NetSpend 2012 Annual Report Download - page 48

NOTE 12 Other Intangible Assets, net
In 2012, TSYS allocated $76.6 million to other intangible
assets due to the acquisitions of ProPay and CPAY. In 2011,
TSYS allocated approximately $11.7 million to other intangible
due to the acquisition of TermNet. Refer to Note 24 for more
information on acquisitions.
Significant components of other intangible assets at
December 31 are summarized as follows:
2012
(in thousands) Gross Accumulated Amortization Net
Customer relationships ....$167,641 (49,822) $117,819
Trade association ......... 10,000 (2,750) 7,250
Trade name .............. 2,537 (1,504) 1,033
Channel relationships ...... 1,600 (266) 1,334
Covenants-not-to-compete . 3,440 (822) 2,618
Total ....................$185,218 (55,164) $130,054
2011
(in thousands) Gross Accumulated Amortization Net
Customer relationships .......$106,312 (34,899) $71,413
Trade association ............ 10,000 (1,750) 8,250
Trade name ................ 2,024 (2,024) —
Channel relationships ........ 1,600 (107) 1,493
Covenants-not-to-compete.... 1,140 (1,046) 94
Total ......................$121,076 (39,826) $81,250
Amortization related to other intangible assets, which is
recorded in selling, general and administrative expenses, was
$16.6 million, $13.2 million and $11.2 million for 2012, 2011
and 2010, respectively.
The weighted average useful life for each component of other
intangible assets, and in total, at December 31, 2012 is as
follows:
Weighted
Average
Amortization
Period (Yrs)
Customer relationships ....................... 8.2
Trade association ............................ 10.0
Trade name ................................. 2.7
Channel relationships ........................ 10.0
Covenants-not-to-compete .................... 2.9
Total ...................................... 8.1
Estimated future amortization expense on other intangible
assets as of December 31, 2012 for the next five years is:
(in thousands)
2013 ........................................... $21,885
2014 ........................................... 21,445
2015 ........................................... 19,669
2016 ........................................... 19,111
2017 ........................................... 18,721
NOTE 13 Long-term Debt and Capital Lease
Obligations
On September 10, 2012, TSYS entered into a Credit
Agreement with JPMorgan Chase Bank, N.A., as
Administrative Agent, J.P. Morgan Securities LLC, The Bank of
Tokyo-Mitsubishi UFJ, Ltd., Regions Capital Markets and U.S.
Bank National Association, as joint lead arrangers and joint
bookrunners, and The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
Regions Capital Markets and U.S. Bank National Association,
as Syndication Agents, and the other lenders named therein
(the Credit Agreement).
The Credit Agreement provides for a $350 million five-year
unsecured revolving credit facility (which may be increased by
up to an additional $350 million under certain circumstances)
and includes a $50 million subfacility for the issuance of
standby letters of credit and a $50 million subfacility for
swingline loans. Up to $262.5 million of the revolving credit
facility (including up to $37.5 million of standby letters of
credit) can be made available in Euro, Pounds Sterling,
Canadian Dollars and other currencies approved by the
lenders providing this portion of the revolving credit facility. At
the Company’s option, the principal balance of loans
outstanding under the revolving credit facility (other than
swingline loans) will bear interest at a rate equal to (i) London
Interbank Offered Rate (LIBOR) for the applicable currency
plus an applicable margin ranging from 0.90% to 1.45%
depending on the Company’s corporate credit rating, or (ii) a
base rate equal to the highest of (a) JPMorgan’s prime rate,
(b) the Federal Funds rate plus 0.50% and (c) one-month
LIBOR for U.S. Dollars plus 1.00%, plus in each case, an
applicable margin ranging from 0% to 0.45% depending on
the Company’s corporate credit rating. Swingline loans bear
interest at the same rate and margins as loans bearing interest
at the base rate described above. In addition, the Company is
to pay each lender a fee in respect of the amount of such
lender’s commitment under the revolving credit facility
(regardless of usage), ranging from 0.10% to 0.30%
depending on the Company’s corporate credit rating. The
revolving credit facility is scheduled to terminate on
September 10, 2017 and the Company is required to repay
the entire principal balance of loans outstanding under this
facility in full on that same date.
The Credit Agreement also provides for a $150 million five-
year unsecured term loan to the Company which was
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