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Table of contents
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, 2022
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 0-25346
___________________________
ACI WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
___________________________
Delaware47-0772104
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
2811 Ponce de Leon BlvdPH 1Coral Gables,Florida33134
(Address of principal executive offices)(Zip code)
(305) 894-2200
(Registrant’s telephone number, including area code)
______________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of the Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  
As of October 31, 2022, there were 112,374,133 shares of the registrant’s common stock outstanding.
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.005 par valueACIWNasdaq Global Select Market



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TABLE OF CONTENTS
Page
Item 1

2

Table of contents
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ACI WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands, except share and per share amounts)
September 30, 2022December 31, 2021
ASSETS
Current assets
Cash and cash equivalents
$134,799 $122,059 
Receivables, net of allowances of $3,851 and $2,861, respectively
302,301 320,405 
Settlement assets
727,754 452,396 
Prepaid expenses
29,766 24,698 
Other current assets
16,342 17,876 
Total current assets1,210,962 937,434 
Noncurrent assets
Accrued receivables, net
248,285 276,164 
Property and equipment, net
54,328 63,050 
Operating lease right-of-use assets
37,916 47,825 
Software, net
134,942 157,782 
Goodwill
1,226,026 1,280,226 
Intangible assets, net
235,053 283,004 
Deferred income taxes, net
55,454 50,778 
Other noncurrent assets
60,174 62,478 
TOTAL ASSETS$3,263,140 $3,158,741 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable
$38,227 $41,312 
Settlement liabilities
727,237 451,575 
Employee compensation
43,637 51,379 
Current portion of long-term debt60,603 45,870 
Deferred revenue
53,163 84,425 
Other current liabilities
75,107 79,594 
Total current liabilities997,974 754,155 
Noncurrent liabilities
Deferred revenue22,440 25,925 
Long-term debt947,750 1,019,872 
Deferred income taxes, net30,465 36,122 
Operating lease liabilities32,235 43,346 
Other noncurrent liabilities34,060 34,544 
Total liabilities2,064,924 1,913,964 
Commitments and contingencies
Stockholders’ equity
Preferred stock; $0.01 par value; 5,000,000 shares authorized; no shares issued at September 30, 2022, and December 31, 2021
  
Common stock; $0.005 par value; 280,000,000 shares authorized; 140,525,055 shares issued at September 30, 2022, and December 31, 2021
702 702 
Additional paid-in capital697,763 688,313 
Retained earnings1,183,230 1,131,281 
Treasury stock, at cost, 27,323,712 and 24,795,009 shares at September 30, 2022, and December 31, 2021, respectively
(555,753)(475,972)
Accumulated other comprehensive loss(127,726)(99,547)
Total stockholders’ equity1,198,216 1,244,777 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$3,263,140 $3,158,741 
The accompanying notes are an integral part of the condensed consolidated financial statements.
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ACI WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Revenues
Software as a service and platform as a service
$195,540 $191,456 $597,080 $583,530 
License
43,661 54,454 168,260 110,383 
Maintenance
49,163 53,519 151,143 159,037 
Services
18,227 17,485 53,613 50,819 
Total revenues
306,591 316,914 970,096 903,769 
Operating expenses
Cost of revenue (1)
171,753 158,712 517,372 476,811 
Research and development
35,899 35,248 114,348 104,791 
Selling and marketing
32,794 33,413 102,793 90,211 
General and administrative
30,516 29,717 84,753 89,429 
Depreciation and amortization
32,140 31,845 95,218 95,434 
Total operating expenses
303,102 288,935 914,484 856,676 
Operating income3,489 27,979 55,612 47,093 
Other income (expense)
Interest expense
(14,336)(11,208)(37,014)(33,943)
Interest income
2,995 2,834 9,205 8,553 
Other, net
41,545 (1,088)45,801 (1,036)
Total other income (expense)30,204 (9,462)17,992 (26,426)
Income before income taxes33,693 18,517 73,604 20,667 
Income tax expense10,576 4,753 21,655 2,347 
Net income$23,117 $13,764 $51,949 $18,320 
Income per common share
Basic
$0.20 $0.12 $0.45 $0.16 
Diluted$0.20 $0.12 $0.45 $0.15 
Weighted average common shares outstanding
Basic113,812 117,512 114,584 117,574 
Diluted114,348 118,540 115,211 118,817 

(1) The cost of revenue excludes charges for depreciation but includes amortization of purchased and developed software for resale.

