Document_and_Entity_Informatio
Document and Entity Information Document (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Feb. 19, 2014 | Jun. 28, 2013 | |
Entity Information [Line Items] | ' | ' | ' |
Entity Registrant Name | 'LPL Financial Holdings Inc. | ' | ' |
Entity Central Index Key | '0001397911 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $2,600,000,000 |
Entity Common Stock, Shares Outstanding | ' | 100,343,788 | ' |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
REVENUES: | ' | ' | ' |
Commission | $2,077,566 | $1,820,517 | $1,754,435 |
Advisory | 1,187,352 | 1,062,490 | 1,027,473 |
Asset-based | 430,990 | 403,067 | 359,724 |
Transaction and fee | 361,252 | 321,558 | 292,207 |
Interest income, net of interest expense | 17,887 | 18,742 | 20,065 |
Other | 65,811 | 34,714 | 25,471 |
Total net revenues | 4,140,858 | 3,661,088 | 3,479,375 |
EXPENSES: | ' | ' | ' |
Commission and advisory | 2,847,785 | 2,509,913 | 2,410,337 |
Compensation and benefits | 400,967 | 362,705 | 322,126 |
Promotional | 111,539 | 107,074 | 82,885 |
Depreciation and amortization | 83,503 | 71,796 | 72,741 |
Professional services | 74,690 | 62,298 | 41,590 |
Occupancy and equipment | 67,551 | 58,568 | 55,470 |
Brokerage, clearing and exchange | 45,059 | 38,924 | 38,087 |
Communications and data processing | 43,075 | 39,522 | 36,696 |
Regulatory fees and other | 31,271 | 32,306 | 26,116 |
Restructuring charges | 30,186 | 5,597 | 21,407 |
Other | 54,521 | 50,444 | 20,471 |
Total operating expenses | 3,790,147 | 3,339,147 | 3,127,926 |
Non-operating interest expense | 51,446 | 54,826 | 68,764 |
Loss on extinguishment of debt | 7,962 | 16,524 | 0 |
Total expenses | 3,849,555 | 3,410,497 | 3,196,690 |
INCOME BEFORE PROVISION FOR INCOME TAXES | 291,303 | 250,591 | 282,685 |
PROVISION FOR INCOME TAXES | 109,446 | 98,673 | 112,303 |
Net income | $181,857 | $151,918 | $170,382 |
EARNINGS PER SHARE (Note 16): | ' | ' | ' |
Basic | $1.74 | $1.39 | $1.55 |
Diluted | $1.72 | $1.37 | $1.50 |
Weighted-average shares outstanding, basic | 104,698 | 109,443 | 108,374 |
Weighted-average shares outstanding, diluted | 106,003 | 111,060 | 112,119 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net income | $181,857 | $151,918 | $170,382 |
Unrealized gain on cash flow hedges, net of tax expense of $72, $0 and $0 for the years ended December 31, 2013, 2012 and 2011, respectively | 115 | 0 | 0 |
Adjustment for items reclassified to earnings, net of tax expense of $0, $527 and $2,258 at December 31, 2013, 2012 and 2011, respectively (Note 13) | 0 | 850 | 3,646 |
Total other comprehensive income, net of tax | 115 | 850 | 3,646 |
Total Comprehensive Income | 181,972 | 152,768 | 174,028 |
Retained Earnings | ' | ' | ' |
Total Comprehensive Income | $181,857 | $151,918 | $170,382 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parentheticals) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Tax expense on unrealized gain on cash flow hedges | $72 | $0 | $0 |
Tax expense on adjustment for items reclassified to earnings | $0 | $527 | $2,258 |
Consolidated_Statements_of_Fin
Consolidated Statements of Financial Condition (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
ASSETS | ' | ' |
Cash and cash equivalents | $516,584 | $466,261 |
Cash and securities segregated under federal and other regulations | 512,351 | 577,433 |
Receivables from: | ' | ' |
Clients, net | 373,675 | 369,814 |
Product sponsors, broker-dealers and clearing organizations | 174,070 | 152,950 |
Others, net | 272,018 | 241,324 |
Securities owned: | ' | ' |
Trading — at fair value | 8,964 | 8,088 |
Held-to-maturity | 6,853 | 10,202 |
Securities borrowed | 7,102 | 9,448 |
Income taxes receivable | 0 | 5,215 |
Fixed assets, net | 189,059 | 130,847 |
Debt issuance costs, net of accumulated amortization of $7,751 and $4,903 at December 31, 2013 and 2012, respectively | 16,281 | 21,254 |
Goodwill | 1,361,361 | 1,371,523 |
Intangible assets, net | 464,522 | 503,528 |
Other assets | 139,991 | 120,637 |
Total assets | 4,042,831 | 3,988,524 |
LIABILITIES: | ' | ' |
Drafts payable | 194,971 | 203,132 |
Payables to clients | 565,204 | 749,505 |
Payables to broker-dealers and clearing organizations | 43,157 | 53,031 |
Accrued commission and advisory expenses payable | 135,149 | 128,459 |
Accounts payable and accrued liabilities | 301,644 | 216,138 |
Income taxes payable | 4,320 | 0 |
Unearned revenue | 73,739 | 61,808 |
Securities sold, but not yet purchased — at fair value | 211 | 366 |
Senior secured credit facilities | 1,535,096 | 1,317,825 |
Deferred income taxes, net | 89,369 | 118,240 |
Total liabilities | 2,942,860 | 2,848,504 |
STOCKHOLDERS' EQUITY: | ' | ' |
Common stock, $.001 par value; 600,000,000 shares authorized; 117,112,465 shares and 115,713,741 shares issued at December 31, 2013 and 2012, respectively | 117 | 116 |
Additional paid-in capital | 1,292,374 | 1,228,075 |
Treasury stock, at cost — 15,216,301 shares and 9,421,800 shares at December 31, 2013 and 2012, respectively | -506,205 | -287,998 |
Accumulated other comprehensive income | 115 | 0 |
Retained earnings | 313,570 | 199,827 |
Total stockholders' equity | 1,099,971 | 1,140,020 |
Total liabilities and stockholders' equity | $4,042,831 | $3,988,524 |
Consolidated_Statements_of_Fin1
Consolidated Statements of Financial Condition (Parentheticals) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Accumulated amortization, Debt issuance costs | $7,751 | $4,903 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 117,112,465 | 115,713,741 |
Treasury stock, shares | 15,216,301 | 9,421,800 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive (Loss) Income | Retained Earnings |
In Thousands, except Share data | ||||||
BEGINNING BALANCE at Dec. 31, 2010 | $1,173,755 | $109 | $1,051,722 | $0 | ($4,496) | $126,420 |
BEGINNING BALANCE, shares at Dec. 31, 2010 | ' | 108,715,000 | ' | 0 | ' | ' |
Net income and other comprehensive income, net of tax expense | 174,028 | ' | ' | ' | 3,646 | 170,382 |
Treasury stock purchases | -89,037 | ' | ' | -89,037 | ' | ' |
Treasury stock purchases, shares | ' | ' | ' | 2,618,000 | ' | ' |
Stock options exercises and other | 10,162 | 1 | 10,161 | ' | ' | ' |
Stock options exercises and other, shares | ' | 1,817,000 | ' | ' | ' | ' |
Excess tax benefits from share-based compensation | 57,590 | ' | 57,590 | ' | ' | ' |
Share-based compensation | 18,250 | ' | 18,250 | ' | ' | ' |
ENDING BALANCE at Dec. 31, 2011 | 1,344,748 | 110 | 1,137,723 | -89,037 | -850 | 296,802 |
ENDING BALANCE, shares at Dec. 31, 2011 | ' | 110,532,000 | ' | 2,618,000 | ' | ' |
Net income and other comprehensive income, net of tax expense | 152,768 | ' | ' | ' | 850 | 151,918 |
Issuance of common stock to settle restricted stock units | 0 | 3 | -3 | ' | ' | ' |
Issuance of common stock to settle restricted stock units, shares | ' | 2,823,000 | ' | ' | ' | ' |
Treasury stock purchases | -199,222 | ' | ' | -199,222 | ' | ' |
Treasury stock purchases, shares | ' | ' | ' | 6,812,000 | ' | ' |
Cash dividends on common stock | -248,809 | ' | ' | ' | ' | -248,809 |
Stock options exercises and other | 16,117 | 3 | 15,937 | 261 | ' | -84 |
Stock options exercises and other, shares | ' | 2,337,000 | ' | -8,000 | ' | ' |
Excess tax benefits from share-based compensation | 53,296 | ' | 53,296 | ' | ' | ' |
Share-based compensation, shares | ' | 22,000 | ' | ' | ' | ' |
Share-based compensation | 21,122 | ' | 21,122 | ' | ' | ' |
ENDING BALANCE at Dec. 31, 2012 | 1,140,020 | 116 | 1,228,075 | -287,998 | 0 | 199,827 |
ENDING BALANCE, shares at Dec. 31, 2012 | ' | 115,714,000 | ' | 9,422,000 | ' | ' |
Net income and other comprehensive income, net of tax expense | 181,972 | ' | ' | ' | 115 | 181,857 |
Treasury stock purchases | -219,091 | ' | ' | -219,091 | ' | ' |
Treasury stock purchases, shares | ' | ' | ' | 5,820,000 | ' | ' |
Cash dividends on common stock | -68,008 | ' | ' | ' | ' | -68,008 |
Stock options exercises and other | 35,025 | 1 | 34,246 | 884 | ' | -106 |
Stock options exercises and other, shares | ' | 1,398,000 | ' | -26,000 | ' | ' |
Excess tax benefits from share-based compensation | 5,381 | ' | 5,381 | ' | ' | ' |
Share-based compensation | 24,672 | ' | 24,672 | ' | ' | ' |
ENDING BALANCE at Dec. 31, 2013 | $1,099,971 | $117 | $1,292,374 | ($506,205) | $115 | $313,570 |
ENDING BALANCE, shares at Dec. 31, 2013 | ' | 117,112,000 | ' | 15,216,000 | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' | ' |
Net income | $181,857 | $151,918 | $170,382 |
Noncash items: | ' | ' | ' |
Depreciation and amortization | 83,503 | 71,796 | 72,741 |
Amortization of debt issuance costs | 4,365 | 4,591 | 5,091 |
Impairment of fixed assets | 842 | 4,033 | 0 |
Loss on disposal of fixed assets | 173 | 204 | 112 |
Share-based compensation | 24,672 | 21,122 | 18,250 |
Excess tax benefits related to share-based compensation | -7,172 | -53,296 | -57,590 |
Provision for bad debts | 2,021 | 1,159 | 3,833 |
Deferred income tax provision | -28,943 | -12,219 | -8,432 |
Loss on extinguishment of debt | -7,962 | -16,524 | 0 |
Impairment of intangible assets | 0 | 0 | 2,776 |
Lease abandonment | 288 | -538 | 1,054 |
Net changes in estimated fair value of contingent consideration obligations | 12,676 | 11,353 | 1,262 |
Closure of NestWise | 9,279 | 0 | 0 |
Loan forgiveness | 21,006 | 1,468 | 1,530 |
Other | 295 | 993 | 1,511 |
Changes in operating assets and liabilities: | ' | ' | ' |
Cash and securities segregated under federal and other regulations | 65,082 | -194,528 | -9,271 |
Receivables from clients | -3,862 | -68,393 | -30,302 |
Receivables from product sponsors, broker-dealers and clearing organizations | -21,120 | -9,457 | 59,839 |
Receivables from others | -53,720 | -53,124 | -22,549 |
Securities owned | -1,148 | -1,321 | 3,158 |
Securities borrowed | 2,346 | -1,558 | 501 |
Other assets | -19,458 | -52,216 | -7,806 |
Drafts payable | -8,161 | 15,557 | 5,086 |
Payables to clients | -184,301 | 292,786 | 73,430 |
Payables to broker-dealers and clearing organizations | -9,874 | 18,276 | -4,315 |
Accrued commissions and advisory expenses payable | 6,690 | 18,744 | -20,693 |
Accounts payable and accrued liabilities | 48,127 | 20,743 | -21,016 |
Income taxes receivable/payable | 14,916 | 47,175 | 202,537 |
Unearned revenue | 11,931 | 2,271 | 5,919 |
Securities sold, but not yet purchased | -155 | 205 | -4,660 |
Net cash provided by operating activities | 160,117 | 254,268 | 442,378 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' | ' |
Capital expenditures | -78,239 | -54,786 | -36,347 |
Purchase of securities classified as held-to-maturity | -2,595 | -7,210 | -7,685 |
Proceeds from maturity of securities classified as held-to-maturity | 5,900 | 8,100 | 6,000 |
Deposits of restricted cash | -1,500 | -64 | -7,794 |
Release of restricted cash | 815 | 7,550 | 22,245 |
Acquisitions, net of cash acquired | 0 | -43,684 | -41,977 |
Proceeds from sale of equity investment | 3,310 | 0 | 0 |
Purchases of minority interest investments | -2,500 | -1,575 | 0 |
Net cash used in investing activities | -74,809 | -91,669 | -65,558 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | ' |
Repayment of senior credit facilities | -866,579 | -1,364,843 | -53,971 |
Proceeds from senior credit facilities | 1,078,957 | 1,330,681 | 0 |
Payment of debt issuance costs | -2,461 | -4,431 | 0 |
Repurchase of common stock | -219,091 | -199,121 | -89,037 |
Dividends on common stock | -68,008 | -248,809 | 0 |
Excess tax benefits related to share-based compensation | 7,172 | 53,296 | 57,590 |
Proceeds from stock option exercises and other | 35,025 | 16,117 | 10,162 |
Net cash used in financing activities | -34,985 | -417,110 | -75,256 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 50,323 | -254,511 | 301,564 |
CASH AND CASH EQUIVALENTS - Beginning of year | 466,261 | 720,772 | 419,208 |
CASH AND CASH EQUIVALENTS - End of year | 516,584 | 466,261 | 720,772 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ' | ' | ' |
Interest paid | 51,712 | 54,883 | 68,669 |
Income taxes paid | 123,583 | 62,260 | 60,651 |
NONCASH DISCLOSURES: | ' | ' | ' |
Fixed assets acquired under built-to-suit lease | 22,979 | 5,599 | 0 |
Discount on proceeds from senior secured credit facilities recorded as debt issuance costs | 4,893 | 19,319 | 0 |
Pending settlement of treasury stock purchases | $0 | $101 | $0 |
Organization_and_Description_o
Organization and Description of the Company | 12 Months Ended |
Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization and Description of the Company | ' |
Organization and Description of the Company | |
LPL Financial Holdings Inc. (“LPLFH”), a Delaware holding corporation, together with its consolidated subsidiaries (collectively, the “Company”) provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions (collectively “advisors”) in the United States of America. Through its custody and clearing platform, using both proprietary and third-party technology, the Company provides access to diversified financial products and services enabling its advisors to offer independent financial advice and brokerage services to retail investors (their “clients”). | |
On December 28, 2005, LPL Holdings, Inc. (“LPLH”), and its subsidiaries were acquired through a merger transaction with BD Acquisition Inc., a wholly owned subsidiary of LPLFH (previously named BD Investment Holdings, Inc.). LPLFH was formed by investment funds affiliated with TPG Global, LLC ("TPG Capital") and Hellman & Friedman LLC ("H&F"). The acquisition was accomplished through the merger of BD Acquisition Inc. with and into LPLH, with LPLH being the surviving entity (the “Acquisition”). The Acquisition was financed by a combination of borrowings under the Company’s senior secured credit facilities, the issuance of senior unsecured subordinated notes and direct and indirect equity investments from the co-investors, management, and the Company’s advisors. | |
On August 15, 2013, investment funds affiliated with H&F distributed an aggregate of 12.6 million shares of LPLFH's common stock to their respective partners (the "H&F Distribution"), representing all of the outstanding shares held by H&F as of the date of the H&F Distribution. In addition, two members of the Company's board of directors (the "Board of Directors") who had been designated to serve as directors by H&F tendered their resignations concurrent with the H&F Distribution, consistent with the terms of the Company's stockholders agreement. | |
Description of Our Subsidiaries — LPLH, a Massachusetts holding corporation, owns 100% of the issued and outstanding common stock of LPL Financial LLC (“LPL Financial”), Fortigent Holdings Company, Inc., Independent Advisers Group Corporation (“IAG”), LPL Insurance Associates, Inc. (“LPLIA”), Concord Capital Partners, Inc. (“CCP”), NestWise LLC (“NestWise”), LPL Independent Advisor Services Group LLC (“IASG”) and UVEST Financial Services Group, Inc. (“UVEST”), with IASG and UVEST remaining largely inactive. LPLH is also the majority stockholder in PTC Holdings, Inc. (“PTCH”), and owns 100% of the issued and outstanding voting common stock. Each member of PTCH's board of directors meets the direct equity ownership interest requirements that are required by the Office of the Comptroller of the Currency. | |
LPL Financial, with primary offices in Boston, San Diego, and Charlotte, is a clearing broker-dealer and an investment adviser that principally transacts business as an agent for its advisors and financial institutions on behalf of their clients in a broad array of financial products and services. LPL Financial is licensed to operate in all 50 states, Washington D.C., Puerto Rico and the U.S. Virgin Islands. | |
Fortigent Holdings Company, Inc. and its subsidiaries (“Fortigent”), acquired in April 2012, provides solutions and consulting services to registered investment advisors, banks and trust companies serving high-net-worth clients. | |
PTCH is a holding company for The Private Trust Company, N.A. (“PTC”). PTC is chartered as a non-depository limited purpose national bank, providing a wide range of trust, investment management oversight and custodial services for estates and families. PTC also provides Individual Retirement Account custodial services for LPL Financial. | |
IAG is a registered investment adviser that offers an investment advisory platform for clients of advisors working for other financial institutions. | |
LPLIA operates as an insurance brokerage general agency that offers life, long-term care, and disability insurance products and services for LPL Financial advisors. | |
Concord Trust and Wealth Solutions ("Concord"), a division of LPL Financial, which acquired the assets of CCP in June 2011, provides technology and open architecture investment management solutions for trust departments of financial institutions (see Note 3). | |
NestWise was established in April 2012 to train, develop and support advisors who focused on the efficient delivery of planning and investment services to the mass market. In connection with the Company's launch of NestWise, NestWise acquired all of the issued and outstanding stock of Veritat Advisors, Inc. (“Veritat”). Veritat was a registered investment advisory firm that developed a version of the online financial planning platform used by NestWise. On August 28, 2013, the Company informed employees of its decision to close the operations of NestWise (the “NestWise Closure”). NestWise ceased operations on September 30, 2013 (see Note 5 and Note 9). | |
UVEST was an introducing broker-dealer and investment adviser that provided independent, nonproprietary third-party brokerage and advisory services to banks, credit unions and other financial institutions. During 2011, the Company committed to a corporate restructuring plan (see Note 4) to enhance its service offering, while generating efficiencies by consolidating the operations of UVEST with those of LPL Financial. Subsequently, UVEST withdrew its registration with Financial Industry Regulatory Authority, Inc. (“FINRA”), is no longer subject to net capital filing requirements and remains largely inactive. | |
IASG is a holding company for Mutual Service Corporation (“MSC”), Associated Financial Group, Inc. (“AFG”), Associated Securities Corp., Inc. (“Associated”), Associated Planners Investment Advisory, Inc. (“APIA”) and Waterstone Financial Group, Inc. (“WFG”) (together, the “Affiliated Entities”). On July 10, 2009, the Company committed to a corporate restructuring plan (see Note 4) to consolidate the operations of the Affiliated Entities with those of LPL Financial. Prior to the consolidation of operations, the Affiliated Entities engaged primarily in introducing brokerage and advisory transactions through unaffiliated third-party clearing broker-dealers. The Affiliated Entities ceased operations as active broker-dealers on September 14, 2009 and the securities licenses of advisors associated with the Affiliated Entities who elected to transfer, as well as their respective client accounts that had previously cleared through a third-party platform, were transferred to the LPL Financial clearing platform. Following the completion of these transfer activities, advisors and client accounts previously associated with the Affiliated Entities became associated with LPL Financial. The Affiliated Entities had no active employees, advisors or client accounts during any of the periods presented. Associated and WFG withdrew their registration with FINRA effective February 5, 2011, and MSC withdrew its registration with FINRA effective November 11, 2011. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Summary of Significant Accounting Policies | ' | ||||||||
Summary of Significant Accounting Policies | |||||||||
Basis of Presentation — These consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which require the Company to make estimates and assumptions regarding the valuation of certain financial instruments, intangible assets, allowance for doubtful accounts, share-based compensation, accruals for liabilities, income taxes, revenue and expense accruals, and other matters that affect the consolidated financial statements and related disclosures. Actual results could differ from those estimates under different assumptions or conditions and the differences may be material to the consolidated financial statements. | |||||||||
Consolidation — These consolidated financial statements include the accounts of LPLFH and its subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments in which the Company exercises significant influence but does not exercise control and is not the primary beneficiary are accounted for using the equity method. | |||||||||
Revenue Recognition Policies | |||||||||
Substantially all of the Company's revenues are based on contractual arrangements. In determining the appropriate recognition of commissions, the Company reviews the terms and conditions of the brokerage account agreements between the Company and its advisors' clients, representative agreements with its advisors, which include payout rates and terms, and selling agreements with product sponsors for packaged investment products such as mutual funds, annuities, insurance and alternative investments. In determining the appropriate recognition of advisory revenues, the Company reviews the terms and conditions of the advisory agreements between the advisors' clients and the applicable Registered Investment Advisor (“RIA”), representative agreements with its advisors, and agreements with third parties who provide specific investment management or investment strategies. | |||||||||
Revenues are recognized in the periods in which the related services are performed provided that persuasive evidence of an arrangement exists, the fee is fixed or determinable and collectability is reasonably assured. Payments received by the Company in advance of the performance of service are deferred and recognized as revenue when earned. | |||||||||
Management considers the nature of the Company's contractual arrangements in determining whether to recognize certain types of revenue on the basis of the gross amount billed or net amount retained after payments are made to providers of certain services related to the product or service offering. | |||||||||
The main factors the Company uses to determine whether to record revenue on a gross or net basis are whether: | |||||||||
• | the Company is primarily responsible for the service to the advisor and their client; | ||||||||
• | the Company has discretion in establishing fees paid by the client and fees due to the third-party service provider; and | ||||||||
• | the Company is involved in the determination of product or service specifications. | ||||||||
When client fees include a portion of charges that are paid to another party and the Company is primarily responsible for providing the service to the client, revenue is recognized on a gross basis in an amount equal to the fee paid by the client. The cost of revenues recognized is the amount due to the other party and is recorded as commission and advisory expense in the consolidated statements of income. | |||||||||
In instances in which another party is primarily responsible for providing the service to the client, revenue is recognized in the net amount retained by the Company. The portion of the fees that are collected from the client by the Company and remitted to the other party are considered pass through amounts and accordingly are not a component of revenues or cost of revenues. | |||||||||
The Company recognizes revenue related to commission, advisory fees, asset-based fees, transaction and other fees, and interest income (net of interest expense). | |||||||||
Commission — Commission revenue represents commissions generated by the Company's advisors for their clients' purchases and sales of securities on exchanges and over the counter, as well as purchases of various investment products such as mutual funds, variable and fixed annuities, alternative investments including non-traded real estate investment trusts and business development companies, fixed income, insurance, group annuities, and option and commodity transactions. The Company generates two types of commission revenues: front-end sales commissions that occur at the point of sale, as well as trailing commissions for which the Company provides ongoing support, awareness and education to clients of its advisors. | |||||||||
Front-end sales commissions are recognized as revenue on a trade-date basis, which is when the Company's performance obligations in generating the commissions have been substantially completed. The Company settles a significant volume of transactions that are initiated directly between its advisors and product sponsors, particularly with regard to mutual fund, 529 education savings plan, and fixed and variable annuity and insurance products. As a result, management must estimate a portion of its commission revenues earned from clients for purchases and sales of these products for each accounting period for which the proceeds have not yet been received. These estimates are based on the amount of commissions earned from transactions in these products in prior periods. | |||||||||
Commission revenue includes mutual fund, 529 education savings plan, and fixed and variable product trailing fees, which are recurring in nature. These trailing fees are earned by the Company based on a percentage of the current market value of clients' investment holdings in trail-eligible assets, and recognized over the period during which services are performed. Because trail commission revenues are generally paid in arrears, management estimates the majority of trail commission revenues earned during each period. These estimates are based on a number of factors, including market levels and the amount of trail commission revenues received in prior periods. | |||||||||
The amount of such accruals are shown as commissions receivable from product sponsors and others, and are classified within receivables from product sponsors, broker-dealers and clearing organizations in the consolidated statements of financial condition. | |||||||||
A substantial portion of the commission revenue is ultimately paid to the advisors. The Company records an estimate for commissions payable based upon payout ratios for each product for which the Company has accrued commission revenue. Such amounts are classified as commission and advisory expense in the consolidated statements of income. | |||||||||
Advisory — The Company records fees charged to clients as advisory revenue in advisory accounts where LPL Financial or IAG is the RIA. A substantial portion of these advisory fees are paid to the related advisor and these payments are classified as commission and advisory expense in the consolidated statements of income. | |||||||||
Certain advisors conduct their advisory business through separate entities by establishing their own RIA pursuant to the Investment Advisers Act of 1940, rather than using the Company's corporate RIA. These stand-alone RIAs ("Independent RIA") engage the Company for clearing, regulatory and custody services, as well as access to the Company's investment advisory platforms. The advisory revenue generated by these Independent RIAs is earned by the advisors, and accordingly not included in the Company's advisory revenues. | |||||||||
The Company charges administrative fees based on the value of assets within these advisory accounts and classifies such revenues as advisory in the consolidated statements of income. | |||||||||
Asset-Based — Asset-based revenues are comprised of fees from cash sweep programs, financial product manufacturer sponsorship programs, and omnibus processing and networking services and are recognized ratably over the period in which services are provided. | |||||||||
Transaction and Fee — The Company charges fees for executing certain transactions in client accounts. Transaction related charges are recognized on a trade-date basis. Other fees relate to services provided and other account charges generally outlined in agreements with clients, advisors and financial institutions. Such fees are recognized as services are performed or as earned, as applicable. In addition, the Company offers various services for which fees are charged on a subscription basis and are recognized over the subscription period. | |||||||||
Interest Income, Net of Interest Expense — The Company earns interest income from its cash equivalents and client margin balances, less interest expense on related transactions. Because interest expense incurred in connection with cash equivalents and client margin balances is completely offset by revenue on related transactions, the Company considers such interest to be an operating expense. Interest expense from operations for the years ended December 31, 2013, 2012 and 2011 did not exceed $1.0 million in any fiscal year presented. | |||||||||
Compensation and Benefits — The Company records compensation and benefits for all cash and deferred compensation, benefits and related taxes as earned by its employees. Compensation and benefits expense also includes fees earned by temporary employees and contractors who perform similar services to those performed by the Company’s employees, primarily software development and project management activities. Temporary employee and contractor services expense was $21.5 million, $21.5 million and $21.0 million during the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||
Share-Based Compensation — Certain employees, advisors, institutions, executive officers, and non-employee directors of the Company participate in various long-term incentive plans, which provide for granting stock options, warrants, restricted stock awards, and restricted stock units. Stock options and warrants generally vest in equal increments over a three- to five-year period and expire on the tenth anniversary following the date of grant. Restricted stock awards and restricted stock units generally vest over a two- to four-year period. | |||||||||
The Company recognizes share-based payments awarded to employees, executive officers and non-employee directors as compensation and benefits expense. The fair value for stock options is estimated using a Black-Scholes valuation model on the grant date. The fair value of restricted stock awards and restricted stock units is equal to the market price of the Company’s stock on the date of grant. Share-based compensation is recognized over the requisite service period of the individual grants, which generally equals the vesting period. | |||||||||
The Company recognizes share-based payments awarded to advisors and financial institutions as commissions and advisory expense. The fair value for stock options is estimated using a Black-Scholes valuation model. The fair value of restricted stock units is equal to the market price of the Company’s stock. Share-based compensation is based on the fair value of the equity awards at each reporting period, and is recognized over the requisite service period of the individual grants, which generally equals the vesting period. | |||||||||
The Company must also make assumptions regarding the number of stock options, warrants, restricted stock units and restricted stock awards that will be forfeited. The forfeiture assumption is ultimately adjusted to the actual forfeiture rate. Therefore, changes in the forfeiture assumptions do not impact the total amount of expense ultimately recognized over the vesting period. Rather, different forfeiture assumptions would only impact the timing of expense recognition over the vesting period. | |||||||||
Earnings Per Share — Basic earnings per share is computed by dividing income by the basic weighted-average number of shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if share-based payment awards were exercised, except when such assumed exercises would have an antidilutive effect on earnings per share. Diluted earnings per share is computed by dividing income by a weighted-average number of shares outstanding amount reflective of this potential dilution. | |||||||||
Prior to February 22, 2012, the Company was required to calculate earnings per share using the two-class method by allocating a portion of its earnings to employees who held stock units containing non-forfeitable rights to dividends or dividend equivalents under its 2008 Nonqualified Deferred Compensation Plan (the "Deferred Compensation Plan"). Basic earnings per share was computed by dividing income less earnings attributable to employees that held stock units under the Deferred Compensation Plan by the basic weighted-average number of shares outstanding. Diluted earnings per share was computed in a manner similar to basic earnings per share, except the weighted-average number of shares outstanding was increased to include the dilutive effect of outstanding stock options, warrants, and other stock-based awards. After the distribution of shares on February 22, 2012 pursuant to the Deferred Compensation Plan, the two-class method was no longer applicable. | |||||||||
Income Taxes — In preparing the consolidated financial statements, the Company estimates income tax expense based on various jurisdictions where it conducts business. The Company must then assess the likelihood that the deferred tax assets will be realized. A valuation allowance is established to the extent that it is more-likely-than-not that such deferred tax assets will not be realized. When the Company establishes a valuation allowance or modifies the existing allowance in a certain reporting period, the Company generally records a corresponding increase or decrease to tax expense in the consolidated statements of income. Management makes significant judgments in determining the provision for income taxes, the deferred tax assets and liabilities, and any valuation allowances recorded against the deferred tax asset. Changes in the estimate of these taxes occur periodically due to changes in the tax rates, changes in the business operations, implementation of tax planning strategies, resolution with taxing authorities of issues where the Company had previously taken certain tax positions and newly enacted statutory, judicial, and regulatory guidance. These changes could have a material effect on the Company’s consolidated statements of income, financial condition or cash flows in the period or periods in which they occur. Income tax credits are accounted for using the flow-through method as a reduction of income tax in the years utilized. | |||||||||
The Company recognizes the tax effects of a position in the consolidated financial statements only if it is more-likely-than-not to be sustained based solely on its technical merits, otherwise no benefits of the position are to be recognized. The more-likely-than-not threshold must continue to be met in each reporting period to support continued recognition of a benefit. Moreover, each tax position meeting the recognition threshold is required to be measured as the largest amount that is greater than 50 percent likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. | |||||||||
Employee Health Care Self-Insurance — The Company is partially self-insured for benefits paid under employee healthcare programs. Self-insurance estimates are determined with the assistance of insurance actuaries, based on historical experience and trends related to claims and payments, information provided by the insurance broker, and industry experience. The Company has coverage for excess losses on either an individual or an aggregate case basis. Estimates of future claim costs are recorded on an undiscounted basis, and are recognized as a liability within accounts payable and accrued liabilities in the consolidated statements of financial condition. | |||||||||
Cash and Cash Equivalents — Cash equivalents are highly liquid investments with an original maturity of 90 days or less that are not required to be segregated under federal or other regulations. The Company's cash and cash equivalents are composed of interest and noninterest-bearing deposits, money market funds and U.S. government obligations. | |||||||||
