Document_and_Entity_Informatio
Document and Entity Information 10K | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | ALLIANCE DATA SYSTEMS CORP | |
Entity Central Index Key | 1101215 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 62,030,256 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
ASSETS | ||
Cash and cash equivalents | $760,398 | $1,077,152 |
Trade receivables, less allowance for doubtful accounts ($4,785 and $3,811 at March 31, 2015 and December 31, 2014, respectively) | 571,560 | 743,294 |
Credit card and loan receivables: | ||
Credit card receivables - restricted for securitization investors | 7,730,899 | 8,312,291 |
Other credit card and loan receivables | 2,998,782 | 2,931,589 |
Total credit card and loan receivables | 10,729,681 | 11,243,880 |
Allowance for loan loss | -586,678 | -570,171 |
Credit card and loan receivables, net | 10,143,003 | 10,673,709 |
Credit card and loan receivables held for sale | 143,837 | 125,060 |
Deferred tax asset, net | 210,805 | 218,872 |
Other current assets | 458,932 | 456,349 |
Redemption settlement assets, restricted | 489,049 | 520,340 |
Total current assets | 12,777,584 | 13,814,776 |
Property and equipment, net | 545,064 | 559,628 |
Deferred tax asset, net | 153 | 164 |
Cash collateral, restricted | 24,940 | 22,511 |
Intangible assets, net | 1,405,484 | 1,515,994 |
Goodwill | 3,790,766 | 3,865,484 |
Other non-current assets | 508,495 | 485,420 |
Total assets | 19,052,486 | 20,263,977 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts payable | 412,503 | 455,656 |
Accrued expenses | 310,356 | 457,472 |
Contingent consideration | 326,023 | |
Deposits | 2,533,417 | 2,645,995 |
Non-recourse borrowings of consolidated securitization entities | 1,708,750 | 1,058,750 |
Current debt | 193,259 | 208,164 |
Other current liabilities | 235,854 | 306,123 |
Deferred revenue | 746,892 | 846,370 |
Deferred tax liability, net | 930 | |
Total current liabilities | 6,141,031 | 6,305,483 |
Deferred revenue | 153,681 | 166,807 |
Deferred tax liability, net | 672,517 | 690,175 |
Deposits | 1,976,957 | 2,127,546 |
Non-recourse borrowings of consolidated securitization entities | 3,088,166 | 4,133,166 |
Long-term and other debt | 4,672,169 | 4,001,082 |
Other liabilities | 209,656 | 207,772 |
Total liabilities | 16,914,177 | 17,632,031 |
Commitments and contingencies (Note 12) | ||
Redeemable non-controlling interest | 226,881 | 235,566 |
Stockholders' equity: | ||
Common stock, $0.01 par value; authorized, 200,000 shares; issued, 111,990 shares and 111,686 shares at March 31, 2015 and December 31, 2014, respectively | 1,120 | 1,117 |
Additional paid-in capital | 2,902,237 | 2,905,563 |
Treasury stock, at cost, 49,878 shares and 47,874 shares at March 31, 2015 and December 31, 2014, respectively | -3,540,689 | -2,975,795 |
Retained earnings | 2,688,313 | 2,540,948 |
Accumulated other comprehensive loss | -139,553 | -75,453 |
Total stockholders' equity | 1,911,428 | 2,396,380 |
Total liabilities and stockholders' equity | $19,052,486 | $20,263,977 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Per Share data, unless otherwise specified | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Trade receivables, allowance for doubtful accounts (in dollars) | $4,785 | $3,811 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, authorized shares | 200,000 | 200,000 |
Common stock, issued shares | 111,990 | 111,686 |
Treasury stock, shares | 49,878 | 47,874 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues | ||
Transaction | $93,285 | $83,980 |
Redemption | 308,145 | 243,690 |
Finance charges, net | 679,462 | 536,261 |
Marketing services | 471,196 | 328,469 |
Other revenue | 49,069 | 40,500 |
Total revenue | 1,601,157 | 1,232,900 |
Operating expenses | ||
Cost of operations (exclusive of depreciation and amortization disclosed separately below) | 989,863 | 772,426 |
Provision for loan loss | 134,929 | 70,582 |
General and administrative | 30,193 | 34,027 |
Depreciation and other amortization | 33,638 | 25,512 |
Amortization of purchased intangibles | 87,990 | 48,561 |
Total operating expenses | 1,276,613 | 951,108 |
Operating income | 324,544 | 281,792 |
Interest expense. | ||
Securitization funding costs | 23,813 | 22,911 |
Interest expense on deposits | 11,738 | 8,234 |
Interest expense on long-term and other debt, net | 42,456 | 36,602 |
Total interest expense, net | 78,007 | 67,747 |
Income before income tax | 246,537 | 214,045 |
Provision for income taxes | 81,705 | 78,298 |
Net income | 164,832 | 135,747 |
Less: net income (loss) attributable to non-controlling interest | 2,273 | -1,648 |
Net income attributable to common stockholders | $162,559 | $137,395 |
Net income attributable to common stockholders per share: | ||
Basic (in dollars per share) | $2.34 | $2.59 |
Diluted (in dollars per share) | $2.32 | $2.08 |
Weighted average shares: | ||
Basic (in shares) | 63,080 | 53,033 |
Diluted (in shares) | 63,599 | 66,065 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net income | $164,832 | $135,747 |
Other comprehensive income (loss), net of tax: | ||
Net unrealized gain on securities available-for-sale, net of tax expense of $452 and $402 for the three months ended March 31, 2015 and 2014, respectively | 917 | 485 |
Net unrealized loss on cash flow hedges, net of tax benefit of $754 for the three months ended March 31, 2015 | -2,403 | |
Foreign currency translation adjustments | -62,614 | 9,333 |
Other comprehensive (loss) income | -64,100 | 9,818 |
Total comprehensive income, net of tax | 100,732 | 145,565 |
Less: comprehensive income (loss) attributable to non-controlling interest | 2,762 | -1,583 |
Comprehensive income attributable to common stockholders | $97,970 | $147,148 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net unrealized (loss) gain on securities, tax expense | $452 | $402 |
Net unrealized loss on cash flow hedges, tax benefit | ($754) |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $164,832 | $135,747 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 121,628 | 74,073 |
Deferred income taxes | -1,562 | 25,324 |
Provision for loan loss | 134,929 | 70,582 |
Non-cash stock compensation | 27,488 | 15,624 |
Amortization of discount on debt | 212 | 8,053 |
Amortization of deferred financing costs | 7,797 | 5,828 |
Change in deferred revenue | -28,029 | -27,131 |
Change in contingent consideration | -99,600 | |
Change in other operating assets and liabilities, net of acquisitions | -98,616 | 37,702 |
Originations of credit card and loan receivables held for sale | -1,373,241 | -1,114,635 |
Sales of credit card and loan receivables held for sale | 1,343,734 | 1,114,245 |
Excess tax benefits from stock-based compensation | -15,007 | -24,805 |
Other | -9,858 | 12,504 |
Net cash provided by operating activities | 174,707 | 333,111 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Change in redemption settlement assets | -12,575 | -77,765 |
Change in cash collateral, restricted | -2,250 | |
Change in restricted cash | -658 | 346 |
Change in credit card and loan receivables | 401,735 | 384,037 |
Payments for acquired business, net of cash | -259,514 | |
Capital expenditures | -42,439 | -43,488 |
Purchases of other investments | -7,767 | -1,657 |
Maturities/sales of other investments | 2,235 | 1,691 |
Other | -1,011 | -4,000 |
Net cash provided by (used in) investing activities | 337,270 | -350 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under debt agreements | 1,001,715 | 496,822 |
Repayments of borrowings | -334,410 | -484,874 |
Proceeds from convertible note hedge counterparties | 93,380 | |
Settlement of convertible note borrowings | -115,053 | |
Payment of acquisition-related contingent consideration | -205,928 | |
Acquisition of non-controlling interest | -87,376 | |
Issuances of deposits | 406,716 | 341,308 |
Repayments of deposits | -669,883 | -483,797 |
Non-recourse borrowings of consolidated securitization entities | 305,000 | 530,000 |
Repayments/maturities of non-recourse borrowings of consolidated securitization entities | -700,000 | -950,000 |
Payment of deferred financing costs | -1,381 | -4,958 |
Excess tax benefits from stock-based compensation | 15,007 | 24,805 |
Proceeds from issuance of common stock | 1,404 | 4,603 |
Purchase of treasury shares | -542,594 | -44,605 |
Other | -10 | |
Net cash used in financing activities | -811,730 | -592,379 |
Effect of exchange rate changes on cash and cash equivalents | -17,001 | -3,562 |
Change in cash and cash equivalents | -316,754 | -263,180 |
Cash and cash equivalents at beginning of period | 1,077,152 | 969,822 |
Cash and cash equivalents at end of period | 760,398 | 706,642 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Interest paid | 70,355 | 40,104 |
Income taxes paid, net | $21,689 | $17,459 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2015 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | |
The unaudited condensed consolidated financial statements included herein have been prepared by Alliance Data Systems Corporation (“ADSC” or, including its consolidated subsidiaries and variable interest entities (“VIEs”), the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 27, 2015. | |
The unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of management, necessary to state fairly the results for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year. | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (1) the reported amounts of assets; (2) liabilities and disclosure of contingent assets and liabilities at the date of the financial statements; and (3) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation in accordance with GAAP. | |
Recently Issued Accounting Standards | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP, and is effective for interim and annual reporting periods beginning after December 15, 2016. On April 1, 2015, the FASB proposed deferring the effective date by one year to December 15, 2017. The FASB has also proposed permitting early adoption of the standard, but not before the original effective date of December 15, 2016. The Company is evaluating the impact that adoption of ASU 2014-09 will have on its consolidated financial statements. | |
In February 2015, the FASB issued ASU 2015-02, “Amendments to the Consolidation Analysis,” which amends the consolidation requirements in Accounting Standards Codification (“ASC”) 810, “Consolidation.” ASU 2015-02 makes targeted amendments to the current consolidation guidance for variable interest entities, which could change consolidation conclusions. ASU 2015-02 is effective for interim and annual periods beginning after December 15, 2015, with early application permitted. The Company is evaluating the impact that adoption of this standard will have on its consolidated financial statements. | |
In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for interim and annual reporting periods beginning after December 15, 2015, with early application permitted. The Company does not expect the adoption of this standard to materially impact its consolidated financial statements. | |
In April 2015, the FASB issued ASU 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” ASU 2015-05 provides guidance about whether a cloud computing arrangement includes a software license and is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. The Company does not expect the adoption of this standard to materially impact its consolidated financial statements. | |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
EARNINGS PER SHARE | ||||||||
EARNINGS PER SHARE | ||||||||
2. EARNINGS PER SHARE | ||||||||
The following table sets forth the computation of basic and diluted net income per share for the periods indicated: | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
(In thousands, except | ||||||||
per share amounts) | ||||||||
Numerator: | ||||||||
Net income attributable to common stockholders | $ | 162,559 | $ | 137,395 | ||||
Less: accretion of redeemable non-controlling interest | 15,194 | — | ||||||
Net income attributable to common stockholders after accretion of redeemable non-controlling interest | $ | 147,365 | $ | 137,395 | ||||
Denominator: | ||||||||
Weighted average shares, basic | 63,080 | 53,033 | ||||||
Weighted average effect of dilutive securities: | ||||||||
Shares from assumed conversion of convertible senior notes | — | 5,734 | ||||||
Shares from assumed exercise of convertible note warrants | — | 6,771 | ||||||
Net effect of dilutive stock options and unvested restricted stock | 519 | 527 | ||||||
Denominator for diluted calculations | 63,599 | 66,065 | ||||||
Net income attributable to common stockholders per share: | ||||||||
Basic | $ | 2.34 | $ | 2.59 | ||||
Diluted | $ | 2.32 | $ | 2.08 | ||||
ACQUISITIONS
ACQUISITIONS | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
ACQUISITIONS | |||||
ACQUISITIONS | |||||
3. ACQUISITIONS | |||||
2014 Acquisitions: | |||||
Brand Loyalty Group B.V. | |||||
On January 2, 2014, the Company acquired a 60% ownership interest in BrandLoyalty Group B.V. (“BrandLoyalty”), a Netherlands-based, data-driven loyalty marketer. BrandLoyalty designs, organizes, implements and evaluates innovative and tailor-made loyalty programs for food retailers worldwide. The acquisition expands the Company’s presence across Europe, Asia and Latin America. The results of BrandLoyalty have been included since the date of acquisition and are reflected in the Company’s LoyaltyOne® segment. The initial cash consideration was approximately $259.5 million in addition to the assumption of debt. The goodwill resulting from the acquisition is not deductible for tax purposes. | |||||
The following table summarizes the final allocation of consideration and the respective fair values of the assets acquired and liabilities assumed in the BrandLoyalty acquisition as of the date of purchase: | |||||
As of | |||||
January 2, 2014 | |||||
(In thousands) | |||||
Current assets, net of cash acquired | $ | 246,769 | |||
Deferred tax asset | 3,509 | ||||
Property and equipment | 19,719 | ||||
Other non-current assets | 3,994 | ||||
Intangible assets | 423,832 | ||||
Goodwill | 565,015 | ||||
Total assets acquired | 1,262,838 | ||||
Current liabilities | 146,559 | ||||
Current portion of long-term debt | 34,180 | ||||
Deferred tax liability | 105,512 | ||||
Long-term debt (net of current portion) | 126,323 | ||||
Other liabilities | 142 | ||||
Total liabilities assumed | 412,716 | ||||
Redeemable non-controlling interest | 341,907 | ||||
Net assets acquired | $ | 508,215 | |||
As part of the initial purchase price allocation, the Company recorded a liability for the earn-out provisions included in the BrandLoyalty share purchase agreement of €181.9 million ($248.7 million as of January 2, 2014). The liability was measured at fair value on the date of purchase and subsequent changes in the fair value of the liability were included in operating expenses in the Company’s consolidated statements of income. On February 10, 2015, the Company paid €269.9 million ($305.5 million) to settle the contingent liability. | |||||
Conversant, Inc. | |||||
On December 10, 2014, the Company completed the acquisition of 100% of the common stock of Conversant, Inc. (“Conversant®”), a digital marketing services company offering unique end-to-end digital marketing solutions that empower clients to more effectively market to their customers across all channels. The results of Conversant have been included since the date of the acquisition and are reflected in the Company’s Epsilon® segment. | |||||
The Company paid total consideration of approximately $2.3 billion, with cash consideration of approximately $936.3 million, net of cash acquired and equity consideration of approximately $1.3 billion through the issuance of approximately 4.6 million shares and the exchange of certain restricted stock awards and stock options. The cash and equity consideration paid and issued were determined in accordance with the terms of the merger agreement, with the value based on the volume weighted average price per share of the Company’s common stock for the consecutive period of 15 trading days ending on the close of trading on the second trading day immediately preceding the closing of the merger. The goodwill recognized is attributable to expected synergies and an assembled workforce. The goodwill resulting from the acquisition is not deductible for tax purposes. | |||||
In the first quarter of 2015, the Company finalized the purchase price allocation, with no changes from the preliminary purchase price allocation disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The following table summarizes the allocation of the consideration and the respective fair values of the assets acquired and liabilities assumed in the Conversant acquisition as of the date of purchase: | |||||
As of | |||||
December 10, | |||||
2014 | |||||
(In thousands) | |||||
Current assets, net of cash acquired | $ | 180,030 | |||
Deferred tax asset | 11,905 | ||||
Property and equipment | 25,555 | ||||
Developed technology | 182,500 | ||||
Other non-current assets | 1,744 | ||||
Intangible assets | 755,600 | ||||
Goodwill | 1,650,299 | ||||
Total assets acquired | 2,807,633 | ||||
Current liabilities | 177,585 | ||||
Deferred tax liability | 344,081 | ||||
Other liabilities | 26,933 | ||||
Total liabilities assumed | 548,599 | ||||
Net assets acquired | $ | 2,259,034 | |||
The following table presents the Company’s unaudited pro forma consolidated revenue and net income for the three months ended March 31, 2014. The unaudited pro forma results include the historical consolidated statements of income of the Company and Conversant, giving effect to the Conversant acquisition and related financing transactions as if they had occurred on January 1, 2013. | |||||
Three Months | |||||
Ended March 31, | |||||
2014 | |||||
(In thousands, | |||||
except per share | |||||
amounts) | |||||
Total revenue | $ | 1,378,813 | |||
Net income | $ | 129,861 | |||
Net income attributable to common stockholders | $ | 131,509 | |||
Net income attributable to common stockholders per share: | |||||
Basic | $ | 2.28 | |||
Diluted | $ | 1.86 | |||
The unaudited pro forma results are not necessarily indicative of the operating results that would have occurred if the Conversant acquisition had been completed as of the date for which the unaudited pro forma financial information is presented. The unaudited pro forma financial information for the three months ended March 31, 2014 includes adjustments that are directly related to the acquisition, factually supportable and expected to have a continuing impact. These adjustments include, but are not limited to, amortization related to fair value adjustments to intangible assets and interest expense on acquisition-related debt. | |||||
CREDIT_CARD_AND_LOAN_RECEIVABL
CREDIT CARD AND LOAN RECEIVABLES | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
CREDIT CARD AND LOAN RECEIVABLES | ||||||||||||
CREDIT CARD AND LOAN RECEIVABLES | ||||||||||||
4. CREDIT CARD AND LOAN RECEIVABLES | ||||||||||||
The Company’s credit card and loan receivables are the only portfolio segment or class of financing receivables. Quantitative information about the components of credit card and loan receivables is presented in the table below: | ||||||||||||
March 31, | December 31, | |||||||||||
2015 | 2014 | |||||||||||
(In thousands) | ||||||||||||
Principal receivables | $ | 10,246,419 | $ | 10,762,498 | ||||||||
Billed and accrued finance charges | 401,579 | 422,838 | ||||||||||
Other credit card and loan receivables | 81,683 | 58,544 | ||||||||||
Total credit card and loan receivables | 10,729,681 | 11,243,880 | ||||||||||
Less credit card receivables — restricted for securitization investors | 7,730,899 | 8,312,291 | ||||||||||
Other credit card and loan receivables | $ | 2,998,782 | $ | 2,931,589 | ||||||||
Allowance for Loan Loss | ||||||||||||
The Company maintains an allowance for loan loss at a level that is appropriate to absorb probable losses inherent in credit card and loan receivables. The allowance for loan loss covers forecasted uncollectible principal as well as unpaid interest and fees. The allowance for loan loss is evaluated monthly for appropriateness. | ||||||||||||
In estimating the allowance for principal loan losses, management utilizes a migration analysis of delinquent and current credit card and loan receivables. Migration analysis is a technique used to estimate the likelihood that a credit card or loan receivable will progress through the various stages of delinquency and to charge-off. The allowance is maintained through an adjustment to the provision for loan loss. Charge-offs of principal amounts, net of recoveries are deducted from the allowance. In estimating the allowance for uncollectible unpaid interest and fees, the Company utilizes historical charge-off trends, analyzing actual charge-offs for the prior three months. The allowance is maintained through an adjustment to finance charges, net. In evaluating the allowance for loan loss for both principal and unpaid interest and fees, management also considers factors that may impact loan loss experience, including seasoning, loan volume and amounts, seasonality, payment rates and forecasting uncertainties. | ||||||||||||
Net charge-offs include the principal amount of losses from credit cardholders unwilling or unable to pay their account balances, as well as bankrupt and deceased credit cardholders, less recoveries and exclude charged-off interest, fees and fraud losses. Charged-off interest and fees reduce finance charges, net while fraud losses are recorded as an expense. Credit card and loan receivables, including unpaid interest and fees, are charged-off at the end of the month during which an account becomes 180 days contractually past due, except in the case of customer bankruptcies or death. Credit card and loan receivables, including unpaid interest and fees, associated with customer bankruptcies or death are charged-off at the end of each month subsequent to 60 days after the receipt of notification of the bankruptcy or death, but in any case, not later than the 180-day contractual time frame. | ||||||||||||
