EVERTEC, Inc.

Company Profile
Evertec®, Inc. (NYSE: EVTC) is a leading full 
service transaction processing company in 
Latin America, focused on simplifying commerce 
(cid:73)(cid:82)(cid:85)(cid:3)(cid:80)(cid:72)(cid:85)(cid:70)(cid:75)(cid:68)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3)(cid:192)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:76)(cid:81)(cid:86)(cid:87)(cid:76)(cid:87)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:74)(cid:82)(cid:89)(cid:72)(cid:85)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)
agencies and consumers.

We provide mission-critical technology solutions 
that enable our customers to issue, process 
and accept transactions securely. We provide 
these comprehensive end-to-end transaction 
processing solutions across several channels 
and geographic markets.

With 28 years of experience in the transaction 
processing industry, we employ nearly
1,900 professionals, including employees
from our 65% owned subsidiary Processa.
We operate in 8 countries and serve customers 
with diverse businesses across 18 countries.

Perfil de la Empresa 
Evertec®, Inc. (NYSE: EVTC), es una compañía 
líder que ofrece servicios de procesamiento 
de transacciones en América Latina, enfocada 
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(cid:76)(cid:81)(cid:86)(cid:87)(cid:76)(cid:87)(cid:88)(cid:70)(cid:76)(cid:82)(cid:81)(cid:72)(cid:86)(cid:3)(cid:192)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:72)(cid:85)(cid:68)(cid:86)(cid:15)(cid:3)(cid:68)(cid:74)(cid:72)(cid:81)(cid:70)(cid:76)(cid:68)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:74)(cid:82)(cid:69)(cid:76)(cid:72)(cid:85)(cid:81)(cid:82)
y consumidores.

(cid:50)(cid:73)(cid:85)(cid:72)(cid:70)(cid:72)(cid:80)(cid:82)(cid:86)(cid:3)(cid:86)(cid:82)(cid:79)(cid:88)(cid:70)(cid:76)(cid:82)(cid:81)(cid:72)(cid:86)(cid:3)(cid:87)(cid:72)(cid:70)(cid:81)(cid:82)(cid:79)(cid:121)(cid:74)(cid:76)(cid:70)(cid:68)(cid:86)(cid:3)(cid:70)(cid:85)(cid:116)(cid:87)(cid:76)(cid:70)(cid:68)(cid:86)(cid:3)(cid:84)(cid:88)(cid:72)(cid:3)
le permiten a nuestros clientes emitir, procesar 
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Brindamos estas soluciones completas a través 
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Con 28 años de experiencia en la industria de 
procesamiento de transacciones, empleamos 
cerca de 1,900 profesionales, incluyendo a los
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somos dueños del 65%. Operamos en 8 países 
y servimos a clientes con diversas operaciones
a través de 18 países.

Current Evertec®’s presence

Potential future Evertec® expansions

 
 
 
 
to our valued
shareholders:

a nuestros valiosos accionistas:

In  2016,  Evertec®(cid:3) (cid:71)(cid:72)(cid:79)(cid:76)(cid:89)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3) (cid:82)(cid:81)(cid:3) (cid:76)(cid:87)(cid:86)(cid:3) (cid:192)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:74)(cid:82)(cid:68)(cid:79)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3)
(cid:80)(cid:68)(cid:71)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:74)(cid:85)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:76)(cid:87)(cid:86)(cid:3)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:72)(cid:74)(cid:76)(cid:70)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:86)(cid:3)(cid:71)(cid:72)(cid:86)(cid:83)(cid:76)(cid:87)(cid:72)(cid:3)(cid:68)(cid:3)
(cid:70)(cid:75)(cid:68)(cid:79)(cid:79)(cid:72)(cid:81)(cid:74)(cid:76)(cid:81)(cid:74)(cid:3)(cid:72)(cid:81)(cid:89)(cid:76)(cid:85)(cid:82)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:51)(cid:88)(cid:72)(cid:85)(cid:87)(cid:82)(cid:3)(cid:53)(cid:76)(cid:70)(cid:82)(cid:17)(cid:3)(cid:3)(cid:58)(cid:72)(cid:3)(cid:85)(cid:72)(cid:81)(cid:72)(cid:90)(cid:72)(cid:71)(cid:3)
(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:72)(cid:89)(cid:72)(cid:79)(cid:3)(cid:82)(cid:73)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)
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(cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3) (cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3) (cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3)
(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:72)(cid:87)(cid:72)(cid:71)(cid:3) (cid:87)(cid:90)(cid:82)(cid:3) (cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:87)(cid:75)(cid:85)(cid:82)(cid:88)(cid:74)(cid:75)(cid:3) (cid:82)(cid:88)(cid:85)(cid:3) (cid:86)(cid:88)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:73)(cid:88)(cid:79)(cid:3)
(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:76)(cid:87)(cid:76)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:17)(cid:3)(cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:83)(cid:85)(cid:82)(cid:88)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:90)(cid:75)(cid:68)(cid:87)(cid:3)
(cid:90)(cid:72)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:76)(cid:86)(cid:75)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:89)(cid:72)(cid:3)(cid:90)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:69)(cid:88)(cid:76)(cid:79)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:68)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:3)(cid:73)(cid:82)(cid:88)(cid:81)(cid:71)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:86)(cid:88)(cid:86)(cid:87)(cid:68)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:192)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:74)(cid:85)(cid:82)(cid:90)(cid:87)(cid:75)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:17)(cid:3)(cid:3)

En  2016,  Evertec®(cid:3) (cid:68)(cid:79)(cid:70)(cid:68)(cid:81)(cid:93)(cid:121)(cid:3) (cid:86)(cid:88)(cid:86)(cid:3) (cid:80)(cid:72)(cid:87)(cid:68)(cid:86)(cid:3) (cid:192)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:72)(cid:85)(cid:68)(cid:86)(cid:3) (cid:92)(cid:3)
(cid:68)(cid:89)(cid:68)(cid:81)(cid:93)(cid:121)(cid:3) (cid:72)(cid:81)(cid:3) (cid:86)(cid:88)(cid:86)(cid:3) (cid:83)(cid:79)(cid:68)(cid:81)(cid:72)(cid:86)(cid:3) (cid:72)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:112)(cid:74)(cid:76)(cid:70)(cid:82)(cid:86)(cid:3) (cid:71)(cid:72)(cid:3) (cid:70)(cid:85)(cid:72)(cid:70)(cid:76)(cid:80)(cid:76)(cid:72)(cid:81)(cid:87)(cid:82)(cid:15)(cid:3) (cid:68)(cid:3)
(cid:83)(cid:72)(cid:86)(cid:68)(cid:85)(cid:3)(cid:71)(cid:72)(cid:79)(cid:3)(cid:68)(cid:80)(cid:69)(cid:76)(cid:72)(cid:81)(cid:87)(cid:72)(cid:3)(cid:71)(cid:72)(cid:86)(cid:68)(cid:192)(cid:68)(cid:81)(cid:87)(cid:72)(cid:3)(cid:84)(cid:88)(cid:72)(cid:3)(cid:86)(cid:72)(cid:3)(cid:89)(cid:76)(cid:89)(cid:72)(cid:3)(cid:72)(cid:81)(cid:3)(cid:51)(cid:88)(cid:72)(cid:85)(cid:87)(cid:82)(cid:3)(cid:53)(cid:76)(cid:70)(cid:82)(cid:17)(cid:3)
(cid:53)(cid:72)(cid:81)(cid:82)(cid:89)(cid:68)(cid:80)(cid:82)(cid:86)(cid:3) (cid:81)(cid:88)(cid:72)(cid:86)(cid:87)(cid:85)(cid:82)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:85)(cid:82)(cid:80)(cid:76)(cid:86)(cid:82)(cid:3) (cid:71)(cid:72)(cid:3) (cid:68)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:68)(cid:85)(cid:3) (cid:72)(cid:79)(cid:3) (cid:81)(cid:76)(cid:89)(cid:72)(cid:79)(cid:3)
(cid:71)(cid:72)(cid:3)(cid:86)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:76)(cid:82)(cid:3)(cid:68)(cid:3)(cid:81)(cid:88)(cid:72)(cid:86)(cid:87)(cid:85)(cid:82)(cid:86)(cid:3)(cid:70)(cid:79)(cid:76)(cid:72)(cid:81)(cid:87)(cid:72)(cid:86)(cid:15)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:68)(cid:80)(cid:82)(cid:86)(cid:3)(cid:80)(cid:72)(cid:77)(cid:82)(cid:85)(cid:68)(cid:81)(cid:71)(cid:82)(cid:3)
(cid:81)(cid:88)(cid:72)(cid:86)(cid:87)(cid:85)(cid:68)(cid:3)(cid:76)(cid:81)(cid:73)(cid:85)(cid:68)(cid:72)(cid:86)(cid:87)(cid:85)(cid:88)(cid:70)(cid:87)(cid:88)(cid:85)(cid:68)(cid:3)(cid:68)(cid:3)(cid:87)(cid:85)(cid:68)(cid:89)(cid:112)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:82)(cid:81)(cid:72)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)
(cid:72)(cid:81)(cid:3)(cid:72)(cid:79)(cid:3)(cid:81)(cid:72)(cid:74)(cid:82)(cid:70)(cid:76)(cid:82)(cid:3)(cid:92)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:72)(cid:87)(cid:68)(cid:80)(cid:82)(cid:86)(cid:3)(cid:71)(cid:82)(cid:86)(cid:3)(cid:68)(cid:71)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:70)(cid:76)(cid:82)(cid:81)(cid:72)(cid:86)(cid:3)(cid:74)(cid:85)(cid:68)(cid:70)(cid:76)(cid:68)(cid:86)(cid:3)
(cid:68)(cid:3)(cid:81)(cid:88)(cid:72)(cid:86)(cid:87)(cid:85)(cid:68)(cid:86)(cid:3)(cid:76)(cid:81)(cid:76)(cid:70)(cid:76)(cid:68)(cid:87)(cid:76)(cid:89)(cid:68)(cid:86)(cid:3)(cid:72)(cid:91)(cid:76)(cid:87)(cid:82)(cid:86)(cid:68)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:71)(cid:72)(cid:86)(cid:68)(cid:85)(cid:85)(cid:82)(cid:79)(cid:79)(cid:82)(cid:3)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:89)(cid:82)(cid:17)(cid:3)
(cid:40)(cid:86)(cid:87)(cid:68)(cid:80)(cid:82)(cid:86)(cid:3)(cid:82)(cid:85)(cid:74)(cid:88)(cid:79)(cid:79)(cid:82)(cid:86)(cid:82)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:79)(cid:82)(cid:3)(cid:79)(cid:82)(cid:74)(cid:85)(cid:68)(cid:71)(cid:82)(cid:3)(cid:72)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:92)(cid:3)(cid:70)(cid:82)(cid:81)(cid:192)(cid:68)(cid:80)(cid:82)(cid:86)(cid:3)(cid:72)(cid:81)(cid:3)
(cid:84)(cid:88)(cid:72)(cid:3)(cid:72)(cid:86)(cid:87)(cid:68)(cid:80)(cid:82)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:87)(cid:85)(cid:88)(cid:92)(cid:72)(cid:81)(cid:71)(cid:82)(cid:3)(cid:88)(cid:81)(cid:68)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:3)(cid:86)(cid:121)(cid:79)(cid:76)(cid:71)(cid:68)(cid:3)(cid:83)(cid:68)(cid:85)(cid:68)(cid:3)(cid:80)(cid:68)(cid:81)(cid:87)(cid:72)(cid:81)(cid:72)(cid:85)(cid:3)
(cid:88)(cid:81)(cid:3)(cid:70)(cid:85)(cid:72)(cid:70)(cid:76)(cid:80)(cid:76)(cid:72)(cid:81)(cid:87)(cid:82)(cid:3)(cid:86)(cid:82)(cid:86)(cid:87)(cid:72)(cid:81)(cid:76)(cid:69)(cid:79)(cid:72)(cid:3)(cid:92)(cid:3)(cid:85)(cid:72)(cid:81)(cid:87)(cid:68)(cid:69)(cid:79)(cid:72)(cid:15)(cid:3)(cid:92)(cid:3)(cid:68)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:68)(cid:85)(cid:3)(cid:72)(cid:79)(cid:3)(cid:89)(cid:68)(cid:79)(cid:82)(cid:85)(cid:3)
(cid:83)(cid:68)(cid:85)(cid:68)(cid:3)(cid:81)(cid:88)(cid:72)(cid:86)(cid:87)(cid:85)(cid:82)(cid:86)(cid:3)(cid:68)(cid:70)(cid:70)(cid:76)(cid:82)(cid:81)(cid:76)(cid:86)(cid:87)(cid:68)(cid:86)(cid:17)

a n n u a l   r e p o r t   2 0 1 6       1

1Adjusted earnings per share is a supplemental measure of Evertec’s performance, is not required by, or presented in accordance with, accounting principles generally 
accepted in the United States of America (“GAAP”). It is not a measurement of the Evertec’s financial performance under GAAP, and should not be considered as an 
alternative to total revenue, net income or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities, 
as an indicator of cash flow or as a measure of Evertec’s liquidity. In addition to GAAP measures, management uses this non-GAAP measure to focus on the factors the 
company believes are pertinent to the daily management of Evertec’s operations and believe it is frequently used by securities analysts, investors and other interested 
parties to evaluate companies in this industry. For a reconciliation of adjusted net income and adjusted earnings per share to the most directly comparable GAAP financial 
performance measures, refer to the chart shown below.

1Predominantly represents reimbursements received for certain software maintenance expenses as part of the Merger. 2Represents the elimination of non-cash equity earnings 
from our 19.99% equity investment in CONTADO, net of cash dividends received. 3Primarily represents share-based compensation and other compensation expense of $6.4 
million and $5.3 million for the year ended December 31, 2016 and 2015 and severance payments of $3.7 million and $6.4 million for the year ended December 31, 2016 and 
2015. For 2014, primarily represents non-cash equity based compensation. 4Primarily represents fees and expenses associated with corporate transactions as defined in the 
Credit Agreement. For the year ending December 31, 2016 also includes certain fees paid to resolve a software maintenance contract matter, fees associated with the debt 
refinancing and a software writedown.  5Represents the elimination of the effects of purchase accounting in connection with certain customer service and software-related 
arrangements whereby Evertec® receives reimbursements from Popular.  6Represents consulting, audit and legal expenses incurred as part of the restatement.  7Represents 
operating depreciation and amortization expense, which excludes amounts generated as a result of the Merger. 8Represents interest expense, less interest income, as they 
appear on our consolidated statements of income and comprehensive income, adjusted to exclude non-cash amortization of the debt issue costs, premium and accretion of 
discount.  9Represents income tax expense calculated on adjusted pre-tax income using the applicable GAAP tax rate. 10Represents the 35% non-controlling equity interest 
in Processa, net of amortization for intangibles created as part of the purchase. For a definition of terms such as “Merger”, “Contado”, “Credit Agreement”, “Popular”, and 
“Processa”, please refer to Evertec’s Form 10-K for the year ended December 31, 2016.

a n n u a l   r e p o r t   2 0 1 6       2

2016 Performance 

Desempeño en 2016

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a n n u a l   r e p o r t   2 0 1 6       3

Renewed Commitment to our Customers

Compromiso renovado con nuestros clientes

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a n n u a l   r e p o r t   2 0 1 6       4

Investment in the Business

Inversión en el negocio

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a n n u a l   r e p o r t   2 0 1 6       5

(cid:50)(cid:81)(cid:3)(cid:48)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3)(cid:20)(cid:19)(cid:15)(cid:3)(cid:40)(cid:89)(cid:72)(cid:85)(cid:87)(cid:72)(cid:70)®(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:74)(cid:88)(cid:72)(cid:86)(cid:87)(cid:86)(cid:3)(cid:89)(cid:76)(cid:86)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:49)(cid:72)(cid:90)(cid:3)(cid:60)(cid:82)(cid:85)(cid:78)(cid:3)(cid:54)(cid:87)(cid:82)(cid:70)(cid:78)(cid:3)(cid:40)(cid:91)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:72)(cid:79)(cid:72)(cid:69)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:20)(cid:19)(cid:3)(cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:1163)(cid:86)(cid:3)(cid:36)(cid:90)(cid:68)(cid:85)(cid:71)(cid:3)(cid:90)(cid:76)(cid:81)(cid:81)(cid:72)(cid:85)(cid:86)(cid:17)(cid:3)(cid:55)(cid:82)(cid:3)(cid:80)(cid:68)(cid:85)(cid:78)(cid:3)
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New York Stock Exchange(cid:3)(cid:83)(cid:68)(cid:85)(cid:68)(cid:3)(cid:70)(cid:72)(cid:79)(cid:72)(cid:69)(cid:85)(cid:68)(cid:85)(cid:3)(cid:70)(cid:82)(cid:81)(cid:3)(cid:79)(cid:82)(cid:86)(cid:3)(cid:20)(cid:19)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:72)(cid:68)(cid:71)(cid:82)(cid:86)(cid:3)(cid:74)(cid:68)(cid:81)(cid:68)(cid:71)(cid:82)(cid:85)(cid:72)(cid:86)(cid:3)(cid:71)(cid:72)(cid:79)(cid:3)(cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:1163)(cid:86)(cid:3)(cid:36)(cid:90)(cid:68)(cid:85)(cid:71)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:17)(cid:3)(cid:51)(cid:68)(cid:85)(cid:68)(cid:3)(cid:80)(cid:68)(cid:85)(cid:70)(cid:68)(cid:85)(cid:3)(cid:79)(cid:68)(cid:3)(cid:82)(cid:70)(cid:68)(cid:86)(cid:76)(cid:121)(cid:81)(cid:3)(cid:48)(cid:68)(cid:70)(cid:3)(cid:54)(cid:70)(cid:75)(cid:88)(cid:72)(cid:86)(cid:86)(cid:79)(cid:72)(cid:85)(cid:15)(cid:3)
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a n n u a l   r e p o r t   2 0 1 6       6

Looking Forward

Mirando hacia el futuro

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Al  comenzar  el  2017,  continuamos  operando  en  el 

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plan  afectarán  negativamente  a  la  economía  a  corto 

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En  2017,  continuaremos  enfocándonos  en  impulsar 
invirtiendo  en  activos 
futuro, 
el  negocio  hacia  el 
fundamentales para continuamente mejorar la experiencia 

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agradecemos a usted, nuestro accionista, por su continuo 
(cid:68)(cid:83)(cid:82)(cid:92)(cid:82)(cid:3)(cid:68)(cid:3)(cid:40)(cid:89)(cid:72)(cid:85)(cid:87)(cid:72)(cid:70)®(cid:17)(cid:3)(cid:40)(cid:86)(cid:83)(cid:72)(cid:85)(cid:68)(cid:80)(cid:82)(cid:86)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:85)(cid:3)(cid:72)(cid:86)(cid:72)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:68)(cid:79)(cid:71)(cid:82)(cid:3)
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“M ” S h
Morgan “Mac” Schuessler
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Presidente y Principal Oficial Ejecutivo

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a n n u a l   r e p o r t   2 0 1 6       7
a n n u a l   r e p o r t   2 0 1 6       7

Evertec®(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:192)(cid:70)(cid:68)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:76)(cid:81)(cid:70)(cid:85)(cid:72)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:76)(cid:87)(cid:86)(cid:3)(cid:86)(cid:88)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:83)(cid:75)(cid:76)(cid:79)(cid:68)(cid:81)(cid:87)(cid:75)(cid:85)(cid:82)(cid:83)(cid:76)(cid:70)(cid:3)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:51)(cid:88)(cid:72)(cid:85)(cid:87)(cid:82)(cid:3)(cid:53)(cid:76)(cid:70)(cid:82)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:68)(cid:86)(cid:87)(cid:3)
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community and environment conservation.
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educación, comunidad y conservación del medio ambiente. 

Our  biggest contributions in 2016
Nuestras mayores contribuciones en 2016 

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Volunteer  Day:(cid:3) (cid:50)(cid:89)(cid:72)(cid:85)(cid:3) (cid:20)(cid:28)(cid:3) (cid:81)(cid:82)(cid:81)(cid:83)(cid:85)(cid:82)(cid:192)(cid:87)(cid:3) (cid:82)(cid:85)(cid:74)(cid:68)(cid:81)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:90)(cid:72)(cid:85)(cid:72)(cid:3) (cid:86)(cid:88)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:72)(cid:71)(cid:3)
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Día de Voluntariado:(cid:3)(cid:48)(cid:105)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:20)(cid:28)(cid:3)(cid:82)(cid:85)(cid:74)(cid:68)(cid:81)(cid:76)(cid:93)(cid:68)(cid:70)(cid:76)(cid:82)(cid:81)(cid:72)(cid:86)(cid:3)(cid:86)(cid:76)(cid:81)(cid:3)(cid:192)(cid:81)(cid:72)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:79)(cid:88)(cid:70)(cid:85)(cid:82)(cid:3)
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Scholarships:  Evertec®(cid:3) (cid:74)(cid:85)(cid:68)(cid:81)(cid:87)(cid:72)(cid:71)(cid:3) (cid:23)(cid:20)(cid:3) (cid:86)(cid:70)(cid:75)(cid:82)(cid:79)(cid:68)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:82)(cid:88)(cid:87)(cid:86)(cid:87)(cid:68)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)
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Becas:  Evertec®(cid:3) (cid:82)(cid:87)(cid:82)(cid:85)(cid:74)(cid:121)(cid:3) (cid:23)(cid:20)(cid:3) (cid:69)(cid:72)(cid:70)(cid:68)(cid:86)(cid:3) (cid:68)(cid:3) (cid:72)(cid:86)(cid:87)(cid:88)(cid:71)(cid:76)(cid:68)(cid:81)(cid:87)(cid:72)(cid:86)(cid:3) (cid:71)(cid:72)(cid:86)(cid:87)(cid:68)(cid:70)(cid:68)(cid:71)(cid:82)(cid:86)(cid:3) (cid:72)(cid:81)(cid:3)
(cid:51)(cid:88)(cid:72)(cid:85)(cid:87)(cid:82)(cid:3)(cid:53)(cid:76)(cid:70)(cid:82)(cid:15)(cid:3)(cid:79)(cid:82)(cid:3)(cid:84)(cid:88)(cid:72)(cid:3)(cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:121)(cid:3)(cid:88)(cid:81)(cid:68)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:121)(cid:81)(cid:3)(cid:71)(cid:72)(cid:3)(cid:7)(cid:26)(cid:22)(cid:15)(cid:19)(cid:19)(cid:19)(cid:17)(cid:3)(cid:36)(cid:71)(cid:72)(cid:80)(cid:105)(cid:86)(cid:15)(cid:3)
(cid:79)(cid:68)(cid:81)(cid:93)(cid:68)(cid:80)(cid:82)(cid:86)(cid:3) (cid:72)(cid:79)(cid:3) (cid:83)(cid:85)(cid:82)(cid:74)(cid:85)(cid:68)(cid:80)(cid:68)(cid:3) (cid:72)(cid:81)(cid:3) (cid:82)(cid:87)(cid:85)(cid:68)(cid:86)(cid:3) (cid:71)(cid:72)(cid:3) (cid:81)(cid:88)(cid:72)(cid:86)(cid:87)(cid:85)(cid:68)(cid:86)(cid:3) (cid:82)(cid:192)(cid:70)(cid:76)(cid:81)(cid:68)(cid:86)(cid:3) (cid:70)(cid:82)(cid:80)(cid:72)(cid:85)(cid:70)(cid:76)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)
(cid:72)(cid:81)(cid:3)(cid:36)(cid:80)(cid:112)(cid:85)(cid:76)(cid:70)(cid:68)(cid:3)(cid:47)(cid:68)(cid:87)(cid:76)(cid:81)(cid:68)(cid:17)(cid:3)(cid:40)(cid:86)(cid:87)(cid:72)(cid:3)(cid:72)(cid:86)(cid:73)(cid:88)(cid:72)(cid:85)(cid:93)(cid:82)(cid:3)(cid:70)(cid:82)(cid:80)(cid:72)(cid:81)(cid:93)(cid:121)(cid:3)(cid:72)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)(cid:3)(cid:92)(cid:3)(cid:79)(cid:68)(cid:3)(cid:70)(cid:68)(cid:81)(cid:87)(cid:76)(cid:71)(cid:68)(cid:71)(cid:3)
(cid:71)(cid:72)(cid:3)(cid:69)(cid:72)(cid:70)(cid:68)(cid:86)(cid:3)(cid:82)(cid:87)(cid:82)(cid:85)(cid:74)(cid:68)(cid:71)(cid:68)(cid:86)(cid:3)(cid:72)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:68)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:121)(cid:3)(cid:72)(cid:81)(cid:3)(cid:88)(cid:81)(cid:3)(cid:22)(cid:19)(cid:8)(cid:17)(cid:3)

