Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 19, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Entity Registrant Name | EVERTEC, Inc. | ||
Entity Central Index Key | 0001559865 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Document Transition Report | false | ||
Entity File Number | 001-35872 | ||
Entity Incorporation, State or Country Code | PR | ||
Entity Tax Identification Number | 66-0783622 | ||
Entity Address, Address Line One | Cupey Center Building, | ||
Entity Address, Address Line Two | Road 176, Kilometer 1.3, | ||
Entity Address, City or Town | San Juan, | ||
Entity Address, Country | PR | ||
Entity Address, Postal Zip Code | 00926 | ||
City Area Code | 787 | ||
Local Phone Number | 759-9999 | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Trading Symbol | EVTC | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,451,933,072 | ||
Entity Common Stock, Shares Outstanding (in shares) | 72,000,261 | ||
Documents Incorporated by Reference |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 111,030 | $ 69,973 |
Restricted cash | 20,091 | 16,773 |
Accounts receivable, net | 106,812 | 100,323 |
Prepaid expenses and other assets | 38,085 | 29,124 |
Total current assets | 276,018 | 216,193 |
Investment in equity investee | 12,288 | 12,149 |
Property and equipment, net | 43,791 | 36,763 |
Operating lease right-of-use asset | 29,979 | 0 |
Goodwill | 399,487 | 394,644 |
Other intangible assets, net | 241,937 | 259,269 |
Deferred tax asset | 2,131 | 1,917 |
Net investment in lease | 722 | 1,060 |
Other long-term assets | 5,323 | 5,297 |
Total assets | 1,011,676 | 927,292 |
Current Liabilities: | ||
Accrued liabilities | 58,160 | 57,006 |
Accounts payable | 39,165 | 47,272 |
Unearned income | 20,668 | 11,527 |
Income tax payable | 6,298 | 6,650 |
Current portion of long-term debt | 14,250 | 14,250 |
Current portion of operating lease liability | 5,773 | 0 |
Total current liabilities | 144,314 | 136,705 |
Long-term debt | 510,947 | 524,056 |
Deferred tax liability | 4,261 | 9,950 |
Unearned income - long term | 28,437 | 26,075 |
Operating lease liability - long-term | 24,679 | 0 |
Other long-term liabilities | 27,415 | 14,900 |
Total liabilities | 740,053 | 711,686 |
Stockholders’ equity | ||
Preferred stock, par value $0.01; 2,000,000 shares authorized; none issued | 0 | 0 |
Common stock, par value $0.01; 206,000,000 shares authorized; 72,000,261 shares issued and outstanding at December 31, 2019 (December 31, 2018 - 72,378,710) | 720 | 723 |
Additional paid-in capital | 0 | 5,783 |
Accumulated earnings | 296,476 | 228,742 |
Accumulated other comprehensive loss, net of tax | (30,009) | (23,789) |
Total EVERTEC, Inc. stockholders’ equity | 267,187 | 211,459 |
Non-controlling interest | 4,436 | 4,147 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 271,623 | 215,606 |
Liabilities and Equity | $ 1,011,676 | $ 927,292 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 206,000,000 | 206,000,000 |
Common stock, issued (in shares) | 72,000,261 | 72,378,710 |
Common stock, outstanding (in shares) | 72,000,261 | 72,378,710 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Revenues | $ 487,374 | $ 453,869 | $ 407,144 |
Operating costs and expenses | |||
Cost of revenues, exclusive of depreciation and amortization shown below | 213,379 | 196,957 | 200,650 |
Selling, general and administrative expenses | 61,411 | 68,717 | 56,161 |
Depreciation and amortization | 68,082 | 63,067 | 64,250 |
Total operating costs and expenses | 342,872 | 328,741 | 321,061 |
Income from operations | 144,502 | 125,128 | 86,083 |
Non-operating income (expenses) | |||
Interest income | 1,217 | 787 | 716 |
Interest expense | (28,811) | (30,044) | (29,861) |
Earnings of equity method investment | 936 | 692 | 604 |
Other (expenses) income | (1,169) | 2,602 | 2,657 |
Total non-operating expenses | (27,827) | (25,963) | (25,884) |
Income before income taxes | 116,675 | 99,165 | 60,199 |
Income tax expense | 12,975 | 12,596 | 4,780 |
Net income | 103,700 | 86,569 | 55,419 |
Less: Net income attributable to non-controlling interest | 231 | 299 | 365 |
Net income attributable to EVERTEC, Inc.’s common stockholders | 103,469 | 86,270 | 55,054 |
Other comprehensive (loss) income, net of tax of $1,070, $345 and $122 | |||
Foreign currency translation adjustments | 4,754 | (10,564) | (635) |
(Loss) gain on cash flow hedges | (10,974) | ||
(Loss) gain on cash flow hedges | (2,377) | 2,178 | |
Total comprehensive income attributable to EVERTEC, Inc.’s common stockholders | $ 97,249 | $ 73,329 | $ 56,597 |
Net income per common share - basic attributable to EVERTEC, Inc.’s common stockholders (in dollar per share) | $ 1.44 | $ 1.19 | $ 0.76 |
Net income per common share - diluted attributable to EVERTEC, Inc.’s common stockholders (in dollar per share) | $ 1.41 | $ 1.16 | $ 0.76 |
Consolidated Statements of In_2
Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Other comprehensive (loss) income, net of tax of $1,070, $345 and $122 | $ 1,070 | $ 345 | $ 122 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive Loss | Non-Controlling Interest |
Beginning balance (in shares) at Dec. 31, 2016 | 72,635,032 | |||||
Beginning balance at Dec. 31, 2016 | $ 108,175 | $ 726 | $ 0 | $ 116,341 | $ (12,391) | $ 3,499 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation recognized | $ 9,642 | 9,642 | ||||
Repurchase of common stock (in shares) | (500,000) | (465,240) | ||||
Repurchase of common stock | $ (7,671) | $ (5) | (2,702) | (4,964) | ||
Stock options exercised, net of cashless exercise (in shares) | 8,798 | |||||
Stock options exercised, net of cashless exercise | (91) | (91) | ||||
Restricted stock grants and units delivered, net of cashless exercise (in shares) | 215,343 | |||||
Restricted stock units delivered, net of cashless | (1,497) | $ 2 | (1,499) | |||
Net income | 55,419 | 55,054 | 365 | |||
Cash dividends declared on common stock, $0.05 per share | (21,747) | (21,747) | ||||
Other comprehensive loss | 1,543 | 1,543 | ||||
Ending balance (in shares) at Dec. 31, 2017 | 72,393,933 | |||||
Ending balance at Dec. 31, 2017 | 147,976 | $ 723 | 5,350 | 148,887 | (10,848) | 3,864 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation recognized | $ 12,592 | 12,592 | ||||
Repurchase of common stock (in shares) | (400,000) | (367,403) | ||||
Repurchase of common stock | $ (10,000) | $ (4) | (9,996) | |||
Restricted stock grants and units delivered, net of cashless exercise (in shares) | 352,180 | |||||
Restricted stock units delivered, net of cashless | (2,159) | $ 4 | (2,163) | |||
Net income | 86,569 | 86,270 | 299 | |||
Cash dividends declared on common stock, $0.05 per share | (7,273) | (7,273) | ||||
Other comprehensive loss | $ (12,941) | (12,941) | ||||
Ending balance (in shares) at Dec. 31, 2018 | 72,378,710 | 72,378,710 | ||||
Ending balance at Dec. 31, 2018 | $ 215,606 | $ 723 | 5,783 | 228,742 | (23,789) | 4,147 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation recognized | $ 13,570 | 13,570 | ||||
Repurchase of common stock (in shares) | (1,100,000) | (1,104,389) | ||||
Repurchase of common stock | $ (31,822) | $ (11) | (10,496) | (21,315) | ||
Restricted stock grants and units delivered, net of cashless exercise (in shares) | 725,940 | |||||
Restricted stock units delivered, net of cashless | (8,849) | $ 8 | (8,857) | |||
Net income | 103,700 | 103,469 | 231 | |||
Cash dividends declared on common stock, $0.05 per share | (14,420) | (14,420) | ||||
Other comprehensive loss | $ (6,162) | (6,220) | 58 | |||
Ending balance (in shares) at Dec. 31, 2019 | 72,000,261 | 72,000,261 | ||||
Ending balance at Dec. 31, 2019 | $ 271,623 | $ 720 | $ 0 | $ 296,476 | $ (30,009) | $ 4,436 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends declared per share (in dollar per share) | $ 0.20 | $ 0.10 | $ 0.30 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | |||
Net income | $ 103,700 | $ 86,569 | $ 55,419 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 68,082 | 63,067 | 64,250 |
Amortization of debt issue costs and accretion of discount | 2,988 | 4,316 | 5,128 |
Amortization of debt issue costs and accretion of discount | 6,161 | 0 | 0 |
Loss on extinguishment of debt | 0 | 2,645 | 0 |
Provision for doubtful accounts and sundry losses | 3,939 | 2,112 | 843 |
Deferred tax benefit | (6,391) | (4,611) | (4,306) |
Share-based compensation | 13,570 | 12,592 | 9,642 |
Loss on impairment of software | 0 | 0 | 11,441 |
Loss on disposition of property and equipment and other intangibles | 893 | 109 | 430 |
Earnings of equity method investment | (936) | (692) | (604) |
Dividend received from equity method investment | 485 | 390 | 0 |
(Increase) decrease in assets: | |||
Accounts receivable | (7,851) | (18,181) | (2,099) |
Prepaid expenses and other assets | (8,770) | (3,911) | (4,048) |
Other long-term assets | (1,750) | (4,432) | 1,654 |
Increase (decrease) in liabilities: | |||
Accounts payable and accrued liabilities | (215) | 16,057 | (870) |
Income tax payable | (596) | 5,245 | (349) |
Unearned income | 11,504 | 7,021 | 8,444 |
Operating lease liabilities | (6,055) | ||
Other long-term liabilities | 1,191 | 4,438 | 811 |
Total adjustments | 76,249 | 86,165 | 90,367 |
Net cash provided by operating activities | 179,949 | 172,734 | 145,786 |
Cash flows from investing activities | |||
Additions to software | (36,871) | (27,386) | (22,174) |
Acquisitions, net of cash acquired | (5,585) | 0 | (42,836) |
Property and equipment acquired | (23,002) | (13,933) | (11,290) |
Proceeds from sales of property and equipment | 111 | 19 | 32 |
Net cash used in investing activities | (65,347) | (41,300) | (76,268) |
Cash flows from financing activities | |||
Proceeds from issuance of long-term debt | 0 | 545,000 | 0 |
Debt issuance costs | 0 | (4,418) | 0 |
Net decrease in short-term borrowings | 0 | (12,000) | (16,000) |
Repayments of borrowings for purchase of equipment and software | (886) | (720) | (2,373) |
Dividends paid | (14,420) | (7,273) | (21,762) |
Withholding taxes paid on share-based compensation | (8,849) | (2,159) | (1,588) |
Repurchase of common stock | (31,822) | (10,000) | (7,671) |
Repayment of long-term debt | (14,250) | (613,485) | (19,789) |
Net cash used in financing activities | (70,227) | (105,055) | (69,183) |
Net increase in cash, cash equivalents and restricted cash | 44,375 | 26,379 | 335 |
Cash, cash equivalents and restricted cash at beginning of the period | 86,746 | 60,367 | 60,032 |
Cash, cash equivalents and restricted cash at end of the period | 131,121 | 86,746 | 60,367 |
Reconciliation of cash, cash equivalents and restricted cash | |||
Cash, cash equivalents and restricted cash | 131,121 | 60,367 | 60,367 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 28,233 | 26,891 | 25,379 |
Cash paid for income taxes | 18,703 | 9,750 | 9,930 |
Supplemental disclosure of non-cash activities: | |||
Payable due to vendor related to property and equipment and software acquired | $ 2,622 | $ 317 | $ 1,037 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
The Company and Summary of Significant Accounting Policies | The Company and Summary of Significant Accounting Policies The Company EVERTEC, Inc. (formerly known as Carib Latam Holdings, Inc.) and its subsidiaries (collectively the “Company,” or “EVERTEC”) is a leading full-service transaction processing business in Latin America and the Caribbean. The Company is based in Puerto Rico and provides a broad range of merchant acquiring, payment services and business process management services across 26 countries in the region. EVERTEC owns and operates the ATH network, one of the leading automated teller machine (“ATM”) and personal identification number (“PIN”) debit networks in Latin America. In addition, EVERTEC provides a comprehensive suite of services for core bank processing, cash processing and technology outsourcing in the regions the Company serves. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants, corporations and government agencies with solutions that are essential to their operations, enabling them to issue, process and accept transactions securely. Initial Public Offering and Other Public Offerings On April 17, 2013, the Company completed its initial public offering of 28,789,943 shares of common stock at a price to the public of $20.00 per share. On September 18, 2013 and December 13, 2013, the Company completed public offerings of 23,000,000 and 15,233,273 shares, respectively, of the Company’s common stock by Apollo Global Management, LLC ("Apollo") and Popular, Inc. ("Popular"), and current and former employees. As of December 31, 2019 , Popular owned approximately 11.7 million shares of EVERTEC's common stock, or 16.2% and Apollo no longer owns any of the Company’s common stock. Basis of Presentation The consolidated financial statements of EVERTEC have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the accompanying consolidated financial statements, prepared in accordance with GAAP, contain all adjustments, all of which are normal and recurring in nature, necessary for a fair presentation. A summary of the most significant accounting policies used in preparing the accompanying consolidated financial statements is as follows: Principles of Consolidation The accompanying consolidated financial statements include the accounts and operations of the Company, which are presented in accordance with GAAP. The Company consolidates all entities that are controlled by ownership of a majority voting interest. Intercompany accounts and transactions are eliminated in the consolidated financial statements. Use of Estimates The preparation of the accompanying consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition The Company’s revenue recognition policy follows the guidance from Accounting Standards Codification ("ASC') 606, Revenue from Contracts with Customers , which provide guidance on the recognition, presentation, and disclosure of revenue in consolidated financial statements. The Company recognizes revenue when (or as) control of goods or services are transferred to a customer. The transfer of control occurs when the customer can direct the use of and receive substantially all the benefits from the transferred good or service. Therefore, revenue is recognized over time (typically for services) or at a point in time (typically for goods). The assessment of revenue recognition is performed by the Company based on the five-step model established in Topic 606, as follows: Step 1: Identify the contract with customer; Step 2: Identify the performance obligations in the contract; Step 3: Determine the transaction price; Step 4: Allocate the transaction price to the performance obligations in the contract; and Step 5: Recognize revenue when or as the entity satisfies a performance obligation. At contract inception, the Company evaluates whether the contract (i) is legally enforceable; (ii) approved by both parties; (iii) properly defines rights and obligations of the parties, including payment terms; (iv) has commercial substance; and (v) collection of substantially all consideration entitled is probable, before proceeding with the assessment of revenue recognition. If any of these requirements is not met, the contract does not exist for purposes of the model and any consideration received is recorded as a liability. A reassessment may be performed in a later date upon change in facts and circumstances. The Company also evaluates within this step if contracts issued within a period of 6 months with the same customer should be accounted for as a single contract. The Company’s contracts with customers may be modified through amendments, change requests and waivers. Upon receipt, modifications of contracts with customers are evaluated to determine if these must be accounted for: (i) as a separate contract, (ii) a cumulative catch-up, or (iii) as a termination and creation of a new contract. Contract modifications must also comply with the requirements to determine if a contract with a customer exists for accounting purposes. To identify performance obligations within contracts with customers, the Company first identifies all the promises in the contract (i.e., explicit and implicit). This includes the customer’s options to acquire additional goods or services for free or at a discount in exchange for an upfront payment. The Company then assesses if each material good or service (or bundle of goods or services) is distinct in nature (i.e., the customer can benefit from the good or service on its own or together with other readily available resources), and is capable of being distinct in the context of the contract (i.e., the promise to transfer the good or service is separately identifiable from other promises in the contract). A distinct good or service (or bundle of goods or services) constitutes a performance obligation. The Company also applies the series guidance to distinct goods or services (either with a specified quantity of goods or services or a stand-ready service), with an over time revenue recognition, to determine whether they should be accounted for as a single performance obligation. These distinct goods or services are recognized as a single performance obligation when their nature and timely increments are substantially the same and have the same pattern of transfer to the customer (i.e., the distinct goods or services within the series use the same method to measure progress towards complete satisfaction). To determine if a performance obligation should be recognized over time, one or more of the following criteria must be met: (1) the customer simultaneously receives and consumes the benefits as the Company performs (i.e., routine or recurring services); (2) the customer controls the asset as the entity creates or enhances it (i.e., asset on customer’s site); or (3) the Company’s performance does not create an asset for which the Company has an alternative use and there is a right to payment for performance to date (i.e., asset built to order). Performance obligations that do not meet the over time criteria are recognized at a point in time. In addition, in Step 2 of the model, the Company evaluates whether the practical expedient of right-to-invoice applies. If this practical expedient is applicable, steps 3, 4 and 5 are waived. For this practical expedient to apply, the right to consideration must correspond directly with the value received by the customer for the Company’s performance to date, no significant up-front payments or retroactive adjustments must exist, and specified minimums must be deemed non-substantive at the contract level. If the contract with the customer has multiple performance obligations and the practical expedient of right-to-invoice does not apply, the Company proceeds to determine the transaction price and allocate it on a stand-alone selling price basis among the different performance obligations identified in the Step 2. The Company generally applies the expected cost-plus margin approach to determine the stand-alone selling price at the performance obligation level. In addition, for performance obligations that are satisfied over time and the right to invoice practical expedient is not available, the Company determines a method to measure progress (i.e., input or output method) based on current facts and circumstances. When these performance obligations have variable consideration within its transaction price and are part of a series, the Company allocates the variable consideration to each time increment. As part of the revenue recognition analysis, when another party is involved in providing goods or services to a customer, the Company evaluates, for each performance obligation, whether it is providing the goods or services itself (i.e., as principal), or if it is only arranging on behalf of the other party. The Company acts as principal if it controls the specified good or service before that good or service is transferred to a customer. To determine if the Company acts as an agent, the Company considers indicators, such as: (i) the responsibility to fulfill a promise; (ii) the inventory risk; and (iii) the price determination. Investment in Equity Investee The Company accounts for investments using the equity method of accounting if the investment provides the Company the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of an investor of between 20 percent and 50 percent, although other factors are considered in determining whether the equity method of accounting is appropriate. Under this method, the investment, originally recorded at cost, is adjusted to recognize the Company’s share of net income or losses as they occur. The Company’s share of investee earnings or losses is recorded, net of taxes, within earnings (losses) of equity method investment caption in the consolidated statements of income and comprehensive income. The Company’s consolidated revenues include fees for services provided to an investee accounted for under the equity method. Additionally, the Company’s interest in the net assets of its equity method investee is reflected in the consolidated balance sheets. On the acquisition of the investment any difference between the cost of the investment and the amount of the underlying equity in net assets of an investee is required to be accounted as if the investee were a consolidated subsidiary. If the difference is assigned to depreciable or amortizable assets or liabilities, then the difference should be amortized or accreted in connection with the equity earnings based on the Company’s proportionate share of the investee’s net income or loss. If the investor is unable to relate the difference to specific accounts of the investee, the difference should be considered goodwill. The Company considers whether the fair value of its equity method investment has declined below its carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If the Company considered any such decline to be other than temporary (based on various factors, including historical financial results, product development activities and the overall health of the investee’s industry), then the Company would record a write-down to estimated fair value. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight-line method and expensed over their estimated useful lives. Amortization of leasehold improvements is computed over the terms of the respective leases, including renewal options considered by management to be reasonably assured of being exercised, or the estimated useful lives of the improvements, whichever is shorter. Costs of maintenance and repairs which do not improve or extend the life of the respective assets are expensed as incurred. Impairment of Long-lived Assets Long-lived assets to be held and used, and long-lived assets to be disposed of, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Capitalization of Software The Company develops software that is used in providing processing services to customers. Capitalized software includes purchased software and internally-developed software and is recognized as software packages within the other intangible assets line item in the consolidated balance sheets. Capitalization of internally developed software occurs only after the preliminary project stage is complete and technological feasibility has been achieved, and management’s estimation that the likelihood of successful development and implementation reaches a provable level. Tasks that are generally capitalized are as follows: (a) system design of a chosen path including software configuration and software interfaces; (b) employee costs directly associated with the internal-use computer software project; (c) software development (coding) and software and system testing and verification; (d) system installation; and (e) enhancements that add function and are considered permanent. These tasks are capitalized and amortized using the straight line method over its estimated useful life, which range from three to ten years and is included in depreciation and amortization in the consolidated statements of income and comprehensive income. The Company capitalizes interest costs incurred in the development of software. The amount of interest capitalized is an allocation of the interest cost incurred during the period required to substantially complete the asset. The interest rate for capitalization purposes is based on a weighted average rate on the Company’s outstanding borrowing. For the years ended December 31, 2019 , 2018 and 2017 , interest cost capitalized amounted to approximately $1.1 million , $1.1 million and $0.8 million , respectively. Software and Maintenance Contracts Software and maintenance contracts are recorded at cost. Amortization of software and maintenance contracts is computed using the straight-line method and expensed over their estimated useful lives which range from one to five years and are recognized in cost of revenues in the consolidated statements of income and comprehensive income. Software and maintenance contracts are recognized as prepaid expenses and other assets or within other long-term assets depending on their remaining useful lives. Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price and related costs over the value assigned to net assets acquired. Goodwill is not amortized, but is tested for impairment at least annually, or more often if events or circumstances indicate there may be impairment. The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative impairment test. If determined to be necessary, the quantitative impairment test shall be used to identify goodwill impairment and measure the amount of a goodwill impairment loss to be recognized (if any). The Company may assess qualitative factors to determine whether it is more likely than not, that is, a likelihood of more than 50 percent that the fair value of the reporting unit is less than its carrying amount, including goodwill. The Company has an unconditional option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test. The Company may resume performing the qualitative assessment in any subsequent period. The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the Company determines to perform a quantitative impairment test, a third-party valuator may be engaged to prepare an independent valuation of each reporting unit. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Additionally, the Company shall consider the income tax effect from any tax-deductible goodwill on the carrying amount of the reporting unit, if applicable, when measuring the goodwill impairment loss. For the years ended December 31, 2019 , 2018 and 2017 , no impairment losses associated with goodwill were recognized. Other identifiable intangible assets with definitive useful lives are amortized using the straight-line method or accelerated methods. These intangibles are evaluated periodically for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable. Other identifiable intangible assets with definitive useful lives include customer relationships, trademarks, software packages and a non-compete agreement. Customer relationships were valued using the excess earnings method under the income approach. Trademark assets were valued using the relief-from-royalty method under the income approach. Internally developed software packages, which include capitalized software development costs, are recorded at cost, while software packages acquired as part of a business combination were valued using the relief-from-royalty method under the income approach. The non-compete agreement was valued based on the estimated impact that theoretical competition would have on revenues and expenses. Derivative Instruments and Hedging Activities The Company uses derivative financial instruments to enhance its ability to manage its exposure to certain financial and market risks. On the date the derivative instrument contract is entered into, the Company may designate the derivative as (1) a hedge of the fair value of a recognized asset or liability or an unrecognized firm commitment (“fair value” hedge), (2) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow” hedge), or (3) as a “standalone” derivative instrument, including economic hedges that the Company has not formally documented as a fair value or cash flow hedge. Changes in the fair value of a derivative that qualifies for cash flow hedge accounting are recognized in Other Comprehensive Income (Loss). Amounts accumulated in other comprehensive income (loss) are reclassified to earnings when the related cash outflow affects earnings. Changes in the fair value of a derivative instrument that is highly effective and that is designated and qualifies as a fair value hedge, along with changes in the fair value of the hedged asset or liability that are attributable to the hedged risk (including gains or losses on firm commitments), are recorded in current-period earnings. Similarly, the changes in the fair value of stand-alone derivative instruments or derivatives not qualifying or designated for hedge accounting are reported in current-period earnings. The Company recognizes all derivative financial instruments in the Consolidated Balance Sheets as assets or liabilities at fair value. The Company presents derivative assets and derivative liabilities separately in the Consolidated Balance Sheets. The Company does not enter into derivative financial instruments for speculative purposes. Income Tax Income taxes are accounted for under the asset and liability method. A temporary difference refers to a difference between the tax basis of an asset or liability, determined based on recognition and measurement requirements for tax positions, and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively. Deferred tax assets and liabilities represent the future effects on income taxes that result from temporary differences and carryforwards that exist at the end of a period. Deferred tax assets and liabilities are measured using enacted tax rates and provisions of the enacted tax law and are not discounted to reflect the time-value of money. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of income and comprehensive income in the period that includes the enactment date. A deferred tax valuation allowance is established if it is considered more likely than not that all or a portion of the deferred tax asset will not be realized. The Company recognizes the benefit of uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement or disposition of the underlying issue with the taxing authority. Accordingly, the amount of benefit recognized in the consolidated financial statements may differ from the amount taken or expected to be taken in the tax return resulting in unrecognized tax benefits (“UTBs”). The Company recognizes the interest and penalties associated with UTBs as part of the provision for income taxes on its consolidated statements of income and comprehensive income. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheets. All companies within EVERTEC are legal entities which file separate income tax returns. Cash and cash equivalents Cash includes cash on hand and in banks and certificates of deposits with original maturities of three months or less. Restricted Cash Restricted cash represents cash received on deposits from participating institutions of the ATH network that has been segregated for the development of the ATH brand and cash maintained as collateral for a credit facility with Popular. Also, restricted cash includes certain cash collected from the Ticketpop business and a reserve account for payment and transaction processing services to merchants. The restrictions of these accounts are based on contractual provisions entered into with third parties. This cash is maintained in separate accounts at a financial institution in Puerto Rico. Allowance for Doubtful Accounts An allowance for doubtful accounts is provided for based on the estimated uncollectible amounts of the related receivables. The estimate is primarily based on a review of the current status of specific accounts receivable. Receivables are considered past due if full payment is not received by the contractual date. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted. Foreign Currency Translation Assets and liabilities denominated in foreign currencies are translated to U.S. dollars using prevailing rates of exchange at the end of the period. Revenues, expenses, gains and losses are translated using weighted average rates for the period. The resulting foreign currency translation adjustment from operations for which the functional currency is other than the U.S. dollar is reported in accumulated other comprehensive loss. Gains and losses on transactions denominated in currencies other than the functional currencies are included in determining net income for the period in which exchange rates change. Share-based Compensation The Company estimates the fair value of stock-based awards, on a contemporaneous basis, at the date they are granted using the Monte Carlo simulation analysis for market based restricted stock units (“RSUs”) using the following assumptions: (1) stock price; (2) risk-free rate; (3) expected volatility; (4) expected annual dividend yield and (5) expected term. The risk-free rate is based on the U.S. Constant Maturities Treasury Interest Rate as of the grant date or the yield of a 2-year or 3-year Treasury bond, as applicable. The expected volatility is based on a combination of historical volatility and implied volatility from publicly traded companies in the Company’s industry. The expected annual dividend yield is based on management’s expectations of future dividends as of the grant date and, in certain cases, assumes that those dividends will be reinvested over the performance period. Performance and time based RSUs and restricted stock are valued based on the market price of the Company’s stock at the grant date. Upon restricted stock or RSUs release, participants may elect to “net share settle”. Rather than requiring the participant to deliver cash to satisfy the tax withholdings, the Company withholds a sufficient number of shares to cover these amounts and delivers the net shares to the participant. Net Income Per Common Share Basic net income per common share is determined by dividing net income by the weighted-average number of common shares outstanding during the period. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently adopted accounting pronouncements In December 2018, SEC Release No. 33-10532, Disclosure Update and Simplification, became effective, amending certain disclosure requirements that were redundant or outdated. The amendments include replacing the requirement to disclose the high and low trading prices of the Company’s common stock with a requirement to disclose the ticker symbol of the common stock. In addition, the amendments expanded the disclosure requirements on the analysis of stockholder’s equity for interim financial statements. Under the amendments, the changes in each caption of stockholder’s equity presented in the balance sheet must be provided in a note or separate statement for the current and comparative year-to date interim periods. The Company adopted the new disclosure requirements in the first quarter of 2019. In February 2016, the Financial Accounting Standards Board (“FASB”) issued updated guidance for leases, codified as Topic 842 , to increase transparency and comparability among organizations by recognizing Right of Use ("ROU") assets and lease liabilities on the balance sheet for all leases, notwithstanding the lease classification. Under the standard, organizations are required to provide disclosures with the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. For lessors, this amended guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. In January 2018, July 2018 and March 2019, the FASB issued Accounting Standards Update (“ASU”) 2018-01, 2018-10, 2018-11 and 2019-01, to amend narrow aspects of the standard, to add new and optional transition method for the adoption of the standard and provide lessors with a practical expedient, among others. These standards are effective for public reporting companies for annual periods, and interim periods within annual periods beginning after December 15, 2018 and replaced the leasing guidance of Topic 840. The Company adopted the standard effective January 1, 2019 using the modified retrospective transition approach and the transition provisions provided by ASU 2018-11. In addition, the Company applied all the practical expedients available for transition, except for the practical expedient pertaining to land easements, since it was not applicable to the Company. Accordingly, the Company accounted for its existing leases without reassessing whether (a) the contract contains a lease under Topic 842, (b) the lease classification was different in accordance to Topic 842, and (c) initial direct costs before transition met the definition of the new leasing standard. For the lease terms determination, the Company considered all facts and circumstances from the lease contract inception up to the effective date of Topic 842. The Company, as a lessee, changed the characterization of the asset recognized for capital leases under ASC 840 to a ROU asset, and the obligation to a lease liability. The Company recognized lease liabilities of $36.2 million , with corresponding ROU assets for the same amount based on the present value of the remaining lease payments of existing operating leases entered into as a lessee with the implementation of the new leasing standard as of January 1, 2019. As a lessor, the Company changed the characterization of the asset recognized for financing leases to a net investment in lease. Results for reporting periods beginning after January 1, 2019 are presented under the new guidance provided by Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 840. Refer to Note 22, Commitments and Contingencies, for discussions of the implementation of the Topic 842 on the Company’s consolidated financial statements. In June 2018, the FASB issued updated guidance for accounting for non-employee share-based payments. The update was issued as part of the FASB simplification initiative and requires an entity to apply the requirements of Topic 718 to nonemployee awards, with certain exceptions, which were previously accounted under Topic 505. The Company adopted this update in the first quarter of 2019 with no material impact on the consolidated financial statements. Any future grants to non-employees will be accounted for under this update. In July 2018, the FASB issued codification improvements for various standards. The amendments represent changes to clarify, correct errors in, or make minor improvements to the codification. Certain amendments included in the update were effective upon issuance of the guidance and the Company adopted them without a material impact on the consolidated financial statements. The remaining guidance improvements with effective dates for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year, were adopted by the Company in the first quarter of 2019, except for the amendments with a later effective date (i.e., Topic 820, Fair Value Measurement), with no material impact on the consolidated financial statements. Recently issued accounting pronouncements In December 2019, the FASB issued updated guidance for Topic 740 Income Taxes as part of its initiative to reduce complexity in accounting standards. The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the amendments is permitted, including adoption in any interim period for public business entities for periods for which financial statements have not yet been issued. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. The Company is currently evaluating the impact, if any, of the adoption of this guidance on the consolidated financial statements. Accounting pronouncements issued prior to 2019 and not yet adopted In June 2016, November 2018, April 2019 and May 2019, the FASB issued updated guidance for the measurement of credit losses on financial instruments, which replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The main objective of these updates is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The updates affect trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. In addition, the updated guidance also clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. The updates provide an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. As of January 1, 2020, the Company implemented the updated guidance using a modified retrospective approach through a cumulative-effect adjustment to retained earnings to align the credit loss methodology with the new standard. The Company implemented its new credit loss model and is updating its processes and controls. Based on the Company's assessment, the updates will have an impact on trade receivables, and other assets that represent rights to receive cash. Based on the quantitative impact analysis, the transition adjustment calculation upon adoption of the standard was not material to retained earnings. The Company has implemented appropriate changes to its business processes, systems and controls to support recognition and disclosures under the new standard. In August 2018, the FASB issued an updated disclosure framework for fair value measurements. The amendments in the issued update remove, modify and add disclosure requirements on fair value measurements in Topic 820 Fair Value Measurements. The amendments in this update are effective to all entities for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain amendments in the update should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented. Early adoption is permitted upon issuance of this update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this update and delay adoption of the additional disclosures until their effective date. The Company adopted this guidance effective January 1, 2020, updated disclosures will be included in future filings. In August 2018, t he FASB issued updated guidance for customer’s accounting for implementation, set-up and other upfront costs incurred in a cloud computing arrangement that is a service contract. The amendments in this update align the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2019, with early adoption permitted, and interim periods within those fiscal years. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted this guidance prospectively, effective January 1, 2020 and applies the guidance in this update to all implementation costs incurred in a cloud computing arrangement that is a service contract. In October 2018, the FASB issued updated guidance to improve related party guidance for variable interest entities. The updated guidance requires entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety when determining whether a decision-making fee is a variable interest. The amendments in this update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. These amendments should be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The Company adopted this guidance effective January 1, 2020. The adoption of this guidance did not have an impact on the consolidated financial statements. In November 2018, the FASB issued updated guidance to clarify the interaction between the guidance for collaborative arrangements and the updated revenue recognition guidance. The amendments in this update, among other things, provide guidance on how to assess whether certain collaborative arrangement transactions should be accounted for under Topic 606. The amendments in this update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted this guidance effective January 1, 2020. Contracts are evaluated under the updated guidance. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Summary of Revenue Recognition Accounting Policy The Company's revenue recognition policy follows Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers , which provides guidance on the recognition, presentation and disclosure of revenue from contracts with customers in consolidated financial statements. Revenue is measured based on the consideration specified in a contract with a customer. Once the Company determines a contract's performance obligations and the transaction price, including an estimate of any variable consideration, the Company allocates the transaction price to each performance obligation in the contract using a stand-alone selling price ("SSP"). The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product or service to a customer. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Nature of performance obligations At contract inception, the Company assesses the goods and services promised in the contract with a customer and identifies a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, the Company considers all the goods or services promised in the contract regardless of whether they are explicitly stated or implied. Payment for the Company’s contracts with customers are typically due in full within 30 days of invoice date. The following is a description of the Company's principal revenue generating activities, including the separate performance obligations by operating segment. The Payment Services - Puerto Rico & Caribbean segment provides financial institutions, government entities and other issuers services to process credit, debit and prepaid cards; automated teller machines and electronic benefit transfer (“EBT”) card programs (which principally consist of services to the government of Puerto Rico for the delivery of benefits to participants). Revenue is principally derived from fixed fees per transaction and time and material basis billing for professional services provided to enhance the existing hosted platforms. Professional services in these contracts are primarily considered non-distinct from the transactional services and accounted for as a single performance obligation. Revenue for these contracts is recognized over time in the amount in which the Company has right to consideration. The Payment Services - Latin America segment provides financial institutions, government entities and other issuers services to process credit, debit and prepaid cards, for which revenue is recognized in the same manner as described above, as well as licensed software solutions for risk and fraud management and card payment processing. Licensed software solutions are provided mainly as Software as a Service ("SaaS") and on-premise perpetual licenses. Set-up fees related to SaaS are considered non-distinct from the license and accounted for as a single performance obligation. SaaS revenues are recognized over time while the customer benefits from the software. On-premises perpetual licenses require significant customization and development. Professional services provided for significant customizations and development are non-distinct from the license and accounted for as a single performance obligation, recognized over time during the development of the license. Revenue is recognized based on the Company's efforts or inputs, measured in labor hours expended, relative to the total expected inputs to satisfy the performance obligation. Maintenance or support services are considered distinct and recognized over time in the amount in which the Company has right to consideration. The Merchant Acquiring segment provides customers with the ability to accept and process debit and credit cards. Revenue is derived from fixed or identifiable fees charged to individual merchants per transaction, set-up fees, monthly membership fees and rental of POS terminals. Set-up fees are considered non-distinct from the transaction processing services and accounted for as a single performance obligation. Revenue for these contracts is recognized over time in the amount in which the Company has right to consideration. The Business Solutions segment consists of revenues from a full suite of business process management solutions. Revenue derived from core bank processing and other processing and transaction-based services are generally recognized over time in the amount in which the Company has right to consideration. Hosting services generally represent a series of distinct monthly increments that are substantially the same and has the same pattern of transfer. Professional services to enhance EVERTEC's platforms are generally considered non-distinct from the hosting service and accounted for as a single performance obligation. Hosting services are generally recognized over time once in production during the remaining term of the contract. Maintenance or support services are usually considered distinct and recognized over time in the amount in which the Company as right to consideration. Hardware and software sales are recognized at a point in time when the control of the asset is transferred to the customer. Indicators of transfer of control include the Company's right to payment, or as the customer has legal title or physical possession of the asset. The Company may also provide professional services to enhance customer's platforms or as IT consulting services by arranging for other parties to transfer the services (i.e., acting as an agent). For these contracts, revenue is recognized on a net basis. The Company’s service contracts may include service level arrangements (“SLA”) generally allowing the customer to receive a credit for part of the service fee when the Company has not provided the agreed level of services. If triggered, the SLA is deemed a consideration payable that may impact the transaction price of the contract, thus SLA performance is monitored and assessed for compliance with arrangements on a monthly basis, including determination and accounting for its economic impact, if any. Refer to Note 23 - Segment Information for further information, including revenue by products and services the Company provides and the geographic regions in which the Company operates. Significant Judgments Determining a measure of progress for performance obligations satisfied over time requires management to make judgments that affect the timing of revenue to be recognized. The Company exercises judgment in identifying a suitable method that depicts the entity’s performance in transferring control of these performance obligations, on a contract by contract basis. The principal criteria used for determining the measure of progress is the availability of reliable information that can be obtained without incurring undue cost, which generally results in the application of an input method since, in most cases, the outputs used to reasonably measure progress are not directly observable. Usually, the input method based on labor hours incurred, with respect to total expected labor hours to satisfy the performance obligation is applied. For performance obligations satisfied at a point in time, the Company determines that the customer is able to direct the use of, and obtain substantially all of the benefits from, the products at the time the products are delivered, the customer has legal title of the products or the Company’s has the right to payment. The Company mainly uses the expected cost-plus margin approach to allocate the transaction price in contracts with multiple performance obligations. To determine the stand-alone selling price, the Company periodically performs an assessment to determine the margin of goods or services with the assistance of the different business areas. This assessment is performed considering past transactions and/or reasonably available information, including market conditions, trends or other company or customer specific factors, among others. Disaggregation of revenue The Company disaggregates revenue from contract with customers into the primary geographical markets, nature of products and services, and timing of transfer of goods and services. The revenue disaggregated by segment, which includes the nature of the products and services that the Company provides and the primary geographical markets in which the Company operates is discussed in Note 23 - Segment Information. In the following table, revenue is disaggregated by timing of revenue recognition. December 31, 2019 (In thousands) Payment Services - Puerto Rico & Caribbean Payment Services - Latin America Merchant Acquiring, net Business Solutions Total Timing of revenue recognition Products and services transferred at a point in time $ 3,041 $ 3,811 $ — $ 10,421 $ 17,273 Products and services transferred over time 82,487 74,985 106,388 206,241 470,101 $ 85,528 $ 78,796 $ 106,388 $ 216,662 $ 487,374 December 31, 2018 (In thousands) Payment Services - Puerto Rico & Caribbean Payment Services - Latin America Merchant Acquiring, net Business Solutions Total Timing of revenue recognition Products and services transferred at a point in time $ 293 $ 2,864 $ — $ 7,329 $ 10,486 Products and services transferred over time 77,744 75,706 99,655 190,278 443,383 $ 78,037 $ 78,570 $ 99,655 $ 197,607 $ 453,869 Contract balances The following table provides information about contract assets from contracts with customers. (In thousands) Contract Assets Balance at beginning of period $ 996 Services transferred to customers 781 Transfers to accounts receivable (586 ) December 31, 2019 $ 1,191 Contract assets of the Company arise when the Company has a contract with a customer for which revenue has been recognized (i.e., goods or services have been transferred), but the customer payment is subject to a future event (i.e., satisfaction of additional performance obligations). Contract assets are considered a receivable when the rights to consideration of the Company become unconditional (i.e., the Company has a present right to payment). The current portion of these contract assets is recorded as part of prepaid expenses and other assets and the long-term portion is included in other long-term assets. Accounts receivable, net at December 31, 2019 amounted to $106.8 million . Unearned income and Unearned income - Long term, which refer to contract liabilities, at December 31, 2019 amounted to $20.7 million and $28.4 million , respectively, and generally arise when consideration is received or due in advance from customers prior to performance. Unearned income is mainly related to upfront fees for implementation or set up activities, including fees charged in pre-production periods in connection with hosting services. During the year ended December 31, 2019 , the Company recognized revenue of $15.6 million that was included in unearned income at December 31, 2018. Transaction price allocated to the remaining performance obligations Revenues from recurring transaction-based and processing services represent the majority of the Company's total revenue as of December 31, 2019 . The Company recognizes revenues from recurring transaction-based and processing services over time at the amounts in which the Company has right to invoice, which corresponds directly to the value to the customer of the Company’s performance completed to date. Therefore, the Company has elected to apply the practical expedient in paragraph 606-10-50-14. Under this practical expedient, the Company is not required to disclose information about remaining performance obligations if the performance obligation is part of a contract with an original expected duration of one year or less or if the Company recognizes revenue at the amount to which it has a right to invoice. The Company also applies the practical expedient in paragraph 606-10-50-14A and does not disclose the information about remaining performance obligations for variable consideration when the variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation in accordance with paragraph 606-10-25-14(b). For contracts excluded from the application of the practical expedients noted above, the estimated aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at December 31, 2019 is $305.4 million . This amount primarily consists of professional service fees for implementation or set up activities related to hosting services and maintenance services, typically recognized over the life of the contract which vary from 2 to 5 |
