UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-27512 CSG SYSTEMS INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Delaware 47-0783182 (State or oth ...

[Part I - FINANCIAL INFORMATION](index=3&type=section&id=Part%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents CSG Systems International, Inc.'s unaudited condensed consolidated financial statements for the three and six-month periods ended June 30, 2019 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | **Total Assets** | **$1,179,717** | **$1,114,362** | | Total current assets | $572,628 | $599,567 | | Total non-current assets | $607,089 | $514,795 | | **Total Liabilities** | **$805,393** | **$753,338** | | Total current liabilities | $335,584 | $350,391 | | Total non-current liabilities | $469,809 | $402,947 | | **Total Stockholders' Equity** | **$374,324** | **$361,024** | - Total assets increased to **$1.18 billion** as of June 30, 2019, from **$1.11 billion** at year-end 2018, primarily driven by the recognition of **$94.0 million** in operating lease right-of-use assets upon adoption of a new lease accounting standard[7](index=7&type=chunk) [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Statement of Income Summary (in thousands, except EPS) | Metric | Q2 2019 | Q2 2018 | Six Months 2019 | Six Months 2018 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | **$245,856** | **$213,033** | **$490,649** | **$414,737** | | Operating Income | $30,338 | $24,087 | $62,431 | $49,854 | | **Net Income** | **$19,379** | **$15,117** | **$38,630** | **$29,131** | | Diluted EPS | $0.60 | $0.46 | $1.19 | $0.88 | - Revenues for Q2 2019 increased **15.4% YoY** to **$245.9 million**, and net income grew **28.2% YoY** to **$19.4 million**. For the six-month period, revenues increased **18.3% YoY**, and net income grew **32.6% YoY**[10](index=10&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive Income (Loss) (in thousands) | Metric | Q2 2019 | Q2 2018 | Six Months 2019 | Six Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $19,379 | $15,117 | $38,630 | $29,131 | | Other Comprehensive Income (Loss) | ($3,808) | ($16,163) | $57 | ($8,547) | | **Total Comprehensive Income (Loss)** | **$15,571** | **($1,046)** | **$38,687** | **$20,584** | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) - For the six months ended June 30, 2019, total stockholders' equity increased from **$361.0 million** to **$374.3 million**. Key activities included net income of **$38.6 million**, offset by common stock repurchases of **$20.3 million** and cash dividend declarations of **$14.7 million**[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Category | 2019 | 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $28,429 | $26,214 | | Net cash used in investing activities | ($15,647) | ($22,830) | | Net cash used in financing activities | ($38,184) | ($4,925) | | **Net decrease in cash and cash equivalents** | **($25,500)** | **($2,572)** | | Cash and cash equivalents, beginning of period | $139,277 | $122,243 | | **Cash and cash equivalents, end of period** | **$113,777** | **$119,671** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details accounting policies and financial data, covering revenue recognition, lease accounting, long-lived assets, debt, commitments, and equity activities - As of June 30, 2019, the company had approximately **$501 million** in remaining performance obligations, primarily from fixed fees and guaranteed minimums, with about **90%** expected to be recognized as revenue by the end of 2021[21](index=21&type=chunk) Revenues by Type and Geography for Six Months Ended June 30 (in thousands) | Revenue by Type | 2019 | 2018 | | :--- | :--- | :--- | | Cloud and related solutions | $441,773 | $364,917 | | Software and services | $25,201 | $25,290 | | Maintenance | $23,675 | $24,530 | | **Total Revenues** | **$490,649** | **$414,737** | | **Revenue by Geography** | **2019** | **2018** | | Americas | $425,120 | $350,120 | | Europe, Middle East, and Africa | $47,232 | $42,411 | | Asia Pacific | $18,297 | $22,206 | - The company adopted the new lease accounting standard (ASU 2016-02, Topic 842) in January 2019, resulting in the recognition of approximately **$80 million** in right-of-use assets and lease liabilities on the balance sheet[33](index=33&type=chunk)[34](index=34&type=chunk) Long-Term Debt Summary as of June 30, 2019 (in thousands) | Debt Instrument | Carrying Value | | :--- | :--- | | 2018 Term Loan, net | $138,628 | | 2016 Convertible Notes, net | $219,670 | | **Total Debt, net** | **$358,298** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2019 financial performance, covering revenue growth, client concentration, operational trends, liquidity, and