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Delaware
(State or Other Jurisdiction of Incorporation or Organization) |
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87-1353472
(I.R.S. Employer Identification No.) |
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c/o Alliance Data Systems Corporation
7500 Dallas Parkway, Suite 700 Plano, Texas (Address of Principal Executive Offices) |
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75024
(Zip Code) |
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Title of each class
to be so registered |
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Name of each exchange on which
each class is to be registered |
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Common Stock, $0.01 par value
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The Nasdaq Stock Market LLC
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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Exhibit
Number |
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Exhibit Title
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| 2.1* | | | Form of Separation and Distribution Agreement between Alliance Data Systems Corporation and Loyalty Ventures Inc. | |
| 3.1 | | | | |
| 3.2 | | | | |
| 10.1* | | | Form of Transition Services Agreement | |
| 10.2* | | | Form of Tax Matters Agreement | |
| 10.3* | | | Form of Employee Matters Agreement | |
| 10.4* | | | Form of 2021 Omnibus Incentive Plan | |
| 10.5 | | | | |
| 10.6* | | | Form of Registration Rights Agreement | |
| 21.1* | | | Subsidiaries of the Registrant | |
| 99.1 | | | Preliminary Information Statement dated September 1, 2021 | |
| 99.2* | | | Form of Notice of Internet Availability of Information Statement Materials | |
Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
LOYALTY VENTURES INC.
LOYALTY VENTURES INC., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:
1. The name of the Corporation is Loyalty Ventures Inc.
2. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on June 21, 2021.
3. This Amended and Restated Certificate of Incorporation restates and amends the provisions of the Certificate of Incorporation of the Corporation and was duly adopted in accordance with the provisions of Sections 141, 242 and 245 of the General Corporation Law of the State of Delaware.
4. The Certificate of Incorporation of the Corporation, as amended and restated herein, shall, upon the effective date of this Amended and Restated Certificate of Incorporation, read as follows:
Article 1.
NAME
The name of the Corporation is Loyalty Ventures Inc.
Article 2.
REGISTERED OFFICE AND AGENT
The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.
Article 3.
PURPOSE AND POWERS
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (“DGCL”).
Article 4.
CAPITAL STOCK
(A) Authorized Shares
(1) Classes of Stock. The total number of shares of stock that the Corporation shall have authority to issue is [·], consisting of [·] shares of Common Stock, par value $0.01 per share (the “Common Stock”), and [·] shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”).
(2) Preferred Stock. The Board of Directors is hereby empowered, without any action or vote by the Corporation’s stockholders (except as may otherwise be provided by the terms of any class or series of Preferred Stock then outstanding), to authorize by resolution or resolutions from time to time the issuance of one or more classes or series of Preferred Stock and to fix the designations, powers, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, with respect to each such class or series of Preferred Stock and the number of shares constituting each such class or series, and to increase or decrease the number of shares of any such class or series to the extent permitted by the DGCL.
(B) Voting Rights
Each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote; provided, however, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any certificate of designations relating to any class or series of Preferred Stock) that relates solely to the terms of one or more outstanding classes or series of Preferred Stock if the holders of such affected class or series are entitled, either separately or together with the holders of one or more other such classes or series, to vote thereon pursuant to this Certificate of Incorporation (including any certificate of designations relating to any class or series of Preferred Stock) or pursuant to the DGCL.
Article 5.
The Board of Directors shall have the power to adopt, amend or repeal the bylaws of the Corporation (the “Bylaws”).
The stockholders may adopt, amend or repeal the Bylaws only as set forth in Section 6.06 of the Corporation’s Bylaws.
Article 6.
BOARD OF DIRECTORS
(A) Power of the Board of Directors. The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors.
(B) Number of Directors. The number of directors which shall constitute the Board of Directors shall, as of the date this Certificate of Incorporation becomes effective, be five and, thereafter, shall be fixed exclusively by one or more resolutions adopted from time to time solely by the affirmative vote of a majority of the Board of Directors.
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(C) Election of Directors.
(1) From the effective date of this Certificate of Incorporation (the “Effective Date”) until the completion of the seventh annual meeting of stockholders to occur after the Effective Date (the “Sunset Date”), the directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be practicable, of one-third of the total number of directors constituting the entire Board of Directors. Each director shall serve for a term ending on the date of the third annual meeting of stockholders next following the annual meeting at which such director was elected; provided that directors initially designated as Class I directors shall serve for a term ending on the date of the 2022 annual meeting, directors initially designated as Class II directors shall serve for a term ending on the 2023 annual meeting, and directors initially designated as Class III directors shall serve for a term ending on the date of the 2024 annual meeting. Notwithstanding the foregoing, each director shall hold office until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal. In the event of any change in the number of directors, the Board of Directors shall apportion any newly created directorships among, or reduce the number of directorships in, such class or classes as shall equalize, as nearly as possible, the number of directors in each class. Commencing with the 2029 annual meeting, the classification of the Board of Directors shall begin a phase-out and each director whose term ends at the 2029 annual meeting and each annual meeting thereafter and is then up for election, and is then elected, shall be elected for a one-year term and such director shall hold office until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal. For the avoidance of doubt, in no event will a decrease in the number of directors shorten the term of any incumbent director.
(2) The names and mailing addresses of the persons who are to serve initially as directors of each Class are:
(3) There shall be no cumulative voting in the election of directors. Election of directors need not be by written ballot unless the Bylaws so provide.
(D) Vacancies. Vacancies on the Board of Directors resulting from death, resignation, removal or otherwise and newly created directorships resulting from any increase in the number of directors shall, except as otherwise required by law, be filled solely by a majority of the directors then in office (although less than a quorum) or by the sole remaining director. Prior to the Sunset Date, each director so appointed shall hold office for a term that shall coincide with the term of the Class to which such director shall have been appointed and, after the Sunset Date, each director so appointed shall hold office for the remainder of the term of the director for which the vacancy occurred and until such director’s successor shall have been duly elected and qualified.
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(E) Removal. For so long as the directors are divided into classes, no director may be removed from office by the stockholders except for cause with the affirmative vote of the holders of not less than a majority of the total voting power of all outstanding securities of the Corporation generally entitled to vote in the election of directors, voting together as a single class. From and after the time at which the directors are no longer divided into classes, any director may be removed at any time, either with or without cause, upon the affirmative vote of the holders of not less than a majority of the total voting power of all outstanding securities of the Corporation generally entitled to vote in the election of directors, voting together as a single class.
Article 7.
MEETINGS OF STOCKHOLDERS
(A) Annual Meetings. An annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting shall be held at such place, on such date, and at such time as the Board of Directors shall determine.
(B) Special Meetings. Special meetings of the stockholders may be called as set forth in Section 2.03 of the Corporation’s Bylaws.
(C) No Action by Written Consent. Subject to the rights of the holders of any class or series of Preferred Stock then outstanding, as may be set forth in the resolution or resolutions adopted by the Board of Directors pursuant to Article 4(A) hereto for such class or series of Preferred Stock, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken only upon the vote of stockholders at an annual or special meeting duly noticed and called in accordance with the DGCL, as amended from time to time, and this Article 7 and may not be taken by written consent of stockholders without a meeting.
Article 8.
LMITATION OF LIABILITY/INDEMNIFICATION
(A) Limited Liability. A director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the DGCL.
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(B) Right to Indemnification.
(1) Each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the DGCL. The right to indemnification conferred in this Article 8 shall also include the right to be paid by the Corporation the expenses incurred in connection with any such proceeding in advance of its final disposition to the fullest extent authorized by the DGCL. The right to indemnification conferred in this Article 8 shall be a contract right.
(2) The Corporation may, by action of its Board of Directors, provide indemnification to such of the employees and agents of the Corporation to such extent and to such effect as the Board of Directors shall determine to be appropriate and authorized by the DGCL.
(C) Insurance. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under DGCL.
(D) Nonexclusivity of Rights. The rights and authority conferred in this Article 8 shall not be exclusive of any other right that any person may otherwise have or hereafter acquire.
(E) Preservation of Rights. Neither the amendment nor repeal of this Article 8, nor the adoption of any provision of this Certificate of Incorporation or the Bylaws, nor, to the fullest extent permitted by DGCL, any modification of law, shall adversely affect any right or protection of any person granted pursuant hereto existing at, or arising out of or related to any event, act or omission that occurred prior to, the time of such amendment, repeal, adoption or modification (regardless of when any proceeding (or part thereof) relating to such event, act or omission arises or is first threatened, commenced or completed).
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Article 9.
SECTION 203 OF THE DGCL
(A) Opt Out of DGCL 203. The Corporation shall not be governed by Section 203 of the DGCL until such time as Alliance Data Systems Corporation no longer beneficially owns 5% or more of the then outstanding shares of our Common Stock, at which such time the Corporation shall automatically become subject to Section 203 of the DGCL.
(B) Limitations on Business Combination. Notwithstanding the foregoing, during such time in which the Corporation is not subject to Section 203 of the DGCL, the Corporation shall not engage in any Business Combination, at any point in time at which the Corporation’s Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act with any Interested Stockholder (as defined herein) for a period of three (3) years following the time that such stockholder became an Interested Stockholder, unless:
(1) prior to such time, the Board approved either the Business Combination or the transaction which resulted in the stockholder becoming an Interested Stockholder, or
(2) upon consummation of the transaction which resulted in the stockholder becoming an Interested Stockholder, the Interested Stockholder owned at least 85% of the Voting Stock (defined below) of the Corporation outstanding at the time the transaction commenced, excluding for purposes of determining the Voting Stock outstanding (but not the outstanding Voting Stock owned by the Interested Stockholder) those shares owned by (i) Persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or
(3) at or subsequent to such time, the Business Combination is approved by the Board and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the Voting Stock of the Corporation outstanding that is not owned by the Interested Stockholder.
(C) Definitions. For purposes of this Article 9,
(1) “Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another Person.
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(2) “Associate,” when used to indicate a relationship with any Person, means:
(i) any corporation, partnership, unincorporated association or other entity of which such Person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of Voting Stock;
(ii) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and
(iii) any relative or spouse of such Person, or any relative of such spouse, who has the same residence as such Person.
(3) “Business Combination,” when used in reference to the Corporation and any Interested Stockholder of the Corporation, means:
(i) any merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation (a) with the Interested Stockholder, or (b) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the Interested Stockholder and as a result of such merger or consolidation Section (B) of this Article 9 is not applicable to the surviving entity;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a stockholder of the Corporation, to or with the Interested Stockholder, whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority owned subsidiary of the Corporation which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding stock of the Corporation;
(iii) any transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of the Corporation of any stock of the Corporation or of such subsidiary to the Interested Stockholder, except: (a) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which securities were outstanding prior to the time that the Interested Stockholder became such; (b) pursuant to a merger under Section 251(g) of the DGCL; (c) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which security is distributed, pro rata to all holders of a class or series of stock of the Corporation subsequent to the time the Interested Stockholder became such; (d) pursuant to an exchange offer by the Corporation to purchase stock made on the same terms to all holders of said stock; or (e) any issuance or transfer of stock by the Corporation; provided, however, that in no case under items (iii)-(v) of this subsection (c) shall there be an increase in the Interested Stockholder’s proportionate share of the stock of any class or series of the Corporation or of the Voting Stock of the Corporation (except as a result of immaterial changes due to fractional share adjustments);
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(iv) any transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the Corporation or of any such subsidiary which is owned by the Interested Stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the Interested Stockholder; or
(v) any receipt by the Interested Stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges, or other financial benefits (other than those expressly permitted in subsections (i) to (iv) above) provided by or through the Corporation or any direct or indirect majority-owned subsidiary.
(4) “control,” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of Voting Stock, by contract, or otherwise. A Person who is the owner of 20% or more of the outstanding Voting Stock of the Corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such Person holds Voting Stock, in good faith and not for the purpose of circumventing this Article 9, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity.
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(5) “Interested Stockholder” means any Person (other than the Corporation and any direct or indirect majority-owned subsidiary of the Corporation) that (i) is the owner of 15% or more of the outstanding Voting Stock of the Corporation, or (ii) is an Affiliate or Associate of the Corporation and was the owner of 15% or more of the outstanding Voting Stock of the Corporation at any time within the three (3) year period immediately prior to the date on which it is sought to be determined whether such Person is an Interested Stockholder, and the Affiliates and Associates of such Person; provided, however, that the term “Interested Stockholder” shall not include (a) Alliance Data Systems Corporation or any of its Affiliates or successor or any “group,” or any member of any such group, to which such Persons are a party under Rule 13d-5 of the Exchange Act or (b) any Person whose ownership of shares in excess of the 15% limitation set forth herein is the result of any action taken solely by the Corporation; provided that such Person specified in this clause (b) shall be an Interested Stockholder if thereafter such Person acquires additional shares of Voting Stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such Person. For the purpose of determining whether a Person is an Interested Stockholder, the Voting Stock of the Corporation deemed to be outstanding shall include stock deemed to be owned by the Person through application of the definition of “owner” below but shall not include any other unissued stock of the Corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.
(6) “owner,” including the terms “own” and “owned,” when used with respect to any stock, means a Person that individually or with or through any of its Affiliates or Associates:
(i) beneficially owns such stock, directly or indirectly; or
(ii) has (a) the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until such tendered stock is accepted for purchase or exchange; or (b) the right to vote such stock pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the owner of any stock because of such Person’s right to vote such stock if the agreement, arrangement or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten (10) or more Persons; or
(iii) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in item (b) of subsection (ii) above), or disposing of such stock with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, such stock.
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(7) “Person” means any individual, corporation, partnership, unincorporated association or other entity.
(8) “stock” means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.
(9) “Voting Stock” means stock of any class or series entitled to vote generally in the election of directors.
Article 10.
AMENDMENTS
The Corporation reserves the right to amend this Certificate of Incorporation in any manner permitted by the DGCL and all rights and powers conferred upon stockholders, directors and officers herein are granted subject to this reservation. Notwithstanding the foregoing, the provisions set forth in Articles 4(B), 5, 6, 7, 9 and this Article 10 may not be repealed or amended in any respect, and no other provision may be adopted, amended or repealed which would have the effect of modifying or permitting the circumvention of the provisions set forth in any of Articles 4(B), 5, 6, 7, 9 or this Article 10, unless such action is approved by the affirmative vote of the holders of not less than 66 2/3% of the total voting power of all outstanding securities of the Corporation generally entitled to vote in the election of directors, voting together as a single class; provided, however, that the provisions of this sentence shall be of no force and effect effective as of the Sunset Date.
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IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be duly signed by Charles L. Horn, its President and Chief Executive Officer, who hereby acknowledges under penalties of perjury that the facts herein stated are true and this Amended and Restated Certificate of Incorporation is the act and the deed of the Corporation, this _____ day of __________, 20__.
LOYALTY VENTURES INC. | |
Charles L. Horn | |
President and Chief Executive Officer |
Exhibit 3.2
AMENDED AND RESTATED BYLAWS
OF
LOYALTY VENTURES INC.
* * * * *
Article 1
Offices
Section 1.01. Registered Office. The registered office of Loyalty Ventures Inc. (the “Corporation”) within the State of Delaware shall be located at either (i) the principal place of business of the Corporation in the State of Delaware or (ii) the office of the corporation or individual acting as the Corporation’s registered agent in Delaware.
Section 1.02. Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the board of directors of the Corporation (the “Board of Directors”) may from time to time determine or the business of the Corporation may require.
Section 1.03. Books. The books of the Corporation may be kept within or without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.
Article 2
Stockholder Meetings
Section 2.01. Time and Place of Meetings. All meetings of stockholders shall be held at such place, either within or without the State of Delaware, on such date and at such time as may be determined from time to time by the Board of Directors (or the Chair of the Board of Directors in the absence of a designation by the Board of Directors), provided that the Board of Directors may in its sole discretion determine that the meeting shall not be held at any physical place, but may instead be held solely by means of remote communication pursuant to Section 6.07.
Section 2.02. Annual Meetings. An annual meeting of stockholders, commencing with the year 2022, shall be held for the election of directors and to transact such other business as may properly be brought before the meeting.
Section 2.03. Special Meetings.
(a) Subject to this Section 2.03, from the effective date of these bylaws (the “Effective Date”) until the completion of the seventh annual meeting of stockholders to occur after the Effective Date (the “Sunset Date”), special meetings of the stockholders may be called only by the Board of Directors acting pursuant to a resolution adopted by a majority of the Board of Directors.
(b) Upon the Sunset Date, a special meeting of stockholders shall be called by the Secretary of the Corporation at the written request or requests (each, a “Special Meeting Request” and, collectively, the “Special Meeting Requests”) of holders of record of at least 20% of the voting power of the outstanding capital stock of the Corporation entitled to vote on the matter or matters to be brought before the proposed special meeting (the “Requisite Percentage”). A Special Meeting Request to the Secretary shall be signed and dated by each stockholder of record (or a duly authorized agent of such stockholder) requesting the special meeting (each, a “Requesting Stockholder”), shall comply with this Section 2.03, and shall include (i) a statement of the specific purpose or purposes of the special meeting, (ii) the information required by Section 2.10(a)(iii) and (iii) documentary evidence that the Requesting Stockholders own the Requisite Percentage as of the date of such written request to the Secretary; provided, however, that if the Requesting Stockholders are not the beneficial owners of the shares representing the Requisite Percentage, then to be valid, the Special Meeting Request(s) must also include documentary evidence (or, if not simultaneously provided with the Special Meeting Request(s), such documentary evidence must be delivered to the Secretary within 10 business days after the date on which the Special Meeting Request(s) are delivered to the Secretary) that the beneficial owners on whose behalf the Special Meeting Request(s) are made beneficially own the Requisite Percentage as of the date on which such Special Meeting Request(s) are delivered to the Secretary. In addition, the Requesting Stockholders and the beneficial owners, if any, on whose behalf the Special Meeting Request(s) are being made shall promptly provide any other information reasonably requested by the Corporation.
(c) A special meeting requested by stockholders shall be held on such date and at such time as may be fixed by the Board of Directors in accordance with these Bylaws; provided, however, that the date of any such special meeting shall not be more than 150 days after a Special Meeting Request that satisfies the requirements of this Section 2.03 is received by the Secretary.
(d) Notwithstanding the foregoing provisions of this Section 2.03, a special meeting requested by stockholders shall not be held if (i) the Special Meeting Request does not comply with this Section 2.03, (ii) the Special Meeting Request relates to an item of business that is not a proper subject for stockholder action under applicable law, (iii) an annual or special meeting of stockholders that included an identical or substantially similar item of business (“Similar Business”) was held not more than 120 days before the Special Meeting Request was received by the Secretary, (iv) the Board of Directors has called or calls for an annual or special meeting of stockholders to be held within 90 days after the Special Meeting Request is received by the Secretary and the business to be conducted at such meeting includes the Similar Business or (v) the Special Meeting Request was made in a manner that involved a violation of Regulation 14A under the Securities Exchange Act of 1934 (as amended (together with the rules and regulations promulgated thereunder), the “Exchange Act”)) or other applicable law. For purposes of this Section 2.03(d), the nomination, election or removal of directors shall be deemed to be Similar Business with respect to all items of business involving the nomination, election or removal of directors, changing the size of the Board of Directors and filling of vacancies and/or newly created directorships resulting from any increase in the authorized number of directors. The Board of Directors shall determine in good faith whether the requirements set forth in this Section 2.03(d) have been satisfied.
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(e) In determining whether a special meeting of stockholders has been requested by the record holders of shares representing in the aggregate at least the Requisite Percentage, multiple Special Meeting Requests delivered to the Secretary will be considered together only if (i) each Special Meeting Request identifies substantially the same purpose or purposes of the special meeting and substantially the same matters proposed to be acted on at the special meeting (in each case as determined in good faith by the Board of Directors) and (ii) such Special Meeting Requests have been dated and delivered to the Secretary within 60 days of the earliest dated Special Meeting Request. A Requesting Stockholder may revoke a Special Meeting Request at any time by written revocation delivered to the Secretary and if, following such revocation, there are outstanding un-revoked requests from Requesting Stockholders holding less than the Requisite Percentage, the Board of Directors may, in its discretion, cancel the special meeting. If none of the Requesting Stockholders appears or sends a duly authorized agent to present the business to be presented for consideration that was specified in the Special Meeting Request, the Corporation need not present such business for a vote at such special meeting.
(f) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting pursuant to Section 2.04. Nothing contained herein shall prohibit the Board of Directors from submitting matters to the stockholders at any special meeting requested by stockholders.
Section 2.04. Notice of Meetings and Adjourned Meetings; Waivers of Notice. (a) Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (“Delaware Law”), such notice shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder of record entitled to vote at such meeting. The Board of Directors or the chair of the meeting may adjourn the meeting to another time or place (whether or not a quorum is present), and notice need not be given of the adjourned meeting if the time, place, if any, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, are announced at the meeting at which such adjournment is made. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
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(b) A written waiver of any such notice signed by the person entitled thereto, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
Section 2.05. Quorum. Unless otherwise provided under the Certificate of Incorporation or these Bylaws and subject to Delaware Law, the presence, in person or by proxy, of the holders of a majority of the total voting power of all outstanding securities of the Corporation generally entitled to vote at a meeting of stockholders shall constitute a quorum for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the Chair of the meeting or a majority in voting interest of the stockholders present in person or represented by proxy may adjourn the meeting, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted that might have been transacted at the meeting as originally notified.