The accompanying notes are an integral part of the condensed consolidated financial statements.

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ACI WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited and in thousands)
 
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Net income$23,117 $13,764 $51,949 $18,320 
Other comprehensive loss:
Foreign currency translation adjustments(13,459)(4,223)(28,179)(5,873)
Total other comprehensive loss(13,459)(4,223)(28,179)(5,873)
Comprehensive income$9,658 $9,541 $23,770 $12,447 

The accompanying notes are an integral part of the condensed consolidated financial statements.
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ACI WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited and in thousands, except share amounts)
Three Months Ended September 30, 2022
Common StockAdditional
Paid-in Capital
Retained EarningsTreasury StockAccumulated Other
Comprehensive Loss
Total
Balance as of June 30, 2022$702 $690,574 $1,160,113 $(528,758)$(114,267)$1,208,364 
Net income— — 23,117 — — 23,117 
Other comprehensive loss— — — — (13,459)(13,459)
Stock-based compensation
— 7,126 — — — 7,126 
Shares issued and forfeited, net, under stock plans
— 63 — 1,250 — 1,313 
Repurchase of 1,154,825 shares of common stock
— — — (28,227)— (28,227)
Repurchase of stock-based compensation awards for tax withholdings
— — — (18)— (18)
Balance as of September 30, 2022$702 $697,763 $1,183,230 $(555,753)$(127,726)$1,198,216 
Three Months Ended September 30, 2021
Common StockAdditional
Paid-in Capital
Retained EarningsTreasury StockAccumulated Other
Comprehensive Loss
Total
Balance as of June 30, 2021$702 $676,399 $1,008,046 $(412,492)$(94,095)$1,178,560 
Net income— — 13,764 — — 13,764 
Other comprehensive loss— — — — (4,223)(4,223)
Stock-based compensation
— 6,367 — — — 6,367 
Shares issued and forfeited, net, under stock plans
— 278 — 845 — 1,123 
Repurchase of stock-based compensation awards for tax withholdings
— — — (37)— (37)
Balance as of September 30, 2021$702 $683,044 $1,021,810 $(411,684)$(98,318)$1,195,554 
The accompanying notes are an integral part of the condensed consolidated financial statements.
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ACI WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited and in thousands, except share amounts)
Nine Months Ended September 30, 2022
Common Stock
Additional
Paid-in Capital
Retained EarningsTreasury Stock
Accumulated Other
Comprehensive Loss
Total
Balance as of December 31, 2021$702 $688,313 $1,131,281 $(475,972)$(99,547)$1,244,777 
Net income— — 51,949 — — 51,949 
Other comprehensive loss— — — — (28,179)(28,179)
Stock-based compensation
— 21,884 — — — 21,884 
Shares issued and forfeited, net, under stock plans
— (12,434)— 16,973 — 4,539 
Repurchase of 3,210,313 shares of common stock
— — — (90,934)— (90,934)
Repurchase of stock-based compensation awards for tax withholdings
— — — (5,820)— (5,820)
Balance as of September 30, 2022$702 $697,763 $1,183,230 $(555,753)$(127,726)$1,198,216 
Nine Months Ended September 30, 2021
Common Stock
Additional
Paid-in Capital
Retained Earnings
Treasury Stock
Accumulated Other
Comprehensive Loss
Total
Balance as of December 31, 2020$702 $682,431 $1,003,490 $(387,581)$(92,445)$1,206,597 
Net income— — 18,320 — — 18,320 
Other comprehensive loss
— — — — (5,873)(5,873)
Stock-based compensation
— 20,790 — — — 20,790 
Shares issued and forfeited, net, under stock plans
— (20,177)— 30,141 — 9,964 
Repurchase of 1,000,000 shares of common stock
— — — (39,411)— (39,411)
Repurchase of stock-based compensation awards for tax withholdings
— — — (14,833)— (14,833)
Balance as of September 30, 2021$702 $683,044 $1,021,810 $(411,684)$(98,318)$1,195,554 
The accompanying notes are an integral part of the condensed consolidated financial statements.
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ACI WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
Nine Months Ended
September 30,
20222021
Cash flows from operating activities:
Net income$51,949 $18,320 
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation
17,052 15,838 
Amortization
78,817 84,528 
Amortization of operating lease right-of-use assets
8,296 7,752 
Amortization of deferred debt issuance costs
3,435 3,525 
Deferred income taxes
(9,059)(11,742)
Stock-based compensation expense
21,884 20,790 
Gain on divestiture(38,452) 
Other
2,483 (27)
Changes in operating assets and liabilities:
Receivables
5,767 55,953 
Accounts payable
(3,047)(5,080)
Accrued employee compensation
(3,872)(1,140)
Deferred revenue
(6,367)10,339 
Other current and noncurrent assets and liabilities
(26,920)(54,573)
Net cash flows from operating activities
101,966 144,483 
Cash flows from investing activities:
Purchases of property and equipment
(8,123)(12,968)
Purchases of software and distribution rights
(18,394)(20,041)
Proceeds from divestiture100,139  
Net cash flows from investing activities
73,622 (33,009)
Cash flows from financing activities:
Proceeds from issuance of common stock
2,801 2,526 
Proceeds from exercises of stock options
1,792 7,252 
Repurchase of stock-based compensation awards for tax withholdings(5,820)(14,833)
Repurchases of common stock
(90,934)(39,411)
Proceeds from revolving credit facility
85,000  
Repayment of revolving credit facility
(75,000)(55,000)
Repayment of term portion of credit agreement
(70,825)(29,212)
Payments on or proceeds from other debt, net(10,106)(10,187)
Net increase (decrease) in settlement assets and liabilities20,084 (55,470)
Net cash flows from financing activities
(143,008)(194,335)
Effect of exchange rate fluctuations on cash(60)84 
Net increase (decrease) in cash and cash equivalents32,520 (82,777)
Cash and cash equivalents, including settlement deposits, beginning of period184,142 265,382 
Cash and cash equivalents, including settlement deposits, end of period$216,662 $182,605 
Reconciliation of cash and cash equivalents to the Consolidated Balance Sheets
Cash and cash equivalents$134,799 $141,482 
Settlement deposits81,863 41,123 
Total cash and cash equivalents, including settlement deposits$216,662 $182,605 
Supplemental cash flow information
Income taxes paid
$24,987 $28,131 
Interest paid
$39,217 $35,966 
The accompanying notes are an integral part of the condensed consolidated financial statements.
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ACI WORLDWIDE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Condensed Consolidated Financial Statements
The unaudited condensed consolidated financial statements include the accounts of ACI Worldwide, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). All intercompany balances and transactions have been eliminated. The condensed consolidated financial statements as of September 30, 2022, and for the three and nine months ended September 30, 2022 and 2021, are unaudited and reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation, in all material respects, of the financial position and operating results for the interim periods. The condensed consolidated balance sheet as of December 31, 2021, is derived from the audited financial statements.