The Company records the actual charge-offs for unpaid interest and fees as a reduction to finance charges, net. For the three months ended March 31, 2015 and 2014, actual charge-offs for unpaid interest and fees were $85.4 million and $75.6 million, respectively. | ||||||||||||
The following table presents the Company’s allowance for loan loss for the periods indicated: | ||||||||||||
Three Months Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
(In thousands) | ||||||||||||
Balance at beginning of period | $ | 570,171 | $ | 503,169 | ||||||||
Provision for loan loss | 134,929 | 70,582 | ||||||||||
Change in estimate for uncollectible unpaid interest and fees | 1,500 | 5,500 | ||||||||||
Recoveries | 39,496 | 38,408 | ||||||||||
Principal charge-offs | (159,418 | ) | (135,001 | ) | ||||||||
Balance at end of period | $ | 586,678 | $ | 482,658 | ||||||||
Delinquencies | ||||||||||||
A credit card account is contractually delinquent if the Company does not receive the minimum payment by the specified due date on the cardholder’s statement. It is the Company’s policy to continue to accrue interest and fee income on all credit card accounts beyond 90 days, except in limited circumstances, until the credit card account balance and all related interest and other fees are paid or charged-off, typically at 180 days delinquent. When an account becomes delinquent, a message is printed on the credit cardholder’s billing statement requesting payment. After an account becomes 30 days past due, a proprietary collection scoring algorithm automatically scores the risk of the account becoming further delinquent. The collection system then recommends a collection strategy for the past due account based on the collection score and account balance and dictates the contact schedule and collections priority for the account. If the Company is unable to make a collection after exhausting all in-house collection efforts, the Company may engage collection agencies and outside attorneys to continue those efforts. | ||||||||||||
The following table presents the delinquency trends of the Company’s credit card and loan receivables portfolio: | ||||||||||||
March 31, | % of | December 31, | % of | |||||||||
2015 | Total | 2014 | Total | |||||||||
(In thousands, except percentages) | ||||||||||||
Receivables outstanding — principal | $ | 10,246,419 | 100.0 | % | $ | 10,762,498 | 100.0 | % | ||||
Principal receivables balances contractually delinquent: | ||||||||||||
31 to 60 days | 131,319 | 1.3 | % | 157,760 | 1.4 | % | ||||||
61 to 90 days | 90,874 | 0.9 | 93,175 | 0.9 | ||||||||
91 or more days | 176,239 | 1.7 | 182,945 | 1.7 | ||||||||
Total | $ | 398,432 | 3.9 | % | $ | 433,880 | 4.0 | % | ||||
Modified Credit Card and Loan Receivables | ||||||||||||
The Company holds certain credit card and loan receivables for which the terms have been modified. The Company’s modified credit card and loan receivables include credit card and loan receivables for which temporary hardship concessions have been granted and credit card and loan receivables in permanent workout programs. These modified credit card and loan receivables include concessions consisting primarily of a reduced minimum payment and an interest rate reduction. The temporary programs’ concessions remain in place for a period no longer than twelve months, while the permanent programs remain in place through the payoff of the credit card and loan receivables if the credit cardholder complies with the terms of the program. These concessions do not include the forgiveness of unpaid principal, but may involve the reversal of certain unpaid interest or fee assessments. In the case of the temporary programs, at the end of the concession period, credit card and loan receivable terms revert to standard rates. These arrangements are automatically terminated if the customer fails to make payments in accordance with the terms of the program, at which time their account reverts back to its original terms. | ||||||||||||
Credit card and loan receivables for which temporary hardship or permanent concessions have been granted are both considered troubled debt restructurings and are collectively evaluated for impairment. Modified credit card and loan receivables are evaluated at their present value with impairment measured as the difference between the credit card and loan receivables balance and the discounted present value of cash flows expected to be collected. Consistent with the Company’s measurement of impairment of modified credit card and loan receivables on a pooled basis, the discount rate used for credit card and loan receivables is the average current annual percentage rate the Company applies to non-impaired credit card and loan receivables, which approximates what would have been applied to the pool of modified credit card and loan receivables prior to impairment. In assessing the appropriate allowance for loan loss, these modified credit card and loan receivables are included in the general pool of credit card and loan receivables with the allowance determined under the contingent loss model of ASC 450-20, “Loss Contingencies.” If the Company applied accounting under ASC 310-40, “Troubled Debt Restructurings by Creditors,” to the modified credit card and loan receivables in these programs, there would not be a material difference in the allowance for loan loss. | ||||||||||||
The Company had $137.6 million and $134.9 million, respectively, as a recorded investment in impaired credit card and loan receivables with an associated allowance for loan loss of $36.7 million and $35.2 million, respectively, as of March 31, 2015 and December 31, 2014. These modified credit card and loan receivables represented less than 2% of the Company’s total credit card and loan receivables as of both March 31, 2015 and December 31, 2014. | ||||||||||||
The average recorded investment in impaired credit card receivables was $134.5 million and $116.3 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||
Interest income on these modified credit card and loan receivables is accounted for in the same manner as other accruing credit card and loan receivables. Cash collections on these modified credit card and loan receivables are allocated according to the same payment hierarchy methodology applied to credit card and loan receivables that are not in such programs. The Company recognized $3.3 million and $3.2 million for the three months ended March 31, 2015 and 2014, respectively, in interest income associated with modified credit card and loan receivables during the period that such credit card and loan receivables were impaired. | ||||||||||||
The following tables provide information on credit card and loan receivables that are considered troubled debt restructurings as described above, which entered into a modification program during the specified periods: | ||||||||||||
Three Months Ended March 31, 2015 | ||||||||||||
Number of | Pre- | Post- | ||||||||||
Restructurings | modification | modification | ||||||||||
Outstanding | Outstanding | |||||||||||
Balance | Balance | |||||||||||
(Dollars in thousands) | ||||||||||||
Troubled debt restructurings — credit card and loan receivables | 39,014 | $ | 42,483 | $ | 42,442 | |||||||
Three Months Ended March 31, 2014 | ||||||||||||
Number of | Pre- | Post- | ||||||||||
Restructurings | modification | modification | ||||||||||
Outstanding | Outstanding | |||||||||||
Balance | Balance | |||||||||||
(Dollars in thousands) | ||||||||||||
Troubled debt restructurings — credit card and loan receivables | 36,552 | $ | 35,786 | $ | 35,755 | |||||||
The tables below summarize troubled debt restructurings that have defaulted in the specified periods where the default occurred within 12 months of their modification date: | ||||||||||||
Three Months Ended | ||||||||||||
March 31, 2015 | ||||||||||||
Number of | Outstanding | |||||||||||
Restructurings | Balance | |||||||||||
(Dollars in thousands) | ||||||||||||
Troubled debt restructurings that subsequently defaulted — credit card and loan receivables | 18,393 | $ | 18,307 | |||||||||
Three Months Ended | ||||||||||||
March 31, 2014 | ||||||||||||
Number of | Outstanding | |||||||||||
Restructurings | Balance | |||||||||||
(Dollars in thousands) | ||||||||||||
Troubled debt restructurings that subsequently defaulted — credit card and loan receivables | 16,728 | $ | 16,141 | |||||||||
Age of Credit Card and Loan Receivable Accounts | ||||||||||||
The following tables set forth, as of March 31, 2015 and 2014, the number of active credit card and loan receivable accounts with balances and the related principal balances outstanding, based upon the age of the active credit card and loan receivable accounts from origination: | ||||||||||||
March 31, 2015 | ||||||||||||
Age of Accounts Since Origination | Number of | Percentage of | Principal | Percentage of | ||||||||
Active Accounts | Active Accounts | Receivables | Principal | |||||||||
with Balances | with Balances | Outstanding | Receivables | |||||||||
Outstanding | ||||||||||||
(In thousands, except percentages) | ||||||||||||
0-12 Months | 5,563 | 29.7 | % | $ | 2,635,391 | 25.7 | % | |||||
13-24 Months | 2,769 | 14.8 | 1,542,384 | 15.0 | ||||||||
25-36 Months | 1,927 | 10.3 | 1,089,567 | 10.6 | ||||||||
37-48 Months | 1,378 | 7.4 | 815,928 | 8.0 | ||||||||
49-60 Months | 1,023 | 5.5 | 611,066 | 6.0 | ||||||||
Over 60 Months | 6,031 | 32.3 | 3,552,083 | 34.7 | ||||||||
Total | 18,691 | 100.0 | % | $ | 10,246,419 | 100.0 | % | |||||
March 31, 2014 | ||||||||||||
Age of Accounts Since Origination | Number of | Percentage of | Principal | Percentage of | ||||||||
Active Accounts | Active Accounts | Receivables | Principal | |||||||||
with Balances | with Balances | Outstanding | Receivables | |||||||||
Outstanding | ||||||||||||
(In thousands, except percentages) | ||||||||||||
0-12 Months | 4,467 | 27.6 | % | $ | 1,895,642 | 24.7 | % | |||||
13-24 Months | 2,325 | 14.4 | 1,049,930 | 13.7 | ||||||||
25-36 Months | 1,604 | 9.9 | 781,339 | 10.2 | ||||||||
37-48 Months | 1,163 | 7.2 | 588,152 | 7.6 | ||||||||
49-60 Months | 962 | 5.9 | 514,670 | 6.7 | ||||||||
Over 60 Months | 5,656 | 35.0 | 2,844,674 | 37.1 | ||||||||
Total | 16,177 | 100.0 | % | $ | 7,674,407 | 100.0 | % | |||||
Credit Quality | ||||||||||||
The Company uses proprietary scoring models developed specifically for the purpose of monitoring the Company’s obligor credit quality. The proprietary scoring models are used as a tool in the underwriting process and for making credit decisions. The proprietary scoring models are based on historical data and require various assumptions about future performance. Information regarding customer performance is factored into these proprietary scoring models to determine the probability of an account becoming 90 or more days past due at any time within the next 12 months. Obligor credit quality is monitored at least monthly during the life of an account. The following table reflects composition of the Company’s credit card and loan receivables by obligor credit quality as of March 31, 2015 and 2014: | ||||||||||||
March 31, 2015 | March 31, 2014 | |||||||||||
Probability of an Account Becoming 90 or More Days Past Due | Total Principal | Percentage of | Total Principal | Percentage of | ||||||||
or Becoming Charged-off (within the next 12 months) | Receivables | Principal | Receivables | Principal | ||||||||
Outstanding | Receivables | Outstanding | Receivables | |||||||||
Outstanding | Outstanding | |||||||||||
(In thousands, except percentages) | ||||||||||||
No Score | $ | 195,400 | 1.9 | % | $ | 151,316 | 2.0 | % | ||||
27.1% and higher | 564,781 | 5.5 | 375,904 | 4.9 | ||||||||
17.1% - 27.0% | 1,017,823 | 9.9 | 714,925 | 9.3 | ||||||||
12.6% - 17.0% | 1,178,364 | 11.5 | 843,358 | 11.0 | ||||||||
3.7% - 12.5% | 4,262,639 | 41.6 | 3,117,732 | 40.6 | ||||||||
1.9% - 3.6% | 1,939,907 | 19.0 | 1,584,841 | 20.7 | ||||||||
Lower than 1.9% | 1,087,505 | 10.6 | 886,331 | 11.5 | ||||||||
Total | $ | 10,246,419 | 100.0 | % | $ | 7,674,407 | 100.0 | % | ||||
Transfer of Financial Assets | ||||||||||||
The Company originates loans under an agreement with one of its clients, and after origination, these loan receivables are sold to the client at par value plus accrued interest. These transfers qualify for sale treatment as they meet the conditions established in ASC 860-10, “Transfers and Servicing.” Following the sale, the client owns the loan receivables, bears the risk of loss in the event of loan defaults and is responsible for all servicing functions related to the loan receivables. The loan receivables originated by the Company that have not yet been sold to the client were $78.4 million and $48.9 million at March 31, 2015 and December 31, 2014, respectively, and are included in credit card and loan receivables held for sale in the Company’s unaudited condensed consolidated balance sheets and carried at the lower of cost or fair value. The carrying value of these loan receivables approximates fair value due to the short duration between the date of origination and sale. Originations and sales of these loan receivables held for sale are reflected as operating activities in the Company’s unaudited condensed consolidated statements of cash flows. | ||||||||||||
Upon the client’s purchase of the originated loan receivables, the Company is obligated to purchase a participating interest in a pool of loan receivables that includes the loan receivables originated by the Company. Such interest participates on a pro rata basis in the cash flows of the underlying pool of loan receivables, including principal repayments, finance charges, losses and recoveries. The Company bears the risk of loss related to its participation interest in this pool. | ||||||||||||
During the three months ended March 31, 2015 and 2014, the Company purchased $67.2 million and $54.6 million, respectively, of loan receivables under these agreements. The total outstanding balance of these loan receivables was $165.0 million and $160.6 million as of March 31, 2015 and December 31, 2014, respectively, and was included in other credit card and loan receivables in the Company’s unaudited condensed consolidated balance sheets. | ||||||||||||
Portfolios Held for Sale | ||||||||||||
The Company has certain credit card portfolios held for sale, which are carried at the lower of cost or fair value, or $65.4 million and $76.2 million as of March 31, 2015 and December 31, 2014, respectively. | ||||||||||||
Securitized Credit Card Receivables | ||||||||||||
The Company regularly securitizes its credit card receivables through its credit card securitization trusts, consisting of the World Financial Network Credit Card Master Trust, World Financial Network Credit Card Master Note Trust (“Master Trust I”) and World Financial Network Credit Card Master Trust III (“Master Trust III”) (collectively, the “WFN Trusts”), and World Financial Capital Credit Card Master Note Trust (the “WFC Trust”). The Company continues to own and service the accounts that generate credit card receivables held by the WFN Trusts and the WFC Trust. In its capacity as a servicer, each of the respective banks earns a fee from the WFN Trusts and the WFC Trust to service and administer the credit card receivables, collect payments and charge-off uncollectible receivables. These fees are eliminated and therefore are not reflected in the Company’s unaudited condensed consolidated statements of income for the three months ended March 31, 2015 and 2014. | ||||||||||||
The WFN Trusts and the WFC Trust are VIEs and the assets of these consolidated VIEs include certain credit card receivables that are restricted to settle the obligations of those entities and are not expected to be available to the Company or its creditors. The liabilities of the consolidated VIEs include non-recourse secured borrowings and other liabilities for which creditors or beneficial interest holders do not have recourse to the general credit of the Company. | ||||||||||||
The tables below present quantitative information about the components of total securitized credit card receivables, delinquencies and net charge-offs: | ||||||||||||
March 31, | December 31, | |||||||||||
2015 | 2014 | |||||||||||
(In thousands) | ||||||||||||
Total credit card receivables — restricted for securitization investors | $ | 7,730,899 | $ | 8,312,291 | ||||||||
Principal amount of credit card receivables — restricted for securitization investors, 90 days or more past due | $ | 133,241 | $ | 145,768 | ||||||||
Three Months Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
(In thousands) | ||||||||||||
Net charge-offs of securitized principal | $ | 98,839 | $ | 85,714 | ||||||||
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2015 | |
INVENTORIES | |
INVENTORIES | |
5. INVENTORIES | |
Inventories of $194.9 million and $220.5 million at March 31, 2015 and December 31, 2014, respectively, consist of finished goods primarily to be utilized as rewards in the Company’s loyalty programs and are included in other current assets in the Company’s unaudited condensed consolidated balance sheets. | |
Inventories are stated at the lower of cost or market and valued primarily on a first-in-first-out basis. The Company records valuation adjustments to its inventories if the cost of inventory exceeds the amount it expects to realize from the ultimate sale or disposal of the inventory. These estimates are based on management’s judgment regarding future market conditions and an analysis of historical experience. | |
OTHER_INVESTMENTS
OTHER INVESTMENTS | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||
OTHER INVESTMENTS | ||||||||||||||||||||||||||
OTHER INVESTMENTS | ||||||||||||||||||||||||||
6. OTHER INVESTMENTS | ||||||||||||||||||||||||||
Other investments consist of restricted cash, marketable securities and U.S. Treasury bonds and are included in other current assets and other assets in the Company’s unaudited condensed consolidated balance sheets. The principal components of other investments, which are carried at fair value, are as follows: | ||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair Value | Amortized | Unrealized | Unrealized | Fair Value | |||||||||||||||||||
Cost | Gains | Losses | Cost | Gains | Losses | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Restricted cash | $ | 30,033 | $ | — | $ | — | $ | 30,033 | $ | 22,611 | $ | — | $ | — | $ | 22,611 | ||||||||||
Marketable securities | 101,209 | 712 | (1,095 | ) | 100,826 | 95,669 | 520 | (1,322 | ) | 94,867 | ||||||||||||||||
U.S. Treasury bonds | 100,065 | 804 | — | 100,869 | 100,072 | 66 | (33 | ) | 100,105 | |||||||||||||||||
Total | $ | 231,307 | $ | 1,516 | $ | (1,095 | ) | $ | 231,728 | $ | 218,352 | $ | 586 | $ | (1,355 | ) | $ | 217,583 | ||||||||
The following tables show the unrealized losses and fair value for those investments that were in an unrealized loss position as of March 31, 2015 and December 31, 2014, aggregated by investment category and the length of time that individual securities have been in a continuous loss position: | ||||||||||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||||||||
Less than 12 months | 12 Months or Greater | Total | ||||||||||||||||||||||||
Fair Value | Unrealized | Fair Value | Unrealized | Fair Value | Unrealized | |||||||||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable securities | $ | 11,267 | $ | (75 | ) | $ | 48,723 | $ | (1,020 | ) | $ | 59,990 | $ | (1,095 | ) | |||||||||||
Total | $ | 11,267 | $ | (75 | ) | $ | 48,723 | $ | (1,020 | ) | $ | 59,990 | $ | (1,095 | ) | |||||||||||
December 31, 2014 | ||||||||||||||||||||||||||
Less than 12 months | 12 Months or Greater | Total | ||||||||||||||||||||||||
Fair Value | Unrealized | Fair Value | Unrealized | Fair Value | Unrealized | |||||||||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable securities | $ | 8,757 | $ | (27 | ) | $ | 48,961 | $ | (1,295 | ) | $ | 57,718 | $ | (1,322 | ) | |||||||||||
U.S. Treasury bonds | 75,043 | (33 | ) | — | — | 75,043 | (33 | ) | ||||||||||||||||||
Total | $ | 83,800 | $ | (60 | ) | $ | 48,961 | $ | (1,295 | ) | $ | 132,761 | $ | (1,355 | ) | |||||||||||
The amortized cost and estimated fair value of the marketable securities and U.S. Treasury bonds at March 31, 2015 by contractual maturity are as follows: | ||||||||||||||||||||||||||
Amortized Cost | Fair Value | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Due in one year or less | $ | 6,643 | $ | 6,611 | ||||||||||||||||||||||
Due after one year through five years | 100,065 | 100,869 | ||||||||||||||||||||||||
Due after five years through ten years | 5,210 | 5,410 | ||||||||||||||||||||||||
Due after ten years | 89,356 | 88,805 | ||||||||||||||||||||||||
Total | $ | 201,274 | $ | 201,695 | ||||||||||||||||||||||
Market values were determined for each individual security in the investment portfolio. When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the security’s issuer, and the Company’s intent to sell the security and whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. The Company typically invests in highly-rated securities with low probabilities of default and has the intent and ability to hold the investments until maturity. As of March 31, 2015, the Company does not consider the investments to be other-than-temporarily impaired. | ||||||||||||||||||||||||||
There were no realized gains or losses from the sale of investment securities for the three months ended March 31, 2015 and 2014. | ||||||||||||||||||||||||||
REDEMPTION_SETTLEMENT_ASSETS
REDEMPTION SETTLEMENT ASSETS | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||
REDEMPTION SETTLEMENT ASSETS | ||||||||||||||||||||||||||
REDEMPTION SETTLEMENT ASSETS | ||||||||||||||||||||||||||
7. REDEMPTION SETTLEMENT ASSETS | ||||||||||||||||||||||||||