Environmental protection:(cid:3)(cid:53)(cid:72)(cid:89)(cid:82)(cid:79)(cid:88)(cid:70)(cid:76)(cid:121)(cid:81)(cid:3)(cid:49)(cid:68)(cid:85)(cid:68)(cid:81)(cid:77)(cid:68)(cid:15)(cid:3)(cid:40)(cid:89)(cid:72)(cid:85)(cid:87)(cid:72)(cid:70)(cid:1163)(cid:86)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3)
(cid:72)(cid:81)(cid:89)(cid:76)(cid:85)(cid:82)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:68)(cid:79)(cid:3) (cid:83)(cid:85)(cid:82)(cid:74)(cid:85)(cid:68)(cid:80)(cid:15)(cid:3) (cid:70)(cid:82)(cid:79)(cid:79)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3) (cid:23)(cid:21)(cid:24)(cid:15)(cid:26)(cid:28)(cid:27)(cid:3) (cid:83)(cid:82)(cid:88)(cid:81)(cid:71)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:85)(cid:72)(cid:70)(cid:92)(cid:70)(cid:79)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)
(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:86)(cid:3) (cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3) (cid:21)(cid:19)(cid:20)(cid:25)(cid:3) (cid:92)(cid:72)(cid:68)(cid:85)(cid:17)(cid:3) (cid:50)(cid:81)(cid:3) (cid:54)(cid:72)(cid:83)(cid:87)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3) (cid:20)(cid:26)(cid:15)(cid:3) (cid:40)(cid:89)(cid:72)(cid:85)(cid:87)(cid:72)(cid:70)®(cid:3) (cid:77)(cid:82)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)
(cid:54)(cid:70)(cid:88)(cid:69)(cid:68)(cid:3) (cid:39)(cid:82)(cid:74)(cid:86)(cid:3) (cid:54)(cid:82)(cid:70)(cid:76)(cid:72)(cid:87)(cid:92)(cid:3) (cid:68)(cid:74)(cid:68)(cid:76)(cid:81)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3) (cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3) (cid:37)(cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:38)(cid:79)(cid:72)(cid:68)(cid:81)(cid:88)(cid:83)(cid:3)
(cid:72)(cid:89)(cid:72)(cid:81)(cid:87)(cid:17)(cid:3) (cid:50)(cid:88)(cid:85)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3) (cid:90)(cid:68)(cid:86)(cid:3) (cid:76)(cid:81)(cid:3) (cid:70)(cid:75)(cid:68)(cid:85)(cid:74)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:70)(cid:79)(cid:72)(cid:68)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:47)(cid:82)(cid:76)(cid:93)(cid:68)(cid:3) (cid:51)(cid:82)(cid:70)(cid:76)(cid:87)(cid:68)(cid:3)
(cid:76)(cid:81)(cid:3)(cid:51)(cid:88)(cid:72)(cid:85)(cid:87)(cid:82)(cid:3)(cid:53)(cid:76)(cid:70)(cid:82)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:90)(cid:72)(cid:3)(cid:90)(cid:72)(cid:85)(cid:72)(cid:3)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:74)(cid:68)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:68)(cid:3)(cid:74)(cid:85)(cid:82)(cid:88)(cid:83)(cid:3)(cid:82)(cid:73)(cid:3)(cid:20)(cid:24)(cid:23)(cid:3)(cid:83)(cid:72)(cid:82)(cid:83)(cid:79)(cid:72)(cid:3)
(cid:11)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)(cid:15)(cid:3) (cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:80)(cid:80)(cid:88)(cid:81)(cid:76)(cid:87)(cid:92)(cid:12)(cid:17)(cid:3) (cid:58)(cid:72)(cid:3) (cid:70)(cid:82)(cid:79)(cid:79)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3) (cid:27)(cid:28)(cid:21)(cid:3)
(cid:83)(cid:82)(cid:88)(cid:81)(cid:71)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:74)(cid:68)(cid:85)(cid:69)(cid:68)(cid:74)(cid:72)(cid:17)
Protección  del  medio  ambiente:  (cid:36)(cid:3) (cid:87)(cid:85)(cid:68)(cid:89)(cid:112)(cid:86)(cid:3) (cid:71)(cid:72)(cid:3) (cid:53)(cid:72)(cid:89)(cid:82)(cid:79)(cid:88)(cid:70)(cid:76)(cid:121)(cid:81)(cid:3) (cid:49)(cid:68)(cid:85)(cid:68)(cid:81)(cid:77)(cid:68)(cid:15)(cid:3)
(cid:72)(cid:79)(cid:3)(cid:83)(cid:85)(cid:82)(cid:74)(cid:85)(cid:68)(cid:80)(cid:68)(cid:3)(cid:71)(cid:72)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:72)(cid:68)(cid:71)(cid:82)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:40)(cid:89)(cid:72)(cid:85)(cid:87)(cid:72)(cid:70)®(cid:3)(cid:71)(cid:76)(cid:85)(cid:76)(cid:74)(cid:76)(cid:71)(cid:82)(cid:3)(cid:68)(cid:3)(cid:79)(cid:68)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:72)(cid:85)(cid:89)(cid:68)(cid:70)(cid:76)(cid:121)(cid:81)(cid:3)(cid:71)(cid:72)(cid:79)(cid:3)
(cid:80)(cid:72)(cid:71)(cid:76)(cid:82)(cid:3)(cid:68)(cid:80)(cid:69)(cid:76)(cid:72)(cid:81)(cid:87)(cid:72)(cid:15)(cid:3)(cid:86)(cid:72)(cid:3)(cid:85)(cid:72)(cid:70)(cid:82)(cid:74)(cid:76)(cid:72)(cid:85)(cid:82)(cid:81)(cid:3)(cid:23)(cid:21)(cid:24)(cid:15)(cid:26)(cid:28)(cid:27)(cid:3)(cid:79)(cid:76)(cid:69)(cid:85)(cid:68)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:85)(cid:72)(cid:70)(cid:76)(cid:70)(cid:79)(cid:68)(cid:71)(cid:82)(cid:86)(cid:3)
(cid:72)(cid:81)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:17)(cid:3)(cid:40)(cid:79)(cid:3)(cid:20)(cid:26)(cid:3)(cid:71)(cid:72)(cid:3)(cid:86)(cid:72)(cid:83)(cid:87)(cid:76)(cid:72)(cid:80)(cid:69)(cid:85)(cid:72)(cid:15)(cid:3)(cid:40)(cid:89)(cid:72)(cid:85)(cid:87)(cid:72)(cid:70)®(cid:3)(cid:89)(cid:82)(cid:79)(cid:89)(cid:76)(cid:121)(cid:3)(cid:68)(cid:3)(cid:88)(cid:81)(cid:76)(cid:85)(cid:86)(cid:72)(cid:3)(cid:68)(cid:3)(cid:54)(cid:70)(cid:88)(cid:69)(cid:68)(cid:3)(cid:39)(cid:82)(cid:74)(cid:86)(cid:3)
(cid:54)(cid:82)(cid:70)(cid:76)(cid:72)(cid:87)(cid:92)(cid:3) (cid:72)(cid:81)(cid:3) (cid:86)(cid:88)(cid:3) (cid:72)(cid:89)(cid:72)(cid:81)(cid:87)(cid:82)(cid:3) (cid:47)(cid:76)(cid:80)(cid:83)(cid:76)(cid:72)(cid:93)(cid:68)(cid:3) (cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:70)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3) (cid:71)(cid:72)(cid:3) (cid:38)(cid:82)(cid:86)(cid:87)(cid:68)(cid:86)(cid:17)(cid:3) (cid:49)(cid:88)(cid:72)(cid:86)(cid:87)(cid:85)(cid:68)(cid:3)
(cid:72)(cid:80)(cid:83)(cid:85)(cid:72)(cid:86)(cid:68)(cid:3)(cid:86)(cid:72)(cid:3)(cid:75)(cid:76)(cid:93)(cid:82)(cid:3)(cid:70)(cid:68)(cid:85)(cid:74)(cid:82)(cid:3)(cid:71)(cid:72)(cid:3)(cid:79)(cid:76)(cid:80)(cid:83)(cid:76)(cid:68)(cid:85)(cid:3)(cid:79)(cid:68)(cid:3)(cid:83)(cid:79)(cid:68)(cid:92)(cid:68)(cid:3)(cid:47)(cid:68)(cid:3)(cid:51)(cid:82)(cid:70)(cid:76)(cid:87)(cid:68)(cid:3)(cid:71)(cid:72)(cid:3)(cid:47)(cid:82)(cid:116)(cid:93)(cid:68)(cid:3)(cid:72)(cid:81)(cid:3)(cid:51)(cid:88)(cid:72)(cid:85)(cid:87)(cid:82)(cid:3)
(cid:53)(cid:76)(cid:70)(cid:82)(cid:3) (cid:92)(cid:3) (cid:79)(cid:82)(cid:74)(cid:85)(cid:68)(cid:80)(cid:82)(cid:86)(cid:3) (cid:84)(cid:88)(cid:72)(cid:3) (cid:20)(cid:24)(cid:23)(cid:3) (cid:83)(cid:72)(cid:85)(cid:86)(cid:82)(cid:81)(cid:68)(cid:86)(cid:3) (cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:85)(cid:68)(cid:81)(cid:3) (cid:11)(cid:72)(cid:81)(cid:87)(cid:85)(cid:72)(cid:3) (cid:72)(cid:80)(cid:83)(cid:79)(cid:72)(cid:68)(cid:71)(cid:82)(cid:86)(cid:15)(cid:3)
(cid:73)(cid:68)(cid:80)(cid:76)(cid:79)(cid:76)(cid:68)(cid:85)(cid:72)(cid:86)(cid:3)(cid:92)(cid:3)(cid:79)(cid:68)(cid:3)(cid:70)(cid:82)(cid:80)(cid:88)(cid:81)(cid:76)(cid:71)(cid:68)(cid:71)(cid:12)(cid:17)(cid:3)(cid:53)(cid:72)(cid:70)(cid:82)(cid:79)(cid:72)(cid:70)(cid:87)(cid:68)(cid:80)(cid:82)(cid:86)(cid:3)(cid:27)(cid:28)(cid:21)(cid:3)(cid:79)(cid:76)(cid:69)(cid:85)(cid:68)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:69)(cid:68)(cid:86)(cid:88)(cid:85)(cid:68)(cid:17)

Corporate contributions: (cid:48)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:7)(cid:20)(cid:24)(cid:19)(cid:15)(cid:19)(cid:19)(cid:19)(cid:3)(cid:90)(cid:72)(cid:85)(cid:72)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:72)(cid:71)(cid:3)(cid:79)(cid:68)(cid:86)(cid:87)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)
(cid:76)(cid:81)(cid:3) (cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:82)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:71)(cid:82)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:81)(cid:82)(cid:81)(cid:16)(cid:83)(cid:85)(cid:82)(cid:192)(cid:87)(cid:3) (cid:76)(cid:81)(cid:86)(cid:87)(cid:76)(cid:87)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:86)(cid:88)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:70)(cid:75)(cid:76)(cid:79)(cid:71)(cid:85)(cid:72)(cid:81)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:72)(cid:81)(cid:89)(cid:76)(cid:85)(cid:82)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:85)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:85)(cid:82)(cid:68)(cid:71)(cid:72)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:88)(cid:81)(cid:76)(cid:87)(cid:92)(cid:17)
Donativos  corporativos:(cid:3) (cid:54)(cid:72)(cid:3) (cid:76)(cid:81)(cid:89)(cid:76)(cid:85)(cid:87)(cid:76)(cid:72)(cid:85)(cid:82)(cid:81)(cid:3) (cid:80)(cid:105)(cid:86)(cid:3) (cid:71)(cid:72)(cid:3) (cid:7)(cid:20)(cid:24)(cid:19)(cid:15)(cid:19)(cid:19)(cid:19)(cid:3) (cid:72)(cid:79)(cid:3) (cid:83)(cid:68)(cid:86)(cid:68)(cid:71)(cid:82)(cid:3)
(cid:68)(cid:120)(cid:82)(cid:3)(cid:72)(cid:81)(cid:3)(cid:68)(cid:88)(cid:86)(cid:83)(cid:76)(cid:70)(cid:76)(cid:82)(cid:86)(cid:3)(cid:92)(cid:3)(cid:71)(cid:82)(cid:81)(cid:68)(cid:87)(cid:76)(cid:89)(cid:82)(cid:86)(cid:3)(cid:83)(cid:68)(cid:85)(cid:68)(cid:3)(cid:76)(cid:81)(cid:86)(cid:87)(cid:76)(cid:87)(cid:88)(cid:70)(cid:76)(cid:82)(cid:81)(cid:72)(cid:86)(cid:3)(cid:86)(cid:76)(cid:81)(cid:3)(cid:192)(cid:81)(cid:72)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:79)(cid:88)(cid:70)(cid:85)(cid:82)(cid:3)(cid:84)(cid:88)(cid:72)(cid:3)
(cid:68)(cid:83)(cid:82)(cid:92)(cid:68)(cid:81)(cid:3)(cid:68)(cid:3)(cid:79)(cid:82)(cid:86)(cid:3)(cid:81)(cid:76)(cid:120)(cid:82)(cid:86)(cid:15)(cid:3)(cid:72)(cid:79)(cid:3)(cid:68)(cid:80)(cid:69)(cid:76)(cid:72)(cid:81)(cid:87)(cid:72)(cid:15)(cid:3)(cid:79)(cid:68)(cid:86)(cid:3)(cid:68)(cid:85)(cid:87)(cid:72)(cid:86)(cid:3)(cid:92)(cid:3)(cid:79)(cid:68)(cid:3)(cid:70)(cid:82)(cid:80)(cid:88)(cid:81)(cid:76)(cid:71)(cid:68)(cid:71)(cid:3)(cid:72)(cid:81)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:17)(cid:3)

Magical  Ice  Performance  at  the  ATH®  Suite:  (cid:41)(cid:82)(cid:85)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:192)(cid:85)(cid:86)(cid:87)(cid:3) (cid:87)(cid:76)(cid:80)(cid:72)(cid:3)
(cid:72)(cid:89)(cid:72)(cid:85)(cid:15)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:20)(cid:19)(cid:19)(cid:3)(cid:70)(cid:75)(cid:76)(cid:79)(cid:71)(cid:85)(cid:72)(cid:81)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:86)(cid:83)(cid:72)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:81)(cid:72)(cid:72)(cid:71)(cid:86)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:26)(cid:3)(cid:81)(cid:82)(cid:81)(cid:16)(cid:83)(cid:85)(cid:82)(cid:192)(cid:87)(cid:3)
(cid:82)(cid:85)(cid:74)(cid:68)(cid:81)(cid:76)(cid:93)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:90)(cid:72)(cid:85)(cid:72)(cid:3) (cid:57)(cid:44)(cid:51)(cid:3) (cid:74)(cid:88)(cid:72)(cid:86)(cid:87)(cid:86)(cid:3) (cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:36)(cid:55)(cid:43)®(cid:3) (cid:49)(cid:72)(cid:87)(cid:90)(cid:82)(cid:85)(cid:78)(cid:3) (cid:86)(cid:88)(cid:76)(cid:87)(cid:72)(cid:3) (cid:68)(cid:87)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3)
(cid:38)(cid:82)(cid:79)(cid:76)(cid:86)(cid:72)(cid:82)(cid:3) (cid:71)(cid:72)(cid:3) (cid:51)(cid:88)(cid:72)(cid:85)(cid:87)(cid:82)(cid:3) (cid:53)(cid:76)(cid:70)(cid:82)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:68)(cid:3) (cid:80)(cid:68)(cid:74)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3) (cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:39)(cid:76)(cid:86)(cid:81)(cid:72)(cid:92)(cid:3)
(cid:50)(cid:81)(cid:3)(cid:44)(cid:70)(cid:72)(cid:3)(cid:86)(cid:75)(cid:82)(cid:90)(cid:17)(cid:3)(cid:40)(cid:89)(cid:72)(cid:85)(cid:87)(cid:72)(cid:70)®(cid:3)(cid:83)(cid:85)(cid:82)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:87)(cid:85)(cid:68)(cid:81)(cid:86)(cid:83)(cid:82)(cid:85)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:85)(cid:72)(cid:73)(cid:85)(cid:72)(cid:86)(cid:75)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3)(cid:86)(cid:88)(cid:76)(cid:87)(cid:72)(cid:3)
(cid:87)(cid:76)(cid:70)(cid:78)(cid:72)(cid:87)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:74)(cid:76)(cid:73)(cid:87)(cid:86)(cid:3) (cid:87)(cid:82)(cid:3) (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:70)(cid:75)(cid:76)(cid:79)(cid:71)(cid:15)(cid:3) (cid:80)(cid:68)(cid:81)(cid:92)(cid:3) (cid:82)(cid:73)(cid:3) (cid:90)(cid:75)(cid:82)(cid:80)(cid:3) (cid:75)(cid:68)(cid:71)(cid:3) (cid:81)(cid:72)(cid:89)(cid:72)(cid:85)(cid:3) (cid:86)(cid:72)(cid:72)(cid:81)(cid:3) (cid:68)(cid:3)
(cid:83)(cid:85)(cid:82)(cid:73)(cid:72)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:79)(cid:76)(cid:89)(cid:72)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:17)
Una noche mágica de Disney on Ice en la Suite de ATH®:(cid:3)(cid:51)or 
(cid:83)(cid:85)(cid:76)(cid:80)(cid:72)(cid:85)(cid:68)(cid:3) (cid:89)(cid:72)(cid:93)(cid:15)(cid:3) (cid:80)(cid:105)(cid:86)(cid:3) (cid:71)(cid:72)(cid:3) (cid:20)(cid:19)(cid:19)(cid:3) (cid:81)(cid:76)(cid:120)(cid:82)(cid:86)(cid:3) (cid:70)(cid:82)(cid:81)(cid:3) (cid:81)(cid:72)(cid:70)(cid:72)(cid:86)(cid:76)(cid:71)(cid:68)(cid:71)(cid:72)(cid:86)(cid:3) (cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:76)(cid:68)(cid:79)(cid:72)(cid:86)(cid:15)(cid:3)
(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:81)(cid:76)(cid:72)(cid:81)(cid:87)(cid:72)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:26)(cid:3)(cid:72)(cid:81)(cid:87)(cid:76)(cid:71)(cid:68)(cid:71)(cid:72)(cid:86)(cid:3)(cid:86)(cid:76)(cid:81)(cid:3)(cid:192)(cid:81)(cid:72)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:79)(cid:88)(cid:70)(cid:85)(cid:82)(cid:15)(cid:3)(cid:73)(cid:88)(cid:72)(cid:85)(cid:82)(cid:81)(cid:3)(cid:76)(cid:81)(cid:89)(cid:76)(cid:87)(cid:68)(cid:71)(cid:82)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)
(cid:75)(cid:82)(cid:81)(cid:82)(cid:85)(cid:3)(cid:72)(cid:81)(cid:3)(cid:79)(cid:68)(cid:3)(cid:86)(cid:88)(cid:76)(cid:87)(cid:72)(cid:3)(cid:71)(cid:72)(cid:3)(cid:79)(cid:68)(cid:3)(cid:53)(cid:72)(cid:71)(cid:3)(cid:36)(cid:55)(cid:43)®(cid:3)(cid:72)(cid:81)(cid:3)(cid:72)(cid:79)(cid:3)(cid:38)(cid:82)(cid:79)(cid:76)(cid:86)(cid:72)(cid:82)(cid:3)(cid:71)(cid:72)(cid:3)(cid:51)(cid:88)(cid:72)(cid:85)(cid:87)(cid:82)(cid:3)(cid:53)(cid:76)(cid:70)(cid:82)(cid:3)(cid:72)(cid:81)(cid:3)(cid:79)(cid:68)(cid:3)
(cid:84)(cid:88)(cid:72)(cid:3)(cid:71)(cid:76)(cid:86)(cid:73)(cid:85)(cid:88)(cid:87)(cid:68)(cid:85)(cid:82)(cid:81)(cid:3)(cid:71)(cid:72)(cid:3)(cid:88)(cid:81)(cid:68)(cid:3)(cid:81)(cid:82)(cid:70)(cid:75)(cid:72)(cid:3)(cid:80)(cid:105)(cid:74)(cid:76)(cid:70)(cid:68)(cid:3)(cid:70)(cid:82)(cid:81)(cid:3)(cid:72)(cid:79)(cid:3)(cid:86)(cid:75)(cid:82)(cid:90)(cid:3)(cid:71)(cid:72)(cid:3)(cid:39)(cid:76)(cid:86)(cid:81)(cid:72)(cid:92)(cid:3)(cid:82)(cid:81)(cid:3)(cid:44)(cid:70)(cid:72)(cid:17)(cid:3)
Evertec®(cid:3) (cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:92)(cid:121)(cid:3) (cid:79)(cid:68)(cid:3) (cid:87)(cid:85)(cid:68)(cid:81)(cid:86)(cid:83)(cid:82)(cid:85)(cid:87)(cid:68)(cid:70)(cid:76)(cid:121)(cid:81)(cid:15)(cid:3) (cid:85)(cid:72)(cid:73)(cid:85)(cid:76)(cid:74)(cid:72)(cid:85)(cid:76)(cid:82)(cid:86)(cid:15)(cid:3) (cid:69)(cid:82)(cid:79)(cid:72)(cid:87)(cid:82)(cid:86)(cid:3) (cid:92)(cid:3) (cid:85)(cid:72)(cid:74)(cid:68)(cid:79)(cid:82)(cid:86)(cid:3)
(cid:83)(cid:68)(cid:85)(cid:68)(cid:3)(cid:70)(cid:68)(cid:71)(cid:68)(cid:3)(cid:81)(cid:76)(cid:120)(cid:82)(cid:15)(cid:3)(cid:80)(cid:88)(cid:70)(cid:75)(cid:82)(cid:86)(cid:3)(cid:71)(cid:72)(cid:3)(cid:79)(cid:82)(cid:86)(cid:3)(cid:70)(cid:88)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:81)(cid:88)(cid:81)(cid:70)(cid:68)(cid:3)(cid:75)(cid:68)(cid:69)(cid:116)(cid:68)(cid:81)(cid:3)(cid:71)(cid:76)(cid:86)(cid:73)(cid:85)(cid:88)(cid:87)(cid:68)(cid:71)(cid:82)(cid:3)(cid:88)(cid:81)(cid:3)
(cid:72)(cid:86)(cid:83)(cid:72)(cid:70)(cid:87)(cid:105)(cid:70)(cid:88)(cid:79)(cid:82)(cid:3)(cid:72)(cid:81)(cid:3)(cid:89)(cid:76)(cid:89)(cid:82)(cid:17)