Section 2.06. Voting. (a) Unless otherwise provided in the Certificate of Incorporation and subject to Delaware Law, each stockholder shall be entitled to one vote for each outstanding share of capital stock of the Corporation held by such stockholder. Any share of capital stock of the Corporation held by the Corporation shall have no voting rights. Except as otherwise required by law, the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, the affirmative vote of the holders of a majority of the votes cast at the meeting on the subject matter shall be the act of the stockholders. Abstentions and broker non-votes shall not be counted as votes cast. Subject to the rights of the holders of any class or series of preferred stock to elect additional directors under specific circumstances, as may be set forth in the certificate of designations for such class or series of preferred stock, directors shall be elected by a plurality of the votes of the shares of capital stock of the Corporation present in person or represented by proxy at the meeting and entitled to vote on the election of directors.
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(b) Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to a corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized, or by proxy sent by cable, telegram or by any means of electronic communication permitted by law, which results in a writing from such stockholder or by his attorney, and delivered to the secretary of the meeting. No proxy shall be voted after three (3) years from its date, unless said proxy provides for a longer period.
Section 2.07. Action by Consent. Subject to the rights of the holders of any class or series of preferred stock then outstanding, as may be set forth in the certificate of designations for such class or series of preferred stock, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken only upon the vote of stockholders at an annual or special meeting duly noticed and called in accordance with Delaware Law and may not be taken by written consent of stockholders without a meeting.
Section 2.08. Organization. At each meeting of stockholders, the Chair of the Board of Directors, if one shall have been elected, or in the Chair’s absence or if one shall not have been elected, the director designated by the vote of the majority of the directors present at such meeting, shall act as chair of the meeting. The Secretary (or in the Secretary’s absence or inability to act, the person whom the chair of the meeting shall appoint secretary of the meeting) shall act as secretary of the meeting and keep the minutes thereof.
Section 2.09. Order of Business. The order of business at all meetings of stockholders shall be as determined by the chair of the meeting.
Section 2.10. Nomination of Directors and Proposal of Other Business.
(a) Annual Meetings of Stockholders. (i) Nominations of persons for election to the Board of Directors or the proposal of other business to be transacted by the stockholders at an annual meeting of stockholders may be made only (A) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (B) by or at the direction of the Board of Directors or any committee thereof or (C) as may be provided in the certificate of designations for any class or series of preferred stock or (D) by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in paragraph (ii) of this Section 2.10(a) and at the time of the annual meeting, who shall be entitled to vote at the meeting and who complies with the procedures set forth in this Section 2.10(a), and, except as otherwise required by law, any failure to comply with these procedures shall result in the nullification of such nomination or proposal.
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(ii) For nominations or other business to be properly brought before an annual meeting of stockholders by a stockholder pursuant to clause (D) of paragraph (i) of this Section 2.10(a), the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and any such proposed business (other than the nominations of persons for election to the Board of Directors) must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to, or mailed and received by, the Secretary of the Corporation at the principal executive offices of the Corporation not less than 120 days nor more than 150 days prior to the first anniversary of the preceding year’s annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is advanced more than 30 days prior to such anniversary date or delayed more than 70 days after such anniversary date then to be timely such notice must be received by the Corporation no earlier than 120 days prior to such annual meeting and no later than the later of 70 days prior to the date of the meeting or the 10th day following the day on which public announcement of the date of the meeting was first made by the Corporation. In no event shall the adjournment or postponement of any meeting, or any announcement thereof, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(iii) A stockholder’s notice to the Secretary shall set forth (A) as to each person whom the stockholder proposes to nominate for election or reelection as a director: (1) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; and (2) a reasonably detailed description of any compensatory, payment or other financial agreement, arrangement or understanding that such person has with any other person or entity other than the Corporation including the amount of any payment or payments received or receivable thereunder, in each case in connection with candidacy or service as a director of the Corporation (a “Third-Party Compensation Arrangement”), (B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend these Bylaws, the text of the proposed amendment), the reasons for conducting such business and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made and (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made:
(1) the name and address of such stockholder (as they appear on the Corporation’s books) and any such beneficial owner;
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(2) for each class or series, the number of shares of capital stock of the Corporation that are held of record or are beneficially owned by such stockholder and by any such beneficial owner;
(3) a description of any agreement, arrangement or understanding between or among such stockholder and any such beneficial owner, any of their respective affiliates or associates, and any other person or persons (including their names) in connection with the proposal of such nomination or other business;
(4) a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or any such beneficial owner or any such nominee with respect to the Corporation’s securities;
(5) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to bring such nomination or other business before the meeting;
(6) a representation as to whether such stockholder or any such beneficial owner intends or is part of a group that intends to (i) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the voting power of the Corporation’s outstanding capital stock required to approve or adopt the proposal or to elect each such nominee and/or (ii) otherwise to solicit proxies from stockholders in support of such proposal or nomination;
(7) any other information relating to such stockholder, beneficial owner, if any, or director nominee or proposed business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies in support of such nominee or proposal pursuant to Section 14 of the Exchange Act; and
(8) such other information relating to any proposed item of business as the Corporation may reasonably require to determine whether such proposed item of business is a proper matter for stockholder action.
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If requested by the Corporation, the information required under clauses 2.10(a)(iii)(C)(2), (3) and (4) of the preceding sentence of this Section 2.10 shall be supplemented by such stockholder and any such beneficial owner not later than 10 days after the record date for the meeting to disclose such information as of the record date.
(b) Special Meetings of Stockholders. Nominations of persons for election to the Board of Directors of the Corporation at a special meeting of stockholders may be made by stockholders only (i) in accordance with Section 2.03 or (ii) if the election of directors is included as business to be brought before a special meeting in the Corporation’s notice of meeting, then only by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 2.10(b) at the time of the special meeting, who shall be entitled to vote at the meeting and who complies with the procedures set forth in this Section 2.10(b). The proposal by stockholders of other business to be conducted at a special meeting of stockholders may be made only in accordance with Section 2.03. For nominations to be properly brought by a stockholder before a special meeting of stockholders pursuant to this Section 2.10(b), the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Corporation (A) not earlier than 150 days prior to the date of the special meeting nor (B) later than the later of 120 days prior to the date of the special meeting or the 10th day following the day on which public announcement of the date of the special meeting was first made. A stockholder’s notice to the Secretary shall comply with the notice requirements of Section 2.10(a)(iii).
(c) General. (i) To be eligible to be a nominee for election as a director, the proposed nominee must provide to the Secretary of the Corporation in accordance with the applicable time periods prescribed for delivery of notice under Section 2.10(a)(ii) or Section 2.10(b): (1) a completed D&O questionnaire (in the form provided by the Secretary of the Corporation at the request of the nominating stockholder) containing information regarding the nominee’s background and qualifications and such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation or to serve as an independent director of the Corporation, (2)a written representation that, unless previously disclosed to the Corporation, the nominee is not and will not become a party to any voting agreement, arrangement or understanding with any person or entity as to how such nominee, if elected as a director, will vote on any issue or that could interfere with such person’s ability to comply, if elected as a director, with his/her fiduciary duties under applicable law, (3) a written representation and agreement that, unless previously disclosed to the Corporation pursuant to Section 2.10(a)(iii)(A)(2), the nominee is not and will not become a party to any Third-Party Compensation Arrangement and (4) a written representation that, if elected as a director, such nominee would be in compliance and will continue to comply with the Corporation’s corporate governance guidelines as disclosed on the Corporation’s website, as amended from time to time. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation the information that is required to be set forth in a stockholder’s notice of nomination that pertains to the nominee.
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(ii) No person shall be eligible to be nominated by a stockholder to serve as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.10. No business proposed by a stockholder shall be conducted at a stockholder meeting except in accordance with the procedures set forth in Section 2.03 and this Section 2.10.
(iii) The chair of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these Bylaws or that business was not properly brought before the meeting, and if he/she should so determine, he/she shall so declare to the meeting and the defective nomination shall be disregarded or such business shall not be transacted, as the case may be. Notwithstanding the foregoing provisions of this Section 2.10, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or other proposed business, such nomination shall be disregarded or such proposed business shall not be transacted, as the case may be, notwithstanding that proxies in respect of such vote may have been received by the Corporation and counted for purposes of determining a quorum. For purposes of this Section 2.10, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.
(iv) Without limiting the foregoing provisions of this Section 2.10, a stockholder shall also comply with all applicable requirements of the Exchange Act with respect to the matters set forth in this Section 2.10; provided, however, that any references in these Bylaws to the Exchange Act are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 2.10, and compliance with paragraphs (a)(i)(C) and (b) of this Section 2.10 shall be the exclusive means for a stockholder to make nominations or submit other business (other than as provided in Section 2.10(c)(v)).
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(v) Notwithstanding anything to the contrary, the notice requirements set forth herein with respect to the proposal of any business pursuant to this Section 2.10 shall be deemed satisfied by a stockholder if such stockholder has submitted a proposal to the Corporation in compliance with Rule 14a-8 under the Exchange Act, and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for the meeting of stockholders.
Article 3
Directors
Section 3.01. General Powers. Except as otherwise provided in Delaware Law or the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
Section 3.02. Number, Election and Term of Office. The Board of Directors shall consist of not less than three nor more than twelve directors, with the exact number of directors to be determined from time to time solely by resolution adopted by the affirmative vote of a majority of the Board. No decrease in the size of the Board of Directors shall serve to shorten the term of an incumbent director. As set forth in Article 6 of the Certificate of Incorporation, from the Effective Date until the Sunset Date, the directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be practicable, of one-third of the total number of directors constituting the entire Board of Directors. Except as otherwise provided in the Certificate of Incorporation, each director shall serve for a term ending on the date of the third annual meeting of stockholders next following the annual meeting at which such director was elected. Commencing with the 2029 annual meeting of stockholders, the classification of the Board of Directors shall begin a phase-out and each director then or thereafter elected shall be elected for a one-year term. Notwithstanding the foregoing, each director shall hold office until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal. Directors need not be stockholders.
Section 3.03. Quorum and Manner of Acting. Unless the Certificate of Incorporation or these Bylaws require a greater number, a majority of the Board of Directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors and, except as otherwise expressly required by law or by the Certificate of Incorporation, the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. When a meeting is adjourned to another time or place (whether or not a quorum is present), notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Board of Directors may transact any business which might have been transacted at the original meeting. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat shall adjourn the meeting, from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
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Section 3.04. Time and Place of Meetings. The Board of Directors shall hold its meetings at such place, either within or without the State of Delaware, and at such time as may be determined from time to time by the Board of Directors (or the Chair of the Board of Directors in the absence of a determination by the Board of Directors) provided that the Board of Directors may in its sole discretion determine that the meeting shall not be held at any physical place, but may instead be held solely by means of remote communication pursuant to Section 6.07.
Section 3.05. Annual Meeting. The Board of Directors shall meet for the purpose of organization, the appointment of officers and the transaction of other business, as soon as practicable after each annual meeting of stockholders. Notice of such meeting need not be given. In the event such annual meeting is not so held, the annual meeting of the Board of Directors may be held at such place either within or without the State of Delaware, on such date and at such time as shall be specified in a notice thereof given as provided in Section 3.07 herein or in a waiver of notice thereof signed by any director who chooses to waive the requirement of notice.
Section 3.06. Regular Meetings. Regularly scheduled, periodic meetings of the Board of Directors may be held without notice at such times, dates and places as shall from time to time be determined by the Board of Directors.
Section 3.07. Special Meetings. Special meetings of the Board of Directors may be called by the Chair of the Board of Directors or the President and shall be called by the Chair of the Board of Directors, or the President or the Secretary of the Corporation, on the written request of three directors. Notice of special meetings of the Board of Directors shall be given to each director at least 48 hours before the date of the meeting in such manner as is determined by the Board of Directors.
Section 3.08. Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders, any action or matter expressly required by Delaware Law to be submitted to the stockholders for approval or (b) adopting, amending or repealing any Bylaw of the Corporation. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.
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Section 3.09. Action by Consent. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions, are filed with the minutes of proceedings of the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 3.10. Resignation. Any director may resign from the Board of Directors at any time by giving notice to the Board of Directors or to the Secretary of the Corporation. Any such notice must be in writing or by electronic transmission to the Board of Directors or to the Secretary of the Corporation. The resignation of any director shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 3.11. Vacancies. Unless otherwise provided in the Certificate of Incorporation, vacancies on the Board of Directors resulting from death, resignation, removal or otherwise and newly created directorships resulting from any increase in the number of directors shall, except as otherwise required by law, be filled solely by a majority of the directors then in office (although less than a quorum) or by the sole remaining director. Prior to the Sunset Date, each director so appointed shall hold office for a term that shall coincide with the term of the Class to which such director shall have been appointed and, after the Sunset Date, each director so appointed shall hold office for the remainder of the term of the director for which the vacancy occurred and until such director’s successor shall have been duly elected and qualified. If there are no directors in office, then an election of directors may be held in accordance with Delaware Law. Unless otherwise provided in the Certificate of Incorporation, when one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in the filling of the other vacancies.
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Section 3.12. Removal. For so long as the directors are divided into classes, no director may be removed from office by the stockholders except for cause with the affirmative vote of the holders of not less than a majority of the total voting power of all outstanding securities of the corporation generally entitled to vote in the election of directors, voting together as a single class. From and after the time at which the directors are no longer divided into classes, any director may be removed at any time, either with or without cause, upon the affirmative vote of the holders of not less than a majority of the total voting power of all outstanding securities of the Corporation generally entitled to vote in the election of directors, voting together as a single class.
Section 3.13. Compensation. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board of Directors shall have authority to fix the compensation of directors, including fees and reimbursement of expenses.
Article 4
Officers
Section 4.01. Principal Officers. The principal officers of the Corporation shall be a Chief Executive Officer, a President, one or more Vice Presidents, a Treasurer and a Secretary who shall have the duty, among other things, to record the proceedings of the meetings of stockholders and directors in a book kept for that purpose. The Corporation may also have such other principal officers, including one or more Controllers, as the Board of Directors may in its discretion appoint. One person may hold the offices and perform the duties of any two or more of said offices, except that no one person shall hold the offices and perform the duties of President and Secretary.
Section 4.02. Appointment, Term of Office and Remuneration. The principal officers of the Corporation shall be appointed by the Board of Directors in the manner determined by the Board of Directors. Each such officer shall hold office until his or her successor is appointed, or until his or her earlier death, resignation or removal. The remuneration of all officers of the Corporation shall be fixed by the Board of Directors or any committee thereof to which such duty has been properly delegated. Any vacancy in any office shall be filled in such manner as the Board of Directors shall determine.
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Section 4.03. Subordinate Officers. In addition to the principal officers enumerated in Section 4.01 herein, the Corporation may have one or more Assistant Treasurers, Assistant Secretaries and Assistant Controllers and such other subordinate officers, agents and employees as the Board of Directors may deem necessary, each of whom shall hold office for such period as the Board of Directors may from time to time determine.
Section 4.04. Removal. Any officer may be removed, with or without cause, at any time, by resolution adopted by the Board of Directors.
Section 4.05. Resignations. Any officer may resign at any time by giving notice to the Board of Directors. Any such notice must be in writing. The resignation of any officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 4.06. Powers and Duties. The officers of the Corporation shall have such powers and perform such duties incident to each of their respective offices and such other duties as may from time to time be conferred upon or assigned to them by the Board of Directors.
Article 5
Capital Stock
Section 5.01. Certificates for Stock; Uncertificated Shares. The shares of the Corporation shall be uncertificated, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be certificated shares or a combination of certificated and uncertificated shares. Except as otherwise required by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of shares represented by certificates of the same class and series shall be identical. Every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of the Corporation by the Chair or Vice Chair of the Board of Directors, or the Chief Executive Officer, President or any Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of such Corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. A Corporation shall not have power to issue a certificate in bearer form.
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Section 5.02. Transfer of Shares. Shares of the stock of the Corporation may be transferred on the record of stockholders of the Corporation by the holder thereof or by such holder’s duly authorized attorney upon surrender of a certificate therefor properly endorsed or upon receipt of proper transfer instructions from the registered holder of uncertificated shares or by such holder’s duly authorized attorney and upon compliance with appropriate procedures for transferring shares in uncertificated form as established by the transfer agent or registrar of such stock, unless waived by the Corporation.
Section 5.03. Authority for Additional Rules Regarding Transfer. The Board of Directors shall have the power and authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer and registration of certificated or uncertificated shares of the stock of the Corporation, as well as for the issuance of new certificates in lieu of those which may be lost or destroyed, and may require of any stockholder requesting replacement of lost or destroyed certificates, bond in such amount and in such form as they may deem expedient to indemnify the Corporation, and/or the transfer agents, and/or the registrars of its stock against any claims arising in connection therewith.
Article 6
General Provisions
Section 6.01. Fixing the Record Date. (a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing such record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided that the Board of Directors may in its discretion or as required by law fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall fix the same date or an earlier date as the record date for stockholders entitled to notice of such adjourned meeting.
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(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
Section 6.02. Dividends. Subject to limitations contained in Delaware Law and the Certificate of Incorporation, the Board of Directors may declare and pay dividends upon the shares of capital stock of the Corporation, which dividends may be paid either in cash, in property or in shares of the capital stock of the Corporation.
Section 6.03. Year. The fiscal year of the Corporation shall commence on January 1 and end on December 31 of each year.
Section 6.04. Corporate Seal. The seal of the Corporation shall be in such form as shall from time to time be adopted by the Board. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.
Section 6.05. Voting of Stock Owned by the Corporation. The Board of Directors may authorize any person, on behalf of the Corporation, to attend, vote at and grant proxies to be used at any meeting of stockholders of any corporation (except this Corporation) in which the Corporation may hold stock.
Section 6.08. Amendments. These Bylaws or any of them, may be altered, amended or repealed, or new Bylaws may be made, by the stockholders entitled to vote thereon at any annual or special meeting thereof or by the Board of Directors. Notwithstanding the foregoing, unless a higher percentage is required by the Certificate of Incorporation as to the provisions set forth in Article 2, Article 3 and Article 5 of these Bylaws, all such amendments must be approved by the affirmative vote of the holders of not less than 662/3% of the total voting power of all outstanding securities of the Corporation, generally entitled to vote in the election of directors, voting together as a single class, or by a majority of the Board of Directors; provided, however, that the provisions of this sentence shall be of no force and effect effective as of the Sunset Date.
Section 6.07. Meeting Attendance via Remote Communication Equipment.
(a) Stockholder Meetings. If authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication:
1. | participate in a meeting of stockholders; and |
2. | be deemed present in person and vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (A) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (B) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (C) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such votes or other action shall be maintained by the Corporation. |
(b) Board Meetings. Unless otherwise restricted by applicable law, the certificate of incorporation or these Bylaws, members of the Board of Directors or any committee thereof may participate in a meeting of the Board of Directors or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business on the ground that the meeting was not lawfully called or convened.
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Section 6.08. Exclusive Forum. Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation; (ii) any action asserting a claim for or based on a breach of a fiduciary duty owed by any current or former director or officer or other employee or agent of the Corporation to the Corporation or to the Corporation’s stockholders, including a claim alleging the aiding and abetting of such a breach of fiduciary duty; (iii) any action asserting a claim against the Corporation or any current or former director or officer or other employee or agent of the Corporation arising pursuant to any provision of the DGCL or the Corporation’s certificate of incorporation or bylaws (as any of the foregoing may be amended from time to time); (iv) any action asserting a claim related to or involving the Corporation that is governed by the internal affairs doctrine; or (v) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL; shall be a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware). Notwithstanding the foregoing, the provisions of this Section 6.08 shall not apply to suits brought to enforce any liability or duty created by the Exchange Act or Securities Act of 1933, as amended.
ARTICLE 7
INTERESTED DIRECTORS, OFFICERS AND STOCKHOLDERS
Section 7.01. Validity. To the fullest extent permitted by law, any contract or other transaction between the Corporation and any of its directors, officers or stockholders (or any corporation or firm in which any of them are directly or indirectly interested) shall be valid for all purposes notwithstanding the presence of such director, officer or stockholder at the meeting authorizing such contract or transaction, or his or her participation or vote in such meeting or authorization.
Section 7.02. Disclosure; Approval. The foregoing shall, however, apply only if the material facts of the relationship or the interests of each such director, officer or stockholder are known or disclosed:
(a) to the Board and it nevertheless in good faith authorizes or ratifies the contract or transaction by a majority of the directors present, each such interested director to be counted in determining whether a quorum is present but not in calculating the majority necessary to carry the vote; or
(b) to the stockholders and they nevertheless in good faith authorize or ratify the contract or transaction by a majority of the shares present, each such interested person to be counted for quorum and voting purposes.
Section 7.03. Nonexclusive. This provision shall not be construed to invalidate any contract or transaction that would be valid in the absence of this provision.
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Exhibit 10.5
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of [date], 20[_] between Loyalty Ventures Inc., a Delaware corporation (the “Company”), and [name], a director, officer, partner, trustee, member, employee, agent or fiduciary of the Company or a direct or indirect subsidiary thereof (“Indemnitee”).
WITNESSETH THAT:
WHEREAS, the Company has adopted that certain Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and that certain Amended and Restated Bylaws (the “Bylaws”) providing for indemnification of the Company’s directors and officers to the maximum extent authorized by the General Corporation Law of the State of Delaware (“DGCL”), as may be applicable from time to time, or any change in such law after the date hereof, but only to the extent that such subsequent change permits the Company to provide broader indemnification rights;
WHEREAS, highly competent persons have become more reluctant to serve corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself. The Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification would increase the difficulty of attracting and retaining such persons;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation and Bylaws of the Company, and any subsequent amendments thereto, and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and
WHEREAS, Indemnitee does not regard the protection available under the Company’s Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve or to take on additional service for or on behalf of the Company on the condition that Indemnitee be so indemnified.
NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve, continue to serve or to take on additional service as a director, officer, partner, trustee, member, employee, agent or fiduciary from and after the date hereof, the parties hereto agree as follows:
1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:
(a) Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(a) if, by reason of Indemnitee’s Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee, or on Indemnitee’s behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.
(b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of Indemnitee’s Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware (the “Delaware Court”) shall determine that such indemnification may be made.
(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, Indemnitee shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section 1(c) and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
2. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
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3. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 3 shall be unsecured and interest free. No objections based on or involving the question whether such charges meet the definition of Expenses, including any question regarding the reasonableness of such Expenses, shall be grounds for failure to advance to Indemnitee, or to reimburse Indemnitee for, the amount claimed within such thirty-day period, and the undertaking above to repay any such amount to the extent it is ultimately determined that Indemnitee is not entitled to indemnification shall be deemed to include an undertaking to repay any such amounts determined not to have met such definition.
4. Procedures and Presumptions for Determination of Entitlement to Indemnification. It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary or Assistant Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.
(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 4(a) hereof, a determination with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board: (1) by a majority vote of the Disinterested Directors, even though less than a quorum, (2) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum, (3) if there are no Disinterested Directors or if the Disinterested Directors so direct, by independent legal counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee, or (4) if so directed by the Board, by the stockholders of the Company.
(c) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 4(b) hereof, the Independent Counsel shall be selected as provided in this Section 4(c). The Independent Counsel shall be selected by the Board. Indemnitee may, within 10 days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 11 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 4(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Delaware Court or other court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 4(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 4(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 4(c), regardless of the manner in which such Independent Counsel was selected or appointed.
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(d) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as hereinafter defined), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, partner, trustee, member, employee agent or fiduciary of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 4(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(f) If the person, persons or entity empowered or selected under Section 4 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 4(f) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 4(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.
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(g) Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(h) The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.
5. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section 4 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 3 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 4(b) of this Agreement within 90 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request therefor or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 4 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification. Indemnitee shall commence such proceeding seeking an adjudication within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 5(a). The Company shall not oppose Indemnitee’s right to seek any such adjudication.
(b) In the event that a determination shall have been made pursuant to Section 4(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 5 shall be conducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 4(b).
(c) If a determination shall have been made pursuant to Section 4(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 5, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.
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(d) In the event that Indemnitee, pursuant to this Section 5, seeks a judicial adjudication of Indemnitee’s rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall pay on Indemnitee’s behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section 11 of this Agreement) actually and reasonably incurred by Indemnitee in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.
(e) The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 5 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.
(f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
6. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders, a resolution of directors of the Company, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Certificate of Incorporation, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, partners, trustees, members, employees, agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, limited liability company, employee benefit plan or other enterprise that such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.
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(c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, partner, trustee, member, employee, agent or fiduciary of any other corporation, partnership, joint venture, trust, limited liability company, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.
7. Exception to Right of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law; or
(c) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any such part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; or
(d) for any reimbursement of the Company by Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Securities Exchange Act of 1934, as amended (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act), if Indemnitee is held liable therefor (including pursuant to any settlement arrangements) or in respect of claw-back provisions promulgated under the rules and regulations of the Securities and Exchange Commission (the “SEC”) pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act; or
(e) if prohibited by applicable law; or
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(f) arising out of Indemnitee’s breach of Indemnitee’s obligations under any employment agreement between the Indemnitee and the Company (if any); or
(g) arising out of Indemnitee’s personal tax matters.
8. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the SEC has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain violations of the Employee Retirement Income Security Act of 1974, or ERISA. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.
9. Duration of Agreement; Binding Effect. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer or director of the Company (or is or was serving at the request of the Company as a director, officer, partner, trustee, member, employee, agent or fiduciary of another corporation, partnership, joint venture, trust, limited liability company, employee benefit plan or other enterprise) and shall continue thereafter so long as Indemnitee may have any liability or potential liability by virtue of having so served or shall be subject to any Proceeding (or any proceeding commenced under Section 5 hereof) by reason of Indemnitee’s Corporate Status, whether or not Indemnitee is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding on the Company, its successors and assigns, and shall inure to the benefit of Indemnitee, Indemnitee’s heirs, and personal representatives and to the benefit of the Company, its successors and assigns.
10. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer or director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as an officer or director of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.
(c) The Company shall not seek from a court, or agree to, a “bar order” which would have the effect of prohibiting or limiting the Indemnitee’s rights to receive advancement of expenses under this Agreement.
11. Definitions. For purposes of this Agreement:
(a) “Corporate Status” describes the status of a person who is or was a director, officer, partner, trustee, member, employee, agent or fiduciary of the Company or of any other corporation, partnership, joint venture, trust, limited liability company, employee benefit plan or other enterprise that such person is or was serving at the express written request of the Company.
(b) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
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(c) “Enterprise” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a director, officer, partner, trustee, member, employee, agent or fiduciary.
(d) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(e) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(f) “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of Indemnitee’s Corporate Status, by reason of any action taken by Indemnitee or of any inaction on Indemnitee’s part while acting in Indemnitee’s Corporate Status; in each case whether or not Indemnitee is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce Indemnitee’s rights under this Agreement.
12. Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.
13. Modification and Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
9
14. Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.
15. Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:
(a) | To Indemnitee at the address set forth below Indemnitee’s signature hereto. | |
(b) | To the Company at: | |
7500 Dallas Parkway, Suite 700 | ||
Plano, Texas 75024 | ||
Attention: General Counsel |
or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.
16. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
17. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
18. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court, and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably the Company, c/o The Corporation Trust Company (or the Company’s then-current registered agent in Delaware) as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
SIGNATURE PAGE TO FOLLOW
10
IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.
COMPANY |
By: | ||
Name: | ||
Title: |
INDEMNITEE |
Name: |
Address: |
Indemnification Agreement Signature Page
| | | | Sincerely, | |
| | | | | |
| | | | Ralph J. Andretta | |
| | | | President and Chief Executive Officer | |
| | | | Sincerely, | |
| | | | | |
| | | | Charles L. Horn | |
| | | | President and Chief Executive Officer | |
| | |
Page
|
| |||
| | | | ii | | | |
| | | | iii | | | |
| | | | 1 | | | |
| | | | 17 | | | |
| | | | 39 | | | |
| | | | 50 | | | |
| | | | 51 | | | |
| | | | 52 | | | |
| | | | 57 | | | |
| | | | 77 | | | |
| | | | 88 | | | |
| | | | 94 | | | |
| | | | 103 | | | |
| | | | 104 | | | |
| | | | 105 | | | |
| | | | 109 | | | |
| | | | F-1 | | |
| | |
As of June 30, 2021
|
| |||||||||
| | |
Actual
|
| |
Pro Forma
(Unaudited) |
| ||||||
| | |
(In thousands, except
share amounts) |
| |||||||||
Cash and equivalents(1)
|
| | | $ | 205,715 | | | | | $ | | | |
Indebtedness: | | | | | | | | | | | | | |
Short-term:
|
| | | | | | | | | | | | |
Short-term borrowings
|
| | | | — | | | | | | | | |
Long-term:
|
| | | | | | | | | | | | |
Long-term debt(2)
|
| | | | — | | | | | | | | |
Total indebtedness
|
| | | | — | | | | | | | | |
Equity: | | | | | | | | | | | | | |
Common stock, par value $0.01; shares authorized, shares issued and outstanding, pro forma(3)
|
| | | | — | | | | | | | | |
Additional paid-in-capital
|
| | | | — | | | | | | | | |
Parent’s net investment
|
| | | | 1,012,586 | | | | | | | | |
Accumulated other comprehensive loss
|
| | | | (25,571) | | | | | | | | |
Total equity
|
| | | $ | 987,015 | | | | | $ | | | |
Total capitalization
|
| | | $ | 987,015 | | | | | $ | | | |
| | |
As of June 30, 2021
|
| |||||||||||||||
| | |
Historical
|
| |
Pro Forma
Adjustments |
| |
Adjusted
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 205,715 | | | | | $ | (a) | | | | | $ | | | |
Accounts receivable, net
|
| | | | 265,729 | | | | | | | | | | | | | | |
Inventories
|
| | | | 162,254 | | | | | | | | | | | | | | |
Redemption settlement assets, restricted
|
| | | | 745,086 | | | | | | | | | | | | | | |
Other current assets
|
| | | | 21,262 | | | | | | | | | | | | | | |
Total current assets
|
| | | | 1,400,046 | | | | | | | | | | | | | | |
Property and equipment, net
|
| | | | 90,329 | | | | | | | | | | | | | | |
Right of use assets – operating
|
| | | | 107,916 | | | | | | | | | | | | | | |
Deferred tax asset, net
|
| | | | 66,839 | | | | | | | | | | | | | | |
Intangible assets, net
|
| | | | 4,102 | | | | | | | | | | | | | | |
Goodwill
|
| | | | 725,632 | | | | | | | | | | | | | | |
Investment in unconsolidated subsidiaries – related party
|
| | | | 2 | | | | | | | | | | | | | | |
Other non-current assets
|
| | | | 3,774 | | | | | | (a) | | | | | | | | |
Total assets
|
| | | $ | 2,398,640 | | | | | $ | | | | | $ | | | ||
LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 65,831 | | | | | $ | (g) | | | | | $ | | | |
Accrued expenses
|
| | | | 53,439 | | | | | | (c) | | | | | | | | |
Deferred revenue
|
| | | | 942,154 | | | | | | | | | | | | | | |
Current operating lease liabilities
|
| | | | 9,888 | | | | | | | | | | | | | | |
Other current liabilities
|
| | | | 103,384 | | | | | | | | | | | | | | |
Total current liabilities
|
| | | | 1,174,696 | | | | | | | | | | | | | | |
Deferred revenue
|
| | | | 100,630 | | | | | | | | | | | | | | |
Deferred tax liability, net
|
| | | | — | | | | | | | | | | | | | | |
Long-term operating lease liabilities
|
| | | | 111,727 | | | | | | | | | | | | | | |
Long-term and other debt
|
| | | | — | | | | | | (a) | | | | | | | | |
Other liabilities
|
| | | | 24,572 | | | | | | | | | | | | | | |
Total liabilities
|
| | | | 1,411,625 | | | | | | | | | | | | | | |
Commitments and contingencies | | | | | | | | | | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | | | | | | | | | | |
Common stock
|
| | | | — | | | | | | (e) | | | | | | | | |
Additional paid-in capital
|
| | | | — | | | | | | (f) | | | | | | | | |
Parent’s net investment
|
| | | | 1,012,586 | | | | | | (f) | | | | | | | | |
Accumulated other comprehensive income (loss)
|
| | | | (25,571) | | | | | | | | | | | | | | |
Total equity
|
| | | | 987,015 | | | | | | | | | | | | | | |
Total liabilities and equity
|
| | | $ | 2,398,640 | | | | | $ | | | | | $ | | | |
| | |
For The Six Months Ended June 30, 2021
|
| |||||||||||||||||||||
| | |
Historical
|
| |
Pro Forma
Adjustments |
| | | | | | | |
Adjusted
|
| |||||||||
| | |
(in thousands, except per share amounts)
|
| |||||||||||||||||||||
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | |
Redemption, net
|
| | | $ | 183,695 | | | | | $ | | | |
|
| | | $ | | | |||||
Services
|
| | | | 133,438 | | | | | | | | | | | | | | | | | | | | |
Other
|
| | | | 10,326 | | | | | | | | | | | | | | | | | | | | |
Total revenue
|
| | | | 327,459 | | | | | | | | | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of operations (exclusive of depreciation and amortization disclosed separately below)
|
| | | | 252,937 | | | | | | | | | | | | | | | | | | | | |
General and administrative
|
| | | | 7,590 | | | | | | | | | | | | | | | | | | | | |
Depreciation and other amortization
|
| | | | 17,571 | | | | | | | | | | | | | | | | | | | | |
Amortization of purchased intangibles
|
| | | | 883 | | | | | | | | | | | | (b) | | | | | | | | |
Total operating expenses
|
| | | | 278,981 | | | | | | | | | | | | | | | | | | | | |
Operating income
|
| | | | 48,478 | | | | | | | | | | | | | | | | | | | | |
Interest (income) expense, net
|
| | | | (182) | | | | | | | | | | | | (c) | | | | | | | | |
Income before income taxes and loss from investment in unconsolidated subsidiaries
|
| | | | 48,660 | | | | | | | | | | | | | | | | | | | | |
Provision (benefit) for income taxes
|
| | | | 15,074 | | | | | | | | | | | | | | | | | | | | |
Loss from investment in unconsolidated subsidiaries – related party,
net of tax |
| | | | 42 | | | | | | | | | | | | | | | | | | | | |
Net income
|
| | | $ | 33,544 | | | | | $ | | | | | | | | | | | $ | | | ||
Pro forma earnings per share | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Diluted
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Pro forma weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | | | | | | | | | | | | | (d) | | | | | | | | |
Diluted
|
| | | | | | | | | | | | | | | | (d) | | | | | | | | |
| | |
For The Year Ended December 31, 2020
|
| | |||||||||||||||||||||||
| | |
Historical
|
| |
Pro Forma
Adjustments |
| | | | | | | |
Adjusted
|
| | |||||||||||
| | |
(in thousands, except per share amounts)
|
| | |||||||||||||||||||||||
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Redemption, net
|
| | | $ | 473,067 | | | | | $ | | | | | | | | | | | $ | | | | ||||
Services
|
| | | | 264,050 | | | | | | | | | | | | | | | | | | | | | | ||
Other
|
| | | | 27,689 | | | | | | | | | | | | | | | | | | | | | | ||
Total revenue
|
| | | | 764,806 | | | | | | | | | | | | | | | | | | | | | | ||
Operating expenses | | | | | | | ||||||||||||||||||||||
Cost of operations (exclusive of depreciation and amortization
disclosed separately below) |
| | | | 587,615 | | | | | | | | | | | | | | | | | | | | | | ||
General and administrative
|
| | | | 14,315 | | | | | | | | | | | | | | | | | | | | | | ||
Depreciation and other amortization
|
| | | | 28,988 | | | | | | | | | | | | | | | | | | | | | | ||
Amortization of purchased intangibles
|
| | | | 48,953 | | | | | | | | | | | | | | | | | | | | | | ||
Total operating expenses
|
| | | | 679,871 | | | | | | | | | | | | | | | | | | | | | | ||
Operating income
|
| | | | 84,935 | | | | | | | | | | | | | | | | | | | | | | ||
Gain on sale of a business
|
| | | | (10,876) | | | | | | | | | | | | | | | | | |||||||
Interest (income) expense, net
|
| | | | (834) | | | | | | | | | | | | (a) | | | | | | | | | | ||
Income before income taxes and loss from investment in unconsolidated subsidiaries
|
| | | | 96,645 | | | | | | | | | | | | | | | | | | | | | | ||
Provision (benefit) for income taxes
|
| | | | 21,324 | | | | | | | | | | | | (c) | | | | | | | | | | ||
Loss from investment in unconsolidated subsidiaries – related party, net of tax
|
| | | | 246 | | | | | | | | | | | | | | | | | | | | | | ||
Net income
|
| | | $ | 75,075 | | | | | $ | | | | | | | | | | | $ | | | | | |||
Pro forma earnings per share | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Basic
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Pro forma weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Basic
