and incorporated herein by reference). | |
4.7 | 2019 Notes Supplemental Indenture, dated as of January 16, 2015, between Change Healthcare Corporation (n/k/a Change Healthcare Engagement Solutions, Inc.) and Wilmington Trust, National Association, as trustee (included as Exhibit 4.8 to the Companys Annual Report on Form 10-K (File No. 1-34435), filed on March 16, 2015, and incorporated herein by reference). | |
4.8 | 2019 Notes Supplemental Indenture, dated as of August 12, 2015, among Altegra Health, Inc., Altegra Health Operating Company, Altegra Health Operating Company Puerto Rico, LLC, Altegra Health Connections, LLC and Wilmington Trust, National Association, as trustee (included as Exhibit 4.3 to the Companys Quarterly Report on Form 10-Q (File No. 1-34435), filed on November 6, 2015, and incorporated herein by reference). | |
4.9 | 2020 Notes Indenture, dated as of November 2, 2011, among Beagle Acquisition Corp., the guarantors party thereto and Wilmington Trust, National Association, as trustee (included as Exhibit 4.4 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
4.10 | 2020 Notes Supplemental Indenture, dated as of November 2, 2011, among the Company, the guarantors party thereto and Wilmington Trust, National Association, as trustee (included as Exhibit 4.5 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). |
Exhibit No. |
Description | |
4.11 | 2020 Notes Supplemental Indenture, dated as of July 10, 2012, between TC3 Health, Inc. and Wilmington Trust, National Association, as trustee (included as Exhibit 4.6 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
4.12 | 2020 Notes Supplemental Indenture, dated as of August 8, 2013, between Goold Health Systems and Wilmington Trust, National Association, as trustee (included as Exhibit 4.2 to the Companys Quarterly Report on Form 10-Q (File No. 1-34435), filed on November 8, 2013, and incorporated herein by reference). | |
4.13 | 2020 Notes Supplemental Indenture, dated as of April 8, 2014, between Vieosoft, Inc. and Wilmington Trust, National Association, as trustee (included as Exhibit 4.2 to the Companys Quarterly Report on Form 10-Q (File No. 1-34435), filed on May 13, 2014, and incorporated herein by reference). | |
4.14 | 2020 Notes Supplemental Indenture, dated as of January 16, 2015, between AdminiSource Communications, Inc. (n/k/a Change Healthcare Correspondence Services, Inc.) and Wilmington Trust, National Association, as trustee (included as Exhibit 4.15 to the Companys Annual Report on Form 10-K (File No. 1-34435), filed on March 16, 2015, and incorporated herein by reference). | |
4.15 | 2020 Notes Supplemental Indenture, dated as of January 16, 2015, between Change Healthcare Corporation (n/k/a Change Healthcare Engagement Solutions, Inc.) and Wilmington Trust, National Association, as trustee (included as Exhibit 4.16 to the Companys Annual Report on Form 10-K (File No. 1-34435), filed on March 16, 2015, and incorporated herein by reference). | |
4.16 | 2020 Notes Supplemental Indenture, dated as of August 12, 2015, among Altegra Health, Inc., Altegra Health Operating Company, Altegra Health Operating Company Puerto Rico, LLC, Altegra Health Connections, LLC and Wilmington Trust, National Association, as trustee (included as Exhibit 4.4 to the Companys Quarterly Report on Form 10-Q (File No. 1-34435), filed on November 6, 2015, and incorporated herein by reference). | |
4.17 | 2019 Notes Registration Rights Agreement, dated as of November 2, 2011, among Beagle Acquisition Corp., the guarantors named therein and Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc., as representatives of the purchasers named therein (included as Exhibit 4.7 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
4.18 | 2019 Notes Joinder Agreement to Registration Rights Agreement, dated as of November 2, 2011, among the Company and certain additional guarantors named therein (included as Exhibit 4.8 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
4.19 | 2020 Notes Registration Rights Agreement, dated as of November 2, 2011, among Beagle Acquisition Corp., the guarantors named therein and Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc., as representatives of the purchasers named therein (included as Exhibit 4.9 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
4.20 | 2021 Notes Indenture, dated as of August 12, 2015, among the Company, the guarantors party thereto and Wilmington Trust, National Association, as trustee (included as Exhibit 4.1 to the Companys Current Report on Form 8-K (File No. 1-34435), filed on August 13, 2015, and incorporated herein by reference). | |
4.21 | 2021 Notes Supplemental Indenture, dated as of August 12, 2015, among Altegra Health, Inc., Altegra Health Operating Company, Altegra Health Operating Company Puerto Rico, LLC, Altegra Health Connections, LLC and Wilmington Trust, National Association, as trustee (included as Exhibit 4.2 to the Companys Current Report on Form 8-K (File No. 1-34435), filed on August 13, 2015, and incorporated herein by reference). | |
4.22 | Form of 2019 Note (included as Exhibit 4.10 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
4.23 | Form of 2020 Note (included as Exhibit 4.11 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
10.1 | Transaction and Advisory Fee Agreement, dated as of November 2, 2011, among the Company, Blackstone Management Partners, L.L.C. and Hellman & Friedman, L.P. (included as Exhibit 10.1 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). |
Exhibit No. |
Description | |
10.2 | Credit Agreement, dated as of November 2, 2011 (the Credit Agreement), among Beagle Intermediate Holding, Inc., the Company, the other borrowers party thereto, Bank of America, N.A., as administrative agent, swingline lender and letter of credit issuer thereunder, and the other agents and lenders parties thereto (included as Exhibit 10.2 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
10.3 | Amendment No. 1 to the Credit Agreement, dated as of April 24, 2012, among the Company, the other borrowers party thereto, Bank of America, N.A., as administrative agent, swingline lender, letter of credit issuer and collateral agent thereunder, and the and the guarantors party thereto (included as Exhibit 10.3 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
10.4 | Amendment No. 2 to the Credit Agreement, dated as of April 25, 2013, among the Company, the other borrowers party thereto, Bank of America, N.A., as administrative agent, swingline lender, letter of credit issuer and collateral agent thereunder, and the guarantors party thereto (included as Exhibit 10.1 to the Companys Current Report on Form 8-K (File No. 1-34435), filed on April 25, 2013, and incorporated herein by reference). | |
10.5 | Amendment No. 3 to the Credit Agreement, dated as of December 12, 2014, among the Company, the other borrowers party thereto, Bank of America, N.A., as administrative agent, swing line lender, letter of credit issuer and collateral agent thereunder, and the lenders, guarantors and agents party thereto (included as Exhibit 10.1 to the Companys Current Report on Form 8-K (File No. 1-34435), filed on December 12, 2014, and incorporated herein by reference). | |
10.6 | Amendment No. 4 to the Credit Agreement, dated as of August 12, 2015, among the Company, the other borrowers party thereto, Bank of America, N.A., as administrative agent, swing line lender, letter of credit issuer and collateral agent thereunder, and the lenders, guarantors and agents party thereto (included as Exhibit 10.1 to the Companys Current Report on Form 8-K (File. No. 1-34435), filed on August 13, 2015, and incorporated herein by reference). | |
10.7 | Security Agreement, dated as of November 2, 2011, among the Company, the other borrowers and debtors party thereto, and Bank of America, N.A., as administrative agent (included as Exhibit 10.4 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
10.8 | Stockholders Agreement, dated as of November 2, 2011, by and among Beagle Parent Corp., Beagle Intermediate Holdings, Inc., Beagle Acquisition Corp. and the sponsors, other investors and managers named therein (included as Exhibit 10.5 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
10.9 | Amendment No. 1 to the Stockholders Agreement and H&F Consent, dated as of November 18, 2015, by and among the Company, Change Healthcare, Inc., Change Healthcare Intermediate Holdings, Inc. and certain investment funds and vehicles affiliated with The Blackstone Group L.P. and Hellman & Friedman LLC (included as Exhibit 10.1 to the Companys Current Report on Form 8-K (File No. 1-34435), filed on November 20, 2015, and incorporated herein by reference). | |
10.10 | Amended and Restated Tax Receivable Agreement (Reorganizations), dated as of November 2, 2011, by and among the Company, H&F ITR Holdco, L.P., Beagle Parent LLC and GA-H&F ITR Holdco, L.P. (included as Exhibit 10.6 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
10.11 | Amended and Restated Tax Receivable Agreement (Exchanges), dated as of November 2, 2011, by and among the Company, H&F ITR Holdco, L.P., Beagle Parent LLC and GA-H&F ITR Holdco, L.P. (included as Exhibit 10.7 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). | |
10.12 | Tax Receivable Agreement (Management) by and among the Company and the persons named therein, dated August 17, 2009 (included as Exhibit 10.6 to the Companys Current Report on Form 8-K (File No. 1-34435), filed on August 17, 2009, and incorporated herein by reference). | |
10.13 | First Amendment to Tax Receivable Agreement (Management), dated as of November 2, 2011, by and among the Company and the parties named thereto (included as Exhibit 10.9 to the Companys Registration Statement on Form S-4 (File No. 333-182786), filed on July 20, 2012, and incorporated herein by reference). |
Exhibit No. |
Description | |
10.14 | Employment Agreement, effective as of September 14, 2012, between Gregory T. Stevens and Emdeon Business Services LLC (n/k/a Change Healthcare Operations, LLC) (included as Exhibit 10.12 to the Companys Registration Statement on Form S-4, as amended (File No. 333-182786), filed on September 17, 2012, and incorporated herein by reference). | |
10.15 | Employment Agreement, dated September 14, 2012, between Gary Stuart and Emdeon Business Services LLC (n/k/a Change Healthcare Operations, LLC) (included as Exhibit 10.15 to the Companys Registration Statement on Form S-4, as amended (File No. 333-182786), filed on September 17, 2012, and incorporated herein by reference). | |
10.16 | Separation Agreement, dated January 8, 2016, between Gary Stuart and Change Healthcare Operations, LLC (included as Exhibit 10.16 to the Companys Annual Report of Form 10-K (File No. 1-34435), filed on March 14, 2016, and incorporated herein by reference). | |
10.17 | Employment Agreement, dated December 11, 2013, between Alex Choy and Emdeon Business Services LLC (n/k/a Change Healthcare Operations, LLC) (included as Exhibit 10.14 to the Companys Annual Report on Form 10-K (File No. 1-34435), filed on March 16, 2015, and incorporated herein by reference). | |
10.18 | Employment Agreement, dated January 23, 2015, between Jason Erdell and Emdeon Business Services LLC (n/k/a Change Healthcare Operations, LLC) (included as Exhibit 10.15 to the Companys Annual Report on Form 10-K (File No. 1-34435), filed on March 16, 2015, and incorporated herein by reference). | |
10.19 | Employment Agreement, dated November 28, 2013, between Kriten Joshi and Emdeon Business Services LLC (n/k/a Change Healthcare Operations, LLC) (included as Exhibit 10.16 to the Companys Annual Report on Form 10-K (File No. 1-34435), filed on March 16, 2015, and incorporated herein by reference). | |
10.20 | Employment Agreement, effective January 6, 2016, between Douglas M. Ghertner and Change Healthcare Operations, LLC (included as Exhibit 10.20 to the Companys Annual Report of Form 10-K (File No. 1-34435), filed on March 14, 2016, and incorporated herein by reference). | |
10.21 | Employment Agreement, dated September 30, 2013, between Neil E. de Crescenzo and Emdeon Business Services LLC (n/k/a Change Healthcare Operations, LLC) (included as Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q (File No. 1-34435), filed on November 8, 2013, and incorporated herein by reference). | |
10.22 | Employment Agreement, dated February 4, 2014, between Randy Giles and Emdeon Business Services LLC (n/k/a Change Healthcare Operations, LLC) (included as Exhibit 10.20 to the Companys Annual Report on Form 10-K (File No. 1-34435), filed on March 17, 2014, and incorporated herein by reference). | |
10.23 | Management Bonus Program, as revised on November 20, 2013 (included as Exhibit 10.21 to the Companys Annual Report on Form 10-K (File No. 1-34435), filed on March 17, 2014, and incorporated herein by reference). | |
10.24 | Form of Indemnification Agreement (included as Exhibit 10.18 to the Companys Annual Report on Form 10-K (File No. 1-34435), filed on March 18, 2013, and incorporated herein by reference). | |
21.1 | Subsidiaries of Registrant (included as Exhibit 21.1 to the Companys Annual Report of Form 10-K (File No. 1-34435), filed on March 14, 2016, and incorporated herein by reference). | |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith). | |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith). | |
32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). | |
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
Exhibit No. |
Description | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
| Denotes a management contract or compensatory plan, contract or arrangement. |
Exhibit 31.1
SARBANES-OXLEY SECTION 302(a) CERTIFICATION
I, Neil E. de Crescenzo, certify that:
1. | I have reviewed this Amendment No. 1 to the Form 10-K for the year ended December 31, 2015 of Change Healthcare Holdings, 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 registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
Date: January 24, 2017
By: | /s/ Neil E. de Crescenzo | |
Name: | Neil E. de Crescenzo | |
Title: | Chief Executive Officer of Change Healthcare Holdings, Inc. |
Exhibit 31.2
SARBANES-OXLEY SECTION 302(a) CERTIFICATION
I, Randy Giles, certify that:
1. | I have reviewed this Amendment No. 1 to the Form 10-K for the year ended December 31, 2015 of Change Healthcare Holdings, 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 registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
Date: January 24, 2017
By: | /s/ Randy Giles | |
Name: | Randy Giles | |
Title: | Chief Financial Officer of Change Healthcare Holdings, Inc. |
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 Amendment No. 1 to the Annual Report of Change Healthcare Holdings, Inc. (the Company) on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Neil E. de Crescenzo, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, in my capacity as an officer of the Company, that, to my knowledge:
1. | The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, 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. |
Date: January 24, 2017 | By: | /s/ Neil E. de Crescenzo | ||||
Name: | Neil E. de Crescenzo | |||||
Title | Chief Executive Officer of Change Healthcare Holdings, Inc. |
Exhibit 32.2
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 Amendment No. 1 to the Annual Report of Change Healthcare Holdings, Inc. (the Company) on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Randy Giles, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, in my capacity as an officer of the Company, that, to my knowledge:
1. | The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, 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. |
Date: January 24, 2017 | By: | /s/ Randy Giles | ||||
Name: | Randy Giles | |||||
Title | Chief Financial Officer of Change Healthcare Holdings, Inc. |
Document and Entity Information |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
shares
| |
Document And Entity Information [Abstract] | |
Document Type | 10-K/A |
Amendment Flag | true |
Document Period End Date | Dec. 31, 2015 |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | Change Healthcare Holdings, Inc. |
Entity Central Index Key | 0001444598 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | shares | 100 |
Entity Public Float | $ | $ 0 |
Entity Current Reporting Status | No |
Entity Voluntary Filers | No |
Entity Well-known Seasoned Issuer | No |
Amendment Description | In connection with a planned contribution of substantially all of the net assets of the Company to a joint venture (the "Transaction"), prior conclusions regarding the Company's accounting for certain historical transactions have been re-evaluated. As part of this re-evaluation, the Company has determined that a restatement of its consolidated financial statements for the years ended December 31, 2015 and 2014 is appropriate. The restatement relates to accounting treatment of certain items and results in an increase of our net income and reduction of balance sheet liabilities. There is no impact on cash flows for the related periods and EBITDA calculations under our credit agreement and indentures are not affected by the restatement In January 2014, the Company effected a change in the tax status of EBS Master LLC ("EBS Master") from a partnership to a corporation. Prior to the tax status change, the Company recognized a deferred tax liability for the difference in the book and tax basis of its investment in EBS Master (i.e. outside basis). Following the tax status change, the Company's deferred tax balances were required to reflect the differences in the book and tax bases of the individual assets and liabilities included in the corporation (i.e. inside basis). In connection with this restructuring, the Company evaluated and it's independent registered public accounting firm concurred with the Company's treatment of this change in tax status from an accounting perspective. In January 2017, following the re-evaluation in connection with the Transaction, the Company, after consultation with its independent public accounting firm, determined that a portion of the deferred tax liability previously related to the outside basis was attributable to the excess of book over tax basis goodwill for which no deferred tax liability would be permitted under generally accepted accounting principles when calculated using the inside basis. Because the Company's consolidated financial statements for the year ended December 31, 2014 included such a deferred tax liability, the Company has restated its consolidated financial statements (including Notes 15 and 20) for the year ended December 31, 2014 to reflect the removal of this deferred tax liability and restated its consolidated financial statements for the year ended December 31, 2015 to refect the effect of this 2014 adjustment on the subsequent period. |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Consolidated Balance Sheets [Abstract] | ||
Allowance for doubtful accounts | $ 3,379 | $ 6,377 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100 | 100 |
Common stock, shares outstanding | 100 | 100 |
Consolidated Statements Of Operations - USD ($) $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
||||||
Revenue: | ||||||||
Solutions revenue | $ 1,124,188 | [1] | $ 1,006,949 | [1] | $ 930,713 | |||
Postage revenue | 352,895 | [1] | 343,464 | [1] | 311,854 | |||
Total revenue | 1,477,083 | [1] | 1,350,413 | [1] | 1,242,567 | |||
Costs and expenses: | ||||||||
Cost of operations (exclusive of depreciation and amortization below) | 507,358 | [1] | 462,332 | [1] | 447,324 | |||
Development and engineering | 45,489 | [1] | 32,956 | [1] | 31,426 | |||
Sales, marketing, general and administrative | 217,716 | [1] | 198,379 | [1] | 170,051 | |||
Customer postage | 352,895 | [1] | 343,464 | [1] | 311,854 | |||
Depreciation and amortization | 342,303 | [1] | 189,218 | [1] | 183,839 | |||
Accretion | 10,496 | [1] | 14,446 | [1] | 26,470 | |||
Impairment of long-lived assets | 8,552 | [1] | 83,169 | [1] | 10,619 | |||
Operating income (loss) | (7,726) | [1] | 26,449 | [1] | 60,984 | |||
Interest expense, net | 168,252 | [1] | 146,829 | [1] | 153,169 | |||
Loss on extinguishment of debt | 23,160 | |||||||
Contingent consideration | (4,825) | [1] | 1,307 | [1] | (69) | |||
Other | (741) | [1] | (3,968) | [1] | (4,133) | |||
Income (loss) before income tax provision (benefit) | (170,412) | [1] | (117,719) | [1] | (111,143) | |||
Income tax provision (benefit) | [1] | (82,579) | (232,562) | (37,163) | ||||
Net income (loss) | [1] | $ (87,833) | $ 114,843 | $ (73,980) | ||||
|
Consolidated Statements Of Comprehensive Income (Loss) - USD ($) $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
||||||
Consolidated Statements Of Comprehensive Income (Loss) [Abstract] | ||||||||
Net income (loss) | [1] | $ (87,833) | $ 114,843 | $ (73,980) | ||||
Other comprehensive income (loss): | ||||||||
Changes in fair value of interest rate swap, net of taxes | (47) | [1] | (393) | [1] | 2,583 | |||
Foreign currency translation adjustment | (654) | [1] | (219) | [1] | (137) | |||
Other comprehensive income (loss) | (701) | [1] | (612) | [1] | 2,446 | |||
Total comprehensive income (loss) | [1] | $ (88,534) | $ 114,231 | $ (71,534) | ||||
|
Consolidated Statements Of Equity - USD ($) $ in Thousands |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Total |
||||
---|---|---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2012 | $ 1,130,968 | $ (94,983) | $ (3,789) | $ 1,032,196 | |||||
Balance, shares at Dec. 31, 2012 | 100 | ||||||||
Equity compensation expense | 7,021 | 7,021 | |||||||
Repurchase of Parent common stock | (613) | (613) | |||||||
Capital contribution from Parent | 1,999 | 1,999 | |||||||
Net income (loss) | (73,980) | (73,980) | [1] | ||||||
Foreign currency translation adjustment | (137) | (137) | |||||||
Change in fair value of interest rate swap, net of taxes | 2,583 | 2,583 | |||||||
Balance at Dec. 31, 2013 | 1,139,375 | (168,963) | (1,343) | 969,069 | |||||
Balance, shares at Dec. 31, 2013 | 100 | ||||||||
Equity compensation expense | 7,334 | 7,334 | |||||||
Issuance of shares in connection with equity compensation plans, net of taxes | 1,223 | 1,223 | |||||||
Repurchase of Parent common stock | (1,221) | (1,221) | |||||||
Capital contribution from Parent | 1,999 | 1,999 | |||||||
Other | 650 | 650 | |||||||
Net income (loss) | 114,843 | 114,843 | [1] | ||||||
Foreign currency translation adjustment | (219) | (219) | [1] | ||||||
Change in fair value of interest rate swap, net of taxes | (393) | (393) | [1] | ||||||
Balance at Dec. 31, 2014 | [1] | 1,149,360 | (54,120) | (1,955) | 1,093,285 | ||||
Balance, shares at Dec. 31, 2014 | [1] | 100 | |||||||
Equity compensation expense | 9,285 | 9,285 | |||||||
Issuance of shares in connection with equity compensation plans, net of taxes | 305 | 305 | |||||||
Repurchase of Parent common stock | (5,772) | (5,772) | |||||||
Capital contribution from Investor Group and management | 166,576 | 166,576 | |||||||
Net income (loss) | (87,833) | (87,833) | [1] | ||||||
Foreign currency translation adjustment | (654) | (654) | [1] | ||||||
Change in fair value of interest rate swap, net of taxes | (47) | (47) | [1] | ||||||
Balance at Dec. 31, 2015 | [1] | $ 1,319,754 | $ (141,953) | $ (2,656) | $ 1,175,145 | ||||
Balance, shares at Dec. 31, 2015 | [1] | 100 | |||||||
|
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
||||||
Operating activities | ||||||||
Net income (loss) | [1] | $ (87,833) | $ 114,843 | $ (73,980) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 342,303 | [1] | 189,218 | [1] | 183,839 | |||
Accretion | 10,496 | [1] | 14,446 | [1] | 26,470 | |||
Equity compensation | 9,285 | [1] | 7,334 | [1] | 7,021 | |||
Deferred income tax expense (benefit) | [1] | (85,938) | (234,089) | (40,033) | ||||
Amortization of debt discount and issuance costs | 10,786 | [1] | 7,847 | [1] | 8,475 | |||
Contingent consideration | (4,825) | [1] | 1,307 | [1] | (69) | |||
Gain on sale of cost method investment | (114) | [1] | (2,925) | |||||
Loss on extinguishment of debt | 22,828 | |||||||
Impairment of long-lived assets | 8,552 | [1] | 83,169 | [1] | 10,619 | |||
Other | (1,820) | [1] | (2,255) | [1] | (1,962) | |||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 5,078 | [1] | (6,824) | [1] | (20,791) | |||
Prepaid expenses and other | 1,210 | [1] | 536 | [1] | 1,442 | |||
Accounts payable | 11,391 | [1] | 4,591 | [1] | 1,335 | |||
Accrued expenses, deferred revenue and other liabilities | (50,966) | [1] | 26,650 | [1] | 29,273 | |||
Tax receivable agreement obligations to related parties | (944) | [1] | (988) | [1] | (1,142) | |||
Net cash provided by (used in) operating activities | 166,775 | [1] | 205,671 | [1] | 150,400 | |||
Investing activities | ||||||||
Purchases of property and equipment | (56,963) | [1] | (55,926) | [1] | (71,086) | |||
Payments for acquisitions, net of cash acquired | (717,669) | [1] | (252,772) | [1] | (18,291) | |||
Other | (5,325) | [1] | 538 | [1] | 5,820 | |||
Net cash provided by (used in) investing activities | (779,957) | [1] | (308,160) | [1] | (83,557) | |||
Financing activities | ||||||||
Proceeds from Term Loan Facility | [1] | 385,411 | 157,600 | |||||
Payments on Term Loan Facility | (16,500) | [1] | (13,279) | [1] | (12,912) | |||
Proceeds from Senior Notes | [1] | 243,453 | ||||||
Proceeds from Revolving Facility | [1] | 60,000 | 183,000 | |||||
Payments on Revolving Facility | [1] | (60,000) | (183,000) | |||||
Payment of loan costs | (2,500) | [1] | (2,096) | [1] | (2,178) | |||
Payment of debt assumed from acquisition | (154,469) | [1] | (25,262) | [1] | (218) | |||
Payment of data sublicense obligation | (6,433) | [1] | (5,300) | [1] | (4,321) | |||
Payments of deferred financing obligations | (6,987) | [1] | (5,441) | [1] | (3,243) | |||