Redemption settlement assets consist of cash and cash equivalents and securities available-for-sale and are designated for settling redemptions by collectors of the AIR MILES® Reward Program in Canada under certain contractual relationships with sponsors of the AIR MILES Reward Program. The principal components of redemption settlement assets, which are carried at fair value, are as follows: | ||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair Value | Cost | Unrealized | Unrealized | Fair Value | |||||||||||||||||||
Gains | Losses | Gains | Losses | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | 225,682 | $ | — | $ | — | $ | 225,682 | $ | 237,127 | $ | — | $ | — | $ | 237,127 | ||||||||||
Mutual funds | 19,717 | 53 | — | 19,770 | — | — | — | — | ||||||||||||||||||
Corporate bonds | 240,311 | 3,286 | — | 243,597 | 280,053 | 3,160 | — | 283,213 | ||||||||||||||||||
Total | $ | 485,710 | $ | 3,339 | $ | — | $ | 489,049 | $ | 517,180 | $ | 3,160 | $ | — | $ | 520,340 | ||||||||||
There were no investments that were in an unrealized loss position at March 31, 2015 and December 31, 2014. | ||||||||||||||||||||||||||
The amortized cost and estimated fair value of the securities at March 31, 2015 by contractual maturity are as follows: | ||||||||||||||||||||||||||
Amortized Cost | Fair Value | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Due in one year or less | $ | 162,813 | $ | 164,204 | ||||||||||||||||||||||
Due after one year through five years | 97,215 | 99,163 | ||||||||||||||||||||||||
Total | $ | 260,028 | $ | 263,367 | ||||||||||||||||||||||
Market values were determined for each individual security in the investment portfolio. When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the security’s issuer, and the Company’s intent to sell the security and whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. The Company typically invests in highly-rated securities with low probabilities of default and has the intent and ability to hold the investments until maturity. As of March 31, 2015, the Company does not consider the investments to be other-than-temporarily impaired. | ||||||||||||||||||||||||||
There were no realized gains or losses from the sale of investment securities for the three months ended March 31, 2015 and 2014. | ||||||||||||||||||||||||||
INTANGIBLE_ASSETS_AND_GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
INTANGIBLE ASSETS AND GOODWILL | |||||||||||||||||
INTANGIBLE ASSETS AND GOODWILL | |||||||||||||||||
8. INTANGIBLE ASSETS AND GOODWILL | |||||||||||||||||
Intangible Assets | |||||||||||||||||
Intangible assets consist of the following: | |||||||||||||||||
March 31, 2015 | |||||||||||||||||
Gross | Accumulated | Net | Amortization Life and Method | ||||||||||||||
Assets | Amortization | ||||||||||||||||
(In thousands) | |||||||||||||||||
Finite Lived Assets | |||||||||||||||||
Customer contracts and lists | $ | 1,191,492 | $ | (236,332 | ) | $ | 955,160 | 4-12 years—straight line | |||||||||
Premium on purchased credit card portfolios | 251,447 | (87,225 | ) | 164,222 | 3-10 years—straight line, accelerated | ||||||||||||
Customer database | 210,300 | (135,400 | ) | 74,900 | 3-10 years—straight line | ||||||||||||
Collector database | 55,172 | (51,663 | ) | 3,509 | 30 years—15% declining balance | ||||||||||||
Publisher networks | 140,200 | (8,556 | ) | 131,644 | 5-7 years — straight line | ||||||||||||
Tradenames | 84,175 | (32,337 | ) | 51,838 | 2-15 years—straight line | ||||||||||||
Purchased data lists | 12,284 | (6,595 | ) | 5,689 | 1-5 years—straight line, accelerated | ||||||||||||
Favorable lease | 6,891 | (1,044 | ) | 5,847 | 3-10 years—straight line | ||||||||||||
Noncompete agreements | 1,300 | (975 | ) | 325 | 3 years—straight line | ||||||||||||
$ | 1,953,261 | $ | (560,127 | ) | $ | 1,393,134 | |||||||||||
Indefinite Lived Assets | |||||||||||||||||
Tradenames | 12,350 | — | 12,350 | Indefinite life | |||||||||||||
Total intangible assets | $ | 1,965,611 | $ | (560,127 | ) | $ | 1,405,484 | ||||||||||
December 31, 2014 | |||||||||||||||||
Gross | Accumulated | Net | Amortization Life and Method | ||||||||||||||
Assets | Amortization | ||||||||||||||||
(In thousands) | |||||||||||||||||
Finite Lived Assets | |||||||||||||||||
Customer contracts and lists | $ | 1,328,056 | $ | (295,263 | ) | $ | 1,032,793 | 4-12 years—straight line | |||||||||
Premium on purchased credit card portfolios | 289,173 | (114,923 | ) | 174,250 | 3-10 years—straight line, accelerated | ||||||||||||
Customer database | 210,300 | (126,157 | ) | 84,143 | 3-10 years—straight line | ||||||||||||
Collector database | 60,238 | (56,239 | ) | 3,999 | 30 years—15% declining balance | ||||||||||||
Publisher networks | 140,200 | (1,662 | ) | 138,538 | 5-7 years — straight line | ||||||||||||
Tradenames | 86,934 | (29,408 | ) | 57,526 | 2-15 years—straight line | ||||||||||||
Purchased data lists | 12,335 | (6,497 | ) | 5,838 | 1-5 years—straight line, accelerated | ||||||||||||
Favorable lease | 6,891 | (767 | ) | 6,124 | 3-10 years—straight line | ||||||||||||
Noncompete agreements | 1,300 | (867 | ) | 433 | 3 years—straight line | ||||||||||||
$ | 2,135,427 | $ | (631,783 | ) | $ | 1,503,644 | |||||||||||
Indefinite Lived Assets | |||||||||||||||||
Tradenames | 12,350 | — | 12,350 | Indefinite life | |||||||||||||
Total intangible assets | $ | 2,147,777 | $ | (631,783 | ) | $ | 1,515,994 | ||||||||||
The estimated amortization expense related to intangible assets for the next five years and thereafter is as follows: | |||||||||||||||||
For the | |||||||||||||||||
Years Ending | |||||||||||||||||
December 31, | |||||||||||||||||
(In thousands) | |||||||||||||||||
2015 (excluding the three months ended March 31, 2015) | $ | 239,092 | |||||||||||||||
2016 | 296,802 | ||||||||||||||||
2017 | 258,009 | ||||||||||||||||
2018 | 195,653 | ||||||||||||||||
2019 | 161,134 | ||||||||||||||||
2020 & thereafter | 242,444 | ||||||||||||||||
Goodwill | |||||||||||||||||
The changes in the carrying amount of goodwill for the three months ended March 31, 2015 are as follows: | |||||||||||||||||
LoyaltyOne | Epsilon | Card Services | Corporate/ | Total | |||||||||||||
Other | |||||||||||||||||
(In thousands) | |||||||||||||||||
December 31, 2014 | $ | 713,457 | $ | 2,890,295 | $ | 261,732 | $ | — | $ | 3,865,484 | |||||||
Effects of foreign currency translation | (73,521 | ) | (1,197 | ) | — | — | (74,718 | ) | |||||||||
March 31, 2015 | $ | 639,936 | $ | 2,889,098 | $ | 261,732 | $ | — | $ | 3,790,766 | |||||||
DEBT
DEBT | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
DEBT | ||||||||||||
DEBT | ||||||||||||
9. DEBT | ||||||||||||
Debt consists of the following: | ||||||||||||
Description | March 31, | December 31, | Maturity | Interest Rate | ||||||||
2015 | 2014 | |||||||||||
(Dollars in thousands) | ||||||||||||
Long-term and other debt: | ||||||||||||
2013 credit facility | $ | 704,000 | $ | — | July 2018 or December 2019 | -1 | ||||||
2013 term loan | 2,586,563 | 2,603,125 | July 2018 or December 2019 | -1 | ||||||||
BrandLoyalty credit facility | 77,321 | 108,789 | December 2015 | -2 | ||||||||
Senior notes due 2017 | 397,544 | 397,332 | December 2017 | 5.25% | ||||||||
Senior notes due 2020 | 500,000 | 500,000 | April 2020 | 6.38% | ||||||||
Senior notes due 2022 | 600,000 | 600,000 | August 2022 | 5.38% | ||||||||
Total long-term and other debt | 4,865,428 | 4,209,246 | ||||||||||
Less: current portion | 193,259 | 208,164 | ||||||||||
Long-term portion | $ | 4,672,169 | $ | 4,001,082 | ||||||||
Deposits: | ||||||||||||
Certificates of deposit | $ | 3,519,218 | $ | 3,934,906 | Various — April 2015 — November 2021 | 0.35% to 3.20% | ||||||
Money market deposits | 991,156 | 838,635 | On demand | -3 | ||||||||
Total deposits | 4,510,374 | 4,773,541 | ||||||||||
Less: current portion | 2,533,417 | 2,645,995 | ||||||||||
Long-term portion | $ | 1,976,957 | $ | 2,127,546 | ||||||||
Non-recourse borrowings of consolidated securitization entities: | ||||||||||||
Fixed rate asset-backed term note securities | $ | 3,376,916 | $ | 3,376,916 | Various - June 2015 — June 2019 | 0.61% to 6.75% | ||||||
Floating rate asset-backed term note securities | 450,000 | 450,000 | February 2016 | -4 | ||||||||
Conduit asset-backed securities | 970,000 | 1,365,000 | Various - September 2015 — May 2016 | -5 | ||||||||
Total non-recourse borrowings of consolidated securitization entities | 4,796,916 | 5,191,916 | ||||||||||
Less: current portion | 1,708,750 | 1,058,750 | ||||||||||
Long-term portion | $ | 3,088,166 | $ | 4,133,166 | ||||||||
-1 | The interest rate is based upon the London Interbank Offered Rate (“LIBOR”) plus an applicable margin. At March 31, 2015, the weighted average interest rate was 2.18% for each of the 2013 Credit Facility and 2013 Term Loan. | |||||||||||
-2 | The interest rate is based upon the Euro Interbank Offered Rate plus an applicable margin. At March 31, 2015, the weighted average interest rate was 2.58%. | |||||||||||
-3 | The interest rates are based on the Federal Funds rate. At March 31, 2015, the interest rates ranged from 0.01% to 0.42%. | |||||||||||
-4 | The interest rate is based upon LIBOR plus an applicable margin. At March 31, 2015, the interest rate was 0.56%. | |||||||||||
-5 | The interest rate is based upon LIBOR or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. At March 31, 2015, the interest rates ranged from 1.03% to 1.72%. | |||||||||||
At March 31, 2015, the Company was in compliance with its debt covenants. | ||||||||||||
Long-term and other debt | ||||||||||||
The Company, as borrower, and ADS Alliance Data Systems, Inc., ADS Foreign Holdings, Inc., Alliance Data Foreign Holdings, Inc., Epsilon Data Management, LLC, Comenity LLC, Comenity Servicing LLC and Aspen Marketing Services, LLC, as guarantors, are party to a credit agreement that provides for a $2.65 billion term loan (the “2013 Term Loan”) with certain principal repayments and a $1.3 billion revolving line of credit (the “2013 Credit Facility” and together with the 2013 Term Loan, the “2013 Credit Agreement”). Total availability under the 2013 Credit Facility at March 31, 2015 was $596.0 million. | ||||||||||||
On March 3, 2015, Conversant LLC and Commission Junction, Inc. were added as guarantors for the 2013 Credit Agreement as well as the Senior Notes due 2017, Senior Notes due 2020, and Senior Notes due 2022. | ||||||||||||
Non-Recourse Borrowings of Consolidated Securitization Entities | ||||||||||||
Asset-Backed Term Notes | ||||||||||||
On April 17, 2015, Master Trust I issued $500.0 million of asset-backed term securities, $140.0 million of which will be retained by the Company and eliminated from the Company’s unaudited condensed consolidated financial statements. These securities mature in April 2018 and have a variable interest rate equal to LIBOR plus a margin of 0.48%. | ||||||||||||
Conduit Facilities | ||||||||||||
The Company has access to committed undrawn capacity through three conduit facilities to support the funding of its credit card receivables through Master Trust I, Master Trust III and the WFC Trust. | ||||||||||||
As of March 31, 2015, total capacity under the conduit facilities was $1.6 billion, of which $1.0 billion had been drawn and was included in non-recourse borrowings of consolidated securitization entities in the Company’s unaudited condensed consolidated balance sheets. | ||||||||||||
On April 1, 2015, Master Trust I amended its 2009-VFN conduit facility, extending the maturity to March 31, 2017. | ||||||||||||
On May 1, 2015, Master Trust III renewed its 2009-VFC conduit facility, increasing the capacity to $900.0 million and extending the maturity to May 1, 2017. | ||||||||||||
DERIVATIVE_INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||||||||||||
DERIVATIVE INSTRUMENTS | ||||||||||||
10. DERIVATIVE INSTRUMENTS | ||||||||||||
The Company uses derivatives to manage risks associated with certain assets and liabilities arising from the potential adverse impact of fluctuations in interest rates and foreign currency exchange rates. | ||||||||||||
The Company is a party to certain interest rate derivative instruments that involve the receipt of variable rate amounts from counterparties in exchange for the Company making fixed rate payments over the life of the agreement without the exchange of the underlying notional amount. These interest rate derivative instruments are not designated as hedges. Such instruments are not speculative and are used to manage interest rate risk, but do not meet the specific hedge accounting requirements of ASC 815, “Derivatives and Hedging.” | ||||||||||||
The Company enters into certain foreign currency derivatives to reduce the volatility of the Company’s cash flows resulting from changes in foreign currency exchange rates associated with certain inventory transactions, certain of which are designated as cash flow hedges. | ||||||||||||
The following tables present the fair values of the derivative instruments included within the Company’s unaudited condensed consolidated balance sheets as of March 31, 2015 and December 31, 2014: | ||||||||||||
March 31, 2015 | ||||||||||||
Balance Sheet Location | Notional Amount | Maturity | Fair Value | |||||||||
(In thousands) | ||||||||||||
Designated as hedging instruments: | ||||||||||||
Foreign currency exchange hedges | Other current assets | $ | 62,796 | April 2015 to January 2016 | $ | 2,834 | ||||||
Foreign currency exchange hedges | Other current liabilities | $ | 12,446 | April 2015 to September 2015 | $ | 1,691 | ||||||
Not designated as hedging instruments: | ||||||||||||
Interest rate derivatives | Other current liabilities | $ | 50,569 | December 2015 | $ | 178 | ||||||
December 31, 2014 | ||||||||||||
Balance Sheet Location | Notional Amount | Maturity | Fair Value | |||||||||
(In thousands) | ||||||||||||
Designated as hedging instruments: | ||||||||||||
Foreign currency exchange hedges | Other current assets | $ | 50,908 | January 2015 to September 2015 | $ | 3,528 | ||||||
Not designated as hedging instruments: | ||||||||||||
Foreign currency exchange hedges | Other current assets | $ | 3,125 | January 2015 to March 2015 | $ | 343 | ||||||
Foreign currency exchange forward contract | Other current liabilities | $ | 236,578 | January 2015 | $ | 16,990 | ||||||
Interest rate derivatives ves | Other current liabilities | $ | 79,429 | December 2015 to August 2016 | $ | 330 | ||||||
Losses of $2.4 million, net of tax, were recognized in other comprehensive income for the quarter ended March 31, 2015 related to foreign currency exchange hedges designated as effective. Changes in the fair value of these hedges, excluding any ineffective portion are recorded in other comprehensive income (loss) until the hedged transactions affect net income. The ineffective portion of these cash flow hedges impacts net income when the ineffectiveness occurs. For the three months ended March 31, 2015, gains of $0.8 million were reclassified from accumulated other comprehensive income into net income (cost of operations) and a de minimus amount of ineffectiveness was recorded. At March 31, 2015, a de minimus amount is expected to be reclassified from accumulated other comprehensive income into net income in the coming 12 months. | ||||||||||||
The following table summarizes activity related to and identifies the location of the Company’s outstanding derivatives not designated as hedging instruments for the three months ended March 31, 2015 and 2014 recognized in the Company’s unaudited condensed consolidated statements of income: | ||||||||||||
2015 | 2014 | |||||||||||
For the three months ended March 31, | Income Statement | Gain (Loss) on | Income Statement | Gain on | ||||||||
Location | Derivative | Location | Derivative | |||||||||
Instruments | Instruments | |||||||||||
(In thousands) | ||||||||||||
Interest rate derivatives | Interest expense on long-term and other debt, net | $ | 27 | Interest expense on long-term and other debt, net | $ | 81 | ||||||
Foreign currency exchange forward contract | General and administrative | $ | (13,724 | ) | General and administrative | $ | — | |||||
Foreign currency exchange hedges | Cost of operations | $ | 319 | Cost of operations | $ | — | ||||||
Gains and losses on derivatives not designated as hedging instruments are included in other operating activities in the unaudited condensed consolidated statements of cash flows for all periods presented. | ||||||||||||
The Company limits its exposure on derivatives by entering into contracts with institutions that are established dealers who maintain certain minimum credit criteria established by the Company. At March 31, 2015, the Company does not maintain any derivative instruments subject to master agreements that would require the Company to post collateral or that contain any credit-risk related contingent features. | ||||||||||||
DEFERRED_REVENUE
DEFERRED REVENUE | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
DEFERRED REVENUE | |||||||||||
DEFERRED REVENUE | |||||||||||
11. DEFERRED REVENUE | |||||||||||
The AIR MILES Reward Program collects fees from its sponsors based on the number of AIR MILES reward miles issued and, in limited circumstances, the number of AIR MILES reward miles redeemed. Because management has determined that the earnings process is not complete at the time an AIR MILES reward mile is issued, the recognition of redemption and service revenue is deferred. | |||||||||||
A reconciliation of deferred revenue for the AIR MILES Reward Program is as follows: | |||||||||||
Deferred Revenue | |||||||||||
Service | Redemption | Total | |||||||||
(In thousands) | |||||||||||
December 31, 2014 | $ | 332,368 | $ | 680,809 | $ | 1,013,177 | |||||
Cash proceeds | 47,611 | 86,940 | 134,551 | ||||||||
Revenue recognized | (46,939 | ) | (115,741 | ) | (162,680 | ) | |||||
Other | — | 25 | 25 | ||||||||
Effects of foreign currency translation | (27,967 | ) | (56,533 | ) | (84,500 | ) | |||||
March 31, 2015 | $ | 305,073 | $ | 595,500 | $ | 900,573 | |||||
Amounts recognized in the unaudited condensed consolidated balance sheets: | |||||||||||
Current liabilities | $ | 151,392 | $ | 595,500 | $ | 746,892 | |||||
Non-current liabilities | $ | 153,681 | $ | — | $ | 153,681 | |||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | |
12. COMMITMENTS AND CONTINGENCIES | |
Litigation and Regulatory Matters | |
The Federal Deposit Insurance Corporation (“FDIC”) has notified Comenity Bank and Comenity Capital Bank (collectively, the “Banks”) that it plans to pursue an enforcement action against them with respect to practices associated with certain of their credit card add-on products. Before the FDIC’s review began, the Banks made changes to these add-on products, and they believe their current business practices substantially address the FDIC’s concerns. An enforcement action could include civil monetary penalties, damages in the form of restitution and additional business practice changes. The Company is not able to make an estimate of loss with respect to this matter at this time. | |
REDEEMABLE_NONCONTROLLING_INTE
REDEEMABLE NON-CONTROLLING INTEREST | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
REDEEMABLE NON-CONTROLLING INTEREST | |||||
REDEEMABLE NON-CONTROLLING INTEREST | |||||
13. REDEEMABLE NON-CONTROLLING INTEREST | |||||
On January 2, 2014, the Company acquired a 60% ownership interest in BrandLoyalty. Pursuant to the BrandLoyalty share purchase agreement, the Company may acquire the remaining 40% ownership interest in BrandLoyalty over a four-year period from the acquisition date at 10% per year at predetermined valuation multiples. If specified annual earnings targets are met by BrandLoyalty, the Company must acquire the additional 10% ownership interest for the year achieved; otherwise, the sellers have a put option to sell the Company their 10% ownership interest for the respective year. | |||||
The specified annual earnings target was met for the year ended December 31, 2014 and the Company acquired an additional 10% ownership interest effective January 1, 2015, increasing its ownership percentage to 70%. The Company paid €77.2 million on February 10, 2015 ($87.4 million) to acquire this additional 10% ownership interest. The remaining 30% interests held by minority interest shareholders are considered redeemable non-controlling interests, as the acquisition of these interests is outside of the Company’s control. | |||||
As of March 31, 2015, the remaining interests are not redeemable, but are probable to be redeemed. As such, the Company adjusted the carrying amount of the redeemable non-controlling interest to the estimated redemption value assuming the interests were redeemable as of March 31, 2015. The estimated redemption values are based on a formula as prescribed in the BrandLoyalty share purchase agreement. | |||||
A reconciliation of the changes in the redeemable non-controlling interest is as follows: | |||||
Redeemable Non- | |||||
Controlling Interest | |||||
(In thousands) | |||||
Balance at January 2, 2014 | $ | 341,907 | |||
Net income attributable to non-controlling interest | 9,847 | ||||
Other comprehensive income attributable to non-controlling interest | 1,988 | ||||
Adjustment to redemption value | 14,775 | ||||
Foreign currency translation adjustments | (39,654 | ) | |||
Reclassification to accrued expenses | (93,297 | ) | |||
Balance at December 31, 2014 | 235,566 | ||||
Net income attributable to non-controlling interest | 2,273 | ||||
Other comprehensive income attributable to non-controlling interest | 489 | ||||
Adjustment to redemption value | 15,194 | ||||
Foreign currency translation adjustments | (26,641 | ) | |||
Balance at March 31, 2015 | $ | 226,881 | |||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
14. STOCKHOLDERS’ EQUITY | ||||||||
Stock Repurchase Program | ||||||||