|
| | | | | | | | | | | | | | | | (d) | | | | | |||||||
Diluted
|
| | | | | | | | | | | | | | | | (d) | | | | | | | | | |
| | |
Three Months Ended June 30,
|
| |
% Change
|
| |
Six Months Ended June 30,
|
| |
% Change
|
| ||||||||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2021 to
2020 |
| |
2021
|
| |
2020
|
| |
2021 to
2020 |
| ||||||||||||||||||
| | |
(in thousands, except percentages)
|
| |||||||||||||||||||||||||||||||||
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Redemption, net
|
| | | $ | 78,831 | | | | | $ | 84,675 | | | | | | (7)% | | | | | $ | 183,695 | | | | | $ | 205,547 | | | | | | (11)% | | |
Services
|
| | | | 67,215 | | | | | | 60,008 | | | | | | 12 | | | | | | 133,438 | | | | | | 130,227 | | | | | | 2 | | |
Other
|
| | | | 4,859 | | | | | | 6,388 | | | | | | (24) | | | | | | 10,326 | | | | | | 13,402 | | | | | | (23) | | |
Total revenue
|
| | | | 150,905 | | | | | | 151,071 | | | | | | — | | | | | | 327,459 | | | | | | 349,176 | | | | | | (6) | | |
Operating expenses
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of operations (exclusive of
depreciation and amortization disclosed separately below) |
| | | | 117,092 | | | | | | 108,850 | | | | | | 8 | | | | | | 252,937 | | | | | | 253,161 | | | | | | — | | |
General and administrative
|
| | | | 3,905 | | | | | | 3,591 | | | | | | 9 | | | | | | 7,590 | | | | | | 7,163 | | | | | | 6 | | |
Depreciation and other amortization
|
| | | | 8,977 | | | | | | 6,547 | | | | | | 37 | | | | | | 17,571 | | | | | | 12,954 | | | | | | 36 | | |
Amortization of purchased intangibles
|
| | | | 444 | | | | | | 11,807 | | | | | | (96) | | | | | | 883 | | | | | | 23,630 | | | | | | (96) | | |
Total operating expenses
|
| | | | 130,418 | | | | | | 130,795 | | | | | | — | | | | | | 278,981 | | | | | | 296,908 | | | | | | (6) | | |
Operating income
|
| | | | 20,487 | | | | | | 20,276 | | | | | | 1 | | | | | | 48,478 | | | | | | 52,268 | | | | | | (7) | | |
Gain on sale of a business
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (10,876) | | | | | | (100) | | |
Interest income, net
|
| | | | (113) | | | | | | (82) | | | | | | 38 | | | | | | (182) | | | | | | (349) | | | | | | (48) | | |
Income before income taxes and
loss (income) from investment in unconsolidated subsidiaries – related party |
| | | | 20,600 | | | | | | 20,358 | | | | | | 1 | | | | | | 48,660 | | | | | | 63,493 | | | | | | (23) | | |
Provision for income taxes
|
| | | | 6,090 | | | | | | 441 | | | | | | 1,281 | | | | | | 15,074 | | | | | | 13,849 | | | | | | 9 | | |
Loss (income) from investment in unconsolidated subsidiaries – related party, net of tax
|
| | | | 5 | | | | | | (10) | | | | | | (150) | | | | | | 42 | | | | | | 58 | | | | | | (28) | | |
Net income
|
| | | $ | 14,505 | | | | | $ | 19,927 | | | | | | (27)% | | | | | $ | 33,544 | | | | | $ | 49,586 | | | | | | (32)% | | |
Key Operating Metrics (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AIR MILES reward miles issued
|
| | | | 1,139.2 | | | | | | 1,053.1 | | | | | | 8% | | | | | | 2,250.8 | | | | | | 2,368.9 | | | | | | (5)% | | |
AIR MILES reward miles redeemed
|
| | | | 800.3 | | | | | | 608.2 | | | | | | 32% | | | | | | 1,539.6 | | | | | | 1,602.2 | | | | | | (4)% | | |
Supplemental Information: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average CAD to USD foreign currency exchange rate
|
| | | | 0.81 | | | | | | 0.72 | | | | | | 13% | | | | | | 0.80 | | | | | | 0.73 | | | | | | 10% | | |
Average EUR to USD foreign currency exchange rate
|
| | | | 1.21 | | | | | | 1.10 | | | | | | 10% | | | | | | 1.21 | | | | | | 1.10 | | | | | | 10% | | |
| | |
Years Ended December 31,
|
| |
% Change
|
| ||||||||||||||||||||||||
|
2020
|
| |
2019
|
| |
2018
|
| |
2020 to
2019 |
| |
2019 to
2018 |
| |||||||||||||||||
|
(in thousands, except percentages)
|
| |||||||||||||||||||||||||||||
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Redemption, net
|
| | | $ | 473,067 | | | | | $ | 637,321 | | | | | $ | 676,279 | | | | | | (26)% | | | | | | (6)% | | |
Services
|
| | | | 264,050 | | | | | | 367,647 | | | | | | 368,170 | | | | | | (28) | | | | | | — | | |
Other
|
| | | | 27,689 | | | | | | 28,163 | | | | | | 23,929 | | | | | | (2) | | | | | | 18 | | |
Total revenue
|
| | | | 764,806 | | | | | | 1,033,131 | | | | | | 1,068,378 | | | | | | (26) | | | | | | (3) | | |
Operating expenses
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of operations (exclusive of depreciation and amortization disclosed separately
below) |
| | | | 587,615 | | | | | | 847,552 | | | | | | 824,203 | | | | | | (31) | | | | | | 3 | | |
General and administrative
|
| | | | 14,315 | | | | | | 14,823 | | | | | | 14,049 | | | | | | (3) | | | | | | 6 | | |
Depreciation and other amortization
|
| | | | 28,988 | | | | | | 32,152 | | | | | | 32,585 | | | | | | (10) | | | | | | (1) | | |
Amortization of purchased intangibles
|
| | | | 48,953 | | | | | | 48,027 | | | | | | 52,238 | | | | | | 2 | | | | | | (8) | | |
Total operating expenses
|
| | | | 679,871 | | | | | | 942,554 | | | | | | 923,075 | | | | | | (28) | | | | | | 2 | | |
Operating income
|
| | | | 84,935 | | | | | | 90,577 | | | | | | 145,303 | | | | | | (6) | | | | | | (38) | | |
Gain on sale of a business
|
| | | | (10,876) | | | | | | — | | | | | | — | | | | | | nm* | | | | | | nm* | | |
Interest (income) expense, net
|
| | | | (834) | | | | | | 2,335 | | | | | | 5,528 | | | | | | (136) | | | | | | (58) | | |
Income before income taxes and loss from investment
in unconsolidated subsidiaries – related party |
| | | | 96,645 | | | | | | 88,242 | | | | | | 139,775 | | | | | | 10 | | | | | | (37) | | |
Provision (benefit) for income taxes
|
| | | | 21,324 | | | | | | 11,331 | | | | | | (2,867) | | | | | | 88 | | | | | | (495) | | |
Loss from investment in unconsolidated subsidiaries – related party, net of tax
|
| | | | 246 | | | | | | 1,681 | | | | | | 5,033 | | | | | | (85) | | | | | | (67) | | |
Net income
|
| | | $ | 75,075 | | | | | $ | 75,230 | | | | | $ | 137,609 | | | | | | —% | | | | | | (45)% | | |
Key Operating Metrics (in millions): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AIR MILES reward miles issued
|
| | | | 4,963.8 | | | | | | 5,511.1 | | | | | | 5,500.0 | | | | | | (10)% | | | | | | —% | | |
AIR MILES reward miles redeemed
|
| | | | 3,127.8 | | | | | | 4,415.7 | | | | | | 4,482.0 | | | | | | (29)% | | | | | | (1)% | | |
Supplemental Information: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average CAD to USD foreign currency exchange rate
|
| | | | 0.75 | | | | | | 0.75 | | | | | | 0.77 | | | | | | (1)% | | | | | | (2)% | | |
Average EUR to USD foreign currency exchange rate
|
| | | | 1.14 | | | | | | 1.12 | | | | | | 1.18 | | | | | | 2% | | | | | | (5)% | | |
| | |
Three Months Ended June 30,
|
| |
Six Months Ended June 30,
|
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2021
|
| |
2020
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Net income
|
| | | $ | 14,505 | | | | | $ | 19,927 | | | | | $ | 33,544 | | | | | $ | 49,586 | | |
Loss (income) from investment in unconsolidated subsidiaries – related party, net of tax
|
| | | | 5 | | | | | | (10) | | | | | | 42 | | | | | | 58 | | |
Provision for income taxes
|
| | | | 6,090 | | | | | | 441 | | | | | | 15,074 | | | | | | 13,849 | | |
Interest income, net
|
| | | | (113) | | | | | | (82) | | | | | | (182) | | | | | | (349) | | |
Depreciation and other amortization
|
| | | | 8,977 | | | | | | 6,547 | | | | | | 17,571 | | | | | | 12,954 | | |
Amortization of purchased intangibles
|
| | | | 444 | | | | | | 11,807 | | | | | | 883 | | | | | | 23,630 | | |
Stock compensation expense
|
| | | | 2,325 | | | | | | 1,954 | | | | | | 4,179 | | | | | | 3,358 | | |
Gain on sale of a business, net of strategic transaction costs(1)
|
| | | | — | | | | | | — | | | | | | — | | | | | | (7,969) | | |
Strategic transaction costs(2)
|
| | | | — | | | | | | 79 | | | | | | — | | | | | | 162 | | |
Restructuring and other charges
|
| | | | — | | | | | | 72 | | | | | | — | | | | | | 129 | | |
Adjusted EBITDA
|
| | | $ | 32,233 | | | | | $ | 40,735 | | | | | $ | 71,111 | | | | | $ | 95,408 | | |
| | |
Years Ended December 31,
|
| |||||||||||||||
|
2020
|
| |
2019
|
| |
2018
|
| |||||||||||
|
(in thousands)
|
| |||||||||||||||||
Net income
|
| | | $ | 75,075 | | | | | $ | 75,230 | | | | | $ | 137,609 | | |
Loss from investment in unconsolidated subsidiaries – related party, net
of tax |
| | | | 246 | | | | | | 1,681 | | | | | | 5,033 | | |
Provision for (benefit from) income taxes
|
| | | | 21,324 | | | | | | 11,331 | | | | | | (2,867) | | |
Interest (income) expense, net
|
| | | | (834) | | | | | | 2,335 | | | | | | 5,528 | | |
Depreciation and other amortization
|
| | | | 28,988 | | | | | | 32,152 | | | | | | 32,585 | | |
Amortization of purchased intangibles
|
| | | | 48,953 | | | | | | 48,027 | | | | | | 52,238 | | |
Stock compensation expense
|
| | | | 7,017 | | | | | | 9,076 | | | | | | 13,333 | | |
Gain on sale of a business, net of strategic transaction costs(1)
|
| | | | (7,816) | | | | | | — | | | | | | — | | |
Strategic transaction costs(2)
|
| | | | 329 | | | | | | 981 | | | | | | — | | |
Restructuring and other charges(3)
|
| | | | 108 | | | | | | 50,780 | | | | | | — | | |
Gain on sale of an investment(4)
|
| | | | — | | | | | | — | | | | | | (9,517) | | |
Adjusted EBITDA
|
| | | $ | 173,390 | | | | | $ | 231,593 | | | | | $ | 233,942 | | |
| | |
Three Months Ended June 30,
|
| |
% Change
|
| |
Six Months Ended June 30,
|
| |
% Change
|
| | ||||||||||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2021 to 2020
|
| |
2021
|
| |
2020
|
| |
2021 to 2020
|
| | ||||||||||||||||||||
| | |
(in thousands, except percentages)
|
| ||||||||||||||||||||||||||||||||||||
Revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
AIR MILES Reward Program
|
| | | $ | 71,937 | | | | | $ | 64,690 | | | | | | 11% | | | | | $ | 142,194 | | | | | $ | 141,153 | | | | | | 1% | | | | ||
BrandLoyalty
|
| | | | 78,968 | | | | | | 86,381 | | | | | | (9) | | | | | | 185,265 | | | | | | 208,023 | | | | | | (11) | | | | ||
Corporate/Other
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Total
|
| | | $ | 150,905 | | | | | $ | 151,071 | | | | | | —% | | | | | $ | 327,459 | | | | | $ | 349,176 | | | | | | (6)% | | | | ||
Adjusted EBITDA: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
AIR MILES Reward Program
|
| | | $ | 36,758 | | | | | $ | 37,007 | | | | | | (1)% | | | | | $ | 73,209 | | | | | $ | 80,260 | | | | | | (9)% | | | | ||
BrandLoyalty
|
| | | | (1,110) | | | | | | 6,879 | | | | | | (116) | | | | | | 4,597 | | | | | | 21,464 | | | | | | (79) | | | | ||
Corporate/Other
|
| | | | (3,415) | | | | | | (3,151) | | | | | | 8 | | | | | | (6,695) | | | | | | (6,316) | | | | | | 6 | | | | ||
Total
|
| | | $ | 32,233 | | | | | $ | 40,735 | | | | | | (21)% | | | | | $ | 71,111 | | | | | $ | 95,408 | | | | | | (25)% | | | |
| | |
Years Ended December 31,
|
| |
% Change
|
| ||||||||||||||||||||||||
|
2020
|
| |
2019
|
| |
2018
|
| |
2020 to 2019
|
| |
2019 to 2018
|
| |||||||||||||||||
|
(in thousands, except percentages)
|
| |||||||||||||||||||||||||||||
Revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AIR MILES Reward Program
|
| | | $ | 277,121 | | | | | $ | 384,021 | | | | | $ | 434,934 | | | | | | (28)% | | | | | | (12)% | | |
BrandLoyalty
|
| | | | 487,685 | | | | | | 649,110 | | | | | | 633,444 | | | | | | (25) | | | | | | 2 | | |
Corporate/Other
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 764,806 | | | | | $ | 1,033,131 | | | | | $ | 1,068,378 | | | | | | (26)% | | | | | | (3)% | | |
Adjusted EBITDA: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AIR MILES Reward Program
|
| | | $ | 144,025 | | | | | $ | 165,168 | | | | | $ | 174,927 | | | | | | (13)% | | | | | | (6)% | | |
BrandLoyalty
|
| | | | 42,161 | | | | | | 79,376 | | | | | | 69,748 | | | | | | (47) | | | | | | 14 | | |
Corporate/Other
|
| | | | (12,796) | | | | | | (12,951) | | | | | | (10,733) | | | | | | (1) | | | | | | 21 | | |
Total
|
| | | $ | 173,390 | | | | | $ | 231,593 | | | | | $ | 233,942 | | | | | | (25)% | | | | | | (1)% | | |
| | |
2021
|
| |
2022
|
| |
2023
|
| |
2024
|
| |
2025
|
| |
Thereafter
|
| |
Total
|
| |||||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||||||||
Operating leases
|
| | | $ | 15,450 | | | | | $ | 16,038 | | | | | $ | 14,669 | | | | | $ | 13,796 | | | | | $ | 13,252 | | | | | $ | 92,846 | | | | | $ | 166,051 | | |
ASC 740 obligations(1)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Purchase obligations(2)
|
| | | | 102,375 | | | | | | 23,963 | | | | | | 23,883 | | | | | | 14,645 | | | | | | 11,348 | | | | | | — | | | | | | 176,214 | | |
Total
|
| | | $ | 117,825 | | | | | $ | 40,001 | | | | | $ | 38,552 | | | | | $ | 28,441 | | | | | $ | 24,600 | | | | | $ | 92,846 | | | | | $ | 342,265 | | |
Reporting Unit
|
| |
Approximate Excess Fair Value %
as of July 1, 2020 |
| |
Goodwill as of
December 31, 2020 |
| ||||||
| | |
(in thousands)
|
| | | | | | | |||
AIR MILES Reward Program
|
| | | | >250% | | | | | $ | 193,276 | | |
BrandLoyalty
|
| | | | ≤10% | | | | | | 542,622 | | |
Total
|
| | | | | | | | | $ | 735,898 | | |
Category
|
| |
Metric
|
| |
Year-End 2020
|
| |||
Employees
|
| | Employees by Geography | | | Americas | | |
942
|
|
| | | (actual) | | | Asia Pacific | | |
105
|
|
| | | | | | EMEA | | |
431
|
|
| | |
# of Nationalities Represented
|
| | | | |
~45
|
|
Development
|
| | 2020 Annual Survey | | |
Opportunity to develop
|
| |
85%
|
|
Diversity, Equity & Inclusion
|
| | 2020 Annual Survey | | | DE&I Environment** | | |
87%
|
|
| | | Gender Representation | | | % Female | | |
58%
|
|
| | | | | | % Female leadership | | |
44%
|
|
Retention
|
| | Voluntary Attrition | | | % Global | | |
10%
|
|
| | | Employee Acquisition | | | % Global | | |
15%
|
|
| | | Tenure | | | Leadership | | |
8 years
|
|
| | | | | | All Employees | | |
7 years
|
|
Compensation
|
| | Compensation and benefits | | |
2020 Expense (millions)
|
| |
$141.8
|
|
Location
|
| |
Segment
|
| |
Approximate
Square Footage |
| |
Lease
Expiration Date |
| |||
Dallas, Texas
|
| | Corporate | | | | | | | | | | |
Toronto, Ontario, Canada
|
| |
AIR MILES Reward Program
|
| | | | 205,525(1) | | | | March 31, 2033 | |
Mississauga, Ontario, Canada
|
| |
AIR MILES Reward Program
|
| | | | 13,699 | | | |
February 28, 2025
|
|
Den Bosch, Netherlands
|
| | BrandLoyalty | | | | | 132,482 | | | |
December 31, 2033
|
|
Maasbree, Netherlands
|
| | BrandLoyalty | | | | | 668,923 | | | |
September 1, 2033
|
|
Name
|
| |
Age
|
| |
Position
|
|
Charles L. Horn | | |
61
|
| | Chief Executive Officer and President | |
John J. Chesnut | | |
49
|
| | Chief Financial Officer | |
Claudia Mennen | | |
48
|
| | BrandLoyalty, Chief Executive Officer | |
Blair F. Cameron | | |
58
|
| | AIR MILES Reward Program, President | |
Cynthia L. Hageman | | |
52
|
| | General Counsel | |
Laura Santillan | | |
50
|
| | Chief Accounting Officer | |
Name
|
| |
Age
|
| |
Committees and Chairs
|
|
Graham W. Atkinson | | |
70
|
| | | |
Roger H. Ballou | | |
70
|
| | | |
Richard A. Genovese | | |
67
|
| | | |
Charles L. Horn | | |
61
|
| | | |
Barbara L. Rayner | | |
61
|
| |
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
Bonus
($) |
| |
Stock
Awards ($)(1) |
| |
Option
Awards ($) |
| |
Non-Equity
Incentive Plan Compensation ($)(2) |
| |
Change in
Pension Value and Nonqualified Deferred Compensation Earnings ($)(3) |
| |
All Other
Compensation ($)(4) |
| |
Total
($) |
| |||||||||||||||||||||||||||
Charles L. Horn
Chief Executive Officer |
| | | | 2020 | | | | | | 722,608 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,300,000 | | | | | | 48,434 | | | | | | 140,686 | | | | | | 2,211,728 | | |
Blair F. Cameron(5)
AIR MILES Reward Program, President |
| | | | 2020 | | | | | | 405,286 | | | | | | — | | | | | | 877,868 | | | | | | — | | | | | | 263,436 | | | | | | — | | | | | | 65,821 | | | | | | 1,612,411 | | |
Claudia Mennen(6)
BrandLoyalty, CEO |
| | | | 2020 | | | | | | 547,878 | | | | | | — | | | | | | 785,609 | | | | | | — | | | | | | 502,138 | | | | | | — | | | | | | 67,529 | | | | | | 1,903,154 | | |
Name
|
| |
Registrant
Contributions to 401(k) or Other Retirement Savings Plans |
| |
Life
Insurance Premiums |
| |
Medical and
Dental Insurance Premiums ($) |
| |
Disability
Insurance Premiums ($) |
| |
Other
($)(1) |
| |
Perquisites
and Personal Benefits ($) |
| ||||||||||||||||||
Charles L. Horn
|
| | | | 14,250 | | | | | | 53 | | | | | | 13,709 | | | | | | 1,242 | | | | | | 15,967 | | | | | | 95,465(2) | | |
Blair F. Cameron(3)
|
| | | | — | | | | | | 436 | | | | | | 5,733(4) | | | | | | — | | | | | | 11,548 | | | | | | 48,104(5) | | |
Claudia Mennen(6)
|
| | | | 24,805(7) | | | | | | 1,343 | | | | | | 871 | | | | | | 2,420 | | | | | | 8,088 | | | | | | 30,002(8) | | |
| | |
Target Non-Equity
Incentive Plan Compensation |
| |
Weighted Payout
|
| |
Achieved Non-Equity
Incentive Plan Compensation |
| |||||||||
Charles L. Horn
|
| |
Not Applicable
|
| |
Not Applicable
|
| |
$1,300,000
|
| |||||||||
Blair F. Cameron(1)
|
| | | $ | 292,706 | | | | | | 90% | | | | | $ | 263,436 | | |
Claudia Mennen(2)
|
| | | $ | 507,210 | | | | | | 99% | | | | | $ | 502,138 | | |
Name
|
| |
Performance-Based
Restricted Stock Units |
| |
Time-Based Restricted
Stock Units |
| |
Total Equity Value
(on Grant Date)(1) |
| |||||||||
Charles L. Horn(2)
|
| | | | — | | | | | | — | | | | | $ | — | | |
Blair F. Cameron
|
| | | | 6,988 | | | | | | 1,747 | | | | | $ | 877,868 | | |
Claudia Mennen
|
| | | | 6,253 | | | | | | 1,564 | | | | | $ | 785,609 | | |
Name
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
|
Number of
Securities Underlying Unexercised Options – Exercisable (#) |
| |
Number of
Securities Underlying Unexercised Options – Unexercisable (#) |
| |
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| |
Number Of
Shares or Units of Stock That Have Not Vested (#) |
| |
Market Value
of Shares or Units of Stock That Have Not Vested ($)(1) |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
| |
Equity Incentive
Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) |
| |||||||||||||||||||||||||||||
Charles L. Horn
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 525(2) | | | | | | 38,903 | | | | | | — | | | | | | — | | |
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 795(3) | | | | | | 58,910 | | | | | | — | | | | | | — | | |
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | — | | |
Blair F. Cameron
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,685(4) | | | | | | 198,959 | | | | | | — | | | | | | — | | |
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 653(5) | | | | | | 48,387 | | | | | | — | | | | | | — | | |
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,988(6) | | | | | | 517,811 | | |
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Claudia Mennen
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,439(7) | | | | | | 180,730 | | | | | | — | | | | | | — | | |
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 408(8) | | | | | | 30,233 | | | | | | — | | | | | | — | | |
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,253(9) | | | | | | 463,347 | | |
Name of Beneficial Owner
|
| |
Amount of
Beneficial Ownership |
| |
Percent of Class
|
| |||
5% Shareholders | | | | | | | | | | |
Alliance Data Systems Corporation(1)
|
| | | | | | | % | | |
BlackRock, Inc.
|
| | | | | | | % | | |
The Vanguard Group, Inc.
