| | | | Sincerely, | |
| | | | | |
| | | | Ralph J. Andretta | |
| | | | President and Chief Executive Officer | |
| | | | Sincerely, | |
| | | | | |
| | | | Charles L. Horn | |
| | | | President and Chief Executive Officer | |
| | |
Page
|
| |||
| | | | ii | | | |
| | | | iii | | | |
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| | | | 39 | | | |
| | | | 50 | | | |
| | | | 51 | | | |
| | | | 52 | | | |
| | | | 59 | | | |
| | | | 79 | | | |
| | | | 90 | | | |
| | | | 96 | | | |
| | | | 109 | | | |
| | | | 110 | | | |
| | | | 112 | | | |
| | | | 117 | | | |
| | | | F-1 | | |
| | |
As of June 30, 2021
|
| |||||||||
| | |
Actual
|
| |
Pro Forma
(Unaudited) |
| ||||||
| | |
(in thousands, except
share amounts) |
| |||||||||
Cash and equivalents(1)
|
| | | $ | 205,715 | | | | | $ | 116,470 | | |
Indebtedness: | | | | | | | | | | | | | |
Current portion of debt(2):
|
| | | | | | | | | | | | |
Short-term borrowings
|
| | | | — | | | | | | 50,625 | | |
Long-term:
|
| | | | | | | | | | | | |
Long-term debt(2)
|
| | | | — | | | | | | 603,157 | | |
Total indebtedness(2)
|
| | | | — | | | | | | 653,782 | | |
Equity: | | | | | | | | | | | | | |
Common stock, par value $0.01; 200,000,000 shares authorized, 24,556,172 shares issued and outstanding, pro forma(3)
|
| | | | — | | | | | | 246 | | |
Additional paid-in-capital
|
| | | | — | | | | | | 199,931 | | |
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 | | | | | $ | 828,388 | | |
| | |
Historical
|
| |
Transaction Pro
Forma Adjustments |
| |
Adjusted
|
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 205,715 | | | | | $ | (89,245) | | | | | | (a) | | | | | $ | 116,470 | | |
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 | | | | | | (52,735) | | | | | | | | | | | | 1,347,311 | | |
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 | | | | | | 975 | | | | | | (b) | | | | | | 4,749 | | |
Total assets
|
| | | $ | 2,398,640 | | | | | $ | (51,744) | | | | | | | | | | | $ | 2,346,896 | | |
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
|
| | | | — | | | | | | 50,625 | | | | | | (b) | | | | | | 50,625 | | |
Other current liabilities
|
| | | | 103,384 | | | | | | — | | | | | | | | | | | | 103,384 | | |
Total current liabilities
|
| | | | 1,174,696 | | | | | | 50,682 | | | | | | | | | | | | 1,225,378 | | |
Deferred revenue
|
| | | | 100,630 | | | | | | — | | | | | | | | | | | | 100,630 | | |
Long-term operating lease liabilities
|
| | | | 111,727 | | | | | | — | | | | | | | | | | | | 111,727 | | |
Long-term and other debt
|
| | | | — | | | | | | 603,157 | | | | | | (b) | | | | | | 603,157 | | |
Other liabilities
|
| | | | 24,572 | | | | | | 106,826 | | | | | | (c) | | | | | | 131,398 | | |
Total liabilities
|
| | | | 1,411,625 | | | | | | 760,665 | | | | | | | | | | | | 2,172,290 | | |
Commitments and contingencies | | | | | | | | | | | | | | | | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock, par value $0.01
|
| | | | — | | | | | | 246 | | | | | | (e) | | | | | | 246 | | |
Additional paid-in capital
|
| | | | — | | | | | | 199,931 | | | | | | (e) | | | | | | 199,931 | | |
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 | | | | | $ | (51,744) | | | | | | | | | | | $ | 2,346,896 | | |
| | |
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) | | | | | | 17,522 | | | | | | (g) | | | | | | 17,340 | | |
Income before income taxes and loss from investment in unconsolidated subsidiaries
|
| | | | 48,660 | | | | | | (17,522) | | | | | | | | | | | | 31,138 | | |
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 | | | | | $ | (17,480) | | | | | | | | | | | $ | 16,064 | | |
Pro forma earnings per share | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | | | | | | | | | | | | | (i) | | | | | $ | 0.65 | | |
Diluted
|
| | | | | | | | | | | | | | | | (i) | | | | | $ | 0.65 | | |
Pro forma weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | | | | | | | | | | | | | (i) | | | | | | 24,556 | | |
Diluted
|
| | | | | | | | | | | | | | | | (i) | | | | | | 24,556 | | |
| | |
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) | | | | | | 35,151 | | | | | | (g) | | | | | | 34,317 | | | | ||
Income before income taxes and loss from investment in unconsolidated subsidiaries
|
| | | | 96,645 | | | | | | (35,151) | | | | | | | | | | | | 61,494 | | | | ||