The condensed consolidated financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2021, filed on February 24, 2022. Results for the three and nine months ended September 30, 2022, are not necessarily indicative of results that may be attained in the future.

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are affected by management’s application of accounting policies, as well as uncertainty in the current economic environment. Actual results could differ from those estimates.

Revision of Prior Period Financial Statements
As of December 31, 2021, the Company revised the previously reported consolidated statements of cash flows to include settlement deposits in total cash and cash equivalents and settlement receivables and settlement liabilities net activity in cash flows from financing activities, both of which were previously included in cash flows from operating activities. This immaterial revision did not have an effect on its previously reported consolidated balance sheets, statements of operations, statements of comprehensive income, or statements of stockholders' equity.
A summary of the revisions to the previously reported balances are presented in the table below for comparative purposes (in thousands):
Nine Months Ended September 30, 2021
As reportedRevision adjustmentAs revised
Cash flows from operating activities:
Other current and noncurrent assets and liabilities$(51,158)$(3,415)$(54,573)
Net cash flows from operating activities147,898 (3,415)144,483 
Cash flows from financing activities:
Net decrease in settlement assets and liabilities$ $(55,470)$(55,470)
Net cash flows from financing activities(138,865)(55,470)(194,335)
Net decrease in cash and cash equivalents$(23,892)$(58,885)$(82,777)
Cash and cash equivalents, including settlement deposits, beginning of period165,374 100,008 265,382 
Cash and cash equivalents, including settlement deposits, end of period141,482 41,123 182,605 