|
| | | | | | | % | | |
Directors and Named Executive Officers | | | | | | | | | | |
Graham W. Atkinson
|
| | | | | | | % | | |
Roger H. Ballou
|
| | | | | | | % | | |
Blair F. Cameron
|
| | | | | | | % | | |
John J. Chesnut
|
| | | | | | | % | | |
Richard A. Genovese
|
| | | | | | | % | | |
Cynthia L. Hageman
|
| | | | | | | % | | |
Charles L. Horn
|
| | | | | | | % | | |
Claudia Mennen
|
| | | | | | | % | | |
Barbara L. Rayner
|
| | | | | | | % | | |
Laura Santillan
|
| | | | | | | % | | |
All directors and officers as a group (ten persons)
|
| | | | | |
|
%
|
| |
| | |
Page
|
| |||
Unaudited Condensed Combined Financial Statements | | | | | | | |
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-7 | | |
| | |
Page
|
| |||
Combined Financial Statements | | | | | | | |
| | | | F-24 | | | |
| | | | F-25 | | | |
| | | | F-26 | | | |
| | | | F-27 | | | |
| | | | F-28 | | | |
| | | | F-29 | | | |
| | | | F-30 | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
| | |
(in thousands)
|
| |||||||||
ASSETS
|
| | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 205,715 | | | | | $ | 278,841 | | |
Accounts receivable, net, less allowance for doubtful accounts ($5.3 million and $4.0 million at June 30, 2021 and December 31, 2020, respectively)
|
| | | | 265,729 | | | | | | 270,559 | | |
Inventories
|
| | | | 162,254 | | | | | | 164,306 | | |
Redemption settlement assets, restricted
|
| | | | 745,086 | | | | | | 693,461 | | |
Other current assets
|
| | | | 21,262 | | | | | | 23,000 | | |
Total current assets
|
| | | | 1,400,046 | | | | | | 1,430,167 | | |
Property and equipment, net
|
| | | | 90,329 | | | | | | 97,916 | | |
Right of use assets – operating
|
| | | | 107,916 | | | | | | 113,870 | | |
Deferred tax asset, net
|
| | | | 66,839 | | | | | | 70,137 | | |
Intangible assets, net
|
| | | | 4,102 | | | | | | 5,097 | | |
Goodwill
|
| | | | 725,632 | | | | | | 735,898 | | |
Investment in unconsolidated subsidiaries – related party
|
| | | | 2 | | | | | | 854 | | |
Other non-current assets
|
| | | | 3,774 | | | | | | 4,125 | | |
Total assets
|
| | | $ | 2,398,640 | | | | | $ | 2,458,064 | | |
LIABILITIES AND EQUITY
|
| | | | | | | | | | | | |
Accounts payable
|
| | | $ | 65,831 | | | | | $ | 74,818 | | |
Accrued expenses
|
| | | | 53,439 | | | | | | 67,056 | | |
Deferred revenue
|
| | | | 942,154 | | | | | | 898,475 | | |
Current operating lease liabilities
|
| | | | 9,888 | | | | | | 9,942 | | |
Other current liabilities
|
| | | | 103,384 | | | | | | 64,990 | | |
Total current liabilities
|
| | | | 1,174,696 | | | | | | 1,115,281 | | |
Deferred revenue
|
| | | | 100,630 | | | | | | 105,544 | | |
Long-term operating lease liabilities
|
| | | | 111,727 | | | | | | 117,648 | | |
Other liabilities
|
| | | | 24,572 | | | | | | 25,290 | | |
Total liabilities
|
| | | | 1,411,625 | | | | | | 1,363,763 | | |
Commitments and contingencies
|
| | | | | | | | | | | | |
Parent’s net investment
|
| | | | 1,012,586 | | | | | | 1,093,920 | | |
Accumulated other comprehensive (loss) income
|
| | | | (25,571) | | | | | | 381 | | |
Total equity
|
| | | | 987,015 | | | | | | 1,094,301 | | |
Total liabilities and equity
|
| | | $ | 2,398,640 | | | | | $ | 2,458,064 | | |
| | |
Three Months Ended
June 30, |
| |
Six Months Ended
June 30, |
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2021
|
| |
2020
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | |
Redemption, net
|
| | | $ | 78,831 | | | | | $ | 84,675 | | | | | $ | 183,695 | | | | | $ | 205,547 | | |
Services
|
| | | | 67,215 | | | | | | 60,008 | | | | | | 133,438 | | | | | | 130,227 | | |
Other
|
| | | | 4,859 | | | | | | 6,388 | | | | | | 10,326 | | | | | | 13,402 | | |
Total revenue
|
| | | | 150,905 | | | | | | 151,071 | | | | | | 327,459 | | | | | | 349,176 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of operations (exclusive of depreciation and amortization disclosed separately below)
|
| | | | 117,092 | | | | | | 108,850 | | | | | | 252,937 | | | | | | 253,161 | | |
General and administrative
|
| | | | 3,905 | | | | | | 3,591 | | | | | | 7,590 | | | | | | 7,163 | | |
Depreciation and other amortization
|
| | | | 8,977 | | | | | | 6,547 | | | | | | 17,571 | | | | | | 12,954 | | |
Amortization of purchased intangibles
|
| | | | 444 | | | | | | 11,807 | | | | | | 883 | | | | | | 23,630 | | |
Total operating expenses
|
| | | | 130,418 | | | | | | 130,795 | | | | | | 278,981 | | | | | | 296,908 | | |
Operating income
|
| | | | 20,487 | | | | | | 20,276 | | | | | | 48,478 | | | | | | 52,268 | | |
Gain on sale of a business
|
| | | | — | | | | | | — | | | | | | — | | | | | | (10,876) | | |
Interest income, net
|
| | | | (113) | | | | | | (82) | | | | | | (182) | | | | | | (349) | | |
Income before income taxes and loss (income) from investment in unconsolidated subsidiaries
|
| | | | 20,600 | | | | | | 20,358 | | | | | | 48,660 | | | | | | 63,493 | | |
Provision for income taxes
|
| | | | 6,090 | | | | | | 441 | | | | | | 15,074 | | | | | | 13,849 | | |
Loss (income) from investment in unconsolidated subsidiaries – related party, net of tax
|
| | | | 5 | | | | | | (10) | | | | | | 42 | | | | | | 58 | | |
Net income
|
| | | $ | 14,505 | | | | | $ | 19,927 | | | | | $ | 33,544 | | | | | $ | 49,586 | | |
| | |
Three Months Ended
June 30, |
| |
Six Months Ended
June 30, |
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2021
|
| |
2020
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Net income
|
| | | $ | 14,505 | | | | | $ | 19,927 | | | | | $ | 33,544 | | | | | $ | 49,586 | | |
Other comprehensive income (loss): | | | | | | | | | | | | | | | | | | | | | | | | | |
Unrealized (loss) gain on securities available-for-sale
|
| | | | (2,076) | | | | | | 13,434 | | | | | | (8,476) | | | | | | 11,527 | | |
Tax benefit
|
| | | | 693 | | | | | | — | | | | | | 693 | | | | | | — | | |
Unrealized (loss) gain on securities available-for-sale, net of tax
|
| | | | (1,383) | | | | | | 13,434 | | | | | | (7,783) | | | | | | 11,527 | | |
Unrealized (loss) gain on cash flow hedges
|
| | | | (193) | | | | | | (1,170) | | | | | | 928 | | | | | | (691) | | |
Tax benefit (expense)
|
| | | | 48 | | | | | | 290 | | | | | | (156) | | | | | | 171 | | |
Unrealized (loss) gain on cash flow hedges, net of tax
|
| | | | (145) | | | | | | (880) | | | | | | 772 | | | | | | (520) | | |
Foreign currency translation adjustments
|
| | | | 10,758 | | | | | | 18,580 | | | | | | (18,941) | | | | | | (2,762) | | |
Other comprehensive income (loss), net of tax
|
| | | | 9,230 | | | | | | 31,134 | | | | | | (25,952) | | | | | | 8,245 | | |
Total comprehensive income, net of tax
|
| | | $ | 23,735 | | | | | $ | 51,061 | | | | | $ | 7,592 | | | | | $ | 57,831 | | |
Three Months Ended June 30, 2021
|
| |
(in thousands)
|
| |||
Balance at April 1, 2021
|
| | | $ | 958,426 | | |
Net income
|
| | | | 14,505 | | |
Other comprehensive income
|
| | | | 9,230 | | |
Change in Parent’s net investment
|
| | | | 4,854 | | |
Balance at June 30, 2021
|
| | | $ | 987,015 | | |
Three Months Ended June 30, 2020
|
| |
(in thousands)
|
| |||
Balance at April 1, 2020
|
| | | $ | 923,115 | | |
Net income
|
| | | | 19,927 | | |
Other comprehensive income
|
| | | | 31,134 | | |
Change in Parent’s net investment
|
| | | | 3,832 | | |
Balance at June 30, 2020
|
| | | $ | 978,008 | | |
Six Months Ended June 30, 2021
|
| |
(in thousands)
|
| |||
Balance at December 31, 2020
|
| | | $ | 1,094,301 | | |
Net income
|
| | | | 33,544 | | |
Other comprehensive loss
|
| | | | (25,952) | | |
Change in Parent’s net investment
|
| | | | (114,878) | | |
Balance at June 30, 2021
|
| | | $ | 987,015 | | |
Six Months Ended June 30, 2020
|
| |
(in thousands)
|
| |||
Balance at December 31, 2019
|
| | | $ | 947,559 | | |
Net income
|
| | | | 49,586 | | |
Other comprehensive income
|
| | | | 8,245 | | |
Change in Parent’s net investment
|
| | | | (27,382) | | |
Balance at June 30, 2020
|
| | | $ | 978,008 | | |
| | |
Six Months Ended
June 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
| | |
(in thousands)
|
| |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | |
Net income
|
| | | $ | 33,544 | | | | | $ | 49,586 | | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 18,454 | | | | | | 36,584 | | |
Deferred income tax expense
|
| | | | 2,579 | | | | | | 189 | | |
Non-cash stock compensation
|
| | | | 4,179 | | | | | | 3,358 | | |
Gain on sale of a business
|
| | | | — | | | | | | (10,876) | | |
Change in other operating assets and liabilities, net of sale of business: | | | | | | | | | | | | | |
Change in deferred revenue
|
| | | | 11,240 | | | | | | 11,805 | | |
Change in accounts receivable
|
| | | | 5,672 | | | | | | 111,463 | | |
Change in accounts payable and accrued expenses
|
| | | | (20,766) | | | | | | (49,557) | | |
Change in other assets
|
| | | | 1,535 | | | | | | 23,303 | | |
Change in other liabilities
|
| | | | 34,135 | | | | | | (46,835) | | |
Other
|
| | | | 7,274 | | | | | | (1,356) | | |
Net cash provided by operating activities
|
| | | | 97,846 | | | | | | 127,664 | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | |
Change in redemption settlement assets, restricted
|
| | | | (41,032) | | | | | | (18,656) | | |
Capital expenditures
|
| | | | (8,859) | | | | | | (13,638) | | |
Distributions from investments in unconsolidated subsidiaries – related party
|
| | | | 795 | | | | | | — | | |
Net cash used in investing activities
|
| | | | (49,096) | | | | | | (32,294) | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | |
Dividends paid to Parent
|
| | | | (120,000) | | | | | | — | | |
Net transfers from (to) Parent
|
| | | | 192 | | | | | | (12,233) | | |
Net cash used in financing activities
|
| | | | (119,808) | | | | | | (12,233) | | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
| | | | 781 | | | | | | (2,776) | | |
Change in cash, cash equivalents and restricted cash
|
| | | | (70,277) | | | | | | 80,361 | | |
Cash, cash equivalents and restricted cash at beginning of year
|
| | | | 337,525 | | | | | | 175,132 | | |
Cash, cash equivalents and restricted cash at end of year
|
| | | $ | 267,248 | | | | | $ | 255,493 | | |
SUPPLEMENTAL CASH FLOW INFORMATION: | | | | | | | | | | | | | |
Interest paid
|
| | | $ | 151 | | | | | $ | 197 | | |
Income taxes paid, net
|
| | | $ | 26,708 | | | | | $ | 39,015 | | |
Three Months Ended June 30, 2021
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Major Source: | | | | | | | | | | | | | | | | | | | |
Coalition loyalty program
|
| | | $ | 68,544 | | | | | $ | — | | | | | $ | 68,544 | | |
Campaign-based loyalty solutions
|
| | | | — | | | | | | 76,630 | | | | | | 76,630 | | |
Other
|
| | | | 2 | | | | | | 2,338 | | | | | | 2,340 | | |
Revenue from contracts with customers
|
| | | $ | 68,546 | | | | | $ | 78,968 | | | | | $ | 147,514 | | |
Investment income
|
| | | | 3,391 | | | | | | — | | | | | | 3,391 | | |
Total
|
| | | $ | 71,937 | | | | | $ | 78,968 | | | | | $ | 150,905 | | |
Three Months Ended June 30, 2020
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Major Source: | | | | | | | | | | | | | | | | | | | |
Coalition loyalty program
|
| | | $ | 61,586 | | | | | $ | — | | | | | $ | 61,586 | | |
Campaign-based loyalty solutions
|
| | | | — | | | | | | 84,815 | | | | | | 84,815 | | |
Other
|
| | | | 17 | | | | | | 1,566 | | | | | | 1,583 | | |
Revenue from contracts with customers
|
| | | $ | 61,603 | | | | | $ | 86,381 | | | | | $ | 147,984 | | |
Investment income
|
| | | | 3,087 | | | | | | — | | | | | | 3,087 | | |
Total
|
| | | $ | 64,690 | | | | | $ | 86,381 | | | | | $ | 151,071 | | |
Six Months Ended June 30, 2021
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Major Source: | | | | | | | | | | | | | | | | | | | |
Coalition loyalty program
|
| | | $ | 135,290 | | | | | $ | — | | | | | $ | 135,290 | | |
Campaign-based loyalty solutions
|
| | | | — | | | | | | 182,927 | | | | | | 182,927 | | |
Other
|
| | | | 1 | | | | | | 2,338 | | | | | | 2,339 | | |
Revenue from contracts with customers
|
| | | $ | 135,291 | | | | | $ | 185,265 | | | | | $ | 320,556 | | |
Investment income
|
| | | | 6,903 | | | | | | — | | | | | | 6,903 | | |
Total
|
| | | $ | 142,194 | | | | | $ | 185,265 | | | | | $ | 327,459 | | |
Six Months Ended June 30, 2020
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Major Source: | | | | | | | | | | | | | | | | | | | |
Coalition loyalty program
|
| | | $ | 132,932 | | | | | $ | — | | | | | $ | 132,932 | | |
Campaign-based loyalty solutions
|
| | | | — | | | | | | 205,069 | | | | | | 205,069 | | |
Other
|
| | | | 1,921(1) | | | | | | 2,954 | | | | | | 4,875 | | |
Revenue from contracts with customers
|
| | | $ | 134,853 | | | | | $ | 208,023 | | | | | $ | 342,876 | | |
Investment income
|
| | | | 6,300 | | | | | | — | | | | | | 6,300 | | |
Total
|
| | | $ | 141,153 | | | | | $ | 208,023 | | | | | $ | 349,176 | | |
Three Months Ended June 30, 2021
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Geographic Region: | | | | | | | | | | | | | | | | | | | |
United States
|
| | | $ | — | | | | | $ | 1,497 | | | | | $ | 1,497 | | |
Canada
|
| | | | 71,937 | | | | | | 1,589 | | | | | | 73,526 | | |
Europe, Middle East and Africa
|
| | | | — | | | | | | 52,431 | | | | | | 52,431 | | |
Asia Pacific
|
| | | | — | | | | | | 19,809 | | | | | | 19,809 | | |
Other
|
| | | | — | | | | | | 3,642 | | | | | | 3,642 | | |
Total
|
| | | $ | 71,937 | | | | | $ | 78,968 | | | | | $ | 150,905 | | |
Three Months Ended June 30, 2020
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Geographic Region: | | | | | | | | | | | | | | | | | | | |
United States
|
| | | $ | — | | | | | $ | 4,132 | | | | | $ | 4,132 | | |
Canada
|
| | | | 64,690 | | | | | | 34 | | | | | | 64,724 | | |
Europe, Middle East and Africa
|
| | | | — | | | | | | 50,708 | | | | | | 50,708 | | |
Asia Pacific
|
| | | | — | | | | | | 13,362 | | | | | | 13,362 | | |
Other
|
| | | | — | | | | | | 18,145 | | | | | | 18,145 | | |
Total
|
| | | $ | 64,690 | | | | | $ | 86,381 | | | | | $ | 151,071 | | |
Six Months Ended June 30, 2021
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Geographic Region: | | | | | | | | | | | | | | | | | | | |
United States
|
| | | $ | — | | | | | $ | 2,542 | | | | | $ | 2,542 | | |
Canada
|
| | | | 142,194 | | | | | | 11,270 | | | | | | 153,464 | | |
Europe, Middle East and Africa
|
| | | | — | | | | | | 131,854 | | | | | | 131,854 | | |
Asia Pacific
|
| | | | — | | | | | | 34,723 | | | | | | 34,723 | | |
Other
|
| | | | — | | | | | | 4,876 | | | | | | 4,876 | | |
Total
|
| | | $ | 142,194 | | | | | $ | 185,265 | | | | | $ | 327,459 | | |
Six Months Ended June 30, 2020
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Geographic Region: | | | | | | | | | | | | | | | | | | | |
United States
|
| | | $ | 1,028 | | | | | $ | 5,246 | | | | | $ | 6,274 | | |
Canada
|
| | | | 139,857 | | | | | | 3,933 | | | | | | 143,790 | | |
Europe, Middle East and Africa
|
| | | | 268 | | | | | | 119,008 | | | | | | 119,276 | | |
Asia Pacific
|
| | | | — | | | | | | 50,411 | | | | | | 50,411 | | |
Other
|
| | | | — | | | | | | 29,425 | | | | | | 29,425 | | |
Total
|
| | | $ | 141,153 | | | | | $ | 208,023 | | | | | $ | 349,176 | | |
| | |
Deferred Revenue
|
| |||||||||||||||
| | |
Service
|
| |
Redemption
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Balance at January 1, 2021
|
| | | $ | 247,186 | | | | | $ | 756,833 | | | | | $ | 1,004,019 | | |
Cash proceeds
|
| | | | 84,832 | | | | | | 137,100 | | | | | | 221,932 | | |
Revenue recognized(1)
|
| | | | (100,343) | | | | | | (110,924) | | | | | | (211,267) | | |
Other
|
| | | | — | | | | | | 704 | | | | | | 704 | | |
Effects of foreign currency translation
|
| | | | 6,623 | | | | | | 20,773 | | | | | | 27,396 | | |
Balance at June 30, 2021
|
| | | $ | 238,298 | | | | | $ | 804,486 | | | | | $ | 1,042,784 | | |
Amounts recognized in the combined balance sheets: | | | | | | | | | | | | | | | | | | | |
Deferred revenue (current)
|
| | | $ | 137,668 | | | | | $ | 804,486 | | | | | $ | 942,154 | | |
Deferred revenue (non-current)
|
| | | $ | 100,630 | | | | | $ | — | | | | | $ | 100,630 | | |
| | |
June 30, 2021
|
| |
December 31, 2020
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
Amortized
Cost |
| |
Unrealized
Gains |
| |
Unrealized
Losses |
| |
Fair Value
|
| |
Amortized
Cost |
| |
Unrealized
Gains |
| |
Unrealized
Losses |
| |
Fair Value
|
| ||||||||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||||||||||||||
Restricted cash
|
| | | $ | 56,132 | | | | | $ | — | | | | | $ | — | | | | | $ | 56,132 | | | | | $ | 55,427 | | | | | $ | — | | | | | $ | — | | | | | $ | 55,427 | | |
Mutual funds
|
| | | | 26,866 | | | | | | — | | | | | | — | | | | | | 26,866 | | | | | | 26,850 | | | | | | — | | | | | | — | | | | | | 26,850 | | |
Corporate bonds
|
| | | | 651,604 | | | | | | 12,454 | | | | | | (1,970) | | | | | | 662,088 | | | | | | 592,247 | | | | | | 19,110 | | | | | | (173) | | | | | | 611,184 | | |
Total
|
| | | $ | 734,602 | | | | | $ | 12,454 | | | | | $ | (1,970) | | | | | $ | 745,086 | | | | | $ | 674,524 | | | | | $ | 19,110 | | | | | $ | (173) | | | | | $ | 693,461 | | |
| | |
June 30, 2021
|
| |||||||||||||||||||||||||||||||||
| | |
Less than 12 months
|
| |
12 Months or Greater
|
| |
Total
|
| |||||||||||||||||||||||||||
| | |
Fair Value
|
| |
Unrealized
Losses |
| |
Fair Value
|
| |
Unrealized
Losses |
| |
Fair Value
|
| |
Unrealized
Losses |
| ||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
Corporate bonds
|
| | | $ | 184,519 | | | | | $ | (1,970) | | | | | $ | — | | | | | $ | — | | | | | $ | 184,519 | | | | | $ | (1,970) | | |
Total
|
| | | $ | 184,519 | | | | | $ | (1,970) | | | | | $ | — | | | | | $ | — | | | | | $ | 184,519 | | | | | $ | (1,970) | | |
| | |
December 31, 2020
|
| |||||||||||||||||||||||||||||||||
| | |
Less than 12 months
|
| |
12 Months or Greater
|
| |
Total
|
| |||||||||||||||||||||||||||
| | |
Fair Value
|
| |
Unrealized
Losses |
| |
Fair Value
|
| |
Unrealized
Losses |
| |
Fair Value
|
| |
Unrealized
Losses |
| ||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
Corporate bonds
|
| | | $ | 46,190 | | | | | $ | (86) | | | | | $ | 10,316 | | | | | $ | (87) | | | | | $ | 56,506 | | | | | $ | (173) | | |
Total
|
| | | $ | 46,190 | | | | | $ | (86) | | | | | $ | 10,316 | | | | | $ | (87) | | | | | $ | 56,506 | | | | | $ | (173) | | |
| | |
Amortized
Cost |
| |
Estimated
Fair Value |
| ||||||
| | |
(in thousands)
|
| |||||||||
Due in one year or less(1)
|
| | | $ | 169,752 | | | | | $ | 170,841 | | |
Due after one year through five years
|
| | | | 489,738 | | | | | | 499,350 | | |
Due after five year through ten years
|
| | | | 18,980 | | | | | | 18,763 | | |
Total
|
| | | $ | 678,470 | | | | | $ | 688,954 | | |
| | |
Three Months Ended
June 30, |
| |
Six Months Ended
June 30, |
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2021
|
| |
2020
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Operating lease cost
|
| | | $ | 4,015 | | | | | $ | 3,749 | | | | | $ | 8,006 | | | | | $ | 7,726 | | |
Short-term lease cost
|
| | | | 87 | | | | | | 97 | | | | | | 171 | | | | | | 247 | | |
Variable lease cost
|
| | | | 1,081 | | | | | | 1,023 | | | | | | 2,212 | | | | | | 2,194 | | |
Total
|
| | | $ | 5,183 | | | | | $ | 4,869 | | | | | $ | 10,389 | | | | | $ | 10,167 | | |
| | |
June 30,
2021 |
| |
June 30,
2020 |
| ||||||
Weighted-average remaining lease term (in years): | | | | | | | | | | | | | |
Operating leases
|
| | | | 11.0 | | | | | | 11.8 | | |
Weighted-average discount rate: | | | | | | | | | | | | | |
Operating leases
|
| | | | 4.6% | | | | | | 4.5% | | |
| | |
Three Months Ended
June 30, |
| |
Six Months Ended
June 30, |
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2021
|
| |
2020
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating cash flows from operating leases
|
| | | $ | 5,645 | | | | | $ | 5,873 | | | | | $ | 9,809 | | | | | $ | 10,083 | | |
Right of use assets obtained in exchange for lease obligations: | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating leases
|
| | | $ | 177 | | | | | $ | 165 | | | | | $ | 184 | | | | | $ | 2,870 | | |
Year
|
| |
Operating
Leases |
| |||
| | |
(in thousands)
|
| |||
2021 (excluding the six months ended June 30, 2021) | | | | $ | 6,976 | | |
2022
|
| | | | 16,115 | | |
2023
|
| | | | 14,693 | | |
2024
|
| | | | 13,767 | | |
2025
|
| | | | 13,216 | | |
Thereafter
|
| | | | 92,617 | | |
Total undiscounted lease liabilities
|
| | | | 157,384 | | |
Less: Amount representing interest
|
| | | | (35,769) | | |
Total present value of minimum lease payments
|
| | | $ | 121,615 | | |
Amounts recognized in the June 30, 2021 combined balance sheet: | | | | | | | |
Current operating lease liabilities
|
| | | $ | 9,888 | | |
Long-term operating lease liabilities
|
| | | | 111,727 | | |
Total
|
| | | $ | 121,615 | | |
| | |
June 30, 2021
|
| |
Amortization Life and Method
|
| |||||||||||||||
| | |
Gross
Assets |
| |
Accumulated
Amortization |
| |
Net
|
| ||||||||||||
| | |
(in thousands)
|
| | | | |||||||||||||||
Tradenames
|
| | | $ | 33,673 | | | | | $ | (29,837) | | | | | $ | 3,836 | | | |
8-15 years – straight line
|
|
Collector database
|
| | | | 56,470 | | | | | | (56,204) | | | | | | 266 | | | | 5 years – straight line | |
Total intangible assets
|
| | | $ | 90,143 | | | | | $ | (86,041) | | | | | $ | 4,102 | | | | | |
| | |
December 31, 2020
|
| |
Amortization Life and Method
|
| |||||||||||||||
| | |
Gross
Assets |
| |
Accumulated
Amortization |
| |
Net
|
| ||||||||||||
| | |
(in thousands)
|
| | | | |||||||||||||||
Customer contracts
|
| | | $ | 354,242 | | | | | $ | (354,242) | | | | | $ | — | | | | 7 years – straight line | |
Tradenames
|
| | | | 34,691 | | | | | | (30,112) | | | | | | 4,579 | | | |
8-15 years – straight line
|
|
Collector database
|
| | | | 54,973 | | | | | | (54,455) | | | | | | 518 | | | | 5 years – straight line | |
Total intangible assets
|
| | | $ | 443,906 | | | | | $ | (438,809) | | | | | $ | 5,097 | | | | | |
| | |
For the Years Ending
December 31, |
| |||
| | |
(in thousands)
|
| |||
2021 (excluding the six months ended June 30, 2021)
|
| | | $ | 874 | | |
2022
|
| | | | 1,217 | | |
2023
|
| | | | 1,217 | | |
2024
|
| | | | 624 | | |
2025
|
| | | | 32 | | |
Thereafter
|
| | | | 138 | | |
| | |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Balance at January 1, 2021
|
| | | $ | 193,276 | | | | | $ | 542,622 | | | | | $ | 735,898 | | |
Effects of foreign currency translation
|
| | | | 5,262 | | | | | | (15,528) | | | | | | (10,266) | | |
Balance at June 30, 2021
|
| | | $ | 198,538 | | | | | $ | 527,094 | | | | | $ | 725,632 | | |
| | |
Three Months Ended
June 30, |
| |
Six Months Ended
June 30, |
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2021
|
| |
2020
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Cost of operations
|
| | | $ | 1,835 | | | | | $ | 1,514 | | | | | $ | 3,284 | | | | | $ | 2,511 | | |
General and administrative
|
| | | | 490 | | | | | | 440 | | | | | | 895 | | | | | | 847 | | |
Total
|
| | | $ | 2,325 | | | | | $ | 1,954 | | | | | $ | 4,179 | | | | | $ | 3,358 | | |
Three Months Ended June 30, 2021
|
| |
Net
Unrealized Gains (Losses) on Securities |
| |
Net Unrealized
Gains (Losses) on Cash Flow Hedges |
| |
Foreign
Currency Translation Adjustments(1) |
| |
Accumulated
Other Comprehensive Loss |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Balance at March 31, 2021
|
| | | $ | 11,867 | | | | | $ | 217 | | | | | $ | (46,885) | | | | | $ | (34,801) | | |
Changes in other comprehensive income (loss)
|
| | | | (1,383) | | | | | | (145) | | | | | | 10,758 | | | | | | 9,230 | | |
Balance at June 30, 2021
|
| | | $ | 10,484 | | | | | $ | 72 | | | | | $ | (36,127) | | | | | $ | (25,571) | | |
Three Months Ended June 30, 2020
|
| |
Net
Unrealized Gains (Losses) on Securities |
| |
Net Unrealized
Gains (Losses) on Cash Flow Hedges |
| |
Foreign
Currency Translation Adjustments(1) |
| |
Accumulated
Other Comprehensive Loss |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Balance at March 31, 2020
|
| | | $ | (1,521) | | | | | $ | 227 | | | | | $ | (113,661) | | | | | $ | (114,955) | | |
Changes in other comprehensive income (loss)
|
| | | | 13,434 | | | | | | (880) | | | | | | 18,580 | | | | | | 31,134 | | |
Balance at June 30, 2020
|
| | | $ | 11,913 | | | | | $ | (653) | | | | | $ | (95,081) | | | | | $ | (83,821) | | |
Six Months Ended June 30, 2021
|
| |
Net
Unrealized Gains (Losses) on Securities |
| |
Net Unrealized
Gains (Losses) on Cash Flow Hedges |
| |
Foreign
Currency Translation Adjustments(1) |
| |
Accumulated
Other Comprehensive Loss |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Balance at December 31, 2020
|
| | | $ | 18,267 | | | | | $ | (700) | | | | | $ | (17,186) | | | | | $ | 381 | | |
Changes in other comprehensive income (loss)
|
| | | | (7,783) | | | | | | 772 | | | | | | (18,941) | | | | | | (25,952) | | |
Balance at June 30, 2021
|
| | | $ | 10,484 | | | | | $ | 72 | | | | | $ | (36,127) | | | | | $ | (25,571) | | |
Six Months Ended June 30, 2020
|
| |
Net
Unrealized Gains (Losses) on Securities |
| |
Net Unrealized
Gains (Losses) on Cash Flow Hedges |
| |
Foreign
Currency Translation Adjustments(1) |
| |
Accumulated
Other Comprehensive Loss |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Balance at December 31, 2019
|
| | | $ | 386 | | | | | $ | (133) | | | | | $ | (92,319) | | | | | $ | (92,066) | | |
Changes in other comprehensive income (loss)
|
| | | | 11,527 | | | | | | (520) | | | | | | (6,649) | | | | | | 4,358 | | |
Recognition resulting from the sale of Precima’s foreign subsidiaries
|
| | | | — | | | | | | — | | | | | | 3,887(2) | | | | | | 3,887 | | |
Balance at June 30, 2020
|
| | | $ | 11,913 | | | | | $ | (653) | | | | | $ | (95,081) | | | | | $ | (83,821) | | |
| | |
June 30, 2021
|
| |
December 31, 2020
|
| ||||||||||||||||||
| | |
Carrying
Amount |
| |
Fair
Value |
| |
Carrying
Amount |
| |
Fair
Value |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Financial assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Redemption settlement assets, restricted
|
| | | $ | 745,086 | | | | | $ | 745,086 | | | | | $ | 693,461 | | | | | $ | 693,461 | | |
Other investments
|
| | | | 260 | | | | | | 260 | | | | | | 253 | | | | | | 253 | | |
Derivative instruments
|
| | | | 889 | | | | | | 889 | | | | | | 353 | | | | | | 353 | | |
Financial liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivative instruments
|
| | | | 1,058 | | | | | | 1,058 | | | | | | 1,505 | | | | | | 1,505 | | |
| | |
Balance at
June 30, 2021 |
| |
Fair Value Measurements at
June 30, 2021 Using |
| ||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Mutual funds(1)
|
| | | $ | 26,866 | | | | | $ | 26,866 | | | | | $ | — | | | | | $ | — | | |
Corporate bonds(1)
|
| | | | 662,088 | | | | | | — | | | | | | 662,088 | | | | | | — | | |
Marketable securities(2)
|
| | | | 260 | | | | | | 260 | | | | | | — | | | | | | — | | |
Derivative instruments(3)
|
| | | | 889 | | | | | | — | | | | | | 889 | | | | | | — | | |
Total assets measured at fair value
|
| | | $ | 690,103 | | | | | $ | 27,126 | | | | | $ | 662,977 | | | | | $ | — | | |
Derivative instruments(3)
|
| | | $ | 1,058 | | | | | $ | — | | | | | $ | 1,058 | | | | | $ | — | | |
Total liabilities measured at fair value
|
| | | $ | 1,058 | | | | | $ | — | | | | | $ | 1,058 | | | | | $ | — | | |
| | |
Balance at
December 31, 2020 |
| |
Fair Value Measurements at
December 31, 2020 Using |
| ||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Mutual funds(1)
|
| | | $ | 26,850 | | | | | $ | 26,850 | | | | | $ | — | | | | | $ | — | | |
Corporate bonds(1)
|
| | | | 611,184 | | | | | | — | | | | | | 611,184 | | | | | | — | | |
Marketable securities(2)
|
| | | | 253 | | | | | | 253 | | | | | | — | | | | | | — | | |
Derivative instruments(3)
|
| | | | 353 | | | | | | — | | | | | | 353 | | | | | | — | | |
Total assets measured at fair value
|
| | | $ | 638,640 | | | | | $ | 27,103 | | | | | $ | 611,537 | | | | | $ | — | | |
Derivative instruments(3)
|
| | | $ | 1,505 | | | | | $ | — | | | | | $ | 1,505 | | | | | $ | — | | |
Total liabilities measured at fair value
|
| | | $ | 1,505 | | | | | $ | — | | | | | $ | 1,505 | | | | | $ | — | | |
Three Months Ended June 30, 2021
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Corporate/
Other |
| |
Total
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Revenues
|
| | | $ | 71,937 | | | | | $ | 78,968 | | | | | $ | — | | | | | $ | 150,905 | | |
Income (loss) before income taxes
|
| | | $ | 30,164 | | | | | $ | (5,659) | | | | | $ | (3,905) | | | | | $ | 20,600 | | |
Interest (income) expense, net
|
| | | | (194) | | | | | | 81 | | | | | | — | | | | | | (113) | | |
Depreciation and amortization
|
| | | | 6,126 | | | | | | 3,295 | | | | | | — | | | | | | 9,421 | | |
Stock compensation expense
|
| | | | 662 | | | | | | 1,173 | | | | | | 490 | | | | | | 2,325 | | |
Adjusted EBITDA(1)
|
| | | $ | 36,758 | | | | | $ | (1,110) | | | | | $ | (3,415) | | | | | $ | 32,233 | | |
Three Months Ended June 30, 2020
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Corporate/
Other |
| |
Total
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Revenues
|
| | | $ | 64,690 | | | | | $ | 86,381 | | | | | $ | — | | | | | $ | 151,071 | | |
Income (loss) before income taxes
|
| | | $ | 32,262 | | | | | $ | (8,313) | | | | | $ | (3,591) | | | | | $ | 20,358 | | |
Interest (income) expense, net
|
| | | | (186) | | | | | | 104 | | | | | | — | | | | | | (82) | | |
Depreciation and amortization
|
| | | | 4,167 | | | | | | 14,187 | | | | | | — | | | | | | 18,354 | | |
Stock compensation expense
|
| | | | 613 | | | | | | 901 | | | | | | 440 | | | | | | 1,954 | | |
Strategic transaction costs
|
| | | | 79 | | | | | | — | | | | | | — | | | | | | 79 | | |
Restructuring and other charges
|
| | | | 72 | | | | | | — | | | | | | — | | | | | | 72 | | |
Adjusted EBITDA(1)
|
| | | $ | 37,007 | | | | | $ | 6,879 | | | | | $ | (3,151) | | | | | $ | 40,735 | | |
Six Months Ended June 30, 2021
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Corporate/
Other |
| |
Total
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Revenues
|
| | | $ | 142,194 | | | | | $ | 185,265 | | | | | $ | — | | | | | $ | 327,459 | | |
Income (loss) before income taxes
|
| | | $ | 60,326 | | | | | $ | (4,076) | | | | | $ | (7,590) | | | | | $ | 48,660 | | |
Interest (income) expense, net
|
| | | | (376) | | | | | | 194 | | | | | | — | | | | | | (182) | | |
Depreciation and amortization
|
| | | | 11,909 | | | | | | 6,545 | | | | | | — | | | | | | 18,454 | | |
Stock compensation expense
|
| | | | 1,350 | | | | | | 1,934 | | | | | | 895 | | | | | | 4,179 | | |
Adjusted EBITDA(1)
|
| | | $ | 73,209 | | | | | $ | 4,597 | | | | | $ | (6,695) | | | | | $ | 71,111 | | |
Six Months Ended June 30, 2020
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Corporate/
Other |
| |
Total
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Revenues
|
| | | $ | 141,153 | | | | | $ | 208,023 | | | | | $ | — | | | | | $ | 349,176 | | |
Income (loss) before income taxes
|
| | | $ | 79,134 | | | | | $ | (8,478) | | | | | $ | (7,163) | | | | | $ | 63,493 | | |
Interest (income) expense, net
|
| | | | (603) | | | | | | 254 | | | | | | — | | | | | | (349) | | |
Depreciation and amortization
|
| | | | 8,405 | | | | | | 28,179 | | | | | | — | | | | | | 36,584 | | |
Stock compensation expense
|
| | | | 952 | | | | | | 1,559 | | | | | | 847 | | | | | | 3,358 | | |
Gain on sale of business, net of strategic transaction costs
|
| | | | (7,969) | | | | | | — | | | | | | — | | | | | | (7,969) | | |
Strategic transaction costs
|
| | | | 162 | | | | | | — | | | | | | — | | | | | | 162 | | |
Restructuring and other charges
|
| | | | 179 | | | | | | (50) | | | | | | — | | | | | | 129 | | |
Adjusted EBITDA(1)
|
| | | $ | 80,260 | | | | | $ | 21,464 | | | | | $ | (6,316) | | | | | $ | 95,408 | | |
| | |
June 30,
2021 |
| |
June 30,
2020 |
| ||||||
| | |
(in thousands)
|
| |||||||||
Cash and cash equivalents
|
| | | $ | 205,715 | | | | | $ | 201,749 | | |
Restricted cash included within other current assets(1)
|
| | | | 5,401 | | | | | | 3,873 | | |
Restricted cash included within redemption settlement assets, restricted(2)
|
| | | | 56,132 | | | | | | 49,871 | | |
Total cash, cash equivalents and restricted cash
|
| | | $ | 267,248 | | | | | $ | 255,493 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
(in thousands)
|
| |||||||||
ASSETS | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 278,841 | | | | | $ | 124,981 | | |
Accounts receivable, net, less allowance for doubtful accounts ($4.0 million and $3.4 million at December 31, 2020 and 2019, respectively)
|
| | | | 270,559 | | | | | | 338,879 | | |
Inventories, net, less allowance for obsolescence ($10.9 million and
$17.2 million at December 31, 2020 and 2019, respectively) |
| | | | 164,306 | | | | | | 218,044 | | |
Redemption settlement assets, restricted
|
| | | | 693,461 | | | | | | 600,810 | | |
Other current assets
|
| | | | 23,000 | | | | | | 30,560 | | |
Total current assets
|
| | | | 1,430,167 | | | | | | 1,313,274 | | |
Property and equipment, net
|
| | | | 97,916 | | | | | | 111,239 | | |
Right of use assets – operating
|
| | | | 113,870 | | | | | | 115,851 | | |
Deferred tax asset, net
|
| | | | 70,137 | | | | | | 62,789 | | |
Intangible assets, net
|
| | | | 5,097 | | | | | | 52,819 | | |
Goodwill
|
| | | | 735,898 | | | | | | 690,814 | | |
Investment in unconsolidated subsidiaries – related party
|
| | | | 854 | | | | | | 451 | | |
Other non-current assets
|
| | | | 4,125 | | | | | | 6,183 | | |
Total assets
|
| | | $ | 2,458,064 | | | | | $ | 2,353,420 | | |
LIABILITIES AND EQUITY | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 74,818 | | | | | $ | 98,670 | | |
Accrued expenses
|
| | | | 67,056 | | | | | | 83,330 | | |
Deferred revenue
|
| | | | 898,475 | | | | | | 807,897 | | |
Current operating lease liabilities
|
| | | | 9,942 | | | | | | 8,905 | | |
Other current liabilities
|
| | | | 64,990 | | | | | | 128,592 | | |
Total current liabilities
|
| | | | 1,115,281 | | | | | | 1,127,394 | | |
Deferred revenue
|
| | | | 105,544 | | | | | | 114,129 | | |
Deferred tax liability, net
|
| | | | — | | | | | | 1,797 | | |
Long-term operating lease liabilities
|
| | | | 117,648 | | | | | | 121,031 | | |
Other liabilities
|
| | | | 25,290 | | | | | | 41,510 | | |
Total liabilities
|
| | | | 1,363,763 | | | | | | 1,405,861 | | |
Commitments and contingencies (Note 16)
|
| | | | | | | | | | | | |
Parent’s net investment
|
| | | | 1,093,920 | | | | | | 1,039,625 | | |
Accumulated other comprehensive income (loss)
|
| | | | 381 | | | | | | (92,066) | | |
Total equity
|
| | | | 1,094,301 | | | | | | 947,559 | | |
Total liabilities and equity
|
| | | $ | 2,458,064 | | | | | $ | 2,353,420 | | |
| | |
Years Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Revenues | | | | | | | | | | | | | | | | | | | |
Redemption, net
|
| | | $ | 473,067 | | | | | $ | 637,321 | | | | | $ | 676,279 | | |
Services
|
| | | | 264,050 | | | | | | 367,647 | | | | | | 368,170 | | |
Other
|
| | | | 27,689 | | | | | | 28,163 | | | | | | 23,929 | | |
Total revenue
|
| | | | 764,806 | | | | | | 1,033,131 | | | | | | 1,068,378 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | |
Cost of operations (exclusive of depreciation and amortization disclosed separately below)
|
| | | | 587,615 | | | | | | 847,552 | | | | | | 824,203 | | |
General and administrative
|
| | | | 14,315 | | | | | | 14,823 | | | | | | 14,049 | | |
Depreciation and other amortization
|
| | | | 28,988 | | | | | | 32,152 | | | | | | 32,585 | | |
Amortization of purchased intangibles
|
| | | | 48,953 | | | | | | 48,027 | | | | | | 52,238 | | |
Total operating expenses
|
| | | | 679,871 | | | | | | 942,554 | | | | | | 923,075 | | |
Operating income
|
| | | | 84,935 | | | | | | 90,577 | | | | | | 145,303 | | |
Gain on sale of a business
|
| | | | (10,876) | | | | | | — | | | | | | — | | |
Interest (income) expense, net
|
| | | | (834) | | | | | | 2,335 | | | | | | 5,528 | | |
Income before income taxes and loss from investment in unconsolidated subsidiaries
|
| | | | 96,645 | | | | | | 88,242 | | | | | | 139,775 | | |
Provision (benefit) for income taxes
|
| | | | 21,324 | | | | | | 11,331 | | | | | | (2,867) | | |
Loss from investment in unconsolidated subsidiaries – related party,
net of tax |
| | | | 246 | | | | | | 1,681 | | | | | | 5,033 | | |
Net income
|
| | | $ | 75,075 | | | | | $ | 75,230 | | | | | $ | 137,609 | | |
| | |
Years Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Net income
|
| | | $ | 75,075 | | | | | $ | 75,230 | | | | | $ | 137,609 | | |
Other comprehensive income (loss): | | | | | | | | | | | | | | | | | | | |
Unrealized gain on securities available-for-sale
|
| | | | 18,551 | | | | | | 6,405 | | | | | | 1,119 | | |
Tax expense
|
| | | | (670) | | | | | | — | | | | | | — | | |
Unrealized gain on securities available-for-sale, net of tax
|
| | | | 17,881 | | | | | | 6,405 | | | | | | 1,119 | | |
Unrealized (loss) gain on cash flow hedges
|
| | | | (639) | | | | | | 115 | | | | | | (93) | | |
Tax benefit (expense)
|
| | | | 72 | | | | | | (24) | | | | | | 16 | | |
Unrealized (loss) gain on cash flow hedges, net of tax
|
| | | | (567) | | | | | | 91 | | | | | | (77) | | |
Foreign currency translation adjustments
|
| | | | 75,133 | | | | | | (6,214) | | | | | | (21,031) | | |
Other comprehensive income (loss), net of tax
|
| | | | 92,447 | | | | | | 282 | | | | | | (19,989) | | |
Total comprehensive income, net of tax
|
| | | $ | 167,522 | | | | | $ | 75,512 | | | | | $ | 117,620 | | |
| | |
(in thousands)
|
| |||
Balance as of January 1, 2018
|
| | | $ | 482,500 | | |
Net income
|
| | | | 137,609 | | |
Other comprehensive loss
|
| | | | (19,989) | | |
Change in Parent’s net investment
|
| | | | 4,910 | | |
Balance as of December 31, 2018
|
| | |
|
605,030
|
| |
Net income
|
| | | | 75,230 | | |
Other comprehensive income
|
| | | | 282 | | |
Change in Parent’s net investment
|
| | | | 267,017 | | |
Balance as of December 31, 2019
|
| | | $ | 947,559 | | |
Net income
|
| | | | 75,075 | | |
Other comprehensive income
|
| | | | 92,447 | | |
Change in Parent’s net investment
|
| | | | (20,780) | | |
Balance as of December 31, 2020
|
| | |
$
|
1,094,301
|
| |
| | |
Years Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | | | | | | | |
Net income
|
| | | $ | 75,075 | | | | | $ | 75,230 | | | | | $ | 137,609 | | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 77,941 | | | | | | 80,179 | | | | | | 84,823 | | |
Deferred income tax benefit
|
| | | | (3,502) | | | | | | (19,853) | | | | | | (54,759) | | |
Non-cash stock compensation
|
| | | | 7,017 | | | | | | 9,076 | | | | | | 13,333 | | |
Loss from investments in unconsolidated subsidiaries – related party
|
| | | | 246 | | | | | | 1,681 | | | | | | 5,033 | | |
Gain on sale of a business
|
| | | | (10,876) | | | | | | — | | | | | | — | | |
Asset impairment charges
|
| | | | — | | | | | | 40,664 | | | | | | — | | |
Gain on sale of an investment
|
| | | | — | | | | | | — | | | | | | (9,517) | | |
Change in other operating assets and liabilities, net of sale of business: | | | | | | | | | | | | | | | | | | | |
Change in deferred revenue
|
| | | | 60,826 | | | | | | 2,943 | | | | | | (17,464) | | |
Change in accounts receivable
|
| | | | 64,194 | | | | | | (36,104) | | | | | | (91,856) | | |
Change in accounts payable and accrued expenses
|
| | | | (40,361) | | | | | | (50,459) | | | | | | 42,094 | | |
Change in other assets
|
| | | | 79,009 | | | | | | 12,845 | | | | | | (56,814) | | |
Change in other liabilities
|
| | | | (86,787) | | | | | | (15,332) | | | | | | 11,531 | | |
Other
|
| | | | (6,465) | | | | | | 4,829 | | | | | | 1,396 | | |
Net cash provided by operating activities
|
| | | | 216,317 | | | | | | 105,699 | | | | | | 65,409 | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | | | | | | | |
Change in redemption settlement assets, restricted
|
| | | | (40,677) | | | | | | (9,496) | | | | | | (42,203) | | |
Capital expenditures
|
| | | | (24,319) | | | | | | (41,457) | | | | | | (34,000) | | |
Acquisition of tradename
|
| | | | — | | | | | | — | | | | | | (1,520) | | |
Proceeds from the sale of investment in unconsolidated subsidiary – related party
|
| | | | — | | | | | | 4,000 | | | | | | — | | |
Investments in unconsolidated subsidiaries – related party
|
| | | | (736) | | | | | | (6,093) | | | | | | (800) | | |
Net cash used in investing activities
|
| | | | (65,732) | | | | | | (53,046) | | | | | | (78,523) | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | | | | | | | |
Borrowings under debt agreements
|
| | | | — | | | | | | 28,271 | | | | | | 48,338 | | |
Repayments of borrowings
|
| | | | — | | | | | | (203,634) | | | | | | (54,734) | | |
Repayments of borrowings from related parties
|
| | | | — | | | | | | (127,845) | | | | | | — | | |
Contribution from the Parent
|
| | | | — | | | | | | 288,693 | | | | | | — | | |
Dividends paid to Parent
|
| | | | — | | | | | | — | | | | | | (6,823) | | |
Net transfers to Parent
|
| | | | (2,638) | | | | | | (28,393) | | | | | | (10,718) | | |
Net cash used in financing activities
|
| | | | (2,638) | | | | | | (42,908) | | | | | | (23,937) | | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
| | | | 14,446 | | | | | | 3,600 | | | | | | (11,533) | | |
Change in cash, cash equivalents and restricted cash
|
| | | | 162,393 | | | | | | 13,345 | | | | | | (48,584) | | |
Cash, cash equivalents and restricted cash at beginning of year
|
| | | | 175,132 | | | | | | 161,787 | | | | | | 210,371 | | |
Cash, cash equivalents and restricted cash at end of year
|
| | | $ | 337,525 | | | | | $ | 175,132 | | | | | $ | 161,787 | | |
SUPPLEMENTAL CASH FLOW INFORMATION: | | | | | | | | | | | | | | | | | | | |
Interest paid
|
| | | $ | 146 | | | | | $ | 5,786 | | | | | $ | 4,748 | | |
Income taxes paid, net
|
| | | $ | 76,750 | | | | | $ | 40,301 | | | | | $ | 87,157 | | |
Year Ended December 31, 2020
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Major Source: | | | | | | | | | | | | | | | | | | | |
Coalition loyalty program
|
| | | $ | 262,470 | | | | | $ | — | | | | | $ | 262,470 | | |
Campaign-based loyalty solutions
|
| | | | — | | | | | | 487,685 | | | | | | 487,685 | | |
Other
|
| | | | 1,899(1) | | | | | | — | | | | | | 1,899 | | |
Revenue from contracts with customers
|
| | | $ | 264,369 | | | | | $ | 487,685 | | | | | $ | 752,054 | | |
Investment income
|
| | | | 12,752 | | | | | | — | | | | | | 12,752 | | |
Total
|
| | | $ | 277,121 | | | | | $ | 487,685 | | | | | $ | 764,806 | | |
Year Ended December 31, 2019
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Major Source: | | | | | | | | | | | | | | | | | | | |
Coalition loyalty program
|
| | | $ | 290,054 | | | | | $ | — | | | | | $ | 290,054 | | |
Campaign-based loyalty solutions
|
| | | | — | | | | | | 635,516 | | | | | | 635,516 | | |
Other
|
| | | | 81,337(1) | | | | | | 13,594 | | | | | | 94,931 | | |
Revenue from contracts with customers
|
| | | $ | 371,391 | | | | | $ | 649,110 | | | | | $ | 1,020,501 | | |
Investment income
|
| | | | 12,630 | | | | | | — | | | | | | 12,630 | | |
Total
|
| | | $ | 384,021 | | | | | $ | 649,110 | | | | | $ | 1,033,131 | | |
Year Ended December 31, 2018
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Major Source: | | | | | | | | | | | | | | | | | | | |
Coalition loyalty program
|
| | | $ | 352,336 | | | | | $ | — | | | | | $ | 352,336 | | |
Campaign-based loyalty solutions
|
| | | | — | | | | | | 613,748 | | | | | | 613,748 | | |
Other
|
| | | | 71,008(1) | | | | | | 19,696 | | | | | | 90,704 | | |
Revenue from contracts with customers
|
| | | $ | 423,344 | | | | | $ | 633,444 | | | | | $ | 1,056,788 | | |
Investment income
|
| | | | 11,590 | | | | | | — | | | | | | 11,590 | | |
Total
|
| | | $ | 434,934 | | | | | $ | 633,444 | | | | | $ | 1,068,378 | | |
Year Ended December 31, 2020
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Geographic Region: | | | | | | | | | | | | | | | | | | | |
United States
|
| | | $ | 1,028 | | | | | $ | 10,062 | | | | | $ | 11,090 | | |
Canada
|
| | | | 275,825 | | | | | | 11,051 | | | | | | 286,876 | | |
Europe, Middle East and Africa
|
| | | | 268 | | | | | | 332,364 | | | | | | 332,632 | | |
Asia Pacific
|
| | | | — | | | | | | 80,546 | | | | | | 80,546 | | |
Other
|
| | | | — | | | | | | 53,662 | | | | | | 53,662 | | |
Total
|
| | | $ | 277,121 | | | | | $ | 487,685 | | | | | $ | 764,806 | | |
Year Ended December 31, 2019
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Geographic Region: | | | | | | | | | | | | | | | | | | | |
United States
|
| | | $ | 37,969 | | | | | $ | 2,142 | | | | | $ | 40,111 | | |
Canada
|
| | | | 336,105 | | | | | | 16,058 | | | | | | 352,163 | | |
Europe, Middle East and Africa
|
| | | | 9,947 | | | | | | 439,193 | | | | | | 449,140 | | |
Asia Pacific
|
| | | | — | | | | | | 121,731 | | | | | | 121,731 | | |
Other
|
| | | | — | | | | | | 69,986 | | | | | | 69,986 | | |
Total
|
| | | $ | 384,021 | | | | | $ | 649,110 | | | | | $ | 1,033,131 | | |
Year Ended December 31, 2018
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Disaggregation of Revenue by Geographic Region: | | | | | | | | | | | | | | | | | | | |
United States
|
| | | $ | 18,838 | | | | | $ | 4,226 | | | | | $ | 23,064 | | |
Canada
|
| | | | 395,832 | | | | | | 15,526 | | | | | | 411,358 | | |
Europe, Middle East and Africa
|
| | | | 20,264 | | | | | | 442,912 | | | | | | 463,176 | | |
Asia Pacific
|
| | | | — | | | | | | 121,995 | | | | | | 121,995 | | |
Other
|
| | | | — | | | | | | 48,785 | | | | | | 48,785 | | |
Total
|
| | | $ | 434,934 | | | | | $ | 633,444 | | | | | $ | 1,068,378 | | |
| | |
Deferred Revenue
|
| |||||||||||||||
| | |
Service
|
| |
Redemption
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Balance at January 1, 2019
|
| | | $ | 247,975 | | | | | $ | 627,300 | | | | | $ | 875,275 | | |
Cash proceeds
|
| | | | 191,992 | | | | | | 313,319 | | | | | | 505,311 | | |
Revenue recognized(1)
|
| | | | (193,725) | | | | | | (309,231) | | | | | | (502,956) | | |
Other
|
| | | | — | | | | | | 561 | | | | | | 561 | | |
Effects of foreign currency translation
|
| | | | 12,363 | | | | | | 31,472 | | | | | | 43,835 | | |
Balance at December 31, 2019
|
| | | $ | 258,605 | | | | | $ | 663,421 | | | | | $ | 922,026 | | |
Cash proceeds
|
| | | | 173,089 | | | | | | 286,177 | | | | | | 459,266 | | |
Revenue recognized(1)
|
| | | | (188,790) | | | | | | (211,482) | | | | | | (400,272) | | |
Other
|
| | | | — | | | | | | 1,410 | | | | | | 1,410 | | |
Effects of foreign currency translation
|
| | | | 4,282 | | | | | | 17,307 | | | | | | 21,589 | | |
Balance at December 31, 2020
|
| | | $ | 247,186 | | | | | $ | 756,833 | | | | | $ | 1,004,019 | | |
Amounts recognized in the combined balance sheets: | | | | | | | | | | | | | | | | | | | |
Deferred revenue (current)
|
| | | $ | 141,642 | | | | | $ | 756,833 | | | | | $ | 898,475 | | |
Deferred revenue (non-current)
|
| | | $ | 105,544 | | | | | $ | — | | | | | $ | 105,544 | | |
| | |
January 10,
2020 |
| |||
| | |
(in thousands)
|
| |||
Assets: | | | | | | | |
Cash and cash equivalents
|
| | | $ | 10,713 | | |
Accounts receivable, net
|
| | | | 17,154 | | |
Other current assets
|
| | | | 2,889 | | |
Property and equipment, net
|
| | | | 9,653 | | |
Goodwill
|
| | | | 3,206 | | |
Other assets
|
| | | | 2,051 | | |
Total assets
|
| | | $ | 45,666 | | |
Liabilities: | | | | | | | |
Accounts payable
|
| | | $ | 223 | | |
Accrued expenses
|
| | | | 2,470 | | |
Other current liabilities
|
| | | | 14,709 | | |
Deferred tax liability
|
| | | | 2,037 | | |
Other liabilities
|
| | | | 71 | | |
Total liabilities
|
| | | $ | 19,510 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
(in thousands)
|
| |||||||||
Licenses
|
| | | $ | 11,583 | | | | | $ | 7,368 | | |
Maintenance
|
| | | | 4,557 | | | | | | 4,573 | | |
Other
|
| | | | 2,869 | | | | | | 5,419 | | |
Prepaid expenses
|
| | | $ | 19,009 | | | | | $ | 17,360 | | |
| | |
December 31, 2020
|
| |
December 31, 2019
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
Amortized
Cost |
| |
Unrealized
Gains |
| |
Unrealized
Losses |
| |
Fair Value
|
| |
Amortized
Cost |
| |
Unrealized
Gains |
| |
Unrealized
Losses |
| |
Fair Value
|
| ||||||||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||||||||||||||
Restricted cash
|
| | | $ | 55,427 | | | | | $ | — | | | | | $ | — | | | | | $ | 55,427 | | | | | $ | 39,309 | | | | | $ | — | | | | | $ | — | | | | | $ | 39,309 | | |
Mutual funds
|
| | | | 26,850 | | | | | | — | | | | | | — | | | | | | 26,850 | | | | | | 25,095 | | | | | | — | | | | | | — | | | | | | 25,095 | | |
Corporate bonds
|
| | | | 592,247 | | | | | | 19,110 | | | | | | (173) | | | | | | 611,184 | | | | | | 536,020 | | | | | | 2,385 | | | | | | (1,999) | | | | | | 536,406 | | |
Total
|
| | | $ | 674,524 | | | | | $ | 19,110 | | | | | $ | (173) | | | | | $ | 693,461 | | | | | $ | 600,424 | | | | | $ | 2,385 | | | | | $ | (1,999) | | | | | $ | 600,810 | | |
| | |
December 31, 2020
|
| |||||||||||||||||||||||||||||||||
| | |
Less than 12 months
|
| |
12 Months or Greater
|
| |
Total
|
| |||||||||||||||||||||||||||
| | |
Fair Value
|
| |
Unrealized
Losses |
| |
Fair Value
|
| |
Unrealized
Losses |
| |
Fair Value
|
| |
Unrealized
Losses |
| ||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
Corporate bonds
|
| | | $ | 46,190 | | | | | $ | (86) | | | | | $ | 10,316 | | | | | $ | (87) | | | | | $ | 56,506 | | | | | $ | (173) | | |
Total
|
| | | $ | 46,190 | | | | | $ | (86) | | | | | $ | 10,316 | | | | | $ | (87) | | | | | $ | 56,506 | | | | | $ | (173) | | |
| | |
December 31, 2019
|
| |||||||||||||||||||||||||||||||||
| | |
Less than 12 months
|
| |
12 Months or Greater
|
| |
Total
|
| |||||||||||||||||||||||||||
| | |
Fair Value
|
| |
Unrealized
Losses |
| |
Fair Value
|
| |
Unrealized
Losses |
| |
Fair Value
|
| |
Unrealized
Losses |
| ||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
Corporate bonds
|
| | | $ | 166,588 | | | | | $ | (1,330) | | | | | $ | 155,118 | | | | | $ | (669) | | | | | $ | 321,706 | | | | | $ | (1,999) | | |
Total
|
| | | $ | 166,588 | | | | | $ | (1,330) | | | | | $ | 155,118 | | | | | $ | (669) | | | | | $ | 321,706 | | | | | $ | (1,999) | | |
| | |
Amortized
Cost |
| |
Estimated
Fair Value |
| ||||||
| | |
(in thousands)
|
| |||||||||
Due in one year or less(1)
|
| | | $ | 144,932 | | | | | $ | 146,015 | | |
Due after one year through five years
|
| | | | 470,209 | | | | | | 487,973 | | |
Due after five year through ten years
|
| | | | 3,956 | | | | | | 4,046 | | |
Total
|
| | | $ | 619,097 | | | | | $ | 638,034 | | |
| | |
Amortized
Cost |
| |
Estimated
Fair Value |
| ||||||
| | |
(in thousands)
|
| |||||||||
Due in one year or less(1)
|
| | | $ | 129,477 | | | | | $ | 129,368 | | |
Due after one year through five years
|
| | | | 427,761 | | | | | | 428,228 | | |
Due after five year through ten years
|
| | | | 3,877 | | | | | | 3,905 | | |
Total
|
| | | $ | 561,115 | | | | | $ | 561,501 | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
(in thousands)
|
| |||||||||
Operating lease cost
|
| | | $ | 15,580 | | | | | $ | 16,379 | | |
Short-term lease cost
|
| | | | 451 | | | | | | 1,142 | | |
Variable lease cost
|
| | | | 4,224 | | | | | | 4,106 | | |
Total
|
| | | $ | 20,255 | | | | | $ | 21,627 | | |
| | |
December 31,
2020 |
| |
December 31,
2019 |
| ||||||
Weighted-average remaining lease term (in years): | | | | | | | | | | | | | |
Operating leases
|
| | | | 11.4 | | | | | | 12.2 | | |
Weighted-average discount rate: | | | | | | | | | | | | | |
Operating leases
|
| | | | 4.6% | | | | | | 4.5% | | |
| | |
Years Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
(in thousands)
|
| |||||||||
Cash paid for amounts included in the measurement of lease liabilities: | | | | | | | | | | | | | |
Operating cash flows from operating leases
|
| | | $ | 17,449 | | | | | $ | 18,183 | | |
Right-of-use assets obtained in exchange for lease obligations: | | | | | | | | | | | | | |
Operating leases
|
| | | $ | 3,028 | | | | | $ | 6,145 | | |
Year
|
| |
Operating Leases
|
| |||
| | |
(in thousands)
|
| |||
2021
|
| | | $ | 15,450 | | |
2022
|
| | | | 16,038 | | |
2023
|
| | | | 14,669 | | |
2024
|
| | | | 13,796 | | |
2025
|
| | | | 13,252 | | |
Thereafter
|
| | | | 92,846 | | |
Total undiscounted lease liabilities
|
| | | | 166,051 | | |
Less: Amount representing interest
|
| | | | (38,461) | | |
Total present value of minimum lease payments
|
| | | $ | 127,590 | | |
Amounts recognized in the December 31, 2020 combined balance sheet: | | | | | | | |
Current operating lease liabilities
|
| | | $ | 9,942 | | |
Long-term operating lease liabilities
|
| | | | 117,648 | | |
Total
|
| | | $ | 127,590 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
(in thousands)
|
| |||||||||
Computer software and development
|
| | | $ | 162,622 | | | | | $ | 163,236 | | |
Furniture and equipment
|
| | | | 28,656 | | | | | | 30,498 | | |
Leasehold improvements
|
| | | | 32,205 | | | | | | 34,154 | | |
Construction in progress
|
| | | | 9,709 | | | | | | 21,348 | | |
Total
|
| | | | 233,192 | | | | | | 249,236 | | |
Accumulated depreciation and amortization
|
| | | | (135,276) | | | | | | (137,997) | | |
Property and equipment, net
|
| | | $ | 97,916 | | | | | $ | 111,239 | | |
| | |
December 31, 2020
|
| |
Amortization Life and
Method |
| |||||||||||||||
| | |
Gross Assets
|
| |
Accumulated
Amortization |
| |
Net
|
| ||||||||||||
| | |
(in thousands)
|
| ||||||||||||||||||
Customer contracts
|
| | | $ | 354,242 | | | | | $ | (354,242) | | | | | $ | — | | | | 7 years – straight line | |
Tradenames
|
| | | | 34,691 | | | | | | (30,112) | | | | | | 4,579 | | | |
8-15 years – straight line
|
|
Collector database
|
| | | | 54,973 | | | | | | (54,455) | | | | | | 518 | | | | 5 years – straight line | |
Total intangible assets
|
| | | $ | 443,906 | | | | | $ | (438,809) | | | | | $ | 5,097 | | | | | |
| | |
December 31, 2019
|
| |
Amortization Life and
Method |
| |||||||||||||||
| | |
Gross
Assets |
| |
Accumulated
Amortization |
| |
Net
|
| ||||||||||||
| | |
(in thousands)
|
| ||||||||||||||||||
Customer contracts
|
| | | $ | 325,149 | | | | | $ | (278,699) | | | | | $ | 46,450 | | | | 7 years – straight line | |
Tradenames
|
| | | | 31,842 | | | | | | (26,488) | | | | | | 5,354 | | | |
8-15 years – straight line
|
|
Collector database
|
| | | | 53,896 | | | | | | (52,881) | | | | | | 1,015 | | | | 5 years – straight line | |
Total intangible assets
|
| | | $ | 410,887 | | | | | $ | (358,068) | | | | | $ | 52,819 | | | | | |
| | |
For the Years Ending
December 31, |
| |||
| | |
(in thousands)
|
| |||
2021
|
| | | $ | 1,772 | | |
2022
|
| | | | 1,254 | | |
2023
|
| | | | 1,254 | | |
2024
|
| | | | 643 | | |
2025
|
| | | | 33 | | |
Thereafter
|
| | | | 141 | | |
| | |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Balance at January 1, 2019
|
| | | $ | 183,576 | | | | | $ | 509,541 | | | | | $ | 693,117 | | |
Effects of foreign currency translation
|
| | | | 9,180 | | | | | | (11,483) | | | | | | (2,303) | | |
Balance at December 31, 2019
|
| | | $ | 192,756 | | | | | $ | 498,058 | | | | | $ | 690,814 | | |
Goodwill allocated to sale of Precima
|
| | | | (3,206) | | | | | | — | | | | | | (3,206) | | |
Effects of foreign currency translation
|
| | | | 3,726 | | | | | | 44,564 | | | | | | 48,290 | | |
Balance at December 31, 2020
|
| | | $ | 193,276 | | | | | $ | 542,622 | | | | | $ | 735,898 | | |
| | | | | |
Proportion of Ownership Interest
|
| |||||||||
Name of Investee
|
| |
Type
|
| |
December 31, 2020
|
| |
December 31, 2019
|
| ||||||
ICOM Information & Communications L.P.
|
| |
Limited partnership
|
| | | | —% | | | | | | —% | | |
Comenity Canada L.P.