Cash and Securities Segregated Under Federal and Other Regulations — The Company's subsidiary, LPL Financial, is subject to requirements related to maintaining cash or qualified securities in a segregated reserve account for the exclusive benefit of its customers in accordance with Rule 15c3-3 of the Security Exchange Act of 1934, as amended, and other regulations. At December 31, 2013, the Company had $512.4 million in cash segregated in a special reserve bank account for the exclusive benefit of clients. | |||||||||
Receivables From and Payables to Clients — Receivables from clients include amounts due on cash and margin transactions. The Company extends credit to clients of its advisors to finance their purchases of securities on margin and receives income from interest charged on such extensions of credit. Payables to clients represent credit balances in client accounts arising from deposits of funds, proceeds from sales of securities, and dividend and interest payments received on securities held in client accounts at LPL Financial. At December 31, 2013 and 2012, $549.5 million and $729.1 million, respectively, of the balance represent free credit balances that are held pending re-investment by the clients. The remaining balance represents funds received from clients to support their trading activities, primarily as collateral for clients' short selling of securities. The Company pays interest on certain client payable balances. | |||||||||
To the extent that margin loans and other receivables from clients are not fully collateralized by client securities, management establishes an allowance that it believes is sufficient to cover any probable losses. When establishing this allowance, management considers a number of factors, including its ability to collect from the client or the client’s advisor and the Company’s historical experience in collecting on such transactions. | |||||||||
The following schedule reflects the Company’s activity in providing for an allowance for uncollectible amounts due from clients for the years ended December 31, 2013 and 2012 (in thousands): | |||||||||
2013 | 2012 | ||||||||
Beginning balance — January 1 | $ | 587 | $ | 716 | |||||
Provision for doubtful accounts | 1 | (129 | ) | ||||||
Ending balance — December 31 | $ | 588 | $ | 587 | |||||
Receivables From Product Sponsors, Broker-Dealers and Clearing Organizations — Receivables from product sponsors, broker-dealers and clearing organizations primarily consists of commission and transaction-related receivables. | |||||||||
Receivables From Others — Receivables from others primarily consist of accrued fees from product sponsors and amounts due to advisors. The Company periodically extends credit to its advisors in the form of recruiting loans, commission advances and other loans. The decisions to extend credit to advisors are generally based on either the advisors’ credit history and their ability to generate future commissions. Certain loans made in connection with recruiting are forgivable over terms ranging from three to five years provided that the advisor remained licensed through LPL Financial. At December 31, 2013, advisor loans totaled $99.6 million of which $62.1 million is forgivable. Management maintains an allowance for uncollectible amounts, which excludes advisor loans that are forgivable, using an aging analysis that takes into account the advisors’ registration status and the specific type of receivable. The aging thresholds and specific percentages used represent management’s best estimates of probable losses. Management monitors the adequacy of these estimates through periodic evaluations against actual trends experienced. | |||||||||
The following schedule reflects the Company’s activity in providing for an allowance for uncollectible amounts due from others for the years ended December 31, 2013 and 2012 (in thousands): | |||||||||
2013 | 2012 | ||||||||
Beginning balance — January 1 | $ | 6,675 | $ | 8,833 | |||||
Provision for doubtful accounts | 2,020 | 1,288 | |||||||
Charge-offs — net of recoveries | (1,604 | ) | (3,446 | ) | |||||
Ending balance — December 31 | $ | 7,091 | $ | 6,675 | |||||
Classification and Valuation of Certain Investments — The classification of an investment determines its accounting treatment. The Company generally classifies its investments in debt and equity instruments (including mutual funds, annuities, corporate bonds, government bonds and municipal bonds) as trading securities, except for government notes held by PTC, which are classified as held-to-maturity based on management’s intent and ability to hold them to maturity. The Company has not classified any investments as available-for-sale. Investment classifications are subject to ongoing review and can change. Securities classified as trading are carried at fair value, while securities classified as held-to-maturity are carried at cost or amortized cost. When possible, the fair value of securities is determined by obtaining quoted market prices. The Company also makes estimates about the fair value of investments and the timing for recognizing losses based on market conditions and other factors. If these estimates change, the Company may recognize additional losses. Both unrealized and realized gains and losses on trading securities are recognized in other revenue on a net basis in the consolidated statements of income. | |||||||||
Securities Owned and Securities Sold, But Not Yet Purchased — Securities owned and securities sold, but not yet purchased are reflected on a trade-date basis at market value with realized and unrealized gains and losses being recorded in other revenue in the consolidated statements of income. Interest income is accrued as earned and dividends are recorded on the ex-dividend date. | |||||||||
U.S. government notes are carried at amortized cost and classified as held-to-maturity. Interest income is accrued as earned. Premiums and discounts are amortized, using a method that approximates the effective yield method, over the term of the security and recorded as an adjustment to the investment yield. | |||||||||
Securities Borrowed and Loaned — Securities borrowed and securities loaned are accounted for as collateralized financings and are recorded at contract value, representing the amount of cash provided for securities borrowed transactions and the amount of cash received for securities loaned (generally in excess of market values). The adequacy of the collateral deposited, which is determined by comparing the market value of the securities borrowed to the cash loaned, is continuously monitored and is adjusted when considered necessary to minimize the risk associated with this activity. The collateral received for securities loaned is generally cash and is adjusted daily through the National Securities Clearing Corporation's ("NSCC") net settlement process, and is classified as payables to broker-dealers and clearing organizations in the consolidated statements of financial condition. Securities loaned generally represent client securities that can be hypothecated under standard margin loan agreements. | |||||||||
The Company borrows securities from other broker-dealers to make deliveries or to facilitate customer short sales. As of December 31, 2013, the contract and collateral market values of borrowed securities were $7.1 million and $7.0 million, respectively. In May 2013, the Company ended its participation in the NSCC Stock Borrow Program and all pledged collateral was returned to the Company. As of December 31, 2012, the contract and collateral values of the securities borrowed by the Company were $9.4 million and $9.4 million, respectively, and the contract and collateral values of the rehypothecated securities loaned under the NSCC Stock Borrow Program $19.3 million and $19.3 million, respectively. | |||||||||
Fixed Assets — Furniture, equipment, computers, purchased software, internally developed software, and leasehold improvements are recorded at historical cost, net of accumulated depreciation and amortization. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets. Furniture, equipment, computers, purchased software, and internally developed software are depreciated over a period of three to seven years. Automobiles have depreciable lives of five years. Leasehold improvements are amortized over the lesser of their useful lives or the terms of the underlying leases. Management reviews fixed assets for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. During the years ended December 31, 2013 and 2012, the Company recorded an asset impairment charge of $0.8 million and $4.0 million, respectively, for certain fixed assets related to internally developed software that were determined to have no estimated fair value. The $0.8 million asset impairment charge for the year ended December 31, 2013 is included in restructuring charges within the consolidated statements of income (see Note 4). No impairment occurred for the year ended December 31, 2011. | |||||||||
Software Development Costs — The Company charges software development costs to operations as incurred during the preliminary project stage, while capitalizing costs at the point at which the conceptual formulation, design and testing of possible software project alternatives are complete and management authorizes and commits to funding the project. The costs of internally developed software that qualify for capitalization are capitalized as fixed assets and subsequently amortized over the estimated useful life of the software, which is generally three years. The Company does not capitalize pilot projects and projects where it believes that the future economic benefits are less than probable. | |||||||||
Acquisitions — When acquiring companies, the Company recognizes separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of income. | |||||||||
Accounting for business combinations requires the Company's management to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets, support liabilities assumed, and pre-acquisition contingencies. Although the Company believes the assumptions and estimates it has made in the past have been reasonable and appropriate, they are based in part on historical experience, market data, and information obtained from the management of the acquired companies and are inherently uncertain. | |||||||||
Examples of critical estimates in valuing certain of the intangible assets the Company has acquired include but are not limited to: (i) future expected cash flows from client relationships, advisor relationships, and product sponsor relationships; (ii) estimates to develop or use software; and (iii) discount rates. | |||||||||
If the Company determines that a pre-acquisition contingency is probable in nature and estimable as of the acquisition date, the Company records its best estimate for such a contingency as a part of the preliminary purchase price allocation. The Company continues to gather information for and evaluate pre-acquisition contingencies throughout the measurement period, with changes to the amounts recorded or identified additional pre-acquisition contingencies included in the purchase price allocation and, subsequently, in the Company's results of operations. | |||||||||
The Company may be required to pay future consideration to the former shareholders of acquired companies, depending upon the terms of the applicable purchase agreement, that is contingent upon the achievement of certain financial or operating targets. The fair value of the contingent consideration is determined using financial forecasts and other estimates that assess the probability and timing of the financial targets being reached, and measuring the associated cash payments at their present value using a risk-adjusted rate of return. The estimated fair value of the contingent consideration on the acquisition date is included in the purchase price of the acquired company. At each reporting date, or whenever there are significant changes in underlying key assumptions, a review of these assumptions is performed and the contingent consideration liability is updated to its estimated fair value. If there are no significant changes in the assumptions, the quarterly determination of the fair value of contingent consideration reflects the implied interest for the passage of time. Changes in the estimated fair value of the contingent consideration obligations may result from changes in the terms of the contingent payments, changes in discount periods and rates, changes in assumptions with respect to the timing and likelihood of achieving the applicable targets, and other related developments. Actual progress toward achieving the financial targets for the remaining measurement periods may be different than the Company's expectations of future performance. The change in the estimated fair value of contingent consideration has been classified as other expenses in the consolidated statements of income. | |||||||||
Reportable Segment — The Company's internal reporting is organized into two service channels: Independent Advisor Services and Institution Services. These service channels qualify as individual operating segments and are aggregated and viewed as one reportable segment due to their similar economic characteristics, products and services, production and distribution processes, and regulatory environment. | |||||||||
Prior to the third quarter of 2013, the Company's internal reporting was organized into three service channels: Independent Advisor Services, Institution Services and Custom Clearing Services. During the third quarter of 2013, functions within Institution Services and Customer Clearing Services were unified under a single service channel: Institution Services. | |||||||||
Goodwill and Other Intangible Assets — The Company classifies intangible assets into three categories: (1) goodwill, (2) intangible assets with indefinite lives not subject to amortization and (3) intangible assets with definite lives subject to amortization. Goodwill represents the excess of purchase price over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. The Company determines the useful lives of identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors considered when determining useful lives include the contractual term of any agreement, the history of the asset, the Company's long-term strategy for the use of the asset, any laws or other local regulations that could impact the useful life of the asset and other economic factors, including competition and specific market conditions. Goodwill and other indefinite-lived assets are not amortized; however, intangible assets that are deemed to have definite lives are amortized over their useful lives, generally ranging from 5 - 20 years (see Note 9). | |||||||||
Goodwill and other indefinite-lived intangible assets are tested annually for impairment in the fourth fiscal quarter and between annual tests if certain events occur indicating that the carrying amounts may be impaired. If a qualitative assessment is used and the Company determines that the fair value of a reporting unit or indefinite-lived intangible asset is more likely than not (i.e., a likelihood of more than 50%) less than its carrying amount, a quantitative impairment test will be performed. If goodwill or other indefinite-lived intangible assets are quantitatively assessed for impairment, a two-step approach is applied. First, the Company compares the estimated fair value of the reporting unit in which the asset resides to its carrying value. The second step, if necessary, measures the amount of such impairment by comparing the implied fair value of the asset to its carrying value. No impairment of goodwill or other indefinite-lived intangible assets has been recognized during the years ended December 31, 2013, 2012 and 2011. | |||||||||
Long-lived assets, such as intangible assets subject to amortization, are reviewed for impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset or asset group exceeds the estimated fair value of the asset or asset group. Long-lived assets to be disposed of by sale are reported at the lower of their carrying amounts or their estimated fair values less costs to sell and are not depreciated. | |||||||||
For the year ended December 31, 2011 the Company recorded a $2.8 million charge for the impairment of advisor and financial institution relationship intangible assets, which is included in restructuring charges within the consolidated statements of income (see Note 4 and Note 9). No impairment occurred for the years ended December 31, 2013 and 2012. | |||||||||
Debt Issuance Costs — Debt issuance and amendment costs have been capitalized and are being amortized as additional interest expense over the expected terms of the related debt agreements. | |||||||||
Equity Method Investment — The Company accounts for investments under the equity method when it exerts significant influence and ownership does not exceed 50% of the common stock. The Company records the investment at cost in the consolidated statements of financial condition and adjusts the carrying amount of the investment to recognize its share of earnings or losses while recording such earnings or losses within the consolidated statements of income. | |||||||||
Drafts Payable — Drafts payable represents checks drawn against the Company that have not yet cleared through the bank. At December 31, 2013, the Company had amounts drawn of $185.0 million related to client activities, and $10.0 million of corporate overdrafts. | |||||||||
Legal Contingencies — The Company is involved in legal proceedings from time to time arising out of its business operations, including arbitrations and lawsuits involving private claimants, and subpoenas, investigations and other actions by government authorities and self-regulatory organizations. The Company also receives written and verbal complaints from customers of advisors. In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases in which claimants seek substantial or indeterminate damages, the Company cannot predict with certainty what the eventual loss or range of loss related to such matters will be. The Company recognizes a liability with regard to legal proceedings when it believes it is probable a liability has occurred and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount, however, the Company accrues the minimum amount in the range. The Company maintains insurance coverage, including general liability, errors and omissions, excess entity errors and omissions and fidelity bond insurance. The Company records legal accruals and related insurance recoveries on a gross basis. | |||||||||
Disputed Matters — Claims filed by clients of advisors are typically arbitrated pursuant to FINRA's procedures for arbitration, rather than litigated in court. In an arbitration, neutral third parties review evidence in the form of documents and testimony, listen to arguments and render a decision on the disputed matter. Through arbitration, the opportunity for appeal is foregone in virtually all matters as the decisions are final and binding. | |||||||||
Defense costs are expensed as incurred and classified as professional services within the consolidated statements of income. When there is indemnification or insurance, the Company may engage in defense of settlement and subsequently seek reimbursement for such matters. In connection with various acquisitions, and pursuant to the purchase and sale agreements, the Company has received third-party indemnification for certain legal proceedings and claims. Some of these matters have been defended and paid directly by the indemnifying party. | |||||||||
Derivative Financial Instruments — The Company uses derivative financial instruments, consisting of non-deliverable foreign currency forward contracts, to mitigate foreign currency exchange rate risk related to operating expenses that are subject to repricing (see Note 13). | |||||||||
The Company has designated these derivative financial instruments as cash flow hedges, all of which qualify for hedge accounting. To qualify for hedge accounting, the derivative must be formally designated as a hedge through documentation of the relationship between the derivative and the hedged item. The documentation must include a description of the hedging instrument, the hedge item, the risk being hedged, the Company's risk management objective and strategy for undertaking the hedge, the method for assessing the effectiveness of the hedge and the method for measuring hedge ineffectiveness. In addition, the hedge relationship must be expected to be highly effective at offsetting changes in either the fair value or cash flows of the hedged item at both inception of the hedge and on an ongoing basis. | |||||||||
The Company assesses the ongoing effectiveness of its cash flow hedges. Changes in the fair value for the effective portion of the Company's cash flow hedges are presented in other comprehensive income and reclassified into earnings to match the timing of the underlying hedged item. Hedge ineffectiveness is measured at the end of each fiscal quarter, with any gains or losses realized into earnings in the current period. | |||||||||
Fair Value of Financial Instruments — The Company’s financial assets and liabilities are carried at fair value or at amounts that, because of their short-term nature, approximate current fair value, with the exception of its indebtedness. The Company carries its indebtedness at amortized cost. The Company measures the implied fair value of its debt instruments using trading levels obtained from a third-party service provider. Accordingly, the debt instruments would qualify as Level 2 fair value measurements (see Note 5). As of December 31, 2013, the carrying amount and fair value of the Company’s indebtedness was approximately $1,535.1 million and $1,533.3 million, respectively. As of December 31, 2012, the carrying amount and fair value was approximately $1,317.8 million and $1,320.4 million, respectively. | |||||||||
Commitments and Contingencies — The Company recognizes a liability with regard to contingencies when it believes it is probable a liability has occurred and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount, however, the Company accrues the minimum amount in the range. | |||||||||
Comprehensive Income — Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, including foreign currency translation adjustments and unrealized gains and losses on marketable securities and derivative instruments. The Company’s comprehensive income (loss) is composed of net income (loss) and the effective portion of the unrealized gains (losses) on financial derivatives in cash flow hedge relationships, net of related tax effects. | |||||||||
Recently Issued Accounting Pronouncements — There are no recent accounting pronouncements that would impact the Company's consolidated statements of income, comprehensive income, financial condition or cash flows. |
Acquisitions
Acquisitions | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
Business Combinations [Abstract] | ' | |||||
Acquisitions | ' | |||||
Acquisitions | ||||||
The Company completed four acquisitions in 2011 and 2012: National Retirement Partners, Inc. ("NRP"), CCP, Fortigent and Veritat. The pro forma results of operations and the results of operations for acquisitions since the acquisition dates have not been separately disclosed because the effects were not sufficiently significant to the consolidated financial statements. | ||||||
Purchase price consideration for the acquisitions of NRP, CCP and Veritat included initial cash payments, as well as future contingent consideration payments. In accordance with the respective acquisition agreements, the former owners have the right to receive certain future payments contingent upon achieving certain financial and operating targets. These contingent consideration obligations are measured at fair value quarterly based on progress towards the defined milestones. | ||||||
National Retirement Partners, Inc. | ||||||
On July 14, 2010, the Company announced a definitive agreement pursuant to which it would acquire certain assets of NRP. NRP's advisors offer retirement products, consulting, and investment services to retirement plan sponsors and plan participants as well as comprehensive financial services to plan participants and this strategic acquisition further enhanced the capabilities and presence of the Company in the group retirement space. On February 9, 2011, the transaction closed. Total cash consideration paid in 2011 for this transaction was $22.0 million. | ||||||
The Company is also required to pay consideration to former shareholders of NRP that is contingent upon the achievement of certain revenue-based milestones in the third year following the acquisition. There is no maximum amount of contingent consideration; however, at the time of the acquisition the Company estimated the fair value of contingent consideration to be $3.3 million, using a discounted cash flow methodology based on financial forecasts determined by management that includes assumptions about revenue growth, operating margins and discount rates. The Company recorded the contingent consideration obligation within accounts payable and accrued liabilities, and re-measured the contingent consideration at fair value at each interim reporting period, with changes recognized in earnings. During the fourth quarter of 2013, the Company finalized the determination of the amount of contingent consideration to be paid to the former shareholders of NRP, resulting in a total estimated payment of $39.3 million (see Note 22). | ||||||
During the years ended December 31, 2012 and 2011, the Company incurred transaction and integration costs associated with the acquisition of NRP totaling $2.3 million and $2.5 million, respectively, which were recorded as other expense in the consolidated statements of income. | ||||||
Set forth below is a reconciliation of assets acquired and liabilities assumed related to the acquisition of NRP during the year ended December 31, 2011 (in thousands): | ||||||
Goodwill | $ | 13,698 | ||||
Intangible assets | 11,800 | |||||
Accounts payable and accrued liabilities | (190 | ) | ||||
Net assets acquired | $ | 25,308 | ||||
The Company allocated the estimated purchase price for NRP to specific amortizable intangible asset categories as follows (dollars in thousands): | ||||||
Amortization | Amount | |||||
Period | Assigned | |||||
(in years) | ||||||
Client relationships | 11 | $ | 4,730 | |||
Advisor relationships | 9 | 4,080 | ||||
Product sponsor relationships | 4 | 2,990 | ||||
Total intangible assets acquired | $ | 11,800 | ||||
Concord Capital Partners, Inc. | ||||||
On April 20, 2011, the Company announced its intent to acquire all of the outstanding common stock of CCP. CCP provided open architecture investment management solutions for trust departments of financial institutions. Through this acquisition, the Company sought to acquire the ability to support both the brokerage and trust business lines of current and prospective financial institutions. On June 22, 2011, the transaction closed. The Company paid $20.0 million, net of cash acquired, at the closing of the transaction to the former shareholders of CCP and placed an additional $2.3 million of cash into escrow subject to adjustment pursuant to the terms of the stock purchase agreement. As of December 31, 2013, $0.5 million remained in an escrow account. The Company has classified the escrow account as restricted cash, which is included in other assets on the consolidated statements of financial condition. | ||||||
The terms of the stock purchase agreement provide for potential consideration that was contingent upon the achievement of certain gross margin-based milestones for the year ended December 31, 2013. At the close of the transaction, the maximum amount of contingent consideration was $15.0 million. The Company estimated the fair value of the contingent consideration to be $11.5 million at the close of the transaction, which was determined using a discounted cash flow methodology based on financial forecasts determined by management that included assumptions about growth in gross margin and discount rates. The contingent consideration obligation was classified within accounts payable and accrued liabilities, and was remeasured at fair value at each interim reporting period with changes recognized in earnings (see Note 5). | ||||||
During the year ended December 31, 2011, the Company incurred transaction and integration costs associated with its acquisition of CCP totaling $1.0 million, which were recorded as other expense in the consolidated statements of income. | ||||||
Set forth below is a reconciliation of assets acquired and liabilities assumed related to the acquisition of CCP during the year ended December 31, 2011 (in thousands): | ||||||
Goodwill | $ | 27,022 | ||||
Accounts receivable | 770 | |||||
Other assets | 190 | |||||
Intangible assets(1) | 7,550 | |||||
Fixed assets(2) | 3,950 | |||||
Accounts payable and accrued liabilities | (5,721 | ) | ||||
Net assets acquired | $ | 33,761 | ||||
________________________ | ||||||
-1 | Intangible assets acquired relate to client relationships and are being amortized over 15 years. | |||||
-2 | Fixed assets acquired relate primarily to internally developed software and are being amortized over 5 years. | |||||
Set forth below is supplemental cash flow information related to the acquisition of CCP for the year ended December 31, 2011 (in thousands): | ||||||
Cash payments, net of cash acquired | $ | 19,969 | ||||
Cash paid to escrow | 2,250 | |||||
Contingent consideration | 11,542 | |||||
Total purchase price | $ | 33,761 | ||||
Fortigent Holdings Company, Inc. | ||||||
On April 23, 2012, the Company acquired all of the outstanding common stock of Fortigent Holdings Company, Inc. and its wholly owned subsidiaries Fortigent, LLC, Fortigent Reporting Company, LLC and Fortigent Strategies Company, LLC. Fortigent is a leading provider of solutions and consulting services to registered investment advisors, banks and trust companies servicing high-net-worth clients. This strategic acquisition further enhances the Company's capabilities and offers an extension of the Company's existing services for wealth management advisors. | ||||||
The Company paid $38.8 million at the closing of the transaction, net of cash acquired. As of December 31, 2013, $1.0 million remains in an escrow account to be paid to former shareholders of Fortigent in accordance with the terms of the stock purchase agreement. Such amount has been classified by the Company as restricted cash and is included in other assets on the consolidated statements of financial condition. Goodwill resulting from this business combination is largely attributable to the existing workforce of Fortigent and synergies expected to arise after the Company's acquisition of Fortigent. During the years ended December 31, 2012 and 2011, the Company incurred transaction and integration costs associated with its acquisition of Fortigent totaling $0.7 million and $0.5 million, respectively, which were recorded as other expense in the consolidated statements of income. | ||||||
Set forth below is a reconciliation of assets acquired and liabilities assumed related to the acquisition of Fortigent during the year ended December 31, 2012 (in thousands): | ||||||
Goodwill | $ | 27,275 | ||||
Accounts receivable | 3,548 | |||||
Other assets | 2,310 | |||||
Intangible assets | 5,400 | |||||
Fixed assets(1) | 6,275 | |||||
Accounts payable and accrued liabilities | (4,803 | ) | ||||
Deferred income taxes - net | (1,239 | ) | ||||
Net assets acquired | $ | 38,766 | ||||
________________________ | ||||||
-1 | Fixed assets acquired relate primarily to internally developed software and are being amortized over 5 years. | |||||
Set forth below is supplemental cash flow information related to the acquisition of Fortigent for the year ended December 31, 2012 (in thousands): | ||||||
Cash payments, net of cash acquired | $ | 28,866 | ||||
Cash paid to escrow | 9,900 | |||||
Total purchase price | $ | 38,766 | ||||
The Company allocated the purchase price of Fortigent for intangible assets to specific amortizable intangible asset categories as follows (dollars in thousands): | ||||||
Amortization | Amount | |||||
Period | Assigned | |||||
(in years) | ||||||
Client relationships | 9.4 | $ | 4,200 | |||
Trade names | 10 | 1,200 | ||||
Total intangible assets acquired | $ | 5,400 | ||||
Veritat Advisors, Inc. | ||||||
In April 2012 the Company launched their subsidiary, NestWise. On July 10, 2012, through its subsidiary NestWise, the Company acquired all of the outstanding common stock of Veritat, a registered investment advisory firm that developed and utilized a proprietary online financial planning platform designed to support advisors who serve the mass market. | ||||||
The Company paid $4.9 million at the closing of the transaction, net of cash acquired. Goodwill resulting from this acquisition was primarily attributable to synergies expected to arise after the Company's acquisition of Veritat. During the year ended December 31, 2012, the Company incurred $0.1 million of transaction costs associated with its acquisition of Veritat, which were recorded as other expense in the consolidated statements of income. | ||||||
In conjunction with the stock purchase agreement, the former owners of Veritat had the right to receive a payment that was contingent upon i) NestWise continuing to operate as a going concern through December 31, 2013, and ii) achieving certain financial targets based on a sliding scale that was sensitive to advisor recruitment, market fluctuation, and the ability of advisors to grow their business. | ||||||
The Company established a contingent consideration liability related to the acquisition of Veritat, based on financial forecasts determined by management that included assumptions about growth in assets under management, earnings, employee retention and discount rates. At the close of the transaction, the Company determined the fair value of the contingent consideration to be $8.4 million, which was included in the total purchase consideration and recorded within accounts payable and accrued liabilities on the consolidated statements of financial condition. | ||||||
Differences between the value of contingent consideration at the time of the acquisition, and the future payment of contingent consideration were recognized into earnings each quarter based on the accretion of interest and the probability of achievement. | ||||||
Set forth below is a reconciliation of assets acquired and liabilities assumed related to the acquisition of Veritat during the year ended December 31, 2012 (in thousands): | ||||||
Goodwill | $ | 10,162 | ||||
Fixed assets(1) | 4,180 | |||||
Accounts payable and accrued liabilities | (67 | ) | ||||
Deferred income taxes - net | (927 | ) | ||||
Net assets acquired | $ | 13,348 | ||||
________________________ | ||||||
-1 | Fixed assets acquired relate primarily to internally developed software and are being amortized over 5 years. | |||||
Set forth below is supplemental cash flow information related to the acquisition of Veritat for the year ended December 31, 2012 (in thousands): | ||||||
Cash payments, net of cash acquired | $ | 4,918 | ||||
Contingent consideration | 8,430 | |||||
Total purchase price | $ | 13,348 | ||||
On August 28, 2013, the Company informed employees of the NestWise Closure. NestWise ceased operations on September 30, 2013 (see Note 5 and Note 9). |
Restructuring
Restructuring | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||||||||||
Restructuring | ' | |||||||||||||||||||||||
Restructuring | ||||||||||||||||||||||||
Consolidation of Affiliated Entities Initiative | ||||||||||||||||||||||||