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Other Current Liabilities
The components of other current liabilities are included in the following table (in thousands):
September 30, 2022December 31, 2021
Vendor financed licenses$12,520 $12,521 
Operating lease liabilities11,061 11,518 
Accrued interest3,026 8,776 
Royalties payable2,905 4,102 
Other45,595 42,677 
Total other current liabilities$75,107 $79,594 

Settlement Assets and Liabilities
Individuals and businesses settle their obligations to the Company’s various Biller clients using credit or debit cards or via automated clearing house (“ACH”) payments. The Company creates a receivable for the amount due from the credit or debit card processor and an offsetting payable to the client. Upon confirmation that the funds have been received, the Company settles the obligation to the client. Due to timing, in some instances, the Company may (1) receive the funds into bank accounts controlled by and in the Company’s name that are not disbursed to its clients by the end of the day, resulting in a settlement deposit on the Company’s books and (2) disburse funds to its clients in advance of receiving funds from the credit or debit card processor, resulting in a net settlement receivable position.

Off Balance Sheet Settlement Accounts

The Company also enters into agreements with certain Biller clients to process payment funds on their behalf. When an ACH or automated teller machine network payment transaction is processed, a transaction is initiated to withdraw funds from the designated source account and deposit them into a settlement account, which is a trust account maintained for the benefit of the Company’s clients. A simultaneous transaction is initiated to transfer funds from the settlement account to the intended destination account. These “back to back” transactions are designed to settle at the same time, usually overnight, such that the Company receives the funds from the source at the same time as it sends the funds to their destination. However, due to the transactions being with various financial institutions there may be timing differences that result in float balances. These funds are maintained in accounts for the benefit of the client, which is separate from the Company’s corporate assets. As the Company does not take ownership of the funds, these settlement accounts are not included in the Company’s balance sheet. The Company is entitled to interest earned on the fund balances. The collection of interest on these settlement accounts is considered in the Company’s determination of its fee structure for clients and represents a portion of the payment for services performed by the Company. The amount of settlement funds as of September 30, 2022, and December 31, 2021, was $308.7 million and $272.8 million, respectively.

Fair Value
The fair value of the Company’s Credit Agreement approximates the carrying value due to the floating interest rate (Level 2 of the fair value hierarchy). The Company measures the fair value of its Senior Notes based on Level 2 inputs, which include quoted market prices and interest rate spreads of similar securities. The fair value of the Company’s 5.750% Senior Notes due 2026 (“2026 Notes”) was $379.9 million and $419.0 million as of September 30, 2022, and December 31, 2021, respectively.

The fair values of cash and cash equivalents approximate the carrying values due to the short period of time to maturity (Level 2 of the fair value hierarchy).











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Goodwill
In accordance with the Accounting Standards Codification ("ASC") 350, Intangibles – Goodwill and Other, the Company assesses goodwill for impairment annually during the fourth quarter of its fiscal year using October 1 balances or when there is evidence that events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. The Company evaluates goodwill at the reporting unit level and has identified its operating segments, Banks, Merchants, and Billers, as the reporting units. As of September 30, 2022, the Company's goodwill balance of $1.2 billion was allocated $671.7 million to Banks, $137.3 million to Merchants, and $417.0 million to Billers.

Recoverability of goodwill is measured using a discounted cash flow model incorporating discount rates commensurate with the risks involved. Use of a discounted cash flow model is common practice in impairment testing in the absence of available transactional market evidence to determine the fair value. The calculated fair value was substantially in excess of the current carrying value for all reporting units based upon the October 1, 2021, annual impairment test and there have been no indications of impairment in the subsequent periods.