On January 1, 2015, the Company’s Board of Directors authorized a stock repurchase program to acquire up to $600.0 million of the Company’s outstanding common stock from January 1, 2015 through December 31, 2015, subject to any restrictions pursuant to the terms of the Company’s credit agreements, indentures, applicable securities laws or otherwise. | ||||||||
For the three months ended March 31, 2015, the Company acquired a total of 2,003,653 shares of its common stock for $564.9 million, of which $22.3 million had not settled as of March 31, 2015. As of March 31, 2015, the Company had $35.1 million available under the stock repurchase program. | ||||||||
On April 15, 2015, the Company’s Board of Directors authorized an increase to the stock repurchase program approved on January 1, 2015 to acquire an additional $400.0 million of the Company’s outstanding common stock from January 1, 2015 through December 31, 2015, for a total authorization of $1.0 billion, subject to any restrictions pursuant to the terms of the Company’s credit agreements, indentures, applicable securities laws or otherwise. | ||||||||
Stock Compensation Expense | ||||||||
Total stock-based compensation expense recognized in the Company’s unaudited condensed consolidated statements of income for the three months ended March 31, 2015 and 2014 is as follows: | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Cost of operations | $ | 22,102 | $ | 10,982 | ||||
General and administrative | 5,386 | 4,642 | ||||||
Total | $ | 27,488 | $ | 15,624 | ||||
During the three months ended March 31, 2015, the Company awarded 222,605 performance-based restricted stock units with a weighted average grant date fair value per share of $284.23 as determined on the date of grant. The performance restriction on the awards will lapse upon determination by the Board of Directors or the Compensation Committee of the Board of Directors that the Company’s earnings before taxes for the period from January 1, 2015 to December 31, 2015 met certain pre-defined vesting criteria that permit a range from 50% to 150% of such performance-based restricted stock units to vest. Upon such determination, the restrictions will lapse with respect to 33% of the award on February 17, 2016, an additional 33% of the award on February 17, 2017 and the final 34% of the award on February 17, 2018, provided that the participant is employed by the Company on each such vesting date. | ||||||||
During the three months ended March 31, 2015, the Company awarded 56,654 service-based restricted stock units with a weighted average grant date fair value per share of $284.31 as determined on the date of grant. Service-based restricted stock units typically vest ratably over three years provided that the participant is employed by the Company on each such vesting date. | ||||||||
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | ||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | ||||||||||||||
15. ACCUMULATED OTHER COMPREHENSIVE INCOME | ||||||||||||||
The changes in each component of accumulated other comprehensive income (loss), net of tax effects, are as follows: | ||||||||||||||
Three Months Ended March 31, 2015 | Net Unrealized | Unrealized | Foreign | Accumulated | ||||||||||
Gains on | Gains (Losses) | Currency | Other | |||||||||||
Securities | on Cash Flow | Translation | Comprehensive | |||||||||||
Hedges | Adjustments(1) | Income (Loss) | ||||||||||||
(In thousands) | ||||||||||||||
Balance at December 31, 2014 | $ | 2,654 | $ | 2,350 | $ | (80,457 | ) | $ | (75,453 | ) | ||||
Changes in other comprehensive income (loss) before reclassifications | 917 | (3,199 | ) | (62,614 | ) | (64,896 | ) | |||||||
Amounts reclassified from other comprehensive income (loss) | — | 796 | — | 796 | ||||||||||
Changes in other comprehensive income (loss) | 917 | (2,403 | ) | (62,614 | ) | (64,100 | ) | |||||||
Balance as of March 31, 2015 | $ | 3,571 | $ | (53 | ) | $ | (143,071 | ) | $ | (139,553 | ) | |||
Three Months Ended March 31, 2014 | Net Unrealized | Unrealized | Foreign | Accumulated | ||||||||||
Gains on | Gains on Cash | Currency | Other | |||||||||||
Securities | Flow Hedges | Translation | Comprehensive | |||||||||||
Adjustments(1) | Income (Loss) | |||||||||||||
(In thousands) | ||||||||||||||
Balance as of December 31, 2013 | $ | 4,189 | $ | — | $ | (22,416 | ) | $ | (18,227 | ) | ||||
Changes in other comprehensive income (loss) | 485 | — | 9,333 | 9,818 | ||||||||||
Balance as of March 31, 2014 | $ | 4,674 | $ | — | $ | (13,083 | ) | $ | (8,409 | ) | ||||
-1 | Primarily related to the impact of changes in the Canadian dollar and Euro foreign currency exchange rates. | |||||||||||||
There were no reclassifications out of accumulated other comprehensive income (loss) into net income for the three months ended March 31, 2014. | ||||||||||||||
FINANCIAL_INSTRUMENTS
FINANCIAL INSTRUMENTS | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
FINANCIAL INSTRUMENTS | ||||||||||||||
FINANCIAL INSTRUMENTS | ||||||||||||||
16. FINANCIAL INSTRUMENTS | ||||||||||||||
In accordance with ASC 825, “Financial Instruments,” the Company is required to disclose the fair value of financial instruments for which it is practical to estimate fair value. To obtain fair values, observable market prices are used if available. In some instances, observable market prices are not readily available and fair value is determined using present value or other techniques appropriate for a particular financial instrument. These techniques involve judgment and as a result are not necessarily indicative of the amounts the Company would realize in a current market exchange. The use of different assumptions or estimation techniques may have a material effect on the estimated fair value amounts. | ||||||||||||||
Fair Value of Financial Instruments — The estimated fair values of the Company’s financial instruments are as follows: | ||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||
Amount | Value | Amount | Value | |||||||||||
(In thousands) | ||||||||||||||
Financial assets | ||||||||||||||
Cash and cash equivalents | $ | 760,398 | $ | 760,398 | $ | 1,077,152 | $ | 1,077,152 | ||||||
Trade receivables, net | 571,560 | 571,560 | 743,294 | 743,294 | ||||||||||
Credit card and loan receivables, net | 10,143,003 | 10,143,003 | 10,673,709 | 10,673,709 | ||||||||||
Credit card and loan receivables held for sale | 143,837 | 143,837 | 125,060 | 125,060 | ||||||||||
Redemption settlement assets, restricted | 489,049 | 489,049 | 520,340 | 520,340 | ||||||||||
Cash collateral, restricted | 24,940 | 24,940 | 22,511 | 22,511 | ||||||||||
Derivative instruments | 2,834 | 2,834 | 3,871 | 3,871 | ||||||||||
Other investments | 231,728 | 231,728 | 217,583 | 217,583 | ||||||||||
Financial liabilities | ||||||||||||||
Accounts payable | 412,503 | 412,503 | 455,656 | 455,656 | ||||||||||
Derivative instruments | 1,869 | 1,869 | 17,290 | 17,290 | ||||||||||
Deposits | 4,510,374 | 4,551,986 | 4,773,541 | 4,801,464 | ||||||||||
Non-recourse borrowings of consolidated securitization entities | 4,796,916 | 4,843,352 | 5,191,916 | 5,225,359 | ||||||||||
Long-term and other debt | 4,865,428 | 4,895,784 | 4,209,246 | 4,227,414 | ||||||||||
Contingent consideration | — | — | 326,023 | 326,023 | ||||||||||
Fair Value of Assets and Liabilities Held at March 31, 2015 and December 31, 2014 | ||||||||||||||
The following techniques and assumptions were used by the Company in estimating fair values of financial instruments as disclosed herein: | ||||||||||||||
Cash and cash equivalents, trade receivables, net and accounts payable — The carrying amount approximates fair value due to the short maturity and the relatively liquid nature of these assets and liabilities. | ||||||||||||||
Credit card and loan receivables, net — The carrying amount of credit card and loan receivables, net approximates fair value due to the short maturity and average interest rates that approximate current market origination rates. | ||||||||||||||
Credit card and loan receivables held for sale — Credit card and loan receivables held for sale are recorded at the lower of cost or fair value, and their carrying amount approximates fair value due to the short duration of the holding period of the receivables prior to sale. | ||||||||||||||
Redemption settlement assets, restricted — Redemption settlement assets, restricted are recorded at fair value based on quoted market prices for the same or similar securities. | ||||||||||||||
Cash collateral, restricted — Spread deposits are recorded at their fair value based on discounted cash flow models. The Company uses a valuation model that calculates the present value of estimated cash flows for each asset. The fair value is based on the term of the underlying securities and a discount rate. The carrying amount of excess funding deposits approximates its fair value due to the relatively short maturity period and average interest rates, which approximate current market rates. | ||||||||||||||
Other investments — Other investments are recorded at fair value based on quoted market prices for the same or similar securities. | ||||||||||||||
Deposits — The fair value is estimated based on the current observable market rates available to the Company for similar deposits with similar remaining maturities. | ||||||||||||||
Non-recourse borrowings of consolidated securitization entities — The fair value is estimated based on the current observable market rates available to the Company for similar debt instruments with similar remaining maturities or quoted market prices for the same transaction. | ||||||||||||||
Long-term and other debt — The fair value is estimated based on the current observable market rates available to the Company for similar debt instruments with similar remaining maturities or quoted market prices for the same transaction. | ||||||||||||||
Derivative instruments — Derivative instruments are recorded at fair value based on a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflected the contractual terms of the derivatives, including the period to maturity, and used observable market-based inputs, including interest rate curves and option volatility. The fair value of the foreign currency derivative instruments is estimated based on published quotations of spot foreign currency rates and forward points which are converted into implied foreign currency rates. | ||||||||||||||
Contingent consideration — The contingent consideration was recorded at fair value. The fair value at inception was determined using a Monte Carlo simulation valuation technique, which is based on certain key assumptions, including the estimated 2014 earnings and net debt of BrandLoyalty, each as defined in the BrandLoyalty share purchase agreement, earnings volatility, and discount rate. As of December 31, 2014, the fair value was determined based on the provisions in the BrandLoyalty share purchase agreement, which was based on a defined multiple, 2014 BrandLoyalty EBITDA and net debt. This liability was settled in the first quarter of 2015. | ||||||||||||||
Financial Assets and Financial Liabilities Fair Value Hierarchy | ||||||||||||||
ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: | ||||||||||||||
· | Level 1, defined as observable inputs such as quoted prices in active markets; | |||||||||||||
· | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and | |||||||||||||
· | Level 3, defined as unobservable inputs where little or no market data exists, therefore requiring an entity to develop its own assumptions. | |||||||||||||
Financial instruments are considered Level 3 when their values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 financial instruments also include those for which the determination of fair value requires significant management judgment or estimation. The use of different techniques to determine fair value of these financial instruments could result in different estimates of fair value at the reporting date. | ||||||||||||||
The following tables provide information for the assets and liabilities carried at fair value measured on a recurring basis as of March 31, 2015 and December 31, 2014: | ||||||||||||||
Balance at | Fair Value Measurements at | |||||||||||||
March 31, | March 31, 2015 Using | |||||||||||||
2015 | Level 1 | Level 2 | Level 3 | |||||||||||
(In thousands) | ||||||||||||||
Corporate bonds (1) | $ | 243,597 | $ | — | $ | 243,597 | $ | — | ||||||
Mutual funds (1) | 19,770 | 19,770 | — | — | ||||||||||
Cash collateral, restricted | 24,940 | 2,251 | — | 22,689 | ||||||||||
Other investments (2) | 231,728 | 135,950 | 95,778 | — | ||||||||||
Derivative instruments (3) | 2,834 | — | 2,834 | — | ||||||||||
Total assets measured at fair value | $ | 522,869 | $ | 157,971 | $ | 342,209 | $ | 22,689 | ||||||
Derivative instruments (3) | $ | 1,869 | $ | — | $ | 1,869 | $ | — | ||||||
Total liabilities measured at fair value | $ | 1,869 | $ | — | $ | 1,869 | $ | — | ||||||
Balance at | Fair Value Measurements at | |||||||||||||
December 31, | December 31, 2014 Using | |||||||||||||
2014 | Level 1 | Level 2 | Level 3 | |||||||||||
(In thousands) | ||||||||||||||
Corporate bonds (1) | $ | 283,213 | $ | — | $ | 283,213 | $ | — | ||||||
Cash collateral, restricted | 22,511 | — | — | 22,511 | ||||||||||
Other investments (2) | 217,583 | 127,764 | 89,819 | — | ||||||||||
Derivative instruments (3) | 3,871 | — | 3,871 | — | ||||||||||
Total assets measured at fair value | $ | 527,178 | $ | 127,764 | $ | 376,903 | $ | 22,511 | ||||||
Derivative instruments (3) | $ | 17,290 | $ | — | $ | 17,290 | $ | — | ||||||
Contingent consideration | 326,023 | — | — | 326,023 | ||||||||||
Total liabilities measured at fair value | $ | 343,313 | $ | — | $ | 17,290 | $ | 326,023 | ||||||
-1 | Amounts are included in redemption settlement assets in the unaudited condensed consolidated balance sheets. | |||||||||||||
-2 | Amounts are included in other current assets and other assets in the unaudited condensed consolidated balance sheets. | |||||||||||||
-3 | Derivative instruments are included in other current assets, other assets and other current liabilities in the unaudited condensed consolidated balance sheets. | |||||||||||||
The following table summarizes the changes in fair value of the Company’s asset and liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as defined in ASC 825: | ||||||||||||||
Cash Collateral, Restricted | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2015 | 2014 | |||||||||||||
(In thousands) | ||||||||||||||
Balance at beginning of period | $ | 22,511 | $ | 34,124 | ||||||||||
Total gains (realized or unrealized): | ||||||||||||||
Included in earnings | 178 | 301 | ||||||||||||
Purchases | — | — | ||||||||||||
Sales | — | — | ||||||||||||
Issuances | — | — | ||||||||||||
Settlements | — | — | ||||||||||||
Transfers in or out of Level 3 | — | — | ||||||||||||
Balance at end of period | $ | 22,689 | $ | 34,425 | ||||||||||
Gains for the period included in earnings related to asset still held at end of period | $ | 178 | $ | 301 | ||||||||||
Spread deposits included in cash collateral, restricted are recorded at their fair value based on discounted cash flow models, utilizing the respective term of each instrument which ranged from 3 to 19 months, with a weighted average term of six months. The unobservable input used to calculate the fair value was the discount rate of 3.1%, which was based on an interest rate curve that is observable in the market as adjusted for a credit spread. Significant increases in the term or the discount rate would result in a lower fair value. Conversely, significant decreases in the term or the discount rate would result in a higher fair value. | ||||||||||||||
For the three months ended March 31, 2015 and 2014, gains included in earnings attributable to cash collateral, restricted are included in securitization funding costs in the Company’s unaudited condensed consolidated statements of income. | ||||||||||||||
Contingent Consideration | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2015 | 2014 | |||||||||||||
(In thousands) | ||||||||||||||
Balance at beginning of period | $ | 326,023 | $ | — | ||||||||||
Total losses (realized or unrealized): | ||||||||||||||
Included in earnings | 547 | — | ||||||||||||
Purchases | — | 248,702 | ||||||||||||
Sales | — | — | ||||||||||||
Issuances | — | — | ||||||||||||
Settlements | (305,528 | ) | — | |||||||||||
Foreign currency transaction adjustments | (21,042 | ) | 1,806 | |||||||||||
Transfers in or out of Level 3 | — | — | ||||||||||||
Balance at end of period | $ | — | $ | 250,508 | ||||||||||
Losses for the period included in earnings related to liability still held at end of period | $ | — | $ | (1,806 | ) | |||||||||
The contingent consideration represents the additional consideration that the Company was required to pay as part of the earn-out provisions included in the BrandLoyalty share purchase agreement. The fair value was determined based on BrandLoyalty’s earnings for the year ended December 31, 2014 using the methodology defined in the BrandLoyalty share purchase agreement. The obligation was settled in the first quarter of 2015. | ||||||||||||||
There were no transfers between Level 1 and 2 within the fair value hierarchy for the years ended December 31, 2014 and 2013. | ||||||||||||||
Financial Instruments Disclosed but Not Carried at Fair Value | ||||||||||||||
The following tables provide assets and liabilities disclosed but not carried at fair value as of March 31, 2015 and December 31, 2014: | ||||||||||||||
Fair Value Measurements at | ||||||||||||||
March 31, 2015 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(In thousands) | ||||||||||||||
Financial assets | ||||||||||||||
Cash and cash equivalents | $ | 760,398 | $ | 760,398 | $ | — | $ | — | ||||||
Credit card and loan receivables, net | 10,143,003 | — | — | 10,143,003 | ||||||||||
Credit card and loan receivables held for sale | 143,837 | — | — | 143,837 | ||||||||||
Total | $ | 11,047,238 | $ | 760,398 | $ | — | $ | 10,286,840 | ||||||
Financial liabilities | ||||||||||||||
Deposits | $ | 4,551,986 | $ | — | $ | 4,551,986 | $ | — | ||||||
Non-recourse borrowings of consolidated securitization entities | 4,843,352 | — | 4,843,352 | — | ||||||||||
Long-term and other debt | 4,895,784 | — | 4,895,784 | — | ||||||||||
Total | $ | 14,291,122 | $ | — | $ | 14,291,122 | $ | — | ||||||
Fair Value Measurements at | ||||||||||||||
December 31, 2014 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(In thousands) | ||||||||||||||
Financial assets | ||||||||||||||
Cash and cash equivalents | $ | 1,077,152 | $ | 1,077,152 | $ | — | $ | — | ||||||
Credit card and loan receivables, net | 10,673,709 | — | — | 10,673,709 | ||||||||||
Credit card and loan receivables held for sale | 125,060 | — | — | 125,060 | ||||||||||
Total | $ | 11,875,921 | $ | 1,077,152 | $ | — | $ | 10,798,769 | ||||||
Financial liabilities | ||||||||||||||
Deposits | $ | 4,801,464 | $ | — | $ | 4,801,464 | $ | — | ||||||
Non-recourse borrowings of consolidated securitization entities | 5,225,359 | — | 5,225,359 | — | ||||||||||
Long-term and other debt | 4,227,414 | — | 4,227,414 | — | ||||||||||
Total | $ | 14,254,237 | $ | — | $ | 14,254,237 | $ | — | ||||||
INCOME_TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2015 | |
INCOME TAXES | |
INCOME TAXES | |
17. INCOME TAXES | |
For the three months ended March 31, 2015 and 2014, the Company utilized an effective tax rate of 33.1% and 36.6%, respectively, to calculate its provision for income taxes. The effective tax rate for three months ended March 31, 2015 includes both a favorable state ruling and a lapse in an applicable statute of limitations. In accordance with ASC 740-270, “Income Taxes — Interim Reporting,” the Company’s expected annual effective tax rate for calendar year 2015 based on all known variables is approximately 35.8%. | |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||||||
18. SEGMENT INFORMATION | ||||||||||||||||||||
Operating segments are defined by ASC 280, “Segment Reporting,” as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the President and Chief Executive Officer. The operating segments are reviewed separately because each operating segment represents a strategic business unit that generally offers different products and serves different markets. | ||||||||||||||||||||
The Company operates in the following reportable segments: LoyaltyOne, Epsilon, and Card Services. In the first quarter of 2015, the Company renamed the Private Label Services and Credit segment to “Card Services,” which had no impact to the reported results of the segment in the current or prior periods. Segment operations consist of the following: | ||||||||||||||||||||
· | LoyaltyOne includes the Company’s Canadian AIR MILES Reward Program and BrandLoyalty; | |||||||||||||||||||
· | Epsilon provides end-to-end, integrated direct marketing solutions that leverage transactional data to help clients more effectively acquire and build stronger relationships with their customers; and | |||||||||||||||||||
· | Card Services provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company’s private label and co-brand credit card programs. | |||||||||||||||||||
Corporate and other immaterial businesses are reported collectively as an “all other” category labeled “Corporate/Other.” Income taxes are not allocated to the segments in the computation of segment operating profit for internal evaluation purposes and have also been included in “Corporate/Other.” | ||||||||||||||||||||
Three Months Ended March 31, 2015 | LoyaltyOne | Epsilon | Card Services | Corporate/ | Eliminations | Total | ||||||||||||||
Other | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenues | $ | 387,952 | $ | 504,901 | $ | 714,718 | $ | 101 | $ | (6,515 | ) | $ | 1,601,157 | |||||||
Income (loss) before income taxes | 53,790 | 7,040 | 259,741 | (74,034 | ) | — | 246,537 | |||||||||||||
Interest expense, net | 705 | (3 | ) | 35,551 | 41,754 | — | 78,007 | |||||||||||||
Operating income (loss) | 54,495 | 7,037 | 295,292 | (32,280 | ) | — | 324,544 | |||||||||||||
