XML 47 R14.htm IDEA: XBRL DOCUMENT
v3.19.3

LONG-TERM DEBT AND LINES OF CREDIT | 9 Months Ended
--- | ---
Sep. 30, 2019
Debt Disclosure [Abstract] |
LONG-TERM DEBT AND LINES OF CREDIT | LONG-TERM DEBT AND LINES OF CREDIT As of September 30, 2019 and December 31, 2018, long-term debt consisted of the following:
| September 30, 2019 |  | December 31, 2018
| (in thousands)
Long-term Debt |  |  |
3.800% senior notes due April 1, 2021 | $ | 763,194 |  |  | $ | — |
3.750% senior notes due June 1, 2023 | 568,598 |  |  | — |
4.000% senior notes due June 1, 2023 | 574,170 |  |  | — |
2.650% senior notes due February 15, 2025 | 991,090 |  |  | — |
4.800% senior notes due April 1, 2026 | 823,448 |  |  | — |
4.450% senior notes due June 1, 2028 | 488,081 |  |  | — |
3.200% senior notes due August 15, 2029 | 1,234,560 |  |  | — |
4.150% senior notes due August 15, 2049 | 739,410 |  |  | — |
Unsecured term loan facility | 1,980,886 |  |  | — |
Unsecured revolving credit facility | 783,000 |  |  | — |
Secured term loans (outstanding under our Prior Credit Facility) | — |  |  | 4,426,243 |
Secured revolving credit facility (outstanding under our Prior Credit Facility) | — |  |  | 704,000 |
Finance lease liabilities | 34,266 |  |  | — |
Other borrowings | 40,374 |  |  | — |
Total long-term debt | 9,021,077 |  |  | 5,130,243 |
Less current portion | 33,373 |  |  | 115,075 |
Long-term debt, excluding current portion | $ | 8,987,704 |  |  | $ | 5,015,168 |
The carrying amounts of our senior notes and term loans are presented net of unamortized discount and unamortized debt issuance costs, as applicable. At September 30, 2019, unamortized discount on senior notes was $6.0 million, and unamortized debt issuance costs on senior notes and the unsecured term loan facility were $48.0 million. Unamortized debt issuance costs on our secured term loans at December 31, 2018 were $37.4 million. The portion of unamortized debt issuance costs related to revolving credit facilities is included in other noncurrent assets. At September 30, 2019, unamortized debt issuance costs on the unsecured revolving credit facility were $18.6 million, and, at December 31, 2018, unamortized debt issuance costs on the secured revolving credit facility were $12.9 million. The debt discounts and debt issuance costs are recognized as an increase to interest expense over the terms of the respective debt instruments. Amortization of discounts and debt issuance costs was $3.1 million and $9.2 million, respectively, for the three and nine months ended September 30, 2019. Amortization of debt issuance costs for the three and nine months ended September 30, 2018 was $2.9 million and $8.6 million, respectively. At September 30, 2019, maturities of long-term debt (excluding finance lease liabilities) were as follows by year (in thousands):
Year ending December 31, |
Remainder of 2019 | $ | 11,536 |
2020 | 22,953 |
2021 | 754,906 |
2022 | 50,038 |
2023 | 1,300,000 |
2024 | 2,533,000 |
2025 and thereafter | 4,200,000 |
Total | $ | 8,872,433 |
See "Note 5—Leases" for more information about our finance lease liabilities, including maturities. Bridge Facility On May 27, 2019, in connection with our entry into the Merger Agreement described in "Note 2—Acquisitions," we obtained commitments for a $2.75 billion, 364-day senior unsecured bridge facility (the "Bridge Facility"). On July 9, 2019, upon our entry into the Term Loan Facility and the Unsecured Revolving Credit Facility (each as defined below), the aggregate commitments under the Bridge Facility were reduced to approximately $2.1 billion. Concurrently with the issuance of the Senior Notes (as defined below), the remaining aggregate commitments under the Bridge Facility were reduced to zero and terminated. For the three and nine months ended September 30, 2019, we recognized $8.8 million and $11.7 million, respectively, of fees associated with the Bridge Facility in interest expense. New Facilities On July 9, 2019, we entered into a term loan credit agreement ("Term Loan Credit Agreement") and a revolving credit agreement ("Unsecured Revolving Credit Agreement") in each case with Bank of America, N.A., as administrative agent, and a syndicate of financial institutions, as lenders and other agents. The Term Loan Credit Agreement provides for a senior unsecured $2.0 billion term loan facility ("Term Loan Facility"). The Unsecured Revolving Credit Agreement provides for a senior unsecured $3.0 billion revolving credit facility ("Unsecured Revolving Credit Facility," together with the Term Loan Facility, the "New Facilities"). We capitalized debt issuance costs of $12.8 million in connection with the issuances under the New Facilities. Borrowings under the Term Loan Facility were made in U.S. dollars and borrowings under the Unsecured Revolving Credit Facility are available to be made in U.S. dollars, euros, sterling, Canadian dollars and, subject to certain conditions, certain other currencies at our option. Borrowings in U.S. dollars and certain other London Interbank Offered Rate ("LIBOR")-quoted currencies will bear interest, at our option, at a rate equal to either (1) the rate (adjusted for any statutory reserve requirements for eurocurrency liabilities) for eurodollar deposits in the London interbank market, (2) a floating rate of interest set forth on the applicable LIBOR screen page designated by Bank of America or (3) the highest of (a) the federal funds effective rate plus 0.5%, (b) the rate of interest as publicly announced by Bank of America as its "prime rate" or (c) LIBOR plus 1.0%, in each case, plus an applicable margin. As of