NetSpend 2014 Annual Report Download - page 35

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Cash Used in Acquisitions
In 2014, the Company paid $38.6 million to NetSpend dissenting shareholders to settle the outstanding lawsuit
associated with the NetSpend acquisition. In 2013, the Company used cash of $1.3 billion in the acquisition of
NetSpend. In 2012, the Company used cash of $188.7 million in the acquisitions of ProPay and CPAY. Refer to
Note 24 in the Consolidated Financial Statements for more information on these acquisitions.
Licensed Computer Software from Vendors
Expenditures for licensed computer software from vendors for increases in processing capacity were $29.6 million
in 2014, compared to $63.6 million in 2013 and $33.0 million in 2012. The increase in expenditures in 2013 was
driven by purchases of software in anticipation of large conversions in 2014 and beyond.
Purchase of Private Equity Investments
In 2011, the Company entered into a limited partnership agreement in connection with its agreement to invest in
an Atlanta, Georgia-based venture capital fund focused exclusively on investing in technology-enabled financial
services companies. Pursuant to the limited partnership agreement, the Company has committed to invest up to
$20 million in the fund so long as its ownership interest in the fund does not exceed 50%. The Company made
investments in the fund of $3.3 million, $1.4 million and $3.0 million in 2014, 2013 and 2012, respectively. The
Company recorded gains on this investment of $793,000, $966,000 and $898,000 for the years ended
December 31, 2014, 2013 and 2012, respectively.
Proceeds from Insurance Recovery for Loss on Disposal
The Company received $6.2 million of proceeds from insurance coverage related to the destruction of property
resulting from a fire. The Company recorded the loss on disposal which was more than offset by the insurance
proceeds received.
Proceeds from Dispositions
During 2014, TSYS sold its Japan-based operations and received $45.0 million of proceeds, net of expenses paid
and cash disposed in connection with this transaction. Refer to Note 2 in the Consolidated Financial Statements
for more information on discontinued operations.
Cash Flows from Financing Activities
Years Ended December 31,
(in thousands) 2014 2013 2012
Repurchase of common stock under plans and tax withholding ............ $(170,516) (103,857) (74,939)
Dividends paid on common stock .................................... (74,796) (56,510) (94,035)
Principal payments on long-term borrowings and capital lease obligations . . (69,939) (166,805) (200,052)
Purchase of noncontrolling interest ................................... (37,500) ——
Subsidiary dividends paid to noncontrolling shareholders ................ (7,172) (7,321) (2,797)
Debt issuance costs ................................................ —(13,573) (2,073)
Proceeds from long-term borrowings ................................. 1,396 1,395,661 150,000
Excess tax benefit from share-based payment arrangements .............. 7,185 3,528 1,259
Proceeds from exercise of stock options ............................... 34,869 40,691 9,672
Net cash (used in) provided by financing activities ....................... $(316,473) 1,091,814 (212,965)
The main source of cash from financing activities has been the use of borrowed funds. The major uses of cash for
financing activities have been the purchase of stock under the stock repurchase plan as described below,
payment of dividends, principal payment on long term debt and capital lease obligations, and purchase of
noncontrolling interests. Net cash used in financing activities for the year ended December 31, 2014 was
$316.5 million and was primarily the result of the repurchase of common stock, payment of dividends, and
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