On July 10, 2009, the Company committed to a corporate restructuring plan that consolidated the operations of the Affiliated Entities with LPL Financial. This restructuring was effected to enhance service offerings to advisors while also generating efficiencies. The Company incurred and paid a majority of the restructuring charges in 2010, including transition assistance to certain advisors that transferred from the Affiliated Entities to LPL Financial. Advisors that received transition assistance entered into contracts with the Company ranging from three to five years. The Company amortizes transition assistance over the contract term, and expense is classified as restructuring charges on the consolidated statements of income. During the years ended December 31, 2013 and 2012, the Company recorded $1.3 million and $1.5 million, respectively, of expense related to the amortization of transition assistance. | ||||||||||||||||||||||||
Consolidation of UVEST Financial Services Group, Inc. | ||||||||||||||||||||||||
On March 14, 2011, the Company committed to a corporate restructuring plan to consolidate the operations of UVEST with LPL Financial. The restructuring plan was effected to enhance the Company’s service offering, while also generating efficiencies. In connection with the consolidation, certain registered representatives associated with UVEST moved to LPL Financial through a transfer of their licenses. The Company completed the transfers in December 2011. Following the transfer of registered representatives and client accounts to LPL Financial, all of the Company’s securities business is done through a single broker-dealer. UVEST withdrew its registration with FINRA effective July 16, 2012 and, as such, is no longer subject to net capital filing requirements and subsequently remains largely inactive. Certain registered representatives that transferred to LPL Financial received transition assistance entered into contracts with the Company ranging from three to five years. The Company amortizes transition assistance over the contract term, and expense is classified as restructuring charges on the consolidated statements of income. During the years ended December 31, 2013 and 2012, the Company recorded $0.6 million and $5.0 million, respectively, of expense related to the amortization of transition assistance. The remaining loan amortization and forgiveness of $2.7 million is expected to be recognized into earnings by October 2016. | ||||||||||||||||||||||||
Service Value Commitment | ||||||||||||||||||||||||
On February 5, 2013, the Company committed to an expansion of its Service Value Commitment, an ongoing effort to position the Company for sustainable long-term growth by improving the service experience of its advisors and delivering efficiencies in its operating model. The Company assessed its information technology delivery, governance, organization and strategy and committed to undertake a course of action (the “Program”) to reposition its labor force and invest in technology, human capital, marketing and other key areas to enable future growth. The Program is expected to be completed in 2015. | ||||||||||||||||||||||||
The Company estimates total charges in connection with the Program to be approximately $65.0 million. These expenditures are comprised of outsourcing and other related costs, technology transformation costs, employee severance obligations and other related costs and non-cash charges for impairment of certain fixed assets related to internally developed software. | ||||||||||||||||||||||||
The following table summarizes the balance of accrued expenses and the changes in the accrued amounts for the Program as of and for the year ended December 31, 2013 (in thousands): | ||||||||||||||||||||||||
Accrued | Costs | Payments | Non-cash | Accrued Balance at December 31, 2013 | Total | |||||||||||||||||||
Balance at | Incurred(1) | Expected | ||||||||||||||||||||||
December 31, | Restructuring | |||||||||||||||||||||||
2012 | Costs | |||||||||||||||||||||||
Outsourcing and other related costs | $ | — | $ | 15,281 | $ | (13,857 | ) | $ | — | $ | 1,424 | $ | 30,000 | |||||||||||
Technology transformation costs | — | 9,269 | (7,516 | ) | — | 1,753 | 23,000 | |||||||||||||||||
Employee severance obligations and other related costs | — | 2,458 | (1,638 | ) | — | 820 | 11,000 | |||||||||||||||||
Asset impairments | — | 842 | — | (842 | ) | — | 1,000 | |||||||||||||||||
Total | $ | — | $ | 27,850 | $ | (23,011 | ) | $ | (842 | ) | $ | 3,997 | $ | 65,000 | ||||||||||
________________________________ | ||||||||||||||||||||||||
-1 | At December 31, 2013, costs incurred represent the total cumulative costs incurred under the Program to date. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value Measurements | ' | |||||||||||||||
Fair Value Measurements | ||||||||||||||||
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Inputs used to measure fair value are prioritized within a three-level fair value hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: | ||||||||||||||||
Level 1 — Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||||
Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. | ||||||||||||||||
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. | ||||||||||||||||
There have been no transfers of assets or liabilities between these fair value measurement classifications during the years ended December 31, 2013 and 2012. | ||||||||||||||||
The Company’s fair value measurements are evaluated within the fair value hierarchy, based on the nature of inputs used to determine the fair value at the measurement date. At December 31, 2013, the Company had the following financial assets and liabilities that are measured at fair value on a recurring basis: | ||||||||||||||||
Cash Equivalents — The Company’s cash equivalents include money market funds, which are short term in nature with readily determinable values derived from active markets. | ||||||||||||||||
Securities Owned and Securities Sold, But Not Yet Purchased — The Company’s trading securities consist of house account model portfolios established and managed for the purpose of benchmarking the performance of its fee based advisory platforms and temporary positions resulting from the processing of client transactions. Examples of these securities include money market funds, U.S. treasury obligations, mutual funds, certificates of deposit, and traded equity and debt securities. | ||||||||||||||||
The Company uses prices obtained from independent third-party pricing services to measure the fair value of its trading securities. Prices received from the pricing services are validated using various methods including comparison to prices received from additional pricing services, comparison to available quoted market prices, and review of other relevant market data including implied yields of major categories of securities. In general, these quoted prices are derived from active markets for identical assets or liabilities. When quoted prices in active markets for identical assets and liabilities are not available, the quoted prices are based on similar assets and liabilities or inputs other than the quoted prices that are observable, either directly or indirectly. For certificates of deposit and treasury securities, the Company utilizes market-based inputs including observable market interest rates that correspond to the remaining maturities or the next interest reset dates. At December 31, 2013, the Company did not adjust prices received from the independent third-party pricing services. | ||||||||||||||||
Other Assets — The Company’s other assets include deferred compensation plan assets that are invested in money market and other mutual funds that are actively traded and valued based on quoted market prices and certain non-traded real estate investment trusts that are valued using quoted prices for identical or similar securities and other inputs that are observable or can be corroborated by observable market data. | ||||||||||||||||
Accounts Payable and Accrued Liabilities — The Company's accounts payable and accrued liabilities include cash flow hedges, which are measured using Level 2 inputs, and contingent consideration liabilities, which are measured using Level 3 inputs. The fair value of the cash flow hedges are determined using quoted prices for similar cash flow hedges, taking into account counterparty credit risk and the Company's own non-performance risk. The contingent consideration liabilities result from the Company's acquisitions of NRP, CCP and Veritat. | ||||||||||||||||
The following table summarizes the Company’s financial assets and financial liabilities measured at fair value on a recurring basis at December 31, 2013 (in thousands): | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
December 31, 2013: | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents | $ | 254,032 | $ | — | $ | — | $ | 254,032 | ||||||||
Securities owned — trading: | ||||||||||||||||
Money market funds | 170 | — | — | 170 | ||||||||||||
Mutual funds | 7,291 | — | — | 7,291 | ||||||||||||
Equity securities | 103 | — | — | 103 | ||||||||||||
Debt securities | — | — | — | — | ||||||||||||
U.S. treasury obligations | 1,400 | — | — | 1,400 | ||||||||||||
Total securities owned — trading | 8,964 | — | — | 8,964 | ||||||||||||
Other assets | 47,539 | 3,072 | — | 50,611 | ||||||||||||
Total assets at fair value | $ | 310,535 | $ | 3,072 | $ | — | $ | 313,607 | ||||||||
Liabilities | ||||||||||||||||
Securities sold, but not yet purchased: | ||||||||||||||||
Mutual funds | $ | 63 | $ | — | $ | — | $ | 63 | ||||||||
Equity securities | 127 | — | — | 127 | ||||||||||||
Debt securities | — | 10 | — | 10 | ||||||||||||
Certificates of deposit | — | 11 | — | 11 | ||||||||||||
Total securities sold, but not yet purchased | 190 | 21 | — | 211 | ||||||||||||
Accounts payable and accrued liabilities | — | — | 39,293 | 39,293 | ||||||||||||
Total liabilities at fair value | $ | 190 | $ | 21 | $ | 39,293 | $ | 39,504 | ||||||||
The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2012 (in thousands): | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
December 31, 2012: | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents | $ | 177,393 | $ | — | $ | — | $ | 177,393 | ||||||||
Securities owned — trading: | ||||||||||||||||
Money market funds | 302 | — | — | 302 | ||||||||||||
Mutual funds | 5,737 | — | — | 5,737 | ||||||||||||
Equity securities | 414 | — | — | 414 | ||||||||||||
Debt securities | — | 235 | — | 235 | ||||||||||||
U.S. treasury obligations | 1,400 | — | — | 1,400 | ||||||||||||
Total securities owned — trading | 7,853 | 235 | — | 8,088 | ||||||||||||
Other assets | 28,624 | — | — | 28,624 | ||||||||||||
Total assets at fair value | $ | 213,870 | $ | 235 | $ | — | $ | 214,105 | ||||||||
Liabilities | ||||||||||||||||
Securities sold, but not yet purchased: | ||||||||||||||||
Mutual funds | $ | 38 | $ | — | $ | — | $ | 38 | ||||||||
Equity securities | 247 | — | — | 247 | ||||||||||||
Debt securities | — | 55 | — | 55 | ||||||||||||
Certificates of deposit | — | 26 | — | 26 | ||||||||||||
Total securities sold, but not yet purchased | 285 | 81 | — | 366 | ||||||||||||
Accounts payable and accrued liabilities | — | — | 35,887 | 35,887 | ||||||||||||
Total liabilities at fair value | $ | 285 | $ | 81 | $ | 35,887 | $ | 36,253 | ||||||||
Changes in Level 3 Recurring Fair Value Measurements | ||||||||||||||||
The table below provides information on the valuation technique, significant unobservable inputs, and the ranges utilized by the Company in measuring fair value on a recurring basis of the significant Level 3 liabilities as of December 31, 2013 (dollars in thousands): | ||||||||||||||||
Fair Value | Valuation Technique | Unobservable Input | Range | |||||||||||||
Contingent consideration obligations | $ | 39,293 | Probability weighted | Discount rate | 3% - 13% | |||||||||||
discounted cash flow | ||||||||||||||||
The Company determines the fair value for its contingent consideration obligations using an income approach whereby the Company assesses the probability and timing of the achievement of the applicable milestones, which are based on contractually negotiated financial or operating targets that vary by acquisition transaction, such as revenues, gross margin, EBITDA, and assets under custody. The contingent payments are estimated using a probability weighted, multi-scenario analysis of expected future performance of the acquired businesses. The Company then discounts these expected payment amounts to calculate the fair value as of the valuation date. The Company's management evaluates the underlying projections and other related factors used in determining fair value each period and makes updates when there have been significant changes in management's expectations. | ||||||||||||||||
The principal significant unobservable input used in the valuations of the Company's contingent consideration obligations is a risk-adjusted discount rate. Whereas management's underlying projections adjust for market penetration and adoption rates, the discount rate is risk-adjusted for key factors such as advisor attrition, advisor recruitment, expenses and overhead costs, average client assets, revenue generation of client assets, and credit risk. An increase in the discount rate will result in a decrease in the fair value of contingent consideration. Conversely, a decrease in the discount rate will result in an increase in the fair value of contingent consideration. | ||||||||||||||||
The contingent consideration obligation related to the acquisition of NRP was based on the achievement of certain revenue-based targets for the trailing twelve-month period ended November 30, 2013, in aggregate for those advisors joining LPL Financial subsequent to the NRP acquisition for whom retirement plans comprise a significant part of their business. During the years ended December 31, 2013 and 2012, as a result of greater than expected recruitment of new advisors who serve retirement plans, the Company revised its revenue estimates and made certain changes in the probability assumptions with respect to the likelihood of achieving the revenue targets. These revisions, combined with implied interest, resulted in an $19.4 million and $16.2 million increase in the fair value of the contingent consideration obligation related to NRP during the years ended December 31, 2013 and 2012, respectively, and are recorded in other expenses in the consolidated statements of income. During the fourth quarter of 2013 the Company finalized the determination of the amount of contingent consideration to be paid to the former shareholders of NRP, resulting in a total estimated payment of $39.3 million (see Note 22). | ||||||||||||||||
The contingent consideration obligation related to the acquisition of CCP is based on the achievement of targeted levels of gross margin attributed to Concord for the year ended December 31, 2013. During the years ended December 31, 2013 and 2012, the Company revised its gross margin estimates and adjusted its assumptions regarding the likelihood of payment. The revisions reduced the fair value of the contingent consideration obligation by $6.8 million and $5.4 million, respectively, included in other expenses in the consolidated statements of income for the years ended December 31, 2013 and 2012, which resulted in the elimination of the contingent consideration obligation. | ||||||||||||||||
The Company established a contingent consideration liability related to the acquisition of Veritat based on the achievement of targeted levels of assets under management and earnings and the retention of key employees. During 2013, the Company ceased operations of NestWise, which held the assets acquired from Veritat. As such, the Company revised its estimate of the potential payment obligation that it may be required to pay the former shareholders of Veritat by $9.3 million, which was recorded as a reduction of other expenses in the consolidated statements of income and eliminated the contingent consideration obligation. | ||||||||||||||||
Set forth below is a reconciliation of contingent consideration for the years ended December 31, 2013 and 2012 (in thousands): | ||||||||||||||||
Fair value at December 31, 2011 | $ | 16,104 | ||||||||||||||
Issuance of contingent consideration | 8,430 | |||||||||||||||
Net changes in estimated fair value of contingent consideration obligations | 11,353 | |||||||||||||||
Fair value at December 31, 2012 | $ | 35,887 | ||||||||||||||
Net changes in estimated fair value of contingent consideration obligations | 12,676 | |||||||||||||||
Closure of NestWise | (9,270 | ) | ||||||||||||||
Fair value at December 31, 2013 | $ | 39,293 | ||||||||||||||
HeldtoMaturity_Securities
Held-to-Maturity Securities | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||||
Held-to-Maturity Securities | ' | |||||||||||||||
Held-to-Maturity Securities | ||||||||||||||||
The Company holds certain investments in securities including U.S. government notes, which are recorded at amortized cost because the Company has both the intent and the ability to hold these investments to maturity. Interest income is accrued as earned. Premiums and discounts are amortized using a method that approximates the effective yield method over the term of the security and are recorded as an adjustment to the investment yield. The Company discloses the fair value of its securities held-to-maturity using quoted prices in active markets, which is a Level 1 fair value measurement. | ||||||||||||||||
The amortized cost, gross unrealized loss or gain and fair value of securities held-to-maturity were as follows (in thousands): | ||||||||||||||||
December 31, | ||||||||||||||||
2013 | 2012 | |||||||||||||||
U.S. government notes: | ||||||||||||||||
Amortized cost | $ | 6,853 | $ | 10,202 | ||||||||||||
Gross unrealized (loss) gain | (58 | ) | $ | 6 | ||||||||||||
Fair value | $ | 6,795 | $ | 10,208 | ||||||||||||
At December 31, 2013, the securities held-to-maturity were scheduled to mature as follows (in thousands): | ||||||||||||||||
Within one year | After one but within five years | After five but within ten years | Total | |||||||||||||
U.S. government notes — at amortized cost | $ | 4,257 | $ | 2,096 | $ | 500 | $ | 6,853 | ||||||||
U.S. government notes — at fair value | $ | 4,258 | $ | 2,073 | $ | 464 | $ | 6,795 | ||||||||
Receivables_from_Product_Spons
Receivables from Product Sponsors, Broker-Dealers and Clearing Organizations and Payables to Broker-Dealers and Clearing Organizations | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Due to and from Broker-Dealers and Clearing Organizations [Abstract] | ' | ||||||||
Receivables from Product Sponsors, Broker-Dealers and Clearing Organizations and Payables to Broker-Dealers and Clearing Organizations | ' | ||||||||
Receivables from Product Sponsors, Broker-Dealers and Clearing Organizations and Payables to Broker-Dealers and Clearing Organizations | |||||||||
Receivables from product sponsors, broker-dealers, and clearing organizations and payables to broker-dealers and clearing organizations were as follows (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Receivables: | |||||||||
Commissions receivable from product sponsors and others | $ | 112,575 | $ | 97,395 | |||||
Receivable from clearing organizations | 49,295 | 35,454 | |||||||
Receivable from broker-dealers | 7,060 | 13,560 | |||||||
Securities failed-to-deliver | 5,140 | 6,541 | |||||||
Total receivables | $ | 174,070 | $ | 152,950 | |||||
Payables: | |||||||||
Payable to clearing organizations | $ | 28,433 | $ | 23,903 | |||||
Securities loaned | — | 19,314 | |||||||
Securities failed-to-receive | 4,840 | 8,868 | |||||||
Payable to broker-dealers | 9,884 | 946 | |||||||
Total payables | $ | 43,157 | $ | 53,031 | |||||
Fixed_Assets
Fixed Assets | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Fixed Assets | ' | ||||||||
Fixed Assets | |||||||||
The components of fixed assets were as follows (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Internally developed software | $ | 232,448 | $ | 272,310 | |||||
Leasehold improvements | 89,259 | 59,414 | |||||||
Computers and software | 86,163 | 98,611 | |||||||
Furniture and equipment | 37,868 | 18,624 | |||||||
Land | 6,642 | 6,572 | |||||||
Total fixed assets | 452,380 | 455,531 | |||||||
Accumulated depreciation and amortization | (263,321 | ) | (324,684 | ) | |||||
Fixed assets, net | $ | 189,059 | $ | 130,847 | |||||
Depreciation and amortization expense for fixed assets was $44.5 million, $32.3 million and $33.8 million for the years ended December 31, 2013, 2012 and 2011, respectively. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||
Goodwill and Other Intangible Assets | ' | |||||||||||||
Goodwill and Other Intangible Assets | ||||||||||||||
A summary of the activity in goodwill is presented below (in thousands): | ||||||||||||||
Balance at December 31, 2011 | $ | 1,334,086 | ||||||||||||
Acquisition of Fortigent | 27,275 | |||||||||||||
Acquisition of Veritat | 10,162 | |||||||||||||
Balance at December 31, 2012 | $ | 1,371,523 | ||||||||||||
Closure of NestWise | (10,162 | ) | ||||||||||||
Balance at December 31, 2013 | $ | 1,361,361 | ||||||||||||
In conjunction with the NestWise Closure, certain assets of NestWise, including goodwill, were determined to have no future economic benefit. Accordingly, the Company derecognized $10.2 million of goodwill held at NestWise during the third quarter of 2013, representing the carrying value of goodwill held at NestWise at the time of closure, which is included within other expenses in the consolidated statements of income. | ||||||||||||||
During the year ended December 31, 2011, and in conjunction with the corporate restructuring plan to consolidate UVEST, certain institutional relationships were determined to have no future economic benefit. Accordingly, the Company recorded an intangible asset impairment charge of $2.8 million for the year ended December 31, 2011. The impairment was determined based upon the attrition of institutions and their related revenue streams during the period of consolidation, and has been classified as a restructuring charge (see Note 4) on the consolidated statements of income. | ||||||||||||||
The components of intangible assets as of December 31, 2013 and 2012 are as follows (dollars in thousands): | ||||||||||||||
Weighted-Average Life | Gross | Accumulated | Net | |||||||||||
Remaining | Carrying | Amortization | Carrying | |||||||||||
(in years) | Value | Value | ||||||||||||
At December 31, 2013: | ||||||||||||||
Definite-lived intangible assets: | ||||||||||||||
Advisor and financial institution relationships | 11.8 | $ | 439,762 | $ | (171,453 | ) | $ | 268,309 | ||||||
Product sponsor relationships | 12.1 | 230,916 | (88,751 | ) | 142,165 | |||||||||
Client relationships | 10.2 | 19,110 | (5,881 | ) | 13,229 | |||||||||
Trade names | 8.3 | 1,200 | (200 | ) | 1,000 | |||||||||
Total definite-lived intangible assets | $ | 690,988 | $ | (266,285 | ) | $ | 424,703 | |||||||
Indefinite-lived intangible assets: | ||||||||||||||
Trademark and trade name | 39,819 | |||||||||||||
Total intangible assets | $ | 464,522 | ||||||||||||
At December 31, 2012: | ||||||||||||||
Definite-lived intangible assets: | ||||||||||||||
Advisor and financial institution relationships | 12.8 | $ | 450,164 | $ | (157,470 | ) | $ | 292,694 | ||||||
Product sponsor relationships | 13 | 230,916 | (76,230 | ) | 154,686 | |||||||||
Client relationships | 11.1 | 19,110 | (3,901 | ) | 15,209 | |||||||||
Trade names | 9.3 | 1,200 | (80 | ) | 1,120 | |||||||||
Total definite-lived intangible assets | $ | 701,390 | $ | (237,681 | ) | $ | 463,709 | |||||||
Indefinite-lived intangible assets: | ||||||||||||||
Trademark and trade name | 39,819 | |||||||||||||
Total intangible assets | $ | 503,528 | ||||||||||||
Total amortization expense of intangible assets was $39.0 million, $39.5 million and $39.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. Future amortization expense is estimated as follows (in thousands): | ||||||||||||||
2014 | $ | 38,680 | ||||||||||||
2015 | 37,775 | |||||||||||||
2016 | 37,619 | |||||||||||||
2017 | 36,752 | |||||||||||||
2018 | 34,301 | |||||||||||||
Thereafter | 239,576 | |||||||||||||
Total | $ | 424,703 | ||||||||||||
Accounts_Payable_and_Accrued_L
Accounts Payable and Accrued Liabilities | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accounts Payable and Accrued Liabilities | ' | |||||||
Accounts Payable and Accrued Liabilities | ||||||||
Accounts payable and accrued liabilities were as follows (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Accounts payable | $ | 59,299 | $ | 58,654 | ||||
Accrued payroll | 73,135 | 52,942 | ||||||
Contingent consideration obligations | 39,436 | 35,887 | ||||||
Advisor deferred compensation plan liability | 45,461 | 26,993 | ||||||
Deferred rent | 35,156 | 13,667 | ||||||
Other accrued liabilities | 49,157 | 27,995 | ||||||
Total accounts payable and accrued liabilities | $ | 301,644 | $ | 216,138 | ||||
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||
Income Taxes | ' | |||||||||||
Income Taxes | ||||||||||||
The Company’s provision for income taxes was as follows (in thousands): | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Current provision: | ||||||||||||
Federal | $ | 119,327 | $ | 96,983 | $ | 105,176 | ||||||
State | 19,062 | 13,909 | 15,559 | |||||||||
Total current provision | 138,389 | 110,892 | 120,735 | |||||||||
Deferred benefit: | ||||||||||||
Federal | (25,586 | ) | (11,137 | ) | (6,781 | ) | ||||||
State | (3,357 | ) | (1,082 | ) | (1,651 | ) | ||||||
Total deferred benefit | (28,943 | ) | (12,219 | ) | (8,432 | ) | ||||||
Provision for income taxes | $ | 109,446 | $ | 98,673 | $ | 112,303 | ||||||
A reconciliation of the U.S. federal statutory income tax rates to the Company’s effective income tax rates is set forth below: | ||||||||||||
Years Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Federal statutory income tax rates | 35 | % | 35 | % | 35 | % | ||||||
State income taxes — net of federal benefit | 3.5 | 3.3 | 3.2 | |||||||||
Non-deductible expenses | 0.4 | 1.1 | 0.4 | |||||||||
Share-based compensation | (0.1 | ) | 0.1 | 0.6 | ||||||||
Business energy tax credit | (0.5 | ) | — | — | ||||||||
Transaction costs | — | 0.1 | 0.2 | |||||||||
Goodwill derecognition | 1.2 | — | — | |||||||||
Contingent consideration obligations | (1.5 | ) | (0.7 | ) | — | |||||||
Other | (0.4 | ) | 0.5 | 0.3 | ||||||||
Effective income tax rates | 37.6 | % | 39.4 | % | 39.7 | % | ||||||
The decrease in the Company's 2013 effective tax rate and income tax expense from 2012 was primarily due to a release of the valuation allowance, larger than usual incentive stock option disqualifying dispositions and utilization of a business energy tax credit. The decrease in the Company's 2012 effective tax rate and income tax expense as compared to 2011 was due to certain matters related to the stock acquisition of CCP, a change in the fair value of the contingent consideration that is not recognizable for tax purposes, and the recognition of a deferred tax asset and related tax benefit from pre-acquisition net operating losses of CCP. | ||||||||||||
The components of the net deferred tax liabilities included in the consolidated statements of financial condition were as follows (in thousands): | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Deferred tax assets: | ||||||||||||
Accrued liabilities | $ | 39,265 | $ | 27,343 | ||||||||
Share-based compensation | 19,442 | 15,581 | ||||||||||
State taxes | 8,447 | 11,739 | ||||||||||
Deferred rent | 2,337 | 2,934 | ||||||||||
Provision for bad debts | 3,110 | 2,779 | ||||||||||
Net operating losses | 1,594 | 2,667 | ||||||||||
Other | 1,788 | 982 | ||||||||||
Subtotal | 75,983 | 64,025 | ||||||||||
Valuation allowance | — | (1,609 | ) | |||||||||
Total deferred tax assets | 75,983 | 62,416 | ||||||||||
Deferred tax liabilities: | ||||||||||||
Amortization of intangible assets | (144,392 | ) | (161,181 | ) | ||||||||
Depreciation of fixed assets | (20,888 | ) | (19,475 | ) | ||||||||
Other | (72 | ) | — | |||||||||
Total deferred tax liabilities | (165,352 | ) | (180,656 | ) | ||||||||
Deferred income taxes — net | $ | (89,369 | ) | $ | (118,240 | ) | ||||||
As a result of certain realization requirements of ASC Topic 718, Compensation - Stock Compensation, the table of deferred tax assets and liabilities shown above does not include certain federal and state net operating loss carryovers and other federal credit carryforwards that arose directly from tax deductions related to equity compensation in excess of share-based compensation recognized for financial reporting. To the extent that the Company utilizes all of these tax attributes in the future to reduce income taxes payable, the Company will record an increase to additional paid-in capital of $5.6 million. The Company uses “with and without ordering” for purposes of determining when excess tax benefits have been realized. | ||||||||||||
The following table reflects a reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits including interest and penalties (in thousands): | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Balance — Beginning of year | $ | 19,867 | $ | 20,120 | $ | 21,057 | ||||||
Increases for tax positions related to the current year | 3,972 | 3,296 | 3,314 | |||||||||
Reductions as a result of a lapse of the applicable statute of limitations | (4,317 | ) | (3,549 | ) | (4,251 | ) | ||||||
Balance — End of year | $ | 19,522 | $ | 19,867 | $ | 20,120 | ||||||
At December 31, 2013, the Company had gross unrecognized tax benefits of $19.5 million, of which $13.9 million (net of the federal benefit on state issues) represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods. | ||||||||||||
At December 31, 2012, the Company had gross unrecognized tax benefits of $19.9 million, of which $14.4 million (net of the federal benefit on state issues) represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods. | ||||||||||||
The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes within the consolidated statements of financial condition. At January 1, 2013, the Company had $2.3 million accrued for interest and $3.2 million accrued for penalties. At December 31, 2013, the liability for unrecognized tax benefits included accrued interest of $2.1 million and penalties of $3.3 million. Tax expense for the year ended December 31, 2013 includes interest benefit of $0.2 million and penalties of $0.1 million. | ||||||||||||
The Company and its subsidiaries file income tax returns in the federal jurisdiction, as well as most state jurisdictions, and are subject to routine examinations by the respective taxing authorities. The Company has concluded all federal income tax matters for years through 2009 and all state income tax matters for years through 2004. | ||||||||||||
The tax years of 2010 to 2013 remain open to examination in the federal jurisdiction. The tax years of 2005 to 2013 remain open to examination in the state jurisdictions. In the next 12 months, it is reasonably possible that the Company expects a reduction in unrecognized tax benefits of $3.5 million primarily related to the statute of limitations expiration in various state jurisdictions. |
Debt
Debt | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||||
Debt | ' | |||||||||||||||||
Debt | ||||||||||||||||||
Senior Secured Credit Facilities — On May 13, 2013, the Company entered into the First Amendment and Incremental Assumption Agreement (“Amended Credit Agreement”) with its wholly owned subsidiary, LPL Holdings, Inc., the other Credit Parties signatory thereto, the Several Lenders parties thereto, Bank of America, N.A. as Administrative Agent, and other parties thereto. The Amended Credit Agreement supplements and amends the Company's Credit Agreement, dated as of March 29, 2012 (“Previous Credit Agreement”). | ||||||||||||||||||
The Previous Credit Agreement had established a Term Loan A with an initial principal amount of $735.0 million maturing on March 29, 2017 ("Term Loan A"), a Term Loan B with an initial principal amount of $615.0 million maturing on March 29, 2019 ("Prior Term Loan B") and a revolving credit facility with borrowing capacity of $250.0 million maturing on March 29, 2017 ("Revolving Credit Facility"). | ||||||||||||||||||
Quarterly repayments of the principal for Term Loan A were scheduled to be 5.0% for the twelve months ended March 31, 2014 and 10.0% for the twelve months ended March 31, 2015, 2016 and 2017 (“Mandatory Amortization”), with the remaining principal due upon maturity. | ||||||||||||||||||
Pursuant to the Amended Credit Agreement, the Company amended Prior Term Loan B to increase its borrowing to an aggregate principal amount of $1,083.9 million (“Amended Term Loan B”). On May 13, 2013, the Company used the proceeds of Amended Term Loan B to (i) refinance the remaining outstanding balance of $608.9 million on Prior Term Loan B and (ii) repay a portion of the outstanding balance on Term Loan A in an aggregate principal amount of $238.9 million (“Term Loan A Repayment”). The remaining loan proceeds are available for working capital requirements and other general corporate purposes. The maturity date of Amended Term Loan B is March 29, 2019. The amount and maturity of the Revolving Credit Facility was not changed in the Amended Credit Agreement. | ||||||||||||||||||
The Term Loan A Repayment prepaid the Mandatory Amortization. Quarterly repayments of the principal for Amended Term Loan B will total 1.0% per year with the remaining principal due upon maturity. Any outstanding principal under the Revolving Credit Facility will be due upon maturity. | ||||||||||||||||||
In connection with the execution of the Amended Credit Agreement, the Company incurred $7.4 million in costs that are capitalized as debt issuance costs in the consolidated statements of financial condition. This refinancing resulted in the prepayment of all outstanding principal borrowings on Prior Term Loan B. In 2013, the Company accelerated the recognition of $8.0 million of unamortized costs attributable to Prior Term Loan B related to the Previous Credit Agreement. This accelerated recognition has been recorded as a loss on extinguishment of debt within the consolidated statements of income for the year ended December 31, 2013. | ||||||||||||||||||
The Amended Credit Agreement subjects the Company to certain financial and non-financial covenants. As of December 31, 2013, the Company was in compliance with such covenants. | ||||||||||||||||||
As of December 31, 2013, the Revolving Credit Facility was being used to support the issuance of $21.4 million of irrevocable letters of credit for the construction of the Company's future San Diego office building and other items. The remaining $228.6 million was undrawn at December 31, 2013. | ||||||||||||||||||
Borrowings under Term Loan A and Amended Term Loan B bear interest at a base rate equal to either one, two, three, six, nine or twelve-month LIBOR (the "Eurodollar Rate") plus the applicable margin, or an alternative base rate (“ABR”) plus the applicable margin. The ABR is equal to the greatest of (a) the prime rate in effect on such day, (b) the effective federal funds rate in effect on such day plus 0.50%, (c) the Eurodollar Rate plus 1.00% and (d) solely in the case of Amended Term Loan B, 1.75%. The Company may voluntarily repay outstanding loans under its Amended Credit Agreement at any time without premium or penalty, other than customary breakage costs with respect to LIBOR loans. | ||||||||||||||||||
Borrowings under Prior Term Loan B bore interest at a base rate equal to either the Eurodollar Rate plus the applicable margin or an ABR plus the applicable margin. The ABR was equal to the greatest of (a) the prime rate in effect on such day, (b) the effective federal funds rate in effect on such day plus 0.50%, (c) the Eurodollar Rate plus 1.00% and (d) 2.00%. | ||||||||||||||||||
The applicable margin for borrowings with respect to both Term Loan A and Amended Term Loan B is currently 1.50% for base rate borrowings and 2.50% for LIBOR borrowings. The LIBOR rate with respect to Amended Term Loan B shall in no event be less than 0.75%. The applicable margin for borrowings under the Revolving Credit Facility is currently 1.50% for base rate borrowings and 2.50% for LIBOR borrowings with a commitment fee of 0.50%. | ||||||||||||||||||