Changes in the carrying amount of goodwill attributable to each reporting unit during the nine months ended September 30, 2022 were as follows (in thousands):

BanksMerchantsBillersTotal
Balance, December 31, 2021
$725,903 $137,289 $417,034 $1,280,226 
Divestiture (1)(54,200)  (54,200)
Balance, September 30, 2022
$671,703 $137,289 $417,034 $1,226,026 

(1) In connection with the divestiture, $54.2 million of goodwill from the Banks segment was allocated to the net assets sold. See Note 3, Divestiture, for further information on the divestiture.

Equity Method Investment
In July 2019, the Company invested $18.3 million for a 30% non-controlling financial interest in a payment technology and services company in India. The Company accounted for this investment using the equity method in accordance with ASC 323, Investments - Equity Method and Joint Ventures. The Company records its share of earnings and losses in the investment on a one-quarter lag basis. Accordingly, the Company recorded an investment of $17.3 million and $19.3 million, which is included in other noncurrent assets in the condensed consolidated balance sheet as of September 30, 2022, and December 31, 2021, respectively.

2. Revenue
In accordance with ASC 606, Revenue From Contracts With Customers, revenue is recognized upon transfer of control of promised products and/or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products and services. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. See Note 10, Segment Information, for additional information, including disaggregation of revenue based on primary solution category.

Total receivables represent amounts billed and amounts earned that are to be billed in the future (i.e., accrued receivables). Included in accrued receivables are services, software as a service ("SaaS"), and platform as a service ("PaaS") revenues earned in the current period but billed in the following period, and amounts due under multi-year software license arrangements with extended payment terms for which the Company has an unconditional right to invoice and receive payment subsequent to invoicing.

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Total receivables, net is comprised of the following (in thousands):
September 30, 2022December 31, 2021
Billed receivables$137,498 $162,479 
Allowance for doubtful accounts(3,851)(2,861)
Billed receivables, net133,647 159,618 
Current accrued receivables, net168,654 160,787 
Long-term accrued receivables, net248,285 276,164 
Total accrued receivables, net416,939 436,951 
Total receivables, net$550,586 $596,569 

One customer accounted for 12.7% and 13.8% of the Company's consolidated receivables balance as of September 30, 2022 and December 31, 2021.

Deferred revenue includes amounts due or received from customers for software licenses, maintenance, services, and/or SaaS and PaaS services in advance of recording the related revenue.

Changes in deferred revenue were as follows (in thousands):
Balance, December 31, 2021
$110,350 
Deferral of revenue89,117 
Recognition of deferred revenue(95,593)
Divestiture(21,581)
Foreign currency translation(6,690)
Balance, September 30, 2022
$75,603 

Revenue allocated to remaining performance obligations represents contracted revenue that will be recognized in future periods, which is comprised of deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. This does not include:
Revenue that will be recognized in future periods from capacity overages that are accounted for as a usage-based royalty.
SaaS and PaaS revenue from variable consideration that will be recognized in accordance with the ‘right to invoice’ practical expedient or meets the allocation objective.

Revenue allocated to remaining performance obligations was $682.0 million as of September 30, 2022, of which the Company expects to recognize approximately 51% over the next 12 months and the remainder thereafter.

During the three and nine months ended September 30, 2022 and 2021, revenue recognized by the Company from performance obligations satisfied in previous periods was not significant.
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3. Divestiture
Corporate Online Banking Solutions

On June 7, 2022, the Company announced a definitive agreement to divest its corporate online banking solutions related assets and liabilities to One Equity Partners ("OEP") for $100.1 million, including preliminary net working capital adjustment. The sale included employees and customer contracts as well as technology assets and intellectual property and closed on September 1, 2022.

For the three and nine months ended September 30, 2022, the Company recognized a gain of $38.5 million on the sale, which is recorded in other, net in the accompanying condensed consolidated statements of operations. This gain is preliminary subject to finalization of post-closing adjustments pursuant to the definitive transaction agreement.