a n n u a l   r e p o r t   2 0 1 6       8

 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-K

È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2016

or

‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Commission File Number 001-35872

EVERTEC, Inc.

(Exact name of registrant as specified in its charter)

Puerto Rico
(State or other jurisdiction of
incorporation or organization)

Cupey Center Building, Road 176, Kilometer 1.3,
San Juan, Puerto Rico
(Address of principal executive offices)

66-0783622
(I.R.S. employer
identification number)

00926
(Zip Code)

(787) 759-9999
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registered

Common Stock, $0.01 par value

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ‘ No È
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ‘ No È
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 È No ‘
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files). Yes È No ‘
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. È
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.:

Large accelerated filer È
Non-accelerated filer ‘ (Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ‘ No È
The aggregate market value of the common stock held by non-affiliates of EVERTEC, Inc. was approximately $959,986,017
based on the closing price of $15.54 as of the close of business on June 30, 2016.
As of February 17, 2017, there were 72,635,032 outstanding shares of common stock of EVERTEC, Inc.

Accelerated filer
‘
Smaller reporting company ‘

Part III incorporates certain information by reference to the Proxy Statement for the 2017 Annual Meeting of Shareholders

Documents Incorporated by Reference:

EVERTEC, Inc.
2016 Annual Report on Form 10-K

TABLE OF CONTENTS

Forward Looking Statements
Part I
Item 1—Business
Item 1A—Risk Factors
Item 1B—Unresolved Staff Comments
Item 2—Properties
Item 3—Legal Proceedings
Item 4—Mine Safety Disclosures
Part II
Item 5—Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities

Item 6—Selected Financial Data
Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A—Quantitative and Qualitative Disclosures About Market Risks
Item 8—Financial Statements and Supplementary Data
Item 9—Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A—Controls and Procedures
Item 9B—Other Information
Part III
Item 10—Directors, Executive Officers and Corporate Governance
Item 11—Executive Compensation
Item 12—Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters

Item 13—Certain Relationships and Related Transactions and Director Independence
Item 14—Principal Accounting Fees and Services
Part IV
Item 15—Exhibits, Financial Statement Schedules
Signatures

Page

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Forward-Looking Statements

This Annual Report on Form 10-K, or Report, contains “forward-looking statements” within the meaning of, and
subject to the protection of, the Private Securities Litigation Reform Act of 1995. Such statements can be
identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “estimates,” “will,”
“should,” “plans” or “anticipates” or the negative thereof or other variations thereon or comparable terminology,
or by discussions of strategy. Readers are cautioned that any such forward-looking statements are not guarantees
of future performance and may involve significant risks and uncertainties, and that actual results may vary
materially from those in the forward-looking statements as a result of various factors. Among the factors that
significantly impact our business and could impact our business in the future are:

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

our reliance on our relationship with Popular, Inc. (“Popular”) for a significant portion of our revenues
and with Banco Popular de Puerto Rico (“Banco Popular”), Popular’s principal banking subsidiary, to
grow our merchant acquiring business;

as a regulated institution, we most likely will be required to obtain regulatory approval before engaging
in certain new activities or businesses, whether organically or by acquisition, and may be unable to
obtain such approval on a timely basis or at all, which may make transactions more expensive or
impossible to complete, or make us less attractive to potential sellers;

our ability to renew our client contracts on terms favorable to us, including our contract with Popular;

our dependence on our processing systems, technology infrastructure, security systems and fraudulent
payment detection systems, as well as on our personnel and certain third parties with whom we do
business, and the risks to our business if our systems are hacked or otherwise compromised;

our ability to develop, install and adopt new software, technology and computing systems;

a decreased client base due to consolidations and failures in the financial services industry;

the credit risk of our merchant clients, for which we may also be liable;

the continuing market position of the ATH network;

a reduction in consumer confidence, whether as a result of a global economic downturn or otherwise,
which leads to a decrease in consumer spending;

our dependence on credit card associations, including any adverse changes in credit card association or
network rules or fees;

changes in the regulatory environment and changes in international, legal, tax, political, administrative
or economic conditions;

the geographical concentration of our business in Puerto Rico, including our business with the
government of Puerto Rico and its instrumentalities, which are facing severe fiscal challenges;

additional adverse changes in the general economic conditions in Puerto Rico, whether as a result of
the government’s debt crisis or otherwise, including the continued migration of Puerto Ricans to the
U.S. mainland, which could negatively affect our customer base, general consumer spending, our cost
of operations and our ability to hire and retain qualified employees;

operating an international business in multiple regions with potential political and economic instability,
including Latin America;

our ability to execute our geographic expansion and acquisition strategies;

our ability to protect our intellectual property rights against infringement and to defend ourselves
against claims of infringement brought by third parties;

our ability to recruit and retain the qualified personnel necessary to operate our business;

our ability to comply with U.S. federal, state, local and foreign regulatory requirements;

1

•

•

•

•

•

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evolving industry standards and adverse changes in global economic, political and other conditions;

our high level of indebtedness and restrictions contained in our debt agreements, including the senior
secured credit facilities, as well as debt that could be incurred in the future;

our ability to prevent a cybersecurity attack or breach in our information security;

our ability to generate sufficient cash to service our indebtedness and to generate future profits;

our ability to refinance our debt;

the possibility that we could lose our preferential tax rate in Puerto Rico;

the risk that the counterparty to our interest rate swap agreement fails to satisfy its obligations under
the agreement; and

other risks and uncertainties detailed in Part I, Item IA “Risk Factors” in this Report.

These forward-looking statements involve a number of risks and uncertainties that could cause actual results to
differ materially from those suggested by the forward-looking statements. Forward-looking statements should,
therefore, be considered in light of various factors, including those set forth under “Item 1A. Risk Factors,” in
“Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and
elsewhere in this Report. These forward-looking statements speak only as of the date of this Report, and we do
not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect
events or circumstances after the date of this Report or to reflect the occurrence of unanticipated events.

2

INDUSTRY AND MARKET DATA

This Form 10-K includes industry data that we obtained from periodic industry publications, including the July
2015 and the September 2016 Nilson Report and the 2015 and 2016 World Payments Report. Industry
publications generally state that the information contained therein has been obtained from sources believed to be
reliable. This Form 10-K also includes market share and industry data that were prepared primarily based on
management’s knowledge of the industry and industry data. Unless otherwise noted, statements as to our market
share and market position relative to our competitors are approximated and based on management estimates
using the above-mentioned latest-available third-party data and our internal analyses and estimates. While we are
not aware of any misstatements regarding any industry data presented herein, our estimates, in particular as they
relate to market share and our general expectations, involve risks and uncertainties and are subject to change
based on various factors, including those discussed under “Risk Factors,” “Forward-Looking Statements” and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K.

3

Item 1. Business

Part I

Except as otherwise indicated or unless the context otherwise requires, (a) the terms “EVERTEC,” “we,” “us,”
“our,” “our Company” and “the Company” refer to EVERTEC, Inc. and its subsidiaries on a consolidated
basis, (b) the term “Holdings” refers to EVERTEC Intermediate Holdings, LLC, but not any of its subsidiaries
and (c) the term “EVERTEC Group” refers to EVERTEC Group, LLC and its predecessor entities and their
subsidiaries on a consolidated basis, including the operations of its predecessor entities prior to the Merger (as
defined below). EVERTEC Inc.’s subsidiaries include Holdings, EVERTEC Group, EVERTEC Dominicana, SAS,
EVERTEC Panamá, S.A., EVERTEC Costa Rica, S.A. (“EVERTEC CR”), EVERTEC Guatemala, S.A., Processa,
SAS, EVERTEC USA, LLC and EVERTEC México Servicios de Procesamiento, S.A. de C.V. Neither EVERTEC
nor Holdings conducts any operations other than with respect to its indirect or direct ownership of EVERTEC
Group.

Company Overview

EVERTEC is a leading full-service transaction processing business in Latin America (which includes Central
America and the Caribbean, unless otherwise specified), providing a broad range of merchant acquiring, payment
processing and business process management services. According to the September 2016 Nilson Report we are
one of the largest merchant acquirers in Latin America based on total number of transactions and we believe we
are the largest merchant acquirer in the Caribbean and Central America. We serve 18 countries in the region from
our base in Puerto Rico. We manage a system of electronic payment networks that process more than two billion
transactions annually, and offer a comprehensive suite of services for core bank processing, cash processing and
technology outsourcing. In addition, we own and operate the ATH network, one of the leading personal
identification number (“PIN”) debit networks in Latin America. We serve a diversified customer base of leading
financial institutions, merchants, corporations and government agencies with “mission-critical” technology
solutions that enable them to issue, process and accept transactions securely. We believe our business is well-
positioned to continue to expand across the fast-growing Latin American region.

We are differentiated, in part, by our diversified business model, which enables us to provide our varied customer
base with a broad range of transaction-processing services from a single source across numerous channels and
geographic markets. We believe this single-source capability provides several competitive advantages that will
enable us to continue to penetrate our existing customer base with complementary new services, win new
customers, develop new sales channels and enter new markets. We believe these competitive advantages include:

• Our ability to provide best in class products;

• Our ability to provide in one package a range of services that traditionally had to be sourced from

different vendors;

• Our ability to serve customers with disparate operations in several geographies with a single integrated

technology solution that enables them to manage their business as one enterprise; and

• Our ability to capture and analyze data across the transaction processing value chain and use that data
to provide value-added services that are differentiated from those offered by pure-play vendors that
serve only one portion of the transaction processing value chain (such as only merchant acquiring or
payment processing).

Our broad suite of services spans the entire transaction processing value chain and includes a range of front-end
customer-facing solutions such as the electronic capture and authorization of transactions at the point-of-sale, as
well as back-end support services such as the clearing and settlement of transactions and account reconciliation
for card issuers. These include: (i) merchant acquiring services, which enable point of sales (“POS”) and
e-commerce merchants to accept and process electronic methods of payment such as debit, credit, prepaid and

4

electronic benefit transfer (“EBT”) cards; (ii) payment processing services, which enable financial institutions
and other issuers to manage, support and facilitate the processing for credit, debit, prepaid, automated teller
machines (“ATM”) and EBT card programs; and (iii) business process management solutions, which provide
“mission-critical” technology solutions such as core bank processing, as well as IT outsourcing and cash
management services to financial institutions, corporations and governments. We provide these services through
a scalable, end-to-end technology platforms that we manage and operate in-house and that generates significant
operating efficiencies that enable us to maximize profitability.

We sell and distribute our services primarily through a proprietary direct sales force with established customer
relationships. We are also building a variety of indirect sales channels that enable us to leverage the distribution
capabilities of partners in adjacent markets, including value-added resellers. We continue to pursue joint ventures
and merchant acquiring alliances.

We benefit from an attractive business model, the hallmarks of which are recurring revenue, scalability,
significant operating margins and moderate capital expenditure requirements. Our revenue is predominantly
recurring in nature because of the mission-critical and embedded nature of the services we provide. In addition,
we generally negotiate multi-year contracts with our customers. Our business model enables us to continue to
grow our business organically in the primary markets we serve without significant incremental capital
expenditures.

We generate revenues based primarily on transaction or discount fees paid by our merchants and financial
institutions in our merchant acquiring and payment processing segments and on transaction fees or fees based on
number of accounts on file in our business solutions segment. Our total revenues increased from $358.4 million
for the year ended December 31, 2013 to $389.5 million for the year ended December 31, 2016, representing a
compound annual growth rate (“CAGR”) of 2.81%. Our Adjusted EBITDA (as defined in “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Net Income
Reconciliation to EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per common
share”) increased from $177.7 million for the year ended December 31, 2013 to $187.6 million for the year ended
December 31, 2016, representing a CAGR of 1.82%. Our Adjusted Net Income (as defined in “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Net Income
Reconciliation to EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per common
share”) increased from $116.0 million for the year ended December 31, 2013 to $124.7 million for the year ended
December 31, 2016, representing a CAGR of 2.41%.