Cash and cash equivalents
Cash and cash equivalents | 12 Months Ended |
Dec. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash and cash equivalents | Cash and cash equivalents At December 31, 2019 and 2018 , the Company’s cash and cash equivalents amounted to $111.0 million and $70.0 million , respectively, which are deposited in deposit accounts within financial institutions. Of the total cash balance at December 31, 2019 and 2018 , $57.8 million and $50.3 million , respectively, resides in subsidiaries located outside of Puerto Rico. Cash deposited in an affiliate financial institution amounted to $51.3 million and $19.6 million as of December 31, 2019 and 2018 , respectively. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net consisted of the following: December 31, (In thousands) 2019 2018 Trade $ 58,493 $ 61,082 Due from affiliates, net 39,095 25,703 Settlement assets 12,353 15,118 Other 232 304 Less: allowance for doubtful accounts (3,361 ) (1,884 ) Accounts receivable, net $ 106,812 $ 100,323 The Company records settlement assets that result from timing differences in the Company’s settlement processes with merchants, financial institutions, and credit card associations related to merchant and card transaction processing. The amounts are generally collected or paid the following business day. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Assets | Prepaid Expenses and Other Assets Prepaid expenses and other assets consisted of the following: December 31, (In thousands) 2019 2018 Software licenses and maintenance contracts $ 11,585 $ 9,961 Deferred project costs 10,060 4,283 Guarantee deposits 4,899 4,611 Insurance 2,007 1,229 Prepaid income taxes 2,029 1,646 Taxes other than income 2,128 1,710 Postage 1,630 2,150 Other 3,747 3,534 Prepaid expenses and other assets $ 38,085 $ 29,124 |
Investment in Equity Investee
Investment in Equity Investee | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Equity Investee | Investment in Equity Investee Consorcio de Tarjetas Dominicanas, S.A. (“CONTADO”) is the largest merchant acquirer and ATM network in the Dominican Republic. The Company uses the equity method of accounting to account for its equity interest in CONTADO. As a result of the acquisition in 2011 of CONTADO’s 19.99% equity interest, the Company calculated an excess cost of the investment in CONTADO over the amount of underlying equity in net assets of approximately $9.0 million , which was mainly attributed to customer relationships, trademark and goodwill intangibles. The Company’s excess basis allocated to amortizable assets is recognized on a straight-line basis over the lives of the appropriate intangibles. Amortization expense for each of the years ended December 31, 2019 , 2018 and 2017 amounted to approximately $0.3 million , $0.3 million and $0.2 million , respectively, and was recorded within earnings of equity method investment in the consolidated statements of income and comprehensive income. The Company recognized $0.9 million , $0.7 million and $0.6 million as equity in CONTADO’s net income, net of amortization, in the consolidated statements of income and comprehensive income for the years ended December 31, 2019 , 2018 and 2017 , respectively. For the years ended December 31, 2019 and 2018 , the Company received $0.5 million and $0.4 million , respectively, in dividends from CONTADO. No dividends were received during 2017 . CONTADO fiscal year ends December 31 and is reported in the consolidated statements of income and comprehensive income for the period subsequent to the acquisition date on a one month lag. No significant events occurred in CONTADO’s operations subsequent to November 30, 2019 that would have materially affected the Company’s reported results. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consisted of the following: Useful life in years December 31, (Dollar amounts in thousands) 2019 2018 Buildings 30 $ 1,542 $ 1,440 Data processing equipment 3 - 5 116,950 110,673 Furniture and equipment 3 - 20 6,936 7,761 Leasehold improvements 5 -10 2,814 2,625 128,242 122,499 Less—accumulated depreciation and amortization (85,780 ) (86,990 ) Depreciable assets, net 42,462 35,509 Land 1,329 1,254 Property and equipment, net $ 43,791 $ 36,763 Depreciation and amortization expense related to property and equipment was $16.6 million , $14.5 million and $14.7 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The changes in the carrying amount of goodwill, allocated by reporting unit, were as follows (See Note 23): (In thousands) Payment Payment Merchant Business Total Balance at December 31, 2017 $ 160,972 $ 53,659 $ 138,121 $ 45,823 $ 398,575 Foreign currency translation adjustments — (3,931 ) — — (3,931 ) Balance at December 31, 2018 160,972 49,728 138,121 45,823 394,644 Goodwill attributable to acquisition — 3,719 — — 3,719 Foreign currency translation adjustments — 1,124 — — 1,124 Balance at December 31, 2019 $ 160,972 $ 54,571 $ 138,121 $ 45,823 $ 399,487 Goodwill is tested for impairment on an annual basis as of August 31, or more often if events or changes in circumstances indicate there may be impairment. The Company may test for goodwill impairment using a qualitative or a quantitative analysis. In a qualitative assessment, the Company assesses whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount. In the quantitative analysis, the Company compares the estimated fair value of the reporting units to their carrying values, including goodwill. The estimated fair value of the reporting units is computed using either an income approach, a market approach, or a combination of both. The income approach involves projecting the cash flows that the reporting unit is expected to generate and converting these cash flows into a present value equivalent through discounting. Significant estimates and assumptions used in the cash flow projection include internal projections and discount rates. Internal projections are based on the Company’s historical experience and estimated future business performance. The discount rate used is based on the weighted-average cost of capital, which reflects the rate of return expected to be earned by market participants and the estimated cost to obtain long-term debt financing. Valuations using the market approach derive from applying metrics of publicly traded companies or historically completed transactions of comparable businesses. Comparable businesses are selected based on the market in which the reporting units operate, considering size, profitability and growth. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired. If the fair value does not exceed the carrying value, an impairment loss equaling the excess amount is recorded, limited to the recorded balance of goodwill. The Company performed a qualitative analysis as of August 31, 2019 by which the Company concluded that it was not more likely than not that the fair value of a reporting unit was less than its carrying amount. The quantitative analysis as of August 31, 2018 indicated that the fair values of the reporting units ranged from 57% to 397% in excess of its carrying amount. No impairment losses were recorded in 2019 , 2018 or 2017 . For details regarding goodwill attributable to acquisition, refer to Note 10-Other Intangible Assets, net. |
Other Intangible Assets, Net
Other Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets, Net | Other Intangible Assets, Net The carrying amount of other intangible assets consisted of the following: Useful life in years December 31, 2019 (In thousands) Gross amount Accumulated amortization Net carrying amount Customer relationships 8 - 14 $ 344,883 $ (220,434 ) $ 124,449 Trademark 2 - 15 42,025 (32,456 ) 9,569 Software packages 3 -10 256,220 (169,974 ) 86,246 Non-compete agreement 15 56,539 (34,866 ) 21,673 Other intangible assets, net $ 699,667 $ (457,730 ) $ 241,937 Useful life in years December 31, 2018 (In thousands) Gross amount Accumulated amortization Net carrying amount Customer relationships 8 - 14 $ 342,738 $ (194,570 ) $ 148,168 Trademark 2 - 15 41,357 (28,888 ) 12,469 Software packages 3 -10 224,855 (151,666 ) 73,189 Non-compete agreement 15 56,539 (31,096 ) 25,443 Other intangible assets, net $ 665,489 $ (406,220 ) $ 259,269 Amortization expense related to intangibles, including software packages, was $51.5 million , $48.6 million and $49.5 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Amortization expense related to software packages was $18.3 million , $14.7 million and $15.9 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. The estimated amortization expenses of balances outstanding at December 31, 2019 for the next five years are as follows: (In thousands) 2020 $ 50,894 2021 45,582 2022 40,459 2023 36,883 2024 28,052 On December 2, 2019, the Company completed the acquisition of 100% of the shares of capital stock of EGM Ingeniería Sin Fronteras, S.A.S., commercially known as PlacetoPay, an electronic payment company based in Medellin, Colombia. The acquisition was not significant to the consolidated financial statements. The Company completed the acquisition for a cash payment of $6.3 million and recognized a customer relationship of $1.8 million , software packages of $0.8 million , a tradename of $0.4 million and goodwill amounting to $3.7 million . Revenues and earnings from the acquisition were insignificant for the year ended December 31, 2019. Pro forma results of operations have not been presented because the effect of this business combination is not material to the consolidated financial condition and results of operations. The results of operations and financial position of PlacetoPay are included in the consolidated financial statements from and after the date of acquisition. During the third quarter of 2017, the Company recognized an impairment charge of $6.5 million through cost of revenues for a third party software solution that is no longer commercially viable. In connection with this exit activity, the Company accrued $5.3 million for ongoing contractual fees, also through cost of revenues and recognized maintenance expense of $1.0 million . Both the liability and the impairment charge affected the Company's Merchant Acquiring segment and Payment Services segments. In the fourth quarter of 2017, the Company recognized an impairment loss related to a multi-year software development project that was impacted by delays caused by the hurricane and projected increased costs with a third party vendor, amounting to $5.0 million through cost of revenues and is in the Company's Payment Services - Puerto Rico & Caribbean segment. The fair value of the impaired assets was determined using discounted cash flow models. |
Other Long-Term Assets
Other Long-Term Assets | 12 Months Ended |
Dec. 31, 2019 | |
Other Long Term Assets [Abstract] | |
Other Long-Term Assets | Other Long-Term Assets As of December 31, 2019 , other long-term assets included $1.4 million related to deferred debt-issuance costs related to the revolving credit facility and $3.9 million related to the long-term portion of certain software and maintenance contracts. As of December 31, 2018 , other long-term assets included $1.8 million related to deferred debt-issuance costs related to the revolving credit facility, $1.8 million related to the long-term portion of certain software and maintenance contracts and a derivative asset of $1.7 million . |
Debt and Short-Term Borrowings
Debt and Short-Term Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt and Short-Term Borrowings | Debt and Short-Term Borrowings Total debt was as follows: December 31, (In thousands) 2019 2018 Senior Secured Credit Facility (2023 Term A) due on November 27, 2023 paying interest at a variable interest rate (LIBOR plus applicable margin (1)(2) ) $ 207,261 $ 217,791 Senior Secured Credit Facility (2024 Term B) due on November 27, 2024 paying interest at a variable interest rate (LIBOR plus applicable margin (1)(3) ) 317,936 320,515 Senior Secured Revolving Credit Facility (2) — — Note Payable due on April 30, 2021 (1) 175 300 Notes Payable due on January 1, 2022 (1) 2,231 — Total debt $ 527,603 $ 538,606 (1) Net of unaccreted discount and unamortized debt issue costs, as applicable. (2) Applicable margin of 2.00% and 2.25% at December 31, 2019 and December 31, 2018 , respectively. (3) Subject to a minimum rate (“LIBOR floor”) of 0.0% plus applicable margin of 3.50% at December 31, 2019 and December 31, 2018 . The following table presents contractual principal payments for the next five years: (In thousands) 2020 $ 15,311 2021 15,053 2022 20,508 2023 173,750 2024 308,750 2018 Senior Secured Credit Facilities On November 27, 2018, EVERTEC and EVERTEC Group (“Borrower”) entered into a credit agreement governing the senior secured credit facilities, consisting of a $220.0 million term loan A facility that matures on November 27, 2023 ("2023 Term A"), a $325.0 million term loan B facility that matures on November 27, 2024 ("2024 Term B") and a $125.0 million revolving credit facility (the "Revolving Facility") that matures on November 27, 2023, with a syndicate of lenders and Bank of America, N.A. (“Bank of America”), as administrative agent, collateral agent, swingline lender and line of credit issuer (collectively the “2018 Credit Agreement”). The material terms and conditions of the senior secured credit facilities are summarized below. Scheduled Amortization Payments The 2023 Term A provides for amortization in the amount of 1.25% of the original principal amount of the 2023 Term A during each of the first twelve quarters starting from the quarter ending March 31, 2019, 1.875% during each of the four subsequent quarters and 2.50% during each of the final three quarters, with the balance payable on the final maturity date. The 2024 Term B provides for quarterly amortization payments totaling 1.00% per annum of the original principal amount of the 2024 Term B, with the balance payable on the final maturity date. Voluntary Prepayments and Reduction and Termination of Commitments The terms of the 2018 senior secured credit facilities allow EVERTEC Group to prepay loans and permanently reduce the loan commitments under the senior secured credit facilities at any time, subject to the payment of customary LIBOR breakage costs, if any, provided that, in connection with certain refinancing or repricing of the 2024 Term B on or prior to the date which is six months after the closing date of the 2018 Credit Agreement, a prepayment premium of 1.00% will be required. Additionally, the terms of the facilities require mandatory repayment of outstanding principal balances based on a percentage of excess cash flow provided that no such prepayment shall be due if the resulting amount of the excess cash flow times the applicable percentage is less than $10 million . Interest The interest rates under the 2023 Term A and revolving credit facility are based on, at EVERTEC Group’s option, (a) adjusted LIBOR plus an interest margin of 2.25% or (b) the greater of (i) Bank of America’s “prime rate,” (ii) the Federal Funds Effective Rate plus 0.5% and (iii) adjusted LIBOR plus 1.0% (“ABR”) plus an interest margin of 1.25% . The interest rates under the 2024 Term B are based on, at EVERTEC Group’s option, (a) adjusted LIBOR plus an interest margin of 3.50% or (b) ABR plus an interest margin of 2.50% . The interest margins under the 2023 Term A and Revolving Facility are subject to reduction based on achievement of specified total secured net leverage ratio. Guarantees and Collateral EVERTEC Group’s obligations under the senior secured credit facilities and under any cash management, interest rate protection or other hedging arrangements entered into with a lender or any affiliate thereof are guaranteed by EVERTEC and each of EVERTEC’s existing wholly-owned subsidiaries (other than EVERTEC Group) and subsequently acquired or organized subsidiaries, subject to certain exceptions. Subject to certain exceptions, the senior secured credit facilities are secured to the extent legally permissible by substantially all of the assets of (1) EVERTEC, including a perfected pledge of all of the limited liability company interests of EVERTEC Intermediate Holdings, LLC (“Holdings”), (2) Holdings, including a perfected pledge of all of the limited liability company interests of EVERTEC Group and (3) EVERTEC Group and the subsidiary guarantors, including but not limited to: (a) a pledge of substantially all capital stock held by EVERTEC Group or any guarantor and (b) a perfected security interest in substantially all tangible and intangible assets of EVERTEC Group and each guarantor. Covenants The senior secured credit facilities contain affirmative and negative covenants that the Company believes are usual and customary for a senior secured credit agreement. The negative covenants in the senior secured credit facilities include, among other things, limitations (subject to exceptions) on the ability of EVERTEC and its restricted subsidiaries to: • declare dividends and make other distributions; • redeem or repurchase capital stock; • grant liens; • make loans or investments (including acquisitions); • merge or enter into acquisitions; • sell assets; • enter into any sale or lease-back transactions; • incur additional indebtedness; • prepay, redeem or repurchase certain indebtedness; • modify the terms of certain debt; • restrict dividends from subsidiaries; • change the business of EVERTEC or its subsidiaries; and • enter into transactions with their affiliates. In addition, the 2023 Term A and the Revolving Facility require EVERTEC to maintain a maximum total secured net leverage ratio of 4.25 to 1.00 for any quarter ending on or prior to September 30, 2020 and for fiscal quarters ending thereafter, 4.00 to 1.00. Concurrently with the execution of the 2018 Credit Agreement, the Company terminated the existing senior secured credit facilities. The net proceeds received by EVERTEC Group from the senior secured credit facilities under the 2018 Credit Agreement, together with other cash available to EVERTEC Group, were used, among other things, to refinance EVERTEC Group’s previous senior secured credit facilities, which consisted of a $191.4 million 2020 Term A and a $379.0 million Term B, under the credit agreement, dated as of April 17, 2013 and as subsequently amended, among EVERTEC Intermediate Holdings, LLC, EVERTEC Group, JPMorgan Chase Bank, N.A., as administrative agent, collateral agent, swingline lender and L/C issuer, and the lenders party thereto. In connection with this transaction, the Company recognized a loss on extinguishment of $2.6 million . The unpaid principal balance at December 31, 2019 of the 2023 Term A Loan and the 2024 Term B Loan was $209.0 million , and $321.8 million , respectively. The additional borrowing capacity for the Revolving Facility loan at December 31, 2019 was $116.9 million . The Company issues letters of credit against the revolving credit facility which reduce the additional borrowing capacity of the revolving credit facility. Events of Default The events of default under the senior secured credit facilities include, without limitation, nonpayment, material misrepresentation, breach of covenants, insolvency, bankruptcy, certain judgments, change of control (as defined in the 2018 Credit Agreement) and cross-events of default on material indebtedness. Notes payable In May 2016, EVERTEC Group entered into a non-interest bearing financing agreement amounting to $0.7 million to purchase software. As of December 31, 2019 and 2018, the outstanding principal balance of the note payable was $0.2 million and $0.3 million , respectively. The current portion of this note is recorded as part of accounts payable and the long-term portion is included in other long-term liabilities. In December 2019, EVERTEC Group entered into two non-interest bearing financing agreements amounting to $2.4 million to purchase software and maintenance. As of December 31, 2019 , the outstanding principal balance of the notes payable was $2.4 million , recorded as part of accounts payable and the long-term portion is included in other long-term liabilities. Interest Rate Swaps At December 31, 2019 , the Company had two interest rate swap agreements, entered into in December 2015 and December 2018, which convert a portion of the interest rate payments on the Company's 2023 Term B Loan from variable to fixed: Swap Agreement Effective date Maturity Date Notional Amount Variable Rate Fixed Rate 2015 Swap January 2017 April 2020 $200 million 1-month LIBOR 1.9225% 2018 Swap April 2020 November 2024 $250 million 1-month LIBOR 2.89% The Company has accounted for these transactions as cash flow hedges. At December 31, 2019 and 2018 , the carrying amount of the derivatives on the Company’s balance sheets is as follows: (In thousands) December 31, 2019 December 31, 2018 Other long-term assets $ — $ 1,683 Other long-term liabilities 14,452 4,059 For the year ended December 31, 2019, the Company recognized gains related to hedging activities on the Statement of Income and Comprehensive Income that offset the Company's interest expense as follows: (In thousands) December 31, 2019 Interest expense $ 677 During the year ended December 31, 2019 , the Company reclassified gains of $0.7 million from accumulated other comprehensive loss into income through interest expense. Based on current LIBOR rates, the Company expects to reclassify losses of $2.2 million from accumulated other comprehensive loss into income through interest expense over the next 12 months. Refer to Note 13 for tabular disclosure of the fair value of the derivative and to Note 15 for tabular disclosure of gains (losses) recorded on cash flow hedging activities. The cash flow hedges are considered highly effective. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | Financial Instruments and Fair Value Measurements Recurring Fair Value Measurements Fair value measurement provisions establish a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. These provisions describe three levels of input that may be used to measure fair value: Level 1: Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level 2: Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability through corroboration with market data at the measurement date. Level 3: Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The Company uses observable inputs when available. Fair value is based upon quoted market prices when available. If market prices are not available, the Company may employ models that mostly use market-based inputs including yield curves, interest rates, volatilities, and credit curves, among others. The Company limits valuation adjustments to those deemed necessary to ensure that the financial instrument’s fair value adequately represents the price that would be received or paid in the marketplace. Valuation adjustments may include consideration of counterparty credit quality and liquidity as well as other criteria. The estimated fair value amounts are subjective in nature and may involve uncertainties and matters of significant judgment for certain financial instruments. Changes in the underlying assumptions used in estimating fair value could affect the results. The fair value measurement levels are not indicative of risk of investment. The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value estimates are made at a specific point in time based on the type of financial instrument and relevant market information. Many of these estimates involve various assumptions and may vary significantly from amounts that could be realized in actual transactions. The following table summarizes fair value measurements by level at December 31, 2019 and 2018 , for assets and liabilities measured at fair value on a recurring basis: (In thousands) Level 1 Level 2 Level 3 Total December 31, 2019 Financial liability: Interest rate swap $ — $ 14,452 $ — $ 14,452 December 31, 2018 Financial asset: Interest rate swap — 1,683 — 1,683 Financial liability: Interest rate swap — 4,059 — 4,059 Derivative Instruments The fair value of the Company’s derivative instrument is determined using a standard valuation model. The significant inputs used in these models are readily available in public markets, or can be derived from observable market transactions, and therefore have been classified as Level 2. Inputs used in these standard valuation models for derivative instruments include the applicable forward rates and discount rates. The discount rates are based on the historical LIBOR Swap rates. The following table presents the carrying value, as applicable, and estimated fair values for financial instruments at December 31, 2019 and 2018 : December 31, 2019 2018 (In thousands) Carrying Amount Fair Value Carrying Amount Fair Value Financial asset: Interest rate swap $ — $ — $ 1,683 $ 1,683 Financial liabilities: Interest rate swap 14,452 14,452 4,059 4,059 2023 Term A 207,261 206,388 217,791 218,625 2024 Term B 317,936 324,163 320,515 319,517 The fair value of the senior secured term loans at December 31, 2019 and 2018 was obtained using the prices provided by third party service providers. Their pricing is based on various inputs such as: market quotes, recent trading activity in a non-active market or imputed prices. Also, the pricing may include the use of an algorithm that could take into account movement in the general high yield market, among other variants. The senior secured term loans, which are not measured at fair value in the balance sheets, if measured, would be categorized as Level 3 in the fair value hierarchy. There were no transfers in or out of Level 3 during the years ended December 31, 2019 , 2018 and 2017 . |
Other Long Term Liabilities
Other Long Term Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Long Term Liabilities | Other Long Term Liabilities As of December 31, 2019 , other long-term liabilities mainly consist of unrecognized tax benefit liabilities and the long-term portion of notes payables of $13.0 million and a derivative liability of $14.5 million . As of December 31, 2018 , other long-term liabilities mainly consist of unrecognized tax benefit liabilities and the long-term portion of notes payables of $10.5 million and a derivative liability of $4.1 million . |
Equity
Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Equity | Equity The Company is authorized to issue up to 206,000,000 shares of common stock of $0.01 par value. At December 31, 2019 and 2018 , the Company had 72,000,261 and 72,378,710 shares outstanding, respectively. The Company is also authorized to issue 2,000,000 shares of $0.01 par value preferred stock. As of December 31, 2019 , no shares of preferred stock have been issued. Stock Repurchase In 2019 , 2018 and 2017 , the Company repurchased a total of 1.1 million , 0.4 million , and 0.5 million shares, respectively, at a cost of $31.8 million , $10.0 million , and $7.7 million . The Company funded such repurchases with cash on hand and borrowings to the existing revolving credit facility. As of December 31, 2019 , 2018 and 2017 , the repurchased shares were permanently retired. Dividends The Company pays a regular quarterly dividend on common stock, subject to the declaration thereof by our Board each quarter. Any declaration and payment of future dividends to holders of our common stock will be at the discretion of our Board and will depend on many factors, including our financial condition, earnings, available cash, business opportunities, legal requirements, restrictions in our debt agreements and other contracts, capital requirements, level of indebtedness and other factors that our Board deems relevant. The Company’s dividend activity in 2019 and 2018 was as follows: Declaration Date Record Date Payment Date Dividend per share July 26, 2018 August 6, 2018 September 7, 2018 $ 0.05 October 25, 2018 November 5, 2018 December 7, 2018 0.05 February 15, 2019 February 26, 2019 March 22, 2019 0.05 April 25, 2019 May 6, 2019 June 7, 2019 0.05 July 25, 2019 August 5, 2019 September 6, 2019 0.05 October 23, 2019 November 4, 2019 December 6, 2019 0.05 Accumulated Other Comprehensive loss The following table provides a summary of the changes in the balances comprising accumulated other comprehensive loss for the years ended December 31, 2019 and 2018 : Foreign Currency Translation Adjustments Cash Flow Hedge Total Balance - December 31, 2017, net of tax $ (11,062 ) $ 214 $ (10,848 ) Other comprehensive loss before reclassifications (10,564 ) (2,273 ) (12,837 ) Amount reclassified to Net Income — (104 ) (104 ) Balance - December 31, 2018, net of tax (21,626 ) (2,163 ) (23,789 ) Other comprehensive income (loss) before reclassifications 4,754 (10,297 ) (5,543 ) Amount reclassified to Net Income — (677 ) (677 ) Balance - December 31, 2019, net of tax $ (16,872 ) $ (13,137 ) $ (30,009 ) |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | Share-based Compensation Long-term Incentive Plan ("LTIP") In the first quarter of 2017, 2018 and 2019, the Compensation Committee of the Company's Board of Directors ("Board") approved grants of restricted stock units (“RSUs”) to executives and certain employees pursuant to the 2017 LTIP, 2018 LTIP and 2019 LTIP, respectively, all under the terms of our 2013 Equity Incentive Plan. Under the LTIPs, the Company granted restricted stock units to eligible participants as time-based awards and/or performance-based awards. The vesting of the RSUs is dependent upon service, market, and/or performance conditions as defined in the grants. Employees that received time-based awards with service conditions are entitled to receive a specific number of shares of the Company’s common stock on the vesting date if the employee is providing services to the Company on the vesting date. Time-based awards vest over a period of three years in substantially equal installments commencing on the grant date and ending on February 24 of each year for the 2017 LTIP, February 28 of each year for the 2018 LTIP, and February 22 of each year for the 2019 LTIP. For the performance-based awards under the 2017 LTIP, 2018 LTIP, and 2019 LTIP, the Compensation Committee established adjusted earnings before income taxes, depreciation and amortization ("Adjusted EBITDA") as the primary performance measure while maintaining focus on total shareholder return through the use of a market-based total shareholder return ("TSR") performance modifier. The TSR modifier adjusts the shares earned based on the core Adjusted EBITDA performance upwards or downwards (+/- 25% ) based on the Company’s relative TSR at the end of the three-year performance period as compared to the companies in the Russell 2000 Index. The Adjusted EBITDA performance measure will be calculated for the one-year period commencing on January 1 of the year of the grant and ending on December 31 of the same year, relative to the goals set by the Compensation Committee for this same period. The shares earned will be subject to an additional two-year service vesting period. Performance and market-based awards vest at the end of the performance period that commenced on February 24, 2017 for the 2017 LTIP, February 28, 2018 for the 2018 LTIP, and February 22, 2019 for the 2019 LTIP. The periods end on February 24, 2020 for the 2017 LTIP, February 28, 2021 for the 2018 LTIP, and February 22, 2022 for the 2019 LTIP. Unless otherwise specified in the award agreement, or in an employment agreement, awards are forfeited if the employee voluntarily ceases to be employed by the Company prior to vesting. The following table summarizes the nonvested restricted shares and RSUs activity for the years ended December 31, 2019 , 2018 and 2017 : Nonvested restricted shares and RSUs Shares Weighted-average Nonvested at December 31, 2016 1,212,364 $ 14.88 Granted 1,584,241 15.37 Vested (315,953 ) 15.30 Forfeited (139,760 ) 16.06 Nonvested at December 31, 2017 2,340,892 15.08 Granted 636,322 17.07 Vested (468,064 ) 18.41 Forfeited (472,987 ) 16.55 Nonvested at December 31, 2018 2,036,163 15.09 Granted 517,153 30.84 Vested (931,389 ) 29.32 Forfeited (29,172 ) 16.52 Nonvested at December 31, 2019 1,592,755 $ — Share-based compensation recognized was as follows: Years ended December 31, (In thousands) 2019 2018 2017 Share-based compensation recognized, net Stock options $ — $ — $ 6 Restricted shares and RSUs 13,570 12,592 9,636 The maximum unrecognized cost for restricted stock units was $17.7 million as of December 31, 2019 . The cost is expected to be recognized over a weighted average period of 1.95 years . |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan EVERTEC, Inc. Puerto Rico Savings and Investment plan (“the EVERTEC Savings Plan”) was established in 2010, as a defined contribution savings plan qualified under section 1165(e) of the Puerto Rico Internal Revenue Code. Investments in the plan are participant directed, and employer matching contributions are determined based on specific provisions of the EVERTEC Savings Plan. Employees are fully vested in the employer’s contributions after five years of service. For the years ended December 31, 2019 , 2018 and 2017 , the costs incurred under the plan amounted to approximately $0.8 million , $0.8 million and $0.7 million , respectively. |
Total Other Income (Expenses)
Total Other Income (Expenses) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Total Other Income (Expenses) | Total Other Income (Expenses) For the year ended December 31, 2019 , other income (expenses) is primarily comprised of $1.7 million in foreign currency transaction losses. For the year ended December 31, 2018 , other income (expenses) is primarily comprised of $2.7 million in foreign currency transaction gains, $1.8 million from federal relief funds received in connection with wages paid in the aftermath of hurricane Maria, and a $2.6 million loss on extinguishment of debt. For the year ended December 31, 2017 , other income (expenses) is primarily comprised of $2.6 million in foreign currency transaction gains. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax | Income Tax On April 17, 2012, EVERTEC Group and Holdings were converted from a Puerto Rico corporation into Puerto Rico limited liability companies to benefit from changes to the Puerto Rico Income Tax Code allowing limited liability companies to be treated as partnerships that are pass-through entities for Puerto Rico tax purposes. As a result of these conversions and subsequent elections to be treated as partnerships, EVERTEC Group’s and Holding’s taxable income flows through to EVERTEC, Inc. EVERTEC Group, Holdings and EVERTEC, Inc. entered into a Tax Payment Agreement pursuant to which EVERTEC Group is obligated to make certain payments to Holdings or EVERTEC, Inc. for taxable periods or portions thereof occurring on or after April 17, 2012 (the “Effective Date”). Under the Tax Payment Agreement, EVERTEC Group will make payments with respect to any and all taxes (including estimated taxes) imposed under the laws of Puerto Rico, the United States of America and any other jurisdiction or any political (including municipal) subdivision or authority or agency in Puerto Rico, the United States of America or such other jurisdiction, that would have been imposed on EVERTEC Group if EVERTEC Group had been a corporation for tax purposes of that jurisdiction, together with all interest and penalties with respect thereto (“Taxes”), reduced by taking into account any applicable net operating losses or other tax attributes of Holdings or EVERTEC, Inc. that reduce Holdings’ or EVERTEC, Inc.’s taxes in such period. The Tax Payment Agreement provides that the payments thereunder shall not exceed the net amount of Taxes that Holdings and EVERTEC, Inc. actually owe to the appropriate taxing authority for a taxable period. Further, the Tax Payment Agreement provides that if Holdings or EVERTEC, Inc. receives a tax refund attributable to any taxable period or portion thereof occurring on or after the Effective Date, EVERTEC, Inc. shall be required to recalculate the payment for such period required to be made by EVERTEC Group to Holdings or EVERTEC, Inc. If the payment, as recalculated, is less than the amount of the payment EVERTEC Group already made to Holdings or EVERTEC, Inc. in respect of such period, Holdings or EVERTEC, Inc. shall promptly make a payment to EVERTEC Group in the amount of such difference. The components of income tax expense consisted of the following: Years ended December 31, (In thousands) 2019 2018 2017 Current tax provision $ 19,366 $ 17,207 $ 9,086 Deferred tax benefit (6,391 ) (4,611 ) (4,306 ) Income tax expense $ 12,975 $ 12,596 $ 4,780 The Company conducts operations in Puerto Rico and certain countries throughout the Caribbean and Latin America. As a result, the income tax expense includes the effect of taxes paid to the Puerto Rico government as well as foreign jurisdictions. The following table presents the segregation of income tax expense based on location of operations: Years ended December 31, (In thousands) 2019 2018 2017 Income before income tax provision Puerto Rico $ 89,667 $ 77,176 $ 47,347 United States 4,047 3,199 3,089 Foreign countries 22,961 18,790 9,763 Total income before income tax provision $ 116,675 $ 99,165 $ 60,199 Current tax provision Puerto Rico $ 7,550 $ 6,841 $ 1,892 United States 339 599 292 Foreign countries 11,477 9,767 6,902 Total current tax provision $ 19,366 $ 17,207 $ 9,086 Deferred tax benefit Puerto Rico $ (4,109 ) $ (2,904 ) $ (3,176 ) United States (216 ) (584 ) (184 ) Foreign countries (2,066 ) (1,123 ) (946 ) Total deferred tax benefit $ (6,391 ) $ (4,611 ) $ (4,306 ) Taxes payable to foreign countries by EVERTEC’s subsidiaries will be paid by such subsidiary and the corresponding liability and expense will be presented in EVERTEC’s consolidated financial statements. On December 10, 2018, the Governor of Puerto Rico signed in to law Act 257, which decreased the maximum corporate tax rate from 39% to 37.5% , effective January 1, 2019. This rate decrease is only applicable to the fully taxable operations of EVERTEC in Puerto Rico. As a result of this tax rate decrease, the deferred taxes were reevaluated as of December 31, 2018, the impact of this reevaluation was considered immaterial. As of December 31, 2019 , the Company has $62.2 million of unremitted earnings from foreign subsidiaries. The Company has not recognized a deferred tax liability on undistributed earnings for the Company’s foreign subsidiaries because these earnings are intended to be indefinitely reinvested. The amount of the unrecognized deferred tax liability depends on judgment required to analyze the withholding tax due, the applicable tax law and factual circumstances in effect at the time of any such distributions. EVERTEC believes it is not practicable at this time to reliably determine the amount of unrecognized deferred tax liability related to the Company’s undistributed earnings. If circumstances change and it becomes apparent that some or all of the undistributed earnings of a subsidiary will be remitted, and income taxes have not been recognized by the parent entity, the parent entity shall accrue as an expense of the current period income taxes attributable to that remittance. On October 19, 2012, EVERTEC Group was granted a tax exemption under the Tax Incentive Act No. 73 of 2008. Under this grant, EVERTEC Group will benefit from a preferential income tax rate on industrial development income, as well as from tax exemptions with respect to its municipal and property tax obligations for certain activities derived from its data processing operations in Puerto Rico. The grant has a term of 15 years effective as of January 1, 2012 with respect to income tax obligations and January 1, 2013 with respect to municipal and property tax obligations. Industrial development income under this grant is subject to a preferential rate of 4% . The grant contains customary commitments, conditions and representations that EVERTEC Group will be required to comply with in order to maintain the grant. The more significant commitments include: (i) maintaining at least 700 employees in EVERTEC Group's Puerto Rico data processing operations, (ii) investing at least $200.0 million in building, machinery, equipment or computer programs to be used in Puerto Rico during the effective term of the grant (to be made over four year capital investment cycles in $50.0 million increments); and (iii) 80% of EVERTEC Group employees must be residents of Puerto Rico. Failure to meet the requirements could result, among other things, in reductions of the benefits of the grant or revocation of the grant in its entirety, which could result in EVERTEC, Inc. paying additional taxes or other payments relative to what would be required to pay to other municipal agencies if the full benefits of the grant are not available. On October 11, 2011, Evertec Group was granted a tax exemption under Tax Incentive Law No. 73 of 2008, retroactively to December 1, 2009. Under this grant, activities derived from consulting and data processing services provided outside Puerto Rico are subject to a preferred rate that declines gradually from 7% to 4% by December 1, 2013. After this date, the rate remains at 4% until its expiration in November 1, 2024 . In addition, in August 2018, the Puerto Rico Industrial Development Company approved the requested extension of a grant under Tax Incentive Law No. 135 of 1997 for EVERTEC Group. Under this grant, activities derived from certain development and installation service in excess of a determined income are subject to a fixed tax rate of 10% for a 10 -year period from January 1, 2018. The following table presents the components of the Company’s deferred tax assets and liabilities: December 31, (In thousands) 2019 2018 Deferred tax assets (“DTA”) Allowance for doubtful accounts $ 271 $ 170 Unearned income 6,807 4,394 Investment in equity subsidiary 51 220 Share-based compensation 1,222 1,684 Debt issuance costs 249 309 Accrued liabilities 1,034 1,257 Derivative liability 1,220 351 Accrual of contract maintenance cost 134 157 Impairment of asset 289 289 Other 1,546 1,976 Total gross deferred tax assets 12,823 10,807 Deferred tax liabilities (“DTL”) Capitalized salaries 1,828 1,756 Derivative asset — 185 Difference between the assigned values and the tax basis of assets and liabilities recognized in business combinations 12,568 16,240 Other 557 659 Total gross deferred tax liabilities 14,953 18,840 Deferred tax liability, net $ (2,130 ) $ (8,033 ) Pursuant to the provision of the PR Code, net operating losses (“NOL”) can be carried forward for a period of seven, ten or twelve taxable years, depending on the taxable year generated. Act 72 of May 29, 2015, limited the amount of NOLs deduction to 80% for regular tax and 70% for alternative minimum tax (“AMT”) for taxable years commencing after December 31, 2014. However, Act 257 of 2018 limits the deduction of NOLs to 90% for regular tax for tax years commencing after December 31, 2019 . At December 31, 2019 , the Company has $0.2 million in NOL carryforwards related to Puerto Rico industrial development income, available to offset future eligible income. The Company recognizes the benefit of uncertain tax positions ("UTPs") only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The following is a tabular reconciliation of the total amounts of UTPs: Years ended December 31, (In thousands) 2019 2018 2017 Balance, beginning of year $ 9,238 $ 9,148 $ 12,219 Gross increases—tax positions in prior period — 578 — Gross decreases—tax positions in prior period (92 ) (488 ) — Lapse of statute of limitations — — (3,071 ) Balance, end of year $ 9,146 $ 9,238 $ 9,148 As of December 31, 2019 , 2018 and 2017 , approximately $9.1 million , $9.2 million and $9.1 million , respectively, would affect the Company’s effective income tax rate, if recognized. The Company recognizes interest and penalties related to UTB as part of income tax expense. During the years ended December 31, 2019 , 2018 and 2017 , the Company recognized an income tax expense of $0.4 million , an income tax expense of $0.4 million and an income tax benefit of $0.8 million , respectively, related to interest and penalties. The amount accrued for interest and penalties at December 31, 2019 and 2018 was $2.0 million , and $1.6 million , respectively. The Company anticipates changes to the UTBs within the next 12 months to be primarily related to interest. The Company believes it has sufficient accruals for contingent tax liabilities. In connection with tax return examinations, contingencies can arise that generally result from different interpretations of tax laws and regulations as they pertain to the amount, timing or inclusion of revenues and expenses in taxable income, or the ability to utilize tax credits to reduce income taxes payable. While it is probable, based on the potential outcome of the Company’s Puerto Rico and foreign tax examinations or the expiration of the statute of limitations for specific jurisdictions, that the liability for UTBs may increase or decrease within the next twelve months, the Company does not expect any such change would have a material effect on our financial condition, results of operations or cash flow. The Company and its subsidiaries are subject to Puerto Rico income tax as well as income tax of multiple foreign jurisdictions. A significant majority of the income tax is from Puerto Rico with a statute of limitations of four years after filing the income tax returns; therefore, the income tax returns for 2015 , 2016 , 2017 , and 2018 are currently open for examination. The income tax expense differs from the amount computed by applying the Puerto Rico statutory income tax rate to the income before income taxes as a result of the following: Years ended December 31, (In thousands) 2019 2018 2017 Computed income tax at statutory rates $ 43,753 $ 38,674 $ 23,477 Benefit of net tax-exempt interest income (126 ) (50 ) (56 ) Differences in tax rates due to multiple jurisdictions 1,058 (678 ) 2,353 Tax (benefit) expense due to a change in estimate (84 ) 467 (334 ) Effect of income subject to tax-exemption grant (31,424 ) (26,260 ) (16,832 ) Unrecognized tax (benefit) expense (32 ) 443 (3,828 ) Other (170 ) — — Income tax expense $ 12,975 $ 12,596 $ 4,780 |
Net Income Per Common Share
Net Income Per Common Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | Net Income Per Common Share The reconciliation of the numerator and the denominator of the earnings per common share is as follows: Years ended December 31, ( Dollar amounts in thousands, except share and per share data) 2019 2018 2017 Net income attributable to EVERTEC, Inc.’s common stockholders $ 103,469 $ 86,270 $ 55,054 Less: non-forfeitable dividends on restricted stock 3 4 10 Net income available to common shareholders $ 103,466 $ 86,266 $ 55,044 Weighted average common shares outstanding 72,099,755 72,607,321 72,479,807 Weighted average potential dilutive common shares (1) 1,376,008 1,812,789 392,381 Weighted average common shares outstanding—assuming dilution 73,475,763 74,420,110 72,872,188 Net income per common share—basic $ 1.44 $ 1.19 $ 0.76 Net income per common share—diluted $ 1.41 $ 1.16 $ 0.76 (1) Potential common shares consist of common stock issuable under the assumed exercise of stock options and RSUs awards using the treasury stock method. Refer to Note 15 for a detail of dividends declared and paid during 2019 and 2018 . |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The following table presents the Company’s transactions with related parties for each of the periods presented below: Years ended December 31, (Dollar amounts in thousands) 2019 2018 2017 Total revenues (1)(2) $ 209,053 $ 188,060 $ 177,213 Cost of revenues $ 5,094 $ 3,422 $ 2,929 Rent and other fees $ 8,519 $ 8,046 $ 7,803 Interest earned from an affiliate Interest income $ 161 $ 147 $ 154 (1) Total revenues from Popular as a percentage of revenues were 43% , 41% and 43% for each of the periods presented above. (2) Includes revenues generated from investee accounted for under the equity method of $1.1 million , $1.3 million and $1.8 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. At December 31, 2019 and 2018 , the Company had the following balances arising from transactions with related parties: December 31, (In thousands) 2019 2018 Cash and restricted cash deposits in affiliated bank $ 64,724 $ 29,136 Other due/to from affiliate Accounts receivable $ 39,095 $ 25,714 Prepaid expenses and other assets $ 4,211 $ 2,796 Operating lease right-of use assets $ 20,617 $ — Other long-term assets $ 57 $ 166 Accounts payable $ 7,250 $ 6,344 Unearned income $ 35,489 $ 25,401 Operating lease liabilities $ 20,905 $ — The balance of cash and restricted cash deposits in an affiliated bank was included within the cash and cash equivalents and restricted cash line items in the accompanying consolidated balance sheets. Due from affiliates mainly included the amounts outstanding related to processing and information technology services billed to Popular subsidiaries according to the terms of the Master Services Agreement (“MSA”) under which EVERTEC Group has a contract to provide such services for at least 15 years on an exclusive basis for the duration of the agreement on commercial terms consistent with historical pricing practices among the parties. This amount was included in the accounts receivable, net in the consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies EVERTEC is a defendant in a number of legal proceedings arising in the ordinary course of business. Based on the opinion of legal counsel, management believes that the final disposition of these matters will not have a material adverse effect on the business, results of operations or financial condition of the Company. The Company has identified certain claims in which a loss may be incurred, but in the aggregate the loss would be minimal. For other claims, where the proceedings are in an initial phase, the Company is unable to estimate the range of possible loss for such legal proceedings. However, the Company at this time believes that any loss related to these latter claims will not be material. Leases The Company’s leases accounting policy follows the guidance from Accounting Standards Codification (“ASC”) 842, Leases, which provides guidance on the recognition, presentation and disclosure of leases in consolidated financial statements. The Company determines if an arrangement is or contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease payable, and operating lease liabilities in the consolidated balance sheet. Finance leases are included in property and equipment, accrued liabilities, and other long-term liabilities in the consolidated balance sheet. ROU assets and lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, Management used the Company’s collateralized incremental borrowing rate (“IBR”) based on the information available at commencement date in determining the present value of future payments. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. We monitor events or changes in circumstances that change the timing or amount of future lease payments which results in the remeasurement of a lease liability, with a corresponding adjustment to the ROU asset. The lease payment terms may include fixed payment terms and variable payments. Fixed payment terms and variable payments that depend on an index (i.e., Consumer Price Index or “CPI”) or rate are considered in the determination of the operating lease liabilities. While lease liabilities are not remeasured because of changes to the CPI, changes are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. Variable payments that do not depend on an index or rate are not included in the lease liabilities determination. Rather, these payments are recognized as variable lease expense when incurred. Variable lease payments are included within operating costs and expenses in the consolidated statement of income and comprehensive income. For operating leases, lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. For finance leases, lease expense is composed of interest expense and amortization expense. The lease liability of these leases is measured using the interest rate method. The ROU asset from financing leases are amortized on a straight-line basis, and is presented as part of Property and Equipment, net. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. The Company elected the practical expedient of not separating lease and related non-lease components for all classes of underlying assets (i.e., building and equipment). The Company also elected as an accounting policy to not recognize lease liabilities and ROU assets for any future short-term leases (i.e., leases with a lease term of 12 months or less). The Company has operating leases for certain office facilities, buildings, telecommunications and other equipment; and finance leases for certain equipment. The Company’s lease contracts have remaining terms ranging from 1 year to 10 years , some of which may include options to extend the leases for up to 5 years , and some which may include the option to terminate the lease within 1 year . At December 31, 2019, equipment leases classified as finance leases, which are included within Property and Equipment, net, were $0.6 million , net of accumulated depreciation. Total lease cost for the twelve months ended December 31, 2019, was as follows: Twelve months ended December 31, 2019 (in thousands) Operating lease cost $ 7,573 Finance lease cost Amortization of right-of-use assets 255 Interest on lease liabilities 24 Variable lease cost 2,515 $ 10,367 Other information related to leases, at December 31, 2019, was as follows: (In thousands) Right-of-use assets obtained in exchange for operating lease obligations: $ 940 Weighted average remaining lease term, in years Operating leases 6 Finance leases 1 Weighted Average Discount Rate Operating leases 4.7 % Finance leases 4.2 % Future minimum lease payments under leases at December 31, 2019 were as follows: (In thousands) Operating Leases Finance Leases 2020 $ 6,574 $ 307 2021 5,824 34 2022 5,483 2 2023 5,496 — 2024 4,995 — Thereafter 6,297 — Total future minimum lease payments 34,669 343 Less: imputed interest (4,217 ) (35 ) Total $ 30,452 $ 308 Reported as of December 31, 2019 Accrued liabilities $ — $ 276 Operating lease liability - current 5,773 — Operating lease liability - long-term 24,679 — Other long-term liabilities — 32 $ 30,452 $ 308 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates in four business segments: Payment Services - Puerto Rico & Caribbean, Payment Services - Latin America (collectively "Payment Services segments"), Merchant Acquiring, and Business Solutions. The Payment Services - Puerto Rico & Caribbean segment revenues are comprised of revenues related to providing access to the ATH debit network and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and POS transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions) and EBT (which principally consist of services to the government of Puerto Rico for the delivery of benefits to participants). For ATH debit network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed and other processing services. For EBT services, revenues are primarily derived from the number of beneficiaries on file. The Payment Services - Latin America segment revenues consist of revenues related to providing access to the ATH network and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and POS transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions), as well as, licensed software solutions for risk and fraud management and card payment processing. For ATH debit network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed and other processing services. The Merchant Acquiring segment consists of revenues from services that allow merchants to accept electronic methods of payment. In the Merchant Acquiring segment, revenues include a discount fee and membership fees charged to merchants, debit network fees and rental fees from POS devices and other equipment, net of credit card interchange and assessment fees charged by credit cards associations (such as VISA or MasterCard) or payment networks. The discount fee is generally a percentage of the transaction value. EVERTEC also charges merchants for other services that are unrelated to the number of transactions or the transaction value. The Business Solutions segment consists of revenues from a full suite of business process management solutions in various product areas such as core bank processing, network hosting and management, IT professional services, business process outsourcing, item processing, cash processing, and fulfillment. Core bank processing and network services revenues are derived in part from a recurrent fixed fee and from fees based on the number of accounts on file (i.e. savings or checking accounts, loans, etc.) or computer resources utilized. Revenues from other processing services within the Business Solutions segment are generally volume-based and depend on factors such as the number of accounts processed. In addition, EVERTEC is a reseller of hardware and software products and these resale transactions are generally non-recurring. In addition to the four operating segments described above, Management identified certain functional cost areas that operate independently and do not constitute businesses in themselves. These areas could neither be concluded as operating segments nor could they be combined with any other operating segments. Therefore, these areas are aggregated and presented as “Corporate and Other” category in the financial statements alongside the operating segments. The Corporate and other category consists of corporate overhead expenses, intersegment eliminations, certain leveraged activities and other non-operating and miscellaneous expenses that are not included in the operating segments. The overhead and leveraged costs relate to activities such as: • marketing, • corporate finance and accounting, • human resources, • legal, • risk management functions, • internal audit, • corporate debt related costs, • non-operating depreciation and amortization expenses generated as a result of the Merger, • intersegment revenues and expenses, and • other non-recurring fees and expenses that are not considered when management evaluates financial performance at a segment level The Chief Operating Decision Maker ("CODM") reviews the operating segments separate financial information to assess performance and to allocate resources. Management evaluates the operating results of each of its operating segments based upon revenues and Adjusted Earnings before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA"). Adjusted EBITDA is defined as EBITDA further adjusted to exclude unusual items and other adjustments. Adjusted EBITDA, as it relates to operating segments, is presented in conformity with Accounting Standards Codification Topic 280, "Segment Reporting" given that it is reported to the CODM for purposes of allocating resources. Segment asset disclosure is not used by the CODM as a measure of segment performance since the segment evaluation is driven by revenues and adjusted EBITDA performance. As such, segment assets are not disclosed in the notes to the accompanying consolidated financial statements. The following tables set forth information about the Company’s operations by its four business segments for the periods indicated below. Historical information has been conformed to the updated presentation. December 31, 2019 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 125,544 $ 84,453 $ 106,388 $ 216,662 $ (45,673 ) $ 487,374 Operating costs and expenses 61,396 65,701 62,098 138,224 15,453 342,872 Depreciation and amortization 11,646 9,930 1,814 16,529 28,163 68,082 Non-operating income (expenses) 1,781 286 48 340 (2,688 ) (233 ) EBITDA 77,575 28,968 46,152 95,307 (35,651 ) 212,351 Compensation and benefits (2) 1,034 1,501 1,004 2,114 8,145 13,798 Transaction, refinancing, and other fees (3) — 210 — — (163 ) 47 Adjusted EBITDA $ 78,609 $ 30,679 $ 47,156 $ 97,421 $ (27,669 ) $ 226,196 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment eliminations predominantly reflect the $39.0 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring, intercompany software sale and developments of $6.7 million from Payment Services- Latin America to Payment Services- Puerto Rico & Caribbean and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees. (2) Primarily represents share-based compensation and other compensation expense and severance payments. (3) Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received. December 31, 2018 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 114,119 $ 80,899 $ 99,655 $ 197,602 $ (38,406 ) $ 453,869 Operating costs and expenses 52,006 75,240 55,778 126,232 19,485 328,741 Depreciation and amortization 9,734 9,284 1,698 13,878 28,473 63,067 Non-operating income (expenses) 2,420 11,750 3 477 (11,356 ) 3,294 EBITDA 74,267 26,693 45,578 85,725 (40,774 ) 191,489 Compensation and benefits (2) 1,087 1,034 938 2,088 8,512 13,659 Transaction, refinancing, exit activity and other fees (3) (250 ) — — — 7,561 7,311 Adjusted EBITDA $ 75,104 $ 27,727 $ 46,516 $ 87,813 $ (24,701 ) $ 212,459 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment eliminations predominantly reflect the $36.1 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring, intercompany software sale and developments of $2.3 million from Payment Services- Latin America to Payment Services- Puerto Rico & Caribbean and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees. (2) Primarily represents share-based compensation and other compensation expense and severance payments. (3) Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, relief contributions related to the 2017 hurricanes and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received. December 31, 2017 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 101,687 $ 62,702 $ 85,778 $ 189,077 $ (32,100 ) $ 407,144 Operating costs and expenses 57,463 66,786 57,574 119,761 19,477 321,061 Depreciation and amortization 8,993 8,880 2,254 15,774 28,349 64,250 Non-operating income (expenses) 2,229 8,726 1 13 (7,708 ) 3,261 EBITDA 55,446 13,522 30,459 85,103 (30,936 ) 153,594 Compensation and benefits (2) 589 816 573 1,687 6,090 9,755 Transaction, refinancing, and other fees (3) 2,499 3,220 6,465 — 2,495 14,679 Adjusted EBITDA $ 58,534 $ 17,558 $ 37,497 $ 86,790 $ (22,351 ) $ 178,028 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment eliminations predominantly reflect the $32.1 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees. (2) Primarily represents share-based compensation and other compensation expense and severance payments. (3) Primarily represents fees and expenses associated with corporate transactions as defined in the 2013 Credit Agreement and consulting, audit and legal expenses incurred as part of the prior year restatement of financial results, certain fees paid to resolve a software maintenance contract matter, a software impairment charge and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A. The reconciliation of EBITDA to consolidated net income is as follows: Years ended December 31, (In thousands) 2019 2018 2017 Total EBITDA $ 212,351 $ 191,489 $ 153,594 Less: Income tax expense 12,975 12,596 4,780 Interest expense, net 27,594 29,257 29,145 Depreciation and amortization 68,082 63,067 64,250 Net Income $ 103,700 $ 86,569 $ 55,419 The geographic segment information below is classified based on the geographic location of the Company’s subsidiaries: Years ended December 31, (Dollar amounts in thousands) 2019 2018 2017 Revenues (1) Puerto Rico $ 392,628 $ 358,436 $ 329,533 Caribbean 15,950 15,672 14,909 Latin America 78,796 79,761 62,702 Total revenues $ 487,374 $ 453,869 $ 407,144 (1) Revenues are based on subsidiaries’ country of domicile. Major customers For the years ended December 31, 2019 , 2018 and 2017 , the Company had one major customer which accounted for approximately $208.0 million or 43% , $186.8 million or 41% , and $175.4 million or 43% , respectively, of total revenues. See Note 21. The Company’s next largest customer, the Government of Puerto Rico, consolidating all individual agencies and public corporations, represented 7% of the Company’s total revenues for each the years ended December 31, 2019 , 2018 and 2017 . |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 20, 2020 , the Board declared a regular quarterly cash dividend of $0.05 per share on the Company’s outstanding shares of common stock. The dividend will be paid on April 3, 2020 to stockholders of record as of the close of business on March 4, 2020 |
Condensed Financial Statements
Condensed Financial Statements Parent Company Only | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Statements Parent Company Only | Condensed Financial Statements Parent Company Only Condensed Balance Sheets December 31, (In thousands) 2019 2018 Assets Current assets: Cash $ 1,678 $ 1,678 Accounts receivable, net 1,290 2,068 Prepaid expenses and other assets 9 41 Total current assets 2,977 3,787 Investment in subsidiaries, at equity 273,759 221,515 Other Intangible Asset 9 $ — Total assets $ 276,745 $ 225,302 Liabilities and stockholders’ equity Current liabilities: Accrued liabilities $ 260 $ 226 Income tax payable 1,757 1,660 Total current liabilities 2,017 1,886 Deferred tax liability, net 485 5,665 Other long-term liabilities 7,056 6,292 Total liabilities 9,558 13,843 Stockholders’ equity: Common stock 720 723 Additional paid-in capital — 5,783 Accumulated earnings 296,476 228,742 Accumulated other comprehensive loss, net of tax (30,009 ) (23,789 ) Total stockholders’ equity 267,187 211,459 Total liabilities and stockholders’ equity $ 276,745 $ 225,302 Condensed Statements of Income and Comprehensive Income Years ended December 31, (In thousands) 2019 2018 2017 Non-operating income (expenses) Equity in earnings of subsidiaries $ 101,078 $ 84,866 $ 49,162 Interest income 367 380 301 Other expenses (1,595 ) (1,396 ) (1,428 ) Income before income taxes 99,850 83,850 48,035 Income tax benefit (3,619 ) (2,420 ) (7,019 ) Net income 103,469 86,270 55,054 Other comprehensive income (loss), net of tax Foreign currency translation adjustments 4,754 (10,564 ) (635 ) (Loss) gain on cash flow hedges (10,974 ) (2,377 ) 2,178 Total comprehensive income $ 97,249 $ 73,329 $ 56,597 Condensed Statements of Cash Flows Years ended December 31, (In thousands) 2019 2018 2017 Cash flows from operating activities $ 55,092 $ 19,431 $ 29,422 Cash flows from financing activities Dividends paid (14,420 ) (7,273 ) (21,762 ) Repurchase of common stock (31,822 ) (10,000 ) (7,671 ) Withholding taxes paid on share-based compensation (8,849 ) (2,159 ) (1,588 ) Net cash used in financing activities (55,091 ) (19,432 ) (31,021 ) Net (decrease) increase in cash 1 (1 ) (1,599 ) Cash at beginning of the period 1,678 1,679 3,278 Cash at end of the period $ 1,679 $ 1,678 $ 1,679 |
The Company and Summary of Si_2
The Company and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
The Company | The Company EVERTEC, Inc. (formerly known as Carib Latam Holdings, Inc.) and its subsidiaries (collectively the “Company,” or “EVERTEC”) is a leading full-service transaction processing business in Latin America and the Caribbean. The Company is based in Puerto Rico and provides a broad range of merchant acquiring, payment services and business process management services across 26 countries in the region. EVERTEC owns and operates the ATH network, one of the leading automated teller machine (“ATM”) and personal identification number (“PIN”) debit networks in Latin America. In addition, EVERTEC provides a comprehensive suite of services for core bank processing, cash processing and technology outsourcing in the regions the Company serves. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants, corporations and government agencies with solutions that are essential to their operations, enabling them to issue, process and accept transactions securely. |
Initial Public Offering and Other Public Offerings | Initial Public Offering and Other Public Offerings On April 17, 2013, the Company completed its initial public offering of 28,789,943 shares of common stock at a price to the public of $20.00 per share. On September 18, 2013 and December 13, 2013, the Company completed public offerings of 23,000,000 and 15,233,273 shares, respectively, of the Company’s common stock by Apollo Global Management, LLC ("Apollo") and Popular, Inc. ("Popular"), and current and former employees. As of December 31, 2019 , Popular owned approximately 11.7 million shares of EVERTEC's common stock, or 16.2% and Apollo no longer owns any of the Company’s common stock. |
Basis of Presentation | Basis of Presentation The consolidated financial statements of EVERTEC have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the accompanying consolidated financial statements, prepared in accordance with GAAP, contain all adjustments, all of which are normal and recurring in nature, necessary for a fair presentation. |
Principles of Consolidation | Principles of Consolidation |
Use of Estimates | Use of Estimates The preparation of the accompanying consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company’s revenue recognition policy follows the guidance from Accounting Standards Codification ("ASC') 606, Revenue from Contracts with Customers , which provide guidance on the recognition, presentation, and disclosure of revenue in consolidated financial statements. The Company recognizes revenue when (or as) control of goods or services are transferred to a customer. The transfer of control occurs when the customer can direct the use of and receive substantially all the benefits from the transferred good or service. Therefore, revenue is recognized over time (typically for services) or at a point in time (typically for goods). The assessment of revenue recognition is performed by the Company based on the five-step model established in Topic 606, as follows: Step 1: Identify the contract with customer; Step 2: Identify the performance obligations in the contract; Step 3: Determine the transaction price; Step 4: Allocate the transaction price to the performance obligations in the contract; and Step 5: Recognize revenue when or as the entity satisfies a performance obligation. At contract inception, the Company evaluates whether the contract (i) is legally enforceable; (ii) approved by both parties; (iii) properly defines rights and obligations of the parties, including payment terms; (iv) has commercial substance; and (v) collection of substantially all consideration entitled is probable, before proceeding with the assessment of revenue recognition. If any of these requirements is not met, the contract does not exist for purposes of the model and any consideration received is recorded as a liability. A reassessment may be performed in a later date upon change in facts and circumstances. The Company also evaluates within this step if contracts issued within a period of 6 months with the same customer should be accounted for as a single contract. The Company’s contracts with customers may be modified through amendments, change requests and waivers. Upon receipt, modifications of contracts with customers are evaluated to determine if these must be accounted for: (i) as a separate contract, (ii) a cumulative catch-up, or (iii) as a termination and creation of a new contract. Contract modifications must also comply with the requirements to determine if a contract with a customer exists for accounting purposes. To identify performance obligations within contracts with customers, the Company first identifies all the promises in the contract (i.e., explicit and implicit). This includes the customer’s options to acquire additional goods or services for free or at a discount in exchange for an upfront payment. The Company then assesses if each material good or service (or bundle of goods or services) is distinct in nature (i.e., the customer can benefit from the good or service on its own or together with other readily available resources), and is capable of being distinct in the context of the contract (i.e., the promise to transfer the good or service is separately identifiable from other promises in the contract). A distinct good or service (or bundle of goods or services) constitutes a performance obligation. The Company also applies the series guidance to distinct goods or services (either with a specified quantity of goods or services or a stand-ready service), with an over time revenue recognition, to determine whether they should be accounted for as a single performance obligation. These distinct goods or services are recognized as a single performance obligation when their nature and timely increments are substantially the same and have the same pattern of transfer to the customer (i.e., the distinct goods or services within the series use the same method to measure progress towards complete satisfaction). To determine if a performance obligation should be recognized over time, one or more of the following criteria must be met: (1) the customer simultaneously receives and consumes the benefits as the Company performs (i.e., routine or recurring services); (2) the customer controls the asset as the entity creates or enhances it (i.e., asset on customer’s site); or (3) the Company’s performance does not create an asset for which the Company has an alternative use and there is a right to payment for performance to date (i.e., asset built to order). Performance obligations that do not meet the over time criteria are recognized at a point in time. In addition, in Step 2 of the model, the Company evaluates whether the practical expedient of right-to-invoice applies. If this practical expedient is applicable, steps 3, 4 and 5 are waived. For this practical expedient to apply, the right to consideration must correspond directly with the value received by the customer for the Company’s performance to date, no significant up-front payments or retroactive adjustments must exist, and specified minimums must be deemed non-substantive at the contract level. If the contract with the customer has multiple performance obligations and the practical expedient of right-to-invoice does not apply, the Company proceeds to determine the transaction price and allocate it on a stand-alone selling price basis among the different performance obligations identified in the Step 2. The Company generally applies the expected cost-plus margin approach to determine the stand-alone selling price at the performance obligation level. In addition, for performance obligations that are satisfied over time and the right to invoice practical expedient is not available, the Company determines a method to measure progress (i.e., input or output method) based on current facts and circumstances. When these performance obligations have variable consideration within its transaction price and are part of a series, the Company allocates the variable consideration to each time increment. As part of the revenue recognition analysis, when another party is involved in providing goods or services to a customer, the Company evaluates, for each performance obligation, whether it is providing the goods or services itself (i.e., as principal), or if it is only arranging on behalf of the other party. The Company acts as principal if it controls the specified good or service before that good or service is transferred to a customer. To determine if the Company acts as an agent, the Company considers indicators, such as: (i) the responsibility to fulfill a promise; (ii) the inventory risk; and (iii) the price determination. |
Investment in Equity Investee | Investment in Equity Investee The Company accounts for investments using the equity method of accounting if the investment provides the Company the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of an investor of between 20 percent and 50 percent, although other factors are considered in determining whether the equity method of accounting is appropriate. Under this method, the investment, originally recorded at cost, is adjusted to recognize the Company’s share of net income or losses as they occur. The Company’s share of investee earnings or losses is recorded, net of taxes, within earnings (losses) of equity method investment caption in the consolidated statements of income and comprehensive income. The Company’s consolidated revenues include fees for services provided to an investee accounted for under the equity method. Additionally, the Company’s interest in the net assets of its equity method investee is reflected in the consolidated balance sheets. On the acquisition of the investment any difference between the cost of the investment and the amount of the underlying equity in net assets of an investee is required to be accounted as if the investee were a consolidated subsidiary. If the difference is assigned to depreciable or amortizable assets or liabilities, then the difference should be amortized or accreted in connection with the equity earnings based on the Company’s proportionate share of the investee’s net income or loss. If the investor is unable to relate the difference to specific accounts of the investee, the difference should be considered goodwill. The Company considers whether the fair value of its equity method investment has declined below its carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If the Company considered any such decline to be other than temporary (based on various factors, including historical financial results, product development activities and the overall health of the investee’s industry), then the Company would record a write-down to estimated fair value. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight-line method and expensed over their estimated useful lives. Amortization of leasehold improvements is computed over the terms of the respective leases, including renewal options considered by management to be reasonably assured of being exercised, or the estimated useful lives of the improvements, whichever is shorter. Costs of maintenance and repairs which do not improve or extend the life of the respective assets are expensed as incurred. |
Impairment on Long-lived Assets | Impairment of Long-lived Assets Long-lived assets to be held and used, and long-lived assets to be disposed of, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. |
Capitalization of Software | Capitalization of Software The Company develops software that is used in providing processing services to customers. Capitalized software includes purchased software and internally-developed software and is recognized as software packages within the other intangible assets line item in the consolidated balance sheets. Capitalization of internally developed software occurs only after the preliminary project stage is complete and technological feasibility has been achieved, and management’s estimation that the likelihood of successful development and implementation reaches a provable level. Tasks that are generally capitalized are as follows: (a) system design of a chosen path including software configuration and software interfaces; (b) employee costs directly associated with the internal-use computer software project; (c) software development (coding) and software and system testing and verification; (d) system installation; and (e) enhancements that add function and are considered permanent. These tasks are capitalized and amortized using the straight line method over its estimated useful life, which range from three to ten years and is included in depreciation and amortization in the consolidated statements of income and comprehensive income. |
Software and Maintenance Contracts | Software and Maintenance Contracts Software and maintenance contracts are recorded at cost. Amortization of software and maintenance contracts is computed using the straight-line method and expensed over their estimated useful lives which range from one to five years and are recognized in cost of revenues in the consolidated statements of income and comprehensive income. Software and maintenance contracts are recognized as prepaid expenses and other assets or within other long-term assets depending on their remaining useful lives. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price and related costs over the value assigned to net assets acquired. Goodwill is not amortized, but is tested for impairment at least annually, or more often if events or circumstances indicate there may be impairment. The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative impairment test. If determined to be necessary, the quantitative impairment test shall be used to identify goodwill impairment and measure the amount of a goodwill impairment loss to be recognized (if any). The Company may assess qualitative factors to determine whether it is more likely than not, that is, a likelihood of more than 50 percent that the fair value of the reporting unit is less than its carrying amount, including goodwill. The Company has an unconditional option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test. The Company may resume performing the qualitative assessment in any subsequent period. The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the Company determines to perform a quantitative impairment test, a third-party valuator may be engaged to prepare an independent valuation of each reporting unit. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Additionally, the Company shall consider the income tax effect from any tax-deductible goodwill on the carrying amount of the reporting unit, if applicable, when measuring the goodwill impairment loss. For the years ended December 31, 2019 , 2018 and 2017 , no impairment losses associated with goodwill were recognized. Other identifiable intangible assets with definitive useful lives are amortized using the straight-line method or accelerated methods. These intangibles are evaluated periodically for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable. Other identifiable intangible assets with definitive useful lives include customer relationships, trademarks, software packages and a non-compete agreement. Customer relationships were valued using the excess earnings method under the income approach. Trademark assets were valued using the relief-from-royalty method under the income approach. Internally developed software packages, which include capitalized software development costs, are recorded at cost, while software packages acquired as part of a business combination were valued using the relief-from-royalty method under the income approach. The non-compete agreement was valued based on the estimated impact that theoretical competition would have on revenues and expenses. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company uses derivative financial instruments to enhance its ability to manage its exposure to certain financial and market risks. On the date the derivative instrument contract is entered into, the Company may designate the derivative as (1) a hedge of the fair value of a recognized asset or liability or an unrecognized firm commitment (“fair value” hedge), (2) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow” hedge), or (3) as a “standalone” derivative instrument, including economic hedges that the Company has not formally documented as a fair value or cash flow hedge. Changes in the fair value of a derivative that qualifies for cash flow hedge accounting are recognized in Other Comprehensive Income (Loss). Amounts accumulated in other comprehensive income (loss) are reclassified to earnings when the related cash outflow affects earnings. Changes in the fair value of a derivative instrument that is highly effective and that is designated and qualifies as a fair value hedge, along with changes in the fair value of the hedged asset or liability that are attributable to the hedged risk (including gains or losses on firm commitments), are recorded in current-period earnings. Similarly, the changes in the fair value of stand-alone derivative instruments or derivatives not qualifying or designated for hedge accounting are reported in current-period earnings. The Company recognizes all |