capital allocation [Company Overview](index=16&type=section&id=Company%20Overview) - CSG is a leading provider of revenue management, digital monetization, customer experience, and payment solutions, primarily serving the communications, media, and entertainment industries[78](index=78&type=chunk) - The company generates approximately **60%** of its revenues from North American cable and satellite markets and **87%** from the Americas region overall for the six months ended June 30, 2019[81](index=81&type=chunk) [Management Overview of Quarterly Results](index=17&type=section&id=Management%20Overview%20of%20Quarterly%20Results) Q2 2019 vs Q2 2018 Financial Highlights (in thousands, except EPS) | Metric | Q2 2019 | Q2 2018 | | :--- | :--- | :--- | | Revenues | $245,856 | $213,033 | | Operating income | $30,338 | $24,087 | | Operating income margin | 12.3% | 11.3% | | Diluted EPS | $0.60 | $0.46 | - The **15% YoY revenue increase** in Q2 2019 was mainly attributed to additional revenues from the acquisition of Forte on October 1, 2018, and continued growth in cloud solutions and managed service arrangements[86](index=86&type=chunk) [Significant Client Relationships](index=17&type=section&id=Significant%20Client%20Relationships) - The company has a significant client concentration, with **Comcast** and **Charter** accounting for **23%** and **20%** of revenues, respectively, in Q2 2019[90](index=90&type=chunk)[91](index=91&type=chunk) - Comcast exercised a one-year renewal option, extending their agreement through June 30, 2020. The company is currently in discussions with Comcast regarding further contract renewal terms[93](index=93&type=chunk)[94](index=94&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) - Total revenues for the six months ended June 30, 2019, increased **18% YoY** to **$490.6 million**, driven by the Forte acquisition, growth in cloud solutions, and a full six months of revenue from the Business Ink acquisition[99](index=99&type=chunk) - Cloud and related solutions revenues grew **21% YoY** for the first six months of 2019, while Software/services and Maintenance revenues saw slight declines, reflecting a strategic shift towards recurring revenue models[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - Operating expenses for the six months ended June 30, 2019, increased **17% YoY**, mainly due to additional costs from the Forte acquisition, including amortization and earn-out compensation[105](index=105&type=chunk) - Operating income margin improved to **12.7%** for the first six months of 2019 from **12.0%** in the prior year period, due to higher revenues and lower restructuring costs[119](index=119&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2019, principal sources of liquidity included **$131.5 million** in cash, cash equivalents, and short-term investments, and a **$200 million** undrawn revolving credit facility[123](index=123&type=chunk)[124](index=124&type=chunk) - Net cash from operating activities for the six months ended June 30, 2019 was **$28.4 million**, a slight increase from **$26.2 million** in the prior year period[128](index=128&type=chunk) - Key uses of cash in the first half of 2019 included **$17.9 million** for capital expenditures, **$14.8 million** for dividend payments, and **$20.7 million** for stock repurchases (including repurchases for tax withholdings)[137](index=137&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - The company believes its current cash, expected operating cash flows, and available credit will be sufficient to meet capital requirements for at least the next twelve months[162](index=162&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate, market value, and foreign currency exchange risks, with a hypothetical 10% adverse change not expected to be material - Interest rate risk exists on the 2018 Credit Agreement, which has variable rates based on LIBOR. The 2016 Convertible Notes have a fixed interest rate[165](index=165&type=chunk) - Market risk for cash equivalents and short-term investments (**$131.5 million** total) is considered minimal due to short maturities and strict investment guidelines[167](index=167&type=chunk)[168](index=168&type=chunk) - Foreign currency exchange risk is present due to global operations, though approximately **88%** of revenues in the first half of 2019 were in U.S. dollars, mitigating this risk[171](index=171&type=chunk)[172](index=172&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2019, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[175](index=175&type=chunk) [Part II - OTHER INFORMATION](index=28&type=section&id=Part%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company states that it is not currently a party to any material pending or threatened legal proceedings - CSG is not presently a party to any material pending or threatened legal proceedings[179](index=179&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) There were no material changes to the risk factors previously disclosed in the company's 2018 Form 10-K during the second quarter of 2019 - No material changes to the risk factors disclosed in the 2018 Form 10-K occurred during the second quarter of 2019[180](index=180&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchases during Q2 2019, including shares bought under the publicly announced program Common Stock Repurchases in Q2 2019 | Period | Total Shares Purchased | Average Price Paid Per Share ($) | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | April 2019 | 66,447 | $44.19 | 65,400 | | May 2019 | 43,187 | $45.86 | 43,000 | | June 2019 | 38,822 | $46.84 | 35,600 | | **Total** | **148,456** | **$45.37** | **144,000** | [Item 6. Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including key agreements and required certifications - Exhibits filed include multiple amendments to the Master Subscriber Management System Agreements with both Comcast and Charter Communications[188](index=188&type=chunk) - Certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included as exhibits[188](index=188&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-27512 CSG SYSTEMS INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Delaware 47-0783182 (State or other j ...

PART I [Business](index=3&type=section&id=Item%201.%20Business) CSG provides revenue management, digital monetization, customer experience, and payment solutions, primarily for the communications industry - CSG provides **revenue management**, **digital monetization**, **customer experience**, and **payment solutions**, with a primary focus on the **global communications industry**[9](index=9&type=chunk) - The company's business strategy is centered on creating **long-term recurring relationships**, expanding its **product portfolio** through **innovation**, delivering on **commitments**, and investing in **talent**[18](index=18&type=chunk)[20](index=20&type=chunk) Key Client Revenue Contribution (2017-2018) | Client | 2018 Revenue (millions) | 2018 % of Total | 2017 Revenue (millions) | 2017 % of Total | | :--- | :--- | :--- | :--- | :--- | | Comcast | $221 | 25% | $219 | 28% | | Charter | $179 | 20% | $171 | 22% | | DISH | $80 | 9% | $89 | 11% | Research & Development Expenses (2017-2018) | Year | R&D Expense (millions) | % of Total Revenues | | :--- | :--- | :--- | | 2018 | $124.0 | 14% | | 2017 | $113.2 | 14% | - The company's primary product solutions include **Revenue Management & Digital Monetization** (**ACP**, **Ascendon**), **Customer Communications Management**, **Payments** (enhanced by the **Forte acquisition**), and **Managed Services**[25](index=25&type=chunk)[28](index=28&type=chunk) - As of December 31, 2018, the company had **3,965 employees**, an increase of **592** from the previous year, largely due to the acquisitions of **Business Ink** and **Forte**[37](index=37&type=chunk) [Risk Factors](index=7&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from client concentration, cybersecurity threats, data privacy, acquisition integration, and global operational complexities - A significant portion of revenues (approximately **55%**) is derived from three largest clients (**Comcast**, **Charter**, and **DISH**), posing a concentration risk[43](index=43&type=chunk) - The delivery of solutions depends on **computing systems** and **networks** that are subject to risks of **interruption**, **outages**, and **security breaches**, including **cyber-attacks**[46](index=46&type=chunk) - The company processes and stores confidential and personally identifiable information (**PII**), making it subject to data privacy laws like **GDPR** and risks associated with **security breaches**[48](index=48&type=chunk) - Acquisitions involve numerous risks, including difficulties in **assimilation**, expansion into **new markets**, and the potential inability to achieve expected **financial targets** and **synergies**[52](index=52&type=chunk) - The business is highly dependent on the **global communications industry**, which is subject to **market consolidation**, increased competition from **digital lifestyle providers**, and fluctuating **capital investment cycles**[55](index=55&type=chunk)[56](index=56&type=chunk) - The company's payment processing business is subject to **U.S. payments regulations**, including state money transmitter licensing requirements, and **anti-money laundering (AML) laws**[63](index=63&type=chunk)[69](index=69&type=chunk) - Global operations expose the company to additional risks, including **foreign currency fluctuations**, compliance with varied legal frameworks like the **FCPA**, political instability, and potential **adverse tax impacts**[70](index=70&type=chunk)[73](index=73&type=chunk) [Unresolved Staff Comments](index=14&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are **no unresolved staff comments**[84](index=84&type=chunk) [Properties](index=15&type=section&id=Item%202.%20Properties) CSG operates globally from over 25 leased sites, including its Colorado headquarters and four U.S. statement production facilities - The company's corporate headquarters is located in **Greenwood Village, Colorado**[88](index=88&type=chunk) - CSG leases over **25 sites worldwide**, covering more than **700,000 square feet** for office space and approximately **350,000 square feet** for four statement production and mailing facilities[87](index=87&type=chunk)[89](index=89&type=chunk) - Leases for office and production facilities expire between **2019** and **2027**[88](index=88&type=chunk)[89](index=89&type=chunk) [Legal Proceedings](index=15&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any material pending or threatened legal proceedings - In the opinion of management, the company is **not presently a party to any material pending or threatened legal proceedings**[91](index=91&type=chunk) [Mine Safety Disclosures](index=15&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - **Not applicable**[92](index=92&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=19&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) CSG's common stock is listed on NASDAQ under 'CSGS', with details on stock performance, equity compensation, and Q4 2018 share repurchases - The company's common stock is listed on the **NASDAQ Stock Market** under the symbol '**CSGS**'[114](index=114&type=chunk) Issuer Repurchases of Equity Securities (Q4 2018) | Period | Total Shares Purchased | Average Price Paid Per Share ($) | | :--- | :--- | :--- | | Oct 1 - Oct 31 | 108,396 | $36.43 | | Nov 1 - Nov 30 | 89,160 | $35.92 | | Dec 1 - Dec 31 | 116,500 | $32.46 | | **Total** | **314,056** | **$34.81** | - As of December 31, 2018, there were **4,460,053 securities** remaining available for future issuance under equity compensation plans approved by security holders[119](index=119&type=chunk) [Selected Financial Data](index=21&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year summary of key financial metrics, reflecting acquisitions, revenue recognition standard adoption, and debt activities Selected Financial Data (2014-2018, in thousands, except per share amounts) | Metric | 2018 (thousands) | 2017 (thousands) | 2016 (thousands) | 2015 (thousands) | 2014 (thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $875,059 | $789,582 | $760,958 | $752,520 | $751,286 | | **Operating income** | $104,932 | $105,685 | $132,629 | $113,140 | $75,690 | | **Net income** | $66,130 | $61,364 | $62,882 | $62,567 | $35,711 | | **Diluted EPS ($)** | $2.01 | $1.87 | $1.90 | $1.87 | $1.06 | | **Dividend per share ($)** | $0.84 | $0.79 | $0.74 | $0.70 | $0.62 | | **Total assets** | $1,114,362 | $904,534 | $891,879 | $862,731 | $839,367 | | **Total debt** | $359,826 | $331,736 | $416,260 | $279,130 | $250,376 | - In **2018**, the company adopted the new revenue recognition standard **ASC 606** using the cumulative effect approach, which resulted in a cumulative adjustment increasing beginning retained earnings by approximately **$7 million** (net of tax)[125](index=125&type=chunk) - The **2018** results include operations from the acquisitions of **Business Ink** (ten months) and **Forte Payment Systems** (three months), which contributed approximately **$74 million** in revenue[125](index=125&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2018, CSG's revenues grew 11% to $875.1 million, driven by acquisitions, while operating income slightly decreased due to investment costs 2018 vs. 2017 Results of Operations Summary | Metric | 2018 | 2017 | | :--- | :--- | :--- | | Revenues (millions) | $875.1 | $789.6 | | Operating Income (millions) | $104.9 | $105.7 | | Operating Margin (%) | 12.0 | 13.4 | | Diluted EPS ($) | $2.01 | $1.87 | - The **11%** revenue increase in **2018** was mainly attributed to the acquisitions of **Business Ink** and **Forte**, which together generated approximately **$74 million** in revenues during the year[149](index=149&type=chunk) - The company acquired **Business Ink** for approximately **$70 million** and **Forte Payment Systems** for approximately **$85 million** in **2018**, funded with existing cash[131](index=131&type=chunk)[133](index=133&type=chunk) - The effective income tax rate for **2018** was **24%**, a