NetSpend 2012 Annual Report Download - page 23

Cash Flows from Financing Activities
Years Ended December 31,
(in thousands) 2012 2011 2010
Principal payments
on long-term debt
borrowings and
capital lease
obligations ....... $(200,052) (28,892) (11,741)
Dividends paid on
common stock .... (94,035) (53,949) (55,087)
Repurchases of
common stock .... (74,939) (121,271) (46,228)
Subsidiary dividends
paid to
noncontrolling
shareholders ...... (2,797) (433) (9,031)
Purchase of
noncontrolling
interests .......... —(174,050) —
Proceeds from
borrowings of
long-term debt .... 150,000 — 39,757
Other .............. 8,858 7,542 654
Net cash used in
financing
activities ......... $(212,965) (371,053) (81,676)
The major uses of cash for financing activities have
been the principal payment on long term debt and
capital lease obligations, purchase of noncontrolling
interests, payment of dividends and the purchase of
stock under the stock repurchase plan as described
below. The main source of cash from financing
activities has been the use of borrowed funds. Net
cash used in financing activities for the year ended
December 31, 2012 was $213.0 million and was
primarily the result of principal payments on long-
term debt borrowings and capital lease obligations,
payment of dividends and the repurchase of common
stock offset by proceeds from borrowings of long-
term debt. Net cash used in financing activities for
the year ended December 31, 2011 was $371.1
million and was primarily the result of the acquisition
of the remaining 49% interest in TMS, payment of
dividends and the repurchase of common stock. The
Company used $81.7 million in cash for financing
activities for the year ended December 31, 2010
primarily for payments on long-term debt and capital
lease obligations and the payments of cash
dividends. Refer to Note 13 in the consolidated
financial statements for more information on the
long-term debt financing.
Financing
In September 2012, TSYS obtained a $150.0 million
note payable from a third party vendor to pay off
existing long term notes.
In December 2010, TSYS obtained a $39.8 million
note payable from a third-party vendor related to
financing the purchase of distributed systems
software.
On October 30, 2008, the Company’s International
Services segment obtained a credit agreement from
a third-party to borrow up to approximately
¥2.0 billion, or $21 million, in a Yen-denominated
three-year loan to finance activities in Japan. The rate
is the LIBOR plus 80 basis points. The Company
initially made a draw of ¥1.5 billion, or approximately
$15.1 million. In January 2009, the Company made
an additional draw down of ¥250 million, or
approximately $2.8 million. In April 2009, the
Company made an additional draw down of
¥250 million, or approximately $2.5 million. On
December 3, 2011, the Company modified its loan to
extend the maturity date to November 5, 2014.
Refer to Note 13 in the consolidated financial
statements for further information on TSYS’ long-term
debt and financing arrangements.
Purchase of Noncontrolling Interest
With the acquisition of TMS, the Company was a
party to put and call arrangements with respect to
the membership units that represented the remaining
noncontrolling interest of FNMS Holding, LLC (FNMS
Holding). The call and put arrangements could have
been exercised at the discretion of TSYS or First
National Bank of Omaha (FNBO) on April 1, 2015,
2016 and 2017, upon the dilution of FNBO’s equity
ownership in FNMS Holding below a designated
threshold and in connection with certain acquisitions
by TSYS or FNMS Holding in excess of designated
value thresholds.
On January 4, 2011, TSYS announced that it
acquired, effective January 1, 2011, the remaining
49% interest in TMS from FNBO. The fair value of the
noncontrolling interest in TMS, owned by a private
company at December 31, 2010, was estimated by
applying the income and market approaches. In
particular, a discounted cash flow method, a
guideline companies method, and a recent equity
transaction were employed. This fair value
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