The applicable margin for borrowings under the Previous Credit Agreement with respect to Prior Term Loan B was 2.00% for base rate borrowings and 3.00% for LIBOR borrowings. The LIBOR rate with respect to Prior Term Loan B had a floor of 1.00%. | ||||||||||||||||||
The Previous Credit Agreement, dated as of March 29, 2012, allowed the Company to repay all outstanding principal borrowings under the Company's Third Amended and Restated Credit Agreement, dated as of May 24, 2010 ("Original Credit Agreement"). Accordingly, in 2012 the Company accelerated the recognition of $16.5 million of debt issuance costs related to borrowings under the Original Credit Agreement, which has been recorded as loss on extinguishment of debt within the consolidated statements of income. | ||||||||||||||||||
The Company’s outstanding borrowings were as follows (dollars in thousands): | ||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||
Interest | Interest | |||||||||||||||||
Maturity | Balance | Rate | Balance | Rate | ||||||||||||||
Senior secured term loans: | ||||||||||||||||||
Term Loan A | 3/29/17 | $ | 459,375 | 2.67 | % | -1 | $ | 707,438 | 2.71 | % | -3 | |||||||
Prior Term Loan B | 3/29/19 | — | — | % | 610,387 | 4 | % | -4 | ||||||||||
Amended Term Loan B | 3/29/19 | 1,075,721 | 3.25 | % | -2 | — | — | % | ||||||||||
Total borrowings | 1,535,096 | 1,317,825 | ||||||||||||||||
Less current borrowings (maturities within 12 months) | 10,839 | 42,900 | ||||||||||||||||
Long-term borrowings — net of current portion | $ | 1,524,257 | $ | 1,274,925 | ||||||||||||||
____________ | ||||||||||||||||||
-1 | As of December 31, 2013, the variable interest rate for Term Loan A is based on the one-month LIBOR of 0.17%, plus the applicable interest rate margin of 2.50%. | |||||||||||||||||
-2 | The variable interest rate for Amended Term Loan B is based on the greater of the LIBOR rate for the period selected (one, three, six, nine or twelve months) or 0.75%, plus the applicable interest rate margin of 2.50%. As of December 31, 2013, the Company elected the following variable interest rates for borrowings under its Amended Term Loan B: six-month LIBOR for $537.8 million, which was designated on September 26, 2013 at an interest rate of 0.37%; and six-month LIBOR for $537.8 million, which was designated on December 27, 2013 at an interest rate of 0.35%. | |||||||||||||||||
-3 | As of December 31, 2012, the variable interest rate for Term Loan A is based on the one-month LIBOR of 0.21%, plus the applicable interest rate margin of 2.50%. | |||||||||||||||||
-4 | As of December 31, 2012, the variable interest rate for Prior Term Loan B is based on the greater of the one-month LIBOR of 0.21% or 1.00%, plus the applicable interest rate margin of 3.00%. | |||||||||||||||||
Bank Loans Payable — The Company maintains three uncommitted lines of credit. Two of the lines have unspecified limits, which are primarily dependent on the Company’s ability to provide sufficient collateral. The third line has a $200.0 million and $150.0 million limit at December 31, 2013 and 2012, respectively, and allows for both collateralized and uncollateralized borrowings. The lines were utilized in 2013 and 2012; however, there were no balances outstanding at December 31, 2013 or 2012. | ||||||||||||||||||
The following summarizes borrowing activity in the revolving and uncommitted line of credit facilities (dollars in thousands): | ||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||
Average balance | $ | 3,615 | $ | 383 | $ | 104 | ||||||||||||
Weighted-average interest rate | 1.79 | % | 1.64 | % | 1 | % | ||||||||||||
The minimum calendar year payments and maturities of the senior secured borrowings as of December 31, 2013 are as follows (in thousands): | ||||||||||||||||||
2014 | $ | 10,838 | ||||||||||||||||
2015 | 10,838 | |||||||||||||||||
2016 | 10,838 | |||||||||||||||||
2017 | 470,214 | |||||||||||||||||
2018 | 10,839 | |||||||||||||||||
Thereafter | 1,021,529 | |||||||||||||||||
Total | $ | 1,535,096 | ||||||||||||||||
Derivative_Financial_Instrumen
Derivative Financial Instruments Derivative Financial Instruments | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||
Derivative Financial Instruments | ' | |||||||||||
Derivative Financial Instruments | ||||||||||||
In 2013, in conjunction with its commitment to expand its Service Value Commitment, the Company entered into a long-term contractual obligation (the "Agreement") with a third-party provider to enhance the quality, speed and cost of processes by outsourcing certain functions. The Agreement enables the third-party provider to use the services of its affiliates in India to provide services to the Company. The Agreement provides for the Company to settle the cost of its contractual obligation to the third-party provider in US dollars each month. However, the Agreement provides that on each annual anniversary date, the price for services (denominated in US dollars) is to be adjusted for the then-current exchange rate between the US dollar ("USD") and the Indian rupee ("INR"). The Agreement provides that, once an annual adjustment is calculated, there are no further modifications to the amounts paid by the Company to the third-party provider for fluctuations in the exchange rate between the US dollar and the Indian rupee until the reset on the next anniversary date. The third-party provider bears the risk of currency movement from the date of signing the Agreement until the reset on the first anniversary of its signing, and during each period until the next annual reset. The Company bears the risk of currency movement at each of the annual reset dates following the first anniversary. | ||||||||||||
To mitigate foreign currency risk arising from these annual anniversary events, the Company uses derivative financial instruments consisting solely of non-deliverable foreign currency contracts, all of which have been designated as cash flow hedges. | ||||||||||||
The details related to the non-deliverable foreign currency contracts at December 31, 2013 are as follows: | ||||||||||||
Settlement Date | Hedged Notional Amount (INR) | Contractual INR/USD Foreign Exchange Rate | Hedged Notional Amount (USD) | |||||||||
(in millions) | (in millions) | |||||||||||
Cash flow hedge #1 | 6/3/14 | 560.4 | 65.96 | $ | 8.5 | |||||||
Cash flow hedge #2 | 6/2/15 | 560.4 | 69.35 | 8.1 | ||||||||
Cash flow hedge #3 | 6/2/16 | 560.4 | 72.21 | 7.8 | ||||||||
Cash flow hedge #4 | 6/2/17 | 560.4 | 74.2 | 7.5 | ||||||||
Total hedged amount | $ | 31.9 | ||||||||||
The Company held an interest rate swap agreement with a notional balance of $65.0 million, which expired on June 30, 2012. The interest rate swap agreement qualified for hedge accounting and was designated as a cash flow hedge against specific payments due on the Company’s Prior Term Loan B. Prior to its expiration the Company assessed the interest rate swap agreement as being highly effective. Accordingly, the changes in fair value of the interest rate swap has been recorded as other comprehensive income, with the fair value included as a liability on the Company’s consolidated statements of financial condition as of December 31, 2012. The Company has reclassified gains into earnings of $1.4 million and $5.9 million for the years ended December 31, 2012 and 2011, respectively, to accumulated other comprehensive income related to the change in the fair value of its interest rate swap agreements. The Company reclassified $1.4 million and $6.3 million to interest expense from accumulated other comprehensive income for the years ended December 31, 2012 and 2011, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Commitments and Contingencies | ' | |||
Commitments and Contingencies | ||||
Leases — The Company leases office space and equipment under various operating leases. These leases are generally subject to scheduled base rent and maintenance cost increases, which are recognized on a straight-line basis over the period of the leases. Total rental expense for all operating leases was approximately $19.4 million, $18.8 million and $17.2 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||
Service Contracts — The Company is party to certain long-term contracts for systems and services that enable back office trade processing and clearing for its product and service offerings. | ||||
Future minimum payments under leases, lease commitments, service contracts and other contractual obligations with remaining terms greater than one year as of December 31, 2013, are as follows (in thousands): | ||||
2014 | $ | 46,449 | ||
2015 | 48,713 | |||
2016 | 47,899 | |||
2017 | 40,987 | |||
2018 | 40,585 | |||
Thereafter | 232,845 | |||
Total(1)(2) | $ | 457,478 | ||
_____________________ | ||||
-1 | The table above includes the minimum payments due over the duration of a contractual obligation, which may be canceled, subject to a termination penalty that is approximately equal to the initial annual minimum payment. The amount constituting the termination penalty steps down ratably through the passage of time. Future minimum payments have not been reduced by this termination penalty. | |||
-2 | Future minimum payments have not been reduced by minimum sublease rental income of $3.9 million due in the future under noncancellable subleases. | |||
Included in the schedule of future minimum payments above is a fifteen-year lease commitment that was executed in December 2011 for the Company's future San Diego office building with a lease commencement date of May 1, 2014. Future minimum payments for this lease commitment are $9.6 million, $14.8 million, $15.4 million, $16.0 million, $16.5 million and $204.3 million for the years 2014, 2015, 2016, 2017, 2018 and thereafter, respectively. | ||||
Guarantees — The Company occasionally enters into certain types of contracts that contingently require it to indemnify certain parties against third-party claims. The terms of these obligations vary and, because a maximum obligation is not explicitly stated, the Company has determined that it is not possible to make an estimate of the amount that it could be obligated to pay under such contracts. | ||||
The Company’s subsidiary, LPL Financial, provides guarantees to securities clearing houses and exchanges under their standard membership agreements, which require a member to guarantee the performance of other members. Under these agreements, if a member becomes unable to satisfy its obligations to the clearing houses and exchanges, all other members would be required to meet any shortfall. The Company’s liability under these arrangements is not quantifiable and may exceed the cash and securities it has posted as collateral. However, the potential requirement for the Company to make payments under these agreements is remote. Accordingly, no liability has been recognized for these transactions. | ||||
Loan Commitments — From time to time, LPL Financial makes loans to its advisors, primarily to newly recruited advisors to assist in the transition process, which may be forgivable. Due to timing differences, LPL Financial may make commitments to issue such loans prior to actually funding them. These commitments are generally contingent upon certain events occurring, including but not limited to the advisor joining LPL Financial. LPL Financial had no significant unfunded commitments at December 31, 2013. | ||||
Disputed Matters — On October 1, 2009, LPLH received written notice from a third-party indemnitor under a certain purchase and sale agreement asserting that it is no longer obligated to indemnify the Company for certain claims under the provisions of the purchase and sale agreement. The Company believed that this assertion was without merit and commenced litigation to enforce its indemnity rights. On March 31, 2011, the court entered judgment granting the Company’s motion for summary judgment in all respects, denied all counterclaims by the third party indemnitor and awarded attorney fees to the Company. On May 2, 2011, the third party indemnitor filed a notice of appeal. The Company filed its appellate brief on October 5, 2011. On December 29, 2011, the Company and the indemnifying party settled certain outstanding items related to the indemnification. The remaining claims outstanding are not material to the Company’s consolidated statements of income, financial condition or cash flows. | ||||
During 2010, the Company settled certain arbitrations that involve activities covered under the third-party indemnification agreement described above. In connection with these settlements in 2010, the Company recorded legal expenses of $11.4 million that have been classified as other expense on the consolidated statements of income. On December 29, 2011, the Company received a $10.5 million cash settlement from the third-party indemnitor, substantially all of which has been classified as a reduction of other expense in the consolidated statements of income. | ||||
The Company maintains insurance coverage for client claims. With respect to these matters, the estimated losses on the majority of pending matters are less than the applicable deductibles of the insurance policies. The Company believes, based on the information available at this time, after consultation with counsel, consideration of amounts accrued, insurance, if any, and indemnifications provided by the third-party indemnitors, if any, that the outcomes of matters with estimated losses in excess of applicable deductibles will not have a material impact on the consolidated statements of income, financial condition or cash flows. | ||||
In 2013, certain former owners of CCP filed lawsuits with claims related to contingent consideration under the stock purchase agreement relating to the Company's acquisition of CCP and employment-related claims. As of February 25, 2014, the Company does not believe that the outcomes of these matters, individually or in the aggregate, will have a material impact on its consolidated statements of income, financial condition or cash flows. | ||||
Regulatory — In July 2012, the Internal Revenue Service (the “IRS”) issued a Notice of Proposed Adjustment (the “Notice”) asserting that the Company is subject to a penalty with respect to an alleged untimely deposit of withholding taxes related to the exercise of certain non-qualified stock options in connection with the Company's initial public offering in 2010. As of December 31, 2012, the Company had recorded an estimate of probable loss within accounts payable and accrued liabilities in the consolidated statements of income and within accounts payable and accrued liabilities in the consolidated statements of financial condition. In 2013, the IRS issued a Summary of Employment Tax Examination, and the Company remitted payment that approximated amounts previously accrued and the matter was concluded. | ||||
In May of 2013, the Company reached an agreement with its principal regulator to resolve a matter related to email surveillance and production, the settlement of which was not significant to the Company's consolidated statements of income, financial condition or cash flows as of and for the year ended December 31, 2013. | ||||
Other Commitments — As of December 31, 2013, the Company had received collateral primarily in connection with client margin loans with a market value of approximately $367.7 million, which it can sell, re-pledge or loan. Of this amount, approximately $28.6 million was pledged with client-owned securities to the Options Clearing Corporation ("OCC") as collateral to secure client obligations related to options positions. Additionally, approximately $144.3 million are held at banks in connection with unutilized secured margin lines of credit; these securities may be used as collateral for loans from these banks. The remainder of $194.8 million has not been sold, re-pledged or loaned, and as of December 31, 2013 there are no restrictions that materially limit the Company's ability to sell, re-pledge or loan the remaining $339.1 million of client collateral. In May 2013, the Company ended its participation in the NSCC Stock Borrow Program and all pledged collateral was returned to the Company. | ||||
Trading securities on the consolidated statements of financial condition includes $1.4 million and $0.9 million pledged to clearing organizations at December 31, 2013 and 2012, respectively. | ||||
Brokerage, clearing and custody services are provided by LPL Financial on a fully disclosed basis. LPL Financial offers its investment advisory programs, platforms, provides technology, and additional processing and related services to the advisors of the broker-dealer subsidiary of a large global insurance company and their clients under a multi-year agreement. Termination fees may be payable by a terminating or breaching party depending on the specific cause of termination. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||||||||||||||||
Share-Based Compensation | ' | ||||||||||||||||||||||||||||||
Stockholders' Equity | |||||||||||||||||||||||||||||||
Share-Based Compensation | |||||||||||||||||||||||||||||||
On November 17, 2010, the Company adopted a 2010 Omnibus Incentive Plan (the "2010 Plan"), which provides for the granting of stock options, warrants, restricted stock awards and restricted stock units. The 2010 Plan serves as the successor to the 2005 Stock Option Plan for Incentive Stock Options, the 2005 Stock Option Plan for Non-qualified Stock Options, the 2008 Advisor and Institution Incentive Plan, the 2008 Stock Option Plan and the Director Restricted Stock Plan (the "Predecessor Plans"). Upon adoption of the 2010 Plan, awards were no longer made under the Predecessor Plans. Awards previously granted under the Predecessor Plans remain outstanding. | |||||||||||||||||||||||||||||||
Under the 2010 Plan, the Company may grant up to 12,055,945 new shares in addition to the shares available for grant under the Predecessor Plans. As of December 31, 2013, the Company had approximately 7,031,762 of authorized unissued shares reserved for issuance upon exercise and conversion of outstanding awards. | |||||||||||||||||||||||||||||||
On May 8, 2012, the Company awarded 22,092 shares of common stock in conjunction with the acquisition of Fortigent, at a price of $33.95 per share, which resulted in share-based compensation of $0.8 million during the year ended December 31, 2012. Such amount has been classified as compensation and benefits expense on the consolidated statements of income. | |||||||||||||||||||||||||||||||
Stock Options and Warrants | |||||||||||||||||||||||||||||||
The following table presents the weighted-average assumptions used by the Company in calculating the fair value of its employee, officer and director stock options with the Black-Scholes valuation model that have been granted during the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Expected life (in years) | 6.25 | 6.49 | 6.5 | ||||||||||||||||||||||||||||
Expected stock price volatility | 45.03 | % | 45.73 | % | 48.82 | % | |||||||||||||||||||||||||
Expected dividend yield | 1.72 | % | 0.29 | % | — | % | |||||||||||||||||||||||||
Risk-free interest rate | 1.39 | % | 1.34 | % | 2.2 | % | |||||||||||||||||||||||||
Fair value of options | $ | 12.05 | $ | 14.43 | $ | 15.99 | |||||||||||||||||||||||||
The fair value of each stock option or warrant awarded to advisors and financial institutions is estimated on the date of the grant and revalued at each reporting period using the Black-Scholes valuation model with the following weighted-average assumptions used during the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Expected life (in years) | 6.24 | 7.61 | 8.3 | ||||||||||||||||||||||||||||
Expected stock price volatility | 40.99 | % | 43.97 | % | 48.24 | % | |||||||||||||||||||||||||
Expected dividend yield | 1.89 | % | 1.7 | % | — | % | |||||||||||||||||||||||||
Risk-free interest rate | 2.04 | % | 1.28 | % | 1.67 | % | |||||||||||||||||||||||||
Fair value of options | $ | 25.92 | $ | 11.46 | $ | 17.74 | |||||||||||||||||||||||||
The risk-free interest rates are based on the implied yield available on U.S. Treasury constant maturities with remaining terms equivalent to the respective expected terms of the options. Options granted prior to March 31, 2012 were granted before the declaration of our special dividend and announcement of the Company's intention, subject in each instance to board approval, to pay regular quarterly dividends. Therefore, those options had an expected dividend yield of zero. For any options granted after the March 30, 2012 announcement regarding regular quarterly dividends, the dividend yield is based on an expected dividend as a percentage of our stock price on the valuation date. The Company estimates the expected term for stock options awarded to employees, officers and directors using the simplified method in accordance with Staff Accounting Bulletin 110, Certain Assumptions Used in Valuation Methods, | |||||||||||||||||||||||||||||||
The Company recognized $12.7 million, $15.9 million and $14.7 million of share-based compensation related to the vesting of stock options awarded to employees, officers, and directors during the years ended December 31, 2013, 2012 and 2011, respectively. As of December 31, 2013, total unrecognized compensation cost related to non-vested share-based compensation arrangements granted to employees, officers, and directors was $26.3 million, which is expected to be recognized over a weighted-average period of 2.69 years. | |||||||||||||||||||||||||||||||
The Company recognized $9.2 million, $3.8 million and $3.3 million of share-based compensation during the years ended December 31, 2013, 2012 and 2011, respectively, related to the vesting of stock options and warrants awarded to its advisors and financial institutions. As of December 31, 2013, total unrecognized compensation cost related to non-vested share-based compensation arrangements granted to advisors and financial institutions was $19.4 million, which is expected to be recognized over a weighted-average period of 3.02 years. | |||||||||||||||||||||||||||||||
The following table summarizes the Company’s stock option and warrant activity for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||||||||||||||||
Shares | Average | Average | Intrinsic | ||||||||||||||||||||||||||||
Exercise Price | Remaining | Value | |||||||||||||||||||||||||||||
Contractual | (In thousands) | ||||||||||||||||||||||||||||||
Term | |||||||||||||||||||||||||||||||
(Years) | |||||||||||||||||||||||||||||||
Outstanding — December 31, 2010 | 10,279,052 | $ | 18.12 | ||||||||||||||||||||||||||||
Granted | 1,151,082 | 31.9 | |||||||||||||||||||||||||||||
Exercised | (1,807,746 | ) | 5.42 | ||||||||||||||||||||||||||||
Forfeited | (599,638 | ) | 27.01 | ||||||||||||||||||||||||||||
Outstanding — December 31, 2011 | 9,022,750 | 21.83 | |||||||||||||||||||||||||||||
Granted | 1,978,862 | 30.99 | |||||||||||||||||||||||||||||
Exercised | (2,335,026 | ) | 7.69 | ||||||||||||||||||||||||||||
Forfeited | (524,577 | ) | 29.75 | ||||||||||||||||||||||||||||
Outstanding — December 31, 2012 | 8,142,009 | 27.61 | |||||||||||||||||||||||||||||
Granted | 1,278,508 | 31.88 | |||||||||||||||||||||||||||||
Exercised | (1,387,918 | ) | 24.67 | ||||||||||||||||||||||||||||
Forfeited | (1,016,078 | ) | 31.15 | ||||||||||||||||||||||||||||
Outstanding — December 31, 2013 | 7,016,521 | $ | 28.45 | 6.92 | $ | 130,481 | |||||||||||||||||||||||||
Exercisable — December 31, 2013 | 3,460,955 | $ | 26.13 | 5.72 | $ | 72,411 | |||||||||||||||||||||||||
The following table summarizes information about outstanding stock options and warrants: | |||||||||||||||||||||||||||||||
Outstanding | Exercisable | ||||||||||||||||||||||||||||||
Range of Exercise Prices | Total | Weighted- | Weighted- | Number of | Weighted- | ||||||||||||||||||||||||||
Number of | Average | Average | Shares | Average | |||||||||||||||||||||||||||
Shares | Remaining | Exercise | Exercise | ||||||||||||||||||||||||||||
Life | Price | Price | |||||||||||||||||||||||||||||
(Years) | |||||||||||||||||||||||||||||||
At December 31, 2013: | |||||||||||||||||||||||||||||||
$1.35 - $2.38 | 53,382 | 0.74 | $ | 1.78 | 53,382 | $ | 1.78 | ||||||||||||||||||||||||
$10.30 - 19.74 | 514,689 | 5.05 | 18.4 | 445,339 | 18.45 | ||||||||||||||||||||||||||
$21.60 - $22.08 | 937,691 | 5.45 | 22.03 | 734,191 | 22.01 | ||||||||||||||||||||||||||
$23.02 - $29.99 | 2,190,928 | 6.48 | 27.38 | 1,359,810 | 26.86 | ||||||||||||||||||||||||||
$30.00 - $32.26 | 1,923,615 | 8.64 | 31.82 | 188,770 | 31.85 | ||||||||||||||||||||||||||
$32.33 - $39.60 | 1,396,216 | 7.14 | 34.54 | 679,463 | 34.46 | ||||||||||||||||||||||||||
7,016,521 | 6.92 | $ | 28.45 | 3,460,955 | $ | 26.13 | |||||||||||||||||||||||||
Restricted Stock | |||||||||||||||||||||||||||||||
The Company grants restricted stock awards and restricted stock units to its employees, officers and directors. A restricted stock unit represents the right to receive one share of common stock upon vesting. The Company recognizes share-based compensation for restricted stock awards and restricted stock units granted to its employees, officers and directors by measuring such awards at their grant date fair value. Share-based compensation is recognized ratably over the requisite service period, which generally equals the vesting period. | |||||||||||||||||||||||||||||||
The following summarizes the Company’s activity in its restricted stock awards and restricted stock units for the years ending December 31, 2013, 2012, and 2011 was as follows: | |||||||||||||||||||||||||||||||
Restricted Stock Awards | Restricted Stock Units | ||||||||||||||||||||||||||||||
Number of | Weighted-Average | Number of | Weighted-Average | ||||||||||||||||||||||||||||
Shares | Grant-Date | Shares | Grant-Date | ||||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||||
Nonvested at December 31, 2010 | 10,692 | $ | 28.3 | — | $ | — | |||||||||||||||||||||||||
Granted | 25,440 | 31.45 | — | — | |||||||||||||||||||||||||||
Vested | — | — | — | — | |||||||||||||||||||||||||||
Forfeited | — | — | — | — | |||||||||||||||||||||||||||
Nonvested at December 31, 2011 | 36,132 | 30.51 | — | — | |||||||||||||||||||||||||||
Granted | 26,680 | 29.99 | 8,925 | 28.01 | |||||||||||||||||||||||||||
Vested | (10,692 | ) | 28.3 | — | — | ||||||||||||||||||||||||||
Forfeited | (3,180 | ) | 31.44 | — | — | ||||||||||||||||||||||||||
Nonvested at December 31, 2012 | 48,940 | 30.65 | 8,925 | 28.01 | |||||||||||||||||||||||||||
Granted | 22,307 | 35.85 | 270,733 | 32.11 | |||||||||||||||||||||||||||
Vested | (20,593 | ) | 31.56 | — | — | ||||||||||||||||||||||||||
Forfeited | (11,501 | ) | 30.43 | (22,974 | ) | 30.37 | |||||||||||||||||||||||||
Nonvested at December 31, 2013 | 39,153 | $ | 33.2 | 256,684 | $ | 32.12 | |||||||||||||||||||||||||
The Company recognized $2.5 million and $0.6 million of share-based compensation related to the vesting of restricted stock awards and restricted stock units during the years ended December 31, 2013 and 2012, respectively, which is included in compensation and benefits on the consolidated statements of income. As of December 31, 2013, total unrecognized compensation cost for restricted stock awards and restricted stock units granted to employees, officers and directors was $6.5 million, which is expected to be recognized over a weighted-average remaining period of 2.43 years. | |||||||||||||||||||||||||||||||
2008 Nonqualified Deferred Compensation Plan | |||||||||||||||||||||||||||||||
On November 19, 2008, the Company established an unfunded, unsecured deferred compensation plan (the "Deferred Compensation Plan") to permit employees and former employees who held non-qualified stock options issued under the 2005 Stock Option Plan for Incentive Stock Options and 2005 Stock Option Plan for Non-qualified Stock Options that were set to expire in 2009 and 2010, to receive stock units under the Deferred Compensation Plan. On February 22, 2012, the Company distributed 1,673,556 shares, net of shares withheld to satisfy withholding tax requirements, pursuant to the terms of the Deferred Compensation Plan. Distributions to participants were made in the form of whole shares of common stock equal to the number of stock units allocated to the participant's account, with fractional shares paid out in cash. Participants authorized the Company to withhold shares from their distribution of common stock to satisfy their withholding tax obligations. Accordingly on February 22, 2012, the Company repurchased 1,149,896 shares and paid $37.5 million of cash consideration related to tax withholdings. The repurchase of shares was executed under the share repurchase program approved by the Board of Directors on August 16, 2011. | |||||||||||||||||||||||||||||||
Dividends | |||||||||||||||||||||||||||||||
The payment, timing and amount of any dividends permitted under the Company's credit facilities are subject to approval by the Board of Directors. Cash dividends per share of common stock and total cash dividends paid during each quarter were as follows (in millions, except per share data): | |||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||
Dividend per Share | Total Cash Dividend | Dividend per Share | Total Cash Dividend | ||||||||||||||||||||||||||||
Fourth quarter | $ | 0.19 | $ | 19.3 | $ | 0.12 | $ | 13 | |||||||||||||||||||||||
Third quarter | $ | 0.19 | $ | 19.9 | $ | 0.12 | $ | 13.2 | |||||||||||||||||||||||
Second quarter | $ | 0.135 | $ | 14.4 | $ | 2 | $ | 222.6 | |||||||||||||||||||||||
First quarter | $ | 0.135 | $ | 14.4 | $ | — | $ | — | |||||||||||||||||||||||
On March 30, 2012, the Company's Board of Directors approved a special dividend of $2.00 per share to common stockholders. The dividend of $222.6 million was paid on May 25, 2012 to stockholders of record as of May 15, 2012. | |||||||||||||||||||||||||||||||
Share Repurchases | |||||||||||||||||||||||||||||||
The Board of Directors has approved several share repurchase programs pursuant to which the Company may repurchase its issued and outstanding shares of common stock from time to time. Repurchased shares are included in treasury stock on the consolidated statements of financial condition. Purchases may be effected in open market or privately negotiated transactions, including transactions with affiliates, with the timing of purchases and the amount of stock purchased generally determined at the discretion of the Company's management. | |||||||||||||||||||||||||||||||
For the years ended December 31, 2013 and 2012, the Company had the following activity under its approved share repurchase programs (in millions, except share and per share data): | |||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||
Approval Date | Authorized Repurchase Amount | Amount Remaining at December 31, 2013 | Shares Purchased | Weighted-Average Price Paid Per Share | Total Cost(1) | Shares Purchased | Weighted-Average Price Paid Per Share | Total Cost(1) | |||||||||||||||||||||||
16-Aug-11 | $ | 70 | $ | — | — | $ | — | $ | — | 1,891,072 | $ | 32.27 | $ | 61 | |||||||||||||||||
25-May-12 | $ | 75 | $ | — | — | $ | — | $ | — | 2,611,022 | $ | 28.74 | $ | 75.1 | |||||||||||||||||
27-Sep-12 | $ | 150 | $ | — | 2,343,651 | $ | 36.14 | $ | 87 | 2,309,558 | $ | 27.34 | $ | 63.1 | |||||||||||||||||
28-May-13 | $ | 200 | $ | 67.9 | 3,476,137 | $ | 38.01 | $ | 132.1 | — | $ | — | $ | — | |||||||||||||||||
$ | 67.9 | 5,819,788 | $ | 37.65 | $ | 219.1 | 6,811,652 | $ | 29.25 | $ | 199.2 | ||||||||||||||||||||
___________________ | |||||||||||||||||||||||||||||||
-1 | Included in the total cost of shares purchased is a commission fee of $0.02 per share. |
Earnings_per_Share
Earnings per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Earnings per Share | ' | ||||||||||||
Earnings per Share | |||||||||||||
A reconciliation of the income used to compute basic and diluted earnings per share for the years noted was as follows (in thousands): | |||||||||||||
For the Years Ended | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic earnings per share: | |||||||||||||
Net income, as reported | 181,857 | $ | 151,918 | $ | 170,382 | ||||||||
Allocation of undistributed earnings to stock units | — | — | (2,176 | ) | |||||||||
Net income, for computing basic earnings per share | $ | 181,857 | $ | 151,918 | $ | 168,206 | |||||||
Diluted earnings per share: | |||||||||||||
Net income, as reported | $ | 181,857 | $ | 151,918 | $ | 170,382 | |||||||
Allocation of undistributed earnings to stock units | — | — | (2,104 | ) | |||||||||
Net income, for computing basic earnings per share | $ | 181,857 | $ | 151,918 | $ | 168,278 | |||||||
A reconciliation of the weighted-average number of shares outstanding used to compute basic and diluted earnings per share for the years noted was as follows (in thousands): | |||||||||||||
For the Years Ended | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic weighted-average number of shares outstanding | 104,698 | 109,443 | 108,374 | ||||||||||
Dilutive common share equivalents | 1,305 | 1,617 | 3,745 | ||||||||||
Diluted weighted-average number of shares outstanding | 106,003 | 111,060 | 112,119 | ||||||||||
Basic and diluted earnings per share for the years noted was as follows: | |||||||||||||
For the Years Ended | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic earnings per share | $ | 1.74 | $ | 1.39 | $ | 1.55 | |||||||
Diluted earnings per share | $ | 1.72 | $ | 1.37 | $ | 1.5 | |||||||
The computation of diluted earnings per share excludes stock options, warrants and restricted stock units that are anti-dilutive. For the years ended December 31, 2013, 2012 and 2011, stock options, warrants and restricted stock units representing common share equivalents of 3,440,171 shares, 4,615,244 shares and 3,919,267 shares, respectively, were anti-dilutive. |
Employee_and_Advisor_Benefit_P
Employee and Advisor Benefit Plans | 12 Months Ended |
Dec. 31, 2013 | |
Compensation and Retirement Disclosure [Abstract] | ' |
Employee and Advisor Benefit Plans | ' |
Employee and Advisor Benefit Plans | |
The Company participates in a 401(k) defined contribution plan sponsored by LPL Financial. All employees meeting minimum age and length of service requirements are eligible to participate. The Company has an employer matching program whereby employer contributions are made to the 401(k) plan, and employees are eligible for matching contributions after completing one year of service. For 2013, 2012 and 2011, contributions were made in an amount equal to 30% of the first 10% of an employee's designated deferral of their eligible compensation. At December 31, 2013, the Company has accrued an additional match equal to 20% of the first 10% of an employee's designated deferral of their eligible compensation, for a total match of 50%. During 2012 and 2011 the Company accrued an additional match equal to 10% of the first 10% of an employee's designated deferral of their eligible compensation, for a total match of 40%. The Company’s total cost under the 401(k) plan was $6.3 million, $4.5 million and $3.8 million for the years ended December 31, 2013, 2012 and 2011, respectively, which is classified as compensation and benefits in the consolidated statements of income. | |
In August 2012, the Company established the 2012 Employee Stock Purchase Plan (the “ESPP”) as a benefit to enable eligible employees to purchase common stock of LPLFH at a discount from the market price through payroll deductions, subject to limitations. Eligible employees may elect to participate in the ESPP only during an open enrollment period. The offering period immediately follows the open enrollment window, upon which time ESPP contributions are withheld from the participant's regular paycheck. The ESPP provides for a 15% discount on the market value of the stock at the lower of the grant date price (first day of the offering period) and the purchase date price (last day of the offering period). | |