|
| |
Limited partnership
|
| | | | 99.9% | | | | | | 99.9% | | |
Year Ended December 31, 2020
|
| |
Termination
Benefits |
| |
Asset
Impairments |
| |
Lease
Termination Costs |
| |
Other Exit
Costs |
| |
Total
|
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
AIR MILES Reward Program
|
| | | $ | 141 | | | | | $ | — | | | | | $ | — | | | | | $ | 17 | | | | | $ | 158 | | |
BrandLoyalty
|
| | | | (52) | | | | | | — | | | | | | — | | | | | | 2 | | | | | | (50) | | |
Total
|
| | | $ | 89 | | | | | $ | — | | | | | $ | — | | | | | $ | 19 | | | | | $ | 108 | | |
Year Ended December 31, 2019
|
| |
Termination
Benefits |
| |
Asset
Impairments |
| |
Lease
Termination Costs |
| |
Other Exit
Costs |
| |
Total
|
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
AIR MILES Reward Program
|
| | | $ | 2,651 | | | | | $ | 420 | | | | | $ | 203 | | | | | $ | 213 | | | | | $ | 3,487 | | |
BrandLoyalty
|
| | | | 4,954 | | | | | | 40,244 | | | | | | — | | | | | | 2,095 | | | | | | 47,293 | | |
Total
|
| | | $ | 7,605 | | | | | $ | 40,664 | | | | | $ | 203 | | | | | $ | 2,308 | | | | | $ | 50,780 | | |
| | |
Termination
Benefits |
| |
Asset
Impairments |
| |
Lease
Termination Costs |
| |
Other Exit
Costs |
| |
Total
|
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
Liability as of January 1, 2019
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Charged to expense
|
| | | | 7,605 | | | | | | 40,664 | | | | | | 203 | | | | | | 2,308 | | | | | | 50,780 | | |
Adjustments for non-cash charges
|
| | | | — | | | | | | (40,664) | | | | | | (203) | | | | | | — | | | | | | (40,867) | | |
Cash payments
|
| | | | (3,959) | | | | | | — | | | | | | — | | | | | | (2,160) | | | | | | (6,119) | | |
Liability as of December 31, 2019
|
| | | $ | 3,646 | | | | | $ | — | | | | | $ | — | | | | | $ | 148 | | | | | $ | 3,794 | | |
Charged to expense
|
| | | | 89 | | | | | | — | | | | | | — | | | | | | 19 | | | | | | 108 | | |
Adjustments for non-cash charges
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Cash payments
|
| | | | (2,466) | | | | | | — | | | | | | — | | | | | | (167) | | | | | | (2,633) | | |
Liability as of December 31, 2020
|
| | | $ | 1,269 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 1,269 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
(in thousands)
|
| |||||||||
Accrued payroll and benefits
|
| | | $ | 29,838 | | | | | $ | 32,924 | | |
Accrued taxes
|
| | | | 14,256 | | | | | | 16,939 | | |
Accrued other liabilities
|
| | | | 22,962 | | | | | | 33,467 | | |
Accrued expenses
|
| | | $ | 67,056 | | | | | $ | 83,330 | | |
| | |
Years Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Cost of operations
|
| | | $ | 5,498 | | | | | $ | 7,204 | | | | | $ | 10,017 | | |
General and administrative
|
| | | | 1,519 | | | | | | 1,872 | | | | | | 3,316 | | |
Total
|
| | | $ | 7,017 | | | | | $ | 9,076 | | | | | $ | 13,333 | | |
| | |
Net Unrealized
Gains (Losses) on Securities |
| |
Net Unrealized
Gains (Losses) on Cash Flow Hedges |
| |
Foreign Currency
Translation Adjustments |
| |
Accumulated
Other Comprehensive Income (Loss) |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Balance as of January 1, 2018
|
| | | $ | (7,138) | | | | | $ | (147) | | | | | $ | (65,074) | | | | | $ | (72,359) | | |
Changes in other comprehensive income (loss) before reclassifications
|
| | | | (208) | | | | | | (77) | | | | | | (21,031) | | | | | | (21,316) | | |
Amounts reclassified from other comprehensive income (loss)
|
| | | | 1,327(1) | | | | | | — | | | | | | — | | | | | | 1,327 | | |
Changes in other comprehensive income (loss)
|
| | | | 1,119 | | | | | | (77) | | | | | | (21,031) | | | | | | (19,989) | | |
Balance at December 31, 2018
|
| | | $ | (6,019) | | | | | $ | (224) | | | | | $ | (86,105) | | | | | $ | (92,348) | | |
Changes in other comprehensive income (loss) before reclassifications
|
| | | | 6,405 | | | | | | 91 | | | | | | (6,214) | | | | | | 282 | | |
Amounts reclassified from other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Changes in other comprehensive income (loss)
|
| | | | 6,405 | | | | | | 91 | | | | | | (6,214) | | | | | | 282 | | |
Balance at December 31, 2019
|
| | | $ | 386 | | | | | $ | (133) | | | | | $ | (92,319) | | | | | $ | (92,066) | | |
Changes in other comprehensive income (loss) before reclassifications
|
| | | | 17,881 | | | | | | (567) | | | | | | 71,246 | | | | | | 88,560 | | |
Amounts reclassified from other comprehensive income (loss)
|
| | | | — | | | | | | — | | | | | | 3,887(2) | | | | | | 3,887 | | |
Changes in other comprehensive income (loss)
|
| | | | 17,881 | | | | | | (567) | | | | | | 75,133 | | | | | | 92,447 | | |
Balance at December 31, 2020
|
| | | $ | 18,267 | | | | | $ | (700) | | | | | $ | (17,186) | | | | | $ | 381 | | |
| | |
Years Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Components of income before income taxes and loss from investment in unconsolidated subsidiaries:
|
| | | | | | | | | | | | | | | | | | |
Domestic
|
| | | $ | (5,326) | | | | | $ | (25,078) | | | | | $ | (29,021) | | |
Foreign
|
| | | | 101,971 | | | | | | 113,320 | | | | | | 168,796 | | |
Total
|
| | | $ | 96,645 | | | | | $ | 88,242 | | | | | $ | 139,775 | | |
Components of income tax expense: | | | | | | | | | | | | | | | | | | | |
Current | | | | | | | | | | | | | | | | | | | |
Federal
|
| | | $ | 63 | | | | | $ | (76) | | | | | $ | (1,921) | | |
State
|
| | | | (303) | | | | | | — | | | | | | 52 | | |
Foreign
|
| | | | 25,066 | | | | | | 31,260 | | | | | | 53,761 | | |
Total current
|
| | | | 24,826 | | | | | | 31,184 | | | | | | 51,892 | | |
Deferred | | | | | | | | | | | | | | | | | | | |
Federal
|
| | | | (63) | | | | | | 124 | | | | | | 1,424 | | |
State
|
| | | | 303 | | | | | | — | | | | | | (52) | | |
Foreign
|
| | | | (3,742) | | | | | | (19,977) | | | | | | (56,131) | | |
Total deferred
|
| | | | (3,502) | | | | | | (19,853) | | | | | | (54,759) | | |
Total provision for income taxes
|
| | | $ | 21,324 | | | | | $ | 11,331 | | | | | $ | (2,867) | | |
| | |
Years Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
2018
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Expected expense at statutory rate
|
| | | $ | 20,296 | | | | | $ | 18,532 | | | | | $ | 29,353 | | |
Increase (decrease) in income taxes resulting from: | | | | | | | | | | | | | | | | | | | |
Foreign rate differential
|
| | | | 1,861 | | | | | | 1,203 | | | | | | 8,155 | | |
Foreign restructuring
|
| | | | 3,598 | | | | | | — | | | | | | (48,033) | | |
Impact of sale transaction
|
| | | | 3,360 | | | | | | — | | | | | | (3,237) | | |
Global intangible low-taxed income
|
| | | | (8,339) | | | | | | 2,895 | | | | | | 5,444 | | |
Non-deductible expenses
|
| | | | 2,396 | | | | | | 4,162 | | | | | | 1,858 | | |
Uncertain tax positions
|
| | | | (7,706) | | | | | | (14,856) | | | | | | 4,332 | | |
Valuation allowance
|
| | | | 5,066 | | | | | | (196) | | | | | | 429 | | |
Other
|
| | | | 792 | | | | | | (409) | | | | | | (1,168) | | |
Total
|
| | | $ | 21,324 | | | | | $ | 11,331 | | | | | $ | (2,867) | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
(in thousands)
|
| |||||||||
Deferred tax assets | | | | | | | | | | | | | |
Deferred revenue
|
| | | $ | 14,960 | | | | | $ | 9,454 | | |
Net operating loss carryforwards and other carryforwards
|
| | | | 69,132 | | | | | | 76,177 | | |
Lease liabilities
|
| | | | 32,934 | | | | | | 31,107 | | |
Accrued expenses and other
|
| | | | 9,844 | | | | | | 14,180 | | |
Intangible assets
|
| | | | 31,478 | | | | | | 25,902 | | |
Total deferred tax assets
|
| | | | 158,348 | | | | | | 156,820 | | |
Valuation allowance
|
| | | | (47,854) | | | | | | (58,586) | | |
Deferred tax assets, net of valuation allowance
|
| | | | 110,494 | | | | | | 98,234 | | |
Deferred tax liabilities | | | | | | | | | | | | | |
Depreciation
|
| | | | 11,394 | | | | | | 10,165 | | |
Right of use assets
|
| | | | 28,963 | | | | | | 27,077 | | |
Total deferred tax liabilities
|
| | | | 40,357 | | | | | | 37,242 | | |
Net deferred tax asset
|
| | | $ | 70,137 | | | | | $ | 60,992 | | |
Amounts recognized in the combined balance sheets: | | | | | | | | | | | | | |
Non-current assets
|
| | | $ | 70,137 | | | | | $ | 62,789 | | |
Non-current liabilities
|
| | | | — | | | | | | (1,797) | | |
Total – Net deferred tax asset
|
| | | $ | 70,137 | | | | | $ | 60,992 | | |
|
Balance at January 1, 2018
|
| | | $ | 45,156 | | |
|
Increases related to prior years’ tax positions
|
| | | | — | | |
|
Decreases related to prior years’ tax positions
|
| | | | (6,304) | | |
|
Increases related to current year tax positions
|
| | | | 38,476 | | |
|
Settlements during the period
|
| | | | — | | |
|
Lapses of applicable statutes of limitation
|
| | | | (849) | | |
|
Foreign currency translation adjustment
|
| | | | (2,248) | | |
|
Balance at December 31, 2018
|
| | | $ | 74,231 | | |
|
Increases related to prior years’ tax positions
|
| | | | — | | |
|
Decreases related to prior years’ tax positions
|
| | | | (10,484) | | |
|
Increases related to current year tax positions
|
| | | | — | | |
|
Settlements during the period
|
| | | | — | | |
|
Lapses of applicable statutes of limitation
|
| | | | (4,251) | | |
|
Foreign currency translation adjustment
|
| | | | 1,081 | | |
|
Balance at December 31, 2019
|
| | | $ | 60,577 | | |
|
Increases related to prior years’ tax positions
|
| | | | 903 | | |
|
Decreases related to prior years’ tax positions
|
| | | | (40,267) | | |
|
Increases related to current year tax positions
|
| | | | — | | |
|
Settlements during the period
|
| | | | — | | |
|
Lapses of applicable statutes of limitation
|
| | | | (6,431) | | |
|
Foreign currency translation adjustment
|
| | | | 4,663 | | |
|
Balance at December 31, 2020
|
| | | $ | 19,445 | | |
| | |
December 31, 2020
|
| |
December 31, 2019
|
| ||||||||||||||||||
| | |
Carrying
Amount |
| |
Fair Value
|
| |
Carrying
Amount |
| |
Fair Value
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Financial assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Redemption settlement assets, restricted
|
| | | $ | 693,461 | | | | | $ | 693,461 | | | | | $ | 600,810 | | | | | $ | 600,810 | | |
Other investments
|
| | | | 253 | | | | | | 253 | | | | | | 248 | | | | | | 248 | | |
Derivative instruments
|
| | | | 353 | | | | | | 353 | | | | | | 175 | | | | | | 175 | | |
Financial liabilities | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivative instruments
|
| | | | 1,505 | | | | | | 1,505 | | | | | | 275 | | | | | | 275 | | |
| | |
Balance at
December 31, 2020 |
| |
Fair Value Measurement at
December 31, 2020 Using |
| ||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Mutual funds(1)
|
| | | $ | 26,850 | | | | | $ | 26,850 | | | | | $ | — | | | | | $ | — | | |
Corporate bonds(1)
|
| | | | 611,184 | | | | | | — | | | | | | 611,184 | | | | | | — | | |
Marketable securities(2)
|
| | | | 253 | | | | | | 253 | | | | | | — | | | | | | — | | |
Derivative instruments(3)
|
| | | | 353 | | | | | | — | | | | | | 353 | | | | | | — | | |
Total assets measured at fair value
|
| | | $ | 638,640 | | | | | $ | 27,103 | | | | | $ | 611,537 | | | | | $ | — | | |
Derivative instruments(3)
|
| | | $ | 1,505 | | | | | $ | — | | | | | $ | 1,505 | | | | | $ | — | | |
Total liabilities measured at fair value
|
| | | $ | 1,505 | | | | | $ | — | | | | | $ | 1,505 | | | | | $ | — | | |
| | |
Balance at
December 31, 2019 |
| |
Fair Value Measurement at
December 31, 2019 Using |
| ||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Mutual funds(1)
|
| | | $ | 25,095 | | | | | $ | 25,095 | | | | | $ | — | | | | | $ | — | | |
Corporate bonds(1)
|
| | | | 536,406 | | | | | | — | | | | | | 536,406 | | | | | | — | | |
Marketable securities(2)
|
| | | | 248 | | | | | | 248 | | | | | | — | | | | | | — | | |
Derivative instruments(3)
|
| | | | 175 | | | | | | — | | | | | | 175 | | | | | | — | | |
Total assets measured at fair value
|
| | | $ | 561,924 | | | | | $ | 25,343 | | | | | $ | 536,581 | | | | | $ | — | | |
Derivative instruments(3)
|
| | | $ | 275 | | | | | $ | — | | | | | $ | 275 | | | | | $ | — | | |
Total liabilities measured at fair value
|
| | | $ | 275 | | | | | $ | — | | | | | $ | 275 | | | | | $ | — | | |
Year Ended December 31, 2020
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Corporate/
Other |
| |
Total
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Revenues
|
| | | $ | 277,121 | | | | | $ | 487,685 | | | | | $ | — | | | | | $ | 764,806 | | |
Income (loss) before income taxes
|
| | | $ | 131,630 | | | | | $ | (20,670) | | | | | $ | (14,315) | | | | | $ | 96,645 | | |
Interest (income) expense, net
|
| | | | (1,071) | | | | | | 237 | | | | | | — | | | | | | (834) | | |
Depreciation and amortization
|
| | | | 18,658 | | | | | | 59,283 | | | | | | — | | | | | | 77,941 | | |
Stock compensation expense
|
| | | | 2,137 | | | | | | 3,361 | | | | | | 1,519 | | | | | | 7,017 | | |
Gain on sale of business, net of strategic transaction costs
|
| | | | (7,816) | | | | | | — | | | | | | — | | | | | | (7,816) | | |
Strategic transaction costs
|
| | | | 329 | | | | | | — | | | | | | — | | | | | | 329 | | |
Restructuring and other charges
|
| | | | 158 | | | | | | (50) | | | | | | — | | | | | | 108 | | |
Adjusted EBITDA(1)
|
| | | $ | 144,025 | | | | | $ | 42,161 | | | | | $ | (12,796) | | | | | $ | 173,390 | | |
Capital expenditures
|
| | | $ | 17,360 | | | | | $ | 6,959 | | | | | $ | — | | | | | $ | 24,319 | | |
Year Ended December 31, 2019
|
| |
AIR MILES
Reward Program |
| |
Brand Loyalty
|
| |
Corporate/
Other |
| |
Total
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Revenues
|
| | | $ | 384,021 | | | | | $ | 649,110 | | | | | $ | — | | | | | $ | 1,033,131 | | |
Income (loss) before income taxes
|
| | | $ | 137,474 | | | | | $ | (34,409) | | | | | $ | (14,823) | | | | | $ | 88,242 | | |
Interest (income) expense, net
|
| | | | (1,722) | | | | | | 4,057 | | | | | | — | | | | | | 2,335 | | |
Depreciation and amortization
|
| | | | 21,088 | | | | | | 59,091 | | | | | | — | | | | | | 80,179 | | |
Stock compensation expense
|
| | | | 3,878 | | | | | | 3,326 | | | | | | 1,872 | | | | | | 9,076 | | |
Strategic transaction costs
|
| | | | 963 | | | | | | 18 | | | | | | — | | | | | | 981 | | |
Restructuring and other charges
|
| | | | 3,487 | | | | | | 47,293 | | | | | | — | | | | | | 50,780 | | |
Adjusted EBITDA(1)
|
| | | $ | 165,168 | | | | | $ | 79,376 | | | | | $ | (12,951) | | | | | $ | 231,593 | | |
Capital expenditures
|
| | | $ | 29,094 | | | | | $ | 12,363 | | | | | $ | — | | | | | $ | 41,457 | | |
Year Ended December 31, 2018
|
| |
AIR MILES
Reward Program |
| |
BrandLoyalty
|
| |
Corporate/
Other |
| |
Total
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Revenues
|
| | | $ | 434,934 | | | | | $ | 633,444 | | | | | $ | — | | | | | $ | 1,068,378 | | |
Income (loss) before income taxes
|
| | | $ | 157,411 | | | | | $ | (3,587) | | | | | $ | (14,049) | | | | | $ | 139,775 | | |
Interest (income) expense, net
|
| | | | (981) | | | | | | 6,509 | | | | | | — | | | | | | 5,528 | | |
Depreciation and amortization
|
| | | | 22,072 | | | | | | 62,751 | | | | | | — | | | | | | 84,823 | | |
Gain on sale of an investment
|
| | | | (9,517) | | | | | | — | | | | | | — | | | | | | (9,517) | | |
Stock compensation expense
|
| | | | 5,942 | | | | | | 4,075 | | | | | | 3,316 | | | | | | 13,333 | | |
Adjusted EBITDA(1)
|
| | | $ | 174,927 | | | | | $ | 69,748 | | | | | $ | (10,733) | | | | | $ | 233,942 | | |
Capital expenditures
|
| | | $ | 20,003 | | | | | $ | 13,997 | | | | | $ | — | | | | | $ | 34,000 | | |
| | |
AIR MILES Reward
Program |
| |
BrandLoyalty
|
| |
Corporate/Other
|
| |
Total
|
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Total Assets | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2020
|
| | | $ | 1,332,388 | | | | | $ | 1,089,937 | | | | | $ | 35,739 | | | | | $ | 2,458,064 | | |
December 31, 2019
|
| | | $ | 1,202,811 | | | | | $ | 1,121,328 | | | | | $ | 29,281 | | | | | $ | 2,353,420 | | |
| | |
United States
|
| |
Canada
|
| |
Europe
Middle East and Africa |
| |
Asia Pacific
|
| |
Other
|
| |
Total
|
| ||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||||||||
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year Ended December 31, 2020
|
| | | $ | 11,090 | | | | | $ | 286,876 | | | | | $ | 332,632 | | | | | $ | 80,546 | | | | | $ | 53,662 | | | | | $ | 764,806 | | |
Year Ended December 31, 2019
|
| | | $ | 40,111 | | | | | $ | 352,163 | | | | | $ | 449,140 | | | | | $ | 121,731 | | | | | $ | 69,986 | | | | | $ | 1,033,131 | | |
Year Ended December 31, 2018
|
| | | $ | 23,064 | | | | | $ | 411,358 | | | | | $ | 463,176 | | | | | $ | 121,995 | | | | | $ | 48,785 | | | | | $ | 1,068,378 | | |
Long Lived Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2020
|
| | | $ | — | | | | | $ | 311,530 | | | | | $ | 714,317 | | | | | $ | 1,902 | | | | | $ | 148 | | | | | $ | 1,027,897 | | |
December 31, 2019
|
| | | $ | 11,533 | | | | | $ | 311,536 | | | | | $ | 713,838 | | | | | $ | 2,993 | | | | | $ | 246 | | | | | $ | 1,040,146 | | |
| | |
December 31,
2020 |
| |
December 31,
2019 |
| |
December 31,
2018 |
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Cash and cash equivalents
|
| | | $ | 278,841 | | | | | $ | 124,981 | | | | | $ | 104,963 | | |
Restricted cash included within other current assets(1)
|
| | | | 3,257 | | | | | | 10,842 | | | | | | 12,937 | | |
Restricted cash included within redemption settlement assets, restricted(2)
|
| | | | 55,427 | | | | | | 39,309 | | | | | | 43,887 | | |
Total cash, cash equivalents and restricted cash
|
| | | $ | 337,525 | | | | | $ | 175,132 | | | | | $ | 161,787 | | |
Description
|
| |
Balance at
Beginning of Year |
| |
Charged to
Costs and Expenses |
| |
Write-offs
Net of Revenue |
| |
Balance at
End of Year |
| ||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Allowance for Doubtful Accounts – Accounts receivable: | | | | | | | | | | | | | | | | | | | | | | | | | |
Year Ended December 31, 2020
|
| | | $ | 3,396 | | | | | $ | 1,128 | | | | | $ | (571) | | | | | $ | 3,953 | | |
Year Ended December 31, 2019
|
| | | $ | 224 | | | | | $ | 3,600 | | | | | $ | (428) | | | | | $ | 3,396 | | |
Year Ended December 31, 2018
|
| | | $ | 38 | | | | | $ | 273 | | | | | $ | (87) | | | | | $ | 224 | | |
Allowance for Obsolescence – Inventories: | | | | | | | | | | | | | | | | | | | | | | | | | |
Year Ended December 31, 2020
|
| | | $ | 17,246 | | | | | $ | 9,074 | | | | | $ | (15,446) | | | | | $ | 10,874 | | |
Year Ended December 31, 2019
|
| | | $ | 3,887 | | | | | $ | 24,304 | | | | | $ | (10,945) | | | | | $ | 17,246 | | |
Year Ended December 31, 2018
|
| | | $ | 3,953 | | | | | $ | 3,748 | | | | | $ | (3,814) | | | | | $ | 3,887 | | |