Repurchase of Parent common stock | (5,772) | [1] | (1,221) | [1] | (613) | |||
Capital contribution from Investor Group and management | 166,881 | [1] | 3,256 | [1] | 1,999 | |||
Payment of contingent consideration | [1] | (5,553) | ||||||
Other | (582) | |||||||
Net cash provided by (used in) financing activities | 597,531 | [1] | 108,257 | [1] | (22,068) | |||
Net increase (decrease) in cash and cash equivalents | (15,651) | [1] | 5,768 | [1] | 44,775 | |||
Cash and cash equivalents at beginning of period | 82,306 | [1] | 76,538 | [1] | 31,763 | |||
Cash and cash equivalents at end of period | [1] | 66,655 | 82,306 | 76,538 | ||||
Supplemental disclosures of cash flow information | ||||||||
Cash paid for interest | 146,521 | [1] | 135,582 | [1] | 140,771 | |||
Cash paid for income taxes | 3,789 | [1] | 736 | [1] | 847 | |||
Deferred financing obligations: | ||||||||
Prepaid expenses and other current assets | [1] | 332 | ||||||
Property and equipment | 736 | [1] | 1,651 | [1] | 12,722 | |||
Intangible assets | [1] | 1,100 | ||||||
Other assets | 3,107 | [1] | 2,646 | |||||
Current portion of long-term debt | (3,982) | [1] | (613) | [1] | (6,377) | |||
Long-term debt | (1,293) | [1] | (1,038) | [1] | (8,991) | |||
Business combinations: | ||||||||
Prepaid expenses and other current assets | [1] | 4,000 | ||||||
Goodwill | $ (4,000) | [1] | 11,345 | [1] | 5,553 | |||
Accrued expenses | (10,695) | [1] | $ (5,553) | |||||
Additional paid-in capital | [1] | $ (650) | ||||||
|
Nature Of Business And Organization |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature Of Business And Organization [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature Of Business And Organization | 1. Nature of Business and Organization Nature of Business Change Healthcare Holdings, Inc. (the “Company”), through its subsidiaries, is a provider of software and analytics, network solutions and technology-enabled services that optimize communications, payments and actionable insights designed to enable smarter healthcare. The Company’s integrated capabilities enable its customers to exchange mission critical information, optimize revenue opportunities, control costs, increase cash flows and efficiently manage complex workflows. Organization The Company was formed as a Delaware limited liability company in September 2006 and converted into a Delaware corporation in September 2008 in anticipation of the Company’s August 2009 initial public offering (the “IPO”). On November 2, 2011, pursuant to an Agreement and Plan of Merger among the Company, Change Healthcare, Inc. (“Parent”) and Beagle Acquisition Corp. (“Merger Sub”), Merger Sub merged with and into the Company with the Company surviving the merger (the “2011 Merger”). Subsequent to the 2011 Merger, the Company became an indirect wholly-owned subsidiary of Parent, which is controlled by affiliates of The Blackstone Group L.P. (“Blackstone”). Restatement of Previously Issued Financial Statements In connection with a planned contribution of substantially all of the net assets of the Company to a joint venture (the “Transaction”), prior conclusions regarding the Company’s accounting for certain historical transactions have been re-evaluated. As part of this re-evaluation, the Company has determined that a restatement of its consolidated financial statements for the years ended December 31, 2015 and 2014 is appropriate. The restatement relates to accounting treatment of certain items and results in an increase of our net income and reduction of balance sheet liabilities. There is no impact on cash flows for the related periods and EBITDA calculations under our credit agreement and indentures are not affected by the restatement In January 2014, the Company effected a change in the tax status of EBS Master LLC (“EBS Master”) from a partnership to a corporation. Prior to the tax status change, the Company recognized a deferred tax liability for the difference in the book and tax basis of its investment in EBS Master (i.e. outside basis). Following the tax status change, the Company’s deferred tax balances were required to reflect the differences in the book and tax bases of the individual assets and liabilities included in the corporation (i.e. inside basis). In January 2017, following the re-evaluation in connection with the Transaction, the Company determined that a portion of the deferred tax liability previously related to the outside basis was attributable to the excess of book over tax basis goodwill for which no deferred tax liability would be permitted under generally accepted accounting principles when calculated using the inside basis. Because the Company’s consolidated financial statements for the year ended December 31, 2014 and 2015 included such a deferred tax liability, the Company has restated its consolidated financial statements and related notes (including Notes 15 and 20) for the year ended December 31, 2014 to reflect the removal of this deferred tax liability and restated its consolidated financial statements for the year ended December 31, 2015 to refect the effect of this 2014 adjustment on the subsequent period. The Company also corrected immaterial other tax adjustments in the periods presented that impacted reported goodwill and deferred tax accounts.
The following table presents the effect on the Company’s consolidated balance sheets and the Company’s consolidated statements of operations, comprehensive income (loss) and cash flows for the periods indicated.
|
Summary Of Significant Accounting Policies |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include all subsidiaries and entities that are controlled by the Company. The results of operations for companies acquired are included in the consolidated financial statements from the effective date of acquisition. All material intercompany accounts and transactions have been eliminated in the consolidated financial statements. Reclassifications Certain reclassifications have been made to prior period financial statements to conform to the current period presentation. Effective January 1, 2015, the Company completed an internal reorganization of its reporting structure which resulted in a change in the composition of its reportable segments to software and analytics, network solutions and technology-enabled services. Segment information has been restated to reflect the current organizational structure. Effective January 1, 2015, in order to clarify the nature of its customer related postage activities, the Company also created separate captions on the statement of operations within revenue and costs and expenses, respectively. Previously, such amounts were included within revenue and costs of operations. To conform to the current presentation, costs of operations were reduced by $343,464 and $311,854 and reclassified as customer postage for the years ended December 31, 2014 and 2013, respectively. Accounting Estimates The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience, current business factors and various other assumptions that the Company believes are necessary to consider in order to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of revenue and expenses and disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic, environmental and political factors and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in the reported results of operations; and if material, the effects of changes in estimates are disclosed in the notes to the consolidated financial statements. Estimates and assumptions by management affect: the allowance for doubtful accounts; the fair value assigned to assets acquired and liabilities assumed in business combinations; tax receivable agreement obligations; the fair value of interest rate swap obligations; contingent consideration; loss accruals; the carrying value of long-lived assets (including goodwill and intangible assets); the amortization period of long-lived assets (excluding goodwill); the carrying value, capitalization and amortization of software development costs; the provision and benefit for income taxes and related deferred tax accounts; certain accrued expenses; revenue recognition; contingencies; and the value attributed to equity awards. Business Combinations The Company recognizes the consideration transferred (i.e. purchase price) in a business combination, as well as the acquired business’ identifiable assets, liabilities and noncontrolling interests at their acquisition date fair value. The excess of the consideration transferred over the fair value of the identifiable assets, liabilities and noncontrolling interest, if any, is recorded as goodwill. Any excess of the fair value of the identifiable assets acquired and liabilities assumed over the consideration transferred, if any, is generally recognized within earnings as of the acquisition date. The fair value of the consideration transferred, assets, liabilities and noncontrolling interests is estimated based on one or a combination of income, costs or market approaches as determined based on the nature of the asset or liability and the level of inputs available to the Company (i.e. quoted prices in an active market, other observable inputs or unobservable inputs). To the extent that the Company’s initial accounting for a business combination is incomplete at the end of a reporting period, provisional amounts are reported for those items which are incomplete. Following the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2015-16, the Company adjusts such provisional amounts in the reporting period in which the adjustment amounts are determined. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity from the date of purchase of three months or less to be cash equivalents. Allowance for Doubtful Accounts The allowance for doubtful accounts reflects the Company’s best estimate of losses inherent in the Company’s receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available evidence. Software Development Costs The Company generally provides services to its customers using software developed for internal use. The costs that are incurred to develop such software are expensed as incurred during the preliminary project stage. Once certain criteria have been met, direct costs incurred in developing or obtaining computer software are capitalized. Training and maintenance costs are expensed as incurred. Capitalized software costs are included in property and equipment in the accompanying consolidated balance sheets and are amortized over a three-year period. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation, including that related to assets under capital lease, is computed using the straight-line method over the estimated useful lives of the related assets. The useful lives for newly acquired assets are generally as follows:
Expenditures for maintenance, repair and renewals of minor items are expensed as incurred. Expenditures for maintenance repair and renewals that extend the useful life of an asset are capitalized. Goodwill and Intangible Assets Goodwill and intangible assets resulting from the Company’s acquisitions are accounted for using the acquisition method of accounting. Intangible assets with definite lives are amortized on a straight-line basis, at their inception, over the estimated useful lives of the related assets generally as follows:
The Company assesses its goodwill for impairment annually (as of October 1 of each year) or whenever significant indicators of impairment are present. The Company first assesses whether it can reach a more likely than not conclusion that goodwill is not impaired via qualitative analysis alone. To the extent such a conclusion cannot be reached based on a qualitative assessment alone, the Company, using the assistance of a valuation specialist as appropriate, compares the fair value of each reporting unit to its associated carrying value. If the fair value of the reporting unit is less than the carrying value, then a hypothetical acquisition method allocation is performed to determine the amount of the goodwill impairment to recognize. The Company recognized no impairment in conjunction with its most recent goodwill impairment analysis. Long-Lived Assets Long-lived assets used in operations are reviewed for impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and fair value. Long-lived assets held for sale are reported at the lower of cost or fair value less costs to sell. Derivatives Derivative financial instruments are used to manage the Company’s interest rate exposure. The Company does not enter into financial instruments for speculative purposes. Derivative financial instruments are accounted for and measured at fair value and recorded on the balance sheet. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction in the same period or periods during which the hedged transaction affects earnings (for example, in “interest expense” when the hedged transactions are interest cash flows associated with floating-rate debt). The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized in interest expense in current earnings during the period of change. Equity Compensation Compensation expense related to the Company’s equity awards is generally recognized on a straight-line basis over the requisite service period. For awards subject to vesting based on market or performance conditions, however, compensation expense is recognized under the accelerated method. The fair value of the equity awards subject only to service conditions is determined by use of a Black-Scholes model. The fair value of the equity awards subject to market or performance conditions is determined by use of a Monte Carlo simulation. Revenue Recognition The Company generates most of its revenue by using technology solutions to provide services to our customers that automate and simplify business and administrative functions for payers, providers and pharmacies, generally on either a per transaction, per document, per communication, per member per month, per provider per month, monthly flat fee, contingent fee or hourly basis. Revenue for financial and administrative information exchange, payment and communication, risk adjustment, quality reporting and healthcare consulting solutions are recognized as the services are provided. Postage fees related to our payment and communication solutions volumes are recorded on a gross basis. Revenue for our eligibility and enrollment and revenue optimization solutions generally are recognized at the time that our provider customer receives notice from the payer of a pending payment. Revenue for payment integrity solutions are recognized at the time that notice of customer acceptance is received. Cash receipts or billings in advance of revenue recognition are recorded as deferred revenues in the accompanying consolidated balance sheets. The Company excludes sales and use tax from revenue in the accompanying consolidated statements of operations. Income Taxes The Company records deferred income taxes for the tax effect of differences between book and tax bases of its assets and liabilities, as well as differences relating to the timing of recognition of income and expenses. Deferred income taxes reflect the available net operating losses and the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of the future tax benefits related to deferred tax assets is dependent on many factors, including the Company’s past earnings history, expected future earnings, the character and jurisdiction of such earnings, reversing taxable temporary differences, unsettled circumstances that, if unfavorably resolved, would adversely affect utilization of its deferred tax assets, carryback and carryforward periods and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. The Company recognizes tax benefits for uncertain tax positions at the time the Company concludes that the tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. The benefit, if any, is measured as the largest amount of benefit, determined on a cumulative probability basis that is more likely than not to be realized upon ultimate settlement. Tax positions failing to qualify for initial recognition are recognized in the first subsequent interim period that they meet the more likely than not standard, upon resolution through negotiation or litigation with the taxing authority or on expiration of the statute of limitations. Tax Receivable Agreement Obligations In connection with the IPO, the Company entered into tax receivable agreements which obligated the Company to make payments to certain current and former owners of the Company, including affiliates of Hellman & Friedman LLC (“Hellman & Friedman”) and certain members of management, equal to 85% of the applicable cash savings that the Company realizes as a result of tax attributes arising from certain previous transactions, including the 2011 Merger. In connection with the 2011 Merger, the Company’s former majority owner assigned its rights under the tax receivable agreements to affiliates of Blackstone (Blackstone, together with Hellman & Friedman and certain current and former members of management, are hereinafter sometimes referred to collectively as the “TRA Members”). Prior to the 2011 Merger, the Company’s balance sheet reflected these obligations at the amount that was both probable and reasonably estimable. In connection with the 2011 Merger, the tax receivable agreement obligations were adjusted to their fair value. The fair value of the obligations at the time of the 2011 Merger is being accreted to the amount of the gross expected obligations using the interest method. Changes in the amount of these obligations resulting from changes to either the timing or amount of cash flows are recognized in the period of change and measured using the discount rate inherent in the initial fair value of the obligations. The accretion of these obligations is classified as a separate caption in the accompanying consolidated statements of operations. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, which replaces most prior general and industry specific revenue recognition guidance with a principles-based comprehensive revenue recognition framework. Under this revised framework, a company will recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. This update is currently scheduled to be effective for fiscal years and interim periods beginning in those years after December 15, 2017. Early adoption is permitted in years beginning after December 15, 2016. Upon adoption, a company may elect to either retrospectively restate each prior reporting period or reflect the cumulative effect of initially applying the update with an adjustment to retained earnings. The Company is currently assessing the potential effects this update may have on its consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-12, which clarifies, in the context of share-based payment awards, that a performance target that affects vesting and could be achieved after the requisite service period has been rendered should be treated as a performance condition. Prior to this update, because there was no explicit guidance, there was diversity in practice among companies. This update is effective for fiscal years and interim periods within those years beginning after December 15, 2015, with early adoption permitted. The Company does not expect the adoption of this update to have a material effect on its consolidated financial statements. In January 2015, the Company adopted FASB ASU No. 2014-08, which changes the requirements for reporting discontinued operations. Following adoption of this update, discontinued operations generally will be reported for the disposal by sale or otherwise of a component or a group of components that represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. Upon adoption, this update had no effect on the Company’s consolidated financial statements. In July 2015, the Company adopted FASB ASU No. 2015-03, which generally requires that debt issue costs related to a debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability. As a result of the adoption of this update, the Company retrospectively adjusted its consolidated balance sheet as of December 31, 2014 to reduce other assets and long-term debt, excluding current portion, by $11,128. In July 2015, the Company adopted FASB ASU No. 2015-05, which provides guidance to customers about whether a cloud computing arrangement includes a software license and requires that all software licenses utilized in internal use software arrangements be accounted for consistent with other licenses of intangible assets. As a result, following the adoption of this update, the Company began recognizing new or materially modified software licenses within intangible assets on its consolidated balance sheet and began recognizing the related amortization of these intangible assets within amortization expense. The adoption of this update had no material effect on the Company’s consolidated financial statements. In October 2015, the Company adopted FASB ASU No. 2015-16, which simplifies the accounting for measurement period adjustments in connection with business combinations. Following the adoption of this update, the Company will recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The adoption of this update had no material effect on the Company’s consolidated financial statements. In December 2015, the Company adopted FASB ASU No. 2015-17, which requires that deferred tax assets and liabilities be classified as non-current on the classified statement of financial position (i.e. the balance sheet). As a result of the adoption of this update, the Company retrospectively adjusted its consolidated balance sheet as of December 31, 2014 to reduce current deferred income tax assets and long-term deferred income tax liabilities by $18,893. In February 2016, the FASB issued ASU No. 2016-02, which generally requires that all lease obligations be recognized on the balance sheet at the present value of the remaining lease payments with a corresponding lease asset. This update is scheduled to be effective for fiscal years and interim periods beginning in those years after December 15, 2018. The Company is currently assessing the potential effects this update may have on its consolidated financial statements.
|
Concentration Of Credit Risk |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Concentration Of Credit Risk [Abstract] | |
Concentration Of Credit Risk | 3. Concentration of Credit Risk The Company’s revenue is primarily generated in the United States. Changes in economic conditions, government regulations or demographic trends, among other matters, in the United States could adversely affect the Company’s revenue and results of operations. The Company maintains its cash and cash equivalent balances in either insured depository accounts or money market mutual funds. The money market mutual funds are limited to investments in low-risk securities such as United States or government agency obligations, or repurchase agreements secured by such securities.
|
Business Combinations |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | 4. Business Combinations In July 2014, the Company acquired all of the equity interests of Capario, Inc. (“Capario”), a technology-enabled provider of revenue cycle management solutions. In November 2014, the Company acquired all of the equity interests of Change Healthcare Corporation (“Engagement Solutions”), a technology-enabled provider of healthcare consumer engagement and transparency solutions. In December 2014, the Company acquired all of the equity interests of Adminisource Communications, Inc. (“Adminisource”), a technology-enabled provider of payment and communication solutions. In August 2015, the Company acquired all of the equity interests of Altegra Health, Inc. (“Altegra Health”), a technology-enabled provider that assists payers and risk bearing providers with analytics and reporting capabilities for risk adjustment, member engagement and quality analysis to achieve actionable insights and improved management for value-based healthcare.
The following table summarizes certain information related to these acquisitions. The preliminary values of the consideration transferred, assets acquired and liabilities assumed in the Altegra Health acquisition, including the related tax effects, are subject to change upon the resolution of pre-acquisition contingencies ($5,658 of which are included as liabilities in the table below) and the receipt of a final valuation and working capital settlement.
The Company generally recognizes goodwill attributable to the assembled workforce and expected synergies among the operations of the acquired entities and the Company’s existing operations. In the case of the Company’s acquisitions of operating companies, synergies generally have resulted from the elimination of duplicative facilities and personnel costs and cross selling opportunities among the Company’s existing customer base. Goodwill is generally deductible for federal income tax purposes when a business combination is treated as an asset purchase. Goodwill is generally not deductible for federal income tax purposes when the business combination is treated as a stock purchase.
|
Property And Equipment |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property And Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property And Equipment | 5. Property and Equipment Property and equipment as of December 31, 2015 and 2014, consisted of the following:
Depreciation expense was $90,294, $88,068 and $80,538 for the years ended December 31, 2015, 2014 and 2013, respectively.
|
Goodwill And Intangible Assets |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets | 6. Goodwill and Intangible Assets The following table presents the changes in the carrying amount of goodwill for the indicated periods.