Depreciation and amortization | 19,933 | 81,182 | 18,324 | 2,189 | — | 121,628 | ||||||||||||||
Stock compensation expense | 2,992 | 15,418 | 3,692 | 5,386 | — | 27,488 | ||||||||||||||
Adjusted EBITDA (1) | 77,420 | 103,637 | 317,308 | (24,705 | ) | — | 473,660 | |||||||||||||
Less: securitization funding costs | — | — | 23,813 | — | — | 23,813 | ||||||||||||||
Less: interest expense on deposits | — | — | 11,738 | — | — | 11,738 | ||||||||||||||
Less: adjusted EBITDA attributable to non-controlling interest | 7,782 | — | — | — | — | 7,782 | ||||||||||||||
Adjusted EBITDA, net (1) | $ | 69,638 | $ | 103,637 | $ | 281,757 | $ | (24,705 | ) | $ | — | $ | 430,327 | |||||||
Three Months Ended March 31, 2014 | LoyaltyOne | Epsilon | Card Services | Corporate/ | Eliminations | Total | ||||||||||||||
Other | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenues | $ | 328,970 | $ | 347,469 | $ | 561,796 | $ | 41 | $ | (5,376 | ) | $ | 1,232,900 | |||||||
Income (loss) before income taxes | 44,376 | 13,147 | 228,355 | (71,833 | ) | — | 214,045 | |||||||||||||
Interest expense, net | 1,562 | (13 | ) | 30,406 | 35,792 | — | 67,747 | |||||||||||||
Operating income (loss) | 45,938 | 13,134 | 258,761 | (36,041 | ) | — | 281,792 | |||||||||||||
Depreciation and amortization | 22,249 | 37,077 | 12,693 | 2,054 | — | 74,073 | ||||||||||||||
Stock compensation expense | 2,784 | 4,991 | 3,207 | 4,642 | — | 15,624 | ||||||||||||||
Adjusted EBITDA (1) | 70,971 | 55,202 | 274,661 | (29,345 | ) | — | 371,489 | |||||||||||||
Less: securitization funding costs | — | — | 22,911 | — | — | 22,911 | ||||||||||||||
Less: interest expense on deposits | — | — | 8,234 | — | — | 8,234 | ||||||||||||||
Less: adjusted EBITDA attributable to non-controlling interest | 5,789 | — | — | — | — | 5,789 | ||||||||||||||
Adjusted EBITDA, net (1) | $ | 65,182 | $ | 55,202 | $ | 243,516 | $ | (29,345 | ) | $ | — | $ | 334,555 | |||||||
-1 | Adjusted EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on GAAP, plus stock compensation expense, provision for income taxes, interest expense, net, depreciation and other amortization and amortization of purchased intangibles. Adjusted EBITDA, net is also a non-GAAP financial measure equal to adjusted EBITDA less securitization funding costs, interest expense on deposits and adjusted EBITDA attributable to the non-controlling interest. Adjusted EBITDA and adjusted EBITDA, net are presented in accordance with ASC 280 as they are the primary performance metrics utilized to assess performance of the segments. | |||||||||||||||||||
NONCASH_FINANCING_AND_INVESTIN
NON-CASH FINANCING AND INVESTING ACTIVITIES | 3 Months Ended |
Mar. 31, 2015 | |
NON-CASH FINANCING AND INVESTING ACTIVITIES | |
NON-CASH FINANCING AND INVESTING ACTIVITIES | |
19. NON-CASH FINANCING AND INVESTING ACTIVITIES | |
In March 2015, the Company purchased 75,000 treasury shares under the Company’s stock repurchase program for an aggregate amount of $22.3 million that had not settled as of March 31, 2015 and was included in accounts payable in the Company’s unaudited condensed consolidated balance sheets. | |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
EARNINGS PER SHARE | ||||||||
Schedule of computation of basic and diluted net income per share | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
(In thousands, except | ||||||||
per share amounts) | ||||||||
Numerator: | ||||||||
Net income attributable to common stockholders | $ | 162,559 | $ | 137,395 | ||||
Less: accretion of redeemable non-controlling interest | 15,194 | — | ||||||
Net income attributable to common stockholders after accretion of redeemable non-controlling interest | $ | 147,365 | $ | 137,395 | ||||
Denominator: | ||||||||
Weighted average shares, basic | 63,080 | 53,033 | ||||||
Weighted average effect of dilutive securities: | ||||||||
Shares from assumed conversion of convertible senior notes | — | 5,734 | ||||||
Shares from assumed exercise of convertible note warrants | — | 6,771 | ||||||
Net effect of dilutive stock options and unvested restricted stock | 519 | 527 | ||||||
Denominator for diluted calculations | 63,599 | 66,065 | ||||||
Net income attributable to common stockholders per share: | ||||||||
Basic | $ | 2.34 | $ | 2.59 | ||||
Diluted | $ | 2.32 | $ | 2.08 | ||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Acquisition | |||||
Schedule of pro forma consolidated revenue and net income | |||||
Three Months | |||||
Ended March 31, | |||||
2014 | |||||
(In thousands, | |||||
except per share | |||||
amounts) | |||||
Total revenue | $ | 1,378,813 | |||
Net income | $ | 129,861 | |||
Net income attributable to common stockholders | $ | 131,509 | |||
Net income attributable to common stockholders per share: | |||||
Basic | $ | 2.28 | |||
Diluted | $ | 1.86 | |||
Brand Loyalty | |||||
Acquisition | |||||
Summary of allocation of the consideration and the respective fair values of the assets acquired and liabilities assumed | |||||
As of | |||||
January 2, 2014 | |||||
(In thousands) | |||||
Current assets, net of cash acquired | $ | 246,769 | |||
Deferred tax asset | 3,509 | ||||
Property and equipment | 19,719 | ||||
Other non-current assets | 3,994 | ||||
Intangible assets | 423,832 | ||||
Goodwill | 565,015 | ||||
Total assets acquired | 1,262,838 | ||||
Current liabilities | 146,559 | ||||
Current portion of long-term debt | 34,180 | ||||
Deferred tax liability | 105,512 | ||||
Long-term debt (net of current portion) | 126,323 | ||||
Other liabilities | 142 | ||||
Total liabilities assumed | 412,716 | ||||
Redeemable non-controlling interest | 341,907 | ||||
Net assets acquired | $ | 508,215 | |||
Conversant | |||||
Acquisition | |||||
Summary of allocation of the consideration and the respective fair values of the assets acquired and liabilities assumed | |||||
As of | |||||
December 10, | |||||
2014 | |||||
(In thousands) | |||||
Current assets, net of cash acquired | $ | 180,030 | |||
Deferred tax asset | 11,905 | ||||
Property and equipment | 25,555 | ||||
Developed technology | 182,500 | ||||
Other non-current assets | 1,744 | ||||
Intangible assets | 755,600 | ||||
Goodwill | 1,650,299 | ||||
Total assets acquired | 2,807,633 | ||||
Current liabilities | 177,585 | ||||
Deferred tax liability | 344,081 | ||||
Other liabilities | 26,933 | ||||
Total liabilities assumed | 548,599 | ||||
Net assets acquired | $ | 2,259,034 | |||
CREDIT_CARD_AND_LOAN_RECEIVABL1
CREDIT CARD AND LOAN RECEIVABLES (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
CREDIT CARD AND LOAN RECEIVABLES | ||||||||||||
Schedule of components of total credit card and loan receivables | ||||||||||||
March 31, | December 31, | |||||||||||
2015 | 2014 | |||||||||||
(In thousands) | ||||||||||||
Principal receivables | $ | 10,246,419 | $ | 10,762,498 | ||||||||
Billed and accrued finance charges | 401,579 | 422,838 | ||||||||||
Other credit card and loan receivables | 81,683 | 58,544 | ||||||||||
Total credit card and loan receivables | 10,729,681 | 11,243,880 | ||||||||||
Less credit card receivables — restricted for securitization investors | 7,730,899 | 8,312,291 | ||||||||||
Other credit card and loan receivables | $ | 2,998,782 | $ | 2,931,589 | ||||||||
Schedule of Company's allowance for loan loss | ||||||||||||
Three Months Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
(In thousands) | ||||||||||||
Balance at beginning of period | $ | 570,171 | $ | 503,169 | ||||||||
Provision for loan loss | 134,929 | 70,582 | ||||||||||
Change in estimate for uncollectible unpaid interest and fees | 1,500 | 5,500 | ||||||||||
Recoveries | 39,496 | 38,408 | ||||||||||
Principal charge-offs | (159,418 | ) | (135,001 | ) | ||||||||
Balance at end of period | $ | 586,678 | $ | 482,658 | ||||||||
Schedule of delinquency trends of the Company's credit card and loan receivables portfolio | ||||||||||||
March 31, | % of | December 31, | % of | |||||||||
2015 | Total | 2014 | Total | |||||||||
(In thousands, except percentages) | ||||||||||||
Receivables outstanding — principal | $ | 10,246,419 | 100.0 | % | $ | 10,762,498 | 100.0 | % | ||||
Principal receivables balances contractually delinquent: | ||||||||||||
31 to 60 days | 131,319 | 1.3 | % | 157,760 | 1.4 | % | ||||||
61 to 90 days | 90,874 | 0.9 | 93,175 | 0.9 | ||||||||
91 or more days | 176,239 | 1.7 | 182,945 | 1.7 | ||||||||
Total | $ | 398,432 | 3.9 | % | $ | 433,880 | 4.0 | % | ||||
Schedule of information on credit card and loan receivables that are considered troubled debt restructurings, which entered into a modification program | ||||||||||||
The following tables provide information on credit card and loan receivables that are considered troubled debt restructurings as described above, which entered into a modification program during the specified periods: | ||||||||||||
Three Months Ended March 31, 2015 | ||||||||||||
Number of | Pre- | Post- | ||||||||||
Restructurings | modification | modification | ||||||||||
Outstanding | Outstanding | |||||||||||
Balance | Balance | |||||||||||
(Dollars in thousands) | ||||||||||||
Troubled debt restructurings — credit card and loan receivables | 39,014 | $ | 42,483 | $ | 42,442 | |||||||
Three Months Ended March 31, 2014 | ||||||||||||
Number of | Pre- | Post- | ||||||||||
Restructurings | modification | modification | ||||||||||
Outstanding | Outstanding | |||||||||||
Balance | Balance | |||||||||||
(Dollars in thousands) | ||||||||||||
Troubled debt restructurings — credit card and loan receivables | 36,552 | $ | 35,786 | $ | 35,755 | |||||||
The tables below summarize troubled debt restructurings that have defaulted in the specified periods where the default occurred within 12 months of their modification date: | ||||||||||||
Three Months Ended | ||||||||||||
March 31, 2015 | ||||||||||||
Number of | Outstanding | |||||||||||
Restructurings | Balance | |||||||||||
(Dollars in thousands) | ||||||||||||
Troubled debt restructurings that subsequently defaulted — credit card and loan receivables | 18,393 | $ | 18,307 | |||||||||
Three Months Ended | ||||||||||||
March 31, 2014 | ||||||||||||
Number of | Outstanding | |||||||||||
Restructurings | Balance | |||||||||||
(Dollars in thousands) | ||||||||||||
Troubled debt restructurings that subsequently defaulted — credit card and loan receivables | 16,728 | $ | 16,141 | |||||||||
Schedule of number of active credit card and loan accounts with balances and the related principal balances outstanding, based upon the age of the active credit card accounts from origination | ||||||||||||
March 31, 2015 | ||||||||||||
Age of Accounts Since Origination | Number of | Percentage of | Principal | Percentage of | ||||||||
Active Accounts | Active Accounts | Receivables | Principal | |||||||||
with Balances | with Balances | Outstanding | Receivables | |||||||||
Outstanding | ||||||||||||
(In thousands, except percentages) | ||||||||||||
0-12 Months | 5,563 | 29.7 | % | $ | 2,635,391 | 25.7 | % | |||||
13-24 Months | 2,769 | 14.8 | 1,542,384 | 15.0 | ||||||||
25-36 Months | 1,927 | 10.3 | 1,089,567 | 10.6 | ||||||||
37-48 Months | 1,378 | 7.4 | 815,928 | 8.0 | ||||||||
49-60 Months | 1,023 | 5.5 | 611,066 | 6.0 | ||||||||
Over 60 Months | 6,031 | 32.3 | 3,552,083 | 34.7 | ||||||||
Total | 18,691 | 100.0 | % | $ | 10,246,419 | 100.0 | % | |||||
March 31, 2014 | ||||||||||||
Age of Accounts Since Origination | Number of | Percentage of | Principal | Percentage of | ||||||||
Active Accounts | Active Accounts | Receivables | Principal | |||||||||
with Balances | with Balances | Outstanding | Receivables | |||||||||
Outstanding | ||||||||||||
(In thousands, except percentages) | ||||||||||||
0-12 Months | 4,467 | 27.6 | % | $ | 1,895,642 | 24.7 | % | |||||
13-24 Months | 2,325 | 14.4 | 1,049,930 | 13.7 | ||||||||
25-36 Months | 1,604 | 9.9 | 781,339 | 10.2 | ||||||||
37-48 Months | 1,163 | 7.2 | 588,152 | 7.6 | ||||||||
49-60 Months | 962 | 5.9 | 514,670 | 6.7 | ||||||||
Over 60 Months | 5,656 | 35.0 | 2,844,674 | 37.1 | ||||||||
Total | 16,177 | 100.0 | % | $ | 7,674,407 | 100.0 | % | |||||
Schedule of composition of obligor credit quality | ||||||||||||
March 31, 2015 | March 31, 2014 | |||||||||||
Probability of an Account Becoming 90 or More Days Past Due | Total Principal | Percentage of | Total Principal | Percentage of | ||||||||
or Becoming Charged-off (within the next 12 months) | Receivables | Principal | Receivables | Principal | ||||||||
Outstanding | Receivables | Outstanding | Receivables | |||||||||
Outstanding | Outstanding | |||||||||||
(In thousands, except percentages) | ||||||||||||
No Score | $ | 195,400 | 1.9 | % | $ | 151,316 | 2.0 | % | ||||
27.1% and higher | 564,781 | 5.5 | 375,904 | 4.9 | ||||||||
17.1% - 27.0% | 1,017,823 | 9.9 | 714,925 | 9.3 | ||||||||
12.6% - 17.0% | 1,178,364 | 11.5 | 843,358 | 11.0 | ||||||||
3.7% - 12.5% | 4,262,639 | 41.6 | 3,117,732 | 40.6 | ||||||||
1.9% - 3.6% | 1,939,907 | 19.0 | 1,584,841 | 20.7 | ||||||||
Lower than 1.9% | 1,087,505 | 10.6 | 886,331 | 11.5 | ||||||||
Total | $ | 10,246,419 | 100.0 | % | $ | 7,674,407 | 100.0 | % | ||||
Schedule of securitized credit card receivables, delinquencies and net charge-offs | ||||||||||||
March 31, | December 31, | |||||||||||
2015 | 2014 | |||||||||||
(In thousands) | ||||||||||||
Total credit card receivables — restricted for securitization investors | $ | 7,730,899 | $ | 8,312,291 | ||||||||
Principal amount of credit card receivables — restricted for securitization investors, 90 days or more past due | $ | 133,241 | $ | 145,768 | ||||||||
Three Months Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
(In thousands) | ||||||||||||
Net charge-offs of securitized principal | $ | 98,839 | $ | 85,714 | ||||||||
OTHER_INVESTMENTS_Tables
OTHER INVESTMENTS (Tables) | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||
OTHER INVESTMENTS | ||||||||||||||||||||||||||
Schedule of principal components of other investments, which are carried at fair value | ||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair Value | Amortized | Unrealized | Unrealized | Fair Value | |||||||||||||||||||
Cost | Gains | Losses | Cost | Gains | Losses | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Restricted cash | $ | 30,033 | $ | — | $ | — | $ | 30,033 | $ | 22,611 | $ | — | $ | — | $ | 22,611 | ||||||||||
Marketable securities | 101,209 | 712 | (1,095 | ) | 100,826 | 95,669 | 520 | (1,322 | ) | 94,867 | ||||||||||||||||
U.S. Treasury bonds | 100,065 | 804 | — | 100,869 | 100,072 | 66 | (33 | ) | 100,105 | |||||||||||||||||
Total | $ | 231,307 | $ | 1,516 | $ | (1,095 | ) | $ | 231,728 | $ | 218,352 | $ | 586 | $ | (1,355 | ) | $ | 217,583 | ||||||||
Schedule of unrealized losses and fair value for investments that were in an unrealized loss position, aggregated by investment category and the length of time that individual securities have been in a continuous loss position | ||||||||||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||||||||
Less than 12 months | 12 Months or Greater | Total | ||||||||||||||||||||||||
Fair Value | Unrealized | Fair Value | Unrealized | Fair Value | Unrealized | |||||||||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable securities | $ | 11,267 | $ | (75 | ) | $ | 48,723 | $ | (1,020 | ) | $ | 59,990 | $ | (1,095 | ) | |||||||||||
Total | $ | 11,267 | $ | (75 | ) | $ | 48,723 | $ | (1,020 | ) | $ | 59,990 | $ | (1,095 | ) | |||||||||||
December 31, 2014 | ||||||||||||||||||||||||||
Less than 12 months | 12 Months or Greater | Total | ||||||||||||||||||||||||
Fair Value | Unrealized | Fair Value | Unrealized | Fair Value | Unrealized | |||||||||||||||||||||
Losses | Losses | Losses | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Marketable securities | $ | 8,757 | $ | (27 | ) | $ | 48,961 | $ | (1,295 | ) | $ | 57,718 | $ | (1,322 | ) | |||||||||||
U.S. Treasury bonds | 75,043 | (33 | ) | — | — | 75,043 | (33 | ) | ||||||||||||||||||
Total | $ | 83,800 | $ | (60 | ) | $ | 48,961 | $ | (1,295 | ) | $ | 132,761 | $ | (1,355 | ) | |||||||||||
Schedule of securities by contractual maturity date | ||||||||||||||||||||||||||
Amortized Cost | Fair Value | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Due in one year or less | $ | 6,643 | $ | 6,611 | ||||||||||||||||||||||
Due after one year through five years | 100,065 | 100,869 | ||||||||||||||||||||||||
Due after five years through ten years | 5,210 | 5,410 | ||||||||||||||||||||||||
Due after ten years | 89,356 | 88,805 | ||||||||||||||||||||||||
Total | $ | 201,274 | $ | 201,695 | ||||||||||||||||||||||
REDEMPTION_SETTLEMENT_ASSETS_T
REDEMPTION SETTLEMENT ASSETS (Tables) | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||
REDEMPTION SETTLEMENT ASSETS | ||||||||||||||||||||||||||
Schedule of redemption settlement assets | ||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||
Cost | Unrealized | Unrealized | Fair Value | Cost | Unrealized | Unrealized | Fair Value | |||||||||||||||||||
Gains | Losses | Gains | Losses | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | 225,682 | $ | — | $ | — | $ | 225,682 | $ | 237,127 | $ | — | $ | — | $ | 237,127 | ||||||||||
Mutual funds | 19,717 | 53 | — | 19,770 | — | — | — | — | ||||||||||||||||||
Corporate bonds | 240,311 | 3,286 | — | 243,597 | 280,053 | 3,160 | — | 283,213 | ||||||||||||||||||
Total | $ | 485,710 | $ | 3,339 | $ | — | $ | 489,049 | $ | 517,180 | $ | 3,160 | $ | — | $ | 520,340 | ||||||||||
Schedule of redemption settlement assets by contractual maturity date | ||||||||||||||||||||||||||
Amortized Cost | Fair Value | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Due in one year or less | $ | 162,813 | $ | 164,204 | ||||||||||||||||||||||
Due after one year through five years | 97,215 | 99,163 | ||||||||||||||||||||||||
Total | $ | 260,028 | $ | 263,367 | ||||||||||||||||||||||
INTANGIBLE_ASSETS_AND_GOODWILL1
INTANGIBLE ASSETS AND GOODWILL (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
INTANGIBLE ASSETS AND GOODWILL | |||||||||||||||||
Schedule of intangible assets | |||||||||||||||||
March 31, 2015 | |||||||||||||||||
Gross | Accumulated | Net | Amortization Life and Method | ||||||||||||||
Assets | Amortization | ||||||||||||||||
(In thousands) | |||||||||||||||||
Finite Lived Assets | |||||||||||||||||
Customer contracts and lists | $ | 1,191,492 | $ | (236,332 | ) | $ | 955,160 | 4-12 years—straight line | |||||||||
Premium on purchased credit card portfolios | 251,447 | (87,225 | ) | 164,222 | 3-10 years—straight line, accelerated | ||||||||||||
Customer database | 210,300 | (135,400 | ) | 74,900 | 3-10 years—straight line | ||||||||||||
Collector database | 55,172 | (51,663 | ) | 3,509 | 30 years—15% declining balance | ||||||||||||
Publisher networks | 140,200 | (8,556 | ) | 131,644 | 5-7 years — straight line | ||||||||||||
Tradenames | 84,175 | (32,337 | ) | 51,838 | 2-15 years—straight line | ||||||||||||
Purchased data lists | 12,284 | (6,595 | ) | 5,689 | 1-5 years—straight line, accelerated | ||||||||||||
Favorable lease | 6,891 | (1,044 | ) | 5,847 | 3-10 years—straight line | ||||||||||||
Noncompete agreements | 1,300 | (975 | ) | 325 | 3 years—straight line | ||||||||||||
$ | 1,953,261 | $ | (560,127 | ) | $ | 1,393,134 | |||||||||||
Indefinite Lived Assets | |||||||||||||||||
Tradenames | 12,350 | — | 12,350 | Indefinite life | |||||||||||||
Total intangible assets | $ | 1,965,611 | $ | (560,127 | ) | $ | 1,405,484 | ||||||||||
December 31, 2014 | |||||||||||||||||
Gross | Accumulated | Net | Amortization Life and Method | ||||||||||||||
Assets | Amortization | ||||||||||||||||
(In thousands) | |||||||||||||||||
Finite Lived Assets | |||||||||||||||||
Customer contracts and lists | $ | 1,328,056 | $ | (295,263 | ) | $ | 1,032,793 | 4-12 years—straight line | |||||||||
Premium on purchased credit card portfolios | 289,173 | (114,923 | ) | 174,250 | 3-10 years—straight line, accelerated | ||||||||||||
Customer database | 210,300 | (126,157 | ) | 84,143 | 3-10 years—straight line | ||||||||||||
Collector database | 60,238 | (56,239 | ) | 3,999 | 30 years—15% declining balance | ||||||||||||
Publisher networks | 140,200 | (1,662 | ) | 138,538 | 5-7 years — straight line | ||||||||||||
Tradenames | 86,934 | (29,408 | ) | 57,526 | 2-15 years—straight line | ||||||||||||
Purchased data lists | 12,335 | (6,497 | ) | 5,838 | 1-5 years—straight line, accelerated | ||||||||||||
Favorable lease | 6,891 | (767 | ) | 6,124 | 3-10 years—straight line | ||||||||||||
Noncompete agreements | 1,300 | (867 | ) | 433 | 3 years—straight line | ||||||||||||
$ | 2,135,427 | $ | (631,783 | ) | $ | 1,503,644 | |||||||||||
Indefinite Lived Assets | |||||||||||||||||
Tradenames | 12,350 | — | 12,350 | Indefinite life | |||||||||||||
Total intangible assets | $ | 2,147,777 | $ | (631,783 | ) | $ | 1,515,994 | ||||||||||
Schedule of estimated amortization expense related to intangible assets | |||||||||||||||||
For the | |||||||||||||||||
Years Ending | |||||||||||||||||
December 31, | |||||||||||||||||
(In thousands) | |||||||||||||||||
2015 (excluding the three months ended March 31, 2015) | $ | 239,092 | |||||||||||||||
2016 | 296,802 | ||||||||||||||||
2017 | 258,009 | ||||||||||||||||
2018 | 195,653 | ||||||||||||||||
2019 | 161,134 | ||||||||||||||||
2020 & thereafter | 242,444 | ||||||||||||||||
Schedule of changes in carrying amount of goodwill | |||||||||||||||||
LoyaltyOne | Epsilon | Card Services | Corporate/ | Total | |||||||||||||
Other | |||||||||||||||||
(In thousands) | |||||||||||||||||
December 31, 2014 | $ | 713,457 | $ | 2,890,295 | $ | 261,732 | $ | — | $ | 3,865,484 | |||||||
Effects of foreign currency translation | (73,521 | ) | (1,197 | ) | — | — | (74,718 | ) | |||||||||
March 31, 2015 | $ | 639,936 | $ | 2,889,098 | $ | 261,732 | $ | — | $ | 3,790,766 | |||||||
DEBT_Tables
DEBT (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
DEBT | ||||||||||||
Schedule of debt | ||||||||||||
Description | March 31, | December 31, | Maturity | Interest Rate | ||||||||
2015 | 2014 | |||||||||||
(Dollars in thousands) | ||||||||||||