decrease from **30%** in **2017**, primarily due to the **U.S. Tax Cuts and Jobs Act** which reduced the corporate tax rate from **35%** to **21%**[136](index=136&type=chunk)[207](index=207&type=chunk) - Cash flows from operating activities increased to **$143.3 million** in **2018** from **$127.2 million** in **2017**[152](index=152&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Total revenues increased 11% to $875.1 million in 2018, primarily from acquisitions, while operating margin contracted to 12.0% due to rising expenses Revenue by Type (2016-2018, in thousands) | Revenue Type | 2018 (thousands) | 2017 (thousands) | 2016 (thousands) | | :--- | :--- | :--- | | Cloud and related solutions | $766,377 | $651,010 | $606,936 | | Software and services | $58,101 | $62,892 | $79,400 | | Maintenance | $50,581 | $75,680 | $74,622 | | **Total revenues** | **$875,059** | **$789,582** | **$760,958** | - The **18%** increase in **Cloud and related solutions revenue** was driven by **$74.1 million** from acquisitions (**Business Ink** and **Forte**) and a **$26.0 million** reclassification of revenue from other categories due to the adoption of **ASC 606**[177](index=177&type=chunk) - **R&D expense** increased **10%** to **$124.0 million** in **2018**, representing **14%** of total revenues, reflecting a heightened level of investment in growth initiatives[194](index=194&type=chunk)[196](index=196&type=chunk) - Operating income margin decreased from **13.4%** in **2017** to **12.0%** in **2018**, reflecting costs from acquisitions and planned business investments[203](index=203&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and equivalents decreased to $162.9 million in 2018 due to acquisitions, while operating cash flow increased, supported by a refinanced credit agreement - Cash, cash equivalents, and short-term investments decreased to **$162.9 million** at year-end **2018** from **$261.4 million** in **2017**, mainly due to approximately **$155 million** used for the acquisitions of **Business Ink** and **Forte**[209](index=209&type=chunk) Cash Flow Summary (2017-2018, in thousands) | Cash Flow Activity | 2018 (thousands) | 2017 (thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $143,341 | $127,195 | | Net Cash used in Investing Activities | ($86,139) | ($29,904) | | Net Cash used in Financing Activities | ($37,509) | ($105,494) | - In **March 2018**, the company refinanced its credit agreement, extending the term to **March 2023**, borrowing **$150 million**, and securing a **$200 million revolving credit facility**, which remained undrawn as of year-end[210](index=210&type=chunk)[211](index=211&type=chunk)[251](index=251&type=chunk) - Key uses of cash in **2018** included **$144.8 million** for **acquisitions**, **$57.1 million** for **capital expenditures**, **$34.7 million** for **common stock repurchases**, and **$28.0 million** for **dividend payments**[226](index=226&type=chunk)[228](index=228&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk) Contractual Obligations as of Dec 31, 2018 (in thousands) | Obligation Type | Total (thousands) | Less than 1 Year (thousands) | Years 2-3 (thousands) | Years 4-5 (thousands) | More than 5 Years (thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Long-term debt | $570,048 | $23,854 | $56,007 | $137,999 | $352,188 | | Leases | $79,465 | $16,609 | $27,147 | $21,034 | $14,675 | | Purchase obligations | $259,410 | $89,826 | $129,199 | $28,787 | $11,598 | | **Total** | **$908,923** | **$130,289** | **$212,353** | **$187,820** | **$378,461** | [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate, market, and foreign currency risks, though a significant portion of revenue is USD-denominated - The company is exposed to **interest rate risk** through its **2018 Credit Agreement**, which has interest rates based on a variable adjusted **LIBOR** rate[265](index=265&type=chunk) - **Market risk** exists for cash equivalents, short-term investments, and the fair value of its convertible debt, which is influenced by **interest rates** and the company's **stock price**[267](index=267&type=chunk)[270](index=270&type=chunk) - **Foreign currency exchange rate risk** is present due to global operations, but is partially mitigated as approximately **87%** of **2018** revenues were generated in **U.S. dollars**[271](index=271&type=chunk)[272](index=272&type=chunk) [Financial Statements and Supplementary Data](index=40&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section includes consolidated financial statements for 2018, management's report on internal controls, and KPMG's unqualified audit opinion - Management concluded that the company's **internal control over financial reporting** was **effective** as of **December 31, 2018**. The assessment excluded the recently acquired **Forte Payment Systems, Inc.