Intangible assets subject to amortization as of December 31, 2015 consisted of the following:
Amortization expense was $252,009, $101,150 and $103,301 for the years ended December 31, 2015, 2014 and 2013, respectively. Aggregate future amortization expense for intangible assets is estimated to be:
|
Accrued Expenses |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | 7. Accrued Expenses Accrued expenses as of December 31, 2015 and 2014 consisted of the following:
|
Long-Term Debt |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | 8. Long-Term Debt The Company’s long-term indebtedness is comprised of a senior secured term loan facility (as amended, the “Term Loan Facility”), a revolving credit facility (the “Revolving Facility”; together with the Term Loan Facility, the “Senior Credit Facilities”), 11% senior notes due 2019 (the “2019 Notes”), 11.25% senior notes due 2020 (the “2020 Notes”) and 6% senior notes due 2021 (the “2021 Notes”; together with the 2019 Notes and 2020 Notes, the “Senior Notes”). Long-term debt as of December 31, 2015 and 2014 consisted of the following:
Senior Credit Facilities The credit agreement governing the Senior Credit Facilities (the “Senior Credit Agreement”) provides that, subject to certain conditions, the Company may request additional tranches of term loans, increase commitments under the Revolving Facility or the Term Loan Facility or add one or more incremental revolving credit facility tranches (provided that the revolving credit commitments outstanding at any time have no more than three different maturity dates) in an aggregate amount not to exceed (a) $300,000 plus (b) an unlimited amount at any time, subject to compliance on a pro forma basis with a first lien net leverage ratio of no greater than 4.00 to 1.00. Availability of such additional tranches of term loans or revolving credit facilities and/or increased commitments is subject to, among other conditions, the absence of any default under the Senior Credit Agreement and the receipt of commitments by existing or additional financial institutions. Proceeds of the Revolving Facility, including up to $30,000 in the form of borrowings on same-day notice, referred to as swingline loans, and up to $50,000 in the form of letters of credits ($6,745 outstanding as of December 31, 2015), are available to provide financing for working capital and general corporate purposes. Borrowings under the Senior Credit Facilities bear interest at an annual rate equal to an applicable margin plus, at the Company’s option, either (a) a base rate determined by reference to the highest of (i) the applicable prime rate, (ii) the federal funds rate plus 0.50% and (iii) a LIBOR rate determined by reference to the costs of funds for United States dollar deposits for an interest period of one month, adjusted for certain additional costs, plus 1.00%, which base rate, in the case of the Term Loan Facility only, shall be no less than 2.25%, or (b) a LIBOR rate determined by reference to the costs of funds for United States dollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, which, in the case of the Term Loan Facility only, shall be no less than 1.25%.
In April 2012, the Company amended the Senior Credit Agreement to reprice the Senior Credit Facilities and borrow $80,000 of additional term loans. In April 2013, the Company again amended the Senior Credit Agreement to further reprice, and also to modify certain financial covenants under the Senior Credit Facilities. Following the April 2013 amendment, the interest rate on both the Term Loan Facility and Revolving Facility is LIBOR plus 2.50%. The Term Loan Facility remains subject to a LIBOR floor of 1.25%, and there continues to be no LIBOR floor on the Revolving Facility. In connection with the April 2013 repricing, the Senior Credit Agreement also was amended to, among other things, eliminate the financial covenant related to the consolidated cash interest coverage ratio and modify the financial covenant related to the net leverage test by maintaining the required first lien net leverage ratio at 5.35 to 1.00 for the remaining term of the Senior Credit Facilities. In December 2014 and August 2015, through further amendments to the Senior Credit Agreement, the Company borrowed an additional $160,000 and $395,000, respectively, under incremental term loan facilities on identical terms and having the same rights and obligations as the existing term loans under the Senior Credit Agreement. In addition to paying interest on outstanding principal under the Senior Credit Facilities, the Company is required to pay customary agency fees, letter of credit fees and a 0.50% commitment fee in respect of the unutilized commitments under the Revolving Facility. The Senior Credit Agreement requires that the Company prepay outstanding loans under the Term Loan Facility, subject to certain exceptions, with (a) 100% of the net cash proceeds of any incurrence of debt other than debt permitted under the Senior Credit Agreement, (b) 50% (which percentage will be reduced to 25% and 0% based on the Company’s first lien net leverage ratio) of the Company’s annual excess cash flow and (c) 100% of the net cash proceeds of certain asset sales and casualty and condemnation events, subject to reinvestment rights and certain other exceptions. The Company generally may voluntarily prepay outstanding loans under the Senior Credit Facilities at any time without premium or penalty other than breakage costs with respect to LIBOR loans. The Company is required to make quarterly payments equal to 0.25% of the aggregate principal amount of the loans under the Term Loan Facility, with the balance due and payable on November 2, 2018. Any principal amount outstanding under the Revolving Facility is due and payable on November 2, 2016. Certain of the Company’s United States wholly-owned restricted subsidiaries, together with the Company, are co-borrowers and jointly and severally liable for all obligations under the Senior Credit Facilities. Such obligations of the co-borrowers are unconditionally guaranteed by Change Healthcare Intermediate Holdings, Inc. (a direct wholly-owned subsidiary of Parent), the Company and each of its existing and future United States wholly-owned restricted subsidiaries (with certain exceptions including immaterial subsidiaries). These obligations are secured by a perfected security interest in substantially all of the assets of the co-borrowers and guarantors now owned or later acquired, including a pledge of all of the capital stock of the Company and its United States wholly-owned restricted subsidiaries and 65% of the capital stock of its foreign restricted subsidiaries, subject in each case to the exclusion of certain assets and additional exceptions.
The Senior Credit Agreement requires the Company to comply with a maximum first lien net leverage ratio financial maintenance covenant, to be tested on the last day of each fiscal quarter. A breach of the first lien net leverage ratio covenant is subject to certain equity cure rights. In addition, the Senior Credit Facilities contain a number of negative covenants that, among other things and subject to certain exceptions, restrict the Company’s ability and the ability of its subsidiaries to:
The Senior Credit Agreement also contains certain customary representations and warranties, affirmative covenants and provisions relating to events of default (including upon change of control). As of December 31, 2015, the Company believes it was in compliance with all of the applicable debt covenants under the Senior Credit Agreement. Senior Notes The 2019 Notes bear interest at an annual rate of 11.00% with interest payable semi-annually on June 30 and December 31 of each year. The 2019 Notes mature on December 31, 2019. The 2020 Notes bear interest at an annual rate of 11.25% with interest payable quarterly on March 31, June 30, September 30 and December 31 of each year. The 2020 Notes mature on December 31, 2020. The 2021 Notes bear interest at an annual rate of 6.00% with interest payable semi-annually on April 15 and October 15 of each year, commencing on April 15, 2016. The 2021 Notes mature on February 15, 2021. The Company may redeem the 2019 Notes, the 2020 Notes or both, in whole or in part, at any time on or after December 31, 2015 at the applicable redemption price, plus accrued and unpaid interest. The Company may redeem the 2021 Notes, in whole or in part, at any time on or after August 15, 2017 at the applicable redemption price, plus accrued and unpaid interest. At any time prior to August 15, 2017, the Company may, at its option and on one or more occasions, redeem up to 40% of the aggregate principal amount of the 2021 Notes at a redemption price equal to 100% of the aggregate principal amount, plus a premium and accrued and unpaid interest with the net cash proceeds of certain equity offerings. At any time prior to August 15, 2017, the Company may redeem the 2021 Notes, in whole or in part, at its option and on one or more occasions, at a redemption price equal to 100% of the principal amount, plus a “make-whole premium” and accrued and unpaid interest. If the Company experiences specific kinds of changes in control, it must offer to purchase the Senior Notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest. The Senior Notes are senior unsecured obligations and rank equally in right of payment with all of the Company’s existing and future indebtedness and senior in right of payment to all of its existing and future subordinated indebtedness. The Company’s obligations under the Senior Notes are guaranteed on a senior basis by all of its existing and subsequently acquired or organized wholly-owned United States restricted subsidiaries that guarantee the Senior Credit Facilities or its other indebtedness or indebtedness of any affiliate guarantor. The Senior Notes and the related guarantees are effectively subordinated to the Company’s existing and future secured obligations and that of its affiliate guarantors to the extent of the value of the collateral securing such obligations, and are structurally subordinated to all existing and future indebtedness and other liabilities of any of the Company’s subsidiaries that do not guarantee the Senior Notes.
The indentures governing the Senior Notes (the “Indentures”) contain customary covenants that restrict the ability of the Company and its restricted subsidiaries to:
The Indentures also contain certain customary affirmative covenants and events of default. As of December 31, 2015, the Company believes it was in compliance with all of the applicable debt covenants under the Senior Notes. Obligation Under Data Sublicense Agreement In 2009 and 2010, the Company acquired certain additional rights to specified uses of its data from the former owner of the Company’s business in order to broaden the Company’s ability to pursue business intelligence and data analytics solutions for payers and providers. The Company previously licensed exclusive rights to this data to the former owner of the Company’s business. In connection with these data rights acquisitions, the Company recorded amortizable intangible assets and corresponding obligations at inception based on the present value of the scheduled annual payments through 2018, which totaled $65,000 in the aggregate (approximately $12,700 remained payable at December 31, 2015). In connection with the 2011 Merger, the Company was required to adjust this obligation to its fair value. Other From time to time, the Company enters into deferred financing arrangements with certain vendors. The obligations under such arrangements are recorded at the present value of the scheduled payments. Such future payments totaled approximately $7,500 at December 31, 2015. Aggregate Future Maturities The aggregate amounts of future maturities under long-term debt arrangements are as follows:
|
Interest Rate Swap |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Rate Swap [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Rate Swap | 9. Interest Rate Swap Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. In January 2012, the Company executed three interest rate swap agreements to hedge the variable cash flows associated with existing variable-rate debt pursuant to the Term Loan Facility. As of December 31, 2015, the Company had outstanding interest rate derivatives with a combined notional amount of $640,000 that were designated as cash flow hedges of interest rate risk. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional $2,562 will be reclassified as an increase to interest expense. The following table summarizes the fair value of the Company’s derivative instruments at December 31, 2015 and 2014, respectively:
Tabular Disclosure of the Effect of Derivative Instruments on the Statement of Operations The effect of the derivative instruments on the accompanying consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013, respectively, is summarized in the following table:
Credit Risk-related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company also could be declared in default on its derivative obligations. As of December 31, 2015, the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $3,117. If the Company had breached any of these provisions at December 31, 2015, the Company could have been required to settle its obligations under the agreements at this termination value. The Company does not offset any derivative instruments and the derivative instruments are not subject to collateral posting requirements.
|
Fair Value Measurements |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | 10. Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company’s assets and liabilities that are measured at fair value on a recurring basis consist of the Company’s derivative financial instruments and contingent consideration associated with business combinations. The table below summarizes these items as of December 31, 2015, aggregated by the level in the fair value hierarchy within which those measurements fall.
The valuation of the Company’s derivative financial instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivative, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair value of the interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments) using the overnight index swap rate as the discount rate. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements and measures the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs to evaluate the likelihood of default by itself and by its counterparties. As of December 31, 2015, the Company determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The valuation of the Company’s contingent consideration obligations was estimated as the present value of total expected contingent consideration payments which were determined using a Monte Carlo simulation. This analysis reflects the contractual terms of the purchase agreement and utilized assumptions with regard to future sales, probabilities of achieving such future sales, the timing of the expected payments and a discount rate. Significant increases with respect to assumptions as to future sales and probabilities of achieving such future sales would have resulted in a higher fair value measurement while an increase in the discount rate would have resulted in a lower fair value measurement. The table below presents a reconciliation of the fair value of the liabilities that use significant unobservable inputs (Level 3). Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
In January 2015, the Company paid approximately $8,057 to the former stockholders of Goold Health Systems in full satisfaction of its contingent consideration liability. In April 2015, the Company exercised its option to terminate all future obligations under the Vieosoft Inc. (“Vieosoft”) stock purchase agreement in exchange for a future cash payment of $4,650 to the former stockholders of Vieosoft. This termination payment was not accepted and the former stockholders of Vieosoft have filed a lawsuit against the Company. In September 2015, the Company concluded that Engagement Solutions will not achieve the performance requirements necessary to earn future contingent consideration payments. As a result, the Company recognized a gain of $4,730 to eliminate the contingent consideration obligation. Assets and Liabilities Measured at Fair Value on a Non-recurring Basis During the year ended December 31, 2015, the Company determined, as a result of technology challenges, slower than expected customer adoption, and management attrition, that one of its recently developed products in the network solutions segment may be impaired. As a result, the Company was required to assess the recoverability of the net assets included in the relevant asset group. The Company recognized an impairment charge, measured as of December 31, 2015, to adjust the carrying value of the asset group to its fair value. This impairment charge was allocated to the affected-long-lived assets on a pro rata basis. In addition, throughout 2015 the Company abandoned certain hardware and software in connection with the continued migration of software development to a cloud-based environment. Among this abandoned hardware and software was a complete redevelopment of an existing software and analytics’ solution in this cloud-based environment. During the year ended December 31, 2014, the Company’s technology-enabled services segment received notice that its existing contract with a customer would not be renewed in full upon its expiration. As a result, the Company abandoned a customer related project that was under development and assessed the recoverability of the net assets included in the relevant asset group. The Company recognized an impairment charge, measured as of April 30, 2014, to write off the abandoned project and to adjust the carrying value of the asset group to its fair value. This latter impairment charge was generally allocated to the affected long-lived assets on a pro rata basis. Additionally, the Company abandoned certain network solutions and technology-enabled services segment development projects in connection with execution of certain strategic initiatives during the year ended December 31, 2014. The following table summarizes the affected financial statement captions, the allocation of the impairment charges among those captions and provides certain quantitative information associated with the required fair value measurements.
Assets and Liabilities Measured at Fair Value upon Initial Recognition The carrying amount and the estimated fair value of financial instruments held by the Company as of December 31, 2015 were:
The carrying amounts of cash equivalents and accounts receivable approximate fair value because of their short-term maturities. The fair value of long-term debt is based upon market quotes and trades by investors in partial interests of these instruments.
|
Commitments |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||
Commitments [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Commitments | 11. Commitments Lease Commitments The Company recognizes lease expense on a straight-line basis, including predetermined fixed escalations, over the initial lease term including reasonably assured renewal periods from the time that the Company controls the leased property. The Company leases its offices and other facilities under operating lease agreements that expire at various dates through 2027. Future minimum lease commitments under these non-cancellable lease agreements as of December 31, 2015 were as follows:
Total rent expense for all operating leases was $14,806, $12,991 and $12,625 for the years ended December 31, 2015, 2014 and 2013, respectively. Post-employment Benefits The Company generally offers post-employment benefits to its employees in the case of certain employee termination events consisting of severance and outplacement services. The extent of such benefits vary based on employee title and, in some cases, accumulate based on the respective employee’s years of service to the Company. Due to the episodic nature of the Company’s severance benefit history and the inability to reasonably predict future termination events, no accrual for accumulating severance benefits is accrued until the point that the payment of a severance benefit is probable and can be reasonably estimated.
|
Legal Proceedings |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Legal Proceedings [Abstract] | |
Legal Proceedings | 12. Legal Proceedings The Company finalized and paid $8,000 related to the settlement of a vendor fee dispute in 2014, with $3,000 and $5,000 of this amount recognized within sales, marketing, general and administrative expense during the years ended December 31, 2014 and 2013, respectively. Additionally, in the normal course of business, the Company is involved in various claims and legal proceedings. While the ultimate resolution of these matters has yet to be determined, the Company does not believe that their outcomes will have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.
|
Incentive Compensation Plans |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incentive Compensation Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incentive Compensation Plans | 13. Incentive Compensation Plans Equity Compensation Plans In connection with the 2011 Merger, Parent assumed the Change Healthcare, Inc. Amended and Restated 2009 Equity Incentive Plan (the “Parent Equity Plan”). Pursuant to the Parent Equity Plan, 180,950 shares of Parent common stock have been reserved for the issuance of equity awards to employees, directors and consultants of Parent and its affiliates. Equity Awards Parent grants equity-based awards of Parent common stock to certain employees and directors under the Parent Equity Plan. Grants under the Parent Equity Plan consist of one, or a combination of, time-vested awards and/or performance-based awards. In each case, the equity awards are subject to certain call rights by Parent in the event of termination of service by the award holder and put rights by the award holder or his/her beneficiaries in the event of death or disability. The Company’s practice is to repurchase shares of Parent common stock held by former employees no earlier than six months following issuance of such shares of Parent common stock. As of December 31, 2015, the Company expects to repurchase 205 such shares of Parent common stock. Rollover Awards: In connection with the 2011 Merger, certain outstanding grants for members of senior management under the Parent Equity Plan were exchanged for new options of Parent common stock (the “Rollover Awards). Time Vested Awards: The time-vested awards consist of the following: (i) Tier I Time Awards were granted with an exercise price equal to the fair value of Parent common stock on the date of grant and generally vest in equal 20% installments on the first through fifth anniversary of the 2011 Merger or the grant date, subject to the award holder’s continued employment through each vesting date. The Company estimates the fair value of the Tier I Time Awards using the Black-Scholes option pricing model. As of December 31, 2015, unrecognized compensation expense related to Tier I Time Awards was $29,960. This expense is expected to be recognized over a weighted average period of 2.24 years. (ii) Tier II Time Awards were granted with an exercise price greater than the fair value of Parent common stock on the date of grant and generally vest in equal 20% installments on the first through fifth anniversary of the 2011 Merger or grant date, subject to the award holder’s continued employment through each vesting date. As the Tier II Time Awards were granted with an exercise price that was significantly out of the money as of the grant date, the Tier II Time Awards contain an implied market condition. As a result, the requisite service period is the longer of the explicit and derived service periods. The Company estimates the fair value of the Tier II Time Awards using a Monte Carlo simulation. As of December 31, 2015, unrecognized compensation expense related to the Tier II Time Awards was $1,250. This expense is expected to be recognized over a weighted average period of 1.87 years. Performance Awards: The performance awards were granted with an exercise price equal to the fair value of Parent common stock on the date of grant and vest, subject to the employee’s continued employment through the vesting date, on the date when Blackstone has sold at least 25% of the maximum number of Parent shares held by it (i.e. a liquidity event) and achieved a specified rate of return. The Company values the performance awards using a Monte Carlo simulation. Because vesting of the performance awards is contingent upon the occurrence of a liquidity event, no compensation expense has been recorded related to the performance awards. In the event that a sale by Blackstone of at least 25% of its stock occurs, the Company will record all related compensation expense at that time. As of December 31, 2015, unrecognized compensation expense related to the performance awards was $28,718. Restricted Stock Units: During 2014, the Company granted 1,500 restricted stock units with a grant date fair value of $1,020 to vest in 20% equal installments on the first through fifth anniversary of the grant date, subject to the employee’s continued employment through each vesting date. As of December 31, 2015, 300 stock units were vested with an intrinsic value of $440 at the time of vesting and unrecognized compensation expense related to the restricted stock units was $998. This expense is expected to be recognized over a weighted average period of 1.94 years. Modification of Awards In September 2013, awards granted to the Company’s former chief executive officer were modified to accelerate vesting and extend the period to exercise a portion of the Tier I Time Awards and Performance Awards for three years following his termination. In November 2014, awards granted to a former executive were modified to extend the period to exercise vested options following his termination. The former executive’s exercise period for the Tier I Time Awards was extended to fourteen months following his termination, and total incremental compensation cost recognized as a result of these modifications to the Tier I Time Awards was $167 and $970 for the years ended December 31, 2014 and 2013, respectively. Activity Summary A summary of award activity under the Parent Equity Plan for the year ended December 31, 2015, is presented separately below for awards valued using the Black Scholes option pricing model and a Monte Carlo simulation. Awards Valued Using the Black Scholes Option Pricing Model
Awards Valued Using a Monte Carlo Simulation
Restricted Stock Units
Black-Scholes and Monte Carlo Simulation Option Pricing Model Assumptions The following table summarizes the weighted average grant date fair values of awards valued using the Black-Scholes and Monte Carlo Simulation option pricing models, as appropriate, and the weighted average assumptions used to develop the fair value estimates under each of the valuation models for the years ended December 31, 2015, 2014 and 2013, respectively:
Expected dividend yield — The Company is subject to limitations on the payment of dividends under its Senior Credit Facilities as further discussed in Note 8 above to these consolidated financial statements. An increase in the dividend yield will decrease compensation expense. Expected volatility — This is a measure of the amount by which the price of the equity instrument has fluctuated or is expected to fluctuate. The expected volatility was based upon the levered median historical volatility of a group of guideline companies. An increase in the expected volatility will increase compensation expense. Risk-free interest rate — This is the U.S. Treasury rate for the week of the grant having a term approximating the expected life of the award. An increase in the risk-free interest rate will increase compensation expense. Expected term — This is the period of time over which the awards are expected to remain outstanding. The Company estimates the expected term as the mid-point between the actual or expected vesting date and the contractual term. An increase in the expected term will increase compensation expense. Summary of Equity Compensation Expense For the years ended December 31, 2015, 2014 and 2013, the Company recognized expense of $9,285, $7,334 and $7,021, and an income tax benefit of $550, $733 and $59, respectively, in the aggregate related to its equity compensation arrangements. Long Term Cash Incentive Plan During 2013, the Company adopted the Change Healthcare Holdings, Inc. Long Term Cash Incentive Plan (the “LTIP”). Under the terms of the LTIP, each participant has the opportunity to accrue a specified percentage of their respective annual base salary during each year of the 2013 to 2017 performance period based on the amount by which earnings before interest, taxes, depreciation and amortization of the participants designated business unit exceed a specified threshold. Aggregate payments under the LTIP will occur only in connection with a change in control of the Company and generally require the continued service of the respective participants through the date of the change in control. At December 31, 2015, based on current participants, the maximum amount of cash payments that could be payable under the LTIP in the event of a change in control are $7,011. As of December 31, 2015, an estimated $3,517 of this maximum amount has been earned by the participants and would be payable in the event of a change in control. Because any payments under the LTIP are contingent upon a change in control, no amounts under the LTIP have been accrued in the accompanying consolidated balance sheets.
|
Retirement Plans |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Retirement Plans [Abstract] | |
Retirement Plans | 14. Retirement Plans Employees of the Company may participate in a 401k plan, which provides for matching contributions from the Company. Expenses related to this 401k plan were $6,322, $5,174 and $4,942 for the years ended December 31, 2015, 2014 and 2013, respectively.