September 30, 2019, the interest rates on the Term Loan Facility and the Unsecured Revolving Credit Facility were 3.42% and 3.33%, respectively. In addition, we are required to pay a quarterly commitment fee with respect to the unused portion of the Unsecured Revolving Credit Facility at an applicable rate per annum ranging from 0.125% to 0.300% depending on our credit rating. Beginning on December 31, 2022, and at the end of each quarter thereafter, the Term Loan Facility must be repaid in quarterly installments in the amount of 2.50% of original principal through the maturity date with the remaining principal balance due upon maturity in September 2024. The Unsecured Revolving Credit Agreement also matures in September 2024. We may issue standby letters of credit of up to $250 million in the aggregate under the Unsecured Revolving Credit Facility. Outstanding letters of credit under the Unsecured Revolving Credit Facility reduce the amount of borrowings available to us. The total available commitments under the Unsecured Revolving Credit Facility at September 30, 2019 were $2,198.8 million. Senior Notes On August 14, 2019, we completed the public offering and issuance of $3.0 billion aggregate principal amount of senior unsecured notes, consisting of the following: (i) $1.0 billion aggregate principal amount of 2.650% senior notes due 2025; (ii) $1.25 billion aggregate principal amount of 3.200% senior notes due 2029; and (iii) $750 million aggregate principal amount of 4.150% senior notes due 2049 (collectively, the "Senior Notes"). Interest on the Senior Notes is payable semi-annually in arrears on each February 15 and August 15, beginning on February 15, 2020. Each series of the Senior Notes is redeemable, at our option, in whole or in part, at any time and from time-to-time at the redemption prices set forth in the related indenture. We issued the Senior Notes at a total discount of $6.1 million and capitalized related debt issuance costs of $29.3 million. From August 14, 2019 to the closing date of the Merger, the proceeds from the issuance of the Senior Notes were held in escrow. Upon closing, the funds were released and used together with borrowings under the Term Loan Facility and the Unsecured Revolving Credit Facility and cash on hand to repay TSYS's unsecured revolving credit facility, to refinance certain of our existing indebtedness, to fund cash payments made in lieu of fractional shares payable in accordance with the terms of the Merger Agreement and to pay transaction fees and costs related to the Merger. In addition, in connection with the Merger, we assumed $3.0 billion aggregate principal amount of senior unsecured notes of TSYS, consisting of the following: (i) $750 million aggregate principal amount of 3.800% senior notes due 2021; (ii) $550 million aggregate principal amount of 3.750% senior notes due 2023; (iii) $550 million aggregate principal amount of 4.000% senior notes due 2023; (iv) $750 million aggregate principal amount of 4.800% senior notes due 2026; and (v) $450 million aggregate principal amount of 4.450% senior notes due 2028. For the 3.800% senior notes due 2021 and the 4.800% senior notes due 2026, interest is payable semi-annually each April 1 and October 1. For the 3.750% senior notes due 2023, the 4.000% senior notes due 2023 and the 4.450% senior notes due 2028, interest is payable semi-annually each June 1 and December 1. The senior notes assumed in the Merger were measured at fair value of $3.2 billion at the acquisition date, which exceeded their aggregate face value by $169.0 million. The difference between the fair value and face value of the assumed senior notes is recognized over the terms of the respective notes as a reduction of interest expense. The amortization of this fair value adjustment was $1.5 million for the three and nine months ended September 30, 2019. As of September 30, 2019, our senior notes had an estimated fair value of $6,313.2 million. The estimated fair value of our senior notes was based on quoted market prices in an active market and is considered to be a Level 1 measurement of the valuation hierarchy. The fair value of other long-term debt approximated its carrying amount at September 30, 2019. Prior Credit Facility Prior to completion of the Merger, we were party to a credit facility agreement with Bank of America, N.A., as administrative agent, and a syndicate of financial institutions, as lenders and other agents (as amended from time to time, the "Prior Credit Facility"). The Prior Credit Facility provided for secured financing comprised of (i) a $1.5 billion revolving credit facility; (ii) a $1.5 billion term loan; (iii) a $1.37 billion term loan; (iv) a $1.14 billion term loan; and (v) a $500 million term loan. Upon the consummation of the Merger, all borrowings outstanding and other amounts due under the Prior Credit Facility were repaid with proceeds from the New Facilities and the Prior Credit Facility was terminated. In connection with the extinguishment of the Prior Credit Facility in the three months ended September 30, 2019, we wrote-off related unamortized debt issuance costs of $16.7 million to interest expense. Compliance with Covenants The Term Loan Credit Agreement contains customary conditions to funding, affirmative covenants, negative covenants, financial covenants and events of default. The Unsecured Revolving Credit Facility Agreement contains customary conditions to funding, affirmative covenants, negative covenants and events of default. As of September 30, 2019, financial covenants under the Term Loan Credit Agreement required a leverage