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 | | | | | $ | (34,905) | | | | | | | | | | | $ | 40,170 | | | | ||
Pro forma earnings per share | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Basic
|
| | | | | | | | | | | | | | | | (i) | | | | | $ | 1.64 | | | | | |
Diluted
|
| | | | | | | | | | | | | | | | (i) | | | | | $ | 1.64 | | | | | |
Pro forma weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Basic
|
| | | | | | | | | | | | | | | | (i) | | | | | | 24,520 | | | | ||
Diluted
|
| | | | | | | | | | | | | | | | (i) | | | | | | 24,520 | | | |
| | |
June 30, 2021
|
| |||
| | |
(in thousands)
|
| |||
Cash received from the incurrence of debt
|
| | | $ | 665,000 | | |
Cash received as a contribution from ADS
|
| | | | 7,948 | | |
Cash transferred to ADS at Separation
|
| | | | (750,000) | | |
Cash paid for debt issuance costs
|
| | | | (12,193) | | |
Pro forma adjustment to cash
|
| | | $ | (89,245) | | |
| | |
June 30, 2021
|
| |||
| | |
(in thousands)
|
| |||
Debt to be issued
|
| | | $ | 675,000 | | |
Debt discount
|
| | | | (10,000) | | |
Deferred financing fees – term loan
|
| | | | (11,218) | | |
Pro Forma adjustment to debt
|
| | | $ | 653,782 | | |
Current portion of debt
|
| | | $ | 50,625 | | |
Long term portion of debt
|
| | | $ | 603,157 | | |
Deferred financing fees – revolving credit facility
|
| | | $ | 975 | | |
Pro forma adjustment to non-current assets
|
| | | $ | 975 | | |
| | |
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) | | |
Common stock, par value of $0.01 per share
|
| | | | 246 | | |
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
|
| | | $ | (199,931) | | |
| | |
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
|
| | | $ | 15,636 | | | | | $ | 31,382 | | |
Amortization of debt discount and deferred financing charges
|
| | | | 1,886 | | | | | | 3,769 | | |
Pro forma adjustment to interest expense
|
| | | $ | 17,522 | | | | | $ | 35,151 | | |
| | |
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)
|
| |
$141.8
|
|
Location
|
| |
Segment
|
| |
Approximate
Square Footage |
| |
Lease
Expiration Date |
| | | | |||
Toronto, Ontario, Canada
|
| |
AIR MILES Reward Program
|
| | | | 205,525(1) | | | | March 31, 2033 | | | ||
Mississauga, Ontario, Canada
|
| |
AIR MILES Reward Program
|
| | | | 13,699 | | | |
February 28, 2025
|
| | ||
Den Bosch, Netherlands
|
| | BrandLoyalty | | | | | 132,482 | | | |
December 31, 2033
|
| | ||
Maasbree, Netherlands
|
| | BrandLoyalty | | | | | 668,923 | | | |
September 1, 2033
|
| |
Name
|
| |
Age
|
| |
Position
|
|
Charles L. Horn | | |
61
|
| | Chief Executive Officer and President | |
John J. Chesnut | | |
49
|
| | Chief Financial Officer | |
Claudia Mennen | | |
48
|
| | BrandLoyalty, Chief Executive Officer | |
Blair F. Cameron | | |
58
|
| | AIR MILES Reward Program, President | |
Cynthia L. Hageman | | |
52
|
| | General Counsel | |
Laura Santillan | | |
50
|
| | Chief Accounting Officer | |
Name
|
| |
Age
|
| |
Committees and Chairs
|
|
Graham W. Atkinson | | |
70
|
| | Audit; Corporate Governance and Nominating (Chair); Compensation | |
Roger H. Ballou | | |
70
|
| | Corporate Governance and Nominating; Compensation | |
Richard A. Genovese | | |
67
|
| | Compensation (Chair); Audit | |
Charles L. Horn | | |
61
|
| | None | |
Barbara L. Rayner | | |
61
|
| | Audit (Chair); Corporate Governance and Nominating | |
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
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)
|
| | | | 4,668,882 | | | | | | 19.0% | | |
BlackRock, Inc.
|
| | | | 1,926,048 | | | | | | 7.8% | | |
The Vanguard Group, Inc.
|
| | | | 1,671,679 | | | | | | 6.8% | | |
Directors and Named Executive Officers | | | | | | | | | | | | | |
Graham W. Atkinson
|
| | | | — | | | | | | — | | |
Roger H. Ballou
|
| | | | 4,321 | | | | | | * | | |
Blair F. Cameron
|
| | | | — | | | | | | — | | |
John J. Chesnut
|
| | | | 1,483 | | | | | | * | | |
Richard A. Genovese
|
| | | | — | | | | | | — | | |
Cynthia L. Hageman
|
| | | | 2,603 | | | | | | * | | |
Charles L. Horn
|
| | | | 2,520 | | | | | | * | | |
Claudia Mennen
|
| | | | — | | | | | | — | | |
Barbara L. Rayner
|
| | | | — | | | | | | — | | |
Laura Santillan
|
| | | | 8,698 | | | | | | * | | |
All directors and officers as a group (ten persons)
|
| | | | 19,625 | | | | | | * | | |
| | |
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 | | |