Corporate Background

EVERTEC, Inc. (formerly known as Carib Latam Holdings, Inc.) is a Puerto Rico corporation organized in April
2012. Our main operating subsidiary, EVERTEC Group, LLC (formerly known as EVERTEC, LLC and
EVERTEC, Inc., hereinafter “EVERTEC Group”), was organized in Puerto Rico in 1988. EVERTEC Group was
formerly a wholly-owned subsidiary of Popular. On September 30, 2010, pursuant to an Agreement and Plan of
Merger (as amended, the “Merger Agreement”), AP Carib Holdings, Ltd. (“Apollo”) acquired a 51% indirect
ownership interest in EVERTEC Group as part of a merger (the “Merger”) and EVERTEC Group became a
wholly-owned subsidiary of Holdings.

On April 17, 2012, EVERTEC Group was converted from a Puerto Rico corporation to a Puerto Rico limited
liability company (the “Conversion”) for the purpose of improving its consolidated tax efficiency by taking
advantage of changes to the Puerto Rico Internal Revenue Code, as amended (the “PR Code”), that permit
limited liability companies to be treated as partnerships that are pass-through entities for Puerto Rico tax
purposes. Concurrent with the Conversion, Holdings, which is our direct subsidiary, was also converted from a
Puerto Rico corporation to a Puerto Rico limited liability company. Prior to these conversions, EVERTEC, Inc.
was formed in order to act as the new parent company of Holdings and its subsidiaries, including EVERTEC
Group. The transactions described above in this paragraph are collectively referred to as the “Reorganization.”

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History

We have over a 25 year operating history in the transaction processing industry. Prior to the Merger, EVERTEC
Group was 100% owned by Popular, the largest financial institution in the Caribbean, and operated substantially
as an independent entity within Popular. As mentioned above, following the Merger, Apollo, which is an affiliate
of the leading private equity investor Apollo Global Management, LLC, owned a 51% interest in us and shortly
thereafter, we began the transition to a separate, stand-alone entity. As a stand-alone company, we have made
substantial investments in our technology and infrastructure, recruited various senior executives with significant
transaction processing experience in Latin America, enhanced our profitability through targeted productivity and
cost savings actions and broadened our footprint beyond the markets historically served.

We continue to benefit from our relationship with Popular. Popular is our largest customer, acts as one of our
largest merchant referral partners and sponsors us with the card associations (such as Visa or MasterCard),
enabling merchants to accept these card associations’ credit card transactions. Popular also provides merchant
sponsorship as one of the participants of the ATH network, enabling merchants to connect to the ATH network
and accept ATH debit card transactions. We provide a number of critical products and services to Popular, which
are governed by a 15-year Amended and Restated Master Services Agreement (the “Master Services
Agreement”) that runs through 2025.

On April 17, 2013, the Company completed its initial public offering of 28,789,943 shares of common stock at a
price to the public of $20.00 per share. On September 18, 2013 and December 13, 2013, the Company completed
public offerings of 23,000,000 and 15,233,273 shares, respectively, of the Company’s common stock by Apollo
Global Management, LLC (“Apollo”), Popular, Inc. (“Popular”), and current and former employees. After the
completion of these offerings, Popular owned approximately 11.7 million shares of EVERTEC’s common stock,
or 16.05% as of December 31, 2016, and Apollo no longer owns any of the Company’s common stock.

Principal Stockholder

Popular, Inc. (NASDAQ: BPOP), whose principal banking subsidiary’s history dates back to 1893, is the No. 1
bank holding company by both assets and deposits based in Puerto Rico, and, as of September 30, 2016, ranks 49
by total asset balance among U.S. bank holding companies. As of December 31, 2016, Popular owned
approximately 16.05% of our common stock.

Industry Trends

Shift to Electronic Payments

The ongoing migration from cash, check and other paper methods of payment to electronic payments continues
to benefit the transaction processing industry globally. This migration is driven by factors including customer
convenience, marketing efforts by financial institutions, card issuer rewards and the development of new forms
of payment. We believe that the penetration of electronic payments in the markets where we principally operate
is significantly lower relative to more mature U.S. and European markets and that this ongoing shift will continue
to generate important growth opportunities for our business. In addition, in an effort to better capture taxes over
generated revenue, recent legislation in Puerto Rico has required most licensed professionals to provide an
electronic payment option to their customers, and that all consumer businesses that generate revenues in excess
of $50,000 provide an electronic payment option to their customers, with the exception of certain businesses,
further expanding the need for an electronic payment network in Puerto Rico.

Fast Growing Latin American and Caribbean Financial Services and Payments Markets

Currently, the penetration of banking products, including electronic payments, in the Latin American and
Caribbean region is lower relative to the mature U.S. and European markets. As these markets continue to grow,
and financial inclusion increases, the emergence of a larger and more sophisticated consumer base will influence

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and drive an increase in card (like debit, credit, prepayment, and EBT) and electronic payments usage. According
to the July 2015 Nilson Report, Latin American purchase transactions on cards are projected to increase by 46%
from 14.37 billion in 2013 to 21.02 billion in 2018. According to the 2015 World Payments Report, non-cash
payment volumes in Latin America grew by 8.6%, while in North America, non-cash payments outperformed
GDP growth by 4.6%. While there was a slight decline in growth in non-cash payment transactions in Latin
America, the growth rate remains at a higher rate than any market considered mature. The CAGR of non-cash
transactions in Latin America from 2010 to 2014 was 10.6%. While in the past mature markets have dominated
non-cash transaction volumes, a shift in balance is occurring as the developing markets’ share of global non-cash
transaction volumes have increased from 12% to 27%. Latin America’s share of non-cash transaction volumes
grew from 25.6 billion in 2010 to 38.3 billion in 2014. If current trends continue, developing markets’ share of
global non-cash volumes is expected to increase from 27% in 2013 to 33% by 2020. We believe that the
attractive characteristics of our markets and our leadership positions across multiple services and sectors will
continue to drive growth and profitability in our businesses.

Ongoing Technology Outsourcing Trends

Financial institutions globally are facing significant challenges including the entrance of non-traditional
competitors, the compression of margins on traditional products, significant channel proliferation and increasing
regulation that could potentially curb profitability. Many of these institutions have traditionally fulfilled their IT
needs through legacy computer systems, operated by the institution itself. Legacy systems are generally highly
proprietary, inflexible and costly to operate and maintain and we believe the trend to outsource in-house technology
systems and processes by financial institutions will continue. We believe our ability to provide integrated, open,
flexible, customer-centric and efficient IT products and services cater to the evolving needs of our customers,
particularly for small- and mid-sized financial institutions in the Latin American markets in which we operate.

Industry Innovation

The electronic payments industry experiences ongoing technology innovation. Emerging payment technologies
such as prepaid cards, contactless payments, payroll cards, mobile commerce, online “wallets” and innovative
POS devices facilitate the continued shift away from cash, check and other paper methods of payment. The
increasing demand for new and flexible payment options catering to a wider range of consumer segments is
driving growth in the electronic payment processing sector.

Our Competitive Strengths

Market Leadership in Latin America and the Caribbean

We believe we have an inherent competitive advantage relative to U.S. competitors based on our first-hand
knowledge of the Latin American and Caribbean markets and technological needs, language and culture. We
have built leadership positions across the transaction processing value chain in the key geographic markets that
we serve, which we believe will enable us to continue to penetrate our core markets and provide advantages to
enter new markets. According to the September 2016 Nilson Report we are one of the largest merchant acquirers
in Latin America based on total number of transactions and we believe we are the largest merchant acquirer in
the Caribbean and Central America. We own and operate the ATH network, one of the leading ATM and PIN
debit networks in Latin America. The ATH network and processing businesses processed over two billion
transactions in 2016, which according to management estimates, makes ATH branded products the most
frequently used electronic method of payment in Puerto Rico. We offer compelling value to our merchants, as
noted in the most recent report published by the Federal Reserve Board regarding debit network fees, the ATH
network ranked as one of the most economical networks for merchants. Given our scale and customer base of top
tier financial institutions and government entities, we believe we are the leading card issuer and core bank
processor in the Caribbean and the only non-bank provider of cash processing services to the U.S. Federal
Reserve in the Caribbean. We believe our competitive position and brand recognition increases card acceptance,
driving usage of our proprietary network, and presents opportunities for future strategic relationships.

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Diversified Business Model across the Transaction Processing Value Chain

Our leadership position in the region is driven in part by our diversified business model which provides a range
of merchant acquiring, payment processing and business solutions services to financial institutions, merchants,
corporations and government agencies across different geographies. We offer end-to-end technology solutions
through a single provider and we have the ability to tailor and customize the features and functionality of our
products and services to the specific requirements of our customers in various industries and across geographic
markets. We believe the breadth of our offerings enables us to penetrate our customer base from a variety of
perspectives and positions us favorably to cross-sell our other offerings over time. For example, we may host a
client’s electronic cash register software (part of the business solutions segment), acquire transactions that
originate at that electronic cash register (part of the merchant acquiring segment), route the transaction through
the ATH network (part of the payment processing segment), and finally settle the transaction between the client
and the issuer bank (part of the payment processing segment). In addition, we can serve customers with disparate
operations in several geographies with a single integrated technology solution that enables them to access one
processing platform and manage their business as one enterprise. We believe these services are becoming
increasingly complementary and integrated as our customers seek to capture, analyze and monetize the vast
amounts of data that they process across their enterprises. As a result, we are able to capture significant value
across the transaction processing value chain and believe that this combination of attributes represents a
differentiated value proposition vis-à-vis our competitors who have a limited product and service offering.

Broad and Deep Customer Relationships and Recurring Revenue Business Model

We have built a strong and long-standing portfolio of financial institution, merchant, corporate and government
customers across Latin America and the Caribbean, which provides us with a reliable, recurring revenue base and
powerful references that have helped us expand into new channels and geographic markets. Our Payment
Processing and Merchant Acquiring segments, as well as certain business lines representing the majority of our
business solutions segment, generate recurring revenues that collectively accounted for approximately 89% of
our total revenues in 2016. We receive recurring revenues from services based on our customers’ on-going daily
commercial activity such as processing loans, hosting accounts and information on our servers, and processing
everyday payments at grocery stores, gas stations and similar establishments. We generally provide these
services under one to five year contracts, often with automatic renewals. We also provide a few project-based
services that generate non-recurring revenues in our business solutions segment such as IT consulting for a
specific project or integration. Additionally, we entered into a 15-year Master Services Agreement with Popular
on September 30, 2010. We provide a number of critical payment processing and business solutions products and
services to Popular and benefit from the bank’s distribution network and continued support. Through our long-
standing and diverse customer relationships, we are able to gain valuable insight into trends in the marketplace
that allows us to identify new market opportunities. In addition, we believe the recurring nature of our business
model provides us with revenue and earnings stability.

Highly Scalable, End-to-End Technology Platforms

Our diversified business model is supported by our scalable, end-to-end technology platforms which allows us to
provide a broad range of transaction processing services and develop and deploy technology solutions to our
customers at low incremental costs and increasing operating efficiencies. We have spent over $160 million over
the last five years on technology investments, including POS, to continue to build the capacity and functionality
of our platforms and we have been able to achieve attractive economies of scale with flexible product
development capabilities. We believe that our platforms will allow us to provide differentiated services to our
customers and facilitate further expansion into new sales channels and geographic markets.

Experienced Management Team with a Strong Track Record of Execution

We have grown our revenue organically by introducing new products and services and expanding our geographic
footprint throughout Latin America. We have a proven track record of creating value from operational and

8

technology improvements and capitalizing on cross-selling opportunities. We have combined new leadership at
EVERTEC, bringing many years of industry experience, with long-standing leadership at the operating business
level. In April 2015, Morgan M. Schuessler, Jr., former President of International for Global Payments, Inc.,
joined our management team as President and Chief Executive Officer. In May 2015, Mariana Lischner Goldvarg
joined the Company as President for our Latin America operations. Prior to joining the Company, she served as
President of Equifax Latin America. In September 2015, Peter J.S. Smith, former Chief Accounting Officer of
Fidelity National Information Services, joined our management team as Chief Financial Officer. In 2012, Philip
Steurer, former Senior Vice President of Latin America for First Data Corporation, joined our management team
as our Chief Operating Officer. Our management has extensive experience managing and growing transaction
processing businesses in Latin America as well as North America, Asia and Europe. Collectively our
management team benefits from an average of over 20 years of industry experience and we believe they are well
positioned to continue to drive growth across business lines and regions. In 2016, Guillermo Rospigliosi, former
Managing Director for Latin America at CyberSource, a Visa subsidiary, joined the company as the Executive
Vice President of Product Management & Marketing of EVERTEC, with 20 years of experience in the Payments,
Financial Services, Innovation, and Technology sectors.

Our Growth Strategy

We intend to grow our business by continuing to execute on the following business strategies:

Continue Cross-Sales to Existing Customers

We seek to grow revenue by continuing to sell additional products and services to our existing merchant,
financial institution, corporate and government customers. We intend to broaden and deepen our customer
relationships by leveraging our full suite of end-to-end technology solutions. For example, we believe that there
is significant opportunity to cross-sell our network services, ATM point-of-sale processing and card issuer
processing services to our over 180 existing financial institution customers, particularly in markets outside of
Puerto Rico. We will also seek to continue to cross-sell value added services into our existing merchant base.

Leverage Our Franchise to Attract New Customers in the Markets We Currently Serve

We intend to attract new customers by leveraging our comprehensive product and services offering, the strength
of our brand and our leading end-to-end technology platform. Furthermore, we believe we are well positioned to
develop new products and services to take advantage of our access to and position in markets we currently serve.
For example, in markets we serve outside of Puerto Rico, we believe there is a significant opportunity to
penetrate small to medium financial institutions with our products and services, as well as to penetrate
governments with offerings such as EBT.

Expand in the Latin American Region

We believe there is substantial opportunity to expand our businesses in the Latin American region. We believe
that we have a competitive advantage relative to U.S. competitors based on our first-hand knowledge of the Latin
American and Caribbean markets and technological needs, language and culture. We believe significant growth
opportunities exist in a number of large markets such as Colombia, México, and Chile, among others. We also
believe that there is an opportunity to provide our services to existing financial institution customers in other
regions where they operate. Additionally, we continually evaluate our strategic plans for geographic expansion,
which can be achieved through joint ventures, partnerships, alliances or strategic acquisitions. For a description
of risks associated with obtaining regulatory approvals and other risks associated with strategic transactions, see
“Item 1A. Risk Factors—Risks Related to Our Business—Our expansion and selective acquisition strategy
exposes us to risks, including the risk that we may not be able to successfully integrate acquired businesses.”