ratio of 3.50 to 1.00 and an interest coverage ratio of 3.00 to 1.00. We were in compliance with all applicable covenants as of September 30, 2019. Settlement Lines of Credit In various markets where we do business, we have specialized lines of credit, which are restricted for use in funding settlement. The settlement lines of credit generally have variable interest rates, are subject to annual review and are denominated in local currency but may, in some cases, facilitate borrowings in multiple currencies. For certain of our lines of credit, the available credit is increased by the amount of cash we have on deposit in specific accounts with the lender. Accordingly, the amount of the outstanding line of credit may exceed the stated credit limit. As of September 30, 2019 and December 31, 2018, a total of $72.1 million and $70.6 million, respectively, of cash on deposit was used to determine the available credit. As of September 30, 2019 and December 31, 2018, respectively, we had $547.6 million and $700.5 million outstanding under these lines of credit with additional capacity to fund settlement of $871.9 million as of September 30, 2019. The weighted-average interest rate on these borrowings was 3.34% and 2.97% at September 30, 2019 and December 31, 2018, respectively. During the three months ended September 30, 2019, the maximum and average outstanding balances under these lines of credit were $699.0 million and $426.6 million, respectively. Derivative Agreements We have interest rate swap agreements with financial institutions to hedge changes in cash flows attributable to interest rate risk on a portion of our variable-rate debt instruments. Net amounts to be received or paid under the swap agreements are reflected as adjustments to interest expense. Since we have designated the interest rate swap agreements as portfolio cash flow hedges, unrealized gains or losses resulting from adjusting the swaps to fair value are recorded as components of other comprehensive income (loss). In addition, in June 2019, we entered into forward-starting interest rate swap agreements with an aggregate notional amount of $1.0 billion. The forward-starting interest rate swaps, designated as cash flow hedges, were designed to manage the exposure to interest rate volatility in anticipation of the issuance of the Senior Notes. During the period from the commencement of the swaps through the date upon which the Senior Notes were issued, the effective portion of the unrealized losses on the swaps was included in other comprehensive loss. Upon issuance of the Senior Notes, we terminated the forward-starting swap agreements and made settlement payments of $48.3 million, which are included cash flows from operating activities in our consolidated statement of cash flows for the nine months ended September 30, 2019 within the caption labeled "Other, net." We have and will continue to reclassify the effective portion of the realized loss from accumulated other comprehensive loss into interest expense over the terms of the related Senior Notes. The fair values of the interest rate swaps were determined based on the present value of the estimated future net cash flows using implied rates in the applicable yield curve as of the valuation date. These derivative instruments were classified within Level 2 of the valuation hierarchy. The table below presents the fair values of our derivative financial instruments, designated as cash flow hedges, included in the consolidated balance sheets:
|  |  |  |  |  |  |  | Fair Values
Derivative Financial Instruments |  | Balance Sheet Location |  | Weighted-Average Fixed Rate of Interest at September 30, 2019 |  | Range of Maturity Dates at September 30, 2019 |  | September 30, 2019 |  | December 31, 2018
|  |  |  |  |  |  |  | (in thousands)
Interest rate swaps (Notional of $500 million at September 30, 2019 and $750 million at December 31, 2018) |  | Prepaid expenses and other current assets |  | 1.46% |  | December 31, 2019 - July 31, 2020 |  | $ | 950 |  |  | $ | 3,200 |
Interest rate swaps (Notional of $550 million at December 31, 2018) |  | Other noncurrent assets |  | NA |  | NA |  | $ | — |  |  | $ | 8,256 |
Interest rate swaps (Notional of $1.5 billion at September 30, 2019 and $950 million at December 31, 2018) |  | Other noncurrent liabilities |  | 2.57% |  | March 31, 2021 - December 31, 2022 |  | $ | 55,238 |  |  | $ | 14,601 |
NA - not applicable. The table below presents the effects of our interest rate swaps on the consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2019 and 2018:
| Three Months Ended |  | Nine Months Ended
| September 30, 2019 |  | September 30, 2018 |  | September 30, 2019 |  | September 30, 2018
| (in thousands)
Net unrealized (losses) gains recognized in other comprehensive loss | $ | (40,265 | ) |  | $ | 1,845 |  |  | $ | (96,997 | ) |  | $ | 12,353 |
Net unrealized losses (gains) reclassified out of other comprehensive loss to interest expense | $ | 1,193 |  |  | $ | (1,663 | ) |  | $ | (1,530 | ) |  | $ | (2,830 | )
As of September 30, 2019, the amount of net unrealized losses in accumulated other comprehensive loss related to our interest rate swaps that is expected to be reclassified into interest expense during the next 12 months was approximately $19.1 million. Interest Expense Interest expense was approximately $96 million and $46 million for the three months ended September 30, 2019 and 2018, respectively, and approximately $221 million and $140 million for the nine months ended September 30, 2019 and 2018, respectively.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration