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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 | | | Form of Amended and Restated Certificate of Incorporation of Loyalty Ventures Inc. | |
| 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 2021 Employee Stock Purchase Plan | |
| 10.7* | | | Form of Registration Rights Agreement | |
| 21.1 | | | | |
| 99.1 | | | Preliminary Information Statement dated September 21, 2021 | |
| 99.2 | | | |
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.
EXCLUSIVE FORUM
(a) 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 Delaware General Corporation Law (“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 subsection (a) shall not apply to suits brought to enforce any liability or duty created by the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”).
(b) The federal district courts of the United States of America shall be, to the fullest extent permitted by law, the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, including the applicable rules and regulations promulgated thereunder.
Article 11.
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 11 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 11, 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 6.06. 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.
16
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.
17
Exhibit 21.1
Subsidiaries of
Loyalty Ventures Inc.
A Delaware Corporation
(as of [Distribution Date], 2021)
Subsidiary | Jurisdiction of Organization | Other Business Names |
ADI Crown Helix Limited | Jersey | None |
Apollo Holdings B.V. | Netherlands | None |
Brand Loyalty Americas BV | Netherlands | None |
Brand Loyalty Asia BV | Netherlands | None |
Brand Loyalty Pty. Ltd. | Australia | None |
Brand Loyalty Brasil Marketing de Promocoes LTDA | Brazil | None |
Brand Loyalty BV | Netherlands | Brand Loyalty Ventures |
Brand Loyalty Benelux | ||
Brand Loyalty Spain | ||
Brand Loyalty Hungary | ||
Brand Loyalty Austria | ||
Brand Loyalty France | ||
Brand Loyalty Poland | ||
Brand Loyalty Turkey | ||
Brand Loyalty EMEA | ||
Brand Loyalty Canada Corp. | Nova Scotia, Canada | BrandLoyalty |
Brand Loyalty Canada Holding B.V. | Netherlands | None |
Brand Loyalty Development B.V. | Netherlands | None |
Brand Loyalty Europe BV | Netherlands | None |
Brand Loyalty France Sarl | France | None |
Brand Loyalty Germany GmbH | Germany | None |
Brand Loyalty Group B.V. | Netherlands | None |
Brand Loyalty Holding BV | Netherlands | None |
Brand Loyalty International BV | Netherlands | None |
Brand Loyalty Italia S.p.A | Italy | None |
Brand Loyalty Japan KK | Japan | None |
Brand Loyalty Korea Co. Ltd. | South Korea | None |
Brand Loyalty Limited (HK) | Hong Kong | None |
Brand Loyalty OOO | Russia | None |
Brand Loyalty Russia BV | Netherlands | None |
Brand Loyalty Sourcing Americas Holding B.V. | Netherlands | None |
Brand Loyalty Sourcing Asia Ltd | Hong Kong | None |
Brand Loyalty Sourcing BV | Netherlands | Brand Loyalty Sourcing |
Brand Loyalty Sourcing USA Inc. | Delaware | None |
Brand Loyalty Switzerland GmbH | Switzerland | None |
Brand Loyalty Trading (Shanghai) Co. Ltd | China | None |
Brand Loyalty UK Ltd | England | None |
Brand Loyalty USA Holding BV | Netherlands | None |
Brand Loyalty USA Inc. | Delaware | None |
Brand Loyalty Worldwide GmbH | Switzerland | None |
Edison International Concept & Agencies BV | Netherlands | BrandLoyalty Naarden |
IceMobile Agency BV | Netherlands | IceMobile |
LoyaltyOne, Co. | Nova Scotia, Canada | AIR MILES |
airmilesshops.ca |
AIR MILES Corporate Incentives | ||
AIR MILES For Business | ||
AIR MILES Incentives | ||
AIR MILES My Planet | ||
AIR MILES Reward Program | ||
Alliance Data | ||
Alliance Data Loyalty Services | ||
Antidote Direct | ||
Données Alliance | ||
GIFTED by AIR MILES | ||
Le Groupe Loyalty | ||
LOCAL par AIR MILES | ||
Loyalty And Marketing Services | ||
LoyaltyOne | ||
LoyaltyOne Canada | ||
Loyalty Services | ||
Ma Planéte | ||
My Planet | ||
Primes D’entreprise Air Miles | ||
Programme de Récompense Air Miles | ||
Squareknot | ||
Zero Gravity Labs | ||
LoyaltyOne Travel Services Co. | Nova Scotia, Canada | AIR MILES Travel Services |
LVI Lux Financing S.àr.l. | Luxembourg | None |
LVI Lux Holdings S.àr.l. | Luxembourg | None |
LVI Sky Oak LLC | Delaware | None |
Max Holding B.V. | Netherlands | None |
Merison Groep B.V. | Netherlands | None |
Merison Retail B.V. | Netherlands | Merison |
Rhombus Investments L.P. | Bermuda | None |
World Licenses BV | Netherlands | None |
| | | | 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 | | | |
| | | | 59 | | | |
| | | | 79 | | | |
| | | | 90 | | | |
| | | | 96 | | | |
| | | | 109 | | | |
| | | | 110 | | | |
| | | | 111 | | | |
| | | | 115 | | | |
| | | | F-1 | | |
| | |
As of June 30, 2021
|
| |||||||||
| | |
Actual
|
| |
Pro Forma
(Unaudited) |
| ||||||
| | |
(in thousands, except
share amounts) |
| |||||||||
Cash and equivalents(1)
|
| | | $ | 205,715 | | | | | $ | 118,970 | | |
Indebtedness: | | | | | | | | | | | | | |
Current portion of debt(2):
|
| | | | | | | | | | | | |
Short-term borrowings
|
| | | | — | | | | | | 6,750 | | |
Long-term:
|
| | | | | | | | | | | | |
Long-term debt(2)
|
| | | | — | | | | | | 649,801 | | |
Total indebtedness(2)
|
| | | | — | | | | | | 656,551 | | |
Equity: | | | | | | | | | | | | | |
Common stock, par value $0.01; shares authorized, shares issued and outstanding, pro forma(3)
|
| | | | — | | | | | | | | |
Additional paid-in-capital
|
| | | | — | | | | | | 200,177 | | |
Parent’s net investment
|
| | | | 1,012,586 | | | | | | — | | |
Accumulated other comprehensive loss
|
| | | | (25,571) | | | | | | (25,571) | | |
Total equity
|
| | | $ | 987,015 | | | | | $ | 174,606 | | |
Total capitalization
|
| | | $ | 987,015 | | | | | $ | 174,606 | | |
| | |
Transaction
Pro Forma Adjustments |
| |
Adjusted
|
| ||||||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 205,715 | | | | | $ | (86,745) | | | | | | (a) | | | | | $ | 118,970 | | |
Accounts receivable, net
|
| | | | 265,729 | | | | | | 36,510 | | | | | | (c) | | | | | | 302,239 | | |
Inventories | | | | | 162,254 | | | | | | — | | | | | | | | | | | | 162,254 | | |
Redemption settlement assets, restricted
|
| | | | 745,086 | | | | | | — | | | | | | | | | | | | 745,086 | | |
Other current assets
|
| | | | 21,262 | | | | | | — | | | | | | | | | | | | 21,262 | | |
Total current assets
|
| | | | 1,400,046 | | | | | | (50,235) | | | | | | | | | | | | 1,349,811 | | |
Property and equipment, net
|
| | | | 90,329 | | | | | | — | | | | | | | | | | | | 90,329 | | |
Right of use assets – operating
|
| | | | 107,916 | | | | | | 18 | | | | | | (c) | | | | | | 107,934 | | |
Deferred tax asset, net
|
| | | | 66,839 | | | | | | — | | | | | | (f) | | | | | | 66,839 | | |
Intangible assets, net
|
| | | | 4,102 | | | | | | — | | | | | | | | | | | | 4,102 | | |
Goodwill
|
| | | | 725,632 | | | | | | — | | | | | | | | | | | | 725,632 | | |
Investment in unconsolidated subsidiaries – related party
|
| | | | 2 | | | | | | (2) | | | | | | (d) | | | | | | — | | |
Other non-current assets
|
| | | | 3,774 | | | | | | 1,244 | | | | | | (b) | | | | | | 5,018 | | |
Total assets
|
| | | $ | 2,398,640 | | | | | $ | (48,975) | | | | | | | | | | | $ | 2,349,665 | | |
LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 65,831 | | | | | $ | 2 | | | | | | (c) | | | | | $ | 65,833 | | |
Accrued expenses
|
| | | | 53,439 | | | | | | 29 | | | | | | (c) | | | | | | 53,468 | | |
Deferred revenue
|
| | | | 942,154 | | | | | | — | | | | | | | | | | | | 942,154 | | |
Current operating lease liabilities
|
| | | | 9,888 | | | | | | 26 | | | | | | (c) | | | | | | 9,914 | | |
Current portion of debt
|
| | | | — | | | | | | 6,750 | | | | | | (b) | | | | | | 6,750 | | |
Other current liabilities
|
| | | | 103,384 | | | | | | — | | | | | | | | | | | | 103,384 | | |
Total current liabilities
|
| | | | 1,174,696 | | | | | | 6,807 | | | | | | | | | | | | 1,181,503 | | |
Deferred revenue
|
| | | | 100,630 | | | | | | — | | | | | | | | | | | | 100,630 | | |
Long-term operating lease liabilities
|
| | | | 111,727 | | | | | | — | | | | | | | | | | | | 111,727 | | |
Long-term and other debt
|
| | | | — | | | | | | 649,801 | | | | | | (b) | | | | | | 649,801 | | |
Other liabilities
|
| | | | 24,572 | | | | | | 106,826 | | | | | | (c) | | | | | | 131,398 | | |
Total liabilities
|
| | | | 1,411,625 | | | | | | 763,434 | | | | | | | | | | | | 2,175,059 | | |
Commitments and contingencies | | | | | | | | | | | | | | | | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock, par value $0.01
|
| | | | — | | | | | | | | | | | | (e) | | | | | | | | |
Additional paid-in capital
|
| | | | — | | | | | | 200,177 | | | | | | (e) | | | | | | 200,177 | | |
Parent’s net investment
|
| | | | 1,012,586 | | | | | | (1,012,586) | | | | | | (e) | | | | | | — | | |
Accumulated other comprehensive income (loss)
|
| | | | (25,571) | | | | | | — | | | | | | | | | | | | (25,571) | | |
Total equity
|
| | | | 987,015 | | | | | | (812,409) | | | | | | | | | | | | 174,606 | | |
Total liabilities and equity
|
| | | $ | 2,398,640 | | | | | $ | (48,975) | | | | | | | | | | | $ | 2,349,665 | | |
| | |
For The Six Months Ended June 30, 2021
|
| |||||||||||||||||||||
| | |
Historical
|
| |
Transaction
Pro Forma Adjustments |
| | | | | | | |
Adjusted
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | |
Redemption, net
|
| | | $ | 183,695 | | | | | $ | — | | | | | | | | | | | $ | 183,695 | | |
Services
|
| | | | 133,438 | | | | | | — | | | | | | | | | | | | 133,438 | | |
Other
|
| | | | 10,326 | | | | | | — | | | | | | | | | | | | 10,326 | | |
Total revenue
|
| | | | 327,459 | | | | | | — | | | | | | | | | | | | 327,459 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of operations (exclusive of depreciation and amortization disclosed separately below)
|
| | | | 252,937 | | | | | | — | | | | | | | | | | | | 252,937 | | |
General and administrative
|
| | | | 7,590 | | | | | | — | | | | | | | | | | | | 7,590 | | |
Depreciation and other amortization
|
| | | | 17,571 | | | | | | — | | | | | | | | | | | | 17,571 | | |
Amortization of purchased intangibles
|
| | | | 883 | | | | | | — | | | | | | | | | | | | 883 | | |
Total operating expenses
|
| | | | 278,981 | | | | | | — | | | | | | | | | | | | 278,981 | | |
Operating income
|
| | | | 48,478 | | | | | | — | | | | | | | | | | | | 48,478 | | |
Interest (income) expense, net
|
| | | | (182) | | | | | | 19,161 | | | | | | (g) | | | | | | 18,979 | | |
Income before income taxes and loss from investment in unconsolidated subsidiaries
|
| | | | 48,660 | | | | | | (19,161) | | | | | | | | | | | | 29,499 | | |
Provision (benefit) for income taxes
|
| | | | 15,074 | | | | | | — | | | | | | (h) | | | | | | 15,074 | | |
Loss from investment in unconsolidated subsidiaries – related party, net of tax
|
| | | | 42 | | | | | | (42) | | | | | | (d) | | | | | | — | | |
Net income
|
| | | $ | 33,544 | | | | | $ | (19,119) | | | | | | | | | | | $ | 14,425 | | |
Pro forma earnings per share | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Diluted
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Pro forma weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | | | | | | | | | | | | | (i) | | | | | | | | |
Diluted
|
| | | | | | | | | | | | | | | | (i) | | | | | | | | |
| | |
For The Year Ended December 31, 2020
|
| | |||||||||||||||||||||||
| | |
Historical
|
| |
Transaction
Pro Forma Adjustments |
| | | | | | | |
Adjusted
|
| | |||||||||||
| | |
(in thousands)
|
| | |||||||||||||||||||||||
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Redemption, net
|
| | | $ | 473,067 | | | | | $ | — | | | | | | | | | | | $ | 473,067 | | | | ||
Services
|
| | | | 264,050 | | | | | | — | | | | | | | | | | | | 264,050 | | | | ||
Other
|
| | | | 27,689 | | | | | | — | | | | | | | | | | | | 27,689 | | | | ||
Total revenue
|
| | | | 764,806 | | | | | | — | | | | | | | | | | | | 764,806 | | | | ||
Operating expenses | | | | | | | ||||||||||||||||||||||
Cost of operations (exclusive of depreciation and amortization disclosed separately below)
|
| | | | 587,615 | | | | | | — | | | | | | | | | | | | 587,615 | | | | ||
General and administrative
|
| | | | 14,315 | | | | | | — | | | | | | | | | | | | 14,315 | | | | ||
Depreciation and other amortization
|
| | | | 28,988 | | | | | | — | | | | | | | | | | | | 28,988 | | | | ||
Amortization of purchased intangibles
|
| | | | 48,953 | | | | | | — | | | | | | | | | | | | 48,953 | | | | ||
Total operating expenses
|
| | | | 679,871 | | | | | | — | | | | | | | | | | | | 679,871 | | | | ||
Operating income
|
| | | | 84,935 | | | | | | — | | | | | | | | | | | | 84,935 | | | | ||
Gain on sale of a business
|
| | | | (10,876) | | | | | | — | | | | | | | | | | | | (10,876) | | | | ||
Interest (income) expense, net
|
| | | | (834) | | | | | | 38,322 | | | | | | (g) | | | | | | 37,488 | | | | ||
Income before income taxes and loss from investment in unconsolidated subsidiaries
|
| | | | 96,645 | | | | | | (38,322) | | | | | | | | | | | | 58,323 | | | | ||
Provision (benefit) for income taxes
|
| | | | 21,324 | | | | | | — | | | | | | (h) | | | | | | 21,324 | | | | ||
Loss from investment in unconsolidated subsidiaries – related party, net of tax
|
| | | | 246 | | | | | | (246) | | | | | | (d) | | | | | | — | | | | ||
Net income
|
| | | $ | 75,075 | | | | | $ | (38,076) | | | | | | | | | | | $ | 36,999 | | | | ||
Pro forma earnings per share | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Basic
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Pro forma weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Basic
|
| | | | | | | | | | | | | | | | (i) | | | | | |||||||
Diluted
|
| | | | | | | | | | | | | | | | (i) | | | | | | | | | |
| | |
June 30, 2021
|
| |||
| | |
(in thousands)
|
| |||
Cash received from the incurrence of debt issued at 98.5%
|
| | | $ | 664,875 | | |
Cash received as a contribution from ADS
|
| | | | 7,948 | | |
Cash transferred to ADS at Separation
|
| | | | (750,000) | | |
Cash paid for debt issuance costs
|
| | | | (9,568) | | |
Pro forma adjustment to cash
|
| | | $ | (86,745) | | |
| | |
June 30, 2021
|
| |||
| | |
(in thousands)
|
| |||
Debt to be issued
|
| | | $ | 675,000 | | |
Debt discount
|
| | | | (10,125) | | |
Deferred financing fees – term loan
|
| | | | (8,324) | | |
Pro Forma adjustment to debt
|
| | | $ | 656,551 | | |
Current portion of debt
|
| | | | 6,750 | | |
Long term portion of debt
|
| | | | 649,801 | | |
Deferred financing fees – revolving credit facility
|
| | | | 1,244 | | |
Pro forma adjustment to non-current assets
|
| | | $ | 1,244 | | |
| | |
June 30, 2021
|
| |||||||||||||||
| | |
Contribution by
ADS |
| |
Tax assets and
liabilities |
| |
Total
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Accounts receivable, net
|
| | | $ | 4,246 | | | | | $ | 32,264 | | | | | $ | 36,510 | | |
Right of use asset
|
| | | | 18 | | | | | | — | | | | | | 18 | | |
Accounts payable
|
| | | | (2) | | | | | | — | | | | | | (2) | | |
Accrued expenses
|
| | | | (29) | | | | | | — | | | | | | (29) | | |
Current operating lease liability
|
| | | | (26) | | | | | | — | | | | | | (26) | | |
Other liabilities
|
| | | | — | | | | | | (106,826) | | | | | | (106,826) | | |
Net assets transferred
|
| | | $ | 4,207 | | | | | $ | (74,562) | | | | | $ | (70,355) | | |
| | |
June 30, 2021
|
| |||
| | |
(in thousands)
|
| |||
Elimination of ADS’ net investment
|
| | | $ | (1,012,586) | | |
Cash transferred to ADS at Separation
|
| | | | 750,000 | | |
Effect of ADS net assets transferred/retained(1)
|
| | | | 62,409 | | |
Pro forma adjustment to additional paid in capital
|
| | | $ | (200,177) | | |
| | |
June 30, 2021
|
| |||
| | |
(in thousands)
|
| |||
Cash contributed by ADS
|
| | | $ | (7,948) | | |
Assets and liabilities of certain Corporate entities
|
| | | | 70,355 | | |
Investment in unconsolidated subsidiary sold to ADS
|
| | | | 2 | | |
Pro forma adjustment to additional paid in capital
|
| | | $ | 62,409 | | |
| | |
Six Months Ended
June 30, 2021 |
| |
Year Ended
December 31, 2020 |
| ||||||
| | |
(in thousands)
|
| |||||||||
Interest expense on debt
|
| | | $ | 17,719 | | | | | $ | 35,438 | | |
Amortization of debt discount and deferred financing charges
|
| | | | 1,442 | | | | | | 2,884 | | |
Pro forma adjustment to interest expense
|
| | | $ | 19,161 | | | | | $ | 38,322 | | |
| | |
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)
|
| |
$141.8
|
|
Location
|
| |
Segment
|
| |
Approximate
Square Footage |
| |
Lease
Expiration Date |
| |||
Dallas, Texas
|
| | Corporate | | | | | | | | | | |
Toronto, Ontario, Canada
|
| |
AIR MILES Reward Program
|
| | | | 205,525(1) | | | | March 31, 2033 | |
Mississauga, Ontario, Canada
|
| |
AIR MILES Reward Program
|
| | | | 13,699 | | | |
February 28, 2025
|
|