**[283](index=283&type=chunk) - The independent registered public accounting firm, **KPMG LLP**, issued an **unqualified opinion** on both the consolidated financial statements and the effectiveness of the company's **internal control over financial reporting**[286](index=286&type=chunk)[295](index=295&type=chunk) Consolidated Balance Sheet Summary (as of Dec 31, in thousands) | Account | 2018 (thousands) | 2017 (thousands) | | :--- | :--- | :--- | | Total current assets | $599,567 | $554,266 | | Total assets | $1,114,362 | $904,534 | | Total current liabilities | $350,391 | $222,593 | | Total liabilities | $753,338 | $561,788 | | Total stockholders' equity | $361,024 | $342,746 | Consolidated Statement of Income Summary (Year Ended Dec 31, in thousands) | Account | 2018 (thousands) | 2017 (thousands) | 2016 (thousands) | | :--- | :--- | :--- | | Total revenues | $875,059 | $789,582 | $760,958 | | Operating income | $104,932 | $105,685 | $132,629 | | Income before income taxes | $86,987 | $87,710 | $99,999 | | Net income | $66,130 | $61,364 | $62,882 | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=74&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - **None reported**[491](index=491&type=chunk) [Controls and Procedures](index=74&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of December 31, 2018, excluding a recent acquisition from the internal control assessment - The **CEO** and **CFO** concluded that the company's **disclosure controls and procedures** were effective as of the end of the period covered by the report[491](index=491&type=chunk) - Management's evaluation of **internal control over financial reporting** excluded **Forte Payment Systems, Inc.**, which was acquired on **October 1, 2018**[492](index=492&type=chunk) - There were **no changes** in internal control over financial reporting during the **fourth quarter of 2018** that have materially affected, or are reasonably likely to materially affect, internal controls[494](index=494&type=chunk) [Other Information](index=75&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - **None**[495](index=495&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=75&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors and executive officers is incorporated by reference from the 2019 Proxy Statement and Part I of this Form 10-K - Information for this item is **incorporated by reference** from the Registrant's Definitive Proxy Statement for its **2019 Annual Meeting of Stockholders**[498](index=498&type=chunk) [Executive Compensation](index=75&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2019 Annual Meeting of Stockholders Proxy Statement - Information for this item is **incorporated by reference** from the Registrant's Definitive Proxy Statement for its **2019 Annual Meeting of Stockholders**[499](index=499&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=75&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership details are incorporated by reference from the 2019 Proxy Statement, excluding equity compensation plan information in Item 5 - Information for this item is **incorporated by reference** from the Registrant's Definitive Proxy Statement for its **2019 Annual Meeting of Stockholders**[500](index=500&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=75&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the 2019 Annual Meeting of Stockholders Proxy Statement - Information for this item is **incorporated by reference** from the Registrant's Definitive Proxy Statement for its **2019 Annual Meeting of Stockholders**[501](index=501&type=chunk) [Principal Accounting Fees and Services](index=75&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the 2019 Annual Meeting of Stockholders Proxy Statement - Information for this item is **incorporated by reference** from the Registrant's Definitive Proxy Statement for its **2019 Annual Meeting of Stockholders**[502](index=502&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=76&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements and exhibits, with no separate schedules, as all required information is in the main financial statements - This section lists the financial statements filed as part of the report, which are indexed on **page 40**[505](index=505&type=chunk) - **No separate financial statement schedules** are provided, as the required information is included within the main financial statements and their notes[505](index=505&type=chunk) - An **Exhibit Index** is provided, listing all exhibits filed with or incorporated by reference into the **Form 10-K**[506](index=506&type=chunk)