9

Develop New Products and Services

Our experience with our customers provides us with insight into their needs and enables us to continuously
develop new transaction processing services. We plan to continue growing our merchant, financial institution,
corporate and government customer base by developing and offering additional value-added products and
services to cross-sell along with our core offerings. We intend to continue to focus on these and other new
product opportunities in order to take advantage of our leadership position in the transaction processing industry
in the Latin American and Caribbean region.

Our Business

We offer our customers end-to-end products and solutions across the transaction processing value chain from a
single source across numerous channels and geographic markets, as further described below.

Merchant Acquiring

According to the September 2016 Nilson Report, we are one of the largest merchant acquirers in Latin America
based on total number of transactions and we believe we are the largest merchant acquirer in the Caribbean and
Central America. Our merchant acquiring business provides services to merchants that allow them to accept
electronic methods of payment such as debit, credit, prepaid and EBT cards carrying the ATH, Visa, MasterCard,
Discover and American Express brands. Our full suite of merchant acquiring services includes, but is not limited
to, the underwriting of each merchant’s contract, the deployment and rental of POS devices and other equipment
necessary to capture merchant transactions, the processing of transactions at the point-of-sale, the settlement of
funds with the participating financial institution, detailed sales reports and customer support. In 2016, our
merchant acquiring business processed over 370 million transactions.

Our Merchant Acquiring business generated $91.2 million, or 23.4%, of total revenues and $31.1 million, or
22.2%, of total segment income from operations for the year ended December 31, 2016.

Payment Processing

We are the largest card processor and card network service provider in the Caribbean. We provide a diversified
suite of payment processing products and services to blue chip regional and global corporate customers,
government agencies, and financial institutions across Latin America and the Caribbean. These services provide
the infrastructure technology necessary to facilitate the processing and routing of payments across the transaction
processing value chain.

At the point-of-sale, we sell transaction processing technology solutions, similar to the services in our merchant
acquiring business, to other merchant acquirers to enable them to service their own merchant customers. We also
offer terminal driving solutions to merchants, merchant acquirers (including our merchant acquiring business)
and financial institutions, which provide the technology to securely operate, manage and monitor POS terminals
and ATMs. We also rent POS devices to financial institution customers who seek to deploy them across their
own businesses.

To connect the POS terminals to card issuers, we own and operate the ATH network, one of the leading ATM
and PIN debit networks in Latin America. The ATH network connects the merchant or merchant acquirer to the
card issuer and enables transactions to be routed or “switched” across the transaction processing value chain. The
ATH network offers the technology, communications standards, rules and procedures, security and encryption,
funds settlement and common branding that allow consumers, merchants, merchant acquirers, ATMs, card issuer
processors and card issuers to conduct commerce seamlessly, across a variety of channels, similar to the services
provided by Visa and MasterCard. The ATH network and processing businesses processed over two billion
transactions in 2016.

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To enable financial institutions, governments and other businesses to issue and operate a range of payment
products and services, we offer an array of card processing and other payment technology services, such as
internet and mobile banking software services, bill payment systems and EBT solutions. Financial institutions
and certain retailers outsource to us certain card processing services such as card issuance, processing card
applications, cardholder account maintenance, transaction authorization and posting, fraud and risk management
services, and settlement. Our payment products include electronic check processing, automated clearing house
(“ACH”), lockbox, online, interactive voice response and web-based payments through personalized websites,
among others.

We have been the main provider of EBT services to the Puerto Rican government since 1998. Our EBT
application allows certain agencies to deliver government benefits to participants through a magnetic card system
and serves over 806,000 active participants.

Our Payment Processing business accounted for $111.5 million, or 28.6%, of total revenues and $52.1 million, or
37.2%, of total segment income from operations for the year ended December 31, 2016.

Business Solutions

We provide our financial institutions, corporate and government customers with a wide suite of business process
management solutions including specifically core bank processing, network hosting and management, IT
consulting services, business process outsourcing, item and cash processing, and fulfillment. In addition, we
believe we are the only non-bank provider of cash processing services to the U.S. Federal Reserve in the
Caribbean.

Our Business Solutions business accounted for $186.8 million, or 47.9%, of total revenues and $56.8 million, or
40.6%, of total segment income from operations for the year ended December 31, 2016.

For additional information regarding the Company’s segments refer to Note 22 of the Audited Consolidated
Financial Statements included elsewhere in this Annual Report on Form 10-K.

Competition

Competitive factors impacting the success of our services include the quality of the technology-based application
or service, application features and functions, ease of delivery and integration, ability of the provider to maintain,
enhance, and support the applications or services, and price. We believe that we compete well in each of these
categories. In addition, we believe that our relationship with Popular, scale and expertise, and financial institution
industry expertise, combined with our ability to offer multiple applications, services and integrated solutions to
individual customers, enhances our competitiveness against companies with more limited offerings and helps us
compete with large global competitors with similar assets to ours.

In merchant acquiring, we compete with several other service providers and financial institutions, including
Vantiv, Inc., First Data Corporation, Global Payments Inc., Elavon, Inc., Sage Payment Solutions, independent
sales organizations and some local banks. Also, the card associations and payment networks are increasingly
offering products and services that compete with ours. The main competitive factors are price, brand awareness,
strength of the relationship with financial institutions, system functionality, integration service capabilities and
innovation. Our business is also impacted by the expansion of new payments methods and devices, card
association business model expansion, and bank consolidation.

In payment processing, we compete with several other third party card processors and debit networks, including
First Data Corporation, Fidelity National Information Services, Inc., Fiserv, Inc., Total System Services, Inc.,
Vantiv, Inc., MasterCard, Visa, American Express, Discover and Global Payments Inc. Also, card associations
and payment networks are increasingly offering products and services that compete with our products and
services. The main competitive factors are price, system performance and reliability, system functionality,
security, service capabilities and disaster recovery and business continuity capabilities.

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In business solutions, our main competition includes internal technology departments within financial
institutions, retailers, data processing or software development departments of large companies and/or large
technology and consulting companies. Main competitive factors are price, system performance and reliability,
system functionality, security, service capabilities, and disaster recovery and business continuity capabilities.

Intellectual Property

We own numerous registrations for several trademarks in different jurisdictions and own or have licenses to use
certain software and technology, which are critical to our business and future success. For example, we own the
ATH and EVERTEC trademarks in several jurisdictions, which are associated by the public, financial institutions
and merchants with high quality and reliable electronic commerce, payments, and debit network solutions and
services. Such goodwill allows us to be competitive, retain our customers, and expand our business. Further, we
also use a combination of (i) proprietary software, and (ii) duly licensed third party software to operate our
business and deliver secure and reliable products and services to our customers. The licensed software is subject
to terms and conditions that we considered within the industry standards. Most are perpetual licenses and the rest
are term licenses with renewable terms. In addition, we monitor these license agreements and maintain close
contact with our suppliers to ensure their continuity of service.

We seek to protect our intellectual property rights by securing appropriate statutory intellectual property
protection in the relevant jurisdictions, including patents. We also protect proprietary know-how and trade secrets
through company confidentiality policies, licenses, programs, and contractual agreements.

Employees

As of December 31, 2016, we employed approximately 1,650 persons across 8 countries in the United States,
Latin America and the Caribbean. None of our employees are subject to collective bargaining agreements, and
we consider our relationships with our employees to be good. We have not experienced any work stoppages.

Government Regulation and Payment Network Rules

Oversight by the Federal Reserve

Popular is a bank holding company that has elected to be treated as a financial holding company under the
provisions of the Gramm-Leach-Bliley Act of 1999. As long as we are deemed to be a “subsidiary” of Popular
for purposes of the Bank Holding Company (“BHC”) Act, we will be subject to regulation and oversight by the
Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and our activities will be
subject to several related significant restrictions, the more significant of which are discussed below.

Transactions with Affiliates

As long as we are deemed to be an affiliate of Popular for purpose of the affiliate transaction rules found in
Section 23A and 23B of the Federal Reserve Act and Regulation W of the Federal Reserve Board, we will be
subject to various restrictions on our ability to borrow from, and engage in certain other transactions with
Popular’s bank subsidiaries, Banco Popular and Banco Popular North America (“BPNA”). In general these rules
require that any “covered transaction” that we enter into with Banco Popular or BPNA (or any of their respective
operating subsidiaries), as the case may be, must be secured by designated amounts of specified collateral and
must be limited to 10% of Banco Popular’s or BPNA’s, as the case may be, capital stock and surplus. In addition,
all “covered transactions” between Banco Popular or BPNA, on the one hand, and Popular and all of its
subsidiaries and affiliates on the other hand, must be limited to 20% of Banco Popular’s or BPNA’s, as the case
may be, capital stock and surplus. “Covered transactions” are defined by statute to include a loan or extension of
credit, as well as a purchase of securities issued by an affiliate, a purchase of assets (unless otherwise exempted
by the Federal Reserve Board) from the affiliate, the acceptance of securities issued by the affiliate as collateral
for a loan, and the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate.

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In addition, Section 23B and Regulation W require that as long as we are deemed an affiliate of Banco Popular or
BPNA, all transactions between us and either Banco Popular or BPNA be on terms and conditions, including
credit standards, that are substantially the same or at least as favorable to Banco Popular or BPNA, as the case
may be, as those prevailing at the time for comparable transactions involving other non-affiliated companies or,
in the absence of comparable transactions, on terms and conditions, including credit standards, that in good faith
would be offered by Banco Popular or BPNA to, or would apply to, non-affiliated companies.

Permissible Activities

As long as we are deemed to be controlled by Popular for bank regulatory purposes, we may conduct only those
activities that are authorized for a bank holding company or a financial holding company under the BHC Act, the
Federal Reserve Board’s Regulation K and other relevant U.S. federal banking laws. These activities generally
include activities that are related to banking, financial in nature or incidental to financial activities. In addition,
restrictions placed on Popular as a result of supervisory or enforcement actions may restrict us or our activities in
certain circumstances, even if these actions are unrelated to our conduct or business. For as long as we are
deemed to be a foreign subsidiary of a bank holding company under the Federal Reserve Board’s regulations, we
will rely on the authority granted under the Federal Reserve Board’s Regulation K to conduct our data
processing, management consulting and related activities outside the United States. The Federal Reserve Board’s
Regulation K generally limits activities of a bank holding company outside the United States that are not banking
or financial in nature, specifically permitted under Regulation K to foreign subsidiaries or necessary to carry on
such activities that are not otherwise permissible for a foreign subsidiary under the banking regulations. We
continue to engage in certain activities outside the scope of such permissible activities pursuant to authority
under the Federal Reserve Board’s Regulation K, which allows a bank holding company to retain, in the context
of an acquisition of a going concern, such otherwise impermissible activities if they account for not more than
5% of either the consolidated assets or consolidated revenues of the acquired organization.

New lines of business, other new activities, divestitures or acquisitions that we may wish to commence in the
future may not be permissible for us under the BHC Act, Regulation K or other relevant U.S. federal banking
laws. Further, as a result of being subject to regulation and supervision by the Federal Reserve Board, we may be
required to obtain the approval of the Federal Reserve Board before engaging in certain new activities or
businesses, whether organically or by acquisition, unless such activities are considered financial in nature. More
generally, the Federal Reserve Board has broad power to approve, deny or refuse to act upon applications or
notices for us to conduct new activities, acquire or divest businesses or assets, or reconfigure existing operations.
If we are unable to obtain approval on a timely basis, are delayed in receiving approval or do not receive
approval, this may make transactions more expensive or may make us less attractive to potential sellers.

Examinations

As a technology service provider to financial institutions, we are also subject to regulatory oversight and
examination by the Federal Financial Institutions Examination Council (the “FFIEC”), an interagency body of
federal financial regulators that includes the Federal Reserve Board. The office of the Commissioner of Financial
Institutions of Puerto Rico also participates in such examinations by the FFIEC. In addition, independent auditors
annually review several of our operations to provide reports on internal controls for our clients’ auditors and
regulators.

Regulatory Reform and Other Legislative Initiatives

The payment card industry has come under increased scrutiny from lawmakers and regulators. In July 2010, the
Dodd-Frank Act was signed into law in the United States. The Dodd-Frank Act sets forth significant structural
and other changes to the regulation of the financial services industry and establishes a new agency, the Consumer
Financial Protection Bureau, or CFPB, to regulate consumer financial products and services (including many
offered by us and by our clients). In addition, Section 1075 of the Dodd-Frank Act (commonly referred to as the

13

“Durbin Amendment”) imposes new restrictions on card networks and debit card issuers. More specifically, the
Durbin Amendment provides that interchange transaction fees that a card issuer or payment network may receive
or charge for an electronic debit transaction must be “reasonable and proportional” to the cost incurred by the
card issuer in authorizing, clearing and settling the transaction. The Federal Reserve Board adopted the final
regulations on June 29, 2011 and added a fraud-prevention adjustment on July 27, 2012.

The regulations (a) limit debit transaction interchange fees to $.21 + (5 bps times the value of the transactions) +
$.01 (as a fraud adjustment for issuers that have in place policies and measures to address fraud); (b) require that
issuers must enable at least two unaffiliated payment card networks on their debit cards without regard to
authentication method; and (c) prohibit card issuers and payment card networks from entering into exclusivity
arrangements for debit card processing and restrict card issuers and payment networks from inhibiting the ability
of merchants to direct the routing of debit card transactions over networks of their choice. The Dodd-Frank Act
also allows merchants to set minimum dollar amounts (currently, not to exceed $10) for the acceptance of a
credit card and provide discounts or incentives to entice consumers to pay with various payment methods, such
as cash, checks, debit cards or credit cards, as the merchant prefers.

In addition to the Dodd-Frank Act, from time to time, various legislative and regulatory initiatives are introduced
in Congress and state legislatures, as well as by regulatory agencies. Such initiatives may include proposals to
diminish the powers of bank holding companies and their affiliates. Such legislation could change banking
statutes and our operating environment in substantial and unpredictable ways. If enacted, such legislation could
increase the cost of doing business or limit permissible activities. We cannot predict whether any such legislation
will be enacted, and, if enacted, the effect that it, or any implementing regulations, would have on our financial
condition or results of operations.

The Dodd-Frank Act assigned most of the regulatory responsibilities previously exercised by the federal banking
regulators and other agencies with respect to consumer financial products and services and other additional
powers to the CFPB. In addition to rulemaking authority over several enumerated federal consumer financial
protection laws, the CFPB is authorized to issue rules prohibiting unfair, deceptive or abusive acts or practices in
connection with any transaction with a consumer for a consumer financial product or service, or the offering of a
consumer financial product or service, and has authority to enforce consumer financial protection laws and CFPB
rules. We are subject to regulation and enforcement by the CFPB because we are an affiliate of Banco Popular
(which is an insured depository institution with greater than $10 billion in assets) for bank regulatory purposes
and because we are a service provider to insured depository institutions with assets of $10 billion or more in
connection with their consumer financial products and to entities that are larger participants in markets for
consumer financial products and services. CFPB rules, examinations and enforcement actions may require us to
adjust our activities and may increase our compliance costs. Various proposals have been made to either
eliminate or restructure the CFPB. It is possible that during the current administration one or more of the various
proposals could become law. It is unclear whether or how any such change could affect the manner in which our
consumer product and service activities in which we engage. One possibility is that regulatory responsibility
would be reallocated to the various bank regulatory agencies.