On January 1, 2008, the Company adopted a non-qualified deferred compensation plan for the purpose of attracting and retaining advisors who operate, for tax purposes, as independent contractors, by providing an opportunity for participating advisors to defer receipt of a portion of their gross commissions generated primarily from commissions earned on the sale of various products. The deferred compensation plan has been fully funded to date by participant contributions. Plan assets are invested in mutual funds, which are held by the Company in a Rabbi Trust. The liability for benefits accrued under the non-qualified deferred compensation plan totaled $45.5 million at December 31, 2013, which is included in accounts payable and accrued liabilities in the consolidated statements of financial condition. The cash values of the related trust assets was $46.1 million at December 31, 2013, which is measured at fair value and included in other assets in the consolidated statements of financial condition. | |
Certain employees and advisors of the Company’s subsidiaries participated in non-qualified deferred compensation plans (the “Plans”) that permitted participants to defer portions of their compensation and earn interest on the deferred amounts. The Plans have been closed to new participants and no contributions have been made since the acquisition date. Plan assets are held by the Company in a Rabbi Trust and accounted for in the manner described above. As of December 31, 2013, the Company has recorded assets of $1.7 million and liabilities of $0.8 million, which are included in other assets and accounts payable and accrued liabilities, respectively, in the consolidated statements of financial condition. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transaction [Line Items] | ' |
Related Party Transactions | ' |
Related Party Transactions | |
The Company has related party transactions with certain portfolio companies of it’s significant shareholder, TPG Capital. During the years ended December 31, 2013, 2012 and 2011 the Company recognized revenue related to services provided to these portfolio companies of $0.5 million, $0.4 million and $0.1 million, respectively. During the years ended December 31, 2013, 2012 and 2011, the Company incurred expenses for services incurred related to these portfolio companies of $0.6 million, $0.9 million and $1.3 million of expense, respectively. As of December 31, 2013 and 2012, receivables from and payables to related parties were not in excess of $0.1 million. |
Net_Capital_and_Regulatory_Req
Net Capital and Regulatory Requirements | 12 Months Ended |
Dec. 31, 2013 | |
Brokers and Dealers [Abstract] | ' |
Net Capital and Regulatory Requirements | ' |
Net Capital and Regulatory Requirements | |
The Company operates in a highly regulated industry. Applicable laws and regulations restrict permissible activities and investments and require compliance with various financial and customer-related regulations. The consequences of noncompliance can include substantial monetary and non-monetary sanctions. In addition, the Company is also subject to comprehensive examinations and supervision by various governmental and self-regulatory agencies. These regulatory agencies generally have broad discretion to prescribe greater limitations on the operations of a regulated entity for the protection of investors or public interest. Furthermore, where the agencies determine that such operations are unsafe or unsound, fail to comply with applicable law, or are otherwise inconsistent with the laws and regulations or with the supervisory policies, greater restrictions may be imposed. | |
The Company’s registered broker-dealer, LPL Financial, is subject to the SEC’s Uniform Net Capital Rule (Rule 15c3-1 under the Exchange Act), which requires the maintenance of minimum net capital, as defined. Net capital and the related net capital requirement may fluctuate on a daily basis. LPL Financial is a clearing broker-dealer and had net capital of $130.4 million with a minimum net capital requirement of $6.9 million and net capital in excess of the minimum requirement of $123.5 million as of December 31, 2013. | |
The Company's subsidiary, PTC, operates in a highly regulated industry and is subject to various regulatory capital requirements. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that if undertaken, could have substantial monetary and non-monetary impacts to PTC's operations. | |
As of December 31, 2013 and 2012, LPL Financial and PTC met all capital adequacy requirements to which they are subject. |
Financial_Instruments_with_Off
Financial Instruments with Off-Balance-Sheet Credit Risk and Concentrations of Credit Risk | 12 Months Ended |
Dec. 31, 2013 | |
Concentration Risk Credit Risk Financial Instruments Off Balance Sheet Risk [Abstract] | ' |
Financial Instruments with Off-Balance-Sheet Credit Risk and Concentrations of Credit Risk | ' |
Financial Instruments with Off-Balance-Sheet Credit Risk and Concentrations of Credit Risk | |
LPL Financial’s client securities activities are transacted on either a cash or margin basis. In margin transactions, LPL Financial extends credit to the advisor's client, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the client’s account. As clients write options contracts or sell securities short, LPL Financial may incur losses if the clients do not fulfill their obligations and the collateral in the clients’ accounts is not sufficient to fully cover losses that clients may incur from these strategies. To control this risk, LPL Financial monitors margin levels daily and clients are required to deposit additional collateral, or reduce positions, when necessary. | |
LPL Financial is obligated to settle transactions with brokers and other financial institutions even if its advisors' clients fail to meet their obligation to LPL Financial. Clients are required to complete their transactions on the settlement date, generally three business days after the trade date. If clients do not fulfill their contractual obligations, LPL Financial may incur losses. In addition, the Company occasionally enters into certain types of contracts to fulfill its sale of when, as, and if issued securities. When, as, and if issued securities have been authorized but are contingent upon the actual issuance of the security. LPL Financial has established procedures to reduce this risk by generally requiring that clients deposit cash or securities into their account prior to placing an order. | |
LPL Financial may at times hold equity securities on both a long and short basis that are recorded on the consolidated statements of financial condition at market value. While long inventory positions represent LPL Financial’s ownership of securities, short inventory positions represent obligations of LPL Financial to deliver specified securities at a contracted price, which may differ from market prices prevailing at the time of completion of the transaction. Accordingly, both long and short inventory positions may result in losses or gains to LPL Financial as market values of securities fluctuate. To mitigate the risk of losses, long and short positions are marked-to-market daily and are continuously monitored by LPL Financial. |
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||||||||||
Selected Quarterly Financial Data (Unaudited) | ' | |||||||||||||||
Selected Quarterly Financial Data (Unaudited) | ||||||||||||||||
2013 | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Net revenues | $ | 974,796 | $ | 1,018,920 | $ | 1,053,212 | $ | 1,093,930 | ||||||||
Net income | $ | 54,717 | $ | 45,091 | $ | 37,631 | $ | 44,418 | ||||||||
Basic earnings per share | $ | 0.51 | $ | 0.42 | $ | 0.36 | $ | 0.44 | ||||||||
Diluted earnings per share | $ | 0.51 | $ | 0.42 | $ | 0.36 | $ | 0.43 | ||||||||
Dividends declared per share | $ | 0.135 | $ | 0.135 | $ | 0.19 | $ | 0.19 | ||||||||
2012 | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Net revenues | $ | 901,773 | $ | 907,843 | $ | 907,228 | $ | 944,244 | ||||||||
Net income | $ | 41,179 | $ | 39,502 | $ | 34,299 | $ | 36,938 | ||||||||
Basic earnings per share | $ | 0.38 | $ | 0.36 | $ | 0.31 | $ | 0.34 | ||||||||
Diluted earnings per share | $ | 0.37 | $ | 0.35 | $ | 0.31 | $ | 0.34 | ||||||||
Dividends declared per share | $ | 2 | $ | — | $ | 0.12 | $ | 0.12 | ||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent Events | |
On February 10, 2014, the Board of Directors declared a cash dividend of $0.24 per share on the Company's outstanding common stock to be paid on March 10, 2014 to all stockholders of record on February 24, 2014. | |
On February 10, 2014, the Board of Directors also approved the expansion of the capacity of the Company's share repurchase plan by $150.0 million to a total of $218.0 million. | |
On February 12, 2014, the Company entered into a share repurchase agreement with the investment fund associated with TPG Capital, pursuant to which the Company would repurchase 1.9 million shares of its common stock at a price of $52.00 per share, for total consideration of $100.0 million. The share repurchase was effected in a private transaction and was contingent on the closing of a registered sale of 1.9 million shares of the Company's common stock by TPG Capital to a private investor. The repurchase transaction closed on February 19, 2014. | |
On February 19, 2014, the Company paid $39.3 million to former shareholders of NRP as consideration related to the achievement of certain revenue-based milestones following the acquisition of NRP by the Company. This amount had previously been recorded as an obligation within accounts payable and accrued liabilities. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Consolidation | ' | ||||||||
Consolidation — These consolidated financial statements include the accounts of LPLFH and its subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments in which the Company exercises significant influence but does not exercise control and is not the primary beneficiary are accounted for using the equity method. | |||||||||
Revenue Recognition Policies | ' | ||||||||
Revenue Recognition Policies | |||||||||
Substantially all of the Company's revenues are based on contractual arrangements. In determining the appropriate recognition of commissions, the Company reviews the terms and conditions of the brokerage account agreements between the Company and its advisors' clients, representative agreements with its advisors, which include payout rates and terms, and selling agreements with product sponsors for packaged investment products such as mutual funds, annuities, insurance and alternative investments. In determining the appropriate recognition of advisory revenues, the Company reviews the terms and conditions of the advisory agreements between the advisors' clients and the applicable Registered Investment Advisor (“RIA”), representative agreements with its advisors, and agreements with third parties who provide specific investment management or investment strategies. | |||||||||
Revenues are recognized in the periods in which the related services are performed provided that persuasive evidence of an arrangement exists, the fee is fixed or determinable and collectability is reasonably assured. Payments received by the Company in advance of the performance of service are deferred and recognized as revenue when earned. | |||||||||
Management considers the nature of the Company's contractual arrangements in determining whether to recognize certain types of revenue on the basis of the gross amount billed or net amount retained after payments are made to providers of certain services related to the product or service offering. | |||||||||
The main factors the Company uses to determine whether to record revenue on a gross or net basis are whether: | |||||||||
• | the Company is primarily responsible for the service to the advisor and their client; | ||||||||
• | the Company has discretion in establishing fees paid by the client and fees due to the third-party service provider; and | ||||||||
• | the Company is involved in the determination of product or service specifications. | ||||||||
When client fees include a portion of charges that are paid to another party and the Company is primarily responsible for providing the service to the client, revenue is recognized on a gross basis in an amount equal to the fee paid by the client. The cost of revenues recognized is the amount due to the other party and is recorded as commission and advisory expense in the consolidated statements of income. | |||||||||
In instances in which another party is primarily responsible for providing the service to the client, revenue is recognized in the net amount retained by the Company. The portion of the fees that are collected from the client by the Company and remitted to the other party are considered pass through amounts and accordingly are not a component of revenues or cost of revenues. | |||||||||
The Company recognizes revenue related to commission, advisory fees, asset-based fees, transaction and other fees, and interest income (net of interest expense). | |||||||||
Commission — Commission revenue represents commissions generated by the Company's advisors for their clients' purchases and sales of securities on exchanges and over the counter, as well as purchases of various investment products such as mutual funds, variable and fixed annuities, alternative investments including non-traded real estate investment trusts and business development companies, fixed income, insurance, group annuities, and option and commodity transactions. The Company generates two types of commission revenues: front-end sales commissions that occur at the point of sale, as well as trailing commissions for which the Company provides ongoing support, awareness and education to clients of its advisors. | |||||||||
Front-end sales commissions are recognized as revenue on a trade-date basis, which is when the Company's performance obligations in generating the commissions have been substantially completed. The Company settles a significant volume of transactions that are initiated directly between its advisors and product sponsors, particularly with regard to mutual fund, 529 education savings plan, and fixed and variable annuity and insurance products. As a result, management must estimate a portion of its commission revenues earned from clients for purchases and sales of these products for each accounting period for which the proceeds have not yet been received. These estimates are based on the amount of commissions earned from transactions in these products in prior periods. | |||||||||
Commission revenue includes mutual fund, 529 education savings plan, and fixed and variable product trailing fees, which are recurring in nature. These trailing fees are earned by the Company based on a percentage of the current market value of clients' investment holdings in trail-eligible assets, and recognized over the period during which services are performed. Because trail commission revenues are generally paid in arrears, management estimates the majority of trail commission revenues earned during each period. These estimates are based on a number of factors, including market levels and the amount of trail commission revenues received in prior periods. | |||||||||
The amount of such accruals are shown as commissions receivable from product sponsors and others, and are classified within receivables from product sponsors, broker-dealers and clearing organizations in the consolidated statements of financial condition. | |||||||||
A substantial portion of the commission revenue is ultimately paid to the advisors. The Company records an estimate for commissions payable based upon payout ratios for each product for which the Company has accrued commission revenue. Such amounts are classified as commission and advisory expense in the consolidated statements of income. | |||||||||
Advisory — The Company records fees charged to clients as advisory revenue in advisory accounts where LPL Financial or IAG is the RIA. A substantial portion of these advisory fees are paid to the related advisor and these payments are classified as commission and advisory expense in the consolidated statements of income. | |||||||||
Certain advisors conduct their advisory business through separate entities by establishing their own RIA pursuant to the Investment Advisers Act of 1940, rather than using the Company's corporate RIA. These stand-alone RIAs ("Independent RIA") engage the Company for clearing, regulatory and custody services, as well as access to the Company's investment advisory platforms. The advisory revenue generated by these Independent RIAs is earned by the advisors, and accordingly not included in the Company's advisory revenues. | |||||||||
The Company charges administrative fees based on the value of assets within these advisory accounts and classifies such revenues as advisory in the consolidated statements of income. | |||||||||
Asset-Based — Asset-based revenues are comprised of fees from cash sweep programs, financial product manufacturer sponsorship programs, and omnibus processing and networking services and are recognized ratably over the period in which services are provided. | |||||||||
Transaction and Fee — The Company charges fees for executing certain transactions in client accounts. Transaction related charges are recognized on a trade-date basis. Other fees relate to services provided and other account charges generally outlined in agreements with clients, advisors and financial institutions. Such fees are recognized as services are performed or as earned, as applicable. In addition, the Company offers various services for which fees are charged on a subscription basis and are recognized over the subscription period. | |||||||||
Interest Income, Net of Interest Expense — The Company earns interest income from its cash equivalents and client margin balances, less interest expense on related transactions. Because interest expense incurred in connection with cash equivalents and client margin balances is completely offset by revenue on related transactions, the Company considers such interest to be an operating expense. Interest expense from operations for the years ended December 31, 2013, 2012 and 2011 did not exceed $1.0 million in any fiscal year presented. | |||||||||
Compensation and Benefits | ' | ||||||||
Compensation and Benefits — The Company records compensation and benefits for all cash and deferred compensation, benefits and related taxes as earned by its employees. Compensation and benefits expense also includes fees earned by temporary employees and contractors who perform similar services to those performed by the Company’s employees, primarily software development and project management activities. Temporary employee and contractor services expense was $21.5 million, $21.5 million and $21.0 million during the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||
Share-Based Compensation | ' | ||||||||
Share-Based Compensation — Certain employees, advisors, institutions, executive officers, and non-employee directors of the Company participate in various long-term incentive plans, which provide for granting stock options, warrants, restricted stock awards, and restricted stock units. Stock options and warrants generally vest in equal increments over a three- to five-year period and expire on the tenth anniversary following the date of grant. Restricted stock awards and restricted stock units generally vest over a two- to four-year period. | |||||||||
The Company recognizes share-based payments awarded to employees, executive officers and non-employee directors as compensation and benefits expense. The fair value for stock options is estimated using a Black-Scholes valuation model on the grant date. The fair value of restricted stock awards and restricted stock units is equal to the market price of the Company’s stock on the date of grant. Share-based compensation is recognized over the requisite service period of the individual grants, which generally equals the vesting period. | |||||||||
The Company recognizes share-based payments awarded to advisors and financial institutions as commissions and advisory expense. The fair value for stock options is estimated using a Black-Scholes valuation model. The fair value of restricted stock units is equal to the market price of the Company’s stock. Share-based compensation is based on the fair value of the equity awards at each reporting period, and is recognized over the requisite service period of the individual grants, which generally equals the vesting period. | |||||||||
The Company must also make assumptions regarding the number of stock options, warrants, restricted stock units and restricted stock awards that will be forfeited. The forfeiture assumption is ultimately adjusted to the actual forfeiture rate. Therefore, changes in the forfeiture assumptions do not impact the total amount of expense ultimately recognized over the vesting period. Rather, different forfeiture assumptions would only impact the timing of expense recognition over the vesting period. | |||||||||
Earnings Per Share | ' | ||||||||
Earnings Per Share — Basic earnings per share is computed by dividing income by the basic weighted-average number of shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if share-based payment awards were exercised, except when such assumed exercises would have an antidilutive effect on earnings per share. Diluted earnings per share is computed by dividing income by a weighted-average number of shares outstanding amount reflective of this potential dilution. | |||||||||
Prior to February 22, 2012, the Company was required to calculate earnings per share using the two-class method by allocating a portion of its earnings to employees who held stock units containing non-forfeitable rights to dividends or dividend equivalents under its 2008 Nonqualified Deferred Compensation Plan (the "Deferred Compensation Plan"). Basic earnings per share was computed by dividing income less earnings attributable to employees that held stock units under the Deferred Compensation Plan by the basic weighted-average number of shares outstanding. Diluted earnings per share was computed in a manner similar to basic earnings per share, except the weighted-average number of shares outstanding was increased to include the dilutive effect of outstanding stock options, warrants, and other stock-based awards. After the distribution of shares on February 22, 2012 pursuant to the Deferred Compensation Plan, the two-class method was no longer applicable. | |||||||||
Income Taxes | ' | ||||||||
Income Taxes — In preparing the consolidated financial statements, the Company estimates income tax expense based on various jurisdictions where it conducts business. The Company must then assess the likelihood that the deferred tax assets will be realized. A valuation allowance is established to the extent that it is more-likely-than-not that such deferred tax assets will not be realized. When the Company establishes a valuation allowance or modifies the existing allowance in a certain reporting period, the Company generally records a corresponding increase or decrease to tax expense in the consolidated statements of income. Management makes significant judgments in determining the provision for income taxes, the deferred tax assets and liabilities, and any valuation allowances recorded against the deferred tax asset. Changes in the estimate of these taxes occur periodically due to changes in the tax rates, changes in the business operations, implementation of tax planning strategies, resolution with taxing authorities of issues where the Company had previously taken certain tax positions and newly enacted statutory, judicial, and regulatory guidance. These changes could have a material effect on the Company’s consolidated statements of income, financial condition or cash flows in the period or periods in which they occur. Income tax credits are accounted for using the flow-through method as a reduction of income tax in the years utilized. | |||||||||
The Company recognizes the tax effects of a position in the consolidated financial statements only if it is more-likely-than-not to be sustained based solely on its technical merits, otherwise no benefits of the position are to be recognized. The more-likely-than-not threshold must continue to be met in each reporting period to support continued recognition of a benefit. Moreover, each tax position meeting the recognition threshold is required to be measured as the largest amount that is greater than 50 percent likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. | |||||||||
Employee Health Care Self-Insurance | ' | ||||||||
Employee Health Care Self-Insurance — The Company is partially self-insured for benefits paid under employee healthcare programs. Self-insurance estimates are determined with the assistance of insurance actuaries, based on historical experience and trends related to claims and payments, information provided by the insurance broker, and industry experience. The Company has coverage for excess losses on either an individual or an aggregate case basis. Estimates of future claim costs are recorded on an undiscounted basis, and are recognized as a liability within accounts payable and accrued liabilities in the consolidated statements of financial condition. | |||||||||
Cash and Cash Equivalents | ' | ||||||||
Cash and Cash Equivalents — Cash equivalents are highly liquid investments with an original maturity of 90 days or less that are not required to be segregated under federal or other regulations. The Company's cash and cash equivalents are composed of interest and noninterest-bearing deposits, money market funds and U.S. government obligations. | |||||||||
Cash and Securities Segregated Under Federal and Other Regulations | ' | ||||||||
Cash and Securities Segregated Under Federal and Other Regulations — The Company's subsidiary, LPL Financial, is subject to requirements related to maintaining cash or qualified securities in a segregated reserve account for the exclusive benefit of its customers in accordance with Rule 15c3-3 of the Security Exchange Act of 1934, as amended, and other regulations. At December 31, 2013, the Company had $512.4 million in cash segregated in a special reserve bank account for the exclusive benefit of clients. | |||||||||
Receivables From and Payables to Clients | ' | ||||||||
Receivables From and Payables to Clients — Receivables from clients include amounts due on cash and margin transactions. The Company extends credit to clients of its advisors to finance their purchases of securities on margin and receives income from interest charged on such extensions of credit. Payables to clients represent credit balances in client accounts arising from deposits of funds, proceeds from sales of securities, and dividend and interest payments received on securities held in client accounts at LPL Financial. At December 31, 2013 and 2012, $549.5 million and $729.1 million, respectively, of the balance represent free credit balances that are held pending re-investment by the clients. The remaining balance represents funds received from clients to support their trading activities, primarily as collateral for clients' short selling of securities. The Company pays interest on certain client payable balances. | |||||||||
To the extent that margin loans and other receivables from clients are not fully collateralized by client securities, management establishes an allowance that it believes is sufficient to cover any probable losses. When establishing this allowance, management considers a number of factors, including its ability to collect from the client or the client’s advisor and the Company’s historical experience in collecting on such transactions. | |||||||||
The following schedule reflects the Company’s activity in providing for an allowance for uncollectible amounts due from clients for the years ended December 31, 2013 and 2012 (in thousands): | |||||||||
2013 | 2012 | ||||||||
Beginning balance — January 1 | $ | 587 | $ | 716 | |||||
Provision for doubtful accounts | 1 | (129 | ) | ||||||
Ending balance — December 31 | $ | 588 | $ | 587 | |||||
Receivables From Product Sponsors, Broker-Dealers and Clearing Organizations | ' | ||||||||
Receivables From Product Sponsors, Broker-Dealers and Clearing Organizations — Receivables from product sponsors, broker-dealers and clearing organizations primarily consists of commission and transaction-related receivables. | |||||||||
Receivables from Others | ' | ||||||||
Receivables From Others — Receivables from others primarily consist of accrued fees from product sponsors and amounts due to advisors. The Company periodically extends credit to its advisors in the form of recruiting loans, commission advances and other loans. The decisions to extend credit to advisors are generally based on either the advisors’ credit history and their ability to generate future commissions. Certain loans made in connection with recruiting are forgivable over terms ranging from three to five years provided that the advisor remained licensed through LPL Financial. At December 31, 2013, advisor loans totaled $99.6 million of which $62.1 million is forgivable. Management maintains an allowance for uncollectible amounts, which excludes advisor loans that are forgivable, using an aging analysis that takes into account the advisors’ registration status and the specific type of receivable. The aging thresholds and specific percentages used represent management’s best estimates of probable losses. Management monitors the adequacy of these estimates through periodic evaluations against actual trends experienced. | |||||||||
The following schedule reflects the Company’s activity in providing for an allowance for uncollectible amounts due from others for the years ended December 31, 2013 and 2012 (in thousands): | |||||||||
2013 | 2012 | ||||||||
Beginning balance — January 1 | $ | 6,675 | $ | 8,833 | |||||
Provision for doubtful accounts | 2,020 | 1,288 | |||||||
Charge-offs — net of recoveries | (1,604 | ) | (3,446 | ) | |||||
Ending balance — December 31 | $ | 7,091 | $ | 6,675 | |||||
Classification and Valuation of Certain Investments | ' | ||||||||
Classification and Valuation of Certain Investments — The classification of an investment determines its accounting treatment. The Company generally classifies its investments in debt and equity instruments (including mutual funds, annuities, corporate bonds, government bonds and municipal bonds) as trading securities, except for government notes held by PTC, which are classified as held-to-maturity based on management’s intent and ability to hold them to maturity. The Company has not classified any investments as available-for-sale. Investment classifications are subject to ongoing review and can change. Securities classified as trading are carried at fair value, while securities classified as held-to-maturity are carried at cost or amortized cost. When possible, the fair value of securities is determined by obtaining quoted market prices. The Company also makes estimates about the fair value of investments and the timing for recognizing losses based on market conditions and other factors. If these estimates change, the Company may recognize additional losses. Both unrealized and realized gains and losses on trading securities are recognized in other revenue on a net basis in the consolidated statements of income. | |||||||||
Securities Owned and Securities Sold, But Not Yet Purchased | ' | ||||||||
Securities Owned and Securities Sold, But Not Yet Purchased — Securities owned and securities sold, but not yet purchased are reflected on a trade-date basis at market value with realized and unrealized gains and losses being recorded in other revenue in the consolidated statements of income. Interest income is accrued as earned and dividends are recorded on the ex-dividend date. | |||||||||
U.S. government notes are carried at amortized cost and classified as held-to-maturity. Interest income is accrued as earned. Premiums and discounts are amortized, using a method that approximates the effective yield method, over the term of the security and recorded as an adjustment to the investment yield. | |||||||||
Securities Borrowed and Loaned | ' | ||||||||
Securities Borrowed and Loaned — Securities borrowed and securities loaned are accounted for as collateralized financings and are recorded at contract value, representing the amount of cash provided for securities borrowed transactions and the amount of cash received for securities loaned (generally in excess of market values). The adequacy of the collateral deposited, which is determined by comparing the market value of the securities borrowed to the cash loaned, is continuously monitored and is adjusted when considered necessary to minimize the risk associated with this activity. The collateral received for securities loaned is generally cash and is adjusted daily through the National Securities Clearing Corporation's ("NSCC") net settlement process, and is classified as payables to broker-dealers and clearing organizations in the consolidated statements of financial condition. Securities loaned generally represent client securities that can be hypothecated under standard margin loan agreements. | |||||||||
The Company borrows securities from other broker-dealers to make deliveries or to facilitate customer short sales. As of December 31, 2013, the contract and collateral market values of borrowed securities were $7.1 million and $7.0 million, respectively. In May 2013, the Company ended its participation in the NSCC Stock Borrow Program and all pledged collateral was returned to the Company. As of December 31, 2012, the contract and collateral values of the securities borrowed by the Company were $9.4 million and $9.4 million, respectively, and the contract and collateral values of the rehypothecated securities loaned under the NSCC Stock Borrow Program $19.3 million and $19.3 million, respectively. | |||||||||
Fixed Assets | ' | ||||||||
Fixed Assets — Furniture, equipment, computers, purchased software, internally developed software, and leasehold improvements are recorded at historical cost, net of accumulated depreciation and amortization. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets. Furniture, equipment, computers, purchased software, and internally developed software are depreciated over a period of three to seven years. Automobiles have depreciable lives of five years. Leasehold improvements are amortized over the lesser of their useful lives or the terms of the underlying leases. Management reviews fixed assets for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. During the years ended December 31, 2013 and 2012, the Company recorded an asset impairment charge of $0.8 million and $4.0 million, respectively, for certain fixed assets related to internally developed software that were determined to have no estimated fair value. The $0.8 million asset impairment charge for the year ended December 31, 2013 is included in restructuring charges within the consolidated statements of income (see Note 4). No impairment occurred for the year ended December 31, 2011. | |||||||||
Software Development Costs | ' | ||||||||
Software Development Costs — The Company charges software development costs to operations as incurred during the preliminary project stage, while capitalizing costs at the point at which the conceptual formulation, design and testing of possible software project alternatives are complete and management authorizes and commits to funding the project. The costs of internally developed software that qualify for capitalization are capitalized as fixed assets and subsequently amortized over the estimated useful life of the software, which is generally three years. The Company does not capitalize pilot projects and projects where it believes that the future economic benefits are less than probable. | |||||||||
Acquisitions | ' | ||||||||
Acquisitions — When acquiring companies, the Company recognizes separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of income. | |||||||||
Accounting for business combinations requires the Company's management to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets, support liabilities assumed, and pre-acquisition contingencies. Although the Company believes the assumptions and estimates it has made in the past have been reasonable and appropriate, they are based in part on historical experience, market data, and information obtained from the management of the acquired companies and are inherently uncertain. | |||||||||