Income Tax | Income Tax Income taxes are accounted for under the asset and liability method. A temporary difference refers to a difference between the tax basis of an asset or liability, determined based on recognition and measurement requirements for tax positions, and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively. Deferred tax assets and liabilities represent the future effects on income taxes that result from temporary differences and carryforwards that exist at the end of a period. Deferred tax assets and liabilities are measured using enacted tax rates and provisions of the enacted tax law and are not discounted to reflect the time-value of money. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of income and comprehensive income in the period that includes the enactment date. A deferred tax valuation allowance is established if it is considered more likely than not that all or a portion of the deferred tax asset will not be realized. The Company recognizes the benefit of uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement or disposition of the underlying issue with the taxing authority. Accordingly, the amount of benefit recognized in the consolidated financial statements may differ from the amount taken or expected to be taken in the tax return resulting in unrecognized tax benefits (“UTBs”). The Company recognizes the interest and penalties associated with UTBs as part of the provision for income taxes on its consolidated statements of income and comprehensive income. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheets. All companies within EVERTEC are legal entities which file separate income tax returns. |
Cash and Cash Equivalents | Cash and cash equivalents Cash includes cash on hand and in banks and certificates of deposits with original maturities of three months or less. |
Restricted Cash | Restricted Cash |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities denominated in foreign currencies are translated to U.S. dollars using prevailing rates of exchange at the end of the period. Revenues, expenses, gains and losses are translated using weighted average rates for the period. The resulting foreign currency translation adjustment from operations for which the functional currency is other than the U.S. dollar is reported in accumulated other comprehensive loss. Gains and losses on transactions denominated in currencies other than the functional currencies are included in determining net income for the period in which exchange rates change. |
Share-based Compensation | Share-based Compensation The Company estimates the fair value of stock-based awards, on a contemporaneous basis, at the date they are granted using the Monte Carlo simulation analysis for market based restricted stock units (“RSUs”) using the following assumptions: (1) stock price; (2) risk-free rate; (3) expected volatility; (4) expected annual dividend yield and (5) expected term. The risk-free rate is based on the U.S. Constant Maturities Treasury Interest Rate as of the grant date or the yield of a 2-year or 3-year Treasury bond, as applicable. The expected volatility is based on a combination of historical volatility and implied volatility from publicly traded companies in the Company’s industry. The expected annual dividend yield is based on management’s expectations of future dividends as of the grant date and, in certain cases, assumes that those dividends will be reinvested over the performance period. Performance and time based RSUs and restricted stock are valued based on the market price of the Company’s stock at the grant date. Upon restricted stock or RSUs release, participants may elect to “net share settle”. Rather than requiring the participant to deliver cash to satisfy the tax withholdings, the Company withholds a sufficient number of shares to cover these amounts and delivers the net shares to the participant. |
Net Income Per Common Share | Net Income Per Common Share Basic net income per common share is determined by dividing net income by the weighted-average number of common shares outstanding during the period. |
Recent Accounting Pronouncements | Recently adopted accounting pronouncements In December 2018, SEC Release No. 33-10532, Disclosure Update and Simplification, became effective, amending certain disclosure requirements that were redundant or outdated. The amendments include replacing the requirement to disclose the high and low trading prices of the Company’s common stock with a requirement to disclose the ticker symbol of the common stock. In addition, the amendments expanded the disclosure requirements on the analysis of stockholder’s equity for interim financial statements. Under the amendments, the changes in each caption of stockholder’s equity presented in the balance sheet must be provided in a note or separate statement for the current and comparative year-to date interim periods. The Company adopted the new disclosure requirements in the first quarter of 2019. In February 2016, the Financial Accounting Standards Board (“FASB”) issued updated guidance for leases, codified as Topic 842 , to increase transparency and comparability among organizations by recognizing Right of Use ("ROU") assets and lease liabilities on the balance sheet for all leases, notwithstanding the lease classification. Under the standard, organizations are required to provide disclosures with the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. For lessors, this amended guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. In January 2018, July 2018 and March 2019, the FASB issued Accounting Standards Update (“ASU”) 2018-01, 2018-10, 2018-11 and 2019-01, to amend narrow aspects of the standard, to add new and optional transition method for the adoption of the standard and provide lessors with a practical expedient, among others. These standards are effective for public reporting companies for annual periods, and interim periods within annual periods beginning after December 15, 2018 and replaced the leasing guidance of Topic 840. The Company adopted the standard effective January 1, 2019 using the modified retrospective transition approach and the transition provisions provided by ASU 2018-11. In addition, the Company applied all the practical expedients available for transition, except for the practical expedient pertaining to land easements, since it was not applicable to the Company. Accordingly, the Company accounted for its existing leases without reassessing whether (a) the contract contains a lease under Topic 842, (b) the lease classification was different in accordance to Topic 842, and (c) initial direct costs before transition met the definition of the new leasing standard. For the lease terms determination, the Company considered all facts and circumstances from the lease contract inception up to the effective date of Topic 842. The Company, as a lessee, changed the characterization of the asset recognized for capital leases under ASC 840 to a ROU asset, and the obligation to a lease liability. The Company recognized lease liabilities of $36.2 million , with corresponding ROU assets for the same amount based on the present value of the remaining lease payments of existing operating leases entered into as a lessee with the implementation of the new leasing standard as of January 1, 2019. As a lessor, the Company changed the characterization of the asset recognized for financing leases to a net investment in lease. Results for reporting periods beginning after January 1, 2019 are presented under the new guidance provided by Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 840. Refer to Note 22, Commitments and Contingencies, for discussions of the implementation of the Topic 842 on the Company’s consolidated financial statements. In June 2018, the FASB issued updated guidance for accounting for non-employee share-based payments. The update was issued as part of the FASB simplification initiative and requires an entity to apply the requirements of Topic 718 to nonemployee awards, with certain exceptions, which were previously accounted under Topic 505. The Company adopted this update in the first quarter of 2019 with no material impact on the consolidated financial statements. Any future grants to non-employees will be accounted for under this update. In July 2018, the FASB issued codification improvements for various standards. The amendments represent changes to clarify, correct errors in, or make minor improvements to the codification. Certain amendments included in the update were effective upon issuance of the guidance and the Company adopted them without a material impact on the consolidated financial statements. The remaining guidance improvements with effective dates for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year, were adopted by the Company in the first quarter of 2019, except for the amendments with a later effective date (i.e., Topic 820, Fair Value Measurement), with no material impact on the consolidated financial statements. Recently issued accounting pronouncements In December 2019, the FASB issued updated guidance for Topic 740 Income Taxes as part of its initiative to reduce complexity in accounting standards. The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the amendments is permitted, including adoption in any interim period for public business entities for periods for which financial statements have not yet been issued. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. The Company is currently evaluating the impact, if any, of the adoption of this guidance on the consolidated financial statements. Accounting pronouncements issued prior to 2019 and not yet adopted In June 2016, November 2018, April 2019 and May 2019, the FASB issued updated guidance for the measurement of credit losses on financial instruments, which replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The main objective of these updates is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The updates affect trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. In addition, the updated guidance also clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. The updates provide an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. As of January 1, 2020, the Company implemented the updated guidance using a modified retrospective approach through a cumulative-effect adjustment to retained earnings to align the credit loss methodology with the new standard. The Company implemented its new credit loss model and is updating its processes and controls. Based on the Company's assessment, the updates will have an impact on trade receivables, and other assets that represent rights to receive cash. Based on the quantitative impact analysis, the transition adjustment calculation upon adoption of the standard was not material to retained earnings. The Company has implemented appropriate changes to its business processes, systems and controls to support recognition and disclosures under the new standard. In August 2018, the FASB issued an updated disclosure framework for fair value measurements. The amendments in the issued update remove, modify and add disclosure requirements on fair value measurements in Topic 820 Fair Value Measurements. The amendments in this update are effective to all entities for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain amendments in the update should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented. Early adoption is permitted upon issuance of this update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this update and delay adoption of the additional disclosures until their effective date. The Company adopted this guidance effective January 1, 2020, updated disclosures will be included in future filings. In August 2018, t he FASB issued updated guidance for customer’s accounting for implementation, set-up and other upfront costs incurred in a cloud computing arrangement that is a service contract. The amendments in this update align the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2019, with early adoption permitted, and interim periods within those fiscal years. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted this guidance prospectively, effective January 1, 2020 and applies the guidance in this update to all implementation costs incurred in a cloud computing arrangement that is a service contract. In October 2018, the FASB issued updated guidance to improve related party guidance for variable interest entities. The updated guidance requires entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety when determining whether a decision-making fee is a variable interest. The amendments in this update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. These amendments should be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The Company adopted this guidance effective January 1, 2020. The adoption of this guidance did not have an impact on the consolidated financial statements. In November 2018, the FASB issued updated guidance to clarify the interaction between the guidance for collaborative arrangements and the updated revenue recognition guidance. The amendments in this update, among other things, provide guidance on how to assess whether certain collaborative arrangement transactions should be accounted for under Topic 606. The amendments in this update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted this guidance effective January 1, 2020. Contracts are evaluated under the updated guidance. |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | In the following table, revenue is disaggregated by timing of revenue recognition. December 31, 2019 (In thousands) Payment Services - Puerto Rico & Caribbean Payment Services - Latin America Merchant Acquiring, net Business Solutions Total Timing of revenue recognition Products and services transferred at a point in time $ 3,041 $ 3,811 $ — $ 10,421 $ 17,273 Products and services transferred over time 82,487 74,985 106,388 206,241 470,101 $ 85,528 $ 78,796 $ 106,388 $ 216,662 $ 487,374 December 31, 2018 (In thousands) Payment Services - Puerto Rico & Caribbean Payment Services - Latin America Merchant Acquiring, net Business Solutions Total Timing of revenue recognition Products and services transferred at a point in time $ 293 $ 2,864 $ — $ 7,329 $ 10,486 Products and services transferred over time 77,744 75,706 99,655 190,278 443,383 $ 78,037 $ 78,570 $ 99,655 $ 197,607 $ 453,869 |
Summary of Contract Balances | The following table provides information about contract assets from contracts with customers. (In thousands) Contract Assets Balance at beginning of period $ 996 Services transferred to customers 781 Transfers to accounts receivable (586 ) December 31, 2019 $ 1,191 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Summary of Accounts Receivable, Net | Accounts receivable, net consisted of the following: December 31, (In thousands) 2019 2018 Trade $ 58,493 $ 61,082 Due from affiliates, net 39,095 25,703 Settlement assets 12,353 15,118 Other 232 304 Less: allowance for doubtful accounts (3,361 ) (1,884 ) Accounts receivable, net $ 106,812 $ 100,323 |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Summary of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consisted of the following: December 31, (In thousands) 2019 2018 Software licenses and maintenance contracts $ 11,585 $ 9,961 Deferred project costs 10,060 4,283 Guarantee deposits 4,899 4,611 Insurance 2,007 1,229 Prepaid income taxes 2,029 1,646 Taxes other than income 2,128 1,710 Postage 1,630 2,150 Other 3,747 3,534 Prepaid expenses and other assets $ 38,085 $ 29,124 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net consisted of the following: Useful life in years December 31, (Dollar amounts in thousands) 2019 2018 Buildings 30 $ 1,542 $ 1,440 Data processing equipment 3 - 5 116,950 110,673 Furniture and equipment 3 - 20 6,936 7,761 Leasehold improvements 5 -10 2,814 2,625 128,242 122,499 Less—accumulated depreciation and amortization (85,780 ) (86,990 ) Depreciable assets, net 42,462 35,509 Land 1,329 1,254 Property and equipment, net $ 43,791 $ 36,763 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill Allocated by Reportable Segments | The changes in the carrying amount of goodwill, allocated by reporting unit, were as follows (See Note 23): (In thousands) Payment Payment Merchant Business Total Balance at December 31, 2017 $ 160,972 $ 53,659 $ 138,121 $ 45,823 $ 398,575 Foreign currency translation adjustments — (3,931 ) — — (3,931 ) Balance at December 31, 2018 160,972 49,728 138,121 45,823 394,644 Goodwill attributable to acquisition — 3,719 — — 3,719 Foreign currency translation adjustments — 1,124 — — 1,124 Balance at December 31, 2019 $ 160,972 $ 54,571 $ 138,121 $ 45,823 $ 399,487 |
Other Intangible Assets, Net (T
Other Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Carrying Amount of Other Intangible Assets | The carrying amount of other intangible assets consisted of the following: Useful life in years December 31, 2019 (In thousands) Gross amount Accumulated amortization Net carrying amount Customer relationships 8 - 14 $ 344,883 $ (220,434 ) $ 124,449 Trademark 2 - 15 42,025 (32,456 ) 9,569 Software packages 3 -10 256,220 (169,974 ) 86,246 Non-compete agreement 15 56,539 (34,866 ) 21,673 Other intangible assets, net $ 699,667 $ (457,730 ) $ 241,937 Useful life in years December 31, 2018 (In thousands) Gross amount Accumulated amortization Net carrying amount Customer relationships 8 - 14 $ 342,738 $ (194,570 ) $ 148,168 Trademark 2 - 15 41,357 (28,888 ) 12,469 Software packages 3 -10 224,855 (151,666 ) 73,189 Non-compete agreement 15 56,539 (31,096 ) 25,443 Other intangible assets, net $ 665,489 $ (406,220 ) $ 259,269 |
Estimated Amortization Expenses | The estimated amortization expenses of balances outstanding at December 31, 2019 for the next five years are as follows: (In thousands) 2020 $ 50,894 2021 45,582 2022 40,459 2023 36,883 2024 28,052 |
Debt and Short-Term Borrowings
Debt and Short-Term Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Total Debt | Total debt was as follows: December 31, (In thousands) 2019 2018 Senior Secured Credit Facility (2023 Term A) due on November 27, 2023 paying interest at a variable interest rate (LIBOR plus applicable margin (1)(2) ) $ 207,261 $ 217,791 Senior Secured Credit Facility (2024 Term B) due on November 27, 2024 paying interest at a variable interest rate (LIBOR plus applicable margin (1)(3) ) 317,936 320,515 Senior Secured Revolving Credit Facility (2) — — Note Payable due on April 30, 2021 (1) 175 300 Notes Payable due on January 1, 2022 (1) 2,231 — Total debt $ 527,603 $ 538,606 (1) Net of unaccreted discount and unamortized debt issue costs, as applicable. (2) Applicable margin of 2.00% and 2.25% at December 31, 2019 and December 31, 2018 , respectively. (3) Subject to a minimum rate (“LIBOR floor”) of 0.0% plus applicable margin of 3.50% at December 31, 2019 and December 31, 2018 . |
Summary of Contractual Principal Payments | The following table presents contractual principal payments for the next five years: (In thousands) 2020 $ 15,311 2021 15,053 2022 20,508 2023 173,750 2024 308,750 |
Schedule of Interest Rate Swap Transaction | At December 31, 2019 , the Company had two interest rate swap agreements, entered into in December 2015 and December 2018, which convert a portion of the interest rate payments on the Company's 2023 Term B Loan from variable to fixed: Swap Agreement Effective date Maturity Date Notional Amount Variable Rate Fixed Rate 2015 Swap January 2017 April 2020 $200 million 1-month LIBOR 1.9225% 2018 Swap April 2020 November 2024 $250 million 1-month LIBOR 2.89% |
Schedule of Carrying Amount of Derivative Instruments on the Balance Sheet | At December 31, 2019 and 2018 , the carrying amount of the derivatives on the Company’s balance sheets is as follows: (In thousands) December 31, 2019 December 31, 2018 Other long-term assets $ — $ 1,683 Other long-term liabilities 14,452 4,059 For the year ended December 31, 2019, the Company recognized gains related to hedging activities on the Statement of Income and Comprehensive Income that offset the Company's interest expense as follows: (In thousands) December 31, 2019 Interest expense $ 677 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements for Assets and Liabilities at Fair Value on Recurring Basis | The following table summarizes fair value measurements by level at December 31, 2019 and 2018 , for assets and liabilities measured at fair value on a recurring basis: (In thousands) Level 1 Level 2 Level 3 Total December 31, 2019 Financial liability: Interest rate swap $ — $ 14,452 $ — $ 14,452 December 31, 2018 Financial asset: Interest rate swap — 1,683 — 1,683 Financial liability: Interest rate swap — 4,059 — 4,059 |
Carrying Value and Estimated Fair Values for Financial Instruments | The following table presents the carrying value, as applicable, and estimated fair values for financial instruments at December 31, 2019 and 2018 : December 31, 2019 2018 (In thousands) Carrying Amount Fair Value Carrying Amount Fair Value Financial asset: Interest rate swap $ — $ — $ 1,683 $ 1,683 Financial liabilities: Interest rate swap 14,452 14,452 4,059 4,059 2023 Term A 207,261 206,388 217,791 218,625 2024 Term B 317,936 324,163 320,515 319,517 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of Dividend Activity | The Company’s dividend activity in 2019 and 2018 was as follows: Declaration Date Record Date Payment Date Dividend per share July 26, 2018 August 6, 2018 September 7, 2018 $ 0.05 October 25, 2018 November 5, 2018 December 7, 2018 0.05 February 15, 2019 February 26, 2019 March 22, 2019 0.05 April 25, 2019 May 6, 2019 June 7, 2019 0.05 July 25, 2019 August 5, 2019 September 6, 2019 0.05 October 23, 2019 November 4, 2019 December 6, 2019 0.05 |
Summary of Changes in Balances Comprising Accumulated Other Comprehensive Loss | The following table provides a summary of the changes in the balances comprising accumulated other comprehensive loss for the years ended December 31, 2019 and 2018 : Foreign Currency Translation Adjustments Cash Flow Hedge Total Balance - December 31, 2017, net of tax $ (11,062 ) $ 214 $ (10,848 ) Other comprehensive loss before reclassifications (10,564 ) (2,273 ) (12,837 ) Amount reclassified to Net Income — (104 ) (104 ) Balance - December 31, 2018, net of tax (21,626 ) (2,163 ) (23,789 ) Other comprehensive income (loss) before reclassifications 4,754 (10,297 ) (5,543 ) Amount reclassified to Net Income — (677 ) (677 ) Balance - December 31, 2019, net of tax $ (16,872 ) $ (13,137 ) $ (30,009 ) |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Nonvested Restricted Shares and RSUs Activity | The following table summarizes the nonvested restricted shares and RSUs activity for the years ended December 31, 2019 , 2018 and 2017 : Nonvested restricted shares and RSUs Shares Weighted-average Nonvested at December 31, 2016 1,212,364 $ 14.88 Granted 1,584,241 15.37 Vested (315,953 ) 15.30 Forfeited (139,760 ) 16.06 Nonvested at December 31, 2017 2,340,892 15.08 Granted 636,322 17.07 Vested (468,064 ) 18.41 Forfeited (472,987 ) 16.55 Nonvested at December 31, 2018 2,036,163 15.09 Granted 517,153 30.84 Vested (931,389 ) 29.32 Forfeited (29,172 ) 16.52 Nonvested at December 31, 2019 1,592,755 $ — |
Share-Based Compensation Recognized | Share-based compensation recognized was as follows: Years ended December 31, (In thousands) 2019 2018 2017 Share-based compensation recognized, net Stock options $ — $ — $ 6 Restricted shares and RSUs 13,570 12,592 9,636 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense (Benefit) | The components of income tax expense consisted of the following: Years ended December 31, (In thousands) 2019 2018 2017 Current tax provision $ 19,366 $ 17,207 $ 9,086 Deferred tax benefit (6,391 ) (4,611 ) (4,306 ) Income tax expense $ 12,975 $ 12,596 $ 4,780 |
Segregation of Income Tax Expense (Benefit) Based on Location of Operations | The following table presents the segregation of income tax expense based on location of operations: Years ended December 31, (In thousands) 2019 2018 2017 Income before income tax provision Puerto Rico $ 89,667 $ 77,176 $ 47,347 United States 4,047 3,199 3,089 Foreign countries 22,961 18,790 9,763 Total income before income tax provision $ 116,675 $ 99,165 $ 60,199 Current tax provision Puerto Rico $ 7,550 $ 6,841 $ 1,892 United States 339 599 292 Foreign countries 11,477 9,767 6,902 Total current tax provision $ 19,366 $ 17,207 $ 9,086 Deferred tax benefit Puerto Rico $ (4,109 ) $ (2,904 ) $ (3,176 ) United States (216 ) (584 ) (184 ) Foreign countries (2,066 ) (1,123 ) (946 ) Total deferred tax benefit $ (6,391 ) $ (4,611 ) $ (4,306 ) |
Components of Deferred Tax Assets and Liabilities | The following table presents the components of the Company’s deferred tax assets and liabilities: December 31, (In thousands) 2019 2018 Deferred tax assets (“DTA”) Allowance for doubtful accounts $ 271 $ 170 Unearned income 6,807 4,394 Investment in equity subsidiary 51 220 Share-based compensation 1,222 1,684 Debt issuance costs 249 309 Accrued liabilities 1,034 1,257 Derivative liability 1,220 351 Accrual of contract maintenance cost 134 157 Impairment of asset 289 289 Other 1,546 1,976 Total gross deferred tax assets 12,823 10,807 Deferred tax liabilities (“DTL”) Capitalized salaries 1,828 1,756 Derivative asset — 185 Difference between the assigned values and the tax basis of assets and liabilities recognized in business combinations 12,568 16,240 Other 557 659 Total gross deferred tax liabilities 14,953 18,840 Deferred tax liability, net $ (2,130 ) $ (8,033 ) |
Reconciliation of Total Amounts of Unrecognized Tax Benefits | The following is a tabular reconciliation of the total amounts of UTPs: Years ended December 31, (In thousands) 2019 2018 2017 Balance, beginning of year $ 9,238 $ 9,148 $ 12,219 Gross increases—tax positions in prior period — 578 — Gross decreases—tax positions in prior period (92 ) (488 ) — Lapse of statute of limitations — — (3,071 ) Balance, end of year $ 9,146 $ 9,238 $ 9,148 |
Income Tax Expense Differs from Computed Income Tax at Statutory Rates | The income tax expense differs from the amount computed by applying the Puerto Rico statutory income tax rate to the income before income taxes as a result of the following: Years ended December 31, (In thousands) 2019 2018 2017 Computed income tax at statutory rates $ 43,753 $ 38,674 $ 23,477 Benefit of net tax-exempt interest income (126 ) (50 ) (56 ) Differences in tax rates due to multiple jurisdictions 1,058 (678 ) 2,353 Tax (benefit) expense due to a change in estimate (84 ) 467 (334 ) Effect of income subject to tax-exemption grant (31,424 ) (26,260 ) (16,832 ) Unrecognized tax (benefit) expense (32 ) 443 (3,828 ) Other (170 ) — — Income tax expense $ 12,975 $ 12,596 $ 4,780 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerator and Denominator of Income Per Common Share | The reconciliation of the numerator and the denominator of the earnings per common share is as follows: Years ended December 31, ( Dollar amounts in thousands, except share and per share data) 2019 2018 2017 Net income attributable to EVERTEC, Inc.’s common stockholders $ 103,469 $ 86,270 $ 55,054 Less: non-forfeitable dividends on restricted stock 3 4 10 Net income available to common shareholders $ 103,466 $ 86,266 $ 55,044 Weighted average common shares outstanding 72,099,755 72,607,321 72,479,807 Weighted average potential dilutive common shares (1) 1,376,008 1,812,789 392,381 Weighted average common shares outstanding—assuming dilution 73,475,763 74,420,110 72,872,188 Net income per common share—basic $ 1.44 $ 1.19 $ 0.76 Net income per common share—diluted $ 1.41 $ 1.16 $ 0.76 (1) Potential common shares consist of common stock issuable under the assumed exercise of stock options and RSUs awards using the treasury stock method. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Summary of Transactions with Related Parties | The following table presents the Company’s transactions with related parties for each of the periods presented below: Years ended December 31, (Dollar amounts in thousands) 2019 2018 2017 Total revenues (1)(2) $ 209,053 $ 188,060 $ 177,213 Cost of revenues $ 5,094 $ 3,422 $ 2,929 Rent and other fees $ 8,519 $ 8,046 $ 7,803 Interest earned from an affiliate Interest income $ 161 $ 147 $ 154 (1) Total revenues from Popular as a percentage of revenues were 43% , 41% and 43% for each of the periods presented above. (2) Includes revenues generated from investee accounted for under the equity method of $1.1 million , $1.3 million and $1.8 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. |