Other Government Regulations

In addition to oversight by the Federal Reserve Board, our services are subject to a broad range of complex
federal, state, Puerto Rico and foreign regulation, including privacy laws, international trade regulations, the
Bank Secrecy Act and other anti-money laundering laws, anti-trust and competition laws, the U.S. Internal
Revenue Code, the PR Code, the Employee Retirement Income Security Act, the Health Insurance Portability
and Accountability Act and other Puerto Rico laws and regulations. Failure of our services to comply with
applicable laws and regulations could result in restrictions on our ability to provide such services, as well as the
imposition of civil fines and/or criminal penalties. The principal areas of regulation (in addition to oversight by
the Federal Reserve Board) that impact our business are described below.

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Privacy

We and our financial institution clients are required to comply with various U.S. state, federal and foreign
privacy laws and regulations, including those imposed under the Gramm-Leach-Bliley Act of 1999 which applies
directly to a broad range of financial institutions and to companies that provide services to financial institutions.
These laws and regulations place restrictions on the collection, processing, storage, use and disclosure of certain
personal information, require disclosure to individuals of detailed privacy practices and provide them with
certain rights to prevent the use and disclosure of protected information. The regulations, however, permit
financial institutions to share information with non-affiliated parties who perform services for the financial
institutions. These laws also impose requirements for safeguarding personal information through the issuance of
data security standards or guidelines. Certain state laws impose similar privacy obligations, as well as, in certain
circumstances, obligations to provide notification to affected individuals, states officers and consumer reporting
agencies, as well as businesses and governmental agencies that own data, of security breaches of computer
databases that contain personal information. In addition, U.S. state and federal government agencies have been
contemplating or developing new initiatives to safeguard privacy and enhance data security. Some foreign
privacy laws are stricter than those applicable under U.S. federal, state or Puerto Rican law. As a provider of
services to financial institutions, we are required to comply with the privacy regulations and are bound by the
same limitations on disclosure of the information received from our customers as apply to the financial
institutions themselves. See “Item 1A. Risk Factors—Risks Related to Our Business—Security breaches or our
own failure to comply with privacy regulations and industry security requirements imposed on providers of
services to financial institutions and card processing services could harm our business by disrupting our delivery
of services and damaging our reputation.”

Anti-Money Laundering and Office of Foreign Assets Control Regulation

Since we provide data processing services to both foreign and domestic financial institutions, we are required to
comply with certain anti-money laundering and terrorist financing laws and economic sanctions imposed on
designated foreign countries, nationals and others. Specifically, we must adhere to the requirements of the Bank
Secrecy Act, as amended by the USA PATRIOT Act of 2001 (collectively, the “BSA”) regarding processing and
facilitation of financial transactions, as well as other state, local and foreign laws relating to money laundering.
Furthermore, as a data processing company that provides services to foreign parties and facilitates financial
transactions between foreign parties, we are obligated to screen transactions for compliance with the sanctions
programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”).
These regulations prohibit us from entering into or facilitating a transaction to or from or dealings with specified
countries, their governments and, in certain circumstances, their nationals and others, such as narcotics
traffickers, and terrorists or terrorist organizations designated by the U.S. Government under one or more
sanctions regimes.

A major focus of governmental policy in recent years has been aimed at combating money laundering and
terrorist financing. Preventing and detecting money laundering, and other related suspicious activities at their
earliest stages warrants careful monitoring. The BSA, along with a number of other anti-money laundering laws,
imposes various reporting and record-keeping requirements concerning currency and other types of monetary
instruments. Similar anti-money laundering, counter-terrorist financing and proceeds of crime laws apply to
movements of currency and payments through electronic transactions and to dealings with persons specified on
lists maintained by organizations similar to OFAC in several other countries and which may impose specific data
retention obligations or prohibitions on intermediaries in the payment process. These laws and regulations
impose obligations to maintain appropriate policies, procedures and controls to detect, prevent and report money
laundering and terrorist financing and to verify the identity of their customers. Failure to maintain and implement
adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws
or regulations, could have serious legal and reputational consequences for us.

15

Federal Trade Commission Act and Other Laws Impacting our Customers’ Business

All persons engaged in commerce, including, but not limited to, us and our merchant and financial institution
customers are subject to Section 5 of the Federal Trade Commission Act prohibiting Unfair or Deceptive Acts or
Practices (“UDAP”). In addition, there are other laws, rules and/or regulations, including the Telemarketing Sales
Act, that may directly impact the activities of our merchant customers and in some cases may subject us, as the
merchant’s payment processor, to investigations, fees, fines and disgorgement of funds in the event we are
deemed to have aided and abetted or otherwise provided the means and instrumentalities to facilitate the illegal
activities of the merchant through our payment processing services. Federal and state regulatory enforcement
agencies including the Federal Trade Commission, or FTC, and the states’ attorneys general have authority to
take action against nonbanks that engage in UDAP or violate other laws, rules and regulations. To the extent we
process payments for a merchant that may be in violation of these laws, rules and regulations, we may be subject
to enforcement actions and as a result may incur losses and liabilities that may impact our business.

Anti-trust and Competition Laws

We are required to comply with various federal, local and foreign competition and anti-trust laws, including the
Sherman Act, Clayton Act, Hart-Scott-Rodino Antitrust Improvements Act, Robinson-Patman Act, Federal Trade
Commission Act and Puerto Rico Anti-Monopoly Act. In general, competition laws are designed to protect
businesses and consumers from anti-competitive behavior. Competition and anti-trust law investigations can be
lengthy and violations are subject to civil and/or criminal fines and other sanctions for both corporations and
individuals that participate in the prohibited conduct. Class action civil anti-trust lawsuits can result in significant
judgments, including in some cases, payment of treble damages and/or attorneys’ fees to the successful plaintiff.
See “Item 1A. Risk Factors—Risks Related to Our Business—Failure to comply with U.S. state and federal
antitrust requirements, or the Puerto Rico Anti-Monopoly Act, and government investigations into our
compliance, could adversely affect our business.”

Foreign Corrupt Practices Act (“FCPA”), Export Administration and Other

As a data processing company that services both foreign and domestic clients, our business activities in foreign
countries, and in particular our transactions with foreign governmental entities, subject us to the anti-bribery
provisions of the FCPA, as well as the laws and regulations of the foreign jurisdiction where we operate.
Pursuant to applicable anti-bribery laws, our transactions with foreign government officials and political
candidates are subject to certain limitations. Finally, in the course of business with foreign clients and
subsidiaries, we export certain software and hardware that is regulated by the Export Administration Regulations
from the United States to the foreign parties. Together, these regulations place restrictions on who we can
transact with, what transactions may be facilitated, how we may operate in foreign jurisdictions, and what we
may export to foreign countries.

The preceding list of laws and regulations is not exhaustive, and the regulatory framework governing our
operations changes continuously. The enactment of new laws and regulations may increasingly affect directly
and indirectly the operation of our business, which could result in substantial regulatory compliance costs,
litigation expense, loss of revenue, decreased profitability and/or adverse publicity.

Association and Network Rules

Several of our subsidiaries are registered with or certified by card associations and payment networks, including
the ATH network, MasterCard, Visa, American Express, Discover and numerous debit and EBT networks as
members or as service providers for member institutions in connection with the services we provide to our
customers. As such, we are subject to applicable card association and network rules, which could subject us to a
variety of fines or penalties that may be levied by the card associations or networks for certain acts and/or
omissions by us, our acquirer customers, processing customers and/or merchants. For example, “EMV” is a
credit and debit card authentication methodology that the card associations are mandating to processors, issuers

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and acquirers in the payment industry. Compliance deadlines for EMV mandates vary by country and by
payment network. We have invested significant resources and man-hours to develop and implement this
methodology in all our payment related platforms. However, we are not certain if or when our financial
institution customers will use or accept the methodology and the time it will take for this technology to be rolled-
out to all customer ATM and POS devices connected to our platforms or adopted by our card issuing clients.
Non-compliance with EMV mandates could result in lost business or financial losses from fraud or fines from
network operators. We are also subject to network operating rules promulgated by the National Automated
Clearing House Association relating to payment transactions processed by us using the Automated Clearing
House Network and to various government laws regarding such operations, including laws pertaining to EBT.

Geographic Concentration

Our revenue composition by geographical area is based in Latin America and Caribbean. Latin America includes,
among others, Costa Rica, México, Guatemala, Colombia and Panamá. The Caribbean includes Puerto Rico, the
Dominican Republic and Virgin Islands, among others. See Note 22 of Audited Consolidated Financial
Statements included elsewhere in this Annual Report on Form 10-K for additional information related to
geographic areas.

Seasonality

Our payment businesses generally experience increased activity during the traditional holiday shopping periods
and around other nationally recognized holidays.

Available Information

EVERTEC’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K
and amendments to such reports (if applicable) filed or furnished pursuant to Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) are available free of charge, through our
website, http://www.evertecinc.com, as soon as reasonably practicable after such material is electronically filed
with or furnished to the SEC. In addition, we make available on our website under the heading of “Corporate
Information” our: (i) Code of Ethics; (ii) Code of Ethics for Service Providers; (iii) Corporate Governance
Guidelines; (iv) the charters of the Audit, Compensation and Nominating and Corporate Governance committees,
and also we intend to disclose any amendments to the Code of Ethics. The aforementioned reports and materials
can also be obtained free of charge upon written request or telephoning to the following address or telephone
number:

EVERTEC, Inc.
Cupey Center Building
Road, 176, Kilometer 1.3
San Juan, Puerto Rico 00926
(787) 759-9999

The public may read and copy any materials EVERTEC files with the SEC at the SEC’s Public Reference Room
at 100 F Street, NE, Washington, D.C. 20549. In addition, the public may obtain information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our filings with the SEC are also available to
the public from commercial document retrieval services and at the web site maintained by the SEC at
http://www.sec.gov.

Item 1A. Risk Factors

Readers should carefully consider, in connection with other information disclosed in this Annual Report on
Form 10-K, the risks and uncertainties described below. The following discussion sets forth some of the more
important risk factors that could affect our business, financial condition, operating results or cash flow. However,

17

other factors, besides those discussed below or elsewhere in this Report or other of our reports filed with or
furnished to the Securities and Exchange Commission (“SEC”), also could adversely affect our business,
financial condition, operating results or cash flow. We cannot assure you that the risk factors described below or
elsewhere in this document are a complete set of all potential risks we may face; additional risks and
uncertainties not presently known to us or not believed by us to be material may also negatively impact us. These
risk factors also serve to describe factors which may cause our results to differ materially from those discussed in
forward looking statements included herein or in other documents or statements that make reference to this
Annual Report on Form 10-K. Please also refer to the section titled “Forward Looking Statements” in this
Annual Report on Form 10-K.

Risks Related to Our Business

We expect to continue to derive a significant portion of our revenue from Popular.

Our services to Popular account for a significant portion of our revenues, and we expect that our services to
Popular will continue to represent a significant portion of our revenues for the foreseeable future. In 2016,
products and services billed to Popular accounted for approximately 45% of our total revenues, of which
approximately 83% (or approximately 37% of total revenues) are derived from core bank processing and related
services for Popular and approximately 17% (or approximately 8% of total revenues) are transaction processing
activities driven by third parties. The majority of Popular’s business is presented in the Business Solutions
segment. If Popular were to terminate, fail to perform under, or fail to renew the Master Services Agreement
(“MSA”), which currently expires in 2025, or our other material agreements with Popular, our revenues could be
materially reduced and our profitability and cash flows could also be materially reduced which, in turn, could
potentially limit our ability to renegotiate our debt.

We depend, in part, on our merchant relationships and our alliance with Banco Popular, a wholly-owned
subsidiary of Popular, to grow our merchant acquiring business. If we are unable to maintain these
relationships and this alliance, our business may be adversely affected.

Growth in our merchant acquiring business is derived primarily from acquiring new merchant relationships, new
and enhanced product and service offerings, cross selling products and services into existing relationships, the
shift of consumer spending to increased usage of electronic forms of payment, and the strength of our
relationship with Banco Popular. A substantial portion of our business is generated from our Independent Sales
Organization Sponsorship and Services Agreement with Banco Popular.

Banco Popular acts as a merchant referral source and provides sponsorship into the ATH, Visa, Discover and
MasterCard networks for merchants, as well as card association sponsorship, clearing and settlement services.
We provide transaction processing and related functions. Both alliance partners may provide management, sales,
marketing, and other administrative services. We rely on the continuing growth of our merchant relationships,
our alliance with Banco Popular and other distribution channels. There can be no guarantee that this growth will
continue and the loss or deterioration of these relationships could negatively impact our business and result in a
reduction of our revenue and profit.

If we are unable to renew client contracts at favorable terms, we could lose clients and our results of
operations and financial condition may be adversely affected.

Failure to achieve favorable renewals of client contracts could negatively impact our business. Our contracts with
private clients generally run for a period of one to five years, except for the Master Services Agreement with
Popular, which has a term of 15 years, and approximately 9 years remaining on the contract, and provide for
termination fees upon early termination. Our government contracts generally run for one year without automatic
renewal periods due to requirements of the government procurement rules and related fiscal funding
requirements. Our standard merchant contract has an initial term of one or three years, with automatic one-year
renewal periods. At the end of the contract term, clients have the opportunity to renegotiate their contracts with

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us and to consider whether to engage one of our competitors to provide products and services. If we are not
successful in achieving high renewal rates and contract terms that are favorable to us, our results of operations
and financial condition may be adversely affected.

Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations,
limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent
of our variable rate debt and prevent us from meeting our obligations under our notes and senior secured
credit facilities.

We are highly leveraged. As of December 31, 2016, the total principal amount of our indebtedness was
approximately $659.5 million. Our high degree of leverage could have important consequences for you,
including:

•

•

•

increasing our vulnerability to adverse economic, industry or competitive developments;

requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal
and interest on our indebtedness, therefore reducing our ability to use our cash flow for other purposes,
including for our operations, capital expenditures and future business opportunities;

exposing us to the risk of increased interest rates because our borrowings are predominantly at variable
rates of interest;

• making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any
failure to comply with the obligations of any of our other debt instruments, including restrictive
covenants and borrowing conditions, could result in an event of default under the agreements
governing such other indebtedness;

•

•

•

restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;

limiting our ability to obtain additional debt or equity financing for working capital, capital
expenditures, business development, debt service requirements, acquisitions and general corporate or
other purposes; and

limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and
placing us at a competitive disadvantage compared to our competitors who are less highly leveraged
and who therefore, may be able to take advantage of opportunities that our leverage prevents us from
exploiting.