Examples of critical estimates in valuing certain of the intangible assets the Company has acquired include but are not limited to: (i) future expected cash flows from client relationships, advisor relationships, and product sponsor relationships; (ii) estimates to develop or use software; and (iii) discount rates. | |||||||||
If the Company determines that a pre-acquisition contingency is probable in nature and estimable as of the acquisition date, the Company records its best estimate for such a contingency as a part of the preliminary purchase price allocation. The Company continues to gather information for and evaluate pre-acquisition contingencies throughout the measurement period, with changes to the amounts recorded or identified additional pre-acquisition contingencies included in the purchase price allocation and, subsequently, in the Company's results of operations. | |||||||||
The Company may be required to pay future consideration to the former shareholders of acquired companies, depending upon the terms of the applicable purchase agreement, that is contingent upon the achievement of certain financial or operating targets. The fair value of the contingent consideration is determined using financial forecasts and other estimates that assess the probability and timing of the financial targets being reached, and measuring the associated cash payments at their present value using a risk-adjusted rate of return. The estimated fair value of the contingent consideration on the acquisition date is included in the purchase price of the acquired company. At each reporting date, or whenever there are significant changes in underlying key assumptions, a review of these assumptions is performed and the contingent consideration liability is updated to its estimated fair value. If there are no significant changes in the assumptions, the quarterly determination of the fair value of contingent consideration reflects the implied interest for the passage of time. Changes in the estimated fair value of the contingent consideration obligations may result from changes in the terms of the contingent payments, changes in discount periods and rates, changes in assumptions with respect to the timing and likelihood of achieving the applicable targets, and other related developments. Actual progress toward achieving the financial targets for the remaining measurement periods may be different than the Company's expectations of future performance. The change in the estimated fair value of contingent consideration has been classified as other expenses in the consolidated statements of income. | |||||||||
Reportable Segment | ' | ||||||||
Reportable Segment — The Company's internal reporting is organized into two service channels: Independent Advisor Services and Institution Services. These service channels qualify as individual operating segments and are aggregated and viewed as one reportable segment due to their similar economic characteristics, products and services, production and distribution processes, and regulatory environment. | |||||||||
Prior to the third quarter of 2013, the Company's internal reporting was organized into three service channels: Independent Advisor Services, Institution Services and Custom Clearing Services. During the third quarter of 2013, functions within Institution Services and Customer Clearing Services were unified under a single service channel: Institution Services. | |||||||||
Goodwill and Other Intangible Assets | ' | ||||||||
Goodwill and Other Intangible Assets — The Company classifies intangible assets into three categories: (1) goodwill, (2) intangible assets with indefinite lives not subject to amortization and (3) intangible assets with definite lives subject to amortization. Goodwill represents the excess of purchase price over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. The Company determines the useful lives of identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors considered when determining useful lives include the contractual term of any agreement, the history of the asset, the Company's long-term strategy for the use of the asset, any laws or other local regulations that could impact the useful life of the asset and other economic factors, including competition and specific market conditions. Goodwill and other indefinite-lived assets are not amortized; however, intangible assets that are deemed to have definite lives are amortized over their useful lives, generally ranging from 5 - 20 years (see Note 9). | |||||||||
Goodwill and other indefinite-lived intangible assets are tested annually for impairment in the fourth fiscal quarter and between annual tests if certain events occur indicating that the carrying amounts may be impaired. If a qualitative assessment is used and the Company determines that the fair value of a reporting unit or indefinite-lived intangible asset is more likely than not (i.e., a likelihood of more than 50%) less than its carrying amount, a quantitative impairment test will be performed. If goodwill or other indefinite-lived intangible assets are quantitatively assessed for impairment, a two-step approach is applied. First, the Company compares the estimated fair value of the reporting unit in which the asset resides to its carrying value. The second step, if necessary, measures the amount of such impairment by comparing the implied fair value of the asset to its carrying value. No impairment of goodwill or other indefinite-lived intangible assets has been recognized during the years ended December 31, 2013, 2012 and 2011. | |||||||||
Long-lived assets, such as intangible assets subject to amortization, are reviewed for impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset or asset group exceeds the estimated fair value of the asset or asset group. Long-lived assets to be disposed of by sale are reported at the lower of their carrying amounts or their estimated fair values less costs to sell and are not depreciated. | |||||||||
For the year ended December 31, 2011 the Company recorded a $2.8 million charge for the impairment of advisor and financial institution relationship intangible assets, which is included in restructuring charges within the consolidated statements of income (see Note 4 and Note 9). No impairment occurred for the years ended December 31, 2013 and 2012. | |||||||||
Debt Issuance Costs | ' | ||||||||
Debt Issuance Costs — Debt issuance and amendment costs have been capitalized and are being amortized as additional interest expense over the expected terms of the related debt agreements. | |||||||||
Equity Method Investment | ' | ||||||||
Equity Method Investment — The Company accounts for investments under the equity method when it exerts significant influence and ownership does not exceed 50% of the common stock. The Company records the investment at cost in the consolidated statements of financial condition and adjusts the carrying amount of the investment to recognize its share of earnings or losses while recording such earnings or losses within the consolidated statements of income. | |||||||||
Drafts Payable | ' | ||||||||
Drafts Payable — Drafts payable represents checks drawn against the Company that have not yet cleared through the bank. At December 31, 2013, the Company had amounts drawn of $185.0 million related to client activities, and $10.0 million of corporate overdrafts. | |||||||||
Legal Contingencies | ' | ||||||||
Legal Contingencies — The Company is involved in legal proceedings from time to time arising out of its business operations, including arbitrations and lawsuits involving private claimants, and subpoenas, investigations and other actions by government authorities and self-regulatory organizations. The Company also receives written and verbal complaints from customers of advisors. In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases in which claimants seek substantial or indeterminate damages, the Company cannot predict with certainty what the eventual loss or range of loss related to such matters will be. The Company recognizes a liability with regard to legal proceedings when it believes it is probable a liability has occurred and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount, however, the Company accrues the minimum amount in the range. The Company maintains insurance coverage, including general liability, errors and omissions, excess entity errors and omissions and fidelity bond insurance. The Company records legal accruals and related insurance recoveries on a gross basis. | |||||||||
Disputed Matters — Claims filed by clients of advisors are typically arbitrated pursuant to FINRA's procedures for arbitration, rather than litigated in court. In an arbitration, neutral third parties review evidence in the form of documents and testimony, listen to arguments and render a decision on the disputed matter. Through arbitration, the opportunity for appeal is foregone in virtually all matters as the decisions are final and binding. | |||||||||
Defense costs are expensed as incurred and classified as professional services within the consolidated statements of income. When there is indemnification or insurance, the Company may engage in defense of settlement and subsequently seek reimbursement for such matters. In connection with various acquisitions, and pursuant to the purchase and sale agreements, the Company has received third-party indemnification for certain legal proceedings and claims. Some of these matters have been defended and paid directly by the indemnifying party. | |||||||||
Derivative Financial Instruments | ' | ||||||||
Derivative Financial Instruments — The Company uses derivative financial instruments, consisting of non-deliverable foreign currency forward contracts, to mitigate foreign currency exchange rate risk related to operating expenses that are subject to repricing (see Note 13). | |||||||||
The Company has designated these derivative financial instruments as cash flow hedges, all of which qualify for hedge accounting. To qualify for hedge accounting, the derivative must be formally designated as a hedge through documentation of the relationship between the derivative and the hedged item. The documentation must include a description of the hedging instrument, the hedge item, the risk being hedged, the Company's risk management objective and strategy for undertaking the hedge, the method for assessing the effectiveness of the hedge and the method for measuring hedge ineffectiveness. In addition, the hedge relationship must be expected to be highly effective at offsetting changes in either the fair value or cash flows of the hedged item at both inception of the hedge and on an ongoing basis. | |||||||||
The Company assesses the ongoing effectiveness of its cash flow hedges. Changes in the fair value for the effective portion of the Company's cash flow hedges are presented in other comprehensive income and reclassified into earnings to match the timing of the underlying hedged item. Hedge ineffectiveness is measured at the end of each fiscal quarter, with any gains or losses realized into earnings in the current period. | |||||||||
Fair Value of Financial Instruments | ' | ||||||||
Fair Value of Financial Instruments — The Company’s financial assets and liabilities are carried at fair value or at amounts that, because of their short-term nature, approximate current fair value, with the exception of its indebtedness. The Company carries its indebtedness at amortized cost. The Company measures the implied fair value of its debt instruments using trading levels obtained from a third-party service provider. Accordingly, the debt instruments would qualify as Level 2 fair value measurements (see Note 5). As of December 31, 2013, the carrying amount and fair value of the Company’s indebtedness was approximately $1,535.1 million and $1,533.3 million, respectively. As of December 31, 2012, the carrying amount and fair value was approximately $1,317.8 million and $1,320.4 million, respectively. | |||||||||
Commitments and Contingencies | ' | ||||||||
Commitments and Contingencies — The Company recognizes a liability with regard to contingencies when it believes it is probable a liability has occurred and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount, however, the Company accrues the minimum amount in the range. | |||||||||
Comprehensive Income | ' | ||||||||
Comprehensive Income — Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, including foreign currency translation adjustments and unrealized gains and losses on marketable securities and derivative instruments. The Company’s comprehensive income (loss) is composed of net income (loss) and the effective portion of the unrealized gains (losses) on financial derivatives in cash flow hedge relationships, net of related tax effects. | |||||||||
Recently Issued Accounting Pronouncements | ' | ||||||||
Recently Issued Accounting Pronouncements — There are no recent accounting pronouncements that would impact the Company's consolidated statements of income, comprehensive income, financial condition or cash flows. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Schedule for uncollectible amounts due from clients | ' | ||||||||
The following schedule reflects the Company’s activity in providing for an allowance for uncollectible amounts due from clients for the years ended December 31, 2013 and 2012 (in thousands): | |||||||||
2013 | 2012 | ||||||||
Beginning balance — January 1 | $ | 587 | $ | 716 | |||||
Provision for doubtful accounts | 1 | (129 | ) | ||||||
Ending balance — December 31 | $ | 588 | $ | 587 | |||||
Schedule for uncollectible amounts due from others | ' | ||||||||
The following schedule reflects the Company’s activity in providing for an allowance for uncollectible amounts due from others for the years ended December 31, 2013 and 2012 (in thousands): | |||||||||
2013 | 2012 | ||||||||
Beginning balance — January 1 | $ | 6,675 | $ | 8,833 | |||||
Provision for doubtful accounts | 2,020 | 1,288 | |||||||
Charge-offs — net of recoveries | (1,604 | ) | (3,446 | ) | |||||
Ending balance — December 31 | $ | 7,091 | $ | 6,675 | |||||
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | |||||||||||||||||
NRP [Member] | CCP [Member] | Fortigent [Member] | Veritat/NestWise [Member] | |||||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ||||||||||||||||
Reconciliation of assets acquired and liabilities assumed | ' | ' | ' | ' | ||||||||||||||||
Set forth below is a reconciliation of assets acquired and liabilities assumed related to the acquisition of NRP during the year ended December 31, 2011 (in thousands): | Set forth below is a reconciliation of assets acquired and liabilities assumed related to the acquisition of CCP during the year ended December 31, 2011 (in thousands): | Set forth below is a reconciliation of assets acquired and liabilities assumed related to the acquisition of Fortigent during the year ended December 31, 2012 (in thousands): | Set forth below is a reconciliation of assets acquired and liabilities assumed related to the acquisition of Veritat during the year ended December 31, 2012 (in thousands): | |||||||||||||||||
Goodwill | $ | 13,698 | Goodwill | $ | 27,022 | Goodwill | $ | 27,275 | Goodwill | $ | 10,162 | |||||||||
Intangible assets | 11,800 | Accounts receivable | 770 | Accounts receivable | 3,548 | Fixed assets(1) | 4,180 | |||||||||||||
Accounts payable and accrued liabilities | (190 | ) | Other assets | 190 | Other assets | 2,310 | Accounts payable and accrued liabilities | (67 | ) | |||||||||||
Net assets acquired | $ | 25,308 | Deferred income taxes - net | (927 | ) | |||||||||||||||
Intangible assets(1) | 7,550 | Intangible assets | 5,400 | Net assets acquired | $ | 13,348 | ||||||||||||||
Fixed assets(2) | 3,950 | Fixed assets(1) | 6,275 | ________________________ | ||||||||||||||||
Accounts payable and accrued liabilities | (5,721 | ) | Accounts payable and accrued liabilities | (4,803 | ) | -1 | Fixed assets acquired relate primarily to internally developed software and are being amortized over 5 years. | |||||||||||||
Net assets acquired | $ | 33,761 | Deferred income taxes - net | (1,239 | ) | |||||||||||||||
Net assets acquired | $ | 38,766 | ||||||||||||||||||
________________________ | ||||||||||||||||||||
________________________ | ||||||||||||||||||||
-1 | Intangible assets acquired relate to client relationships and are being amortized over 15 years. | |||||||||||||||||||
-1 | Fixed assets acquired relate primarily to internally developed software and are being amortized over 5 years. | |||||||||||||||||||
-2 | Fixed assets acquired relate primarily to internally developed software and are being amortized over 5 years. | |||||||||||||||||||
Supplemental cash flow information | ' | ' | ' | ' | ||||||||||||||||
Set forth below is supplemental cash flow information related to the acquisition of CCP for the year ended December 31, 2011 (in thousands): | Set forth below is supplemental cash flow information related to the acquisition of Fortigent for the year ended December 31, 2012 (in thousands): | Set forth below is supplemental cash flow information related to the acquisition of Veritat for the year ended December 31, 2012 (in thousands): | ||||||||||||||||||
Cash payments, net of cash acquired | $ | 19,969 | Cash payments, net of cash acquired | $ | 28,866 | Cash payments, net of cash acquired | $ | 4,918 | ||||||||||||
Cash paid to escrow | 2,250 | Cash paid to escrow | 9,900 | Contingent consideration | 8,430 | |||||||||||||||
Contingent consideration | 11,542 | Total purchase price | $ | 38,766 | Total purchase price | $ | 13,348 | |||||||||||||
Total purchase price | $ | 33,761 | ||||||||||||||||||
Estimated purchase price to specific amortizable intangible asset | ' | ' | ' | ' | ||||||||||||||||
The Company allocated the estimated purchase price for NRP to specific amortizable intangible asset categories as follows (dollars in thousands): | The Company allocated the purchase price of Fortigent for intangible assets to specific amortizable intangible asset categories as follows (dollars in thousands): | |||||||||||||||||||
Amortization | Amount | Amortization | Amount | |||||||||||||||||
Period | Assigned | Period | Assigned | |||||||||||||||||
(in years) | (in years) | |||||||||||||||||||
Client relationships | 11 | $ | 4,730 | Client relationships | 9.4 | $ | 4,200 | |||||||||||||
Advisor relationships | 9 | 4,080 | Trade names | 10 | 1,200 | |||||||||||||||
Product sponsor relationships | 4 | 2,990 | Total intangible assets acquired | $ | 5,400 | |||||||||||||||
Total intangible assets acquired | $ | 11,800 | ||||||||||||||||||
Restructuring_Tables
Restructuring (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||||||||||
Summary of changes in accrued restructuring expense balance | ' | |||||||||||||||||||||||
The following table summarizes the balance of accrued expenses and the changes in the accrued amounts for the Program as of and for the year ended December 31, 2013 (in thousands): | ||||||||||||||||||||||||
Accrued | Costs | Payments | Non-cash | Accrued Balance at December 31, 2013 | Total | |||||||||||||||||||
Balance at | Incurred(1) | Expected | ||||||||||||||||||||||
December 31, | Restructuring | |||||||||||||||||||||||
2012 | Costs | |||||||||||||||||||||||
Outsourcing and other related costs | $ | — | $ | 15,281 | $ | (13,857 | ) | $ | — | $ | 1,424 | $ | 30,000 | |||||||||||
Technology transformation costs | — | 9,269 | (7,516 | ) | — | 1,753 | 23,000 | |||||||||||||||||
Employee severance obligations and other related costs | — | 2,458 | (1,638 | ) | — | 820 | 11,000 | |||||||||||||||||
Asset impairments | — | 842 | — | (842 | ) | — | 1,000 | |||||||||||||||||
Total | $ | — | $ | 27,850 | $ | (23,011 | ) | $ | (842 | ) | $ | 3,997 | $ | 65,000 | ||||||||||
________________________________ | ||||||||||||||||||||||||
-1 | At December 31, 2013, costs incurred represent the total cumulative costs incurred under the Program to date. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Financial assets and financial liabilities measured at fair value on a recurring basis | ' | |||||||||||||||
The following table summarizes the Company’s financial assets and financial liabilities measured at fair value on a recurring basis at December 31, 2013 (in thousands): | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
December 31, 2013: | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents | $ | 254,032 | $ | — | $ | — | $ | 254,032 | ||||||||
Securities owned — trading: | ||||||||||||||||
Money market funds | 170 | — | — | 170 | ||||||||||||
Mutual funds | 7,291 | — | — | 7,291 | ||||||||||||
Equity securities | 103 | — | — | 103 | ||||||||||||
Debt securities | — | — | — | — | ||||||||||||
U.S. treasury obligations | 1,400 | — | — | 1,400 | ||||||||||||
Total securities owned — trading | 8,964 | — | — | 8,964 | ||||||||||||
Other assets | 47,539 | 3,072 | — | 50,611 | ||||||||||||
Total assets at fair value | $ | 310,535 | $ | 3,072 | $ | — | $ | 313,607 | ||||||||
Liabilities | ||||||||||||||||
Securities sold, but not yet purchased: | ||||||||||||||||
Mutual funds | $ | 63 | $ | — | $ | — | $ | 63 | ||||||||
Equity securities | 127 | — | — | 127 | ||||||||||||
Debt securities | — | 10 | — | 10 | ||||||||||||
Certificates of deposit | — | 11 | — | 11 | ||||||||||||
Total securities sold, but not yet purchased | 190 | 21 | — | 211 | ||||||||||||
Accounts payable and accrued liabilities | — | — | 39,293 | 39,293 | ||||||||||||
Total liabilities at fair value | $ | 190 | $ | 21 | $ | 39,293 | $ | 39,504 | ||||||||
The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2012 (in thousands): | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
December 31, 2012: | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents | $ | 177,393 | $ | — | $ | — | $ | 177,393 | ||||||||
Securities owned — trading: | ||||||||||||||||
Money market funds | 302 | — | — | 302 | ||||||||||||
Mutual funds | 5,737 | — | — | 5,737 | ||||||||||||
Equity securities | 414 | — | — | 414 | ||||||||||||
Debt securities | — | 235 | — | 235 | ||||||||||||
U.S. treasury obligations | 1,400 | — | — | 1,400 | ||||||||||||
Total securities owned — trading | 7,853 | 235 | — | 8,088 | ||||||||||||
Other assets | 28,624 | — | — | 28,624 | ||||||||||||
Total assets at fair value | $ | 213,870 | $ | 235 | $ | — | $ | 214,105 | ||||||||
Liabilities | ||||||||||||||||
Securities sold, but not yet purchased: | ||||||||||||||||
Mutual funds | $ | 38 | $ | — | $ | — | $ | 38 | ||||||||
Equity securities | 247 | — | — | 247 | ||||||||||||
Debt securities | — | 55 | — | 55 | ||||||||||||
Certificates of deposit | — | 26 | — | 26 | ||||||||||||
Total securities sold, but not yet purchased | 285 | 81 | — | 366 | ||||||||||||
Accounts payable and accrued liabilities | — | — | 35,887 | 35,887 | ||||||||||||
Total liabilities at fair value | $ | 285 | $ | 81 | $ | 35,887 | $ | 36,253 | ||||||||
Fair value measurements significant Level 3 liabilities | ' | |||||||||||||||
The table below provides information on the valuation technique, significant unobservable inputs, and the ranges utilized by the Company in measuring fair value on a recurring basis of the significant Level 3 liabilities as of December 31, 2013 (dollars in thousands): | ||||||||||||||||
Fair Value | Valuation Technique | Unobservable Input | Range | |||||||||||||
Contingent consideration obligations | $ | 39,293 | Probability weighted | Discount rate | 3% - 13% | |||||||||||
discounted cash flow | ||||||||||||||||
Reconciliation of contingent consideration classified as a liability using significant unobservable inputs (Level 3) | ' | |||||||||||||||
Set forth below is a reconciliation of contingent consideration for the years ended December 31, 2013 and 2012 (in thousands): | ||||||||||||||||
Fair value at December 31, 2011 | $ | 16,104 | ||||||||||||||
Issuance of contingent consideration | 8,430 | |||||||||||||||
Net changes in estimated fair value of contingent consideration obligations | 11,353 | |||||||||||||||
Fair value at December 31, 2012 | $ | 35,887 | ||||||||||||||
Net changes in estimated fair value of contingent consideration obligations | 12,676 | |||||||||||||||
Closure of NestWise | (9,270 | ) | ||||||||||||||
Fair value at December 31, 2013 | $ | 39,293 | ||||||||||||||
HeldtoMaturity_Securities_Tabl
Held-to-Maturity Securities (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||||
Summary of amortized cost, gross unrealized (loss) gain and fair value of securities held-to-maturity | ' | |||||||||||||||
The amortized cost, gross unrealized loss or gain and fair value of securities held-to-maturity were as follows (in thousands): | ||||||||||||||||
December 31, | ||||||||||||||||
2013 | 2012 | |||||||||||||||
U.S. government notes: | ||||||||||||||||
Amortized cost | $ | 6,853 | $ | 10,202 | ||||||||||||
Gross unrealized (loss) gain | (58 | ) | $ | 6 | ||||||||||||
Fair value | $ | 6,795 | $ | 10,208 | ||||||||||||
Maturities of securities held-to-maturity | ' | |||||||||||||||
At December 31, 2013, the securities held-to-maturity were scheduled to mature as follows (in thousands): | ||||||||||||||||
Within one year | After one but within five years | After five but within ten years | Total | |||||||||||||
U.S. government notes — at amortized cost | $ | 4,257 | $ | 2,096 | $ | 500 | $ | 6,853 | ||||||||
U.S. government notes — at fair value | $ | 4,258 | $ | 2,073 | $ | 464 | $ | 6,795 | ||||||||
Receivables_from_Product_Spons1
Receivables from Product Sponsors, Broker-Dealers and Clearing Organizations and Payables to Broker-Dealers and Clearing Organizations (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Due to and from Broker-Dealers and Clearing Organizations [Abstract] | ' | ||||||||
Receivables from Product Sponsors, Broker-Dealers and Clearing Organizations and Payables to Broker-Dealers and Clearing Organizations | ' | ||||||||
Receivables from product sponsors, broker-dealers, and clearing organizations and payables to broker-dealers and clearing organizations were as follows (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Receivables: | |||||||||
Commissions receivable from product sponsors and others | $ | 112,575 | $ | 97,395 | |||||
Receivable from clearing organizations | 49,295 | 35,454 | |||||||
Receivable from broker-dealers | 7,060 | 13,560 | |||||||
Securities failed-to-deliver | 5,140 | 6,541 | |||||||
Total receivables | $ | 174,070 | $ | 152,950 | |||||
Payables: | |||||||||
Payable to clearing organizations | $ | 28,433 | $ | 23,903 | |||||
Securities loaned | — | 19,314 | |||||||
Securities failed-to-receive | 4,840 | 8,868 | |||||||
Payable to broker-dealers | 9,884 | 946 | |||||||
Total payables | $ | 43,157 | $ | 53,031 | |||||
Fixed_Assets_Tables
Fixed Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
The components of fixed assets | ' | ||||||||
The components of fixed assets were as follows (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Internally developed software | $ | 232,448 | $ | 272,310 | |||||
Leasehold improvements | 89,259 | 59,414 | |||||||
Computers and software | 86,163 | 98,611 | |||||||
Furniture and equipment | 37,868 | 18,624 | |||||||
Land | 6,642 | 6,572 | |||||||
Total fixed assets | 452,380 | 455,531 | |||||||
Accumulated depreciation and amortization | (263,321 | ) | (324,684 | ) | |||||
Fixed assets, net | $ | 189,059 | $ | 130,847 | |||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||
Summary of activity in goodwill | ' | |||||||||||||
A summary of the activity in goodwill is presented below (in thousands): | ||||||||||||||
Balance at December 31, 2011 | $ | 1,334,086 | ||||||||||||
Acquisition of Fortigent | 27,275 | |||||||||||||
Acquisition of Veritat | 10,162 | |||||||||||||
Balance at December 31, 2012 | $ | 1,371,523 | ||||||||||||
Closure of NestWise | (10,162 | ) | ||||||||||||
Balance at December 31, 2013 | $ | 1,361,361 | ||||||||||||
Components of intangible assets | ' | |||||||||||||
The components of intangible assets as of December 31, 2013 and 2012 are as follows (dollars in thousands): | ||||||||||||||
Weighted-Average Life | Gross | Accumulated | Net | |||||||||||
Remaining | Carrying | Amortization | Carrying | |||||||||||
(in years) | Value | Value | ||||||||||||
At December 31, 2013: | ||||||||||||||
Definite-lived intangible assets: | ||||||||||||||
Advisor and financial institution relationships | 11.8 | $ | 439,762 | $ | (171,453 | ) | $ | 268,309 | ||||||
Product sponsor relationships | 12.1 | 230,916 | (88,751 | ) | 142,165 | |||||||||
Client relationships | 10.2 | 19,110 | (5,881 | ) | 13,229 | |||||||||
Trade names | 8.3 | 1,200 | (200 | ) | 1,000 | |||||||||
Total definite-lived intangible assets | $ | 690,988 | $ | (266,285 | ) | $ | 424,703 | |||||||
Indefinite-lived intangible assets: | ||||||||||||||
Trademark and trade name | 39,819 | |||||||||||||
Total intangible assets | $ | 464,522 | ||||||||||||
At December 31, 2012: | ||||||||||||||
Definite-lived intangible assets: | ||||||||||||||
Advisor and financial institution relationships | 12.8 | $ | 450,164 | $ | (157,470 | ) | $ | 292,694 | ||||||
Product sponsor relationships | 13 | 230,916 | (76,230 | ) | 154,686 | |||||||||
Client relationships | 11.1 | 19,110 | (3,901 | ) | 15,209 | |||||||||
Trade names | 9.3 | 1,200 | (80 | ) | 1,120 | |||||||||
Total definite-lived intangible assets | $ | 701,390 | $ | (237,681 | ) | $ | 463,709 | |||||||
Indefinite-lived intangible assets: | ||||||||||||||
Trademark and trade name | 39,819 | |||||||||||||
Total intangible assets | $ | 503,528 | ||||||||||||
Amortization expense | ' | |||||||||||||
Future amortization expense is estimated as follows (in thousands): | ||||||||||||||
2014 | $ | 38,680 | ||||||||||||
2015 | 37,775 | |||||||||||||
2016 | 37,619 | |||||||||||||
2017 | 36,752 | |||||||||||||
2018 | 34,301 | |||||||||||||
Thereafter | 239,576 | |||||||||||||
Total | $ | 424,703 | ||||||||||||
Accounts_Payable_and_Accrued_L1
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Summary of accounts payable and accrued liabilities | ' | |||||||
Accounts payable and accrued liabilities were as follows (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Accounts payable | $ | 59,299 | $ | 58,654 | ||||
Accrued payroll | 73,135 | 52,942 | ||||||
Contingent consideration obligations | 39,436 | 35,887 | ||||||
Advisor deferred compensation plan liability | 45,461 | 26,993 | ||||||
Deferred rent | 35,156 | 13,667 | ||||||
Other accrued liabilities | 49,157 | 27,995 | ||||||
Total accounts payable and accrued liabilities | $ | 301,644 | $ | 216,138 | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||
Summary of provision for income taxes | ' | |||||||||||
The Company’s provision for income taxes was as follows (in thousands): | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Current provision: | ||||||||||||
Federal | $ | 119,327 | $ | 96,983 | $ | 105,176 | ||||||
State | 19,062 | 13,909 | 15,559 | |||||||||
Total current provision | 138,389 | 110,892 | 120,735 | |||||||||
Deferred benefit: | ||||||||||||
Federal | (25,586 | ) | (11,137 | ) | (6,781 | ) | ||||||
State | (3,357 | ) | (1,082 | ) | (1,651 | ) | ||||||
Total deferred benefit | (28,943 | ) | (12,219 | ) | (8,432 | ) | ||||||
Provision for income taxes | $ | 109,446 | $ | 98,673 | $ | 112,303 | ||||||
Summary of effective income tax rate reconciliation | ' | |||||||||||
A reconciliation of the U.S. federal statutory income tax rates to the Company’s effective income tax rates is set forth below: | ||||||||||||
Years Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Federal statutory income tax rates | 35 | % | 35 | % | 35 | % | ||||||
State income taxes — net of federal benefit | 3.5 | 3.3 | 3.2 | |||||||||
Non-deductible expenses | 0.4 | 1.1 | 0.4 | |||||||||
Share-based compensation | (0.1 | ) | 0.1 | 0.6 | ||||||||
Business energy tax credit | (0.5 | ) | — | — | ||||||||
Transaction costs | — | 0.1 | 0.2 | |||||||||
Goodwill derecognition | 1.2 | — | — | |||||||||
Contingent consideration obligations | (1.5 | ) | (0.7 | ) | — | |||||||
Other | (0.4 | ) | 0.5 | 0.3 | ||||||||
Effective income tax rates | 37.6 | % | 39.4 | % | 39.7 | % | ||||||
Components of the net deferred income taxes | ' | |||||||||||
The components of the net deferred tax liabilities included in the consolidated statements of financial condition were as follows (in thousands): | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Deferred tax assets: | ||||||||||||
Accrued liabilities | $ | 39,265 | $ | 27,343 | ||||||||
Share-based compensation | 19,442 | 15,581 | ||||||||||
State taxes | 8,447 | 11,739 | ||||||||||
Deferred rent | 2,337 | 2,934 | ||||||||||
Provision for bad debts | 3,110 | 2,779 | ||||||||||
Net operating losses | 1,594 | 2,667 | ||||||||||
Other | 1,788 | 982 | ||||||||||
Subtotal | 75,983 | 64,025 | ||||||||||
Valuation allowance | — | (1,609 | ) | |||||||||
Total deferred tax assets | 75,983 | 62,416 | ||||||||||
Deferred tax liabilities: | ||||||||||||
Amortization of intangible assets | (144,392 | ) | (161,181 | ) | ||||||||
Depreciation of fixed assets | (20,888 | ) | (19,475 | ) | ||||||||
Other | (72 | ) | — | |||||||||
Total deferred tax liabilities | (165,352 | ) | (180,656 | ) | ||||||||
Deferred income taxes — net | $ | (89,369 | ) | $ | (118,240 | ) | ||||||
Summary of gross unrecognized tax benefits including interest and penalties reconciliation | ' | |||||||||||
The following table reflects a reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits including interest and penalties (in thousands): | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Balance — Beginning of year | $ | 19,867 | $ | 20,120 | $ | 21,057 | ||||||
Increases for tax positions related to the current year | 3,972 | 3,296 | 3,314 | |||||||||
Reductions as a result of a lapse of the applicable statute of limitations | (4,317 | ) | (3,549 | ) | (4,251 | ) | ||||||
Balance — End of year | $ | 19,522 | $ | 19,867 | $ | 20,120 | ||||||
Debt_Tables
Debt (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||||
Outstanding borrowings | ' | |||||||||||||||||
The Company’s outstanding borrowings were as follows (dollars in thousands): | ||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||
Interest | Interest | |||||||||||||||||
Maturity | Balance | Rate | Balance | Rate | ||||||||||||||
Senior secured term loans: | ||||||||||||||||||
Term Loan A | 3/29/17 | $ | 459,375 | 2.67 | % | -1 | $ | 707,438 | 2.71 | % | -3 | |||||||
Prior Term Loan B | 3/29/19 | — | — | % | 610,387 | 4 | % | -4 | ||||||||||
Amended Term Loan B | 3/29/19 | 1,075,721 | 3.25 | % | -2 | — | — | % | ||||||||||
Total borrowings | 1,535,096 | 1,317,825 | ||||||||||||||||
Less current borrowings (maturities within 12 months) | 10,839 | 42,900 | ||||||||||||||||
Long-term borrowings — net of current portion | $ | 1,524,257 | $ | 1,274,925 | ||||||||||||||
____________ | ||||||||||||||||||
-1 | As of December 31, 2013, the variable interest rate for Term Loan A is based on the one-month LIBOR of 0.17%, plus the applicable interest rate margin of 2.50%. | |||||||||||||||||
-2 | The variable interest rate for Amended Term Loan B is based on the greater of the LIBOR rate for the period selected (one, three, six, nine or twelve months) or 0.75%, plus the applicable interest rate margin of 2.50%. As of December 31, 2013, the Company elected the following variable interest rates for borrowings under its Amended Term Loan B: six-month LIBOR for $537.8 million, which was designated on September 26, 2013 at an interest rate of 0.37%; and six-month LIBOR for $537.8 million, which was designated on December 27, 2013 at an interest rate of 0.35%. | |||||||||||||||||
-3 | As of December 31, 2012, the variable interest rate for Term Loan A is based on the one-month LIBOR of 0.21%, plus the applicable interest rate margin of 2.50%. | |||||||||||||||||
-4 | As of December 31, 2012, the variable interest rate for Prior Term Loan B is based on the greater of the one-month LIBOR of 0.21% or 1.00%, plus the applicable interest rate margin of 3.00%. | |||||||||||||||||
Summary of borrowing activity in the revolving and uncommitted line of credit facilities | ' | |||||||||||||||||
The following summarizes borrowing activity in the revolving and uncommitted line of credit facilities (dollars in thousands): | ||||||||||||||||||
Years Ended December 31, | ||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||
Average balance | $ | 3,615 | $ | 383 | $ | 104 | ||||||||||||
Weighted-average interest rate | 1.79 | % | 1.64 | % | 1 | % | ||||||||||||
Summary of minimum calendar year payments and maturities of the senior secured borrowings | ' | |||||||||||||||||
The minimum calendar year payments and maturities of the senior secured borrowings as of December 31, 2013 are as follows (in thousands): | ||||||||||||||||||
2014 | $ | 10,838 | ||||||||||||||||
2015 | 10,838 | |||||||||||||||||
2016 | 10,838 | |||||||||||||||||
2017 | 470,214 | |||||||||||||||||
2018 | 10,839 | |||||||||||||||||
Thereafter | 1,021,529 | |||||||||||||||||
Total | $ | 1,535,096 | ||||||||||||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments Derivative Financial Instruments (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||
Schedule of non-deliverable foreign currency contracts | ' | |||||||||||
The details related to the non-deliverable foreign currency contracts at December 31, 2013 are as follows: | ||||||||||||
Settlement Date | Hedged Notional Amount (INR) | Contractual INR/USD Foreign Exchange Rate | Hedged Notional Amount (USD) | |||||||||
(in millions) | (in millions) | |||||||||||
Cash flow hedge #1 | 6/3/14 | 560.4 | 65.96 | $ | 8.5 | |||||||
Cash flow hedge #2 | 6/2/15 | 560.4 | 69.35 | 8.1 | ||||||||
Cash flow hedge #3 | 6/2/16 | 560.4 | 72.21 | 7.8 | ||||||||
Cash flow hedge #4 | 6/2/17 | 560.4 | 74.2 | 7.5 | ||||||||
Total hedged amount | $ | 31.9 | ||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Future minimum payments under leases, lease commitments and other non cancellable contractual obligations | ' | |||
Future minimum payments under leases, lease commitments, service contracts and other contractual obligations with remaining terms greater than one year as of December 31, 2013, are as follows (in thousands): | ||||
2014 | $ | 46,449 | ||
2015 | 48,713 | |||
2016 | 47,899 | |||
2017 | 40,987 | |||
2018 | 40,585 | |||
Thereafter | 232,845 | |||
Total(1)(2) | $ | 457,478 | ||
_____________________ | ||||
-1 | The table above includes the minimum payments due over the duration of a contractual obligation, which may be canceled, subject to a termination penalty that is approximately equal to the initial annual minimum payment. The amount constituting the termination penalty steps down ratably through the passage of time. Future minimum payments have not been reduced by this termination penalty. | |||
-2 | Future minimum payments have not been reduced by minimum sublease rental income of $3.9 million due in the future under noncancellable subleases. |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||||||||||||||||
Weighted-average assumptions used for calculating the fair value of its stock options and warrants with the Black-Scholes valuation model | ' | ||||||||||||||||||||||||||||||
The following table presents the weighted-average assumptions used by the Company in calculating the fair value of its employee, officer and director stock options with the Black-Scholes valuation model that have been granted during the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Expected life (in years) | 6.25 | 6.49 | 6.5 | ||||||||||||||||||||||||||||
Expected stock price volatility | 45.03 | % | 45.73 | % | 48.82 | % | |||||||||||||||||||||||||
Expected dividend yield | 1.72 | % | 0.29 | % | — | % | |||||||||||||||||||||||||
Risk-free interest rate | 1.39 | % | 1.34 | % | 2.2 | % | |||||||||||||||||||||||||
Fair value of options | $ | 12.05 | $ | 14.43 | $ | 15.99 | |||||||||||||||||||||||||
The fair value of each stock option or warrant awarded to advisors and financial institutions is estimated on the date of the grant and revalued at each reporting period using the Black-Scholes valuation model with the following weighted-average assumptions used during the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Expected life (in years) | 6.24 | 7.61 | 8.3 | ||||||||||||||||||||||||||||
Expected stock price volatility | 40.99 | % | 43.97 | % | 48.24 | % | |||||||||||||||||||||||||
Expected dividend yield | 1.89 | % | 1.7 | % | — | % | |||||||||||||||||||||||||
Risk-free interest rate | 2.04 | % | 1.28 | % | 1.67 | % | |||||||||||||||||||||||||
Fair value of options | $ | 25.92 | $ | 11.46 | $ | 17.74 | |||||||||||||||||||||||||
Summary of the Company's activity in its stock option and warrant plans | ' | ||||||||||||||||||||||||||||||
The following table summarizes the Company’s stock option and warrant activity for the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||||||||||||||||
Shares | Average | Average | Intrinsic | ||||||||||||||||||||||||||||
Exercise Price | Remaining | Value | |||||||||||||||||||||||||||||
Contractual | (In thousands) | ||||||||||||||||||||||||||||||
Term | |||||||||||||||||||||||||||||||
(Years) | |||||||||||||||||||||||||||||||
Outstanding — December 31, 2010 | 10,279,052 | $ | 18.12 | ||||||||||||||||||||||||||||
Granted | 1,151,082 | 31.9 | |||||||||||||||||||||||||||||
Exercised | (1,807,746 | ) | 5.42 | ||||||||||||||||||||||||||||
Forfeited | (599,638 | ) | 27.01 | ||||||||||||||||||||||||||||
Outstanding — December 31, 2011 | 9,022,750 | 21.83 | |||||||||||||||||||||||||||||
Granted | 1,978,862 | 30.99 | |||||||||||||||||||||||||||||
Exercised | (2,335,026 | ) | 7.69 | ||||||||||||||||||||||||||||
Forfeited | (524,577 | ) | 29.75 | ||||||||||||||||||||||||||||
Outstanding — December 31, 2012 | 8,142,009 | 27.61 | |||||||||||||||||||||||||||||
Granted | 1,278,508 | 31.88 | |||||||||||||||||||||||||||||
Exercised | (1,387,918 | ) | 24.67 | ||||||||||||||||||||||||||||
Forfeited | (1,016,078 | ) | 31.15 | ||||||||||||||||||||||||||||
Outstanding — December 31, 2013 | 7,016,521 | $ | 28.45 | 6.92 | $ | 130,481 | |||||||||||||||||||||||||
Exercisable — December 31, 2013 | 3,460,955 | $ | 26.13 | 5.72 | $ | 72,411 | |||||||||||||||||||||||||
Summary of information about outstanding stock options and warrants | ' | ||||||||||||||||||||||||||||||
The following table summarizes information about outstanding stock options and warrants: | |||||||||||||||||||||||||||||||
Outstanding | Exercisable | ||||||||||||||||||||||||||||||
Range of Exercise Prices | Total | Weighted- | Weighted- | Number of | Weighted- | ||||||||||||||||||||||||||
Number of | Average | Average | Shares | Average | |||||||||||||||||||||||||||
Shares | Remaining | Exercise | Exercise | ||||||||||||||||||||||||||||
Life | Price | Price | |||||||||||||||||||||||||||||
(Years) | |||||||||||||||||||||||||||||||
At December 31, 2013: | |||||||||||||||||||||||||||||||
$1.35 - $2.38 | 53,382 | 0.74 | $ | 1.78 | 53,382 | $ | 1.78 | ||||||||||||||||||||||||
$10.30 - 19.74 | 514,689 | 5.05 | 18.4 | 445,339 | 18.45 | ||||||||||||||||||||||||||
$21.60 - $22.08 | 937,691 | 5.45 | 22.03 | 734,191 | 22.01 | ||||||||||||||||||||||||||
$23.02 - $29.99 | 2,190,928 | 6.48 | 27.38 | 1,359,810 | 26.86 | ||||||||||||||||||||||||||
$30.00 - $32.26 | 1,923,615 | 8.64 | 31.82 | 188,770 | 31.85 | ||||||||||||||||||||||||||
$32.33 - $39.60 | 1,396,216 | 7.14 | 34.54 | 679,463 | 34.46 | ||||||||||||||||||||||||||
7,016,521 | 6.92 | $ | 28.45 | 3,460,955 | $ | 26.13 | |||||||||||||||||||||||||
Summary of the status of the Company's restricted stock | ' | ||||||||||||||||||||||||||||||
The following summarizes the Company’s activity in its restricted stock awards and restricted stock units for the years ending December 31, 2013, 2012, and 2011 was as follows: | |||||||||||||||||||||||||||||||
Restricted Stock Awards | Restricted Stock Units | ||||||||||||||||||||||||||||||
Number of | Weighted-Average | Number of | Weighted-Average | ||||||||||||||||||||||||||||
Shares | Grant-Date | Shares | Grant-Date | ||||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||||
Nonvested at December 31, 2010 | 10,692 | $ | 28.3 | — | $ | — | |||||||||||||||||||||||||
Granted | 25,440 | 31.45 | — | — | |||||||||||||||||||||||||||
Vested | — | — | — | — | |||||||||||||||||||||||||||
Forfeited | — | — | — | — | |||||||||||||||||||||||||||
Nonvested at December 31, 2011 | 36,132 | 30.51 | — | — | |||||||||||||||||||||||||||
Granted | 26,680 | 29.99 | 8,925 | 28.01 | |||||||||||||||||||||||||||
Vested | (10,692 | ) | 28.3 | — | — | ||||||||||||||||||||||||||
Forfeited | (3,180 | ) | 31.44 | — | — | ||||||||||||||||||||||||||
Nonvested at December 31, 2012 | 48,940 | 30.65 | 8,925 | 28.01 | |||||||||||||||||||||||||||
Granted | 22,307 | 35.85 | 270,733 | 32.11 | |||||||||||||||||||||||||||
Vested | (20,593 | ) | 31.56 | — | — | ||||||||||||||||||||||||||
Forfeited | (11,501 | ) | 30.43 | (22,974 | ) | 30.37 | |||||||||||||||||||||||||
Nonvested at December 31, 2013 | 39,153 | $ | 33.2 | 256,684 | $ | 32.12 | |||||||||||||||||||||||||
Summary of cash dividends paid | ' | ||||||||||||||||||||||||||||||
The payment, timing and amount of any dividends permitted under the Company's credit facilities are subject to approval by the Board of Directors. Cash dividends per share of common stock and total cash dividends paid during each quarter were as follows (in millions, except per share data): | |||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||
Dividend per Share | Total Cash Dividend | Dividend per Share | Total Cash Dividend | ||||||||||||||||||||||||||||
Fourth quarter | $ | 0.19 | $ | 19.3 | $ | 0.12 | $ | 13 | |||||||||||||||||||||||
Third quarter | $ | 0.19 | $ | 19.9 | $ | 0.12 | $ | 13.2 | |||||||||||||||||||||||
Second quarter | $ | 0.135 | $ | 14.4 | $ | 2 | $ | 222.6 | |||||||||||||||||||||||
First quarter | $ | 0.135 | $ | 14.4 | $ | — | $ | — | |||||||||||||||||||||||
Summary of share repurchase plan activity | ' | ||||||||||||||||||||||||||||||
For the years ended December 31, 2013 and 2012, the Company had the following activity under its approved share repurchase programs (in millions, except share and per share data): | |||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||
Approval Date | Authorized Repurchase Amount | Amount Remaining at December 31, 2013 | Shares Purchased | Weighted-Average Price Paid Per Share | Total Cost(1) | Shares Purchased | Weighted-Average Price Paid Per Share | Total Cost(1) | |||||||||||||||||||||||
16-Aug-11 | $ | 70 | $ | — | — | $ | — | $ | — | 1,891,072 | $ | 32.27 | $ | 61 | |||||||||||||||||
25-May-12 | $ | 75 | $ | — | — | $ | — | $ | — | 2,611,022 | $ | 28.74 | $ | 75.1 | |||||||||||||||||
27-Sep-12 | $ | 150 | $ | — | 2,343,651 | $ | 36.14 | $ | 87 | 2,309,558 | $ | 27.34 | $ | 63.1 | |||||||||||||||||
28-May-13 | $ | 200 | $ | 67.9 | 3,476,137 | $ | 38.01 | $ | 132.1 | — | $ | — | $ | — | |||||||||||||||||
$ | 67.9 | 5,819,788 | $ | 37.65 | $ | 219.1 | 6,811,652 | $ | 29.25 | $ | 199.2 | ||||||||||||||||||||
___________________ | |||||||||||||||||||||||||||||||
-1 | Included in the total cost of shares purchased is a commission fee of $0.02 per share. |
Earnings_per_Share_Tables
Earnings per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Earnings per share reconciliation | ' | ||||||||||||
A reconciliation of the income used to compute basic and diluted earnings per share for the years noted was as follows (in thousands): | |||||||||||||
For the Years Ended | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic earnings per share: | |||||||||||||
Net income, as reported | 181,857 | $ | 151,918 | $ | 170,382 | ||||||||
Allocation of undistributed earnings to stock units | — | — | (2,176 | ) | |||||||||
Net income, for computing basic earnings per share | $ | 181,857 | $ | 151,918 | $ | 168,206 | |||||||
Diluted earnings per share: | |||||||||||||
Net income, as reported | $ | 181,857 | $ | 151,918 | $ | 170,382 | |||||||
Allocation of undistributed earnings to stock units | — | — | (2,104 | ) | |||||||||
Net income, for computing basic earnings per share | $ | 181,857 | $ | 151,918 | $ | 168,278 | |||||||
Weighted-average shares outstanding reconciliation | ' | ||||||||||||
A reconciliation of the weighted-average number of shares outstanding used to compute basic and diluted earnings per share for the years noted was as follows (in thousands): | |||||||||||||
For the Years Ended | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic weighted-average number of shares outstanding | 104,698 | 109,443 | 108,374 | ||||||||||
Dilutive common share equivalents | 1,305 | 1,617 | 3,745 | ||||||||||
Diluted weighted-average number of shares outstanding | 106,003 | 111,060 | 112,119 | ||||||||||
Basic and diluted earnings per share | ' | ||||||||||||
Basic and diluted earnings per share for the years noted was as follows: | |||||||||||||
For the Years Ended | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic earnings per share | $ | 1.74 | $ | 1.39 | $ | 1.55 | |||||||
Diluted earnings per share | $ | 1.72 | $ | 1.37 | $ | 1.5 | |||||||
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||||||||||
Schedule of selected quarterly financial data | ' | |||||||||||||||
2013 | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Net revenues | $ | 974,796 | $ | 1,018,920 | $ | 1,053,212 | $ | 1,093,930 | ||||||||
Net income | $ | 54,717 | $ | 45,091 | $ | 37,631 | $ | 44,418 | ||||||||
Basic earnings per share | $ | 0.51 | $ | 0.42 | $ | 0.36 | $ | 0.44 | ||||||||
Diluted earnings per share | $ | 0.51 | $ | 0.42 | $ | 0.36 | $ | 0.43 | ||||||||
Dividends declared per share | $ | 0.135 | $ | 0.135 | $ | 0.19 | $ | 0.19 | ||||||||
2012 | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Net revenues | $ | 901,773 | $ | 907,843 | $ | 907,228 | $ | 944,244 | ||||||||
Net income | $ | 41,179 | $ | 39,502 | $ | 34,299 | $ | 36,938 | ||||||||
Basic earnings per share | $ | 0.38 | $ | 0.36 | $ | 0.31 | $ | 0.34 | ||||||||
Diluted earnings per share | $ | 0.37 | $ | 0.35 | $ | 0.31 | $ | 0.34 | ||||||||
Dividends declared per share | $ | 2 | $ | — | $ | 0.12 | $ | 0.12 | ||||||||
Organization_and_Description_o1
Organization and Description of the Company (Details) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
LPLH [Member] | LPL Financial [Member] | Fortigent [Member] | IAG [Member] | LPLIA [Member] | CCP [Member] | Veritat/NestWise [Member] | IASG [Member] | UVEST [Member] | PTCH [Member] | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares distributed by H&F | 12.6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consolidation, Parent Ownership Interest [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership interest percentage in subsidiary | ' | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
Number of states in which entity operates | ' | ' | 50 | ' | ' | ' | ' | ' | ' | ' | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies Other Operating Expense (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Temporary Employee and Contractor Services [Member] | ' | ' | ' |
Other Operating Cost and Expense Components [Line Items] | ' | ' | ' |
Other cost and expense, operating | $21.50 | $21.50 | $21 |
Maximum [Member] | Interest Expense [Member] | ' | ' | ' |
Other Operating Cost and Expense Components [Line Items] | ' | ' | ' |
Other cost and expense, operating | $1 | $1 | $1 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies Share-Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Stock options and warrants | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Expiration Period | '10 years |
Stock options and warrants | Minimum [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Vesting Period | '3 years |
Stock options and warrants | Maximum [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Vesting Period | '5 years |
Restricted stock awards and restricted stock units | Minimum [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Vesting Period | '2 years |
Restricted stock awards and restricted stock units | Maximum [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Vesting Period | '4 years |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies Income Taxes (Details) | Dec. 31, 2013 |
Accounting Policies [Abstract] | ' |
Likelihood of realization of tax position upon settlement, minimum | 50.00% |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies Cash and Cash Equivalents (Details) | Dec. 31, 2013 |
days | |
Accounting Policies [Abstract] | ' |
Cash Equivalents, maximum number of days to maturity | 90 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies Cash and Securities Segregated Under Federal and Other Regulations (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Accounting Policies [Abstract] | ' | ' |
Cash and Securities Segregated under Federal and Other Regulations | $512,351 | $577,433 |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies Receivables From and Payables to Clients (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Accounting Policies [Abstract] | ' | ' | ' |
Free credit balances held | $549,500,000 | $729,100,000 | ' |
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' |
Provision for bad debts | 2,021,000 | 1,159,000 | 3,833,000 |
Receivables from clients [Member] | ' | ' | ' |
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' |
Beginning balance - January 1 | 587,000 | 716,000 | ' |
Provision for bad debts | 1,000 | -129,000 | ' |
Ending balance - December 31 | $588,000 | $587,000 | ' |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies Receivables From Others (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Accounting Policies [Abstract] | ' | ' | ' |
Total Advisor Loans | $99,600,000 | ' | ' |
Forgivable Advisor Loans | 62,100,000 | ' | ' |
Movement in Valuation of Allowances and Reserves [Roll Forward] | ' | ' | ' |
Provision for bad debts | 2,021,000 | 1,159,000 | 3,833,000 |
Receivables from others [Member] | ' | ' | ' |
Movement in Valuation of Allowances and Reserves [Roll Forward] | ' | ' | ' |
Beginning balance - January 1 | 6,675,000 | 8,833,000 | ' |
Provision for bad debts | 2,020,000 | 1,288,000 | ' |
Charge-offs - net of recoveries | -1,604,000 | -3,446,000 | ' |
Ending balance - December 31 | $7,091,000 | $6,675,000 | ' |
Recovered_Sheet1
Summary of Significant Accounting Policies Securities Borrowed and Loaned (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Securities borrowed and loaned [Line Items] | ' | ' |
Securities borrowed, contract value | $7,102 | $9,448 |
Securities loaned, contract value | 0 | 19,314 |
Securities borrowed, collateral market value | 6,966 | 9,416 |
Securities loaned, collateral market value | $0 | $19,314 |
Recovered_Sheet2
Summary of Significant Accounting Policies Fixed Assets (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Impairment charge for certain fixed assets | $842 | $4,033 | $0 |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member] | Fixed Assets [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Impairment charge for certain fixed assets | ' | $4,033 | ' |
Recovered_Sheet3
Summary of Significant Accounting Policies Reportable Segment (Details) | 6 Months Ended | |
Dec. 31, 2013 | Jun. 30, 2013 | |
Accounting Policies [Abstract] | ' | ' |
Number of service channels | 2 | 3 |
Recovered_Sheet4
Summary of Significant Accounting Policies Goodwill and Other Intangible Assets (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Goodwill impairment loss | $0 | $0 | $0 |
Impairment of intangible assets, indefinite-lived (excluding goodwill) | 0 | 0 | 0 |
Impairment of intangible assets, finite-lived | $0 | $0 | $2,776,000 |
Minimum [Member] | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Finite-lived intangible assets, useful life | '5 years | ' | ' |
Maximum [Member] | ' | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' |
Finite-lived intangible assets, useful life | '20 years | ' | ' |
Recovered_Sheet5
Summary of Significant Accounting Policies Equity Method Investment (Details) (Maximum [Member]) | Dec. 31, 2013 |
Maximum [Member] | ' |
Schedule of Equity Method Investments [Line Items] | ' |
Equity method investment ownership exceeding limit | 50.00% |
Recovered_Sheet6
Summary of Significant Accounting Policies Drafts Payable (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Drafts payable | $194,971 | $203,132 |
Client Activities [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Drafts payable | 185,000 | ' |
Corporate Overdrafts [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Drafts payable | $10,000 | ' |
Recovered_Sheet7
Summary of Significant Accounting Policies Fair Value of Financial Instruments (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | ' | ' |
Senior secured credit facilities | $1,535,096,000 | $1,317,825,000 |
Fair value of indebtedness | $1,533,300,000 | $1,320,400,000 |
Purchase_Price_Allocations_Det
Purchase Price Allocations (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | |||
In Thousands, unless otherwise specified | NRP [Member] | CCP [Member] | Fortigent [Member] | Veritat/NestWise [Member] | ||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | |||
Intangible assets amortization period (in years) | ' | ' | ' | ' | '15 years | ' | ' | |||
Fixed assets useful life (in years) | ' | ' | ' | ' | '5 years | '5 years | '5 years | |||
Reconciliation of assets acquired and liabilities assumed | ' | ' | ' | ' | ' | ' | ' | |||
Goodwill | $1,361,361 | $1,371,523 | $1,334,086 | $13,698 | $27,022 | $27,275 | $10,162 | |||
Accounts receivable | ' | ' | ' | ' | 770 | 3,548 | ' | |||
Other assets | ' | ' | ' | ' | 190 | 2,310 | ' | |||
Intangible assets | ' | ' | ' | 11,800 | 7,550 | [1] | 5,400 | ' | ||
Fixed assets | ' | ' | ' | ' | 3,950 | [2] | 6,275 | [2] | 4,180 | [2] |
Accounts payable and accrued liabilities | ' | ' | ' | -190 | -5,721 | -4,803 | -67 | |||
Deferred income taxes - net | ' | ' | ' | ' | ' | -1,239 | -927 | |||
Net assets acquired | ' | ' | ' | $25,308 | $33,761 | $38,766 | $13,348 | |||
[1] | Intangible assets acquired relate to client relationships and are being amortized over 15 years. | |||||||||
[2] | Fixed assets acquired relate primarily to internally developed software and are being amortized over 5 years. |
Cash_Flow_Information_Details
Cash Flow Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Business Acquisition [Line Items] | ' | ' | ' |
Cash payments, net of cash acquired | $0 | $43,684 | $41,977 |
NRP [Member] | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' |
Cash payments, net of cash acquired | ' | ' | 22,008 |
Contingent consideration | ' | ' | 3,300 |
Total purchase price | ' | ' | 25,308 |
CCP [Member] | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' |
Cash payments, net of cash acquired | ' | ' | 19,969 |
Cash paid to escrow | ' | ' | 2,250 |
Contingent consideration | ' | ' | 11,542 |
Total purchase price | ' | ' | 33,761 |
Fortigent [Member] | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' |
Cash payments, net of cash acquired | ' | 28,866 | ' |
Cash paid to escrow | ' | 9,900 | ' |
Total purchase price | ' | 38,766 | ' |
Veritat/NestWise [Member] | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' |
Cash payments, net of cash acquired | ' | 4,918 | ' |
Contingent consideration | ' | 8,430 | ' |
Total purchase price | ' | $13,348 | ' |
Intangible_Asset_Allocation_De
Intangible Asset Allocation (Details) (USD $) | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | NRP [Member] | NRP [Member] | NRP [Member] | NRP [Member] | Fortigent [Member] | Fortigent [Member] | Fortigent [Member] |
Client relationships [Member] | Advisor Relationships [Member] | Product sponsor relationships [Member] | Client relationships [Member] | Trade Names [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Intangible assets amortization period (in years) | ' | '11 years | '9 years | '4 years | ' | '9 years 5 months | '10 years |
Total intangible assets acquired | $11,800 | $4,730 | $4,080 | $2,990 | $5,400 | $4,200 | $1,200 |
Acquisitions_Details_Textuals
Acquisitions (Details Textuals) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Feb. 09, 2011 | Dec. 31, 2011 | Dec. 31, 2012 | Jun. 22, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Jul. 10, 2012 | |
NRP [Member] | NRP [Member] | NRP [Member] | NRP [Member] | CCP [Member] | CCP [Member] | CCP [Member] | Fortigent [Member] | Fortigent [Member] | Veritat/NestWise [Member] | Veritat/NestWise [Member] | ||||
Business Combinations (Textuals) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash payments, net of cash acquired | $0 | $43,684,000 | $41,977,000 | ' | $22,008,000 | ' | ' | $19,969,000 | ' | ' | $28,866,000 | ' | $4,918,000 | ' |
Maximum amount of contingent consideration, unlimited | ' | ' | ' | ' | 'no maximum | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated fair value of contingent consideration | ' | ' | ' | ' | ' | ' | 3,300,000 | ' | ' | 11,542,000 | ' | ' | ' | 8,430,000 |
Estimated cash payment of contingent consideration | 39,436,000 | 35,887,000 | ' | ' | ' | 39,293,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction costs related to acquisition | ' | ' | ' | 2,300,000 | 2,500,000 | ' | ' | 1,000,000 | ' | ' | 700,000 | 500,000 | 100,000 | ' |
Cash paid to escrow | ' | ' | ' | ' | ' | ' | ' | 2,250,000 | ' | ' | 9,900,000 | ' | ' | ' |
Cash remaining in escrow | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | 1,012,000 | ' | ' | ' |
Maximum amount of contingent consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,000,000 | ' | ' | ' | ' |
Total purchase price | ' | ' | ' | ' | $25,308,000 | ' | ' | $33,761,000 | ' | ' | $38,766,000 | ' | $13,348,000 | ' |
Restructuring_Details
Restructuring (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring charges | $30,186,000 | $5,597,000 | $21,407,000 |
Affiliated Entity [Member] | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring charges | 1,300,000 | 1,500,000 | ' |
UVEST [Member] | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring charges | 600,000 | 5,000,000 | ' |
Remaining restructuring costs | $2,700,000 | ' | ' |
Restructuring_Restructuring_Ta
Restructuring Restructuring Table SVC (Details) (Service Value Commitment [Member], USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | |
Restructuring Reserve [Roll Forward] | ' | |
Total Expected Restructuring Costs | $65,000 | |
Restructuring Charges [Member] | ' | |
Restructuring Reserve [Roll Forward] | ' | |
Accrued Balance, Beginning of Period | 0 | |
Costs incurred | 27,850 | [1] |
Payments | -23,011 | |
Non-cash | -842 | |
Accrued Balance, End of Period | 3,997 | |
Total Expected Restructuring Costs | 65,000 | |
Outsourcing and other related costs | ' | |
Restructuring Reserve [Roll Forward] | ' | |
Accrued Balance, Beginning of Period | 0 | |
Costs incurred | 15,281 | [1] |
Payments | -13,857 | |
Non-cash | 0 | |
Accrued Balance, End of Period | 1,424 | |
Total Expected Restructuring Costs | 30,000 | |
Technology transformation costs | ' | |
Restructuring Reserve [Roll Forward] | ' | |
Accrued Balance, Beginning of Period | 0 | |
Costs incurred | 9,269 | [1] |
Payments | -7,516 | |
Non-cash | 0 | |
Accrued Balance, End of Period | 1,753 | |
Total Expected Restructuring Costs | 23,000 | |
Employee severance obligations and other related costs | ' | |
Restructuring Reserve [Roll Forward] | ' | |
Accrued Balance, Beginning of Period | 0 | |
Costs incurred | 2,458 | [1] |
Payments | -1,638 | |
Non-cash | 0 | |
Accrued Balance, End of Period | 820 | |
Total Expected Restructuring Costs | 11,000 | |
Asset impairments | ' | |
Restructuring Reserve [Roll Forward] | ' | |
Accrued Balance, Beginning of Period | 0 | |
Costs incurred | 842 | [1] |
Payments | 0 | |
Non-cash | -842 | |
Accrued Balance, End of Period | 0 | |
Total Expected Restructuring Costs | $1,000 | |
[1] | At December 31, 2013, costs incurred represent the total cumulative costs incurred under the Program to date. |
Fair_Value_Measurements_Financ
Fair Value Measurements Financial Assets and Liabilities Measured on a Recurring and Nonrecurring Basis (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | $8,964 | $8,088 | ' |
Securities sold, but not yet purchased — at fair value | 211 | 366 | ' |
Asset Impairment Charges [Abstract] | ' | ' | ' |
Impairment charge for certain fixed assets | 842 | 4,033 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Cash equivalents | 254,032 | 177,393 | ' |
Securities owned — trading | 8,964 | 7,853 | ' |
Other assets | 47,539 | 28,624 | ' |
Total assets at fair value | 310,535 | 213,870 | ' |
Securities sold, but not yet purchased — at fair value | 190 | 285 | ' |
Accounts payable and accrued liabilities | 0 | 0 | ' |
Total liabilities at fair value | 190 | 285 | ' |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Cash equivalents | 0 | 0 | ' |
Securities owned — trading | 0 | 235 | ' |
Other assets | 3,072 | 0 | ' |
Total assets at fair value | 3,072 | 235 | ' |
Securities sold, but not yet purchased — at fair value | 21 | 81 | ' |
Accounts payable and accrued liabilities | 0 | 0 | ' |
Total liabilities at fair value | 21 | 81 | ' |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Cash equivalents | 0 | 0 | ' |
Securities owned — trading | 0 | 0 | ' |
Other assets | 0 | 0 | ' |
Total assets at fair value | 0 | 0 | ' |
Securities sold, but not yet purchased — at fair value | 0 | 0 | ' |
Accounts payable and accrued liabilities | 39,293 | 35,887 | ' |
Total liabilities at fair value | 39,293 | 35,887 | ' |
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Cash equivalents | 254,032 | 177,393 | ' |
Securities owned — trading | 8,964 | 8,088 | ' |
Other assets | 50,611 | 28,624 | ' |
Total assets at fair value | 313,607 | 214,105 | ' |
Securities sold, but not yet purchased — at fair value | 211 | 366 | ' |
Accounts payable and accrued liabilities | 39,293 | 35,887 | ' |
Total liabilities at fair value | 39,504 | 36,253 | ' |
Mutual Funds [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 63 | 38 | ' |
Mutual Funds [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 0 | 0 | ' |
Mutual Funds [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 0 | 0 | ' |
Mutual Funds [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 63 | 38 | ' |
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 127 | 247 | ' |
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 0 | 0 | ' |
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 0 | 0 | ' |
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 127 | 247 | ' |
Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 0 | 0 | ' |
Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 10 | 55 | ' |
Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 0 | 0 | ' |
Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 10 | 55 | ' |
Certificates of Deposit [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 0 | 0 | ' |
Certificates of Deposit [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 11 | 26 | ' |
Certificates of Deposit [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 0 | 0 | ' |
Certificates of Deposit [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities sold, but not yet purchased — at fair value | 11 | 26 | ' |
Money Market Funds [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 170 | 302 | ' |
Money Market Funds [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 0 | 0 | ' |
Money Market Funds [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 0 | 0 | ' |
Money Market Funds [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 170 | 302 | ' |
Mutual Funds [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 7,291 | 5,737 | ' |
Mutual Funds [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 0 | 0 | ' |
Mutual Funds [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 0 | 0 | ' |
Mutual Funds [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 7,291 | 5,737 | ' |
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 103 | 414 | ' |
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 0 | 0 | ' |
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 0 | 0 | ' |
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 103 | 414 | ' |
Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 0 | 0 | ' |
Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 0 | 235 | ' |
Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 0 | 0 | ' |
Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 0 | 235 | ' |
U.S. Treasury Obligations [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 1,400 | 1,400 | ' |
U.S. Treasury Obligations [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 0 | 0 | ' |
U.S. Treasury Obligations [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | 0 | 0 | ' |
U.S. Treasury Obligations [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Securities owned — trading | $1,400 | $1,400 | ' |
Fair_Value_Measurements_Signif
Fair Value Measurements Significant Level 3 Liabilities (Details) (Fair Value, Inputs, Level 3 [Member], Fair Value, Measurements, Recurring [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ' | ' | ' |
Fair Value at period end | $39,293 | $35,887 | $16,104 |
Fair Value Measurements, Valuation Techniques | 'Probability weighted discounted cash flow | ' | ' |
Minimum [Member] | ' | ' | ' |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ' | ' | ' |
Fair Value Inputs, Discount Rate | 3.00% | ' | ' |
Maximum [Member] | ' | ' | ' |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ' | ' | ' |
Fair Value Inputs, Discount Rate | 13.00% | ' | ' |
Fair_Value_Measurements_Change
Fair Value Measurements Changes in Level 3 Recurring Fair Value Measurements (Details Textuals) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Net changes in estimated fair value of contingent consideration obligations | $12,676 | $11,353 | $1,262 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Estimated fair value of contingent consideration | 39,293 | 35,887 | 16,104 |
NRP [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Net changes in estimated fair value of contingent consideration obligations | 19,351 | 16,211 | ' |
Estimated fair value of contingent consideration | 39,293 | ' | ' |
CCP [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Net changes in estimated fair value of contingent consideration obligations | -6,795 | -5,435 | ' |
Veritat/NestWise [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' |
Net changes in estimated fair value of contingent consideration obligations | ($9,270) | ' | ' |
Fair_Value_Measurements_Change1
Fair Value Measurements Changes in Level 3 Recurring Fair Value Measurements (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' |
Net changes in estimated fair value of contingent consideration obligations | $12,676 | $11,353 | $1,262 |
Closure of NestWise | 12,676 | 11,353 | 1,262 |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' |
Fair value, end of period | 39,293 | 35,887 | 16,104 |
Veritat/NestWise [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' |
Issuances of contingent consideration | ' | 8,430 | ' |
Net changes in estimated fair value of contingent consideration obligations | -9,270 | ' | ' |
Closure of NestWise | -9,270 | ' | ' |
National Retirement Partners, Concord Capital Partners and NestWise [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' |
Net changes in estimated fair value of contingent consideration obligations | 12,676 | 11,353 | ' |
Closure of NestWise | $12,676 | $11,353 | ' |
HeldtoMaturity_Securities_Deta
Held-to-Maturity Securities (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of amortized cost, gross unrealized gains and fair value of securities held-to-maturity | ' | ' |
Amortized Cost | $6,853 | $10,202 |
U.S. government notes | ' | ' |
Summary of amortized cost, gross unrealized gains and fair value of securities held-to-maturity | ' | ' |
Amortized Cost | 6,853 | 10,202 |
Gross Unrealized (Loss) Gain | -58 | ' |
Gross Unrealized (Loss) Gain | ' | 6 |
Fair Value, Inputs, Level 1 [Member] | U.S. government notes | ' | ' |
Summary of amortized cost, gross unrealized gains and fair value of securities held-to-maturity | ' | ' |
U.S. government notes - at fair value | $6,795 | $10,208 |
HeldtoMaturity_Securities_Deta1
Held-to-Maturity Securities (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Maturities of securities held-to-maturity | ' | ' |