Balances of Transactions with Related Parties | At December 31, 2019 and 2018 , the Company had the following balances arising from transactions with related parties: December 31, (In thousands) 2019 2018 Cash and restricted cash deposits in affiliated bank $ 64,724 $ 29,136 Other due/to from affiliate Accounts receivable $ 39,095 $ 25,714 Prepaid expenses and other assets $ 4,211 $ 2,796 Operating lease right-of use assets $ 20,617 $ — Other long-term assets $ 57 $ 166 Accounts payable $ 7,250 $ 6,344 Unearned income $ 35,489 $ 25,401 Operating lease liabilities $ 20,905 $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Components of Lease Expense | Total lease cost for the twelve months ended December 31, 2019, was as follows: Twelve months ended December 31, 2019 (in thousands) Operating lease cost $ 7,573 Finance lease cost Amortization of right-of-use assets 255 Interest on lease liabilities 24 Variable lease cost 2,515 $ 10,367 Other information related to leases, at December 31, 2019, was as follows: (In thousands) Right-of-use assets obtained in exchange for operating lease obligations: $ 940 Weighted average remaining lease term, in years Operating leases 6 Finance leases 1 Weighted Average Discount Rate Operating leases 4.7 % Finance leases 4.2 % |
Maturities of Operating Lease Liabilities | Future minimum lease payments under leases at December 31, 2019 were as follows: (In thousands) Operating Leases Finance Leases 2020 $ 6,574 $ 307 2021 5,824 34 2022 5,483 2 2023 5,496 — 2024 4,995 — Thereafter 6,297 — Total future minimum lease payments 34,669 343 Less: imputed interest (4,217 ) (35 ) Total $ 30,452 $ 308 Reported as of December 31, 2019 Accrued liabilities $ — $ 276 Operating lease liability - current 5,773 — Operating lease liability - long-term 24,679 — Other long-term liabilities — 32 $ 30,452 $ 308 |
Maturities of Financing Lease Liabilities | Future minimum lease payments under leases at December 31, 2019 were as follows: (In thousands) Operating Leases Finance Leases 2020 $ 6,574 $ 307 2021 5,824 34 2022 5,483 2 2023 5,496 — 2024 4,995 — Thereafter 6,297 — Total future minimum lease payments 34,669 343 Less: imputed interest (4,217 ) (35 ) Total $ 30,452 $ 308 Reported as of December 31, 2019 Accrued liabilities $ — $ 276 Operating lease liability - current 5,773 — Operating lease liability - long-term 24,679 — Other long-term liabilities — 32 $ 30,452 $ 308 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Summary of Operations by Business Segments | The following tables set forth information about the Company’s operations by its four business segments for the periods indicated below. Historical information has been conformed to the updated presentation. December 31, 2019 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 125,544 $ 84,453 $ 106,388 $ 216,662 $ (45,673 ) $ 487,374 Operating costs and expenses 61,396 65,701 62,098 138,224 15,453 342,872 Depreciation and amortization 11,646 9,930 1,814 16,529 28,163 68,082 Non-operating income (expenses) 1,781 286 48 340 (2,688 ) (233 ) EBITDA 77,575 28,968 46,152 95,307 (35,651 ) 212,351 Compensation and benefits (2) 1,034 1,501 1,004 2,114 8,145 13,798 Transaction, refinancing, and other fees (3) — 210 — — (163 ) 47 Adjusted EBITDA $ 78,609 $ 30,679 $ 47,156 $ 97,421 $ (27,669 ) $ 226,196 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment eliminations predominantly reflect the $39.0 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring, intercompany software sale and developments of $6.7 million from Payment Services- Latin America to Payment Services- Puerto Rico & Caribbean and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees. (2) Primarily represents share-based compensation and other compensation expense and severance payments. (3) Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received. December 31, 2018 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 114,119 $ 80,899 $ 99,655 $ 197,602 $ (38,406 ) $ 453,869 Operating costs and expenses 52,006 75,240 55,778 126,232 19,485 328,741 Depreciation and amortization 9,734 9,284 1,698 13,878 28,473 63,067 Non-operating income (expenses) 2,420 11,750 3 477 (11,356 ) 3,294 EBITDA 74,267 26,693 45,578 85,725 (40,774 ) 191,489 Compensation and benefits (2) 1,087 1,034 938 2,088 8,512 13,659 Transaction, refinancing, exit activity and other fees (3) (250 ) — — — 7,561 7,311 Adjusted EBITDA $ 75,104 $ 27,727 $ 46,516 $ 87,813 $ (24,701 ) $ 212,459 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment eliminations predominantly reflect the $36.1 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring, intercompany software sale and developments of $2.3 million from Payment Services- Latin America to Payment Services- Puerto Rico & Caribbean and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees. (2) Primarily represents share-based compensation and other compensation expense and severance payments. (3) Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, relief contributions related to the 2017 hurricanes and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received. December 31, 2017 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 101,687 $ 62,702 $ 85,778 $ 189,077 $ (32,100 ) $ 407,144 Operating costs and expenses 57,463 66,786 57,574 119,761 19,477 321,061 Depreciation and amortization 8,993 8,880 2,254 15,774 28,349 64,250 Non-operating income (expenses) 2,229 8,726 1 13 (7,708 ) 3,261 EBITDA 55,446 13,522 30,459 85,103 (30,936 ) 153,594 Compensation and benefits (2) 589 816 573 1,687 6,090 9,755 Transaction, refinancing, and other fees (3) 2,499 3,220 6,465 — 2,495 14,679 Adjusted EBITDA $ 58,534 $ 17,558 $ 37,497 $ 86,790 $ (22,351 ) $ 178,028 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment eliminations predominantly reflect the $32.1 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees. (2) Primarily represents share-based compensation and other compensation expense and severance payments. (3) Primarily represents fees and expenses associated with corporate transactions as defined in the 2013 Credit Agreement and consulting, audit and legal expenses incurred as part of the prior year restatement of financial results, certain fees paid to resolve a software maintenance contract matter, a software impairment charge and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A. |
Reconciliation of Income from Operations to Consolidated Net Income | The reconciliation of EBITDA to consolidated net income is as follows: Years ended December 31, (In thousands) 2019 2018 2017 Total EBITDA $ 212,351 $ 191,489 $ 153,594 Less: Income tax expense 12,975 12,596 4,780 Interest expense, net 27,594 29,257 29,145 Depreciation and amortization 68,082 63,067 64,250 Net Income $ 103,700 $ 86,569 $ 55,419 |
Segment Information by Geographic Location | The geographic segment information below is classified based on the geographic location of the Company’s subsidiaries: Years ended December 31, (Dollar amounts in thousands) 2019 2018 2017 Revenues (1) Puerto Rico $ 392,628 $ 358,436 $ 329,533 Caribbean 15,950 15,672 14,909 Latin America 78,796 79,761 62,702 Total revenues $ 487,374 $ 453,869 $ 407,144 (1) Revenues are based on subsidiaries’ country of domicile. |
The Company and Summary of Si_3
The Company and Summary of Significant Accounting Policies - Additional Information (Detail) | Dec. 13, 2013shares | Sep. 18, 2013shares | Apr. 17, 2013$ / sharesshares | Dec. 31, 2019USD ($)country$ / sharesshares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Company And Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of countries where services are provided | country | 26 | |||||
Offering price (in dollars per share) | $ / shares | $ 0.01 | |||||
Interest cost capitalized | $ | $ 1,100,000 | $ 1,100,000 | $ 800,000 | |||
Impairment losses | $ | $ 0 | $ 0 | $ 0 | |||
Software and Maintenance Contracts | Minimum | ||||||
Company And Summary Of Significant Accounting Policies [Line Items] | ||||||
Intangible asset useful life | 1 year | |||||
Software and Maintenance Contracts | Maximum | ||||||
Company And Summary Of Significant Accounting Policies [Line Items] | ||||||
Intangible asset useful life | 5 years | |||||
Software Development | Minimum | ||||||
Company And Summary Of Significant Accounting Policies [Line Items] | ||||||
Intangible asset useful life | 3 years | |||||
Software Development | Maximum | ||||||
Company And Summary Of Significant Accounting Policies [Line Items] | ||||||
Intangible asset useful life | 10 years | |||||
Selling Stockholders | ||||||
Company And Summary Of Significant Accounting Policies [Line Items] | ||||||
Shares issued under public offerings (in shares) | 15,233,273 | 23,000,000 | ||||
Popular | ||||||
Company And Summary Of Significant Accounting Policies [Line Items] | ||||||
Shares issued under public offerings (in shares) | 11,700,000 | |||||
Percentage of equity interest owned | 16.20% | |||||
Apollo Global Management LLC | ||||||
Company And Summary Of Significant Accounting Policies [Line Items] | ||||||
Shares issued under public offerings (in shares) | 0 | |||||
IPO | Common Stock | ||||||
Company And Summary Of Significant Accounting Policies [Line Items] | ||||||
Shares issued under public offerings (in shares) | 28,789,943 | |||||
Offering price (in dollars per share) | $ / shares | $ 20 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease liabilities | $ 30,452 | ||
Operating lease right-of-use asset | $ 29,979 | $ 0 | |
ASU 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease liabilities | $ 36,200 | ||
Operating lease right-of-use asset | $ 36,200 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 487,374 | $ 453,869 | $ 407,144 |
Products and services transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 17,273 | 10,486 | |
Products and services transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 470,101 | 443,383 | |
Payment Services - Puerto Rico & Caribbean | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 85,528 | 78,037 | |
Payment Services - Puerto Rico & Caribbean | Products and services transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 3,041 | 293 | |
Payment Services - Puerto Rico & Caribbean | Products and services transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 82,487 | 77,744 | |
Payment Services - Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 78,796 | 78,570 | |
Payment Services - Latin America | Products and services transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 3,811 | 2,864 | |
Payment Services - Latin America | Products and services transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 74,985 | 75,706 | |
Merchant Acquiring, net | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 106,388 | 99,655 | |
Merchant Acquiring, net | Products and services transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | |
Merchant Acquiring, net | Products and services transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 106,388 | 99,655 | |
Business Solutions | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 216,662 | 197,607 | |
Business Solutions | Products and services transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 10,421 | 7,329 | |
Business Solutions | Products and services transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 206,241 | $ 190,278 |
Revenues - Contract Balances (D
Revenues - Contract Balances (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Revenue, Contract Balances [Roll Forward] | |
Beginning of period | $ 996 |
Services transferred to customers | 781 |
Transfers to accounts receivable | (586) |
End of period | $ 1,191 |
Revenues - Performance Obligati
Revenues - Performance Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Accounts receivable, net | $ 106,812 | $ 100,323 |
Unearned income | 20,668 | 11,527 |
Unearned income - long term | 28,437 | $ 26,075 |
Revenue recognized that was included in unearned income | 15,600 | |
Transaction price allocated to performance obligations that are unsatisfied or partially satisfied | $ 305,400 | |
Professional Services, All Other Contracts | Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation, period of expected timing of satisfcation | 2 years | |
Professional Services, All Other Contracts | Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation, period of expected timing of satisfcation | 5 years |
Cash and cash equivalents (Deta
Cash and cash equivalents (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | $ 111,030 | $ 69,973 | $ 50,423 |
Cash Deposited In an Affiliate Financial Institution | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 51,300 | 19,600 | |
Territories Other Than Puerto Rico | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | $ 57,800 | $ 50,300 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Trade | $ 58,493 | $ 61,082 |
Due from affiliates, net | 39,095 | 25,703 |
Settlement assets | 12,353 | 15,118 |
Other | 232 | 304 |
Less: allowance for doubtful accounts | (3,361) | (1,884) |
Accounts receivable, net | $ 106,812 | $ 100,323 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Prepaid Expenses And Other Current Assets [Line Items] | ||
Software licenses and maintenance contracts | $ 11,585 | $ 9,961 |
Deferred project costs | 10,060 | 4,283 |
Guarantee deposits | 4,899 | 4,611 |
Insurance | 2,007 | 1,229 |
Postage | 1,630 | 2,150 |
Other | 3,747 | 3,534 |
Prepaid expenses and other assets | 38,085 | 29,124 |
Income taxes | ||
Prepaid Expenses And Other Current Assets [Line Items] | ||
Prepaid income tax | 2,029 | 1,646 |
Taxes other than Income | ||
Prepaid Expenses And Other Current Assets [Line Items] | ||
Prepaid income tax | $ 2,128 | $ 1,710 |
Investment in Equity Investee (
Investment in Equity Investee (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2011 | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity interest in CONTADO acquisition | 19.99% | |||
Equity interest in CONTADO, excess cost of investment over underlying equity in net assets | $ 9,000,000 | |||
Earnings of equity method investment | $ 936,000 | $ 692,000 | $ 604,000 | |
Dividends received from CONTADO | 500,000 | 400,000 | 0 | |
Equity Method Investments | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interest in CONTADO, amortization expense | $ 300,000 | $ 300,000 | $ 200,000 |
Property and Equipment, Net (De
Property and Equipment, Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 128,242 | $ 122,499 |
Less—accumulated depreciation and amortization | (85,780) | (86,990) |
Depreciable assets, net | 42,462 | 35,509 |
Land | 1,329 | 1,254 |
Property and equipment, net | $ 43,791 | 36,763 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 30 years | |
Property and equipment, gross | $ 1,542 | 1,440 |
Data processing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 116,950 | 110,673 |
Data processing equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 3 years | |
Data processing equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 5 years | |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 6,936 | 7,761 |
Furniture and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 3 years | |
Furniture and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 20 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,814 | $ 2,625 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 5 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 10 years |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 16.6 | $ 14.5 | $ 14.7 |
Goodwill - Changes in Carrying
Goodwill - Changes in Carrying Amount of Goodwill Allocated by Reportable Segments (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 394,644 | $ 398,575 |
Foreign currency translation adjustments | 1,124 | (3,931) |
Goodwill attributable to acquisition | 3,719 | |
Goodwill, ending balance | 399,487 | 394,644 |
Payment Services - Puerto Rico & Caribbean | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 160,972 | 160,972 |
Foreign currency translation adjustments | 0 | 0 |
Goodwill attributable to acquisition | 0 | |
Goodwill, ending balance | 160,972 | 160,972 |
Payment Services - Latin America | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 49,728 | 53,659 |
Foreign currency translation adjustments | 1,124 | (3,931) |
Goodwill attributable to acquisition | 3,719 | |
Goodwill, ending balance | 54,571 | 49,728 |
Merchant Acquiring, net | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 138,121 | 138,121 |
Foreign currency translation adjustments | 0 | 0 |
Goodwill attributable to acquisition | 0 | |
Goodwill, ending balance | 138,121 | 138,121 |
Business Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 45,823 | 45,823 |
Foreign currency translation adjustments | 0 | 0 |
Goodwill attributable to acquisition | 0 | |
Goodwill, ending balance | $ 45,823 | $ 45,823 |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2019 | |
Goodwill [Line Items] | ||||
Impairment losses | $ 0 | $ 0 | $ 0 | |
Minimum | ||||
Goodwill [Line Items] | ||||
Reporting units, percentage of fair value in excess of carrying amount | 57.00% | |||
Maximum | ||||
Goodwill [Line Items] | ||||
Reporting units, percentage of fair value in excess of carrying amount | 397.00% |
Other Intangible Assets, Net -
Other Intangible Assets, Net - Carrying Amount of Other Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | $ 699,667 | $ 665,489 |
Accumulated amortization | (457,730) | (406,220) |
Net carrying amount | 241,937 | 259,269 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | 344,883 | 342,738 |
Accumulated amortization | (220,434) | (194,570) |
Net carrying amount | $ 124,449 | $ 148,168 |
Customer relationships | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 8 years | 8 years |
Customer relationships | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 14 years | 14 years |
Trademark | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | $ 42,025 | $ 41,357 |
Accumulated amortization | (32,456) | (28,888) |
Net carrying amount | $ 9,569 | $ 12,469 |
Trademark | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 2 years | 2 years |
Trademark | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 15 years | 15 years |
Software packages | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | $ 256,220 | $ 224,855 |
Accumulated amortization | (169,974) | (151,666) |
Net carrying amount | $ 86,246 | $ 73,189 |
Software packages | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 3 years | 3 years |
Software packages | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 10 years | 10 years |
Non-compete agreement | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 15 years | 15 years |
Gross amount | $ 56,539 | $ 56,539 |
Accumulated amortization | (34,866) | (31,096) |
Net carrying amount | $ 21,673 | $ 25,443 |
Other Intangible Assets, Net _2
Other Intangible Assets, Net - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 02, 2019 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Other Intangible Assets [Line Items] | ||||||
Goodwill | $ 398,575 | $ 399,487 | $ 394,644 | $ 398,575 | ||
Loss on impairment of software | $ 6,500 | 0 | 0 | 11,441 | ||
Ongoing contractual fees accrued | 5,300 | |||||
Maintenance expense | 1,000 | |||||
EGM Ingeniería Sin Fronteras, S.A.S. | ||||||
Other Intangible Assets [Line Items] | ||||||
Cash payment for acquisition | $ 6,300 | |||||
Goodwill | 3,700 | |||||
Business Solutions | ||||||
Other Intangible Assets [Line Items] | ||||||
Goodwill | 45,823 | 45,823 | 45,823 | 45,823 | ||
Loss on impairment of software | $ 5,000 | |||||
Other Intangible Assets | ||||||
Other Intangible Assets [Line Items] | ||||||
Amortization expense | 51,500 | 48,600 | 49,500 | |||
Customer relationships | EGM Ingeniería Sin Fronteras, S.A.S. | ||||||
Other Intangible Assets [Line Items] | ||||||
Intangible assets | 1,800 | |||||
Trademark | EGM Ingeniería Sin Fronteras, S.A.S. | ||||||
Other Intangible Assets [Line Items] | ||||||
Intangible assets | 400 | |||||
Software packages | ||||||
Other Intangible Assets [Line Items] | ||||||
Amortization expense | $ 18,300 | $ 14,700 | $ 15,900 | |||
Software packages | EGM Ingeniería Sin Fronteras, S.A.S. | ||||||
Other Intangible Assets [Line Items] | ||||||
Intangible assets | $ 800 |
Other Intangible Assets, Net _3
Other Intangible Assets, Net - Estimated Amortization Expenses (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 50,894 |
2021 | 45,582 |
2022 | 40,459 |
2023 | 36,883 |
2024 | $ 28,052 |
Other Long-Term Assets (Detail)
Other Long-Term Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Other Long Term Assets [Line Items] | ||
Other long-term assets, related to certain software and maintenance contracts | $ 5,323 | $ 5,297 |
Other Long-Term Assets | ||
Schedule of Other Long Term Assets [Line Items] | ||
Deferred debt-issuance costs | 1,400 | 1,800 |
Other long-term assets, related to certain software and maintenance contracts | $ 3,900 | 1,800 |
Derivative Assets | ||
Schedule of Other Long Term Assets [Line Items] | ||
Derivative assets | $ 1,700 |
Debt and Short-Term Borrowing_2
Debt and Short-Term Borrowings - Summary of Total Debt (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Total debt | $ 527,603 | $ 538,606 |
Credit Facility | Term A due on November 27, 2023 | ||
Debt Instrument [Line Items] | ||
Credit facility | $ 207,261 | $ 217,791 |
Credit Facility | Term A due on November 27, 2023 | LIBOR | ||
Debt Instrument [Line Items] | ||
Margin interest rate | 2.00% | 2.25% |
Credit Facility | Term B due on November 27, 2024 | ||
Debt Instrument [Line Items] | ||
Credit facility | $ 317,936 | $ 320,515 |
Credit Facility | Term B due on November 27, 2024 | LIBOR | ||
Debt Instrument [Line Items] | ||
Margin interest rate | 3.50% | |
Minimum variable rate | 0.00% | |
Credit Facility | Senior Secured Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facility | $ 0 | $ 0 |
Credit Facility | Senior Secured Revolving Credit Facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Margin interest rate | 2.25% | |
Notes Payable | Note Payable due on April 30, 2021 | ||
Debt Instrument [Line Items] | ||
Note payable | 175 | $ 300 |
Notes Payable | Note Payable due on January 1, 2022 | ||
Debt Instrument [Line Items] | ||
Note payable | $ 2,231 | $ 0 |
Debt and Short-Term Borrowing_3
Debt and Short-Term Borrowings - Summary of Contractual Principal Payments (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2019 | $ 15,311 |
2020 | 15,053 |
2021 | 20,508 |
2022 | 173,750 |
2023 | $ 308,750 |
Debt and Short-Term Borrowing_4
Debt and Short-Term Borrowings - Senior Secured Credit Facilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | May 31, 2019 | Nov. 27, 2018 | Nov. 26, 2018 | |
Debt Instrument [Line Items] | ||||||||||
Loss on extinguishment of debt | $ 0 | $ 2,645 | $ 0 | |||||||
2018 Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Prepayment premium | 1.00% | |||||||||
Prepayment trigger, maximum value of excess cash flow times interest rate | $ 10,000 | |||||||||
Loss on extinguishment of debt | 2,600 | |||||||||
Term A due on November 27, 2023 | Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Credit facility | $ 217,791 | 207,261 | $ 217,791 | |||||||
Unpaid principal balance | $ 209,000 | |||||||||
Term A due on November 27, 2023 | Credit Facility | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin interest rate | 2.00% | 2.25% | ||||||||
Term A due on November 27, 2023 | Credit Facility | 2018 Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 220,000 | |||||||||
Quarterly amortization, rate | 1.25% | |||||||||
Term A due on November 27, 2023 | Credit Facility | 2018 Credit Agreement | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin interest rate | 2.25% | |||||||||
Term A due on November 27, 2023 | Credit Facility | 2018 Credit Agreement | Federal Funds Effective Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin interest rate | 0.50% | |||||||||
Term A due on November 27, 2023 | Credit Facility | 2018 Credit Agreement | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin interest rate | 1.00% | |||||||||
Term A due on November 27, 2023 | Credit Facility | 2018 Credit Agreement | ABR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin interest rate | 1.25% | |||||||||
Term B due on November 27, 2024 | Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Credit facility | $ 320,515 | $ 317,936 | $ 320,515 | |||||||
Unpaid principal balance | $ 321,800 | |||||||||
Term B due on November 27, 2024 | Credit Facility | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin interest rate | 3.50% | |||||||||
Term B due on November 27, 2024 | Credit Facility | 2018 Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 325,000 | |||||||||
Quarterly amortization, annualized rate | 1.00% | |||||||||
Term B due on November 27, 2024 | Credit Facility | 2018 Credit Agreement | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin interest rate | 3.50% | |||||||||
Term B due on November 27, 2024 | Credit Facility | 2018 Credit Agreement | ABR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin interest rate | 2.50% | |||||||||
Senior Secured Revolving Credit Facility | Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Credit facility | $ 0 | $ 0 | $ 0 | |||||||
Line of credit, remaining borrowing capacity | $ 116,900 | |||||||||
Senior Secured Revolving Credit Facility | Credit Facility | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Margin interest rate | 2.25% | |||||||||
Senior Secured Revolving Credit Facility | Credit Facility | 2018 Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 125,000 | |||||||||
Term A due on January 2020 | Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Credit facility | $ 191,400 | |||||||||
Term B due on April 17, 2013 | Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Credit facility | $ 379,000 | |||||||||
Forecast | Term A due on November 27, 2023 | Credit Facility | 2018 Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Quarterly amortization, rate | 2.50% | 1.875% |
Debt and Short-Term Borrowing_5
Debt and Short-Term Borrowings - Notes Payable (Details) - Notes Payable $ in Millions | Dec. 31, 2019USD ($)agreement | Dec. 31, 2018USD ($) | May 31, 2016USD ($) |
Non-Interest Bearing Financing Agreement One | |||
Debt Instrument [Line Items] | |||
Non interest bearing financing agreement amount | $ 0.7 | ||
Notes payable | $ 0.2 | $ 0.3 | |
Non-Interest Bearing Financing Agreement Two | |||
Debt Instrument [Line Items] | |||
Non interest bearing financing agreement amount | 2.4 | ||
Notes payable | $ 2.4 | ||
Number of financing arrangements | agreement | 2 |
Debt and Short-Term Borrowing_6
Debt and Short-Term Borrowings - Interest Rate Swaps (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | ||
Other long-term assets | $ 0 | $ 1,683,000 |
Other long-term liabilities | 14,452,000 | $ 4,059,000 |
Reclassified losses from accumulated other comprehensive income loss | 677,000 | |
2015 Interest Rate Swap Agreement | ||
Derivative [Line Items] | ||
Notional Amount | 200,000,000 | |
2018 Interest Rate Swap Agreement | ||
Derivative [Line Items] | ||
Notional Amount | $ 250,000,000 | |
1-month LIBOR | 2015 Interest Rate Swap Agreement | ||
Derivative [Line Items] | ||