|
Income Taxes |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | 15. Income Taxes The income tax provision (benefit) for the years ended December 31, 2015, 2014 and 2013, respectively, was as follows:
The differences between the federal statutory rate and the effective income tax rate principally relate to the impact of valuation allowances and uncertain tax positions related to state income taxes, changes in the Company’s Tennessee apportionment resulting from the enactment of the Tennessee Revenue Modernization Act in May 2015, book versus tax basis differences in the Company’s investment in subsidiary prior to the change in tax status of such subsidiary from a partnership to a corporation in January 2014 and stock compensation expense recorded for book purposes but not deductible for tax. The reconciliation between the federal statutory rate and the effective income tax rate is as follows:
At December 31, 2015, the Company had net operating loss carryforwards (tax effected) for federal and state income tax purposes of approximately $191,406 and $43,680, respectively, which expire from 2026 through 2035 and 2016 through 2035, respectively. A portion of net operating loss carryforwards may be subject to an annual limitation regarding their utilization against taxable income in future periods due to the “change of ownership related to a legal entity simplification” provisions of the Internal Revenue Code and similar state provisions. The Company and certain of its subsidiaries are included in Parent’s consolidated filing group for U.S. federal income tax purposes, as well as in certain state income tax returns that include Parent. With respect to tax returns for any taxable period in which the Company or any of its subsidiaries are included in a tax return filing with Parent, the amount of taxes to be paid by the Company is determined, subject to certain adjustments, as if it and its subsidiaries filed their own tax returns excluding Parent. Significant components of the Company’s deferred tax assets (liabilities) as of December 31, 2015 and 2014 were as follows:
In January 2014, the Company effected a change in the tax status of a subsidiary from a partnership to a corporation. Prior to the tax status change, the Company recognized a deferred tax liability for the difference in the book and tax basis of its investment in such subsidiary (i.e. outside basis). Following the tax status change, the Company’s deferred tax balances reflect differences in the book and tax bases of the individual assets and liabilities included in the corporation. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:
The Company had unrecognized tax benefits of $752 as of December 31, 2015 and 2014, which if recognized, would affect the effective income tax rate. The Company recognizes interest income and expense (if any) related to income taxes as a component of income tax expense. The Company recognized no interest and penalties for the years ended December 31, 2015, 2014 and 2013, respectively. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company’s U.S. federal and state income tax returns for the tax years 2012 and beyond remain subject to examination by the Internal Revenue Service. With respect to state and local jurisdictions and countries outside of the United States, the Company and its subsidiaries are typically subject to examination for a number of years after the income tax returns have been filed. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties have been provided for in the accompanying consolidated financial statements for any adjustments that may be incurred due to state, local or foreign audits.
|
Tax Receivable Agreement Obligations To Related Parties |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tax Receivable Agreement Obligations To Related Parties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tax Receivable Agreement Obligations To Related Parties | 16. Tax Receivable Agreement Obligations to Related Parties The Company is a party to tax receivable agreements which obligate it to make payments to certain current and former owners of the Company, including affiliates of Blackstone, Hellman & Friedman and certain members of management (collectively, the “TRA Members”), equal to 85% of the applicable cash savings that the Company realizes as a result of tax attributes arising from certain previous transactions, including the 2011 Merger. The Company will retain the benefit of the remaining 15% of these tax savings. The Company expects cumulative remaining payments under the tax receivable agreements of $355,742. $174,480 of this amount, which reflected the initial fair value of the tax receivable agreement obligations plus recognized accretion, was reflected as an obligation on the accompanying consolidated balance sheet at December 31, 2015. The accompanying consolidated statement of operations for the years ended December 31, 2015, 2014 and 2013 include accretion expense of $10,496, $14,446 and $26,470, respectively, related to this obligation. During 2015, the Company changed its estimate of the timing and amount of future cash flows attributable to the tax receivable agreements as a result of a change in the Company’s effective tax rate, acquisitions consummated during the year and routine updates to financial projections. These revised estimates resulted in a decrease to loss before income tax benefit of $11,648 for the year ended December 31, 2015. Based on current facts and circumstances, the Company estimates the aggregate payments due under the tax receivable agreements to be as follows:
The timing and/or amount of aggregate payments due may vary based on a number of factors, including the amount and timing of the taxable income the Company generates in the future and the tax rate then applicable, the use of loss carryovers and the portion of payments under the tax receivable agreements constituting imputed interest or amortizable basis.
|
Other Related Party Transactions |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Other Related Party Transactions [Abstract] | |
Other Related Party Transactions | 17. Other Related Party Transactions Transaction and Advisory Fee Agreement In connection with the 2011 Merger, the Company entered into a transaction and advisory fee agreement with Blackstone Management Partners L.L.C., an affiliate of Blackstone (“BMP”), and Hellman & Friedman, L.P., an affiliate of Hellman & Friedman (“HFLP,” and, together with BMP, the “Managers”), for a term of twelve years. Pursuant to the agreement, in consideration for certain advisory services, the Company is obligated to pay the Managers at the beginning of each fiscal year an aggregate advisory fee of $6,000 or an agreed upon amount not to exceed 2% of consolidated EBITDA (as defined in the Senior Credit Agreement) for such fiscal year. Pursuant to the agreement, the Managers are also entitled to receive transaction fees equal to 1% of the aggregate transaction value upon the consummation of any acquisition, divestiture, disposition, merger, consolidation, restructuring or recapitalization, issuance of private or public debt or equity securities (including an initial public offering of equity securities), financing or similar transaction involving the Company. Pursuant to the agreement, in connection with or in anticipation of a change in control of the Company, sale of all or substantially all of the assets of the Company or an initial public offering of the equity of the Company or parent entity of the Company or their successors, the Managers have the option to receive, in consideration of such Manager’s role in facilitating such transaction and in settlement of the termination of the services, a single lump sum cash payment equal to the then-present value of all the then-current and future annual advisory fees payable under the agreement, assuming a remaining twelve-year payment period. To the extent that the Company does not pay the lump sum fee when due, the obligation will accrue interest at an annual rate of 10%, compounded quarterly. During the years ended December 31, 2015, 2014 and 2013, the Company paid $6,000 ($4,350 to BMP and $1,650 to HFLP) in advisory fees for each year and approximately $700, $400 and $200, respectively, as reimbursement to BMP for their out of pocket expenses. The advisory fees are reflected within sales, marketing, general and administrative expense in the accompanying consolidated statements of operations. Term Loans Held by Related Party During the years ended December 31, 2015, 2014 and 2013, certain investment funds managed by GSO Capital Partners LP (the “GSO-managed funds”) held a portion of the term loans under the Senior Credit Facilities. GSO Advisor Holdings LLC (“GSO Advisor”) is the general partner of GSO Capital Partners LP. Blackstone, indirectly through its subsidiaries, holds all of the issued and outstanding equity interests of GSO Advisor. As of December 31, 2015 and 2014, the GSO-managed funds held $55,247 and $68,588 in principal amount of the Senior Credit Facilities ($552 and $686 of which is classified within current portion of long-term debt), respectively. Transactions with Blackstone Portfolio Companies The Company provides various services to certain Blackstone portfolio companies under contracts that were executed in the normal course of business. The Company recognized revenue of $3,167, $3,230 and $6,959 related to services provided to Blackstone portfolio companies for the years ended December 31, 2015, 2014 and 2013, respectively. Transactions with Hellman & Friedman Portfolio Companies The Company both provides various services to, and purchases from, certain Hellman & Friedman portfolio companies under contracts that were executed in the normal course of business. The Company recognized revenue of $5,751, $6,028 and $2,029 related to services provided to Hellman & Friedman portfolio companies for the years ended December 31, 2015, 2014 and 2013, respectively. The Company paid Hellman & Friedman portfolio companies $233, $116 and $695 related to services provided to the Company for the years ended December 31, 2015, 2014 and 2013, respectively. Other During 2015, the Company executed agreements with a vendor and its affiliate in which a director of the Company is the president and chief executive officer to provide certain software related services. Under these agreements, the Company paid the vendor approximately $681 in the aggregate for the year ended December 31, 2015.
|
Segment Reporting |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | 18. Segment Reporting Effective January 1, 2015, the Company completed an internal reorganization of its reporting structure which resulted in a change in the composition of its operating segments. Additionally, the Company periodically makes other changes to the composition of its operating segments. Prior period segment information throughout the notes to these consolidated financial statements is restated to reflect the organizational structure and any other changes made. Management views the Company’s operating results in three reportable segments: (a) software and analytics, (b) network solutions and (c) technology-enabled services. Listed below are the results of operations for each of the reportable segments. This information is reflected in the manner utilized by management to make operating decisions, assess performance and allocate resources. Such amounts include allocations of corporate shared services functions that are essential to the core operations of the reportable segments such as information technology, operations and product development functions. Segment assets and related depreciation expenses are not presented to management for purposes of operational decision making, and therefore are not included in the accompanying tables. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies in Note 2 to these consolidated financial statements. Software and Analytics The software and analytics segment provides revenue cycle technology, revenue optimization, payment integrity, electronic payment, risk adjustment, quality reporting, data and analytics and engagement solutions. Network Solutions The network solutions segment provides financial and administrative information exchange solutions for medical, pharmacy and dental claims management and other standardized healthcare transactions, including clinical information exchange capabilities. Technology-enabled Services The technology-enabled services segment provides payment and communication, eligibility and enrollment, healthcare consulting, payment automation and pharmacy benefits administration solutions. Corporate and Eliminations Inter-segment revenue and expenses primarily represent claims management and payment and communication solutions provided between segments. Corporate and eliminations includes pass-through postage costs, management, administrative and certain other shared corporate services functions such as legal, finance, human resources and marketing, as well as eliminations to remove inter-segment revenue and expenses. These administrative costs are excluded from the adjusted EBITDA measure for each respective operating segment. The revenue and adjusted EBITDA for the operating segments are as follows:
|
Accumulated Other Comprehensive Income (Loss) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | 19. Accumulated Other Comprehensive Income (Loss) The following is a summary of the accumulated other comprehensive income (loss) balances, net of taxes, as of and for the year ended December 31, 2015.
|
Supplemental Condensed Consolidating Financial Information |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Condensed Consolidating Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Condensed Consolidating Financial Information | 20. Supplemental Condensed Consolidating Financial Information In lieu of providing separate annual and interim financial statements for each guarantor of debt securities to be registered, Regulation S-X of SEC Guidelines, Rules and Regulations (“Regulation S-X”) provides companies, if certain criteria are satisfied, with the option to instead provide condensed consolidating financial information for its issuers, guarantors and non-guarantors. In the case of the Company, the applicable criteria include the following: (i) the Senior Notes are fully and unconditionally guaranteed on a joint and several basis (subject to customary release provisions), (ii) each of the guarantors of the Senior Notes is a direct or indirect 100%-owned subsidiary of the Company and (iii) any non-guarantors are considered minor as that term is defined in Regulation S-X. Because each of these criteria has been satisfied by the Company, summarized condensed consolidating balance sheets at December 31, 2015 and 2014, condensed consolidating statements of operations, comprehensive income (loss) and cash flows for each of the years ended December 31, 2015, 2014 and 2013, respectively, for the Company, segregating the issuer, the subsidiary guarantors and consolidating adjustments, are reflected below. Prior year amounts have been reclassified to conform to the current year presentation.
Condensed Consolidating Balance Sheet
Condensed Consolidating Balance Sheet
Condensed Consolidating Statement of Operations
Condensed Consolidating Statement of Operations
Condensed Consolidating Statement of Operations
Condensed Consolidating Statement of Comprehensive Income (Loss)
Condensed Consolidating Statement of Comprehensive Income (Loss)
Condensed Consolidating Statement of Comprehensive Income (Loss)
Condensed Consolidating Statement of Cash Flows
Condensed Consolidating Statement of Cash Flows
Condensed Consolidating Statement of Cash Flows
|
Schedule II - Valuation And Qualifying Accounts |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II - Valuation And Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II - Valuation And Qualifying Accounts | Change Healthcare Holdings, Inc. Schedule II—Valuation and Qualifying Accounts (In Thousands)
|
Summary Of Significant Accounting Policies (Policy) |
12 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||
Summary Of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||
Principles Of Consolidation | Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include all subsidiaries and entities that are controlled by the Company. The results of operations for companies acquired are included in the consolidated financial statements from the effective date of acquisition. All material intercompany accounts and transactions have been eliminated in the consolidated financial statements.
|
||||||||||||||||||||||||
Reclassifications | Reclassifications Certain reclassifications have been made to prior period financial statements to conform to the current period presentation. Effective January 1, 2015, the Company completed an internal reorganization of its reporting structure which resulted in a change in the composition of its reportable segments to software and analytics, network solutions and technology-enabled services. Segment information has been restated to reflect the current organizational structure. Effective January 1, 2015, in order to clarify the nature of its customer related postage activities, the Company also created separate captions on the statement of operations within revenue and costs and expenses, respectively. Previously, such amounts were included within revenue and costs of operations. To conform to the current presentation, costs of operations were reduced by $343,464 and $311,854 and reclassified as customer postage for the years ended December 31, 2014 and 2013, respectively.
|
||||||||||||||||||||||||
Accounting Estimates | Accounting Estimates The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience, current business factors and various other assumptions that the Company believes are necessary to consider in order to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of revenue and expenses and disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic, environmental and political factors and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in the reported results of operations; and if material, the effects of changes in estimates are disclosed in the notes to the consolidated financial statements. Estimates and assumptions by management affect: the allowance for doubtful accounts; the fair value assigned to assets acquired and liabilities assumed in business combinations; tax receivable agreement obligations; the fair value of interest rate swap obligations; contingent consideration; loss accruals; the carrying value of long-lived assets (including goodwill and intangible assets); the amortization period of long-lived assets (excluding goodwill); the carrying value, capitalization and amortization of software development costs; the provision and benefit for income taxes and related deferred tax accounts; certain accrued expenses; revenue recognition; contingencies; and the value attributed to equity awards.
|
||||||||||||||||||||||||
Business Combinations | Business Combinations The Company recognizes the consideration transferred (i.e. purchase price) in a business combination, as well as the acquired business’ identifiable assets, liabilities and noncontrolling interests at their acquisition date fair value. The excess of the consideration transferred over the fair value of the identifiable assets, liabilities and noncontrolling interest, if any, is recorded as goodwill. Any excess of the fair value of the identifiable assets acquired and liabilities assumed over the consideration transferred, if any, is generally recognized within earnings as of the acquisition date. The fair value of the consideration transferred, assets, liabilities and noncontrolling interests is estimated based on one or a combination of income, costs or market approaches as determined based on the nature of the asset or liability and the level of inputs available to the Company (i.e. quoted prices in an active market, other observable inputs or unobservable inputs). To the extent that the Company’s initial accounting for a business combination is incomplete at the end of a reporting period, provisional amounts are reported for those items which are incomplete. Following the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2015-16, the Company adjusts such provisional amounts in the reporting period in which the adjustment amounts are determined.
|
||||||||||||||||||||||||
Cash And Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity from the date of purchase of three months or less to be cash equivalents.
|
||||||||||||||||||||||||
Allowance For Doubtful Accounts | Allowance for Doubtful Accounts The allowance for doubtful accounts reflects the Company’s best estimate of losses inherent in the Company’s receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available evidence.
|
||||||||||||||||||||||||
Software Development Costs | Software Development Costs The Company generally provides services to its customers using software developed for internal use. The costs that are incurred to develop such software are expensed as incurred during the preliminary project stage. Once certain criteria have been met, direct costs incurred in developing or obtaining computer software are capitalized. Training and maintenance costs are expensed as incurred. Capitalized software costs are included in property and equipment in the accompanying consolidated balance sheets and are amortized over a three-year period.
|
||||||||||||||||||||||||
Property And Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation, including that related to assets under capital lease, is computed using the straight-line method over the estimated useful lives of the related assets. The useful lives for newly acquired assets are generally as follows:
Expenditures for maintenance, repair and renewals of minor items are expensed as incurred. Expenditures for maintenance repair and renewals that extend the useful life of an asset are capitalized.
|
||||||||||||||||||||||||
Goodwill And Intangible Assets | Goodwill and Intangible Assets Goodwill and intangible assets resulting from the Company’s acquisitions are accounted for using the acquisition method of accounting. Intangible assets with definite lives are amortized on a straight-line basis, at their inception, over the estimated useful lives of the related assets generally as follows:
The Company assesses its goodwill for impairment annually (as of October 1 of each year) or whenever significant indicators of impairment are present. The Company first assesses whether it can reach a more likely than not conclusion that goodwill is not impaired via qualitative analysis alone. To the extent such a conclusion cannot be reached based on a qualitative assessment alone, the Company, using the assistance of a valuation specialist as appropriate, compares the fair value of each reporting unit to its associated carrying value. If the fair value of the reporting unit is less than the carrying value, then a hypothetical acquisition method allocation is performed to determine the amount of the goodwill impairment to recognize. The Company recognized no impairment in conjunction with its most recent goodwill impairment analysis.
|
||||||||||||||||||||||||
Long-Lived Assets | Long-Lived Assets Long-lived assets used in operations are reviewed for impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and fair value. Long-lived assets held for sale are reported at the lower of cost or fair value less costs to sell.
|
||||||||||||||||||||||||
Derivatives | Derivatives Derivative financial instruments are used to manage the Company’s interest rate exposure. The Company does not enter into financial instruments for speculative purposes. Derivative financial instruments are accounted for and measured at fair value and recorded on the balance sheet. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction in the same period or periods during which the hedged transaction affects earnings (for example, in “interest expense” when the hedged transactions are interest cash flows associated with floating-rate debt). The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized in interest expense in current earnings during the period of change.
|
||||||||||||||||||||||||
Equity Compensation | Equity Compensation Compensation expense related to the Company’s equity awards is generally recognized on a straight-line basis over the requisite service period. For awards subject to vesting based on market or performance conditions, however, compensation expense is recognized under the accelerated method. The fair value of the equity awards subject only to service conditions is determined by use of a Black-Scholes model. The fair value of the equity awards subject to market or performance conditions is determined by use of a Monte Carlo simulation.
|
||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition The Company generates most of its revenue by using technology solutions to provide services to our customers that automate and simplify business and administrative functions for payers, providers and pharmacies, generally on either a per transaction, per document, per communication, per member per month, per provider per month, monthly flat fee, contingent fee or hourly basis. Revenue for financial and administrative information exchange, payment and communication, risk adjustment, quality reporting and healthcare consulting solutions are recognized as the services are provided. Postage fees related to our payment and communication solutions volumes are recorded on a gross basis. Revenue for our eligibility and enrollment and revenue optimization solutions generally are recognized at the time that our provider customer receives notice from the payer of a pending payment. Revenue for payment integrity solutions are recognized at the time that notice of customer acceptance is received. Cash receipts or billings in advance of revenue recognition are recorded as deferred revenues in the accompanying consolidated balance sheets. The Company excludes sales and use tax from revenue in the accompanying consolidated statements of operations.
|
||||||||||||||||||||||||
Income Taxes | Income Taxes The Company records deferred income taxes for the tax effect of differences between book and tax bases of its assets and liabilities, as well as differences relating to the timing of recognition of income and expenses. Deferred income taxes reflect the available net operating losses and the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of the future tax benefits related to deferred tax assets is dependent on many factors, including the Company’s past earnings history, expected future earnings, the character and jurisdiction of such earnings, reversing taxable temporary differences, unsettled circumstances that, if unfavorably resolved, would adversely affect utilization of its deferred tax assets, carryback and carryforward periods and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. The Company recognizes tax benefits for uncertain tax positions at the time the Company concludes that the tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. The benefit, if any, is measured as the largest amount of benefit, determined on a cumulative probability basis that is more likely than not to be realized upon ultimate settlement. Tax positions failing to qualify for initial recognition are recognized in the first subsequent interim period that they meet the more likely than not standard, upon resolution through negotiation or litigation with the taxing authority or on expiration of the statute of limitations.
|
||||||||||||||||||||||||
Tax Receivable Agreement Obligations | Tax Receivable Agreement Obligations In connection with the IPO, the Company entered into tax receivable agreements which obligated the Company to make payments to certain current and former owners of the Company, including affiliates of Hellman & Friedman LLC (“Hellman & Friedman”) and certain members of management, equal to 85% of the applicable cash savings that the Company realizes as a result of tax attributes arising from certain previous transactions, including the 2011 Merger. In connection with the 2011 Merger, the Company’s former majority owner assigned its rights under the tax receivable agreements to affiliates of Blackstone (Blackstone, together with Hellman & Friedman and certain current and former members of management, are hereinafter sometimes referred to collectively as the “TRA Members”). Prior to the 2011 Merger, the Company’s balance sheet reflected these obligations at the amount that was both probable and reasonably estimable. In connection with the 2011 Merger, the tax receivable agreement obligations were adjusted to their fair value. The fair value of the obligations at the time of the 2011 Merger is being accreted to the amount of the gross expected obligations using the interest method. Changes in the amount of these obligations resulting from changes to either the timing or amount of cash flows are recognized in the period of change and measured using the discount rate inherent in the initial fair value of the obligations. The accretion of these obligations is classified as a separate caption in the accompanying consolidated statements of operations.