U.S. government notes - at amortized cost, Total | $6,853 | $10,202 |
U.S. government notes | ' | ' |
Maturities of securities held-to-maturity | ' | ' |
U.S. government notes - at amortized cost, Within one year | 4,257 | ' |
U.S. government notes - at amortized cost, After one but within five years | 2,096 | ' |
U.S. government notes - at amortized cost, After five through ten years | 500 | ' |
U.S. government notes - at amortized cost, Total | 6,853 | ' |
U.S. government notes - at fair value, Within one year | 4,258 | ' |
U.S. government notes - at fair value, After one but within five years | 2,073 | ' |
U.S. government notes - at fair value, After five through ten years | 464 | ' |
U.S. government notes - at fair value | $6,795 | ' |
Receivables_from_Product_Spons2
Receivables from Product Sponsors, Broker-Dealers and Clearing Organizations and Payables to Broker-Dealers and Clearing Organizations (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Receivables: | ' | ' |
Commissions receivable from product sponsors and others | $112,575 | $97,395 |
Receivable from clearing organizations | 49,295 | 35,454 |
Receivable from broker-dealers | 7,060 | 13,560 |
Securities failed-to-deliver | 5,140 | 6,541 |
Total receivables | 174,070 | 152,950 |
Payables: | ' | ' |
Payable to clearing organizations | 28,433 | 23,903 |
Securities loaned | 0 | 19,314 |
Securities failed-to-receive | 4,840 | 8,868 |
Payable to broker-dealers | 9,884 | 946 |
Total payables | $43,157 | $53,031 |
Fixed_Assets_Details
Fixed Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
The components of fixed assets | ' | ' |
Internally developed software | $232,448 | $272,310 |
Leasehold improvements | 89,259 | 59,414 |
Computers and software | 86,163 | 98,611 |
Furniture and equipment | 37,868 | 18,624 |
Land | 6,642 | 6,572 |
Total fixed assets | 452,380 | 455,531 |
Accumulated depreciation and amortization | -263,321 | -324,684 |
Fixed assets, net | $189,059 | $130,847 |
Fixed_Assets_Details_Textuals
Fixed Assets (Details Textuals) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Plant and Equipment [Abstract] | ' | ' | ' |
Depreciation and amortization expense | $44.50 | $32.30 | $33.80 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets Goodwill (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | Fortigent [Member] | Veritat/NestWise [Member] | Veritat/NestWise [Member] | |||
Goodwill [Roll Forward] | ' | ' | ' | ' | ' | ' |
Goodwill, beginning balance | $1,361,361 | $1,371,523 | $1,334,086 | ' | $10,162 | ' |
Acquisition of Fortigent | ' | ' | ' | 27,275 | ' | 10,162 |
Acquisition of Veritat | ' | ' | ' | 27,275 | ' | 10,162 |
Closure of NestWise | ' | ' | ' | ' | -10,162 | ' |
Goodwill, ending balance | $1,361,361 | $1,371,523 | $1,334,086 | $27,275 | ' | $10,162 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Intangible Assets [Line Items] | ' | ' |
Total intangible assets | $464,522 | $503,528 |
Definite-lived intangible assets: | ' | ' |
Gross Carrying Value | 690,988 | 701,390 |
Accumulated Amortization | -266,285 | -237,681 |
Net Carrying Value | 424,703 | 463,709 |
Trademark and trade name [Member] | ' | ' |
Indefinite-lived intangible assets: | ' | ' |
Net Carrying Value | 39,819 | 39,819 |
Advisor and financial institution relationships [Member] | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | '11 years 10 months | '12 years 10 months |
Definite-lived intangible assets: | ' | ' |
Gross Carrying Value | 439,762 | 450,164 |
Accumulated Amortization | -171,453 | -157,470 |
Net Carrying Value | 268,309 | 292,694 |
Product sponsor relationships [Member] | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | '12 years 1 month | '13 years |
Definite-lived intangible assets: | ' | ' |
Gross Carrying Value | 230,916 | 230,916 |
Accumulated Amortization | -88,751 | -76,230 |
Net Carrying Value | 142,165 | 154,686 |
Client relationships [Member] | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | '10 years 2 months | '11 years 1 month |
Definite-lived intangible assets: | ' | ' |
Gross Carrying Value | 19,110 | 19,110 |
Accumulated Amortization | -5,881 | -3,901 |
Net Carrying Value | 13,229 | 15,209 |
Trade names [Member] | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | '8 years 4 months | '9 years 4 months |
Definite-lived intangible assets: | ' | ' |
Gross Carrying Value | 1,200 | 1,200 |
Accumulated Amortization | -200 | -80 |
Net Carrying Value | $1,000 | $1,120 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets (Details Textuals) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' | ' |
Total amortization expense of intangible assets | $39,000,000 | $39,500,000 | $39,000,000 |
Impairment of intangible assets, finite-lived | 0 | 0 | 2,776,000 |
Veritat/NestWise [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Goodwill derecognition related to NestWise Closure | ($10,162,000) | ' | ' |
Intangible_Assets_Details_1
Intangible Assets (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Amortization expense | ' | ' |
2014 | $38,680 | ' |
2015 | 37,775 | ' |
2016 | 37,619 | ' |
2017 | 36,752 | ' |
2018 | 34,301 | ' |
Thereafter | 239,576 | ' |
Total | $424,703 | $463,709 |
Accounts_Payable_and_Accrued_L2
Accounts Payable and Accrued Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Summary of accounts payable and accrued liabilities | ' | ' |
Accounts payable | $59,299 | $58,654 |
Accrued payroll | 73,135 | 52,942 |
Contingent consideration obligations | 39,436 | 35,887 |
Advisor deferred compensation plan liability | 45,461 | 26,993 |
Deferred rent | 35,156 | 13,667 |
Other accrued liabilities | 49,157 | 27,995 |
Total accounts payable and accrued liabilities | $301,644 | $216,138 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current provision: | ' | ' | ' |
Federal | $119,327 | $96,983 | $105,176 |
State | 19,062 | 13,909 | 15,559 |
Total current provision | 138,389 | 110,892 | 120,735 |
Deferred benefit: | ' | ' | ' |
Federal | -25,586 | -11,137 | -6,781 |
State | -3,357 | -1,082 | -1,651 |
Total deferred benefit | -28,943 | -12,219 | -8,432 |
Provision for income taxes | $109,446 | $98,673 | $112,303 |
Income_Taxes_Details_1
Income Taxes (Details 1) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Summary of company's effective income tax rate reconciliation | ' | ' | ' |
Federal statutory income tax rates | 35.00% | 35.00% | 35.00% |
State income taxes - net of federal benefit | 3.50% | 3.30% | 3.20% |
Non-deductible expenses | 0.40% | 1.10% | 0.40% |
Share-based compensation | -0.10% | 0.10% | 0.60% |
Business energy tax credit | -0.50% | 0.00% | 0.00% |
Transaction costs | 0.00% | 0.10% | 0.20% |
Goodwill derecognition | 1.20% | 0.00% | 0.00% |
Contingent consideration obligations | -1.50% | -0.70% | 0.00% |
Other | -0.40% | 0.50% | 0.30% |
Effective income tax rates | 37.60% | 39.40% | 39.70% |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Accrued liabilities | $39,265 | $27,343 |
Share-based compensation | 19,442 | 15,581 |
State taxes | 8,447 | 11,739 |
Deferred rent | 2,337 | 2,934 |
Provision for bad debts | 3,110 | 2,779 |
Net operating losses | 1,594 | 2,667 |
Other | 1,788 | 982 |
Subtotal | 75,983 | 64,025 |
Valuation allowance | 0 | -1,609 |
Total deferred tax assets | 75,983 | 62,416 |
Deferred tax liabilities: | ' | ' |
Amortization of intangible assets | -144,392 | -161,181 |
Depreciation of fixed assets | -20,888 | -19,475 |
Other | -72 | 0 |
Total deferred tax liabilities | -165,352 | -180,656 |
Deferred income taxes - net | ($89,369) | ($118,240) |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of gross unrecognized tax benefits including interest and penalties reconciliation | ' | ' | ' |
Balance - Beginning of year | $19,867 | $20,120 | $21,057 |
Increases for tax positions related to the current year | 3,972 | 3,296 | 3,314 |
Reductions as a result of a lapse of the applicable statute of limitations | -4,317 | -3,549 | -4,251 |
Balance - End of year | $19,522 | $19,867 | $20,120 |
Income_Taxes_Details_Textuals
Income Taxes (Details Textuals) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Increase to additional paid-in capital | $5,600,000 | ' | ' | ' |
Gross unrecognized tax benefits | 19,522,000 | 19,867,000 | 20,120,000 | 21,057,000 |
Unrecognized tax benefits, net of the federal benefit on state issues, favorable income tax rate effect | 13,900,000 | 14,400,000 | ' | ' |
Unrecognized tax benefits, interest accrued | 2,100,000 | 2,300,000 | ' | ' |
Unrecognized tax benefits, penalties accrued | 3,300,000 | 3,200,000 | ' | ' |
Unrecognized tax benefits, interest expense included in tax expense | -200,000 | ' | ' | ' |
Unrecognized tax benefits, penalties expense included in tax expense | 100,000 | ' | ' | ' |
Reduction in unrecognized tax benefits related to the statute of limitations | $3,500,000 | ' | ' | ' |
Debt_Details
Debt (Details) (USD $) | Dec. 31, 2013 | 13-May-13 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | |||||
Senior secured term loans: | ' | ' | ' | ||
Balance | $1,535,096 | ' | $1,317,825 | ||
Less current borrowings (maturities within 12 months) | 10,839 | ' | 42,900 | ||
Long-term borrowings - net of current portion | 1,524,257 | ' | 1,274,925 | ||
Term Loan A [Member] | ' | ' | ' | ||
Senior secured term loans: | ' | ' | ' | ||
Balance | 459,375 | ' | 707,438 | ||
Interest Rate | 2.67% | [1] | ' | 2.71% | [2] |
Prior Term Loan B [Member] | ' | ' | ' | ||
Senior secured term loans: | ' | ' | ' | ||
Balance | 0 | 608,900 | 610,387 | ||
Interest Rate | 0.00% | ' | 4.00% | [3] | |
Amended Term Loan B [Member] | ' | ' | ' | ||
Senior secured term loans: | ' | ' | ' | ||
Balance | $1,075,721 | ' | $0 | ||
Interest Rate | 3.25% | [4] | ' | 0.00% | |
[1] | As of December 31, 2013, the variable interest rate for Term Loan A is based on the one-month LIBOR of 0.17%, plus the applicable interest rate margin of 2.50%. | ||||
[2] | As of December 31, 2012, the variable interest rate for Term Loan A is based on the one-month LIBOR of 0.21%, plus the applicable interest rate margin of 2.50%. | ||||
[3] | As of December 31, 2012, the variable interest rate for Prior Term Loan B is based on the greater of the one-month LIBOR of 0.21% or 1.00%, plus the applicable interest rate margin of 3.00%. | ||||
[4] | The variable interest rate for Amended Term Loan B is based on the greater of the LIBOR rate for the period selected (one, three, six, nine or twelve months) or 0.75%, plus the applicable interest rate margin of 2.50%. As of December 31, 2013, the Company elected the following variable interest rates for borrowings under its Amended Term Loan B: six-month LIBOR for $537.8 million, which was designated on September 26, 2013 at an interest rate of 0.37%; and six-month LIBOR for $537.8 million, which was designated on December 27, 2013 at an interest rate of 0.35%. |
Debt_Details_1
Debt (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of borrowing activity in the revolving and uncommitted line of credit facilities | ' | ' | ' |
Average balance | $3,615 | $383 | $104 |
Weighted-average interest rate | 1.79% | 1.64% | 1.00% |
Debt_Details_2
Debt (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Summary of minimum calendar year payments and maturities of the senior secured borrowings | ' | ' |
2014 | $10,838 | ' |
2015 | 10,838 | ' |
2016 | 10,838 | ' |
2017 | 470,214 | ' |
2018 | 10,839 | ' |
Thereafter | 1,021,529 | ' |
Total | $1,535,096 | $1,317,825 |
Debt_Details_Textuals
Debt (Details Textuals) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | 13-May-13 | Dec. 31, 2012 | Dec. 31, 2013 | 13-May-13 | Dec. 31, 2012 | Mar. 29, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | 13-May-13 | Dec. 31, 2012 | Mar. 29, 2012 | Mar. 29, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Revolving Line Of Credit [Member] | Amended Term Loan B [Member] | Amended Term Loan B [Member] | Amended Term Loan B [Member] | Term Loan A [Member] | Term Loan A [Member] | Term Loan A [Member] | Term Loan A [Member] | Term Loan A [Member] | Term Loan A [Member] | Prior Term Loan B [Member] | Prior Term Loan B [Member] | Prior Term Loan B [Member] | Prior Term Loan B [Member] | Revolving Line Of Credit [Member] | Revolving Line Of Credit [Member] | 2013 Term Loans [Member] | Bank Loans Payable [Member] | Bank Loans Payable [Member] | Base Rate [Member] | Base Rate [Member] | Base Rate [Member] | Libor Rate [Member] | Libor Rate [Member] | Libor Rate [Member] | Libor Rate [Member] | Libor Rate [Member] | Libor Rate [Member] | Libor Rate [Member] | Libor Rate 1 Month [Member] | Libor Rate 1 Month [Member] | Alternative Base Rate [Member] | Alternative Base Rate [Member] | Alternative Base Rate [Member] | Alternative Base Rate [Member] | Eurodollar Rate [Member] | Eurodollar Rate [Member] | Minimum alternative base rate [Member] | Minimum alternative base rate [Member] | September 26, 2013 [Member] | September 26, 2013 [Member] | December 27, 2013 [Member] | December 27, 2013 [Member] | ||||
Years one and two [Member] | Years three, four and five [Member] | Prior Term Loan B [Member] | Term Loan A and Amended Term Loan B [Member] | Revolving Line Of Credit [Member] | Amended Term Loan B [Member] | Term Loan A [Member] | Prior Term Loan B [Member] | Prior Term Loan B [Member] | Prior Term Loan B [Member] | Term Loan A and Amended Term Loan B [Member] | Revolving Line Of Credit [Member] | Amended Term Loan B [Member] | Prior Term Loan B [Member] | Prior Term Loan B [Member] | Term Loan A and Amended Term Loan B [Member] | Prior Term Loan B [Member] | Term Loan A and Amended Term Loan B [Member] | Amended Term Loan B [Member] | Prior Term Loan B [Member] | Amended Term Loan B [Member] | Libor Rate 6 month [Member] | Amended Term Loan B [Member] | Libor Rate 6 month [Member] | |||||||||||||||||||||||
Minimum [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate principal amount of senior secured credit facilities | ' | ' | ' | ' | ' | $1,083,900,000 | ' | ' | ' | ' | $735,000,000 | ' | ' | ' | ' | ' | $615,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Secured Debt | 1,535,096,000 | 1,317,825,000 | ' | ' | 1,075,721,000 | ' | 0 | 459,375,000 | ' | 707,438,000 | ' | ' | ' | 0 | 608,900,000 | 610,387,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 537,800,000 | ' | 537,800,000 | ' |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000,000 | ' | ' | 200,000,000 | 150,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility to support related party debt | ' | ' | ' | 21,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Remaining Borrowing Capacity | ' | ' | ' | 228,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument periodic payment principal, percent | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | 5.00% | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Issuance Cost | ' | ' | ' | ' | 7,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Write off of Deferred Debt Issuance Cost | 7,962,000 | 16,524,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,962,000 | ' | ' | ' | ' | ' | 16,524,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Margin rate for borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | 1.50% | 1.50% | ' | 2.50% | 3.00% | 3.00% | ' | 2.50% | 2.50% | ' | ' | ' | 0.50% | ' | 0.50% | 1.00% | 1.00% | 1.75% | 2.00% | ' | ' | ' | ' |
Benchmark short-term interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.75% | ' | ' | ' | 1.00% | ' | ' | 0.17% | 0.21% | 0.75% | ' | 1.00% | ' | ' | ' | ' | ' | ' | 0.37% | ' | 0.35% |
Percentage of commitment fee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of Debt | ' | ' | ' | ' | ' | ' | ' | ' | 238,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of uncommitted lines of credit maintaining the company | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Uncommitted lines of credit, unspecified limit | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding revolving facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative_Financial_Instrumen2
Derivative Financial Instruments Derivative Financial Instruments (Details) | Dec. 31, 2013 | Jun. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Millions, unless otherwise specified | USD ($) | USD ($) | Cash Flow Hedge 1 [Member] | Cash Flow Hedge 1 [Member] | Cash Flow Hedge 2 [Member] | Cash Flow Hedge 2 [Member] | Cash Flow Hedge 3 [Member] | Cash Flow Hedge 3 [Member] | Cash Flow Hedge 4 [Member] | Cash Flow Hedge 4 [Member] |
USD ($) | INR | USD ($) | INR | USD ($) | INR | USD ($) | INR | |||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Hedged Notional Amount | $31.90 | $65 | $8.50 | 560.4 | $8.10 | 560.4 | $7.80 | 560.4 | $7.50 | 560.4 |
Contractual INR/USD Foreign Exchange Rate | ' | ' | 65.96 | 65.96 | 69.35 | 69.35 | 72.21 | 72.21 | 74.2 | 74.2 |
Derivative_Financial_Instrumen3
Derivative Financial Instruments Derivative Financial Instruments (Details Textuals) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2012 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ' | ' |
Hedged Notional Amount | $31.90 | ' | $65 |
Reclassified gains related to interest rate swap agreements | 1.4 | 5.9 | ' |
Interest rate cash flow hedge gain (loss) reclassified | $1.40 | $6.30 | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
2014 | $46,449 | |
2015 | 48,713 | |
2016 | 47,899 | |
2017 | 40,987 | |
2018 | 40,585 | |
Thereafter | 232,845 | |
Total | $457,478 | [1],[2] |
[1] | Future minimum payments have not been reduced by minimum sublease rental income of $3.9 million due in the future under noncancellable subleases. | |
[2] | The table above includes the minimum payments due over the duration of a contractual obligation, which may be canceled, subject to a termination penalty that is approximately equal to the initial annual minimum payment. The amount constituting the termination penalty steps down ratably through the passage of time. Future minimum payments have not been reduced by this termination penalty. |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textuals) (USD $) | 0 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 29, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Commitments and Contingencies [Line Items] | ' | ' | ' | ' | ' |
Operating leases rental expense | ' | $19.40 | $18.80 | $17.20 | ' |
Minimum sublease rental income | ' | 3.9 | ' | ' | ' |
Future minimum payments for future San Diego office, 2014 | ' | 9.6 | ' | ' | ' |
Future minimum payments for future San Diego office, 2015 | ' | 14.8 | ' | ' | ' |
Future minimum payments for future San Diego office, 2016 | ' | 15.4 | ' | ' | ' |
Future minimum payments for future San Diego office, 2017 | ' | 16 | ' | ' | ' |
Future minimum payments for future San Diego office, 2018 | ' | 16.5 | ' | ' | ' |
Future minimum payments for future San Diego office, Thereafter | ' | 204.3 | ' | ' | ' |
Legal expenses related to third-party indemnification agreement | ' | ' | ' | ' | 11.4 |
Amount received from third-party indemnitor | 10.5 | ' | ' | ' | ' |
Other Commitments [Abstract] | ' | ' | ' | ' | ' |
Collateral security | ' | 367.7 | ' | ' | ' |
Amount pledged with client-owned securities | ' | 28.6 | ' | ' | ' |
Collateral security held at banks | ' | 144.3 | ' | ' | ' |
Collateral security that has not been sold, re-pledged or loaned | ' | 194.8 | ' | ' | ' |
Remaining collateral securities that can be sold, re-pledged or loaned | ' | 339.1 | ' | ' | ' |
Trading securities pledged to clearing organizations | ' | $1.40 | $0.90 | ' | ' |
Stockholders_Equity_Stock_Opti
Stockholders' Equity Stock Option and Warrant Assumptions (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Employee Stock Option Awards [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ' | ' | ' |
Expected life (in years) | '6 years 3 months 1 day | '6 years 5 months 27 days | '6 years 6 months |
Expected stock price volatility | 45.03% | 45.73% | 48.82% |
Expected dividend yield | 1.72% | 0.29% | 0.00% |
Risk-free interest rate | 1.39% | 1.34% | 2.20% |
Fair value of options | $12.05 | $14.43 | $15.99 |
Advisors and Financial Institutions [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ' | ' | ' |
Expected life (in years) | '6 years 2 months 25 days | '7 years 7 months 10 days | '8 years 3 months 18 days |
Expected stock price volatility | 40.99% | 43.97% | 48.24% |
Expected dividend yield | 1.89% | 1.70% | 0.00% |
Risk-free interest rate | 2.04% | 1.28% | 1.67% |
Fair value of options | $25.92 | $11.46 | $17.74 |
Stock_Option_and_Warrant_Activ
Stock Option and Warrant Activity (Details) (USD $) | 12 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' |
Number of Shares Outstanding, Beginning Balance | 8,142,009 | 9,022,750 | 10,279,052 | ' |
Number of Shares, Granted | 1,278,508 | 1,978,862 | 1,151,082 | ' |
Number of Shares, Exercised | -1,387,918 | -2,335,026 | -1,807,746 | ' |
Number of Shares, Forfeited | -1,016,078 | -524,577 | -599,638 | ' |
Number of Shares Outstanding, Ending Balance | 7,016,521 | 8,142,009 | 9,022,750 | ' |
Number of Shares, Exercisable, Ending Balance | 3,460,955 | ' | ' | ' |
Weighted-Average Exercise Price, Granted | $31.88 | $30.99 | $31.90 | ' |
Weighted-Average Exercise Price, Exercised | $24.67 | $7.69 | $5.42 | ' |
Weighted-Average Exercise Price, Forfeited | $31.15 | $29.75 | $27.01 | ' |
Weighted-Average Exercise Price, Outstanding, Ending Balance | $28.45 | $27.61 | $21.83 | $18.12 |
Weighted-Average Exercise Price, Exercisable, Weighted Average Exercise Price | $26.13 | ' | ' | ' |
Weighted-Average Remaining Contractual Term for Options Outstanding | '6 years 11 months 2 days | ' | ' | ' |
Weighted-Average Remaining Contractual Term for Options Exercisable | '5 years 8 months 20 days | ' | ' | ' |
Aggregate Intrinsic Value, Ending Balance | $130,481 | ' | ' | ' |
Aggregate Intrinsic Value, Exercisable, Ending Balance | $72,411 | ' | ' | ' |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) (USD $) | 3 Months Ended |
Dec. 31, 2013 | |
Summary of information about outstanding stock options and warrants | ' |
Total Number of Shares, Outstanding | 7,016,521 |
Weighted-Average Remaining Life, Outstanding | '6 years 11 months 1 day |
Weighted-Average Exercise Price, Outstanding | $28.45 |
Number of Shares, Exercisable | 3,460,955 |
Weighted-Average Exercise Price, Exercisable | $26.13 |
Range $1.35 - $2.38 | ' |
Summary of information about outstanding stock options and warrants | ' |
Total Number of Shares, Outstanding | 53,382 |
Weighted-Average Remaining Life, Outstanding | '0 years 8 months 25 days |
Weighted-Average Exercise Price, Outstanding | $1.78 |
Number of Shares, Exercisable | 53,382 |
Weighted-Average Exercise Price, Exercisable | $1.78 |
Range $10.30 - $19.74 | ' |
Summary of information about outstanding stock options and warrants | ' |
Total Number of Shares, Outstanding | 514,689 |
Weighted-Average Remaining Life, Outstanding | '5 years 0 months 20 days |
Weighted-Average Exercise Price, Outstanding | $18.40 |
Number of Shares, Exercisable | 445,339 |
Weighted-Average Exercise Price, Exercisable | $18.45 |
Range $21.60 - $22.08 | ' |
Summary of information about outstanding stock options and warrants | ' |
Total Number of Shares, Outstanding | 937,691 |
Weighted-Average Remaining Life, Outstanding | '5 years 5 months 13 days |
Weighted-Average Exercise Price, Outstanding | $22.03 |
Number of Shares, Exercisable | 734,191 |
Weighted-Average Exercise Price, Exercisable | $22.01 |
Range $23.02 - $29.99 | ' |
Summary of information about outstanding stock options and warrants | ' |
Total Number of Shares, Outstanding | 2,190,928 |
Weighted-Average Remaining Life, Outstanding | '6 years 5 months 23 days |
Weighted-Average Exercise Price, Outstanding | $27.38 |
Number of Shares, Exercisable | 1,359,810 |
Weighted-Average Exercise Price, Exercisable | $26.86 |
Range $30.00 - $32.26 | ' |
Summary of information about outstanding stock options and warrants | ' |
Total Number of Shares, Outstanding | 1,923,615 |
Weighted-Average Remaining Life, Outstanding | '8 years 7 months 20 days |
Weighted-Average Exercise Price, Outstanding | $31.82 |
Number of Shares, Exercisable | 188,770 |
Weighted-Average Exercise Price, Exercisable | $31.85 |
Range $32.33 - $39.60 | ' |
Summary of information about outstanding stock options and warrants | ' |
Total Number of Shares, Outstanding | 1,396,216 |
Weighted-Average Remaining Life, Outstanding | '7 years 1 month 20 days |
Weighted-Average Exercise Price, Outstanding | $34.54 |
Number of Shares, Exercisable | 679,463 |
Weighted-Average Exercise Price, Exercisable | $34.46 |
Ristricted_Stock_Activity_Deta
Ristricted Stock Activity (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Restricted Stock Awards [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ' | ' | ' |
Number of Shares, Beginning Balance | 48,940 | 36,132 | 10,692 |
Number of Shares, Granted | 22,307 | 26,680 | 25,440 |
Number of Shares, Vested | -20,593 | -10,692 | 0 |
Number of Shares, Forfeited | -11,501 | -3,180 | 0 |
Number of Shares, Ending Balance | 39,153 | 48,940 | 36,132 |
Weighted-Average Grant-Date Fair Value, Beginning Balance | $30.65 | $30.51 | $28.30 |
Weighted-Average Grant-Date Fair Value, Granted | $35.85 | $29.99 | $31.45 |
Weighted-Average Grant-Date Fair Value, Vested | $31.56 | $28.30 | $0 |
Weighted-Average Grant-Date Fair Value, Forfeited | $30.43 | $31.44 | $0 |
Weighted-Average Grant-Date Fair Value, Ending Balance | $33.20 | $30.65 | $30.51 |
Restricted Stock Units [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ' | ' | ' |
Number of Shares, Beginning Balance | 8,925 | 0 | 0 |
Number of Shares, Granted | 270,733 | 8,925 | 0 |
Number of Shares, Vested | 0 | 0 | 0 |
Number of Shares, Forfeited | -22,974 | 0 | 0 |
Number of Shares, Ending Balance | 256,684 | 8,925 | 0 |
Weighted-Average Grant-Date Fair Value, Beginning Balance | $28.01 | $0 | $0 |
Weighted-Average Grant-Date Fair Value, Granted | $32.11 | $28.01 | $0 |
Weighted-Average Grant-Date Fair Value, Vested | $0 | $0 | $0 |
Weighted-Average Grant-Date Fair Value, Forfeited | $30 | $0 | $0 |
Weighted-Average Grant-Date Fair Value, Ending Balance | $32.12 | $28.01 | $0 |
Stockholders_Equity_Details_Te
Stockholders' Equity (Details Textuals) (USD $) | 12 Months Ended | 0 Months Ended | |||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Feb. 22, 2012 | |
Employee Stock Option [Member] | Employee Stock Option [Member] | Employee Stock Option [Member] | Advisors and Financial Institutions [Member] | Advisors and Financial Institutions [Member] | Advisors and Financial Institutions [Member] | Restricted Stock [Member] | Restricted Stock [Member] | Fortigent [Member] | Nonqualified Deferred Compensation Plan [Member] | ||||
Share-based Compensation [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Authorized shares | 12,055,945 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Authorized unissued shares | 7,031,762 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares awarded in acquisition of Fortigent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,092 | ' |
Price per share awarded in acquisition of Fortigent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $33.95 | ' |
Share-based compensation related to acquisition of Fortigent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $800,000 | ' |
Share based compensation expense | ' | ' | ' | 12,700,000 | 15,900,000 | 14,700,000 | 9,200,000 | 3,800,000 | 3,300,000 | 2,500,000 | 600,000 | ' | ' |
Share based compensation cost unrecognized | ' | ' | ' | 26,300,000 | ' | ' | 19,400,000 | ' | ' | 6,500,000 | ' | ' | ' |
Non-vested compensation cost weighted-average period | ' | ' | ' | '2 years 8 months 10 days | ' | ' | '3 years 0 months 7 days | ' | ' | '2 years 5 months 5 days | ' | ' | ' |
2008 Nonqualified Deferred Compensation Plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Shares, Issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,673,556 |
Treasury stock purchases, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,149,896 |
Treasury stock purchases | $219,091,000 | $199,222,000 | $89,037,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $37,500,000 |
Stockholders_Equity_Dividends_
Stockholders' Equity Dividends (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Dividend paid per share of common stock | $0.19 | $0.19 | $0.14 | $0.14 | $0.12 | $0.12 | $2 | $0 | ' | ' |
Cash dividends on common stock | $19,300 | $19,900 | $14,400 | $14,400 | $13,000 | $13,200 | $222,600 | $0 | $68,008 | $248,809 |
Stockholders_Equity_Share_Repu
Stockholders' Equity Share Repurchase Program (Details) (USD $) | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Remaining Authorized Repurchase Amount | $67.90 | ' | ||
Shares Purchased | 5,819,788 | 6,811,652 | ||
Weighted-Average Price Paid Per Share | $37.65 | $29.25 | ||
Total Cost of Shares Repurchased | 219.1 | [1] | 199.2 | [1] |
Commission Fee Paid Per Repurchased Share | $0.02 | ' | ||
August 2011 [Member] | ' | ' | ||
Authorized Repurchase Amount | 70 | ' | ||
Remaining Authorized Repurchase Amount | 0 | ' | ||
Shares Purchased | 0 | 1,891,072 | ||
Weighted-Average Price Paid Per Share | $0 | $32.27 | ||
Total Cost of Shares Repurchased | 0 | [1] | 61 | [1] |
May 2012 [Member] | ' | ' | ||
Authorized Repurchase Amount | 75 | ' | ||
Remaining Authorized Repurchase Amount | 0 | ' | ||
Shares Purchased | 0 | 2,611,022 | ||
Weighted-Average Price Paid Per Share | $0 | $28.74 | ||
Total Cost of Shares Repurchased | 0 | [1] | 75.1 | [1] |
September 2012 [Member] | ' | ' | ||
Authorized Repurchase Amount | 150 | ' | ||
Remaining Authorized Repurchase Amount | 0 | ' | ||
Shares Purchased | 2,343,651 | 2,309,558 | ||
Weighted-Average Price Paid Per Share | $36.14 | $27.34 | ||
Total Cost of Shares Repurchased | 87 | [1] | 63.1 | [1] |
May 2013 [Member] | ' | ' | ||
Authorized Repurchase Amount | 200 | ' | ||
Remaining Authorized Repurchase Amount | 67.9 | ' | ||
Shares Purchased | 3,476,137 | 0 | ||
Weighted-Average Price Paid Per Share | $38.01 | $0 | ||
Total Cost of Shares Repurchased | $132.10 | [1] | $0 | [1] |
[1] | Included in the total cost of shares purchased is a commission fee of $0.02 per share. |
Earnings_per_Share_Details
Earnings per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Basic earnings per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income, as reported | $44,418 | $37,631 | $45,091 | $54,717 | $36,938 | $34,299 | $39,502 | $41,179 | $181,857 | $151,918 | $170,382 |
Allocation of undistributed earnings to stock units | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | -2,176 |
Net income, for computing basic earnings per share | ' | ' | ' | ' | ' | ' | ' | ' | 181,857 | 151,918 | 168,206 |
Diluted earnings per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income, as reported | 44,418 | 37,631 | 45,091 | 54,717 | 36,938 | 34,299 | 39,502 | 41,179 | 181,857 | 151,918 | 170,382 |
Allocation of undistributed earnings to stock units | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | -2,104 |
Net income, for computing diluted earnings per share | ' | ' | ' | ' | ' | ' | ' | ' | $181,857 | $151,918 | $168,278 |
Reconciliation of weighted average shares for the basic and diluted shares computations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic weighted average number of shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 104,698 | 109,443 | 108,374 |
Dilutive common share equivalents | ' | ' | ' | ' | ' | ' | ' | ' | 1,305 | 1,617 | 3,745 |
Diluted weighted average number of shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 106,003 | 111,060 | 112,119 |
Basic and diluted earnings per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic earnings per share | $0.44 | $0.36 | $0.42 | $0.51 | $0.34 | $0.31 | $0.36 | $0.38 | $1.74 | $1.39 | $1.55 |
Diluted earnings per share | $0.43 | $0.36 | $0.42 | $0.51 | $0.34 | $0.31 | $0.35 | $0.37 | $1.72 | $1.37 | $1.50 |
Earnings_per_Share_Details_Tex
Earnings per Share (Details Textuals) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Earnings Per Share [Abstract] | ' | ' | ' |
Antidilutive securities excluded from computation of Earnings per Share amount | 3,440,171 | 4,615,244 | 3,919,267 |
Employee_and_Advisor_Benefit_P1
Employee and Advisor Benefit Plans (Details Textuals) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Employee and Advisor Benefit Plans [Abstract] | ' | ' | ' |
Percentage of eligible compensation matched by employer | 30.00% | 30.00% | 30.00% |
Percentage of employee compensation eligible for match | 10.00% | 10.00% | 10.00% |
Percentage of eligible compensation accrued in employer discretionary match | 20.00% | 10.00% | 10.00% |
Total percentage of eligible compensation matched by employer | 50.00% | 40.00% | ' |
Total contribution cost recognized | $6,300,000 | $4,500,000 | $3,800,000 |
Employee stock purchase plan purchase price discount | 15.00% | ' | ' |
Deferred Compensation Arrangements [Abstract] | ' | ' | ' |
Deferred Compensation Arrangement with Individual, Recorded Liability | 45,461,000 | 26,993,000 | ' |
Deferred Compensation Arrangement with Individual, Employer Contribution | 46,070,000 | ' | ' |
Deferred Compensation Arrangement with Individual, Compensation Expense | 1,735,000 | ' | ' |
Deferred Compensation Arrangement, Rabbi Trust, Recorded Liability | $755,000 | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (TPG Capital [Member], USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Related Party Transaction [Line Items] | ' | ' | ' |
Related party expenses | $0.60 | $0.90 | $1.30 |
Related party revenues | 0.5 | 0.4 | 0.1 |
Maximum [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Related party accounts receivable | 0.1 | 0.1 | ' |
Related party accounts payable | $0.10 | $0.10 | ' |
Net_Capital_and_Regulatory_Req1
Net Capital and Regulatory Requirements (Details) (LPL Financial [Member], USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
LPL Financial [Member] | ' |
Schedule of Net Capital and Net Capital Requirements for Company's Broker-Dealer Subsidiaries [Line Items] | ' |
Net Capital | $130.40 |
Minimum Net Capital Requirement | 6.9 |
Net Capital in Excess of the Minimum Requirement | $123.50 |
Selected_Quarterly_Financial_D2
Selected Quarterly Financial Data (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly Financial Information Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net revenues | $1,093,930 | $1,053,212 | $1,018,920 | $974,796 | $944,244 | $907,228 | $907,843 | $901,773 | $4,140,858 | $3,661,088 | $3,479,375 |
Net income | $44,418 | $37,631 | $45,091 | $54,717 | $36,938 | $34,299 | $39,502 | $41,179 | $181,857 | $151,918 | $170,382 |
Basic earnings per share | $0.44 | $0.36 | $0.42 | $0.51 | $0.34 | $0.31 | $0.36 | $0.38 | $1.74 | $1.39 | $1.55 |
Diluted earnings per share | $0.43 | $0.36 | $0.42 | $0.51 | $0.34 | $0.31 | $0.35 | $0.37 | $1.72 | $1.37 | $1.50 |
Dividends declared per share | $0.19 | $0.19 | $0.14 | $0.14 | $0.12 | $0.12 | $0 | $2 | ' | ' | ' |
Subsequent_Events_Subsequent_E
Subsequent Events Subsequent Events (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 10, 2014 | Feb. 24, 2014 | Feb. 19, 2014 | Feb. 10, 2014 | Feb. 10, 2014 | Feb. 19, 2014 | ||
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | February 2014 [Member] | NRP [Member] | |||||
Subsequent Event [Member] | Subsequent Event [Member] | |||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ||
Dividends Payable, Date Declared | ' | ' | ' | ' | ' | 10-Feb-14 | ' | ' | ||
Dividends Payable, Amount Per Share | ' | ' | ' | ' | ' | $0.24 | ' | ' | ||
Dividends Payable, Date to be Paid | ' | ' | 10-Mar-14 | ' | ' | ' | ' | ' | ||
Dividends Payable, Date of Record | ' | ' | ' | 24-Feb-14 | ' | ' | ' | ' | ||
Stock Repurchase Program, Authorized Amount | ' | ' | ' | ' | ' | $218 | $150 | ' | ||
Stock Repurchased During Period, Shares | 5,819,788 | 6,811,652 | ' | ' | 1,900,000 | ' | ' | ' | ||
Treasury Stock Acquired, Average Cost Per Share | $37.65 | $29.25 | ' | ' | $52 | ' | ' | ' | ||
Stock Repurchased During Period, Value | 219.1 | [1] | 199.2 | [1] | ' | ' | 100 | ' | ' | ' |
Payment of Contingent Consideration Obligation | ' | ' | ' | ' | ' | ' | ' | $39.30 | ||
[1] | Included in the total cost of shares purchased is a commission fee of $0.02 per share. |