Long-term and other debt: | ||||||||||||
2013 credit facility | $ | 704,000 | $ | — | July 2018 or December 2019 | -1 | ||||||
2013 term loan | 2,586,563 | 2,603,125 | July 2018 or December 2019 | -1 | ||||||||
BrandLoyalty credit facility | 77,321 | 108,789 | December 2015 | -2 | ||||||||
Senior notes due 2017 | 397,544 | 397,332 | December 2017 | 5.25% | ||||||||
Senior notes due 2020 | 500,000 | 500,000 | April 2020 | 6.38% | ||||||||
Senior notes due 2022 | 600,000 | 600,000 | August 2022 | 5.38% | ||||||||
Total long-term and other debt | 4,865,428 | 4,209,246 | ||||||||||
Less: current portion | 193,259 | 208,164 | ||||||||||
Long-term portion | $ | 4,672,169 | $ | 4,001,082 | ||||||||
Deposits: | ||||||||||||
Certificates of deposit | $ | 3,519,218 | $ | 3,934,906 | Various — April 2015 — November 2021 | 0.35% to 3.20% | ||||||
Money market deposits | 991,156 | 838,635 | On demand | -3 | ||||||||
Total deposits | 4,510,374 | 4,773,541 | ||||||||||
Less: current portion | 2,533,417 | 2,645,995 | ||||||||||
Long-term portion | $ | 1,976,957 | $ | 2,127,546 | ||||||||
Non-recourse borrowings of consolidated securitization entities: | ||||||||||||
Fixed rate asset-backed term note securities | $ | 3,376,916 | $ | 3,376,916 | Various - June 2015 — June 2019 | 0.61% to 6.75% | ||||||
Floating rate asset-backed term note securities | 450,000 | 450,000 | February 2016 | -4 | ||||||||
Conduit asset-backed securities | 970,000 | 1,365,000 | Various - September 2015 — May 2016 | -5 | ||||||||
Total non-recourse borrowings of consolidated securitization entities | 4,796,916 | 5,191,916 | ||||||||||
Less: current portion | 1,708,750 | 1,058,750 | ||||||||||
Long-term portion | $ | 3,088,166 | $ | 4,133,166 | ||||||||
-1 | The interest rate is based upon the London Interbank Offered Rate (“LIBOR”) plus an applicable margin. At March 31, 2015, the weighted average interest rate was 2.18% for each of the 2013 Credit Facility and 2013 Term Loan. | |||||||||||
-2 | The interest rate is based upon the Euro Interbank Offered Rate plus an applicable margin. At March 31, 2015, the weighted average interest rate was 2.58%. | |||||||||||
-3 | The interest rates are based on the Federal Funds rate. At March 31, 2015, the interest rates ranged from 0.01% to 0.42%. | |||||||||||
-4 | The interest rate is based upon LIBOR plus an applicable margin. At March 31, 2015, the interest rate was 0.56%. | |||||||||||
-5 | The interest rate is based upon LIBOR or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. At March 31, 2015, the interest rates ranged from 1.03% to 1.72%. | |||||||||||
DERIVATIVE_INSTRUMENTS_Tables
DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||||||||||||
Schedule of fair value of derivative instruments | ||||||||||||
March 31, 2015 | ||||||||||||
Balance Sheet Location | Notional Amount | Maturity | Fair Value | |||||||||
(In thousands) | ||||||||||||
Designated as hedging instruments: | ||||||||||||
Foreign currency exchange hedges | Other current assets | $ | 62,796 | April 2015 to January 2016 | $ | 2,834 | ||||||
Foreign currency exchange hedges | Other current liabilities | $ | 12,446 | April 2015 to September 2015 | $ | 1,691 | ||||||
Not designated as hedging instruments: | ||||||||||||
Interest rate derivatives | Other current liabilities | $ | 50,569 | December 2015 | $ | 178 | ||||||
December 31, 2014 | ||||||||||||
Balance Sheet Location | Notional Amount | Maturity | Fair Value | |||||||||
(In thousands) | ||||||||||||
Designated as hedging instruments: | ||||||||||||
Foreign currency exchange hedges | Other current assets | $ | 50,908 | January 2015 to September 2015 | $ | 3,528 | ||||||
Not designated as hedging instruments: | ||||||||||||
Foreign currency exchange hedges | Other current assets | $ | 3,125 | January 2015 to March 2015 | $ | 343 | ||||||
Foreign currency exchange forward contract | Other current liabilities | $ | 236,578 | January 2015 | $ | 16,990 | ||||||
Interest rate derivatives ves | Other current liabilities | $ | 79,429 | December 2015 to August 2016 | $ | 330 | ||||||
Schedule of activity and location of derivatives not designated as hedging instruments in the condensed consolidated statements of income | ||||||||||||
2015 | 2014 | |||||||||||
For the three months ended March 31, | Income Statement | Gain (Loss) on | Income Statement | Gain on | ||||||||
Location | Derivative | Location | Derivative | |||||||||
Instruments | Instruments | |||||||||||
(In thousands) | ||||||||||||
Interest rate derivatives | Interest expense on long-term and other debt, net | $ | 27 | Interest expense on long-term and other debt, net | $ | 81 | ||||||
Foreign currency exchange forward contract | General and administrative | $ | (13,724 | ) | General and administrative | $ | — | |||||
Foreign currency exchange hedges | Cost of operations | $ | 319 | Cost of operations | $ | — | ||||||
DEFERRED_REVENUE_Tables
DEFERRED REVENUE (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
DEFERRED REVENUE | |||||||||||
Schedule of reconciliation of deferred revenue for the AIR MILES Reward Program | |||||||||||
Deferred Revenue | |||||||||||
Service | Redemption | Total | |||||||||
(In thousands) | |||||||||||
December 31, 2014 | $ | 332,368 | $ | 680,809 | $ | 1,013,177 | |||||
Cash proceeds | 47,611 | 86,940 | 134,551 | ||||||||
Revenue recognized | (46,939 | ) | (115,741 | ) | (162,680 | ) | |||||
Other | — | 25 | 25 | ||||||||
Effects of foreign currency translation | (27,967 | ) | (56,533 | ) | (84,500 | ) | |||||
March 31, 2015 | $ | 305,073 | $ | 595,500 | $ | 900,573 | |||||
Amounts recognized in the unaudited condensed consolidated balance sheets: | |||||||||||
Current liabilities | $ | 151,392 | $ | 595,500 | $ | 746,892 | |||||
Non-current liabilities | $ | 153,681 | $ | — | $ | 153,681 | |||||
REDEEMABLE_NONCONTROLLING_INTE1
REDEEMABLE NON-CONTROLLING INTEREST (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
REDEEMABLE NON-CONTROLLING INTEREST | |||||
Schedule of reconciliation of the changes in the Redeemable noncontrolling interest | |||||
Redeemable Non- | |||||
Controlling Interest | |||||
(In thousands) | |||||
Balance at January 2, 2014 | $ | 341,907 | |||
Net income attributable to non-controlling interest | 9,847 | ||||
Other comprehensive income attributable to non-controlling interest | 1,988 | ||||
Adjustment to redemption value | 14,775 | ||||
Foreign currency translation adjustments | (39,654 | ) | |||
Reclassification to accrued expenses | (93,297 | ) | |||
Balance at December 31, 2014 | 235,566 | ||||
Net income attributable to non-controlling interest | 2,273 | ||||
Other comprehensive income attributable to non-controlling interest | 489 | ||||
Adjustment to redemption value | 15,194 | ||||
Foreign currency translation adjustments | (26,641 | ) | |||
Balance at March 31, 2015 | $ | 226,881 | |||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Schedule of stock-based compensation expense | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
(In thousands) | ||||||||
Cost of operations | $ | 22,102 | $ | 10,982 | ||||
General and administrative | 5,386 | 4,642 | ||||||
Total | $ | 27,488 | $ | 15,624 | ||||
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | ||||||||||||||
Schedule of changes in each component of accumulated comprehensive income (loss), net of tax effects | ||||||||||||||
Three Months Ended March 31, 2015 | Net Unrealized | Unrealized | Foreign | Accumulated | ||||||||||
Gains on | Gains (Losses) | Currency | Other | |||||||||||
Securities | on Cash Flow | Translation | Comprehensive | |||||||||||
Hedges | Adjustments(1) | Income (Loss) | ||||||||||||
(In thousands) | ||||||||||||||
Balance at December 31, 2014 | $ | 2,654 | $ | 2,350 | $ | (80,457 | ) | $ | (75,453 | ) | ||||
Changes in other comprehensive income (loss) before reclassifications | 917 | (3,199 | ) | (62,614 | ) | (64,896 | ) | |||||||
Amounts reclassified from other comprehensive income (loss) | — | 796 | — | 796 | ||||||||||
Changes in other comprehensive income (loss) | 917 | (2,403 | ) | (62,614 | ) | (64,100 | ) | |||||||
Balance as of March 31, 2015 | $ | 3,571 | $ | (53 | ) | $ | (143,071 | ) | $ | (139,553 | ) | |||
Three Months Ended March 31, 2014 | Net Unrealized | Unrealized | Foreign | Accumulated | ||||||||||
Gains on | Gains on Cash | Currency | Other | |||||||||||
Securities | Flow Hedges | Translation | Comprehensive | |||||||||||
Adjustments(1) | Income (Loss) | |||||||||||||
(In thousands) | ||||||||||||||
Balance as of December 31, 2013 | $ | 4,189 | $ | — | $ | (22,416 | ) | $ | (18,227 | ) | ||||
Changes in other comprehensive income (loss) | 485 | — | 9,333 | 9,818 | ||||||||||
Balance as of March 31, 2014 | $ | 4,674 | $ | — | $ | (13,083 | ) | $ | (8,409 | ) | ||||
-1 | Primarily related to the impact of changes in the Canadian dollar and Euro foreign currency exchange rates. | |||||||||||||
FINANCIAL_INSTRUMENTS_Tables
FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
FINANCIAL INSTRUMENTS | ||||||||||||||
Schedule of estimated fair value of Company's financial instruments | ||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||
Amount | Value | Amount | Value | |||||||||||
(In thousands) | ||||||||||||||
Financial assets | ||||||||||||||
Cash and cash equivalents | $ | 760,398 | $ | 760,398 | $ | 1,077,152 | $ | 1,077,152 | ||||||
Trade receivables, net | 571,560 | 571,560 | 743,294 | 743,294 | ||||||||||
Credit card and loan receivables, net | 10,143,003 | 10,143,003 | 10,673,709 | 10,673,709 | ||||||||||
Credit card and loan receivables held for sale | 143,837 | 143,837 | 125,060 | 125,060 | ||||||||||
Redemption settlement assets, restricted | 489,049 | 489,049 | 520,340 | 520,340 | ||||||||||
Cash collateral, restricted | 24,940 | 24,940 | 22,511 | 22,511 | ||||||||||
Derivative instruments | 2,834 | 2,834 | 3,871 | 3,871 | ||||||||||
Other investments | 231,728 | 231,728 | 217,583 | 217,583 | ||||||||||
Financial liabilities | ||||||||||||||
Accounts payable | 412,503 | 412,503 | 455,656 | 455,656 | ||||||||||
Derivative instruments | 1,869 | 1,869 | 17,290 | 17,290 | ||||||||||
Deposits | 4,510,374 | 4,551,986 | 4,773,541 | 4,801,464 | ||||||||||
Non-recourse borrowings of consolidated securitization entities | 4,796,916 | 4,843,352 | 5,191,916 | 5,225,359 | ||||||||||
Long-term and other debt | 4,865,428 | 4,895,784 | 4,209,246 | 4,227,414 | ||||||||||
Contingent consideration | — | — | 326,023 | 326,023 | ||||||||||
Schedule of assets and liabilities carried at fair value measured on recurring basis | ||||||||||||||
Balance at | Fair Value Measurements at | |||||||||||||
March 31, | March 31, 2015 Using | |||||||||||||
2015 | Level 1 | Level 2 | Level 3 | |||||||||||
(In thousands) | ||||||||||||||
Corporate bonds (1) | $ | 243,597 | $ | — | $ | 243,597 | $ | — | ||||||
Mutual funds (1) | 19,770 | 19,770 | — | — | ||||||||||
Cash collateral, restricted | 24,940 | 2,251 | — | 22,689 | ||||||||||
Other investments (2) | 231,728 | 135,950 | 95,778 | — | ||||||||||
Derivative instruments (3) | 2,834 | — | 2,834 | — | ||||||||||
Total assets measured at fair value | $ | 522,869 | $ | 157,971 | $ | 342,209 | $ | 22,689 | ||||||
Derivative instruments (3) | $ | 1,869 | $ | — | $ | 1,869 | $ | — | ||||||
Total liabilities measured at fair value | $ | 1,869 | $ | — | $ | 1,869 | $ | — | ||||||
Balance at | Fair Value Measurements at | |||||||||||||
December 31, | December 31, 2014 Using | |||||||||||||
2014 | Level 1 | Level 2 | Level 3 | |||||||||||
(In thousands) | ||||||||||||||
Corporate bonds (1) | $ | 283,213 | $ | — | $ | 283,213 | $ | — | ||||||
Cash collateral, restricted | 22,511 | — | — | 22,511 | ||||||||||
Other investments (2) | 217,583 | 127,764 | 89,819 | — | ||||||||||
Derivative instruments (3) | 3,871 | — | 3,871 | — | ||||||||||
Total assets measured at fair value | $ | 527,178 | $ | 127,764 | $ | 376,903 | $ | 22,511 | ||||||
Derivative instruments (3) | $ | 17,290 | $ | — | $ | 17,290 | $ | — | ||||||
Contingent consideration | 326,023 | — | — | 326,023 | ||||||||||
Total liabilities measured at fair value | $ | 343,313 | $ | — | $ | 17,290 | $ | 326,023 | ||||||
-1 | Amounts are included in redemption settlement assets in the unaudited condensed consolidated balance sheets. | |||||||||||||
-2 | Amounts are included in other current assets and other assets in the unaudited condensed consolidated balance sheets. | |||||||||||||
-3 | Derivative instruments are included in other current assets, other assets and other current liabilities in the unaudited condensed consolidated balance sheets. | |||||||||||||
Summary of changes in fair value of the Company's assets measured on a recurring basis using significant unobservable inputs (Level 3) | ||||||||||||||
Cash Collateral, Restricted | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2015 | 2014 | |||||||||||||
(In thousands) | ||||||||||||||
Balance at beginning of period | $ | 22,511 | $ | 34,124 | ||||||||||
Total gains (realized or unrealized): | ||||||||||||||
Included in earnings | 178 | 301 | ||||||||||||
Purchases | — | — | ||||||||||||
Sales | — | — | ||||||||||||
Issuances | — | — | ||||||||||||
Settlements | — | — | ||||||||||||
Transfers in or out of Level 3 | — | — | ||||||||||||
Balance at end of period | $ | 22,689 | $ | 34,425 | ||||||||||
Gains for the period included in earnings related to asset still held at end of period | $ | 178 | $ | 301 | ||||||||||
Summary of changes in fair value of the Company's liabilities measured on a recurring basis using significant unobservable inputs (Level 3) | ||||||||||||||
Contingent Consideration | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2015 | 2014 | |||||||||||||
(In thousands) | ||||||||||||||
Balance at beginning of period | $ | 326,023 | $ | — | ||||||||||
Total losses (realized or unrealized): | ||||||||||||||
Included in earnings | 547 | — | ||||||||||||
Purchases | — | 248,702 | ||||||||||||
Sales | — | — | ||||||||||||
Issuances | — | — | ||||||||||||
Settlements | (305,528 | ) | — | |||||||||||
Foreign currency transaction adjustments | (21,042 | ) | 1,806 | |||||||||||
Transfers in or out of Level 3 | — | — | ||||||||||||
Balance at end of period | $ | — | $ | 250,508 | ||||||||||
Losses for the period included in earnings related to liability still held at end of period | $ | — | $ | (1,806 | ) | |||||||||
Schedule of assets and liabilities disclosed but not carried at fair value | ||||||||||||||
Fair Value Measurements at | ||||||||||||||
March 31, 2015 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(In thousands) | ||||||||||||||
Financial assets | ||||||||||||||
Cash and cash equivalents | $ | 760,398 | $ | 760,398 | $ | — | $ | — | ||||||
Credit card and loan receivables, net | 10,143,003 | — | — | 10,143,003 | ||||||||||
Credit card and loan receivables held for sale | 143,837 | — | — | 143,837 | ||||||||||
Total | $ | 11,047,238 | $ | 760,398 | $ | — | $ | 10,286,840 | ||||||
Financial liabilities | ||||||||||||||
Deposits | $ | 4,551,986 | $ | — | $ | 4,551,986 | $ | — | ||||||
Non-recourse borrowings of consolidated securitization entities | 4,843,352 | — | 4,843,352 | — | ||||||||||
Long-term and other debt | 4,895,784 | — | 4,895,784 | — | ||||||||||
Total | $ | 14,291,122 | $ | — | $ | 14,291,122 | $ | — | ||||||
Fair Value Measurements at | ||||||||||||||
December 31, 2014 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(In thousands) | ||||||||||||||
Financial assets | ||||||||||||||
Cash and cash equivalents | $ | 1,077,152 | $ | 1,077,152 | $ | — | $ | — | ||||||
Credit card and loan receivables, net | 10,673,709 | — | — | 10,673,709 | ||||||||||
Credit card and loan receivables held for sale | 125,060 | — | — | 125,060 | ||||||||||
Total | $ | 11,875,921 | $ | 1,077,152 | $ | — | $ | 10,798,769 | ||||||
Financial liabilities | ||||||||||||||
Deposits | $ | 4,801,464 | $ | — | $ | 4,801,464 | $ | — | ||||||
Non-recourse borrowings of consolidated securitization entities | 5,225,359 | — | 5,225,359 | — | ||||||||||
Long-term and other debt | 4,227,414 | — | 4,227,414 | — | ||||||||||
Total | $ | 14,254,237 | $ | — | $ | 14,254,237 | $ | — | ||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||||||
Schedule of segment information | ||||||||||||||||||||
Three Months Ended March 31, 2015 | LoyaltyOne | Epsilon | Card Services | Corporate/ | Eliminations | Total | ||||||||||||||
Other | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenues | $ | 387,952 | $ | 504,901 | $ | 714,718 | $ | 101 | $ | (6,515 | ) | $ | 1,601,157 | |||||||
Income (loss) before income taxes | 53,790 | 7,040 | 259,741 | (74,034 | ) | — | 246,537 | |||||||||||||
Interest expense, net | 705 | (3 | ) | 35,551 | 41,754 | — | 78,007 | |||||||||||||
Operating income (loss) | 54,495 | 7,037 | 295,292 | (32,280 | ) | — | 324,544 | |||||||||||||
Depreciation and amortization | 19,933 | 81,182 | 18,324 | 2,189 | — | 121,628 | ||||||||||||||
Stock compensation expense | 2,992 | 15,418 | 3,692 | 5,386 | — | 27,488 | ||||||||||||||
Adjusted EBITDA (1) | 77,420 | 103,637 | 317,308 | (24,705 | ) | — | 473,660 | |||||||||||||
Less: securitization funding costs | — | — | 23,813 | — | — | 23,813 | ||||||||||||||
Less: interest expense on deposits | — | — | 11,738 | — | — | 11,738 | ||||||||||||||
Less: adjusted EBITDA attributable to non-controlling interest | 7,782 | — | — | — | — | 7,782 | ||||||||||||||
Adjusted EBITDA, net (1) | $ | 69,638 | $ | 103,637 | $ | 281,757 | $ | (24,705 | ) | $ | — | $ | 430,327 | |||||||
Three Months Ended March 31, 2014 | LoyaltyOne | Epsilon | Card Services | Corporate/ | Eliminations | Total | ||||||||||||||
Other | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenues | $ | 328,970 | $ | 347,469 | $ | 561,796 | $ | 41 | $ | (5,376 | ) | $ | 1,232,900 | |||||||
Income (loss) before income taxes | 44,376 | 13,147 | 228,355 | (71,833 | ) | — | 214,045 | |||||||||||||
Interest expense, net | 1,562 | (13 | ) | 30,406 | 35,792 | — | 67,747 | |||||||||||||
Operating income (loss) | 45,938 | 13,134 | 258,761 | (36,041 | ) | — | 281,792 | |||||||||||||
Depreciation and amortization | 22,249 | 37,077 | 12,693 | 2,054 | — | 74,073 | ||||||||||||||
Stock compensation expense | 2,784 | 4,991 | 3,207 | 4,642 | — | 15,624 | ||||||||||||||
Adjusted EBITDA (1) | 70,971 | 55,202 | 274,661 | (29,345 | ) | — | 371,489 | |||||||||||||
Less: securitization funding costs | — | — | 22,911 | — | — | 22,911 | ||||||||||||||
Less: interest expense on deposits | — | — | 8,234 | — | — | 8,234 | ||||||||||||||
Less: adjusted EBITDA attributable to non-controlling interest | 5,789 | — | — | — | — | 5,789 | ||||||||||||||
Adjusted EBITDA, net (1) | $ | 65,182 | $ | 55,202 | $ | 243,516 | $ | (29,345 | ) | $ | — | $ | 334,555 | |||||||
-1 | Adjusted EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable financial measure based on GAAP, plus stock compensation expense, provision for income taxes, interest expense, net, depreciation and other amortization and amortization of purchased intangibles. Adjusted EBITDA, net is also a non-GAAP financial measure equal to adjusted EBITDA less securitization funding costs, interest expense on deposits and adjusted EBITDA attributable to the non-controlling interest. Adjusted EBITDA and adjusted EBITDA, net are presented in accordance with ASC 280 as they are the primary performance metrics utilized to assess performance of the segments. | |||||||||||||||||||
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Numerator: | ||
Net income attributable to common stockholders | $162,559 | $137,395 |
Less: accretion of redeemable non-controlling interest | 15,194 | |
Net income attributable to common stockholders after accretion of redeemable non-controlling interest | $147,365 | $137,395 |
Denominator: | ||
Weighted average shares, basic | 63,080 | 53,033 |
Weighted average effect of dilutive securities: | ||
Shares from assumed conversion of convertible senior notes | 5,734 | |
Shares from assumed exercise of convertible note warrants | 6,771 | |
Net effect of dilutive stock options and unvested restricted stock (in shares) | 519 | 527 |
Denominator for diluted calculation (in shares) | 63,599 | 66,065 |
Net income attributable to common stockholders per share: | ||
Basic (in dollars per share) | $2.34 | $2.59 |
Diluted (in dollars per share) | $2.32 | $2.08 |
ACQUISITIONS_Details
ACQUISITIONS (Details) | 3 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||
Share data in Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Feb. 10, 2015 | Feb. 10, 2015 | Jan. 02, 2014 | Mar. 31, 2015 | Jan. 01, 2015 | Dec. 31, 2014 | Jan. 02, 2014 | Dec. 10, 2014 | Dec. 10, 2014 | Dec. 10, 2014 | Dec. 10, 2014 |
USD ($) | USD ($) | USD ($) | Brand Loyalty | Brand Loyalty | Brand Loyalty | Brand Loyalty | Brand Loyalty | Brand Loyalty | Brand Loyalty | Conversant | Conversant | Conversant | Conversant | |
USD ($) | EUR (€) | USD ($) | USD ($) | USD ($) | EUR (€) | USD ($) | USD ($) | Developed technology | Other intangible assets | |||||
USD ($) | USD ($) | |||||||||||||
Acquisition | ||||||||||||||
Ownership interest acquired (as a percent) | 60.00% | 10.00% | 100.00% | |||||||||||
Cash consideration | $259,514,000 | $259,500,000 | $936,300,000 | |||||||||||
Contingent liability | 326,023,000 | 248,700,000 | 181,900,000 | |||||||||||
Payment of acquisition-related contingent consideration | 205,928,000 | 305,500,000 | 269,900,000 | |||||||||||
Total consideration | 2,300,000,000 | |||||||||||||
Equity consideration | 1,300,000,000 | |||||||||||||
Equity consideration (in shares) | 4.6 | |||||||||||||
Number of consecutive trading days used to determine weighted average value per share | 15 days | |||||||||||||
Number of days preceeding the day of closing the merger, on which the calculation days for weighted average value shall close | 2 days | |||||||||||||
Fair values of assets acquired and liabilities assumed in acquisition | ||||||||||||||
Current assets, net of cash acquired | 246,769,000 | 180,030,000 | ||||||||||||