The Company and OEP have also entered into a Transition Services Agreement ("TSA"), whereby the Company will continue to perform certain functions on OEP's behalf during a migration period not expected to exceed 18 months. The TSA is meant to reimburse the Company for direct costs in order to provide such functions, which are no longer generating revenue for the Company.
4. Debt
As of September 30, 2022, the Company had $10.0 million, $607.3 million, and $400.0 million outstanding under its Revolving Credit Facility, Term Loans, and Senior Notes, respectively, with up to $488.5 million of unused borrowings under the Revolving Credit Facility portion of the Credit Agreement, as amended, and up to $1.5 million of unused borrowings under the Letter of Credit agreement. The amount of unused borrowings actually available varies in accordance with the terms of the agreement.

Credit Agreement
On April 5, 2019, the Company and its wholly-owned subsidiaries, ACI Worldwide Corp. and ACI Payments, Inc. entered into the Second Amended and Restated Credit Agreement (the “Credit Agreement”) with the lenders, and Bank of America, N.A., as administrative agent for the lenders, to amend and restate the Company's existing agreement, as amended, dated February 24, 2017.

On May 5, 2022, the Company and Bank of America entered into the LIBOR Transition Amendment (the "Amendment") that replaced the LIBOR reference rate with the Secured Overnight Financing Rate ("SOFR") reference rate. No other terms or conditions of the Credit Agreement were changed as a result of the Amendment.

The Credit Agreement consists of (a) a five-year $500.0 million senior secured revolving credit facility (the “Revolving Credit Facility”), which includes sublimits for (1) the issuance of standby letters of credit and (2) swingline loans, (b) a five-year $279.0 million senior secured term loan facility (the "Initial Term Loan") and (c) a five-year $500.0 million Delayed Draw Term Loan (together with the Initial Term Loan, the "Term Loans", and together with the Initial Term Loan and the Revolving Credit Facility, the “Credit Facility”). The Credit Agreement also allows the Company to request optional incremental term loans and increases in the revolving commitment. The Credit Facility will mature on April 5, 2024.

At the Company’s option, borrowings under the Credit Facility bear interest at an annual rate equal to, either (a) a base rate determined by reference to the highest of (1) the annual interest rate publicly announced by the administrative agent as its Prime Rate, (2) the federal funds effective rate plus 1/2 of 1%, or (3) SOFR rate determined by reference to the costs of funds for U.S. dollar deposits for a one-month interest period, adjusted for certain additional costs, plus 1% or (b) a SOFR rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowings, adjusted for certain additional costs, plus an applicable margin. Based on the calculation of the applicable consolidated total leverage ratio, the applicable margin for borrowings under the Credit Facility is between 0.25% to 1.25% with respect to base rate borrowings and between 1.25% and 2.25% with respect to SOFR rate borrowings. Interest is due and payable monthly. The interest rate in effect for the Credit Facility as of September 30, 2022, was 4.88%.

The Company is also required to pay (a) a commitment fee related to the unutilized commitments under the Revolving Credit Facility, payable quarterly in arrears, (b) letter of credit fees on the maximum amount available to be drawn under all outstanding letters of credit in an amount equal to the applicable margin on SOFR rate borrowings under the Revolving Credit Facility on an annual basis, payable quarterly in arrears, and (c) customary fronting fees for the issuance of letters of credit fees and agency fees.

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Senior Notes
On August 21, 2018, the Company completed a $400.0 million offering of the 2026 Notes at an issue price of 100% of the principal amount in a private placement for resale to qualified institutional buyers. The 2026 Notes bear interest at an annual rate of 5.750%, payable semi-annually in arrears on February 15 and August 15 of each year. The 2026 Notes will mature on August 15, 2026.

Maturities on debt outstanding as of September 30, 2022, are as follows (in thousands):
Fiscal Year Ending December 31,
Remainder of 2022$14,607 
202369,906 
2024532,823 
2025 
2026400,000 
Thereafter 
Total$1,017,336 

As of September 30, 2022, and at all times during the period, the Company was in compliance with its financial debt covenants.