Fixed Rate | 1.9225% | |
1-month LIBOR | 2018 Interest Rate Swap Agreement | ||
Derivative [Line Items] | ||
Fixed Rate | 2.89% |
Debt and Short-Term Borrowing_7
Debt and Short-Term Borrowings - Interest Rate Swaps Narrative (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)agreement | |
Debt Disclosure [Abstract] | |
Number of interest rate swap agreements | agreement | 2 |
Reclassified losses from accumulated other comprehensive income loss | $ 677 |
Reclassification from accumulated comprehensive loss over the next 12 months | $ 2,200 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements - Fair Value Measurements for Assets and Liabilities at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Financial liabilities | ||
Interest rate swap | $ 4,059 | |
Fair Value, Measurements, Recurring | ||
Financial assets | ||
Interest rate swap | 1,683 | |
Financial liabilities | ||
Interest rate swap | $ 14,452 | |
Fair Value, Measurements, Recurring | Level 1 | ||
Financial assets | ||
Interest rate swap | 0 | |
Financial liabilities | ||
Interest rate swap | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Financial assets | ||
Interest rate swap | 1,683 | |
Financial liabilities | ||
Interest rate swap | 14,452 | 4,059 |
Fair Value, Measurements, Recurring | Level 3 | ||
Financial assets | ||
Interest rate swap | 0 | |
Financial liabilities | ||
Interest rate swap | $ 0 | $ 0 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements - Carrying Value and Estimated Fair Values for Financial Instruments (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Financial liabilities | ||
Interest rate swap | $ 4,059 | |
Carrying Amount | ||
Financial assets | ||
Interest rate swap | $ 0 | 1,683 |
Financial liabilities | ||
Interest rate swap | 14,452 | 4,059 |
Carrying Amount | Credit Facility | 2023 Term A | ||
Financial liabilities | ||
Senior secured term loan | 207,261 | 217,791 |
Carrying Amount | Credit Facility | 2024 Term B | ||
Financial liabilities | ||
Senior secured term loan | 317,936 | 320,515 |
Fair Value | ||
Financial assets | ||
Interest rate swap | 0 | 1,683 |
Financial liabilities | ||
Interest rate swap | 14,452 | 4,059 |
Fair Value | Credit Facility | 2023 Term A | ||
Financial liabilities | ||
Senior secured term loan | 206,388 | 218,625 |
Fair Value | Credit Facility | 2024 Term B | ||
Financial liabilities | ||
Senior secured term loan | $ 324,163 | $ 319,517 |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measurements - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |||
Transfer in or out of Level 3 assets | $ 0 | $ 0 | $ 0 |
Other Long Term Liabilities (De
Other Long Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other Long Term Liabilities [Line Items] | ||
Derivative liability | $ 14,452 | $ 4,059 |
Other Noncurrent Liabilities | ||
Other Long Term Liabilities [Line Items] | ||
Unrecognized tax benefit liabilities and long term notes payables | 13,000 | 10,500 |
Derivative liability | $ 14,500 | $ 4,100 |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | |||
Common stock, authorized (in shares) | 206,000,000 | 206,000,000 | |
Common stock, par value (in dollars per share) | $ 0.01 | ||
Common stock, outstanding (in shares) | 72,000,261 | 72,378,710 | |
Preferred stock, authorized (in shares) | 2,000,000 | 2,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock, issued (in shares) | 0 | 0 | |
Shares repurchased (in shares) | 1,100,000 | 400,000 | 500,000 |
Repurchase of common stock | $ 31,822 | $ 10,000 | $ 7,671 |
Equity - Summary of Dividend Ac
Equity - Summary of Dividend Activity (Detail) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
First Quarter Dividend | ||
Dividends Payable [Line Items] | ||
Declaration Date | Feb. 15, 2019 | |
Record Date | Feb. 26, 2019 | |
Payment Date | Mar. 22, 2019 | |
Dividend per share (in dollars per share) | $ 0.05 | |
Second Quarter Dividend | ||
Dividends Payable [Line Items] | ||
Declaration Date | Apr. 25, 2019 | |
Record Date | May 6, 2019 | |
Payment Date | Jun. 7, 2019 | |
Dividend per share (in dollars per share) | $ 0.05 | |
Third Quarter Dividend | ||
Dividends Payable [Line Items] | ||
Declaration Date | Jul. 25, 2019 | Jul. 26, 2018 |
Record Date | Aug. 5, 2019 | Aug. 6, 2018 |
Payment Date | Sep. 6, 2019 | Sep. 7, 2018 |
Dividend per share (in dollars per share) | $ 0.05 | $ 0.05 |
Fourth Quarter Dividend | ||
Dividends Payable [Line Items] | ||
Declaration Date | Oct. 23, 2019 | Oct. 25, 2018 |
Record Date | Nov. 4, 2019 | Nov. 5, 2018 |
Payment Date | Dec. 6, 2019 | Dec. 7, 2018 |
Dividend per share (in dollars per share) | $ 0.05 | $ 0.05 |
Equity - Summary of Changes in
Equity - Summary of Changes in Balances Comprising Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | $ 215,606 | $ 147,976 |
Other comprehensive loss before reclassifications | (5,543) | (12,837) |
Amount reclassified to Net Income | (677) | (104) |
Ending balance | 271,623 | 215,606 |
Foreign Currency Translation Adjustments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (21,626) | (11,062) |
Other comprehensive loss before reclassifications | 4,754 | (10,564) |
Amount reclassified to Net Income | 0 | 0 |
Ending balance | (16,872) | (21,626) |
Cash Flow Hedge | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (2,163) | 214 |
Other comprehensive loss before reclassifications | (10,297) | (2,273) |
Amount reclassified to Net Income | (677) | (104) |
Ending balance | (13,137) | (2,163) |
AOCI Attributable to Parent | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (23,789) | (10,848) |
Ending balance | $ (30,009) | $ (23,789) |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Time Based Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum unrecognized cost for stock options | $ 17.7 |
Unrecognized compensation cost, weighted average period of recognition | 1 year 11 months 12 days |
2017 LTIP | Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Performance adjustment percent | 25.00% |
Performance measurement period | 1 year |
Requisite service period | 2 years |
Share-based Compensation - Nonv
Share-based Compensation - Nonvested Restricted Shares and RSUs Activity (Detail) - Restricted shares and RSUs - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | |||
Beginning balance (in shares) | 2,036,163 | 2,340,892 | 1,212,364 |
Granted (in shares) | 517,153 | 636,322 | 1,584,241 |
Vested (in shares) | (931,389) | (468,064) | (315,953) |
Forfeited (in shares) | (29,172) | (472,987) | (139,760) |
Ending balance (in shares) | 1,592,755 | 2,036,163 | 2,340,892 |
Weighted-average grant date fair value | |||
Beginning balance (in dollar per share) | $ 15.09 | $ 15.08 | $ 14.88 |
Granted (in dollar per share) | 30.84 | 17.07 | 15.37 |
Vested (in dollar per share) | 29.32 | 18.41 | 15.30 |
Forfeited (in dollar per share) | 16.52 | 16.55 | 16.06 |
Ending balance (in dollar per share) | $ 0 | $ 15.09 | $ 15.08 |
Share-based Compensation - Shar
Share-based Compensation - Share-based Compensation Recognized (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation recognized, net | $ 0 | $ 0 | $ 6 |
Restricted shares and RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation recognized, net | $ 13,570 | $ 12,592 | $ 9,636 |
Employee Benefit Plan (Detail)
Employee Benefit Plan (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Defined contribution saving plan, vesting period | 5 years | ||
Defined contribution saving plan cost | $ 0.8 | $ 0.8 | $ 0.7 |
Total Other Income (Expenses) (
Total Other Income (Expenses) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |||
Other income (expenses), foreign currency transaction gain | $ 1,700 | $ 2,700 | $ 2,600 |
Gain on federal relief funds received | 1,800 | ||
Loss on extinguishment of debt | $ 0 | $ 2,645 | $ 0 |
Income Tax - Components of Inco
Income Tax - Components of Income Tax (Benefit) Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Current tax provision | $ 19,366 | $ 17,207 | $ 9,086 |
Deferred tax benefit | (6,391) | (4,611) | (4,306) |
Income tax expense | $ 12,975 | $ 12,596 | $ 4,780 |
Income Tax - Segregation of Inc
Income Tax - Segregation of Income Tax Expense (Benefit) Based on Location of Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income before income tax provision | |||
Income before income tax provision | $ 116,675 | $ 99,165 | $ 60,199 |
Current tax provision | |||
Current tax provision (benefit), Puerto Rico | 7,550 | 6,841 | 1,892 |
Current tax provision (benefit), United States | 339 | 599 | 292 |
Current tax provision (benefit), Foreign countries | 11,477 | 9,767 | 6,902 |
Total current tax provision | 19,366 | 17,207 | 9,086 |
Deferred tax benefit | |||
Puerto Rico | (4,109) | (2,904) | (3,176) |
United States | (216) | (584) | (184) |
Foreign countries | (2,066) | (1,123) | (946) |
Total deferred tax benefit | (6,391) | (4,611) | (4,306) |
Puerto Rico | |||
Income before income tax provision | |||
Income before income tax provision | 89,667 | 77,176 | 47,347 |
United States | |||
Income before income tax provision | |||
Income before income tax provision | 4,047 | 3,199 | 3,089 |
Foreign countries | |||
Income before income tax provision | |||
Income before income tax provision | $ 22,961 | $ 18,790 | $ 9,763 |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) $ in Thousands | Dec. 01, 2013 | Oct. 19, 2012USD ($)employee | Oct. 11, 2011 | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Income Tax Examination [Line Items] | |||||||
Unremitted earnings for foreign subsidiaries | $ 62,200 | ||||||
Preferential tax rate | 4.00% | 7.00% | 4.00% | ||||
Commitments to maintain tax exemption grant, minimum number of employees to be maintained, second period | employee | 700 | ||||||
Commitments to maintain tax exemption grant, investments | $ 200,000 | ||||||
Commitments to maintain tax exemption grant, investment increment over four year cycle | $ 50,000 | ||||||
NOL carryforwards available to offset future taxable income | $ 200 | ||||||
Unrecognized tax benefits | 9,146 | $ 9,238 | $ 9,148 | $ 12,219 | |||
Unrecognized tax benefits (expense) | (400) | 400 | $ (800) | ||||
Income tax benefit (expense) | $ 2,000 | $ 1,600 | |||||
Income Tax | |||||||
Income Tax Examination [Line Items] | |||||||
Tax exemption period | 15 years | ||||||
Puerto Rico | |||||||
Income Tax Examination [Line Items] | |||||||
Commitments to maintain tax exemption grant, percentage of resident employees | 80.00% |
Income Tax - Components of Defe
Income Tax - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets | ||
Allowance for doubtful accounts | $ 271 | $ 170 |
Unearned income | 6,807 | 4,394 |
Investment in equity subsidiary | 51 | 220 |
Share-based compensation | 1,222 | 1,684 |
Debt issuance costs | 249 | 309 |
Accrued liabilities | 1,034 | 1,257 |
Derivative liability | 1,220 | 351 |
Accrual of contract maintenance cost | 134 | 157 |
Impairment of asset | 289 | 289 |
Other | 1,546 | 1,976 |
Total gross deferred tax assets | 12,823 | 10,807 |
Deferred tax liabilities | ||
Capitalized salaries | 1,828 | 1,756 |
Derivative asset | 0 | 185 |
Difference between the assigned values and the tax basis of assets and liabilities recognized in business combinations | 12,568 | 16,240 |
Other | 557 | 659 |
Total gross deferred tax liabilities | 14,953 | 18,840 |
Deferred tax liability, net | $ (2,130) | $ (8,033) |
Income Tax - Reconciliation of
Income Tax - Reconciliation of Total Amounts of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance, beginning of year | $ 9,238 | $ 9,148 | $ 12,219 |
Gross increases—tax positions in prior period | 0 | 578 | 0 |
Gross decreases—tax positions in prior period | (92) | (488) | 0 |
Lapse of statute of limitations | 0 | 0 | (3,071) |
Balance, end of year | $ 9,146 | $ 9,238 | $ 9,148 |
Income Tax - Income Tax Expense
Income Tax - Income Tax Expense Differs from Computed Income Tax at Statutory Rates (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Computed income tax at statutory rates | $ 43,753 | $ 38,674 | $ 23,477 |
Benefit of net tax-exempt interest income | (126) | (50) | (56) |
Differences in tax rates due to multiple jurisdictions | 1,058 | (678) | 2,353 |
Tax (benefit) expense due to a change in estimate | (84) | 467 | (334) |
Effect of income subject to tax-exemption grant | (31,424) | (26,260) | (16,832) |
Unrecognized tax (benefit) expense | (32) | 443 | (3,828) |
Other | (170) | 0 | 0 |
Income tax expense | $ 12,975 | $ 12,596 | $ 4,780 |
Net Income Per Common Share (De
Net Income Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Net income | $ 103,469 | $ 86,270 | $ 55,054 |
Less: non-forfeitable dividends on restricted stock | 3 | 4 | 10 |
Net income available to common shareholders | $ 103,466 | $ 86,266 | $ 55,044 |
Weighted average common shares outstanding (in shares) | 72,099,755 | 72,607,321 | 72,479,807 |
Weighted average potential dilutive common shares (in shares) | 1,376,008 | 1,812,789 | 392,381 |
Weighted average common shares outstanding-assuming dilution (in shares) | 73,475,763 | 74,420,110 | 72,872,188 |
Net income per common share - basic (in dollar per share) | $ 1.44 | $ 1.19 | $ 0.76 |
Net income per common share - diluted (in dollar per share) | $ 1.41 | $ 1.16 | $ 0.76 |
Related Party Transactions - Tr
Related Party Transactions - Transactions with Related Parties (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Total revenues | $ 209,053 | $ 188,060 | $ 177,213 |
Cost of revenues | 5,094 | 3,422 | 2,929 |
Rent and other fees | 8,519 | 8,046 | 7,803 |
Interest earned from an affiliate | |||
Interest income | 161 | 147 | 154 |
Earnings of equity method investment | 936 | 692 | 604 |
Popular | |||
Interest earned from an affiliate | |||
Earnings of equity method investment | $ 1,100 | $ 1,300 | $ 1,800 |
Popular | Customer Concentration Risk | Total Revenue | |||
Interest earned from an affiliate | |||
Total percentage of revenues from Popular | 43.00% | 41.00% | 43.00% |
Related Party Transactions - Su
Related Party Transactions - Summary of Balances of Transactions with Related Parties (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Related Party Transactions [Abstract] | ||
Cash and restricted cash deposits in affiliated bank | $ 64,724 | $ 29,136 |
Other due/to from affiliate | ||
Accounts receivable | 39,095 | 25,714 |
Prepaid expenses and other assets | 4,211 | 2,796 |
Operating lease right-of use assets | 20,617 | 0 |
Other long-term assets | 57 | 166 |
Accounts payable | 7,250 | 6,344 |
Unearned income | 35,489 | 25,401 |
Operating lease liabilities | $ 20,905 | $ 0 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Popular | |
Related Party Transaction [Line Items] | |
Service contract period | 15 years |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Equipment leases classified as finance leases | $ 0.6 |
Office Facilities, Buildings, Telecommunications, And Other Equipment | |
Lessee, Lease, Description [Line Items] | |
Lease renewal term | 5 years |
Termination period | 1 year |
Office Facilities, Buildings, Telecommunications, And Other Equipment | Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Office Facilities, Buildings, Telecommunications, And Other Equipment | Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 10 years |
Commitments and Contingencies_2
Commitments and Contingencies - Components of Lease Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease cost | $ 7,573 |
Finance lease cost | |
Amortization of right-of-use assets | 255 |
Interest on lease liabilities | 24 |
Variable lease cost | 2,515 |
Lease, cost | 10,367 |
Operating Lease, Assets And Liabilities, Lessee [Abstract] | |
Right-of-use assets obtained in exchange for operating lease obligations: | $ 940 |
Weighted average remaining lease term, in years | |
Operating leases | 6 years |
Finance leases | 1 year |
Weighted Average Discount Rate | |
Operating leases | 4.70% |
Finance leases | 4.20% |
Commitments and Contingencies_3
Commitments and Contingencies - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Operating Leases | ||
2020 | $ 6,574 | |
2021 | 5,824 | |
2022 | 5,483 | |
2023 | 5,496 | |
2024 | 4,995 | |
Thereafter | 6,297 | |
Total future minimum lease payments | 34,669 | |
Less: imputed interest | (4,217) | |
Operating lease liabilities | 30,452 | |
Finance Leases | ||
2020 | 307 | |
2021 | 34 | |
2022 | 2 | |
2023 | 0 | |
2024 | 0 | |
Thereafter | 0 | |
Total future minimum lease payments | 343 | |
Less: imputed interest | (35) | |
Finance lease liabilities | 308 | |
Accrued liabilities | 276 | |
Operating lease liability - current | 5,773 | $ 0 |
Operating lease liability - long-term | 24,679 | $ 0 |
Other long-term liabilities | $ 32 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of operating business segments | segment | 4 | ||
Revenues | $ 487,374 | $ 453,869 | $ 407,144 |
Major Customer | Total Revenue | |||
Segment Reporting Information [Line Items] | |||
Revenues | $ 208,000 | $ 186,800 | $ 175,400 |
Major Customer | Total Revenue | Customer Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Percentage of total revenue from major customer | 43.00% | 41.00% | 43.00% |
Puerto Rico | Total Revenue | Customer Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Percentage of total revenue from major customer | 7.00% | 7.00% | 7.00% |
Segment Information - Informati
Segment Information - Information about Operations by Business Segments (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2011 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 487,374 | $ 453,869 | $ 407,144 | |
Operating costs and expenses | 342,872 | 328,741 | 321,061 | |
Depreciation and amortization | 68,082 | 63,067 | 64,250 | |
Non-operating income (expenses) | (233) | 3,294 | 3,261 | |
EBITDA | 212,351 | 191,489 | 153,594 | |
Compensation and benefits | 13,798 | 13,659 | 9,755 | |
Transaction, refinancing, exit activity and other fees | 47 | 7,311 | 14,679 | |
Adjusted EBITDA | $ 226,196 | $ 212,459 | $ 178,028 | |
Equity interest in CONTADO acquisition | 19.99% | |||
Consorcio de Tarjetas Dominicanas S.A. | ||||
Segment Reporting Information [Line Items] | ||||
Equity interest in CONTADO acquisition | 19.99% | 19.99% | 19.99% | |
Merchant Acquiring, net | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 106,388 | $ 99,655 | ||
Business Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 216,662 | 197,607 | ||
Operating Segments | Payment Services - Puerto Rico & Caribbean | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 125,544 | 114,119 | $ 101,687 | |
Operating costs and expenses | 61,396 | 52,006 | 57,463 | |
Depreciation and amortization | 11,646 | 9,734 | 8,993 | |
Non-operating income (expenses) | 1,781 | 2,420 | 2,229 | |
EBITDA | 77,575 | 74,267 | 55,446 | |
Compensation and benefits | 1,034 | 1,087 | 589 | |
Transaction, refinancing, exit activity and other fees | 0 | (250) | 2,499 | |
Adjusted EBITDA | 78,609 | 75,104 | 58,534 | |
Operating Segments | Payment Services - Latin America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 84,453 | 80,899 | 62,702 | |
Operating costs and expenses | 65,701 | 75,240 | 66,786 | |
Depreciation and amortization | 9,930 | 9,284 | 8,880 | |
Non-operating income (expenses) | 286 | 11,750 | 8,726 | |
EBITDA | 28,968 | 26,693 | 13,522 | |
Compensation and benefits | 1,501 | 1,034 | 816 | |
Transaction, refinancing, exit activity and other fees | 210 | 0 | 3,220 | |
Adjusted EBITDA | 30,679 | 27,727 | 17,558 | |
Operating Segments | Merchant Acquiring, net | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 106,388 | 99,655 | 85,778 | |
Operating costs and expenses | 62,098 | 55,778 | 57,574 | |
Depreciation and amortization | 1,814 | 1,698 | 2,254 | |
Non-operating income (expenses) | 48 | 3 | 1 | |
EBITDA | 46,152 | 45,578 | 30,459 | |
Compensation and benefits | 1,004 | 938 | 573 | |
Transaction, refinancing, exit activity and other fees | 0 | 0 | 6,465 | |
Adjusted EBITDA | 47,156 | 46,516 | 37,497 | |
Operating Segments | Business Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 216,662 | 197,602 | 189,077 | |
Operating costs and expenses | 138,224 | 126,232 | 119,761 | |
Depreciation and amortization | 16,529 | 13,878 | 15,774 | |
Non-operating income (expenses) | 340 | 477 | 13 | |
EBITDA | 95,307 | 85,725 | 85,103 | |
Compensation and benefits | 2,114 | 2,088 | 1,687 | |
Transaction, refinancing, exit activity and other fees | 0 | 0 | 0 | |
Adjusted EBITDA | 97,421 | 87,813 | 86,790 | |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | (45,673) | (38,406) | (32,100) | |
Operating costs and expenses | 15,453 | 19,485 | 19,477 | |
Depreciation and amortization | 28,163 | 28,473 | 28,349 | |
Non-operating income (expenses) | (2,688) | (11,356) | (7,708) | |
EBITDA | (35,651) | (40,774) | (30,936) | |
Compensation and benefits | 8,145 | 8,512 | 6,090 | |
Transaction, refinancing, exit activity and other fees | (163) | 7,561 | 2,495 | |
Adjusted EBITDA | (27,669) | (24,701) | (22,351) | |
Processing Fee | Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 39,000 | 36,100 | $ (32,100) | |
Software Sale and Developments | Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 6,700 | $ 2,300 |
Segment Information - Reconcili
Segment Information - Reconciliation of EBITDA to Net Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting [Abstract] | |||
EBITDA | $ 212,351 | $ 191,489 | $ 153,594 |
Less | |||
Income tax expense | 12,975 | 12,596 | 4,780 |
Interest expense, net | 27,594 | 29,257 | 29,145 |
Depreciation and amortization | 68,082 | 63,067 | 64,250 |
Net income | $ 103,700 | $ 86,569 | $ 55,419 |
Segment Information - Segment I
Segment Information - Segment Information by Geographic Location (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | $ 487,374 | $ 453,869 | $ 407,144 |
Puerto Rico | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 392,628 | 358,436 | 329,533 |
Caribbean | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 15,950 | 15,672 | 14,909 |
Latin America | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | $ 78,796 | $ 79,761 | $ 62,702 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Feb. 20, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Subsequent Event [Line Items] | ||||
Cash dividends declared per share (in dollar per share) | $ 0.20 | $ 0.10 | $ 0.30 | |
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Cash dividends declared per share (in dollar per share) | $ 0.05 |
Condensed Financial Statement_2
Condensed Financial Statements Parent Company Only - Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | |||
Cash and cash equivalents | $ 111,030 | $ 69,973 | $ 50,423 |
Accounts receivable, net | 106,812 | 100,323 | |
Prepaid expenses and other assets | 38,085 | 29,124 | |
Total current assets | 276,018 | 216,193 | |
Investment in subsidiaries, at equity | 12,288 | 12,149 | |
Other Intangible Asset | 241,937 | 259,269 | |
Total assets | 1,011,676 | 927,292 | |
Current Liabilities: | |||
Accrued liabilities | 58,160 | 57,006 | |
Accounts payable | 39,165 | 47,272 | |
Income tax payable | 6,298 | 6,650 | |
Total current liabilities | 144,314 | 136,705 | |
Deferred tax liability, net | 4,261 | 9,950 | |
Other long-term liabilities | 27,415 | 14,900 | |
Total liabilities | 740,053 | 711,686 | |
Stockholders’ equity: | |||
Common stock | 720 | 723 | |
Additional paid-in capital | 0 | 5,783 | |
Accumulated earnings | 296,476 | 228,742 | |
Accumulated other comprehensive loss, net of tax | (30,009) | (23,789) | |
Total EVERTEC, Inc. stockholders’ equity | 267,187 | 211,459 | |
Liabilities and Equity | 1,011,676 | 927,292 | |
EVERTEC | |||
Current Assets: | |||
Cash and cash equivalents | 1,678 | 1,678 | |
Accounts receivable, net | 1,290 | 2,068 | |
Prepaid expenses and other assets | 9 | 41 | |
Total current assets | 2,977 | 3,787 | |
Investment in subsidiaries, at equity | 273,759 | 221,515 | |
Other Intangible Asset | 9 | 0 | |
Total assets | 276,745 | 225,302 | |
Current Liabilities: | |||
Accrued liabilities | 260 | 226 | |
Income tax payable | 1,757 | 1,660 | |
Total current liabilities | 2,017 | 1,886 | |
Deferred tax liability, net | 485 | 5,665 | |
Other long-term liabilities | 7,056 | 6,292 | |
Total liabilities | 9,558 | 13,843 | |
Stockholders’ equity: | |||
Common stock | 720 | 723 | |
Additional paid-in capital | 0 | 5,783 | |
Accumulated earnings | 296,476 | 228,742 | |
Accumulated other comprehensive loss, net of tax | (30,009) | (23,789) | |
Total EVERTEC, Inc. stockholders’ equity | 267,187 | 211,459 | |
Liabilities and Equity | $ 276,745 | $ 225,302 |
Condensed Financial Statement_3
Condensed Financial Statements Parent Company Only - Condensed Statements of Income and Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Non-operating income (expenses) | |||
Equity in earnings of subsidiaries | $ 936 | $ 692 | $ 604 |
Interest income | 1,217 | 787 | 716 |
Other (expenses) income | (1,169) | 2,602 | 2,657 |
Income before income taxes | 116,675 | 99,165 | 60,199 |
Income tax benefit | 12,975 | 12,596 | 4,780 |
Net income attributable to EVERTEC, Inc.’s common stockholders | 103,469 | 86,270 | 55,054 |
Other comprehensive income (loss), net of tax | |||
(Loss) gain on cash flow hedges | (10,974) | ||
(Loss) gain on cash flow hedges | (2,377) | 2,178 | |
Total comprehensive income attributable to EVERTEC, Inc.’s common stockholders | 97,249 | 73,329 | 56,597 |
EVERTEC | |||
Non-operating income (expenses) | |||
Equity in earnings of subsidiaries | 101,078 | 84,866 | 49,162 |
Interest income | 367 | 380 | 301 |
Other (expenses) income | (1,595) | (1,396) | (1,428) |
Income before income taxes | 99,850 | 83,850 | 48,035 |
Income tax benefit | (3,619) | (2,420) | (7,019) |
Net income attributable to EVERTEC, Inc.’s common stockholders | 103,469 | 86,270 | 55,054 |
Other comprehensive income (loss), net of tax | |||
Foreign currency translation adjustments | 4,754 | (10,564) | (635) |
(Loss) gain on cash flow hedges | (10,974) | ||
(Loss) gain on cash flow hedges | (2,377) | 2,178 | |
Total comprehensive income attributable to EVERTEC, Inc.’s common stockholders | $ 97,249 | $ 73,329 | $ 56,597 |
Condensed Financial Statement_4
Condensed Financial Statements Parent Company Only - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Financial Statements, Captions [Line Items] | |||
Cash flows from operating activities | $ 179,949 | $ 172,734 | $ 145,786 |
Cash flows from financing activities | |||
Dividends paid | (14,420) | (7,273) | (21,762) |
Repurchase of common stock | (31,822) | (10,000) | (7,671) |
Withholding taxes paid on share-based compensation | (8,849) | (2,159) | (1,588) |
Net cash used in financing activities | (70,227) | (105,055) | (69,183) |
Net increase in cash, cash equivalents and restricted cash | 44,375 | 26,379 | 335 |
Cash, cash equivalents and restricted cash at beginning of the period | 86,746 | 60,367 | 60,032 |
Cash, cash equivalents and restricted cash at end of the period | 131,121 | 86,746 | 60,367 |
EVERTEC | |||
Condensed Financial Statements, Captions [Line Items] | |||
Cash flows from operating activities | 55,092 | 19,431 | 29,422 |
Cash flows from financing activities | |||
Dividends paid | (14,420) | (7,273) | (21,762) |
Repurchase of common stock | (31,822) | (10,000) | (7,671) |
Withholding taxes paid on share-based compensation | (8,849) | (2,159) | (1,588) |
Net cash used in financing activities | (55,091) | (19,432) | (31,021) |
Net increase in cash, cash equivalents and restricted cash | 1 | (1) | (1,599) |
Cash, cash equivalents and restricted cash at beginning of the period | 1,678 | 1,679 | 3,278 |
Cash, cash equivalents and restricted cash at end of the period | $ 1,679 | $ 1,678 | $ 1,679 |
Uncategorized Items - evertec10
Label | Element | Value |
Accounting Standards Update 2016-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 4,203,000 |
Accounting Standards Update 2016-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 4,203,000 |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 842,000 |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 858,000 |
Accounting Standards Update 2014-09 [Member] | Noncontrolling Interest [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (16,000) |