|
||||||||||||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, which replaces most prior general and industry specific revenue recognition guidance with a principles-based comprehensive revenue recognition framework. Under this revised framework, a company will recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. This update is currently scheduled to be effective for fiscal years and interim periods beginning in those years after December 15, 2017. Early adoption is permitted in years beginning after December 15, 2016. Upon adoption, a company may elect to either retrospectively restate each prior reporting period or reflect the cumulative effect of initially applying the update with an adjustment to retained earnings. The Company is currently assessing the potential effects this update may have on its consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-12, which clarifies, in the context of share-based payment awards, that a performance target that affects vesting and could be achieved after the requisite service period has been rendered should be treated as a performance condition. Prior to this update, because there was no explicit guidance, there was diversity in practice among companies. This update is effective for fiscal years and interim periods within those years beginning after December 15, 2015, with early adoption permitted. The Company does not expect the adoption of this update to have a material effect on its consolidated financial statements. In January 2015, the Company adopted FASB ASU No. 2014-08, which changes the requirements for reporting discontinued operations. Following adoption of this update, discontinued operations generally will be reported for the disposal by sale or otherwise of a component or a group of components that represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. Upon adoption, this update had no effect on the Company’s consolidated financial statements. In July 2015, the Company adopted FASB ASU No. 2015-03, which generally requires that debt issue costs related to a debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability. As a result of the adoption of this update, the Company retrospectively adjusted its consolidated balance sheet as of December 31, 2014 to reduce other assets and long-term debt, excluding current portion, by $11,128. In July 2015, the Company adopted FASB ASU No. 2015-05, which provides guidance to customers about whether a cloud computing arrangement includes a software license and requires that all software licenses utilized in internal use software arrangements be accounted for consistent with other licenses of intangible assets. As a result, following the adoption of this update, the Company began recognizing new or materially modified software licenses within intangible assets on its consolidated balance sheet and began recognizing the related amortization of these intangible assets within amortization expense. The adoption of this update had no material effect on the Company’s consolidated financial statements. In October 2015, the Company adopted FASB ASU No. 2015-16, which simplifies the accounting for measurement period adjustments in connection with business combinations. Following the adoption of this update, the Company will recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The adoption of this update had no material effect on the Company’s consolidated financial statements. In December 2015, the Company adopted FASB ASU No. 2015-17, which requires that deferred tax assets and liabilities be classified as non-current on the classified statement of financial position (i.e. the balance sheet). As a result of the adoption of this update, the Company retrospectively adjusted its consolidated balance sheet as of December 31, 2014 to reduce current deferred income tax assets and long-term deferred income tax liabilities by $18,893. In February 2016, the FASB issued ASU No. 2016-02, which generally requires that all lease obligations be recognized on the balance sheet at the present value of the remaining lease payments with a corresponding lease asset. This update is scheduled to be effective for fiscal years and interim periods beginning in those years after December 15, 2018. The Company is currently assessing the potential effects this update may have on its consolidated financial statements.
|
Nature Of Business And Organization (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature Of Business And Organization [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Effects Of Restatement Adjustments On Consolidated Financial Statements |
|
Summary Of Significant Accounting Policies (Tables) |
12 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||
Summary Of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||
Useful Lives Of Newly Acquired Assets |
|
||||||||||||||||||||||||
Estimated Useful Lives Of Intangible Assets |
|
Business Combinations (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Information Related To Acquisitions |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Other And Contingent Consideration Information Related To Acquisitions |
|
Property And Equipment (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property And Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Property And Equipment |
|
Goodwill And Intangible Assets (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Goodwill Activity |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets Subject To Amortization |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Future Amortization Expense For Intangible Assets |
|
Accrued Expenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Accrued Expenses |
|
Long-Term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Long-Term Debt |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Amounts of Future Maturities under Long-Term Arrangements |
|
Interest Rate Swap (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Rate Swap [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Of Derivative Instrument |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect Of Derivative Instrument On The Accompanying Consolidated Statements Of Operations |
|
Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Of Financial Instruments Measured On A Recurring Basis |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of The Fair Value Of The Liabilities That Use Significant Unobservable Inputs (Level 3) |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quantitative Information About Level 3 Fair Value Measurements |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amount And The Estimated Fair Value Of Financial Instruments |
|
Commitments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||
Commitments [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule Of Future Minimum Lease Commitments Under Non-Cancelable Lease Agreements |
|
Incentive Compensation Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation Related Costs, Share-based Payments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Share-based Compensation, Restricted Stock Units Award Activity |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Black Scholes Option Pricing Model [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation Related Costs, Share-based Payments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Share Based Compensation, Stock Options Activity |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monte Carlo Simulation Pricing Model [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation Related Costs, Share-based Payments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Share Based Compensation, Stock Options Activity |
|
Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Provision (Benefit) |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Between Federal Statutory Rate And Effective Income Tax Rate |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Components Of Deferred Tax Assets (Liabilities) |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of Beginning And Ending Amount Of Unrecognized Tax Benefit |
|
Tax Receivable Agreement Obligations To Related Parties (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tax Receivable Agreement Obligations To Related Parties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Aggregate Payments Due Under The Tax Receivable Agreements |
|
Segment Reporting (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue And Total Segment Contribution For The Reportable Segments |
|
Accumulated Other Comprehensive Income (Loss) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Accumulated Other Comprehensive Income (Loss) |
|
Supplemental Condensed Consolidating Financial Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Condensed Consolidating Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet
Condensed Consolidating Balance Sheet
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statement Of Operations | Condensed Consolidating Statement of Operations
Condensed Consolidating Statement of Operations
Condensed Consolidating Statement of Operations
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statement Of Comprehensive Income (Loss) | Condensed Consolidating Statement of Comprehensive Income (Loss)
Condensed Consolidating Statement of Comprehensive Income (Loss)
Condensed Consolidating Statement of Comprehensive Income (Loss)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statement Of Cash Flows |
Condensed Consolidating Statement of Cash Flows
Condensed Consolidating Statement of Cash Flows
|
Nature Of Business And Organization (Summary Of Effects Of Restatement Adjustments On Consolidated Financial Statements - Balance Sheets) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||
---|---|---|---|---|---|---|---|---|
Goodwill | $ 2,213,770 | [1] | $ 1,686,239 | [1] | $ 1,486,104 | |||
Deferred income tax liabilities | [1] | 214,597 | 186,784 | |||||
Accumulated deficit | [1] | (141,953) | (54,120) | |||||
Previously Reported [Member] | ||||||||
Goodwill | 2,230,100 | 1,702,569 | ||||||
Deferred income tax liabilities | 430,383 | 394,334 | ||||||
Accumulated deficit | (341,409) | (245,340) | ||||||
Adjustments [Member] | ||||||||
Goodwill | (16,330) | (16,330) | ||||||
Deferred income tax liabilities | (215,786) | (207,550) | ||||||
Accumulated deficit | $ 199,456 | $ 191,220 | ||||||
|
Nature Of Business And Organization (Summary Of Effects Of Restatement Adjustments On Consolidated Financial Statements - Statements Of Operations) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||
Income tax provision (benefit) | [1] | $ (82,579) | $ (232,562) | $ (37,163) | |||
Net income (loss) | [1] | (87,833) | 114,843 | (73,980) | |||
Change Healthcare Holdings, Inc. [Member] | |||||||
Income tax provision (benefit) | (102,176) | (88,467) | [1] | (51,237) | |||
Net income (loss) | (87,833) | 114,843 | [1] | (73,980) | |||
Previously Reported [Member] | |||||||
Income tax provision (benefit) | (74,343) | (41,865) | (36,685) | ||||
Net income (loss) | (96,069) | (75,854) | (74,458) | ||||
Adjustments [Member] | |||||||
Income tax provision (benefit) | (8,236) | (190,697) | (478) | ||||
Net income (loss) | $ 8,236 | $ 190,697 | $ 478 | ||||
|
Nature Of Business And Organization (Summary Of Effects Of Restatement Adjustments On Consolidated Financial Statements - Statements Of Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||
Net income (loss) | [1] | $ (87,833) | $ 114,843 | $ (73,980) | |||
Total comprehensive income (loss) | [1] | (88,534) | 114,231 | (71,534) | |||
Change Healthcare Holdings, Inc. [Member] | |||||||
Net income (loss) | (87,833) | 114,843 | [1] | (73,980) | |||
Total comprehensive income (loss) | (88,534) | 114,231 | [1] | (71,534) | |||
Previously Reported [Member] | |||||||
Net income (loss) | (96,069) | (75,854) | (74,458) | ||||
Total comprehensive income (loss) | (96,770) | (76,466) | (72,012) | ||||
Adjustments [Member] | |||||||
Net income (loss) | 8,236 | 190,697 | 478 | ||||
Total comprehensive income (loss) | $ 8,236 | $ 190,697 | $ 478 | ||||
|
Nature Of Business And Organization (Summary Of Effects Of Restatement Adjustments On Consolidated Financial Statements - Cash Flows) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||
Net income (loss) | [1] | $ (87,833) | $ 114,843 | $ (73,980) | |||
Deferred income tax expense (benefit) | [1] | (85,938) | (234,089) | (40,033) | |||
Change Healthcare Holdings, Inc. [Member] | |||||||
Net income (loss) | (87,833) | 114,843 | [1] | (73,980) | |||
Deferred income tax expense (benefit) | (24,507) | (88,066) | (49,673) | ||||
Previously Reported [Member] | |||||||
Net income (loss) | (96,069) | (75,854) | (74,458) | ||||
Deferred income tax expense (benefit) | (77,702) | (43,392) | (39,555) | ||||
Adjustments [Member] | |||||||
Net income (loss) | 8,236 | 190,697 | 478 | ||||
Deferred income tax expense (benefit) | $ (8,236) | $ (190,697) | $ (478) | ||||
|
Summary Of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Customer postage | $ 352,895 | [1] | $ 343,464 | [1] | $ 311,854 | |||
Percentage of cash savings | 85.00% | |||||||
Other assets, net | [1] | $ 8,500 | 9,183 | |||||
Long-term debt, excluding current portion | [1] | 2,741,178 | 2,135,468 | |||||
Deferred income tax liabilities | [1] | 214,597 | 186,784 | |||||
Adjustments [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Deferred income tax liabilities | (215,786) | (207,550) | ||||||
Adjustments [Member] | Accounting Standards Update 2015-03 [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Other assets, net | (11,128) | |||||||
Long-term debt, excluding current portion | (11,128) | |||||||
Adjustments [Member] | Accounting Standards Update 2015-17 [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Deferred income tax assets | (18,893) | |||||||
Deferred income tax liabilities | (18,893) | |||||||
Change Healthcare Holdings, Inc. [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Other assets, net | 268,137 | 166,736 | [1] | |||||
Long-term debt, excluding current portion | $ 1,015,243 | $ 769,236 | [1] | |||||
|
Summary Of Significant Accounting Policies (Useful Lives Of Newly Acquired Assets) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Internally Developed Software [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment, in years | 3 years |
Minimum [Member] | Computer Equipment [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment, in years | 3 years |
Minimum [Member] | Production Equipment [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment, in years | 5 years |
Minimum [Member] | Office Equipment, Furniture And Fixtures [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment, in years | 3 years |
Minimum [Member] | Technology [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment, in years | 6 years |
Maximum [Member] | Computer Equipment [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment, in years | 5 years |
Maximum [Member] | Production Equipment [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment, in years | 7 years |
Maximum [Member] | Office Equipment, Furniture And Fixtures [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment, in years | 7 years |
Maximum [Member] | Technology [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment, in years | 9 years |
Summary Of Significant Accounting Policies (Estimated Useful Lives Of Intangible Assets) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Data sublicense agreement [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of the intangible assets, in years | 6 years |
Minimum [Member] | Customer relationships [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of the intangible assets, in years | 5 years |
Minimum [Member] | Tradenames [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of the intangible assets, in years | 3 years |
Minimum [Member] | Non-compete agreements [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of the intangible assets, in years | 2 years |
Minimum [Member] | Premise-Based Software [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of the intangible assets, in years | 1 year |
Maximum [Member] | Customer relationships [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of the intangible assets, in years | 20 years |
Maximum [Member] | Tradenames [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of the intangible assets, in years | 20 years |
Maximum [Member] | Non-compete agreements [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of the intangible assets, in years | 5 years |
Maximum [Member] | Premise-Based Software [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful lives of the intangible assets, in years | 3 years |
Business Combinations (Narrative) (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Altegra Health [Member] | |
Business Acquisition [Line Items] | |
Pre-acquisition contingencies, liabilities | $ 5,658 |
Business Combinations (Summary Of Information Related To Acquisitions) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||
Allocation of the Consideration Transferred: | |||||||
Goodwill | $ 2,213,770 | [1] | $ 1,686,239 | [1] | $ 1,486,104 | ||
Altegra Health [Member] | |||||||
Total Consideration Fair Value at Acquisition Date: | |||||||
Cash paid at closing | 735,669 | ||||||
Other | (4,000) | ||||||
Total consideration transferred | 731,669 | ||||||
Allocation of the Consideration Transferred: | |||||||
Cash | 17,176 | ||||||
Accounts receivable | 52,977 | ||||||
Prepaid expenses and other current assets | 7,691 | ||||||
Property and equipment | 40,521 | ||||||
Goodwill | 532,276 | ||||||
Accounts payable | (836) | ||||||
Accrued sales taxes | (5,380) | ||||||
Other accrued expenses | (51,585) | ||||||
Deferred revenues | (5,100) | ||||||
Deferred income tax liabilities | (114,495) | ||||||
Long-term debt | (154,469) | ||||||
Total consideration transferred | 731,669 | ||||||
Acquisition costs in sales, marketing, general and administrative expense: | |||||||
Acquisition costs in sales, marketing, general and administrative expense | 4,685 | ||||||
Altegra Health [Member] | Tradenames [Member] | |||||||
Allocation of the Consideration Transferred: | |||||||
Identifiable intangible assets | 17,930 | ||||||
Altegra Health [Member] | Non-compete agreements [Member] | |||||||
Allocation of the Consideration Transferred: | |||||||
Identifiable intangible assets | 43,040 | ||||||
Altegra Health [Member] | Customer relationships [Member] | |||||||
Allocation of the Consideration Transferred: | |||||||
Identifiable intangible assets | 351,290 | ||||||
Altegra Health [Member] | Other [Member] | |||||||
Allocation of the Consideration Transferred: | |||||||
Identifiable intangible assets | 633 | ||||||
Adminisource [Member] | |||||||
Total Consideration Fair Value at Acquisition Date: | |||||||
Cash paid at closing | 34,825 | ||||||
Other | (925) | ||||||
Total consideration transferred | 33,900 | ||||||
Allocation of the Consideration Transferred: | |||||||
Accounts receivable | 6,474 | ||||||
Prepaid expenses and other current assets | 466 | ||||||
Deferred income tax assets | 3,797 | ||||||
Property and equipment | 874 | ||||||
Goodwill | 3,223 | ||||||
Accounts payable | (279) | ||||||
Other accrued expenses | (1,993) | ||||||
Total consideration transferred | 33,900 | ||||||
Acquisition costs in sales, marketing, general and administrative expense: | |||||||
Acquisition costs in sales, marketing, general and administrative expense | 553 | ||||||
Adminisource [Member] | Tradenames [Member] | |||||||
Allocation of the Consideration Transferred: | |||||||
Identifiable intangible assets | 108 | ||||||
Adminisource [Member] | Customer relationships [Member] | |||||||
Allocation of the Consideration Transferred: | |||||||
Identifiable intangible assets | 21,230 | ||||||
Engagement Solutions [Member] | |||||||
Total Consideration Fair Value at Acquisition Date: | |||||||
Cash paid at closing | 138,329 | ||||||
Contingent consideration | 4,730 | ||||||
Parent options fair value | 650 | ||||||
Other | 80 | ||||||
Total consideration transferred | 143,789 | ||||||
Allocation of the Consideration Transferred: | |||||||
Cash | 8,053 | ||||||
Accounts receivable | 335 | ||||||
Prepaid expenses and other current assets | 397 | ||||||
Deferred income tax assets | 9,170 | ||||||
Property and equipment | 7,953 | ||||||
Goodwill | 109,994 | ||||||
Accounts payable | (174) | ||||||
Other accrued expenses | (2,203) | ||||||
Deferred revenues | (306) | ||||||
Long-term debt | (2,000) | ||||||
Total consideration transferred | 143,789 | ||||||
Acquisition costs in sales, marketing, general and administrative expense: | |||||||
Acquisition costs in sales, marketing, general and administrative expense | 48 | 732 | |||||
Engagement Solutions [Member] | Tradenames [Member] | |||||||
Allocation of the Consideration Transferred: | |||||||
Identifiable intangible assets | 5,300 | ||||||
Engagement Solutions [Member] | Non-compete agreements [Member] | |||||||
Allocation of the Consideration Transferred: | |||||||
Identifiable intangible assets | 2,840 | ||||||
Engagement Solutions [Member] | Customer relationships [Member] | |||||||
Allocation of the Consideration Transferred: | |||||||
Identifiable intangible assets | 4,430 | ||||||
Capario [Member] | |||||||
Total Consideration Fair Value at Acquisition Date: | |||||||
Cash paid at closing | 89,423 | ||||||
Other | (219) | ||||||
Total consideration transferred | 89,204 | ||||||
Allocation of the Consideration Transferred: | |||||||
Cash | 2,292 | ||||||
Accounts receivable | 4,839 | ||||||
Prepaid expenses and other current assets | 1,113 | ||||||
Property and equipment | 9,580 | ||||||
Goodwill | 76,279 | ||||||
Accounts payable | (2,270) | ||||||
Other accrued expenses | (8,818) | ||||||
Deferred revenues | (2) | ||||||
Current maturities of long-term debt | (2,600) | ||||||
Deferred income tax liabilities | (14,367) | ||||||
Long-term debt | (18,785) | ||||||
Other long-term liabilities | (207) | ||||||
Total consideration transferred | 89,204 | ||||||