Total debt is comprised of the following (in thousands):
September 30, 2022December 31, 2021
Term loans$607,336 $678,160 
Revolving credit facility10,000  
5.750% Senior notes, due August 2026
400,000 400,000 
Debt issuance costs(8,983)(12,418)
Total debt1,008,353 1,065,742 
Less: current portion of term loans65,038 50,431 
Less: current portion of debt issuance costs(4,435)(4,561)
Total long-term debt$947,750 $1,019,872 

Overdraft Facility
In 2019, the Company and ACI Payments, Inc. entered in to an uncommitted overdraft facility with Bank of America, N.A. The overdraft facility bears interest at the federal funds effective rate plus 2.250% based on the Company’s average outstanding balance and the frequency in which overdrafts occur. The overdraft facility acts as a secured loan under the terms of the Credit Agreement to provide an additional funding mechanism for timing differences that can occur in the bill payment settlement process. Amounts outstanding on the overdraft facility are included in other current liabilities in the condensed consolidated balance sheet. As of September 30, 2022, there was $75.0 million available and no amount outstanding on the overdraft facility. As of December 31, 2021, there was no amount outstanding on the overdraft facility.

Other
The Company finances certain multi-year license agreements for internal-use software. Upon execution, these arrangements have been treated as a non-cash investing and financing activity for purposes of the condensed consolidated statements of cash flows. During the nine months ended September 30, 2022, the Company financed certain multi-year license agreements for internal-use software for $10.7 million, with annual payments through April 2024. As of September 30, 2022, $9.3 million was outstanding on these and other license agreements previously entered into, of which $5.8 million and $3.5 million is included in other current liabilities and other noncurrent liabilities, respectively, in the condensed consolidated balance sheet. As of December 31, 2021, $2.9 million was outstanding on these agreements, all of which is included in other current liabilities in the condensed consolidated balance sheet.
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5. Software and Other Intangible Assets
The carrying amount and accumulated amortization of the Company's software assets subject to amortization at each balance sheet date are as follows (in thousands):
September 30, 2022December 31, 2021
Gross Carrying AmountAccumulated AmortizationNet BalanceGross Carrying AmountAccumulated AmortizationNet Balance
Software for internal use$446,394 $(311,452)$134,942 $440,242 $(283,109)$157,133 
Software for resale121,801 (121,801) 127,904 (127,255)649 
Total software$568,195 $(433,253)$134,942 $568,146 $(410,364)$157,782 
Amortization of software for internal use is computed using the straight-line method over an estimated useful life of generally three to eight years. Software for internal use amortization expense recorded during the three months ended September 30, 2022 and 2021, totaled $17.3 million and $17.5 million, respectively. Software for internal use amortization expense recorded during the nine months ended September 30, 2022 and 2021, totaled $51.1 million and $51.8 million, respectively. These software amortization expense amounts are reflected in depreciation and amortization in the condensed consolidated statements of operations.

Amortization of software for resale is computed using the greater of (a) the ratio of current gross revenues to the total of current and future gross revenues expected to be derived from the software or (b) the straight-line method over the remaining estimated useful life of generally five to ten years. Software for resale amortization expense recorded during the three months ended September 30, 2021 totaled $1.5 million. There was no software for resale amortization expense recorded during the three months ended September 30, 2022. Software for resale amortization expense recorded during the nine months ended September 30, 2022 and 2021, totaled $0.7 million and $4.9 million, respectively. These software amortization expense amounts are reflected in cost of revenue in the condensed consolidated statements of operations.

The carrying amount and accumulated amortization of the Company’s other intangible assets subject to amortization at each balance sheet date are as follows (in thousands):
September 30, 2022December 31, 2021
Gross Carrying AmountAccumulated AmortizationNet BalanceGross Carrying AmountAccumulated AmortizationNet Balance
Customer relationships$457,027 $(225,527)$231,500 $507,962 $(230,152)$277,810 
Trademarks and trade names22,942 (19,389)3,553 23,839 (18,645)5,194 
Total other intangible assets$479,969 $(244,916)$235,053 $531,801 $(248,797)$283,004 

Other intangible assets amortization expense recorded during the three months ended September 30, 2022 and 2021, totaled $8.8 million and $9.3 million, respectively. Other intangible assets amortization expense recorded during the nine months ended September 30, 2022 and 2021, totaled $27.1 million and $27.8 million, respectively.

Based on capitalized intangible assets as of September 30, 2022, estimated amortization expense amounts in future fiscal years are as follows (in thousands):
Fiscal Year Ending December 31,Software AmortizationOther Intangible Assets Amortization
Remainder of 2022$16,699 $