Deferred tax asset | 3,509,000 | 11,905,000 | ||||||||||||
Property and equipment | 19,719,000 | 25,555,000 | ||||||||||||
Other non-current assets | 3,994,000 | 1,744,000 | ||||||||||||
Intangible assets | 423,832,000 | 182,500,000 | 755,600,000 | |||||||||||
Goodwill | 3,790,766,000 | 3,865,484,000 | 565,015,000 | 1,650,299,000 | ||||||||||
Total assets acquired | 1,262,838,000 | 2,807,633,000 | ||||||||||||
Current liabilities | 146,559,000 | 177,585,000 | ||||||||||||
Current portion of long-term debt | 34,180,000 | |||||||||||||
Deferred tax liability | 105,512,000 | 344,081,000 | ||||||||||||
Long-term debt (net of current portion) | 126,323,000 | |||||||||||||
Other liabilities | 142,000 | 26,933,000 | ||||||||||||
Total liabilities assumed | 412,716,000 | 548,599,000 | ||||||||||||
Redeemable Noncontrolling Interest, Equity, Carrying Amount | 226,881,000 | 235,566,000 | 341,907,000 | 226,881,000 | 235,566,000 | |||||||||
Net assets acquired | 508,215,000 | 2,259,034,000 | ||||||||||||
Unaudited Pro Forma Information | ||||||||||||||
Total revenue | 1,378,813,000 | |||||||||||||
Net income | 129,861,000 | |||||||||||||
Net income attributable to common stockholders | $131,509,000 | |||||||||||||
Basic (in dollars per share) | $2.28 | |||||||||||||
Diluted (in dollars per share) | $1.86 |
CREDIT_CARD_AND_LOAN_RECEIVABL2
CREDIT CARD AND LOAN RECEIVABLES (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
CREDIT CARD AND LOAN RECEIVABLES | |||
Principal receivables | $10,246,419,000 | $10,762,498,000 | |
Billed and accrued finance charges | 401,579,000 | 422,838,000 | |
Other credit card and loan receivables | 81,683,000 | 58,544,000 | |
Total credit card and loan receivables | 10,729,681,000 | 11,243,880,000 | |
Less credit card receivables - restricted for securitization investors | 7,730,899,000 | 8,312,291,000 | |
Other credit card and loan receivables | 2,998,782,000 | 2,931,589,000 | |
Allowance for Loan Loss | |||
The period over which the Company analyzes actual charge-offs | 3 months | ||
Number of days a loan is contractually past due before resulting in charge-off | 180 days | ||
Number of days after notification of creditor's bankruptcy or death when an account is charged-off | 60 days | ||
Actual charge-offs for unpaid interest and fees | 85,400,000 | 75,600,000 | |
Balance at beginning of period | 570,171,000 | 503,169,000 | |
Provision for loan loss | 134,929,000 | 70,582,000 | |
Change in estimate for uncollectible unpaid interest and fees | 1,500,000 | 5,500,000 | |
Recoveries | 39,496,000 | 38,408,000 | |
Principal charge-offs | -159,418,000 | -135,001,000 | |
Balance at end of period | 586,678,000 | 482,658,000 | |
Period beyond which interest and fee income accrue on credit card accounts | 90 days | ||
Period for which interest and fee income accrue until balance, interest and fees paid or charged off | 180 days | ||
Period an account becomes past due before a proprietary collection scoring algorithm automatically scores the risk of an account becoming further delinquent | 30 days | ||
Credit card and loan receivables portfolio delinquency trend | |||
Receivables outstanding - principal | 10,246,419,000 | 10,762,498,000 | |
Principal receivables balances contractually delinquent: | |||
31 to 60 days | 131,319,000 | 157,760,000 | |
61 to 90 days | 90,874,000 | 93,175,000 | |
91 or more days | 176,239,000 | 182,945,000 | |
Total | 398,432,000 | 433,880,000 | |
Percentage Principal receivables balances contractually delinquent : | |||
Receivables outstanding - principal (as a percent) | 100.00% | 100.00% | |
Principal receivables balances contractually delinquent: | |||
31 to 60 days (as a percent) | 1.30% | 1.40% | |
61 to 90 days (as a percent) | 0.90% | 0.90% | |
91 or more days (as a percent) | 1.70% | 1.70% | |
Total (as a percent) | 3.90% | 4.00% | |
Modified Credit Card and Loan Receivables | |||
Maximum period of time temporary programs' concessions remain in place | 12 months | ||
Impaired credit card and loan receivables | 137,600,000 | 134,900,000 | |
Allowance for loan loss on impaired credit card and loan receivables | 36,700,000 | 35,200,000 | |
Maximum percentage of credit card and loan receivables to total portfolio | 2.00% | 2.00% | |
Average recorded investment in impaired credit card and loan receivables | 134,500,000 | 116,300,000 | |
Interest income on modified credit card and loan receivables | 3,300,000 | 3,200,000 | |
Troubled debt restructurings - credit card and loan receivables | |||
Modifications related to troubled debt restructurings within credit card and loan receivables | |||
Number of Restructurings | 39,014 | 36,552 | |
Pre-modification Outstanding Balance | 42,483,000 | 35,786,000 | |
Post-modification Outstanding Balance | 42,442,000 | 35,755,000 | |
Troubled debt restructurings that subsequently defaulted - credit card and loan receivables | |||
Modifications related to troubled debt restructurings within credit card and loan receivables | |||
Number of Restructurings | 18,393 | 16,728 | |
Outstanding Balance | $18,307,000 | $16,141,000 |
CREDIT_CARD_AND_LOAN_RECEIVABL3
CREDIT CARD AND LOAN RECEIVABLES (Details 2) (USD $) | Mar. 31, 2015 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | item | item |
Age of Accounts Since Origination | ||
Number of Active Accounts with Balances | 18,691,000 | 16,177,000 |
Percentage of Active Accounts with Balances | 100.00% | 100.00% |
Principal Receivables Outstanding | $10,246,419 | $7,674,407 |
Percentage of Principal Receivables Outstanding | 100.00% | 100.00% |
0-12 Months | ||
Age of Accounts Since Origination | ||
Number of Active Accounts with Balances | 5,563,000 | 4,467,000 |
Percentage of Active Accounts with Balances | 29.70% | 27.60% |
Principal Receivables Outstanding | 2,635,391 | 1,895,642 |
Percentage of Principal Receivables Outstanding | 25.70% | 24.70% |
13-24 Months | ||
Age of Accounts Since Origination | ||
Number of Active Accounts with Balances | 2,769,000 | 2,325,000 |
Percentage of Active Accounts with Balances | 14.80% | 14.40% |
Principal Receivables Outstanding | 1,542,384 | 1,049,930 |
Percentage of Principal Receivables Outstanding | 15.00% | 13.70% |
25-36 Months | ||
Age of Accounts Since Origination | ||
Number of Active Accounts with Balances | 1,927,000 | 1,604,000 |
Percentage of Active Accounts with Balances | 10.30% | 9.90% |
Principal Receivables Outstanding | 1,089,567 | 781,339 |
Percentage of Principal Receivables Outstanding | 10.60% | 10.20% |
37-48 Months | ||
Age of Accounts Since Origination | ||
Number of Active Accounts with Balances | 1,378,000 | 1,163,000 |
Percentage of Active Accounts with Balances | 7.40% | 7.20% |
Principal Receivables Outstanding | 815,928 | 588,152 |
Percentage of Principal Receivables Outstanding | 8.00% | 7.60% |
49-60 Months | ||
Age of Accounts Since Origination | ||
Number of Active Accounts with Balances | 1,023,000 | 962,000 |
Percentage of Active Accounts with Balances | 5.50% | 5.90% |
Principal Receivables Outstanding | 611,066 | 514,670 |
Percentage of Principal Receivables Outstanding | 6.00% | 6.70% |
Over 60 Months | ||
Age of Accounts Since Origination | ||
Number of Active Accounts with Balances | 6,031,000 | 5,656,000 |
Percentage of Active Accounts with Balances | 32.30% | 35.00% |
Principal Receivables Outstanding | $3,552,083 | $2,844,674 |
Percentage of Principal Receivables Outstanding | 34.70% | 37.10% |
CREDIT_CARD_AND_LOAN_RECEIVABL4
CREDIT CARD AND LOAN RECEIVABLES (Details 3) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months) | |||
Principal Receivables Outstanding | $10,246,419,000 | $7,674,407,000 | |
Percentage of Principal Receivables Outstanding | 100.00% | 100.00% | |
Transfer of Financial Assets | |||
Loan receivables originated that have not yet been sold to the client | 78,400,000 | 48,900,000 | |
Purchase of loan receivables generated in the program | 67,200,000 | 54,600,000 | |
Program receivables | 165,000,000 | 160,600,000 | |
No Score | |||
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months) | |||
Principal Receivables Outstanding | 195,400,000 | 151,316,000 | |
Percentage of Principal Receivables Outstanding | 1.90% | 2.00% | |
27.1% and higher | |||
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months) | |||
Principal Receivables Outstanding | 564,781,000 | 375,904,000 | |
Percentage of Principal Receivables Outstanding | 5.50% | 4.90% | |
17.1% - 27.0% | |||
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months) | |||
Principal Receivables Outstanding | 1,017,823,000 | 714,925,000 | |
Percentage of Principal Receivables Outstanding | 9.90% | 9.30% | |
12.6% - 17.0% | |||
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months) | |||
Principal Receivables Outstanding | 1,178,364,000 | 843,358,000 | |
Percentage of Principal Receivables Outstanding | 11.50% | 11.00% | |
3.7% - 12.5% | |||
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months) | |||
Principal Receivables Outstanding | 4,262,639,000 | 3,117,732,000 | |
Percentage of Principal Receivables Outstanding | 41.60% | 40.60% | |
1.9% - 3.6% | |||
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months) | |||
Principal Receivables Outstanding | 1,939,907,000 | 1,584,841,000 | |
Percentage of Principal Receivables Outstanding | 19.00% | 20.70% | |
Lower than 1.9% | |||
Probability of an Account Becoming 90 or More Days Past Due or Becoming Charged-off (within the next 12 months) | |||
Principal Receivables Outstanding | $1,087,505,000 | $886,331,000 | |
Percentage of Principal Receivables Outstanding | 10.60% | 11.50% |
CREDIT_CARD_AND_LOAN_RECEIVABL5
CREDIT CARD AND LOAN RECEIVABLES (Details 4) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Portfolio Held For Sale | |||
Carrying value of the credit card portfolios held for sale | $65,400,000 | $76,200,000 | |
Securitized Credit Card Receivables | |||
Total credit card receivables - restricted for securitization investors | 7,730,899,000 | 8,312,291,000 | |
Principal amount of credit card receivables - restricted for securitization investors, 90 days or more past due | 133,241,000 | 145,768,000 | |
Net charge-offs of securitized principal | $98,839,000 | $85,714,000 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
INVENTORIES | ||
Inventories | $194.90 | $220.50 |
OTHER_INVESTMENTS_Details
OTHER INVESTMENTS (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Restricted cash | |||
Amortized Cost | $30,033 | $22,611 | |
Fair value | 30,033 | 22,611 | |
Marketable securities | |||
Amortized Cost | 101,209 | 95,669 | |
Unrealized Gains | 712 | 520 | |
Unrealized Losses | -1,095 | -1,322 | |
Fair Value | 100,826 | 94,867 | |
U.S. Treasury bonds | |||
Amortized Cost | 100,065 | 100,072 | |
Unrealized Gains | 804 | 66 | |
Unrealized Losses | -33 | ||
Fair Value | 100,869 | 100,105 | |
Other Investments, Total | |||
Amortized Cost | 231,307 | 218,352 | |
Unrealized Gains | 1,516 | 586 | |
Unrealized Losses | -1,095 | -1,355 | |
Fair Value | 231,728 | 217,583 | |
Fair Value, Marketable securities | |||
Less than 12 months | 11,267 | 8,757 | |
12 Months or Greater | 48,723 | 48,961 | |
Total | 59,990 | 57,718 | |
Unrealized Losses, Marketable securities | |||
Less than 12 months | -75 | -27 | |
12 Months or Greater | -1,020 | -1,295 | |
Total | -1,095 | -1,322 | |
Fair Value, U.S. Treasury bonds | |||
Less than 12 months | 75,043 | ||
Total | 75,043 | ||
Unrealized Losses, U.S. Treasury bonds | |||
Less than 12 months | -33 | ||
Total | -33 | ||
Fair Value, Total | |||
Less than 12 months | 11,267 | 83,800 | |
12 Months or Greater | 48,723 | 48,961 | |
Total | 59,990 | 132,761 | |
Unrealized Losses, Total | |||
Less than 12 months | -75 | -60 | |
12 Months or Greater | -1,020 | -1,295 | |
Total | -1,095 | -1,355 | |
Amortized Cost | |||
Due in one year or less | 6,643 | ||
Due after one year through five years | 100,065 | ||
Due after five years through ten years | 5,210 | ||
Due after ten years | 89,356 | ||
Total | 201,274 | ||
Fair Value | |||
Due in one year or less | 6,611 | ||
Due after one year through five years | 100,869 | ||
Due after five years through ten years | 5,410 | ||
Due after ten years | 88,805 | ||
Fair Value | 201,695 | ||
Realized gains or losses | |||
Realized gains or losses from the sale of investment securities | $0 | $0 |
REDEMPTION_SETTLEMENT_ASSETS_D
REDEMPTION SETTLEMENT ASSETS (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
REDEMPTION SETTLEMENT ASSETS | |||
Cost | $485,710 | $517,180 | |
Unrealized Gains | 3,339 | 3,160 | |
Fair Value | 489,049 | 520,340 | |
Amortized cost of the redemption settlement assets by contractual maturity | |||
Due in one year or less | 162,813 | ||
Due after one year through five years | 97,215 | ||
Total | 260,028 | ||
Estimated fair value of the redemption settlement assets by contractual maturity | |||
Due in one year or less | 164,204 | ||
Due after one year through five years | 99,163 | ||
Total | 263,367 | ||
Realized gains or losses from the sale of investment securities | 0 | 0 | |
Cash and cash equivalents | |||
REDEMPTION SETTLEMENT ASSETS | |||
Cost | 225,682 | 237,127 | |
Fair Value | 225,682 | 237,127 | |
Mutual funds | |||
REDEMPTION SETTLEMENT ASSETS | |||
Cost | 19,717 | ||
Unrealized Gains | 53 | ||
Fair Value | 19,770 | ||
Corporate bonds | |||
REDEMPTION SETTLEMENT ASSETS | |||
Cost | 240,311 | 280,053 | |
Unrealized Gains | 3,286 | 3,160 | |
Fair Value | $243,597 | $283,213 |
INTANGIBLE_ASSETS_AND_GOODWILL2
INTANGIBLE ASSETS AND GOODWILL (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Schedule of Finite and Indefinite-lived Intangible Assets | ||
Finite lived assets, gross | 1,953,261 | 2,135,427 |
Accumulated Amortization | -560,127 | -631,783 |
Finite lived assets, net | 1,393,134 | 1,503,644 |
Total Intangible Assets | ||
Gross Assets | 1,965,611 | 2,147,777 |
Accumulated Amortization | -560,127 | -631,783 |
Net | 1,405,484 | 1,515,994 |
Trade names | ||
Indefinite Lived Assets | ||
Indefinite lived assets | 12,350 | 12,350 |
Total Intangible Assets | ||
Net | 12,350 | 12,350 |
Customer contracts and lists | ||
Schedule of Finite and Indefinite-lived Intangible Assets | ||
Finite lived assets, gross | 1,191,492 | 1,328,056 |
Accumulated Amortization | -236,332 | -295,263 |
Finite lived assets, net | 955,160 | 1,032,793 |
Total Intangible Assets | ||
Accumulated Amortization | -236,332 | -295,263 |
Customer contracts and lists | Minimum | ||
Amortization Life and Method | ||
Useful life | 4 years | 4 years |
Customer contracts and lists | Maximum | ||
Amortization Life and Method | ||
Useful life | 12 years | 12 years |
Premium on purchased credit card portfolios | ||
Schedule of Finite and Indefinite-lived Intangible Assets | ||
Finite lived assets, gross | 251,447 | 289,173 |
Accumulated Amortization | -87,225 | -114,923 |
Finite lived assets, net | 164,222 | 174,250 |
Total Intangible Assets | ||
Accumulated Amortization | -87,225 | -114,923 |
Premium on purchased credit card portfolios | Minimum | ||
Amortization Life and Method | ||
Useful life | 3 years | 3 years |
Premium on purchased credit card portfolios | Maximum | ||
Amortization Life and Method | ||
Useful life | 10 years | 10 years |
Customer database | ||
Schedule of Finite and Indefinite-lived Intangible Assets | ||
Finite lived assets, gross | 210,300 | 210,300 |
Accumulated Amortization | -135,400 | -126,157 |
Finite lived assets, net | 74,900 | 84,143 |
Total Intangible Assets | ||
Accumulated Amortization | -135,400 | -126,157 |
Customer database | Minimum | ||
Amortization Life and Method | ||
Useful life | 3 years | 3 years |
Customer database | Maximum | ||
Amortization Life and Method | ||
Useful life | 10 years | 10 years |
Collector database | ||
Schedule of Finite and Indefinite-lived Intangible Assets | ||
Finite lived assets, gross | 55,172 | 60,238 |
Accumulated Amortization | -51,663 | -56,239 |
Finite lived assets, net | 3,509 | 3,999 |
Amortization Life and Method | ||
Useful life | 30 years | 30 years |
Declining balance (as a percent) | 15.00% | 15.00% |
Total Intangible Assets | ||
Accumulated Amortization | -51,663 | -56,239 |
Publisher Networks | ||
Schedule of Finite and Indefinite-lived Intangible Assets | ||
Finite lived assets, gross | 140,200 | 140,200 |
Accumulated Amortization | -8,556 | -1,662 |
Finite lived assets, net | 131,644 | 138,538 |
Total Intangible Assets | ||
Accumulated Amortization | -8,556 | -1,662 |
Publisher Networks | Minimum | ||
Amortization Life and Method | ||
Useful life | 5 years | 5 years |
Publisher Networks | Maximum | ||
Amortization Life and Method | ||
Useful life | 7 years | 7 years |
Tradenames | ||
Schedule of Finite and Indefinite-lived Intangible Assets | ||
Finite lived assets, gross | 84,175 | 86,934 |
Accumulated Amortization | -32,337 | -29,408 |
Finite lived assets, net | 51,838 | 57,526 |
Total Intangible Assets | ||
Accumulated Amortization | -32,337 | -29,408 |
Tradenames | Minimum | ||
Amortization Life and Method | ||
Useful life | 2 years | 2 years |
Tradenames | Maximum | ||
Amortization Life and Method | ||
Useful life | 15 years | 15 years |
Purchased data lists | ||
Schedule of Finite and Indefinite-lived Intangible Assets | ||
Finite lived assets, gross | 12,284 | 12,335 |
Accumulated Amortization | -6,595 | -6,497 |
Finite lived assets, net | 5,689 | 5,838 |
Total Intangible Assets | ||
Accumulated Amortization | -6,595 | -6,497 |
Purchased data lists | Minimum | ||
Amortization Life and Method | ||
Useful life | 1 year | 1 year |
Purchased data lists | Maximum | ||
Amortization Life and Method | ||
Useful life | 5 years | 5 years |
Favorable lease | ||
Schedule of Finite and Indefinite-lived Intangible Assets | ||
Finite lived assets, gross | 6,891 | 6,891 |
Accumulated Amortization | -1,044 | -767 |
Finite lived assets, net | 5,847 | 6,124 |
Total Intangible Assets | ||
Accumulated Amortization | -1,044 | -767 |
Favorable lease | Minimum | ||
Amortization Life and Method | ||
Useful life | 3 years | 3 years |
Favorable lease | Maximum | ||
Amortization Life and Method | ||
Useful life | 10 years | 10 years |
Noncompete agreements | ||
Schedule of Finite and Indefinite-lived Intangible Assets | ||
Finite lived assets, gross | 1,300 | 1,300 |
Accumulated Amortization | -975 | -867 |
Finite lived assets, net | 325 | 433 |
Amortization Life and Method | ||
Useful life | 3 years | 3 years |
Total Intangible Assets | ||
Accumulated Amortization | -975 | -867 |
INTANGIBLE_ASSETS_AND_GOODWILL3
INTANGIBLE ASSETS AND GOODWILL (Details 2) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Estimated amortization expense related to intangible assets for the next five years and thereafter | |
2015 (excluding the three months ended March 31, 2015) | $239,092 |
2016 | 296,802 |
2017 | 258,009 |
2018 | 195,653 |
2019 | 161,134 |
2020 & thereafter | $242,444 |
INTANGIBLE_ASSETS_AND_GOODWILL4
INTANGIBLE ASSETS AND GOODWILL (Details 3) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Goodwill | ||
Beginning Balance | $3,865,484 | |
Effects of foreign currency translation | -74,718 | |
Ending Balance | 3,790,766 | |
LoyaltyOne | ||
Goodwill | ||
Beginning Balance | 713,457 | |
Effects of foreign currency translation | -73,521 | |
Ending Balance | 639,936 | |
Epsilon | ||
Goodwill | ||
Beginning Balance | 2,890,295 | |
Effects of foreign currency translation | -1,197 | |
Ending Balance | 2,889,098 | |
Card Services | ||
Goodwill | ||
Beginning Balance | 261,732 | |
Ending Balance | $261,732 | $261,732 |
DEBT_Details
DEBT (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||
Mar. 31, 2015 | Apr. 14, 2015 | Dec. 31, 2014 | 1-May-15 | |
Debt | ||||
Less current portion | ($193,259,000) | ($208,164,000) | ||
Long-term and other debt | 4,672,169,000 | 4,001,082,000 | ||
Less: current portion | -2,533,417,000 | -2,645,995,000 | ||
Long-term portion | 1,976,957,000 | 2,127,546,000 | ||
Less: current portion | -1,708,750,000 | -1,058,750,000 | ||
Long-term portion | 3,088,166,000 | 4,133,166,000 | ||
Total deposits | ||||
Debt | ||||
Deposits | 4,510,374,000 | 4,773,541,000 | ||
Less: current portion | -2,533,417,000 | -2,645,995,000 | ||
Long-term portion | 1,976,957,000 | 2,127,546,000 | ||
Certificates of deposit | ||||
Debt | ||||
Deposits | 3,519,218,000 | 3,934,906,000 | ||
Interest Rate - minimum (as a percent) | 0.35% | |||
Interest Rate - maximum (as a percent) | 3.20% | |||
Money market deposits | ||||
Debt | ||||
Deposits | 991,156,000 | 838,635,000 | ||
Interest Rate - minimum (as a percent) | 0.01% | |||
Interest Rate - maximum (as a percent) | 0.42% | |||
Non-recourse borrowings of consolidated securitization entities | ||||
Debt | ||||
Total non-recourse borrowings of consolidated securitization entities | 4,796,916,000 | 5,191,916,000 | ||
Less: current portion | -1,708,750,000 | -1,058,750,000 | ||
Long-term portion | 3,088,166,000 | 4,133,166,000 | ||
Fixed rate asset-backed term note securities | ||||
Debt | ||||
Total non-recourse borrowings of consolidated securitization entities | 3,376,916,000 | 3,376,916,000 | ||
Interest Rate - minimum (as a percent) | 0.61% | |||
Interest Rate - maximum (as a percent) | 6.75% | |||
Floating rate asset-backed term note securities | ||||
Debt | ||||
Interest Rate (as a percent) | 0.56% | |||
Total non-recourse borrowings of consolidated securitization entities | 450,000,000 | 450,000,000 | ||
Conduit asset-backed securities | ||||
Debt | ||||
Total non-recourse borrowings of consolidated securitization entities | 970,000,000 | 1,365,000,000 | ||
Interest Rate - minimum (as a percent) | 1.03% | |||
Interest Rate - maximum (as a percent) | 1.72% | |||
Maximum borrowing capacity | 1,600,000,000 | |||
Number of facilities with access to undrawn committed capacity | 3 | |||
Master Trust I | April 2015 issuance | Subsequent event | ||||
Debt | ||||
Amount borrowed | 500,000,000 | |||
Retained amount of subordinated class of notes | 140,000,000 | |||
Master Trust I | April 2015 issuance | LIBOR | Subsequent event | ||||
Debt | ||||
Basis spread on variable rate (as a percent) | 0.48% | |||
Master Trust III | Subsequent event | ||||
Debt | ||||
Maximum borrowing capacity | 900,000,000 | |||
Long-term and other debt | ||||
Debt | ||||
Total long-term and other debt | 4,865,428,000 | 4,209,246,000 | ||
Less current portion | -193,259,000 | -208,164,000 | ||
Long-term and other debt | 4,672,169,000 | 4,001,082,000 | ||
2013 Credit Facility | ||||
Debt | ||||
Total long-term and other debt | 704,000,000 | |||
Weighted average interest rate (as a percent) | 2.18% | |||
Maximum borrowing capacity under certain circumstances | 1,300,000,000 | |||
Total availability under Credit Facility | 596,000,000 | |||
2013 Term Loan | ||||
Debt | ||||
Total long-term and other debt | 2,586,563,000 | 2,603,125,000 | ||
Weighted average interest rate (as a percent) | 2.18% | |||
Maximum borrowing capacity under certain circumstances | 2,650,000,000 | |||
Senior Notes due 2017 | ||||
Debt | ||||
Total long-term and other debt | 397,544,000 | 397,332,000 | ||
Interest Rate (as a percent) | 5.25% | |||
Senior Notes Due 2020 | ||||
Debt | ||||
Total long-term and other debt | 500,000,000 | 500,000,000 | ||
Interest Rate (as a percent) | 6.38% | |||
Senior Notes Due 2022 | ||||
Debt | ||||
Total long-term and other debt | 600,000,000 | 600,000,000 | ||
Interest Rate (as a percent) | 5.38% | |||
BrandLoyalty credit facility | ||||
Debt | ||||
Total long-term and other debt | $77,321,000 | $108,789,000 | ||
Weighted average interest rate (as a percent) | 2.58% |
DERIVATIVE_INSTRUMENTS_Details
DERIVATIVE INSTRUMENTS (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Designated as hedging instrument | Foreign currency exchange hedges | Other current assets | ||
Notional amount, fair value and classification of the company's outstanding derivative contracts | ||
Notional Amount | $62,796 | $50,908 |
Fair value | 2,834 | 3,528 |
Designated as hedging instrument | Foreign currency exchange hedges | Other current liabilities | ||
Notional amount, fair value and classification of the company's outstanding derivative contracts | ||
Notional Amount | 12,446 | |
Fair Value | 1,691 | |
Not designated as hedging instrument | Foreign currency exchange hedges | Other current assets | ||
Notional amount, fair value and classification of the company's outstanding derivative contracts | ||
Notional Amount | 3,125 | |
Fair value | 343 | |
Not designated as hedging instrument | Foreign currency exchange forward contract | Other current liabilities | ||
Notional amount, fair value and classification of the company's outstanding derivative contracts | ||
Notional Amount | 236,578 | |
Fair Value | 16,990 | |
Not designated as hedging instrument | Interest rate derivatives | Other current liabilities | ||
Notional amount, fair value and classification of the company's outstanding derivative contracts | ||
Notional Amount | 50,569 | 79,429 |
Fair Value | $178 | $330 |
DERIVATIVE_INSTRUMENTS_Details1
DERIVATIVE INSTRUMENTS (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Activity related to company's outstanding derivative contracts and location | ||
Gains related to foreign exchange hedges designated as effective | ($2,403) | |
Reclassifications out of accumulated other comprehensive income (loss) into net income | 0 | |
Foreign currency exchange forward contract | General and administrative | ||
Activity related to company's outstanding derivative contracts and location | ||
Gains (losses) on derivative instruments | -13,724 | |
Foreign currency exchange hedges | ||
Activity related to company's outstanding derivative contracts and location | ||
Gains related to foreign exchange hedges designated as effective | -2,400 | |
Reclassifications out of accumulated other comprehensive income (loss) into net income | 800 | |
Foreign currency exchange hedges | Cost of operations | ||
Activity related to company's outstanding derivative contracts and location | ||
Gains (losses) on derivative instruments | 319 | |
Interest rate derivatives | Interest expense | ||
Activity related to company's outstanding derivative contracts and location | ||
Gains (losses) on derivative instruments | $27 | $81 |
DEFERRED_REVENUE_Details
DEFERRED REVENUE (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Movement in deferred revenue | ||
Beginning balance | $1,013,177 | |
Cash proceeds | 134,551 | |
Revenue recognized | -162,680 | |
Other | 25 | |
Effects of foreign currency translation | -84,500 | |
Ending balance | 900,573 | |
Amounts recognized in the consolidated balance sheets: | ||
Current liabilities | 746,892 | 846,370 |
Non-current liabilities | 153,681 | 166,807 |
Service | ||
Movement in deferred revenue | ||
Beginning balance | 332,368 | |
Cash proceeds | 47,611 | |
Revenue recognized | -46,939 | |
Effects of foreign currency translation | -27,967 | |
Ending balance | 305,073 | |
Amounts recognized in the consolidated balance sheets: | ||
Current liabilities | 151,392 | |
Non-current liabilities | 153,681 | |
Redemption | ||
Movement in deferred revenue | ||
Beginning balance | 680,809 | |
Cash proceeds | 86,940 | |
Revenue recognized | -115,741 | |
Other | 25 | |
Effects of foreign currency translation | -56,533 | |
Ending balance | 595,500 | |
Amounts recognized in the consolidated balance sheets: | ||
Current liabilities | $595,500 |
REDEEMABLE_NONCONTROLLING_INTE2
REDEEMABLE NON-CONTROLLING INTEREST (Details) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2015 | Mar. 31, 2014 | Feb. 10, 2015 | Feb. 10, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Jan. 01, 2015 | Jan. 02, 2014 | |
USD ($) | USD ($) | Brand Loyalty | Brand Loyalty | Brand Loyalty | Brand Loyalty | Brand Loyalty | Brand Loyalty | Brand Loyalty | |
USD ($) | EUR (€) | USD ($) | USD ($) | USD ($) | |||||
Redeemable noncontrolling interest | |||||||||
Ownership interest acquired (as a percent) | 10.00% | 60.00% | |||||||
Ownership percentage | 70.00% | ||||||||
Ownership interest that may be acquired over a four-year period (as a percent) | 40.00% | ||||||||
Period over which remaining ownership interest may be acquired | 4 years | ||||||||
Ownership interest that may be acquired each year (as a percent) | 10.00% | ||||||||
Additional interest which the entity must acquire if specified annual earnings targets are met (as a percent) | 10.00% | ||||||||
Ownership interest for which sellers have a put option to sell if specified annual earnings targets are not met (as a percent) | 10.00% | ||||||||
Payments to acquire additional ownership interest | $87,400,000 | € 77,200,000 | |||||||
Ownership interest held by minority interest (as a percent) | 30.00% | ||||||||
Reconciliation of the changes in the Redeemable noncontrolling interest | |||||||||
Balance at beginning of period | 235,566,000 | 235,566,000 | 341,907,000 | ||||||
Net income attributable to non-controlling interest | 2,273,000 | -1,648,000 | 2,273,000 | 9,847,000 | |||||
Other comprehensive income attributable to non-controlling interest | 489,000 | 1,988,000 | |||||||
Adjustment to redemption value | 15,194,000 | 15,194,000 | 14,775,000 | ||||||
Foreign currency translation adjustments | -26,641,000 | -39,654,000 | |||||||
Reclassification to accrued expenses | -93,297,000 | ||||||||
Balance at end of period | $226,881,000 | $226,881,000 | $235,566,000 | $235,566,000 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 3 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Jan. 01, 2015 | Apr. 15, 2015 |
Stock Repurchase Programs | |||
Amount of company's outstanding common stock authorized to be repurchased | $600 | ||
Stock acquired (in shares) | 2,003,653 | ||
Total cost of shares repurchased | 564.9 | ||
Shares repurchased amount not settled | 22.3 | ||
Available balance under stock repurchase program | 35.1 | ||
Subsequent event | |||
Stock Repurchase Programs | |||
Amount of company's outstanding common stock authorized to be repurchased | 1,000 | ||
Increase in the amount of common stock authorized to be repurchased | $400 |
STOCKHOLDERS_EQUITY_Details_2
STOCKHOLDERS' EQUITY (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||
Stock-based compensation expense | $27,488 | $15,624 |
Cost of operations. | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||
Stock-based compensation expense | 22,102 | 10,982 |
General and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||
Stock-based compensation expense | $5,386 | $4,642 |
STOCKHOLDERS_EQUITY_Details_3
STOCKHOLDERS' EQUITY (Details 3) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Performance-based restricted stock unit awards | |
Stock Compensation Plans | |
Shares granted | 222,605 |
Weighted average grant-date fair value (in dollars per share) | $284.23 |
Percentage of stock units for which restrictions lapse on February 18, 2016 | 33.00% |
Percentage of stock units for which restrictions lapse on February 21, 2017 | 33.00% |
Percentage of stock units for which restrictions lapse on February 17, 2018 | 34.00% |
Performance-based restricted stock unit awards | Minimum | |
Stock Compensation Plans | |
Percentage of stock units to vest | 50.00% |
Performance-based restricted stock unit awards | Maximum | |
Stock Compensation Plans | |
Percentage of stock units to vest | 150.00% |
Service-based restricted stock unit awards | |
Stock Compensation Plans | |
Shares granted | 56,654 |
Weighted average grant-date fair value (in dollars per share) | $284.31 |
Award vesting period | 3 years |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Accumulated Other Comprehensive Income | ||
Balance at the beginning of the period | ($75,453) | |
Amounts reclassified from other comprehensive income (loss) | 0 | |
Changes in other comprehensive income (loss) | -64,100 | 9,818 |
Balance at the end of the period | -139,553 | |
Net Unrealized Gains (Losses) on Securities | ||
Accumulated Other Comprehensive Income | ||
Balance at the beginning of the period | 2,654 | 4,189 |
Changes in other comprehensive income (loss) before reclassifications | 917 | |
Changes in other comprehensive income (loss) | 917 | 485 |
Balance at the end of the period | 3,571 | 4,674 |
Unrealized Losses on Cash Flow Hedges | ||
Accumulated Other Comprehensive Income | ||
Balance at the beginning of the period | 2,350 | |
Changes in other comprehensive income (loss) before reclassifications | -3,199 | |
Amounts reclassified from other comprehensive income (loss) | 796 | |
Changes in other comprehensive income (loss) | -2,403 | |
Balance at the end of the period | -53 | |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income | ||
Balance at the beginning of the period | -80,457 | -22,416 |
Changes in other comprehensive income (loss) before reclassifications | -62,614 | |
Changes in other comprehensive income (loss) | -62,614 | 9,333 |
Balance at the end of the period | -143,071 | -13,083 |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income | ||
Balance at the beginning of the period | -75,453 | -18,227 |
Changes in other comprehensive income (loss) before reclassifications | -64,896 | |
Amounts reclassified from other comprehensive income (loss) | 796 | |
Changes in other comprehensive income (loss) | -64,100 | 9,818 |
Balance at the end of the period | ($139,553) | ($8,409) |
FINANCIAL_INSTRUMENTS_Details
FINANCIAL INSTRUMENTS (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Financial assets | ||
Cash and cash equivalents | $760,398 | $1,077,152 |
Credit card and loan receivables, net | 10,143,003 | 10,673,709 |
Credit card and loan receivables held for sale | 143,837 | 125,060 |
Redemption settlement assets, restricted | 489,049 | 520,340 |
Cash collateral, restricted | 24,940 | 22,511 |
Other investments | 231,728 | 217,583 |
Financial liabilities | ||
Deposits | 4,551,986 | 4,801,464 |
Non-recourse borrowings of consolidated securitization entities | 4,843,352 | 5,225,359 |
Long-term and other debt | 4,895,784 | 4,227,414 |
Carrying Amount | ||
Financial assets | ||
Cash and cash equivalents | 760,398 | 1,077,152 |
Trade receivables, net | 571,560 | 743,294 |
Credit card and loan receivables, net | 10,143,003 | 10,673,709 |
Credit card and loan receivables held for sale | 143,837 | 125,060 |
Redemption settlement assets, restricted | 489,049 | 520,340 |
Cash collateral, restricted | 24,940 | 22,511 |
Derivative instruments | 2,834 | 3,871 |
Other investments | 231,728 | 217,583 |
Financial liabilities | ||
Accounts payable | 412,503 | 455,656 |
Derivative instruments | 1,869 | 17,290 |
Deposits | 4,510,374 | 4,773,541 |
Non-recourse borrowings of consolidated securitization entities | 4,796,916 | 5,191,916 |
Long-term and other debt | 4,865,428 | 4,209,246 |
Contingent consideration | 326,023 | |
Fair Value. | ||
Financial assets | ||
Cash and cash equivalents | 760,398 | 1,077,152 |
Trade receivables, net | 571,560 | 743,294 |
Credit card and loan receivables, net | 10,143,003 | 10,673,709 |
Credit card and loan receivables held for sale | 143,837 | 125,060 |
Redemption settlement assets, restricted | 489,049 | 520,340 |
Cash collateral, restricted | 24,940 | 22,511 |
Derivative instruments | 2,834 | 3,871 |
Other investments | 231,728 | 217,583 |
Financial liabilities | ||
Accounts payable | 412,503 | 455,656 |
Derivative instruments | 1,869 | 17,290 |
Deposits | 4,551,986 | 4,801,464 |
Non-recourse borrowings of consolidated securitization entities | 4,843,352 | 5,225,359 |
Long-term and other debt | 4,895,784 | 4,227,414 |
Contingent consideration | $326,023 |
FINANCIAL_INSTRUMENTS_Details_
FINANCIAL INSTRUMENTS (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets disclosed at fair value | ||
Cash collateral, restricted | $24,940 | $22,511 |
Other investments | 231,728 | 217,583 |
Total assets measured at fair value | 11,047,238 | 11,875,921 |
Liabilities disclosed at fair value | ||
Total liabilities measured at fair value | 14,291,122 | 14,254,237 |
Level 1 | ||
Assets disclosed at fair value | ||
Total assets measured at fair value | 760,398 | 1,077,152 |
Level 2 | ||
Liabilities disclosed at fair value | ||
Total liabilities measured at fair value | 14,291,122 | 14,254,237 |
Level 3 | ||
Assets disclosed at fair value | ||
Total assets measured at fair value | 10,286,840 | 10,798,769 |
Recurring | ||
Assets disclosed at fair value | ||
Corporate bonds | 243,597 | 283,213 |
Mutual funds | 19,770 | |
Cash collateral, restricted | 24,940 | 22,511 |
Other investments | 231,728 | 217,583 |
Derivative instruments | 2,834 | 3,871 |
Total assets measured at fair value | 522,869 | 527,178 |
Liabilities disclosed at fair value | ||
Derivative instruments | 1,869 | 17,290 |
Contingent consideration | 326,023 | |
Total liabilities measured at fair value | 1,869 | 343,313 |
Recurring | Level 1 | ||
Assets disclosed at fair value | ||
Mutual funds | 19,770 | |
Cash collateral, restricted | 2,251 | |
Other investments | 135,950 | 127,764 |
Total assets measured at fair value | 157,971 | 127,764 |
Recurring | Level 2 | ||
Assets disclosed at fair value | ||
Corporate bonds | 243,597 | 283,213 |
Other investments | 95,778 | 89,819 |
Derivative instruments | 2,834 | 3,871 |
Total assets measured at fair value | 342,209 | 376,903 |
Liabilities disclosed at fair value | ||
Derivative instruments | 1,869 | 17,290 |
Total liabilities measured at fair value | 1,869 | 17,290 |
Recurring | Level 3 | ||
Assets disclosed at fair value | ||
Cash collateral, restricted | 22,689 | 22,511 |
Total assets measured at fair value | 22,689 | 22,511 |
Liabilities disclosed at fair value | ||
Contingent consideration | 326,023 | |
Total liabilities measured at fair value | $326,023 |
FINANCIAL_INSTRUMENTS_Details_1
FINANCIAL INSTRUMENTS (Details 3) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Changes in fair value of the Company's asset and liability measured on a recurring basis using significant unobservable inputs (Level 3) | ||||
Fair value assets amount transfer from level 1 to level 2 | $0 | $0 | ||
Fair value assets amount transfer from level 2 to level 1 | 0 | 0 | ||
Fair value liabilities amount transfer from level 1 to level 2 | 0 | 0 | ||
Fair value liabilities amount transfer from level 2 to level 1 | 0 | 0 | ||
Contingent Consideration | ||||
Changes in fair value of the Company's asset and liability measured on a recurring basis using significant unobservable inputs (Level 3) | ||||
Beginning Balance | 326,023 | |||
Total losses (realized or unrealized) included in earnings | -547 | |||
Purchases | 248,702 | |||
Settlements | -305,528 | |||
Foreign currency transaction adjustments | -21,042 | 1,806 | ||
Ending Balance | 250,508 | |||
Losses for the period included in earnings related to liability still held at end of period | -1,806 | |||
Cash Collateral, Restricted | ||||
Changes in fair value of the Company's asset and liability measured on a recurring basis using significant unobservable inputs (Level 3) | ||||
Beginning Balance | 22,511 | 34,124 | ||
Total gains (realized or unrealized) included in earnings | 178 | 301 | ||
Ending Balance | 22,689 | 34,425 | ||
Gains for the period included in earnings related to assets still held at end of period | $178 | $301 | ||
Discount rate (as a percent) | 3.10% | |||
Cash Collateral, Restricted | Minimum | ||||
Changes in fair value of the Company's asset and liability measured on a recurring basis using significant unobservable inputs (Level 3) | ||||
Term | 3 months | |||
Cash Collateral, Restricted | Maximum | ||||
Changes in fair value of the Company's asset and liability measured on a recurring basis using significant unobservable inputs (Level 3) | ||||
Term | 19 months | |||
Cash Collateral, Restricted | Weighted average | ||||
Changes in fair value of the Company's asset and liability measured on a recurring basis using significant unobservable inputs (Level 3) | ||||
Term | 6 months |
FINANCIAL_INSTRUMENTS_Details_2
FINANCIAL INSTRUMENTS (Details 4) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Financial assets | ||
Cash and cash equivalents | $760,398 | $1,077,152 |
Credit card and loan receivables, net | 10,143,003 | 10,673,709 |
Credit card and loan receivables held for sale | 143,837 | 125,060 |
Total assets measured at fair value | 11,047,238 | 11,875,921 |
Financial liabilities | ||
Deposits | 4,551,986 | 4,801,464 |
Non-recourse borrowings of consolidated securitization entities | 4,843,352 | 5,225,359 |
Long-term and other debt | 4,895,784 | 4,227,414 |
Total liabilities measured at fair value | 14,291,122 | 14,254,237 |
Level 1 | ||
Financial assets | ||
Cash and cash equivalents | 760,398 | 1,077,152 |
Total assets measured at fair value | 760,398 | 1,077,152 |
Level 2 | ||
Financial liabilities | ||
Deposits | 4,551,986 | 4,801,464 |
Non-recourse borrowings of consolidated securitization entities | 4,843,352 | 5,225,359 |
Long-term and other debt | 4,895,784 | 4,227,414 |
Total liabilities measured at fair value | 14,291,122 | 14,254,237 |
Level 3 | ||
Financial assets | ||
Credit card and loan receivables, net | 10,143,003 | 10,673,709 |
Credit card and loan receivables held for sale | 143,837 | 125,060 |
Total assets measured at fair value | $10,286,840 | $10,798,769 |
INCOME_TAXES_Details
INCOME TAXES (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2015 | |
INCOME TAXES | |||
Effective tax rate utilized (as a percent) | 33.10% | 36.60% | 35.80% |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Segment information | ||
Revenues | $1,601,157 | $1,232,900 |
Income (loss) before income taxes | 246,537 | 214,045 |
Interest expense, net | 78,007 | 67,747 |
Operating income | 324,544 | 281,792 |
Depreciation and amortization | 121,628 | 74,073 |
Stock compensation expense | 27,488 | 15,624 |
Adjusted EBITDA | 473,660 | 371,489 |
Less: Securitization funding costs | 23,813 | 22,911 |
Less: Interest expense on deposits | 11,738 | 8,234 |
Less: Adjusted EBITDA attributable to non-controlling interest | 7,782 | 5,789 |
Adjusted EBITDA, net | 430,327 | 334,555 |
Operating segment | LoyaltyOne | ||
Segment information | ||
Revenues | 387,952 | 328,970 |
Income (loss) before income taxes | 53,790 | 44,376 |
Interest expense, net | 705 | 1,562 |
Operating income | 54,495 | 45,938 |
Depreciation and amortization | 19,933 | 22,249 |
Stock compensation expense | 2,992 | 2,784 |
Adjusted EBITDA | 77,420 | 70,971 |
Less: Adjusted EBITDA attributable to non-controlling interest | 7,782 | 5,789 |
Adjusted EBITDA, net | 69,638 | 65,182 |
Operating segment | Epsilon | ||
Segment information | ||
Revenues | 504,901 | 347,469 |
Income (loss) before income taxes | 7,040 | 13,147 |
Interest expense, net | -3 | -13 |
Operating income | 7,037 | 13,134 |
Depreciation and amortization | 81,182 | 37,077 |
Stock compensation expense | 15,418 | 4,991 |
Adjusted EBITDA | 103,637 | 55,202 |
Adjusted EBITDA, net | 103,637 | 55,202 |
Operating segment | Card Services | ||
Segment information | ||
Revenues | 714,718 | 561,796 |
Income (loss) before income taxes | 259,741 | 228,355 |
Interest expense, net | 35,551 | 30,406 |
Operating income | 295,292 | 258,761 |
Depreciation and amortization | 18,324 | 12,693 |
Stock compensation expense | 3,692 | 3,207 |
Adjusted EBITDA | 317,308 | 274,661 |
Less: Securitization funding costs | 23,813 | 22,911 |
Less: Interest expense on deposits | 11,738 | 8,234 |
Adjusted EBITDA, net | 281,757 | 243,516 |
Corporate/Other. | ||
Segment information | ||
Revenues | 101 | 41 |
Income (loss) before income taxes | -74,034 | -71,833 |
Interest expense, net | 41,754 | 35,792 |
Operating income | -32,280 | -36,041 |
Depreciation and amortization | 2,189 | 2,054 |
Stock compensation expense | 5,386 | 4,642 |
Adjusted EBITDA | -24,705 | -29,345 |
Adjusted EBITDA, net | -24,705 | -29,345 |
Eliminations | ||
Segment information | ||
Revenues | ($6,515) | ($5,376) |
NONCASH_FINANCING_AND_INVESTIN1
NON-CASH FINANCING AND INVESTING ACTIVITIES (Details) (USD $) | 1 Months Ended |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 |
NON-CASH FINANCING AND INVESTING ACTIVITIES | |
Treasury shares purchased (in shares) | 75,000 |
Shares repurchased amount not settled | $22.30 |