Den Bosch, Netherlands
|
| | BrandLoyalty | | | | | 132,482 | | | |
December 31, 2033
|
|
Maasbree, Netherlands
|
| | BrandLoyalty | | | | | 668,923 | | | |
September 1, 2033
|
|
Name
|
| |
Age
|
| |
Position
|
|
Charles L. Horn | | |
61
|
| | Chief Executive Officer and President | |
John J. Chesnut | | |
49
|
| | Chief Financial Officer | |
Claudia Mennen | | |
48
|
| | BrandLoyalty, Chief Executive Officer | |
Blair F. Cameron | | |
58
|
| | AIR MILES Reward Program, President | |
Cynthia L. Hageman | | |
52
|
| | General Counsel | |
Laura Santillan | | |
50
|
| | Chief Accounting Officer | |
Name
|
| |
Age
|
| |
Committees and Chairs
|
|
Graham W. Atkinson | | |
70
|
| | Audit; Corporate Governance and Nominating (Chair); Compensation | |
Roger H. Ballou | | |
70
|
| | Corporate Governance and Nominating; Compensation | |
Richard A. Genovese | | |
67
|
| | Compensation (Chair); Audit | |
Charles L. Horn | | |
61
|
| | None | |
Barbara L. Rayner | | |
61
|
| | Audit (Chair); Corporate Governance and Nominating | |
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
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 | | |
Exhibit 99.2
Important Notice Regarding the Availability of Materials
Alliance Data Systems Corporation
|
You are receiving this communication because you hold securities in Alliance Data Systems Corporation (“ADS”). ADS has released informational materials regarding the spin-off of Loyalty Ventures Inc. (“Loyalty Ventures”) and its consolidated subsidiaries from ADS that are now available for your review. This notice provides instructions on how to access ADS materials for informational purposes only. |
Alliance Data Systems Corporation 7500 Dallas Parkway, Suite 700 Plano, Texas 75024 |
To effect the spin-off, ADS will distribute on a pro rata basis to its stockholders 81% of the issued and outstanding shares of Loyalty Ventures common stock held by it. Immediately following the distribution, which will be effective as of the date and time referenced in the Information Statement that Loyalty Ventures has prepared in connection with the spin-off, Loyalty Ventures will be an independent, publicly traded company. Loyalty Ventures is not soliciting proxy or consent authority in connection with the spin-off. |
The materials consist of the Information Statement, plus any supplements, that Loyalty Ventures has prepared in connection with the spin-off. You may view the materials online at [investor relations website] and easily request a paper or e-mail copy (see reverse side). | |
See the reverse side for instructions on how to access materials. |
How to Access the Materials
Materials Available to VIEW or RECEIVE:
INFORMATION STATEMENT
How to View Online:
CONTROL NO. |
Visit: [proxy website]
How to Request and Receive a PAPER or E-MAIL Copy:
If you want to receive a paper or e-mail copy of these materials, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request:
1) BY INTERNET: [investor relations website]
2) BY TELEPHONE: [--]
3) BY E-MAIL*: [--]
* If requesting materials by e-mail, please send a blank e-mail with the 12-digit control number located in the shaded gray box above in the subject line. No other requests should be included within the e-mail.
Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor.
THIS NOTICE WILL ENABLE YOU TO ACCESS
MATERIALS FOR INFORMATIONAL PURPOSES ONLY
2