Acquisition costs in sales, marketing, general and administrative expense: | |||||||
Acquisition costs in sales, marketing, general and administrative expense | $ 975 | ||||||
Capario [Member] | Tradenames [Member] | |||||||
Allocation of the Consideration Transferred: | |||||||
Identifiable intangible assets | 900 | ||||||
Capario [Member] | Non-compete agreements [Member] | |||||||
Allocation of the Consideration Transferred: | |||||||
Identifiable intangible assets | 2,740 | ||||||
Capario [Member] | Customer relationships [Member] | |||||||
Allocation of the Consideration Transferred: | |||||||
Identifiable intangible assets | $ 38,510 | ||||||
|
Business Combinations (Summary Of Other And Contingent Consideration Information Related To Acquisitions) (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Altegra Health [Member] | |
Other Information: | |
Gross contractual accounts receivable | $ 54,608 |
Amount not expected to be collected | 1,631 |
Adminisource [Member] | |
Other Information: | |
Gross contractual accounts receivable | 7,521 |
Amount not expected to be collected | 1,047 |
Engagement Solutions [Member] | |
Other Information: | |
Gross contractual accounts receivable | 335 |
Contingent consideration range, Min | 0 |
Contingent consideration range, Max | $ 50,000 |
Basis of measurement | Revenue performance |
Type of measurement | Level 3 |
Increase (decrease) to net loss | $ (4,730) |
Engagement Solutions [Member] | Minimum [Member] | |
Other Information: | |
Measurement period | Jan. 01, 2015 |
Range of annual revenue performance | $ 5,516 |
Expected payment date, year | 2016 |
Discount rate | 10.50% |
Engagement Solutions [Member] | Maximum [Member] | |
Other Information: | |
Measurement period | Dec. 31, 2017 |
Range of annual revenue performance | $ 51,376 |
Expected payment date, year | -2018 |
Discount rate | 11.30% |
Capario [Member] | |
Other Information: | |
Gross contractual accounts receivable | $ 5,112 |
Amount not expected to be collected | $ 273 |
Property And Equipment (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Property And Equipment [Abstract] | |||
Depreciation expense | $ 90,294 | $ 88,068 | $ 80,538 |
Property And Equipment (Schedule Of Property And Equipment) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
||
---|---|---|---|---|
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | $ 560,387 | $ 487,811 | ||
Less accumulated depreciation | (316,242) | (243,658) | ||
Property and equipment, net | [1] | 244,145 | 244,153 | |
Computer Equipment [Member] | ||||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | 72,628 | 71,700 | ||
Production Equipment [Member] | ||||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | 25,484 | 24,266 | ||
Office Equipment, Furniture And Fixtures [Member] | ||||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | 12,766 | 12,019 | ||
Software [Member] | ||||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | 177,833 | 147,211 | ||
Technology [Member] | ||||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | 192,157 | 171,433 | ||
Leasehold Improvements [Member] | ||||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | 36,745 | 36,105 | ||
Construction In Progress [Member] | ||||
Property Plant And Equipment [Line Items] | ||||
Property and equipment, gross | $ 42,774 | $ 25,077 | ||
|
Goodwill And Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Goodwill And Intangible Assets [Abstract] | |||
Amortization expense of intangible assets | $ 252,009 | $ 101,150 | $ 103,301 |
Goodwill And Intangible Assets (Schedule Of Goodwill Activity) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
||||
Goodwill and Intangible Assets [Line Items] | |||||
Balance | $ 1,686,239 | [1] | $ 1,486,104 | ||
Acquisitions | 532,276 | 200,402 | |||
Other | (4,745) | (267) | |||
Balance | [1] | 2,213,770 | 1,686,239 | ||
Payer [Member] | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Balance | 576,830 | 426,964 | |||
Acquisitions | 532,276 | 149,866 | |||
Other | (3,943) | ||||
Balance | 1,105,163 | 576,830 | |||
Provider [Member] | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Balance | 614,567 | 568,323 | |||
Acquisitions | 46,511 | ||||
Other | (267) | ||||
Balance | 614,567 | 614,567 | |||
Pharmacy [Member] | |||||
Goodwill and Intangible Assets [Line Items] | |||||
Balance | 494,842 | 490,817 | |||
Acquisitions | 4,025 | ||||
Other | (802) | ||||
Balance | $ 494,040 | $ 494,842 | |||
|
Goodwill And Intangible Assets (Intangible Assets Subject To Amortization) (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|||
Finite Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | $ 2,108,463 | |||
Accumulated Amortization | (400,600) | |||
Intangible assets, net | [1] | $ 1,707,863 | $ 1,539,394 | |
Customer relationships [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Weighted Average Remaining Life | 14 years 7 months 6 days | |||
Gross Carrying Amount | $ 1,979,182 | |||
Accumulated Amortization | (350,846) | |||
Intangible assets, net | $ 1,628,336 | |||
Tradenames [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Weighted Average Remaining Life | 5 years 2 months 12 days | |||
Gross Carrying Amount | $ 24,775 | |||
Accumulated Amortization | (2,757) | |||
Intangible assets, net | $ 22,018 | |||
Non-compete agreements [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Weighted Average Remaining Life | 1 year 8 months 12 days | |||
Gross Carrying Amount | $ 61,852 | |||
Accumulated Amortization | (21,529) | |||
Intangible assets, net | $ 40,323 | |||
Data sublicense agreement [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Weighted Average Remaining Life | 1 year 9 months 18 days | |||
Gross Carrying Amount | $ 31,000 | |||
Accumulated Amortization | (21,821) | |||
Intangible assets, net | $ 9,179 | |||
Other [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Weighted Average Remaining Life | 2 years 7 months 6 days | |||
Gross Carrying Amount | $ 11,654 | |||
Accumulated Amortization | (3,647) | |||
Intangible assets, net | $ 8,007 | |||
|
Goodwill And Intangible Assets (Aggregate Future Amortization Expense For Intangible Assets) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
||
---|---|---|---|---|
Goodwill And Intangible Assets [Abstract] | ||||
2016 | $ 147,658 | |||
2017 | 134,933 | |||
2018 | 120,587 | |||
2019 | 114,614 | |||
2020 | 112,931 | |||
Thereafter | 1,077,140 | |||
Intangible assets, net | [1] | $ 1,707,863 | $ 1,539,394 | |
|
Accrued Expenses (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Accrued Expenses [Abstract] | ||
Customer deposits | $ 29,136 | $ 28,618 |
Accrued compensation | 34,235 | 31,786 |
Accrued rebates | 7,494 | 10,272 |
Accrued telecommunications | 4,257 | 5,196 |
Accrued outside services | 8,387 | 7,722 |
Accrued insurance | 4,208 | 5,338 |
Accrued income, sales and other taxes | 9,180 | 3,183 |
Accrued interest | 7,376 | 1,828 |
Interest rate swap agreement | 1,870 | 2,567 |
Accrued liabilities for purchases of property and equipment | 2,883 | 2,833 |
Current portion of contingent consideration | 4,650 | 11,548 |
Current portion of tax receivable agreement obligations to related parties | 986 | 945 |
Pass-through payments | 28,222 | 48,072 |
Other accrued liabilities | 24,285 | 15,298 |
Accrued expenses, total | $ 167,169 | $ 175,206 |
Long-Term Debt (Narrative) (Details) $ in Thousands |
1 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Aug. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
Apr. 30, 2013 |
Apr. 30, 2012
USD ($)
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2013
USD ($)
|
Dec. 31, 2010
USD ($)
|
|
Debt Instrument [Line Items] | |||||||
Loss on extinguishment of debt | $ (23,160) | ||||||
Senior Credit Facilities [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Accordion credit | $ 300 | ||||||
Net leverage ratio | 5.35 | ||||||
Proceeds from credit facility | $ 395,000 | $ 160,000 | |||||
Percentage of capital stock of foreign restricted subsidiaries | 65.00% | ||||||
Senior Credit Facilities [Member] | Federal Funds Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.50% | ||||||
Senior Credit Facilities [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.00% | ||||||
Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Repurchase price percent equal of the principal amount, plus accrued and unpaid interest | 101.00% | ||||||
Data sublicense agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Payments due related to an asset acquired | $ 12,700 | $ 65,000 | |||||
Deferred Financing [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Deferred financing obligations recorded at the present value of the scheduled payments | $ 7,500 | ||||||
Senior Secured Term Loan Facility, Effective Interest Of 4.29% [Member] | Senior Credit Facilities [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maturity date | Nov. 02, 2018 | ||||||
Senior Secured Term Loan Facility, Effective Interest Of 4.54% [Member] | Senior Credit Facilities [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maturity date | Nov. 02, 2018 | ||||||
11% Senior Notes Due December 31, 2019 [Member] | Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 11.00% | 11.00% | |||||
Maturity date | Dec. 31, 2019 | ||||||
11.25% Senior Notes Due December 31, 2020 [Member] | Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 11.25% | 11.25% | |||||
Maturity date | Dec. 31, 2020 | ||||||
6% Senior Notes Due February 15, 2021 [Member] | Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 6.00% | 6.00% | |||||
Maturity date | Feb. 15, 2021 | ||||||
Redemption period end date | Aug. 15, 2017 | ||||||
Percentage of aggregate principal amount, plus a premium and accrued and unpaid interest that can be redeemed | 100.00% | ||||||
Redemption price percentage | 100.00% | ||||||
Maximum [Member] | Senior Credit Facilities [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Net leverage ratio | 4.00 | ||||||
Maximum [Member] | 6% Senior Notes Due February 15, 2021 [Member] | Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of amount outstanding that can be redeemed | 40.00% | ||||||
Revolving Credit Facility, Swingline Loans [Member] | Senior Credit Facilities [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 30,000 | ||||||
Revolving Credit Facility, Letters Of Credit [Member] | Senior Credit Facilities [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 50,000 | ||||||
Revolving Credit Facility [Member] | Senior Credit Facilities [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maturity date | Nov. 02, 2016 | ||||||
Line of credt, amount borrowed | $ 6,745 | ||||||
Commitment fee percentage | 0.50% | ||||||
Revolving Credit Facility [Member] | Senior Credit Facilities [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
LIBOR floor rate | 0.00% | ||||||
Term Loan Facility [Member] | Senior Credit Facilities [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maturity date | Nov. 02, 2018 | ||||||
Proceeds from issuance of debt | $ 80,000 | ||||||
Net cash proceeds of incurrence of debt, percentage | 100.00% | ||||||
Percentage of annual excess cash flow | 50.00% | ||||||
Percentage of annual excess cash flow based on first lien net leverage ratio | 25.00% | ||||||
Reduced percentage of annual excess cash flow based on first lien net leverage ratio | 0.00% | ||||||
Net cash proceeds of asset sales and casualty and condemnation events | 100.00% | ||||||
Percentage of premium on aggregate principal amount of Incremental Term Loan | 0.25% | ||||||
Term Loan Facility [Member] | Senior Credit Facilities [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.50% | 1.25% | |||||
LIBOR floor rate | 1.25% | ||||||
Term Loan Facility [Member] | Senior Credit Facilities [Member] | Base Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.25% |
Long-Term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 2,821,729,000 | ||||
Other | 7,427,000 | $ 12,129,000 | |||
Less current portion | [1] | (32,775,000) | (27,308,000) | ||
Long-term debt | [1] | 2,741,178,000 | 2,135,468,000 | ||
Data sublicense agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | 10,810,000 | 17,237,000 | |||
Senior Secured Term Loan Facility, Effective Interest Of 4.29% [Member] | Senior Credit Facilities [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | 1,621,981,000 | 1,245,376,000 | |||
Long-term debt, face amount | $ 1,696,000,000 | 1,696,000,000 | |||
Maturity date | Nov. 02, 2018 | ||||
Long-term debt, unamortized discount | $ 23,511,000 | $ 20,016,000 | |||
Long-term debt, effective interest rate | 4.29% | 4.29% | |||
Senior Secured Term Loan Facility, Effective Interest Of 4.54% [Member] | Senior Credit Facilities [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 154,666,000 | $ 155,162,000 | |||
Long-term debt, face amount | $ 160,000,000 | 160,000,000 | |||
Maturity date | Nov. 02, 2018 | ||||
Long-term debt, unamortized discount | $ 3,334,000 | $ 4,438,000 | |||
Long-term debt, effective interest rate | 4.54% | 4.54% | |||
Senior Secured Revolving Credit Facility, Expiring On November 2, 2016 [Member] | Senior Credit Facilities [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, face amount | $ 125,000,000 | ||||
Maturity date | Nov. 02, 2016 | ||||
11% Senior Notes Due December 31, 2019 [Member] | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 368,701,000 | $ 367,523,000 | |||
Long-term debt, face amount | $ 375,000,000 | $ 375,000,000 | |||
Long-term debt, stated interest rate | 11.00% | 11.00% | |||
Maturity date | Dec. 31, 2019 | ||||
Long-term debt, unamortized discount | $ 6,299,000 | $ 7,477,000 | |||
Long-term debt, effective interest rate | 11.53% | 11.53% | |||
11.25% Senior Notes Due December 31, 2020 [Member] | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 366,529,000 | $ 365,349,000 | |||
Long-term debt, face amount | $ 375,000,000 | $ 375,000,000 | |||
Long-term debt, stated interest rate | 11.25% | 11.25% | |||
Maturity date | Dec. 31, 2020 | ||||
Long-term debt, unamortized discount | $ 8,471,000 | $ 9,651,000 | |||
Long-term debt, effective interest rate | 11.85% | 11.85% | |||
6% Senior Notes Due February 15, 2021 [Member] | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 243,839,000 | ||||
Long-term debt, face amount | $ 250,000,000 | $ 250,000,000 | |||
Long-term debt, stated interest rate | 6.00% | 6.00% | |||
Maturity date | Feb. 15, 2021 | ||||
Long-term debt, unamortized discount | $ 6,161,000 | $ 0 | |||
Long-term debt, effective interest rate | 6.57% | 6.57% | |||
|
Long-Term Debt (Aggregate Amounts of Future Maturities under Long-Term Arrangements) (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Long-Term Debt [Abstract] | |
2016 | $ 32,775 |
2017 | 22,311 |
2018 | 1,766,643 |
2019 | 375,000 |
2020 | 375,000 |
Thereafter | 250,000 |
Long-term Debt, Total | $ 2,821,729 |
Interest Rate Swap (Narrative) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Disclosure Interest Rate Swap Narrative [Abstract] | |
Interest rate derivatives designated as cash flow hedges, notional amount | $ 640,000,000 |
Estimated reclassification as increase to interest expense | 2,562,000 |
Termination value of derivatives | $ 3,117,000 |
Interest Rate Swap (Fair Value Of Derivative Instrument) (Details) - Designated as Hedging Instrument [Member] - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Derivatives designated as hedging instruments: | ||
Fair Values of Derivative Instruments Asset (Liability) Derivatives | $ (2,426) | $ (2,345) |
Other assets [Member] | Interest Rate Swap And Cap Agreements [Member] | ||
Derivatives designated as hedging instruments: | ||
Fair Values of Derivative Instruments Asset Derivatives | 222 | |
Accrued expenses [Member] | Interest Rate Swap And Cap Agreements [Member] | ||
Derivatives designated as hedging instruments: | ||
Fair Values of Derivative Instruments (Liability) Derivatives | (1,870) | $ (2,567) |
Other long-term liabilities [Member] | Interest Rate Swap And Cap Agreements [Member] | ||
Derivatives designated as hedging instruments: | ||
Fair Values of Derivative Instruments (Liability) Derivatives | $ (556) |
Interest Rate Swap (Effect Of Derivative Instrument On The Accompanying Consolidated Statements Of Operations) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Derivatives in Cash Flow Hedging Relationships | |||
Gain/ (loss) related to effective portion of derivative recognized in other comprehensive loss | $ (2,668) | $ (3,255) | $ (1,559) |
Gain/ (loss) related to effective portion of derivative reclassified from accumulated other comprehensive loss to interest expense | $ (2,587) | $ (2,587) | $ (2,586) |
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands |
1 Months Ended | |
---|---|---|
Apr. 30, 2015 |
Jan. 31, 2015 |
|
Goold [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Settlement of contingent consideration | $ 8,057 | |
Vieosoft [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Payment to terminate all future obligations related to stock purchase agreement | $ 4,650 |
Fair Value Measurements (Fair Value Of Financial Instruments Measured On A Recurring Basis) (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Interest rate swaps | $ (2,426) |
Contingent consideration obligations | (4,650) |
Total | (7,076) |
Significant Other Observable Inputs (Level 1) [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Interest rate swaps | |
Contingent consideration obligations | |
Total | |
Significant Other Observable Inputs (Level 2) [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Interest rate swaps | (2,426) |
Contingent consideration obligations | |
Total | (2,426) |
Significant Unobservable Inputs (Level 3) [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Interest rate swaps | |
Contingent consideration obligations | (4,650) |
Total | $ (4,650) |
Fair Value Measurements (Reconciliation Of The Fair Value Of The Liabilities That Use Significant Unobservable Inputs (Level 3)) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||||
Total changes included in contingent consideration | $ 4,825 | [1] | $ (1,307) | [1] | $ 69 | ||
Significant Unobservable Inputs (Level 3) [Member] | |||||||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||||
Balance at beginning of period | (17,486) | (5,484) | (296) | ||||
Adjustment of provisional amounts | (50) | ||||||
Issuances of contingent consideration | (10,695) | (5,553) | |||||
Settlement of contingent consideration | 8,061 | 296 | |||||
Total changes included in contingent consideration | 4,825 | (1,307) | 69 | ||||
Balance at end of period | $ (4,650) | $ (17,486) | $ (5,484) | ||||
|
Fair Value Measurements (Quantitative Information About Level 3 Fair Value Measurements) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||||||
Impairment of long-lived assets to be held and used | $ 8,552 | [1] | $ 83,169 | [1] | $ 10,619 | ||
Significant Unobservable Inputs (Level 3) [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||||||
Fair value of long-lived assets to be held and used, Relevant asset group | 786 | 13,066 | |||||
Impairment of long-lived assets to be held and used | $ 4,995 | $ 73,220 | |||||
Significant Unobservable Inputs (Level 3) [Member] | DCF [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||||||
Probability of contract extension | 80.00% | ||||||
Remaining life of asset group | 7 years | ||||||
Discount rate | 14.90% | ||||||
Risk free interest rate | 1.60% | ||||||
Significant Unobservable Inputs (Level 3) [Member] | Minimum [Member] | DCF [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||||||
Probability of new contract execution | 20.00% | ||||||
Expected annual revenue range | $ 101 | $ 3,080 | |||||
Significant Unobservable Inputs (Level 3) [Member] | Maximum [Member] | DCF [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||||||
Probability of new contract execution | 90.00% | ||||||
Expected annual revenue range | 5,443 | $ 3,590 | |||||
Significant Unobservable Inputs (Level 3) [Member] | Customer relationships [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||||||
Impairment of long-lived assets to be held and used | 72,290 | ||||||
Significant Unobservable Inputs (Level 3) [Member] | Non-compete agreements [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||||||
Impairment of long-lived assets to be held and used | 672 | ||||||
Significant Unobservable Inputs (Level 3) [Member] | Other [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||||||
Impairment of long-lived assets to be held and used | 1,464 | ||||||
Significant Unobservable Inputs (Level 3) [Member] | Property and Equipment [Member] | |||||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||||||
Impairment of long-lived assets to be held and used | 2,859 | 930 | |||||
Long-lived assets to be disposed of | $ 3,557 | $ 9,949 | |||||
|
Fair Value Measurements (Carrying Amount And The Estimated Fair Value Of Financial Instruments) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
[1] | Dec. 31, 2012 |
||||
---|---|---|---|---|---|---|---|---|---|
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||||
Cash and cash equivalents, Carrying Amount | $ 66,655 | [1] | $ 82,306 | [1] | $ 76,538 | $ 31,763 | |||
Accounts receivable, Carrying Amount | [1] | 280,858 | $ 233,791 | ||||||
Cash and cash equivalents, Fair Value | 66,655 | ||||||||
Accounts receivable, Fair Value | 280,858 | ||||||||
Significant Other Observable Inputs (Level 1) [Member] | |||||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||||
Senior Credit Facilities, Carrying Amount (Level 1) | 1,776,647 | ||||||||
Senior Credit Facilities, Fair Value (Level 1) | 1,774,860 | ||||||||
Significant Other Observable Inputs (Level 2) [Member] | |||||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||||
Senior Notes, Carrying Amount (Level 2) | 979,069 | ||||||||
Senior Notes, Fair Value (Level 2) | $ 1,026,250 | ||||||||
|
Commitments (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Commitments [Abstract] | |||
Total rent expense for operating leases | $ 14,806 | $ 12,991 | $ 12,625 |
Commitments (Schedule Of Future Minimum Lease Commitments Under Non-Cancelable Lease Agreements) (Details) $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Commitments [Abstract] | |
2016 | $ 14,748 |
2017 | 12,947 |
2018 | 11,466 |
2019 | 6,646 |
2020 | 5,407 |
Thereafter | 19,019 |
Total minimum lease payments | $ 70,233 |
Legal Proceedings (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Legal Proceedings [Abstract] | ||
Settlement amount | $ 8,000 | |
Recognized loss from an underpayment of fees to a vendor | $ 3,000 | $ 5,000 |
Incentive Compensation Plans (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock shares expected to be repurchased | 205 | ||||||
Equity compensation | $ 9,285 | [1] | $ 7,334 | [1] | $ 7,021 | ||
Expense related to equity compensation arrangements | 9,285 | [1] | 7,334 | [1] | 7,021 | ||
Tax benefit from share based compensation | 550 | 733 | 59 | ||||
Maximum amount of cash payments that could be payable under Long Term Cash Incentive Plan in the event of change in control | 7,011 | ||||||
Estimated maximum amount of cash payments that could be payable under Long Term Cash Incentive Plan in the event of change in control that has been earned by perticipants | $ 3,517 | ||||||
Tier I Time Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Yearly vesting percentage of awards | 20.00% | ||||||
Unrecognized compensation expense | $ 29,960 | ||||||
Weighted average period | 2 years 2 months 27 days | ||||||
Total incremental compensation cost recognized | $ 167 | 970 | |||||
Tier II Time Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Yearly vesting percentage of awards | 20.00% | ||||||
Unrecognized compensation expense | $ 1,250 | ||||||
Weighted average period | 1 year 10 months 13 days | ||||||
Performance Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity compensation | $ 0 | ||||||
Unrecognized compensation expense | 28,718 | ||||||
Expense related to equity compensation arrangements | 0 | ||||||
Restricted Stock Units (RSUs) [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Yearly vesting percentage of awards | 20.00% | ||||||
Unrecognized compensation expense | $ 998 | ||||||
Weighted average period | 1 year 11 months 9 days | ||||||
Granted in period | 1,500 | ||||||
Grant date fair value per unit | $ 1,020 | ||||||
Vested | 300 | ||||||
Total fair value of vested units | $ 440 | ||||||
Parent Equity Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares reserved for future issuance | 180,950 | ||||||
Change Healthcare Holdings, Inc. [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity compensation | $ 315 | $ 335 | 240 | ||||
Expense related to equity compensation arrangements | $ 315 | $ 335 | $ 240 | ||||
Minimum [Member] | Performance Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of liquidity event threshhold | 25.00% | ||||||
|
Incentive Compensation Plans (Schedule Of Share Based Compensation, Stock Options Activity) (Details) $ / shares in Units, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015
USD ($)
$ / shares
shares
|
Dec. 31, 2014
USD ($)
$ / shares
shares
|
|
Black Scholes Option Pricing Model [Member] | Tier I Time Awards [Member] | ||
Awards: | ||
Outstanding Options, beginning balance | shares | 61,370.0 | |
Granted Options | shares | 18,182.5 | |
Exercised Options | shares | (1,586.2) | |
Forfeited Options | shares | (3,850.8) | |
Outstanding Options, ending balance | shares | 74,115.5 | 61,370.0 |
Outstanding and Exercisable Options | shares | 29,295.2 | |
Weighted Average Exercise Price: | ||
Outstanding Options, Weighted Average Exercise Price, beginning balance | $ / shares | $ 1,074 | |
Granted Options, Weighted Average Exercise Price | $ / shares | 1,682 | |
Exercised Options, Weighted Average Exercise Price | $ / shares | 1,003 | |
Forfeited Options, Weighted Average Exercise Price | $ / shares | 1,117 | |
Outstanding Options, Weighted Average Exercise Price, ending balance | $ / shares | $ 1,218 | $ 1,074 |
Outstanding and Exercisable Options, Weighted Average Exercise Price | $ / shares | 1,030 | |
Weighted Average Remaining Contractual Term: | ||
Weighted average remaining contractual term, Outstanding | 7 years 10 months 24 days | 8 years 4 months 24 days |
Weighted average remaining contractual term, Exercisable | 7 years | |
Aggregate Intrinsic Value: | ||
Aggregate Intrinsic Value, Beginning Balance | $ | $ 24,005 | |
Aggregate Intrinsic Value, Exercised | $ | 1,035 | |
Aggregate Intrinsic Value, Ending Balance | $ | 40,942 | $ 24,005 |
Aggregate Intrinsic Value, Outstanding and exercisable, Ending Balance | $ | $ 21,685 | |
Black Scholes Option Pricing Model [Member] | Rollover Awards [Member] | ||
Awards: | ||
Outstanding Options, beginning balance | shares | 2,582.0 | |
Exercised Options | shares | (240.0) | |
Outstanding Options, ending balance | shares | 2,342.0 | 2,582.0 |
Outstanding and Exercisable Options | shares | 2,342.0 | |
Weighted Average Exercise Price: | ||
Outstanding Options, Weighted Average Exercise Price, beginning balance | $ / shares | $ 220 | |
Exercised Options, Weighted Average Exercise Price | $ / shares | 250 | |
Outstanding Options, Weighted Average Exercise Price, ending balance | $ / shares | $ 217 | $ 220 |
Outstanding and Exercisable Options, Weighted Average Exercise Price | $ / shares | 217 | |
Weighted Average Remaining Contractual Term: | ||
Weighted average remaining contractual term, Outstanding | 6 years 6 months | 7 years 4 months 24 days |
Weighted average remaining contractual term, Exercisable | 6 years 6 months | |
Aggregate Intrinsic Value: | ||
Aggregate Intrinsic Value, Beginning Balance | $ | $ 3,215 | |
Aggregate Intrinsic Value, Exercised | $ | 292 | |
Aggregate Intrinsic Value, Ending Balance | $ | 3,637 | $ 3,215 |
Aggregate Intrinsic Value, Outstanding and exercisable, Ending Balance | $ | $ 3,637 | |
Monte Carlo Simulation Pricing Model [Member] | Tier II Time Awards [Member] | ||
Awards: | ||
Outstanding Options, beginning balance | shares | 14,250.0 | |
Outstanding Options, ending balance | shares | 14,250.0 | 14,250.0 |
Outstanding and Exercisable Options | shares | 7,990.0 | |
Weighted Average Exercise Price: | ||
Outstanding Options, Weighted Average Exercise Price, beginning balance | $ / shares | $ 2,500 | |
Outstanding Options, Weighted Average Exercise Price, ending balance | $ / shares | $ 2,500 | $ 2,500 |
Outstanding and Exercisable Options, Weighted Average Exercise Price | $ / shares | 2,500 | |
Weighted Average Remaining Contractual Term: | ||
Weighted average remaining contractual term, Outstanding | 7 years 2 months 12 days | 8 years 2 months 12 days |
Weighted average remaining contractual term, Exercisable | 6 years 10 months 24 days | |
Monte Carlo Simulation Pricing Model [Member] | Performance Awards [Member] | ||
Awards: | ||
Outstanding Options, beginning balance | shares | 59,572.5 | |
Granted Options | shares | 18,182.5 | |
Forfeited Options | shares | (10,182.5) | |
Outstanding Options, ending balance | shares | 67,572.5 | 59,572.5 |
Weighted Average Exercise Price: | ||
Outstanding Options, Weighted Average Exercise Price, beginning balance | $ / shares | $ 1,074 | |
Granted Options, Weighted Average Exercise Price | $ / shares | 1,681 | |
Forfeited Options, Weighted Average Exercise Price | $ / shares | 1,084 | |
Outstanding Options, Weighted Average Exercise Price, ending balance | $ / shares | $ 1,237 | $ 1,074 |
Weighted Average Remaining Contractual Term: | ||
Weighted average remaining contractual term, Outstanding | 8 years | 8 years 4 months 24 days |
Weighted average remaining contractual term, Exercisable | 0 years |
Incentive Compensation Plans (Schedule Of Share-based Compensation, Restricted Stock Units Award Activity) (Details) - Restricted Stock Units (RSUs) [Member] - shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unvested at beginning of period | 1,500 | |
Granted | 1,500 | |
Canceled | ||
Vested | 300 | |
Unvested at end of period | 1,200 | 1,500 |
Incentive Compensation Plans (Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques) (Details) - Black Sholes Option Pricing And Monte Carlo Simulation Pricing Model [Member] - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Tier I Time Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair value | $ 864.02 | $ 721.62 | $ 606.70 |
Expected volatility | 51.24% | 59.22% | 62.05% |
Risk-free interest rate | 1.76% | 1.93% | 1.77% |
Expected term (years) | 6 years 5 months 27 days | 6 years 6 months | 6 years 5 months 23 days |
Tier II Time Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair value | $ 399.07 | $ 399.07 | |
Expected volatility | 55.87% | 55.87% | |
Risk-free interest rate | 2.76% | 2.76% | |
Performance Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair value | $ 465.06 | $ 409.74 | $ 371.61 |
Expected volatility | 50.70% | 54.01% | 55.87% |
Risk-free interest rate | 1.70% | 2.35% | 2.76% |
Retirement Plans (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Retirement Plans [Abstract] | |||
Expenses related to retirement plan | $ 6,322 | $ 5,174 | $ 4,942 |
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||
Income Tax Disclosure [Line Items] | |||||
Unrecognized tax benefits, that if recognized, would affect the effective income tax rate | $ 752 | ||||
Cumulative interest and penalties related to income taxes | 0 | $ 0 | $ 0 | ||
Income tax benefit | [1] | $ 82,579 | $ 232,562 | $ 37,163 | |
Effective Income Tax Rate Continuing Operations | 48.46% | 197.56% | 33.43% | ||
Federal [Member] | |||||
Income Tax Disclosure [Line Items] | |||||
Net operating loss carry forwards (tax effected) for federal income tax purposes | $ 191,406 | ||||
Federal [Member] | Minimum [Member] | |||||
Income Tax Disclosure [Line Items] | |||||
Tax Credit Carryforward, Expiration Date | Dec. 31, 2026 | ||||
Federal [Member] | Maximum [Member] | |||||
Income Tax Disclosure [Line Items] | |||||
Tax Credit Carryforward, Expiration Date | Dec. 31, 2035 | ||||
State [Member] | |||||
Income Tax Disclosure [Line Items] | |||||
Net operating loss carry forwards (tax effected) for state income tax purposes | $ 43,680 | ||||
State [Member] | Minimum [Member] | |||||
Income Tax Disclosure [Line Items] | |||||
Tax Credit Carryforward, Expiration Date | Dec. 31, 2016 | ||||
State [Member] | Maximum [Member] | |||||
Income Tax Disclosure [Line Items] | |||||
Tax Credit Carryforward, Expiration Date | Dec. 31, 2035 | ||||
|
Income Taxes (Income Tax Provision (Benefit)) (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
||||
Current: | ||||||
Federal | $ (1,063) | $ 349 | ||||
State | $ 3,359 | 2,590 | 2,521 | |||
Current income tax provision (benefit) | 3,359 | 1,527 | 2,870 | |||
Deferred: | ||||||
Federal | (61,349) | (203,812) | (41,506) | |||
State | (24,589) | (30,277) | 1,473 | |||
Deferred income tax provision (benefit) | [1] | (85,938) | (234,089) | (40,033) | ||
Total income tax provision (benefit) | [1] | $ (82,579) | $ (232,562) | $ (37,163) | ||
|
Income Taxes (Reconciliation Between Federal Statutory Rate And Effective Income Tax Rate) (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Taxes [Abstract] | |||
Statutory U.S. federal tax rate | 35.00% | 35.00% | 35.00% |
State income taxes (net of federal benefit) | 13.11% | 25.86% | (1.39%) |
Tax receivable agreements | (0.41%) | (1.89%) | (1.00%) |
Other | 0.76% | (0.33%) | 0.82% |
Change in tax status | 138.92% | ||
Effective income tax rate | 48.46% | 197.56% | 33.43% |
Income Taxes (Significant Components Of Deferred Tax Assets (Liabilities)) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Deferred tax assets and (liabilities): | ||
Depreciation and amortization | $ (522,281) | $ (444,830) |
Accounts receivable | 2,129 | 2,503 |
Fair value of interest rate swap | 1,009 | 967 |
Accruals and reserves | 14,340 | 17,756 |
Capital and net operating losses | 235,934 | 203,962 |
Debt discount and interest | 14 | 451 |
Equity compensation | 11,839 | 8,675 |
Valuation allowance | (1,670) | (15,468) |
Tax receivable agreement obligation to related parties | 40,981 | 37,211 |
Other | 3,108 | 1,989 |
Net deferred tax assets and (liabilities) | (214,597) | (186,784) |
Non-current deferred tax liabilities | (214,597) | (186,784) |
Net deferred tax assets and (liabilities) | $ (214,597) | $ (186,784) |
Income Taxes (Reconciliation Of Beginning And Ending Amount Of Unrecognized Tax Benefit) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Taxes [Abstract] | |||
Unrecognized benefit from prior years | $ 10,312 | $ 11,366 | $ 11,021 |
Decreases from prior period tax positions | (38) | (216) | |
Increases from current period tax positions | 331 | 561 | |
Decreases from settlements with taxing authorities | (1,347) | ||
Ending unrecognized benefit | $ 10,312 | $ 10,312 | $ 11,366 |
Tax Receivable Agreement Obligations To Related Parties (Narrative) (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Tax Receivable Agreement Obligations To Related Parties [Abstract] | |
Percentage of cash savings | 85.00% |
Retained ratio of tax savings | 15.00% |
Cumulative payments under tax receivable agreement | $ 355,742 |
Initial fair value of tax receivable agreement | 174,480 |
Change in estimate effect on pretax income/loss | $ 11,648 |
Tax Receivable Agreement Obligations To Related Parties (Estimated Aggregate Payments Due Under The Tax Receivable Agreements) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
||
---|---|---|---|---|
Tax Receivable Agreement Obligations To Related Parties [Abstract] | ||||
2016 | $ 986 | |||
2017 | 6,212 | |||
2018 | 57,708 | |||
2019 | 89,678 | |||
2020 | 41,895 | |||
Thereafter | 159,263 | |||
Gross expected payments | 355,742 | |||
Less: Amounts representing discount | (181,263) | |||
Total tax receivable agreement obligations due to related parties | 174,479 | |||
Less: Current portion due (included in accrued expenses) | (986) | $ (945) | ||
Tax receivable agreement obligations to related parties | [1] | $ 173,493 | $ 163,983 | |
|
Other Related Party Transactions (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Related Party Transaction [Line Items] | |||
Term of transaction and advisory fee agreement | 12 years | ||
Percentage of Consolidated EBITDA paid as advisory fee | 2.00% | ||
Percentage of aggregate transaction value paid as transaction fee | 1.00% | ||
Advisory Fee [Member] | |||
Related Party Transaction [Line Items] | |||
Related party expense | $ 6,000 | $ 6,000 | $ 6,000 |
Other [Member] | |||
Related Party Transaction [Line Items] | |||
Related party expense | 681 | ||
BMP [Member] | |||
Related Party Transaction [Line Items] | |||
Reimbursement to related party of out of pocket expenses | 700 | 400 | 200 |
BMP [Member] | Advisory Fee [Member] | |||
Related Party Transaction [Line Items] | |||
Related party expense | 4,350 | 4,350 | 4,350 |
HFLP [Member] | |||
Related Party Transaction [Line Items] | |||
Related party expense | 233 | 116 | 695 |
Recognized revenue | 5,751 | 6,028 | 2,029 |
HFLP [Member] | Advisory Fee [Member] | |||
Related Party Transaction [Line Items] | |||
Related party expense | 1,650 | 1,650 | 1,650 |
Blackstone Portfolio Companies [Member] | |||
Related Party Transaction [Line Items] | |||
Recognized revenue | 3,167 | 3,230 | $ 6,959 |
Senior Credit Facilities [Member] | GSO Advisor Holdings L L C [Member] | |||
Related Party Transaction [Line Items] | |||
Debt held by related parties | 55,247 | 68,588 | |
Debt held by related parties, current | $ 552 | $ 686 |
Segment Reporting (Details) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2015
USD ($)
segment
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|||||
Segment Reporting Information [Line Items] | |||||||
Number of operating segments | segment | 3 | ||||||
Solution revenue | $ 1,124,188 | [1] | $ 1,006,949 | [1] | $ 930,713 | ||
Postage revenue | 352,895 | [1] | 343,464 | [1] | 311,854 | ||
Total revenue | 1,477,083 | [1] | 1,350,413 | [1] | 1,242,567 | ||
Income (loss) before income tax provision (benefit) | (170,412) | [1] | (117,719) | [1] | (111,143) | ||
Interest expense | 168,252 | [1] | 146,829 | [1] | 153,169 | ||
Depreciation and amortization | 342,303 | [1] | 189,218 | [1] | 183,839 | ||
EBITDA | 340,143 | 218,328 | 225,865 | ||||
Equity compensation | 9,285 | [1] | 7,334 | [1] | 7,021 | ||
Acquisition accounting adjustments | 1,806 | 1,035 | 894 | ||||
Acquisition-related costs | 8,443 | 6,927 | 3,245 | ||||
Transaction-related costs and advisory fees | 6,703 | 6,448 | 6,948 | ||||
Strategic initiatives, duplicative and transition costs | 10,890 | 12,864 | 8,401 | ||||
Severance costs | 6,995 | 8,005 | 7,520 | ||||
Loss on extinguishment of debt and other related costs | 24,311 | ||||||
Accretion | 10,496 | [1] | 14,446 | [1] | 26,470 | ||
Impairment of long-lived assets | 8,552 | [1] | 83,169 | [1] | 10,619 | ||
Contingent consideration | (4,825) | [1] | 1,307 | [1] | (69) | ||
Other non-routine, net | 5,117 | 4,484 | 2,765 | ||||
EBITDA Adjustments | 63,462 | 146,019 | 98,125 | ||||
Adjusted EBITDA | 403,605 | 364,347 | 323,990 | ||||
Corporate And Eliminations [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Solution revenue | (26,375) | (23,275) | (25,002) | ||||
Postage revenue | 352,895 | 343,464 | 311,854 | ||||
Total revenue | 320,469 | 311,114 | 280,511 | ||||
Income (loss) before income tax provision (benefit) | (625,075) | (450,249) | (466,243) | ||||
Interest expense | 168,252 | 146,829 | 153,169 | ||||
Depreciation and amortization | 342,303 | 189,218 | 183,839 | ||||
EBITDA | (114,520) | (114,202) | (129,235) | ||||
Equity compensation | 5,792 | 5,151 | 3,536 | ||||
Acquisition accounting adjustments | (56) | (34) | |||||
Acquisition-related costs | 6,943 | 4,461 | 1,054 | ||||
Transaction-related costs and advisory fees | 6,703 | 6,448 | 6,948 | ||||
Strategic initiatives, duplicative and transition costs | 5,672 | 11,620 | 5,326 | ||||
Severance costs | 1,192 | 2,890 | 4,712 | ||||
Loss on extinguishment of debt and other related costs | 24,311 | ||||||
Accretion | 10,496 | 14,446 | 26,470 | ||||
Impairment of long-lived assets | (578) | 4,005 | 318 | ||||
Contingent consideration | 236 | ||||||
Other non-routine, net | 3,538 | (1,216) | (3,584) | ||||
EBITDA Adjustments | 39,758 | 47,985 | 69,057 | ||||
Adjusted EBITDA | (74,762) | (66,217) | (60,178) | ||||
Corporate And Eliminations [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Total revenue | (6,051) | (9,075) | (6,341) | ||||
Payer [Member] | Operating Segments [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Solution revenue | 353,526 | 249,489 | 206,974 | ||||
Total revenue | 354,716 | 250,519 | 209,147 | ||||
Income (loss) before income tax provision (benefit) | 115,721 | 84,897 | 56,203 | ||||
EBITDA | 115,721 | 84,897 | 56,203 | ||||
Equity compensation | 1,972 | 567 | 735 | ||||
Acquisition accounting adjustments | 1,165 | 305 | 517 | ||||
Acquisition-related costs | 395 | 88 | 200 | ||||
Strategic initiatives, duplicative and transition costs | 2,101 | 828 | 892 | ||||
Severance costs | 2,209 | 1,389 | 810 | ||||
Impairment of long-lived assets | 2,178 | 219 | 5,782 | ||||
Contingent consideration | (4,825) | ||||||
Other non-routine, net | 944 | 1,235 | 600 | ||||
EBITDA Adjustments | 6,139 | 4,631 | 9,536 | ||||
Adjusted EBITDA | 121,860 | 89,528 | 65,739 | ||||
Payer [Member] | Corporate And Eliminations [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Total revenue | (1,190) | (1,030) | (2,173) | ||||
Provider [Member] | Operating Segments [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Solution revenue | 375,582 | 349,061 | 331,479 | ||||
Total revenue | 375,965 | 349,413 | 331,813 | ||||
Income (loss) before income tax provision (benefit) | 194,166 | 173,586 | 158,061 | ||||
EBITDA | 194,166 | 173,586 | 158,061 | ||||
Equity compensation | 820 | 567 | 1,540 | ||||
Acquisition accounting adjustments | 5 | 6 | 116 | ||||
Acquisition-related costs | 93 | 110 | 141 | ||||
Strategic initiatives, duplicative and transition costs | 1,333 | 237 | 1,596 | ||||
Severance costs | 846 | 1,592 | 1,207 | ||||
Impairment of long-lived assets | 5,953 | 2,036 | 1,831 | ||||
Contingent consideration | 1,071 | (69) | |||||
Other non-routine, net | 521 | 334 | 277 | ||||
EBITDA Adjustments | 9,571 | 5,953 | 6,639 | ||||
Adjusted EBITDA | 203,737 | 179,539 | 164,700 | ||||
Provider [Member] | Corporate And Eliminations [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Total revenue | (383) | (352) | (334) | ||||
Pharmacy [Member] | Operating Segments [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Solution revenue | 421,455 | 431,674 | 417,262 | ||||
Total revenue | 425,933 | 439,367 | 421,096 | ||||
Income (loss) before income tax provision (benefit) | 144,776 | 74,047 | 140,836 | ||||
EBITDA | 144,776 | 74,047 | 140,836 | ||||
Equity compensation | 701 | 1,049 | 1,210 | ||||
Acquisition accounting adjustments | 636 | 780 | 295 | ||||
Acquisition-related costs | 1,012 | 2,268 | 1,850 | ||||
Strategic initiatives, duplicative and transition costs | 1,784 | 179 | 587 | ||||
Severance costs | 2,748 | 2,134 | 791 | ||||
Impairment of long-lived assets | 999 | 76,909 | 2,688 | ||||
Other non-routine, net | 114 | 4,131 | 5,472 | ||||
EBITDA Adjustments | 7,994 | 87,450 | 12,893 | ||||
Adjusted EBITDA | 152,770 | 161,497 | 153,729 | ||||
Pharmacy [Member] | Corporate And Eliminations [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Total revenue | $ (4,478) | $ (7,693) | $ (3,834) | ||||
|
Accumulated Other Comprehensive Income (Loss) (Summary Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||
Balance | $ 1,093,285 | [1] | $ 969,069 | $ 1,032,196 | |||
Change associated with foreign currency translation | (654) | [1] | (219) | [1] | (137) | ||
Balance | 1,175,145 | [1] | 1,093,285 | [1] | 969,069 | ||
Foreign Currency Translation Adjustment [Member] | |||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||
Balance | (483) | ||||||
Change associated with foreign currency translation | (654) | ||||||
Change associated with current period hedging | |||||||
Reclassification into earnings | |||||||
Balance | (1,137) | (483) | |||||
Cash Flow Hedge [Member] | |||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||
Balance | (1,472) | ||||||
Change associated with foreign currency translation | |||||||
Change associated with current period hedging | 2,540 | ||||||
Reclassification into earnings | (2,587) | ||||||
Balance | (1,519) | (1,472) | |||||
Accumulated Other Comprehensive Income (Loss) [Member] | |||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||
Balance | (1,955) | [1] | (1,343) | (3,789) | |||
Change associated with foreign currency translation | (654) | (219) | (137) | ||||
Change associated with current period hedging | 2,540 | ||||||
Reclassification into earnings | (2,587) | ||||||
Balance | (2,656) | [1] | (1,955) | [1] | $ (1,343) | ||
Change Healthcare Holdings, Inc. [Member] | |||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||
Balance | [1] | 1,093,285 | |||||
Balance | $ 1,175,145 | $ 1,093,285 | [1] | ||||
|
Supplemental Condensed Consolidating Financial Information (Condensed Consolidating Balance Sheet) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Current assets: | ||||||||||
Cash and cash equivalents | $ 66,655 | [1] | $ 82,306 | [1] | $ 76,538 | [1] | $ 31,763 | |||
Accounts receivable, net of allowance for doubtful accounts | [1] | 280,858 | 233,791 | |||||||
Prepaid expenses and other current assets | [1] | 35,413 | 29,246 | |||||||
Total current assets | [1] | 382,926 | 345,343 | |||||||
Property and equipment, net | [1] | 244,145 | 244,153 | |||||||
Goodwill | 2,213,770 | [1] | 1,686,239 | [1] | 1,486,104 | |||||
Intangible assets, net | [1] | 1,707,863 | 1,539,394 | |||||||
Other assets, net | [1] | 8,500 | 9,183 | |||||||
Total assets | [1] | 4,557,204 | 3,824,312 | |||||||
Current liabilities: | ||||||||||
Accounts payable | [1] | 27,950 | 16,399 | |||||||
Accrued expenses | [1] | 167,169 | 175,206 | |||||||
Deferred revenues | [1] | 12,943 | 10,518 | |||||||
Current portion of long-term debt | [1] | 32,775 | 27,308 | |||||||
Total current liabilities | [1] | 240,837 | 229,431 | |||||||
Long-term debt, excluding current portion | [1] | 2,741,178 | 2,135,468 | |||||||
Deferred income tax liabilities | [1] | 214,597 | 186,784 | |||||||
Tax receivable agreement obligations to related parties | [1] | 173,493 | 163,983 | |||||||
Other long-term liabilities | [1] | 11,954 | 15,361 | |||||||
Commitments and contingencies | [1] | |||||||||
Equity | 1,175,145 | [1] | 1,093,285 | [1] | 969,069 | 1,032,196 | ||||
Total liabilities and equity | [1] | 4,557,204 | 3,824,312 | |||||||
Consolidating Adjustments [Member] | ||||||||||
Current assets: | ||||||||||
Due from affiliates | (135,406) | (180,610) | [1] | |||||||
Investment in consolidated subsidiaries | (1,976,243) | (1,915,452) | [1] | |||||||
Other assets, net | (267,687) | (165,477) | [1] | |||||||
Total assets | (2,379,336) | (2,261,539) | [1] | |||||||
Current liabilities: | ||||||||||
Due to affiliates | (135,406) | (180,610) | [1] | |||||||
Deferred income tax liabilities | (267,687) | (165,477) | [1] | |||||||
Equity | (1,976,243) | (1,915,452) | [1] | |||||||
Total liabilities and equity | (2,379,336) | (2,261,539) | [1] | |||||||
Change Healthcare Holdings, Inc. [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 738 | 796 | [1] | 2,794 | 754 | |||||
Prepaid expenses and other current assets | 2,234 | 2,267 | [1] | |||||||
Total current assets | 2,972 | 3,063 | [1] | |||||||
Property and equipment, net | 3 | 7 | [1] | |||||||
Due from affiliates | 135,406 | |||||||||
Investment in consolidated subsidiaries | 1,976,243 | 1,915,452 | [1] | |||||||
Intangible assets, net | 1,000 | 133,500 | [1] | |||||||
Other assets, net | 268,137 | 166,736 | [1] | |||||||
Total assets | 2,383,761 | 2,218,758 | [1] | |||||||
Current liabilities: | ||||||||||
Accrued expenses | 10,689 | 4,935 | [1] | |||||||
Current portion of long-term debt | 8,099 | 6,709 | [1] | |||||||
Total current liabilities | 18,788 | 11,644 | [1] | |||||||
Due to affiliates | [1] | 180,610 | ||||||||
Long-term debt, excluding current portion | 1,015,243 | 769,236 | [1] | |||||||
Tax receivable agreement obligations to related parties | 173,493 | 163,983 | [1] | |||||||
Other long-term liabilities | 1,092 | |||||||||
Equity | 1,175,145 | 1,093,285 | [1] | |||||||
Total liabilities and equity | 2,383,761 | 2,218,758 | [1] | |||||||
Guarantor Subsidiaries [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 65,917 | 81,510 | [1] | $ 73,744 | $ 31,009 | |||||
Accounts receivable, net of allowance for doubtful accounts | 280,858 | 233,791 | [1] | |||||||
Prepaid expenses and other current assets | 33,179 | 26,979 | [1] | |||||||
Total current assets | 379,954 | 342,280 | [1] | |||||||
Property and equipment, net | 244,142 | 244,146 | [1] | |||||||
Due from affiliates | [1] | 180,610 | ||||||||
Goodwill | 2,213,770 | 1,686,239 | [1] | |||||||
Intangible assets, net | 1,706,863 | 1,405,894 | [1] | |||||||
Other assets, net | 8,050 | 7,924 | [1] | |||||||
Total assets | 4,552,779 | 3,867,093 | [1] | |||||||
Current liabilities: | ||||||||||
Accounts payable | 27,950 | 16,399 | [1] | |||||||
Accrued expenses | 156,480 | 170,271 | [1] | |||||||
Deferred revenues | 12,943 | 10,518 | [1] | |||||||
Current portion of long-term debt | 24,676 | 20,599 | [1] | |||||||
Total current liabilities | 222,049 | 217,787 | [1] | |||||||
Due to affiliates | 135,406 | |||||||||
Long-term debt, excluding current portion | 1,725,935 | 1,366,232 | [1] | |||||||
Deferred income tax liabilities | 482,284 | 352,261 | [1] | |||||||
Other long-term liabilities | 10,862 | 15,361 | [1] | |||||||
Equity | 1,976,243 | 1,915,452 | [1] | |||||||
Total liabilities and equity | $ 4,552,779 | $ 3,867,093 | [1] | |||||||
|
Supplemental Condensed Consolidating Financial Information (Condensed Consolidating Statement Of Operations) (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
||||||
Condensed Income Statements [Line Items] | ||||||||
Solutions revenue | $ 1,124,188 | [1] | $ 1,006,949 | [1] | $ 930,713 | |||
Postage revenue | 352,895 | [1] | 343,464 | [1] | 311,854 | |||
Total revenue | 1,477,083 | [1] | 1,350,413 | [1] | 1,242,567 | |||
Costs and expenses: | ||||||||
Cost of operations (exclusive of depreciation and amortization below) | 507,358 | [1] | 462,332 | [1] | 447,324 | |||
Development and engineering | 45,489 | [1] | 32,956 | [1] | 31,426 | |||
Sales, marketing, general and administrative | 217,716 | [1] | 198,379 | [1] | 170,051 | |||
Customer postage | 352,895 | [1] | 343,464 | [1] | 311,854 | |||
Depreciation and amortization | 342,303 | [1] | 189,218 | [1] | 183,839 | |||
Accretion | 10,496 | [1] | 14,446 | [1] | 26,470 | |||
Impairment of long-lived assets | 8,552 | [1] | 83,169 | [1] | 10,619 | |||
Operating income (loss) | (7,726) | [1] | 26,449 | [1] | 60,984 | |||
Interest expense, net | 168,252 | [1] | 146,829 | [1] | 153,169 | |||
Loss on extinguishment of debt | 23,160 | |||||||
Contingent consideration | (4,825) | [1] | 1,307 | [1] | (69) | |||
Other | (741) | [1] | (3,968) | [1] | (4,133) | |||
Income (loss) before income tax provision (benefit) | (170,412) | [1] | (117,719) | [1] | (111,143) | |||
Income tax provision (benefit) | [1] | (82,579) | (232,562) | (37,163) | ||||
Net income (loss) | [1] | (87,833) | 114,843 | (73,980) | ||||
Consolidating Adjustments [Member] | ||||||||
Costs and expenses: | ||||||||
Equity in earnings of consolidated subsidiaries | 56,575 | 160,311 | [1] | 14,159 | ||||
Income (loss) before income tax provision (benefit) | (56,575) | (160,311) | [1] | (14,159) | ||||
Net income (loss) | (56,575) | (160,311) | [1] | (14,159) | ||||
Change Healthcare Holdings, Inc. [Member] | ||||||||
Costs and expenses: | ||||||||
Cost of operations (exclusive of depreciation and amortization below) | 228 | |||||||
Sales, marketing, general and administrative | 11,447 | 17,126 | [1] | 12,321 | ||||
Depreciation and amortization | 132,509 | 9,003 | [1] | 9,004 | ||||
Accretion | 10,496 | 14,446 | [1] | 26,470 | ||||
Operating income (loss) | (154,680) | (40,575) | [1] | (47,795) | ||||
Equity in earnings of consolidated subsidiaries | (56,575) | (160,311) | [1] | (14,159) | ||||
Interest expense, net | 91,904 | 93,471 | [1] | 94,021 | ||||
Loss on extinguishment of debt | 485 | |||||||
Other | (111) | [1] | (2,925) | |||||
Income (loss) before income tax provision (benefit) | (190,009) | 26,376 | [1] | (125,217) | ||||
Income tax provision (benefit) | (102,176) | (88,467) | [1] | (51,237) | ||||
Net income (loss) | (87,833) | 114,843 | [1] | (73,980) | ||||
Guarantor Subsidiaries [Member] | ||||||||
Condensed Income Statements [Line Items] | ||||||||
Solutions revenue | 1,124,188 | 1,006,949 | [1] | 930,713 | ||||
Postage revenue | 352,895 | 343,464 | [1] | 311,854 | ||||
Total revenue | 1,477,083 | 1,350,413 | [1] | 1,242,567 | ||||
Costs and expenses: | ||||||||
Cost of operations (exclusive of depreciation and amortization below) | 507,130 | 462,332 | [1] | 447,324 | ||||
Development and engineering | 45,489 | 32,956 | [1] | 31,426 | ||||
Sales, marketing, general and administrative | 206,269 | 181,253 | [1] | 157,730 | ||||
Customer postage | 352,895 | 343,464 | [1] | 311,854 | ||||
Depreciation and amortization | 209,794 | 180,215 | [1] | 174,835 | ||||
Impairment of long-lived assets | 8,552 | 83,169 | [1] | 10,619 | ||||
Operating income (loss) | 146,954 | 67,024 | [1] | 108,779 | ||||
Interest expense, net | 76,348 | 53,358 | [1] | 59,148 | ||||
Loss on extinguishment of debt | 22,675 | |||||||
Contingent consideration | (4,825) | 1,307 | [1] | (69) | ||||
Other | (741) | (3,857) | [1] | (1,208) | ||||
Income (loss) before income tax provision (benefit) | 76,172 | 16,216 | [1] | 28,233 | ||||
Income tax provision (benefit) | 19,597 | (144,095) | [1] | 14,074 | ||||
Net income (loss) | $ 56,575 | $ 160,311 | [1] | $ 14,159 | ||||
|
Supplemental Condensed Consolidating Financial Information (Condensed Consolidating Statement Of Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
||||||
Condensed Statement of Comprehensive Income (Loss) [Line Items] | ||||||||
Net income (loss) | [1] | $ (87,833) | $ 114,843 | $ (73,980) | ||||
Other comprehensive income (loss): | ||||||||
Changes in fair value of interest rate swap, net of taxes | (47) | [1] | (393) | [1] | 2,583 | |||
Foreign currency translation adjustment | (654) | [1] | (219) | [1] | (137) | |||
Other comprehensive income (loss) | (701) | [1] | (612) | [1] | 2,446 | |||
Total comprehensive income (loss) | [1] | (88,534) | 114,231 | (71,534) | ||||
Consolidating Adjustments [Member] | ||||||||
Condensed Statement of Comprehensive Income (Loss) [Line Items] | ||||||||
Net income (loss) | (56,575) | (160,311) | [1] | (14,159) | ||||
Other comprehensive income (loss): | ||||||||
Equity in other comprehensive earnings | 654 | 219 | [1] | 137 | ||||
Other comprehensive income (loss) | 654 | 219 | [1] | 137 | ||||
Total comprehensive income (loss) | (55,921) | (160,092) | [1] | (14,022) | ||||
Change Healthcare Holdings, Inc. [Member] | ||||||||
Condensed Statement of Comprehensive Income (Loss) [Line Items] | ||||||||
Net income (loss) | (87,833) | 114,843 | [1] | (73,980) | ||||
Other comprehensive income (loss): | ||||||||
Changes in fair value of interest rate swap, net of taxes | (47) | (393) | [1] | 2,583 | ||||
Equity in other comprehensive earnings | (654) | (219) | [1] | (137) | ||||
Other comprehensive income (loss) | (701) | (612) | [1] | 2,446 | ||||
Total comprehensive income (loss) | (88,534) | 114,231 | [1] | (71,534) | ||||
Guarantor Subsidiaries [Member] | ||||||||
Condensed Statement of Comprehensive Income (Loss) [Line Items] | ||||||||
Net income (loss) | 56,575 | 160,311 | [1] | 14,159 | ||||
Other comprehensive income (loss): | ||||||||
Foreign currency translation adjustment | (654) | (219) | [1] | (137) | ||||
Other comprehensive income (loss) | (654) | (219) | [1] | (137) | ||||
Total comprehensive income (loss) | $ 55,921 | $ 160,092 | [1] | $ 14,022 | ||||
|
Supplemental Condensed Consolidating Financial Information (Condensed Consolidating Statement Of Cash Flows) (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
||||||
Operating activities | ||||||||
Net income (loss) | [1] | $ (87,833) | $ 114,843 | $ (73,980) | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 342,303 | [1] | 189,218 | [1] | 183,839 | |||
Accretion | 10,496 | [1] | 14,446 | [1] | 26,470 | |||
Equity compensation expense | 9,285 | [1] | 7,334 | [1] | 7,021 | |||
Deferred income tax expense (benefit) | [1] | (85,938) | (234,089) | (40,033) | ||||
Amortization of debt discount and issuance costs | 10,786 | [1] | 7,847 | [1] | 8,475 | |||
Contingent consideration | (4,825) | [1] | 1,307 | [1] | (69) | |||
Gain on sale of cost method investment | (114) | [1] | (2,925) | |||||
Loss on extinguishment of debt | 22,828 | |||||||
Impairment of long-lived assets | 8,552 | [1] | 83,169 | [1] | 10,619 | |||
Other | (1,820) | [1] | (2,255) | [1] | (1,962) | |||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 5,078 | [1] | (6,824) | [1] | (20,791) | |||
Prepaid expenses and other | 1,210 | [1] | 536 | [1] | 1,442 | |||
Accounts payable | 11,391 | [1] | 4,591 | [1] | 1,335 | |||
Accrued expenses, deferred revenue, and other liabilities | (50,966) | [1] | 26,650 | [1] | 29,273 | |||
Tax receivable agreement obligations to related parties | (944) | [1] | (988) | [1] | (1,142) | |||
Net cash provided by (used in) operating activities | 166,775 | [1] | 205,671 | [1] | 150,400 | |||
Investing activities | ||||||||
Purchases of property and equipment | (56,963) | [1] | (55,926) | [1] | (71,086) | |||
Payments for acquisitions, net of cash acquired | (717,669) | [1] | (252,772) | [1] | (18,291) | |||
Proceeds from sale of cost method investment | 5,820 | |||||||
Other | (5,325) | [1] | 538 | [1] | 5,820 | |||
Net cash provided by (used in) investing activities | (779,957) | [1] | (308,160) | [1] | (83,557) | |||
Financing activities | ||||||||
Proceeds from Term Loan Facility | [1] | 385,411 | 157,600 | |||||
Payments on Term Loan Facility | (16,500) | [1] | (13,279) | [1] | (12,912) | |||
Proceeds from Senior Notes | [1] | 243,453 | ||||||
Proceeds from Revolving Facility | [1] | 60,000 | 183,000 | |||||
Payments on Revolving Facility | [1] | (60,000) | (183,000) | |||||
Payment of loan costs | (2,500) | [1] | (2,096) | [1] | (2,178) | |||
Payment of debt assumed from acquisition | (154,469) | [1] | (25,262) | [1] | (218) | |||
Payment of data sublicense obligation | (6,433) | [1] | (5,300) | [1] | (4,321) | |||
Payments of deferred financing obligations | (6,987) | [1] | (5,441) | [1] | (3,243) | |||
Repurchase of Parent common stock | (5,772) | [1] | (1,221) | [1] | (613) | |||
Capital contribution from Investor Group and management | 166,881 | [1] | 3,256 | [1] | 1,999 | |||
Payment of contingent consideration | [1] | (5,553) | ||||||
Other | (582) | |||||||
Net cash provided by (used in) financing activities | 597,531 | [1] | 108,257 | [1] | (22,068) | |||
Net increase (decrease) in cash and cash equivalents | (15,651) | [1] | 5,768 | [1] | 44,775 | |||
Cash and cash equivalents at beginning of period | 82,306 | [1] | 76,538 | [1] | 31,763 | |||
Cash and cash equivalents at end of period | [1] | 66,655 | 82,306 | 76,538 | ||||
Consolidating Adjustments [Member] | ||||||||
Operating activities | ||||||||
Net income (loss) | (56,575) | (160,311) | [1] | (14,159) | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Equity in earnings of consolidated subsidiaries | 56,575 | 160,311 | [1] | 14,159 | ||||
Investing activities | ||||||||
Investment in subsidiaries, net | (4,755) | (95) | (5,821) | |||||
Net cash provided by (used in) investing activities | (4,755) | (95) | (5,821) | |||||
Financing activities | ||||||||
Distributions from (to) Change Healthcare Holdings, Inc., net | 4,755 | 95 | 5,821 | |||||
Net cash provided by (used in) financing activities | 4,755 | 95 | 5,821 | |||||
Change Healthcare Holdings, Inc. [Member] | ||||||||
Operating activities | ||||||||
Net income (loss) | (87,833) | 114,843 | [1] | (73,980) | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 132,509 | 9,003 | [1] | 9,004 | ||||
Accretion | 10,496 | 14,446 | [1] | 26,470 | ||||
Equity compensation expense | 315 | 335 | 240 | |||||
Deferred income tax expense (benefit) | (24,507) | (88,066) | (49,673) | |||||
Amortization of debt discount and issuance costs | 3,390 | 2,704 | 2,501 | |||||
Gain on sale of cost method investment | (114) | (2,925) | ||||||
Loss on extinguishment of debt | 478 | |||||||
Equity in earnings of consolidated subsidiaries | (56,575) | (160,311) | [1] | (14,159) | ||||
Other | (1,488) | (1,089) | (822) | |||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses and other | (77,416) | 773 | (2,402) | |||||
Accrued expenses, deferred revenue, and other liabilities | 9,464 | (2,608) | 3,171 | |||||
Tax receivable agreement obligations to related parties | (944) | (988) | (1,142) | |||||
Due to/from affiliates | (316,014) | 111,582 | 6,209 | |||||
Net cash provided by (used in) operating activities | (408,603) | 510 | (97,030) | |||||
Investing activities | ||||||||
Purchases of property and equipment | (11) | |||||||
Proceeds from sale of cost method investment | 96,475 | |||||||
Other | 677 | |||||||
Investment in subsidiaries, net | 4,755 | 95 | 5,821 | |||||
Net cash provided by (used in) investing activities | 4,755 | 772 | 102,285 | |||||
Financing activities | ||||||||
Proceeds from Term Loan Facility | 8,481 | |||||||
Payments on Term Loan Facility | (320) | (276) | (280) | |||||
Proceeds from Senior Notes | 243,453 | |||||||
Payment of loan costs | (2,500) | |||||||
Payment of data sublicense obligation | (6,433) | (5,300) | (4,321) | |||||
Repurchase of Parent common stock | (5,772) | (960) | (613) | |||||
Capital contribution from Investor Group and management | 166,881 | 3,256 | 1,999 | |||||
Net cash provided by (used in) financing activities | 403,790 | (3,280) | (3,215) | |||||
Net increase (decrease) in cash and cash equivalents | (58) | (1,998) | 2,040 | |||||
Cash and cash equivalents at beginning of period | 796 | [1] | 2,794 | 754 | ||||
Cash and cash equivalents at end of period | 738 | 796 | [1] | 2,794 | ||||
Guarantor Subsidiaries [Member] | ||||||||
Operating activities | ||||||||
Net income (loss) | 56,575 | 160,311 | [1] | 14,159 | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 209,794 | 180,215 | [1] | 174,835 | ||||
Equity compensation expense | 8,970 | 6,999 | 6,781 | |||||
Deferred income tax expense (benefit) | (61,431) | (146,023) | 9,640 | |||||
Amortization of debt discount and issuance costs | 7,396 | 5,143 | 5,974 | |||||
Contingent consideration | (4,825) | 1,307 | [1] | (69) | ||||
Loss on extinguishment of debt | 22,350 | |||||||
Impairment of long-lived assets | 8,552 | 83,169 | [1] | 10,619 | ||||
Other | (332) | (1,166) | (1,140) | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 5,078 | (6,824) | (20,791) | |||||
Prepaid expenses and other | 78,626 | (237) | 3,844 | |||||
Accounts payable | 11,391 | 4,591 | 1,335 | |||||
Accrued expenses, deferred revenue, and other liabilities | (60,430) | 29,258 | 26,102 | |||||
Due to/from affiliates | 316,014 | (111,582) | (6,209) | |||||
Net cash provided by (used in) operating activities | 575,378 | 205,161 | 247,430 | |||||
Investing activities | ||||||||
Purchases of property and equipment | (56,963) | (55,926) | (71,075) | |||||
Payments for acquisitions, net of cash acquired | (717,669) | (252,772) | (18,291) | |||||
Proceeds from sale of cost method investment | (90,655) | |||||||
Other | (5,325) | (139) | ||||||
Net cash provided by (used in) investing activities | (779,957) | (308,837) | (180,021) | |||||
Financing activities | ||||||||
Distributions from (to) Change Healthcare Holdings, Inc., net | (4,755) | (95) | (5,821) | |||||
Proceeds from Term Loan Facility | 376,930 | 157,600 | ||||||
Payments on Term Loan Facility | (16,180) | (13,003) | (12,632) | |||||
Proceeds from Revolving Facility | 60,000 | 183,000 | ||||||
Payments on Revolving Facility | (60,000) | (183,000) | ||||||
Payment of loan costs | (2,096) | (2,178) | ||||||
Payment of debt assumed from acquisition | (154,469) | (25,262) | (218) | |||||
Payments of deferred financing obligations | (6,987) | (5,441) | (3,243) | |||||
Repurchase of Parent common stock | (261) | |||||||
Payment of contingent consideration | (5,553) | |||||||
Other | (582) | |||||||
Net cash provided by (used in) financing activities | 188,986 | 111,442 | (24,674) | |||||
Net increase (decrease) in cash and cash equivalents | (15,593) | 7,766 | 42,735 | |||||
Cash and cash equivalents at beginning of period | 81,510 | [1] | 73,744 | 31,009 | ||||
Cash and cash equivalents at end of period | $ 65,917 | $ 81,510 | [1] | $ 73,744 | ||||
|
Schedule II - Valuation And Qualifying Accounts (Details) - Allowance for Doubtful Accounts [Member] - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | $ 6,377 | $ 3,856 | $ 3,585 |
Charged to Costs and Expenses | (1,052) | 5,027 | 1,982 |
Charged to Other Accounts | 1,631 | 88 | 854 |
Write-offs | (3,577) | (2,594) | (2,565) |
Balance at End of Year | $ 3,379 | $ 6,377 | $ 3,856 |
Q C"\O: >UMZ[
MS*TMSB3)\\;0^1TPW!:$C1*YXV,*@"(\+S;VXHUS2?+,,72.!PSWYH'S25K:
M!2N$A0?&1)QQ+DF>.?2MMP ,=^9Y\TGHH,.&!P##FZN,=34.)LE#Q] )'C!<
M&[P.A544?]%#8)HKF<6Z&P>3Y*%CV13_ \$T,=<[)WA)#\"[2WI%H^GV*HX
M]?_3>P$8-FDG5SMMM6^WXR9F-ULW;X=^F/^NSEXV2HMQ6Y.>5^G#DTK!E> 1
MKIRW0O_[B_/.[.]EN]T?NME+T_=-/>[DO39-[X-^^CG<^9TO-Y>#RK_VPT\7
M?K?G'='S0=\Y++EO/P74$L#!!0 ( M .$HTO'H#\ $ &H% 8
M >&PO=V]R:W-H965T NZ:U/D"*K&<-? ?[HS]IMR(+2]4)D*93$FFH L)$1BL_ /E-O%DUX*B769.^9)0Z!8-.>Z4Q\"(R)5)B#!FE5,%(
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MX*YY6;2]%^^N[LO /W-?)5QY9'#B>D_ZH26!\#E-[?#LGC;92@
M=@5_'CPP&"I/D$. F3663C'%^2FQBLP>PV=D; ?V+H$MTL=>WD&(VR_K!P:C
ML54/KD["]M"X=XAWZAG>&]
M-V_::3:B>;0M@"-/6G4VIZUS_9$Q6[:@A;W!'CK_IT:CA?.A:9CM#8@JDK1B
M/$G>,BUD1XLLYLZFR'!P2G9P-L0.6@OSZP0*QYRF]#GQ()O6A00KLEXT\!7<
MM_YL?,06E4IJZ*S$CABH
<2=*W$@?Y'I_?K_.VJQ6WD
M;Y?E=W?K NFJ0!H%TJ6!77+5XQKFNDNR.%0)IHGC9%&I>Q5'>9&=)_:!QDOY
M!Q_'_969ABN+3MKYJXT74&OMP%M);OP,M?Z%S8& VH7M-[\WXYR-@=/=](3(
M_(Z+OU!+ P04 " +0#A*B!\\QL8! X! &0 'AL+W=O