For the year ended December 31, 2016, our cash interest expense on the senior secured credit facilities amounted
to $22.5 million. Our interest expense could increase if interest rates increase because the entire amount of the
indebtedness under the senior secured credit facilities bears interest at a variable rate. At December 31, 2016, we
had approximately $659.5 million aggregate principal amount of variable rate indebtedness under the senior
secured credit facilities of which $200 million is fixed with an interest rate swap. A 100 basis point increase in
interest rates over our floor(s) on our debt balances outstanding as of December 31, 2016 under the senior
secured credit facilities would increase our annual interest expense by approximately $4.6 million when taking
into consideration the referenced fixed interest rate swap.

We rely on our systems, employees and certain counterparties, and certain failures could materially adversely
affect our operations.

Our businesses are dependent on our ability to process, record and monitor a large number of transactions. If any
of our financial, accounting, or other data processing systems or applications fail or have other significant
shortcomings or limitations, we could be materially adversely affected. We are similarly dependent on our
employees. We could be materially adversely affected if one of our employees causes a significant operational
breakdown or failure, either as a result of human error or where an individual purposefully sabotages or
fraudulently manipulates our operations or systems. Third parties with which we do business could also be

19

sources of operational risk to us, including relating to breakdowns or failures of such parties’ own systems or
employees. Any of these occurrences could diminish our ability to operate one or more of our businesses, or
result in potential liability to clients, reputational damage and regulatory intervention, any of which could
materially adversely affect us.

We may be subject to disruptions of our operating systems arising from events that are wholly or partially
beyond our control, which may include, for example, computer viruses or electrical or telecommunications
outages, natural disasters, disease pandemics or other unanticipated damage to property or physical assets. Such
an incident occurred on January 9, 2016, when our payments network suffered a two hour interruption of service.
Such disruptions may give rise to losses in service to customers and loss or liability to us. In addition, there is the
risk that our controls and procedures as well as business continuity and data security systems prove to be
inadequate. Any such failure could affect our operations, damage our reputation and materially adversely affect
our results of operations by requiring us to expend significant resources to correct the defect, by causing a loss of
confidence in our services that leads to a decrease in use of our services, and by exposing us to litigation,
regulatory fines, penalties or other sanctions or losses not covered by insurance.

If our amortizable intangible assets or goodwill become impaired, it may adversely affect our financial
condition and operating results.

If our amortizable intangible assets or goodwill were to become impaired, we may be required to record a
significant charge to earnings. Under the generally accepted accounting principles in the United States of
America (“GAAP”), definitive useful life intangibles are evaluated periodically for impairment when events or
changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is tested for
impairment at least annually.

The goodwill impairment evaluation process requires us to make estimates and assumptions with regards to the
fair value of our reporting units. Actual values may differ significantly from these estimates. Such differences
could result in future impairment of goodwill that would, in turn, negatively impact our results of operations and
the reporting unit where the goodwill is recorded.

For 2016, the Company used a “qualitative assessment” option or “step zero” for the goodwill impairment test
for all of its reporting units. With this process, the Company first assesses whether it is “more likely than not”
that the fair value of a reporting unit is less than its carrying amount. If the answer is no, then the fair value of the
reporting unit does not need to be measured, and step one and step two are bypassed. In assessing the fair value
of a reporting unit, which is based on the nature of the business and reporting unit’s current and expected
financial performance, the Company uses a combination of factors such as general macroeconomic conditions,
industry and market conditions, overall financial performance and the entity and reporting unit specific events. In
2016, step one and step two were bypassed for all reporting units.

Our risk management procedures may not be fully effective in identifying or helping us mitigate our risk
exposure against all types of risks.

We operate in a rapidly changing industry, and we have experienced significant change in the past four years,
including our separation from Popular following the Merger, our initial public offering in April 2013 and our
listing on the New York Stock Exchange (“NYSE”). Accordingly, we may not be fully effective in identifying,
monitoring and managing our risks. In some cases, the information we use to perform our risk assessments may
not be accurate, complete or up-to-date. In other cases, our risk assessments may depend upon information that
we may not have or cannot obtain. If we are not fully effective or we are not always successful in identifying all
risks to which we are or may be exposed, we could be subject to losses, penalties, litigation or regulatory actions
that could harm our reputation or have a material adverse effect on our business, financial conditions and results
of operations.

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Security breaches or our own failure to comply with privacy regulations and industry security requirements
imposed on providers of services to financial institutions and card processing services could harm our
business by disrupting our delivery of services and damaging our reputation.

As part of our business, we electronically receive, process, store and transmit sensitive business information of
our customers. In addition, we collect personal consumer data, such as names and addresses, social security
numbers, driver’s license numbers, cardholder data and payment history records. The uninterrupted operation of
our information systems and the confidentiality of the customer/consumer information that resides on such
systems are critical to the successful operations of our business. Despite the safeguards we have in place,
unauthorized access to our computer systems or databases could result in the theft or publication of confidential
information, the deletion or modification of records or could otherwise cause interruptions in our operations.
These risks are increased when we transmit information over the Internet. Our visibility in the global payments
industry may attract hackers to conduct attacks on our systems that could compromise the security of our data or
could cause interruptions in the operations of our businesses and subject us to increased costs, litigation and other
liabilities. There is also a possibility of mishandling or misuse, for example, if such information were erroneously
provided to parties who are not permitted to have the information, either by fault of our systems, employees
acting contrary to our policies, or where such information is intercepted or otherwise improperly taken by third
parties. An information breach in the system and loss of confidential information such as credit card numbers and
related information could have a longer and more significant impact on the business operations than a hardware
failure and could result in claims against us for misuse of personal information, such as identity theft.

Additionally, as a provider of services to financial institutions, such as card processing services, we are subject
directly (or indirectly through our clients) to the same laws, regulations, industry standards and limitations on
disclosure of the information we receive from our customers that apply to the customers themselves. If we fail to
comply with these regulations, standards and limitations, we could be exposed to claims for breach of contract,
fines, governmental proceedings, or prohibitions on card processing services. In addition, as more restrictive
privacy laws, rules or industry security requirements are adopted in the future on the federal or local level or by a
specific industry body, the change could have an adverse impact on us through increased costs or restrictions on
business processes. We may be required to expend significant capital and other resources to comply with
mandatory privacy and security standards required by law, industry standards or contracts.

Any inability to prevent security or privacy breaches or failure to comply with privacy regulations and industry
security requirements could cause our existing customers to lose confidence in our systems and terminate their
agreements with us, and could inhibit our ability to attract new customers, damage our reputation and/or
adversely impact our relationship with administrative agencies.

We may experience breakdowns in our processing systems that could damage customer relations and expose
us to liability.

We depend heavily on the reliability of our processing systems in our core businesses. A system outage or data
loss, regardless of reason, could have a material adverse effect on our business, financial condition and results of
operations. Not only would we suffer damage to our reputation in the event of a system outage or data loss, but
we may also be liable to third parties. Some of our contractual agreements with financial institutions require the
crediting of certain fees if our systems do not meet certain specified service levels. To successfully operate our
business, we must be able to protect our processing and other systems from interruption, including from events
that may be beyond our control. Events that could cause system interruptions include, but are not limited to, fire,
natural disasters, telecommunications failure, computer viruses, terrorist acts and war. Although we have taken
steps to protect against data loss and system failures, there is still risk that we may lose critical data or experience
system failures. We perform the vast majority of disaster recovery operations ourselves, though we utilize select
third parties for some aspects of recovery. To the extent we outsource our disaster recovery, we are at risk of the
vendor’s unresponsiveness in the event of breakdowns in our systems. Furthermore, our property and business
interruption insurance may not be adequate to compensate us for all losses or failures that may occur.

21

Lack of system integrity, fraudulent payments or credit quality related to funds settlement could result in a
financial loss.

We settle funds on behalf of financial institutions, other businesses and consumers and process funds transactions
from clients, card issuers, payment networks and consumers on a daily basis for a variety of transaction types.
Transactions facilitated by us include debit card, credit card, electronic bill payment transactions, ACH
payments, electronic benefits transfer transactions and check clearing that supports consumers, financial
institutions and other businesses. These payment activities rely upon the technology infrastructure that facilitates
the verification of activity with counterparties, the facilitation of the payment and, in some cases, the detection or
prevention of fraudulent payments. If the continuity of operations, integrity of processing, or ability to detect or
prevent fraudulent payments were compromised this could result in a financial loss to us.

We may experience defects, development delays, installation difficulties, system failure, or other service
disruptions with respect to our technology solutions, which would harm our business and reputation and
expose us to potential liability.

Many of our services are based on sophisticated software, technology and computing systems, and we may
encounter delays when developing new technology solutions and services. Further, the technology solutions
underlying our services have occasionally contained and may in the future contain undetected errors or defects
when first introduced or when new versions are released. In addition, we may experience difficulties in installing
or integrating our technologies on platforms used by our customers. Finally, our systems and operations could be
exposed to damage or interruption from fire, natural disaster, power loss, telecommunications failure,
unauthorized entry and computer viruses or other cyber-attacks. Attacks on information technology systems
continue to grow in frequency, complexity and sophistication, a trend we expect will continue. Such attacks have
become a point of focus for individuals, businesses and governmental entities. The objectives of these attacks
include, among other things, gaining unauthorized access to systems to facilitate financial fraud, disrupt
operations, cause denial of service events, corrupt data, and steal non-public information.

As part of our business, we electronically receive, process, store and transmit a wide range of confidential
information, including sensitive customer information and personal consumer data. We also operate payment,
cash access and electronic card systems. A successful cyber-attack on our system could result in: (1) interruption
of business operations; (2) delay in market acceptance; (3) additional development and remediation costs;
(4) diversion of technical and other resources; (5) loss of customers; (6) negative publicity and loss of reputation;
or (7) exposure to liability claims.

Any one or more of the foregoing could have a material adverse effect on our business, financial condition and
results of operations.

The ability to adopt technology to changing industry and customer needs or trends may affect our
competitiveness or demand for our products, which may adversely affect our operating results.

Changes in technology may limit the competitiveness of and demand for our services. Our businesses operate in
industries that are subject to technological advancements, developing industry standards and changing customer
needs and preferences. Also, our customers continue to adopt new technology for business and personal uses. We
must anticipate and respond to these industry and customer changes in order to remain competitive within our
relative markets. Our inability to respond to new competitors and technological advancements could impact all of
our businesses. For example, the ability to adopt technological advancements surrounding POS technology
available to merchants could have an impact on our merchant acquiring business.

Consolidations in the banking and financial services industry could adversely affect our revenues by
eliminating existing or potential clients and making us more dependent on a more limited number of clients.

In recent years, there have been a number of mergers and consolidations in the banking and financial services
industry. Mergers and consolidations of financial institutions reduce the number of our clients and potential

22

clients, which could adversely affect our revenues. Further, if our clients fail or merge with or are acquired by
other entities that are not our clients, or that use fewer of our services, they may discontinue or reduce their use
of our services. It is also possible that the larger banks or financial institutions resulting from mergers or
consolidations would have greater leverage in negotiating terms with us or could decide to perform in-house
some or all of the services which we currently provide or could provide. Any of these developments could have a
material adverse effect on our business, financial condition and results of operations.

We are subject to the credit risk that our merchants will be unable to satisfy obligations for which we may also
be liable.

We are subject to the credit risk of our merchants being unable to satisfy obligations for which we also may be
liable. For example, as the merchant acquirer, we are contingently liable for transactions originally acquired by
us that are disputed by the cardholder and charged back to the merchants. For certain merchants, if we are unable
to collect this amount from the merchant, due to the merchant’s insolvency or other reasons, we will bear the loss
for the amount of the refund or chargeback paid to the cardholder. Notwithstanding our adherence to industry
standards with regards to the acceptance of new merchants and certain steps to screen for credit risk, it is possible
that a default on such obligations by one or more of our merchants could have a material adverse effect on our
business.

Increased competition or changes in consumer spending or payment preferences could adversely affect our
business.

A decline in the market for our services, either as a result of increased competition, a decrease in consumer
spending or a shift in consumer payment preferences, could have a material adverse effect on our business. We
may face increased competition in the future as new companies enter the market and existing competitors expand
their services. Some of these competitors could have greater overall financial, technical and marketing resources
than us, which could enhance their ability to finance acquisitions, fund internal growth and respond more quickly
to professional and technological changes. Some competitors could have or may develop a lower cost structure.
New competitors or alliances among competitors could emerge, resulting in a loss of business for us and a
corresponding decline in revenues and profit margin. Further, if consumer confidence decreases in a way that
adversely affects consumer spending, whether in conjunction with a global economic downturn or otherwise, we
could experience a reduction in the volume of transactions we process. In addition, if we fail to respond to
changes in technology or consumer payment preferences, we could lose business to competitors.

Changes in credit card association or other network rules or standards could adversely affect our business.

In order to provide our transaction processing services, several of our subsidiaries are registered with or certified
by Visa, Discover and MasterCard and other networks as members or as service providers for member
institutions. As such, we and many of our customers are subject to card association and network rules that could
subject us or our customers to a variety of fines or penalties that may be levied by the card associations or
networks for certain acts or omissions by us, acquirer customers, processing customers and merchants. Visa,
Discover, MasterCard and other networks, some of which are our competitors, set the standards with respect to
which we must comply. The termination of Banco Popular’s or our subsidiaries’ member registration or our
subsidiaries’ status as a certified service provider, or any changes in card association or other network rules or
standards, including interpretation and implementation of the rules or standards, that increase the cost of doing
business or limit our ability to provide transaction processing services to or through our customers, could have an
adverse effect on our business, operating results and financial condition.

Changes in interchange fees or other fees charged by card associations and debit networks could increase our
costs or otherwise adversely affect our business.

From time to time, card associations and debit networks change interchange, processing and other fees, which
could impact our merchant acquiring and payment processing businesses. It is possible that competitive pressures

23

will result in our merchant acquiring and payment processing businesses absorbing a portion of such increases in
the future, which would increase our operating costs, reduce our profit margin and adversely affect our business,
operating results and financial condition.

Our revenues from the sale of services to merchants that accept Visa, Discover and MasterCard cards are
dependent upon our continued Visa, Discover and MasterCard registration and financial institution
sponsorship.

In order to provide our Visa, Discover and MasterCard transaction processing services, we must be registered as
a merchant processor of Visa, Discover and MasterCard. These designations are dependent upon our being
sponsored by member banks of those organizations. If our sponsor banks should stop providing sponsorship for
us, we would need to find another financial institution to serve as a sponsor, which could prove to be difficult
and/or more expensive. If we are unable to find a replacement financial institution to provide sponsorship we
may no longer be able to provide processing services to the affected customers which would negatively impact
our revenues and earnings.

For purposes of the BHC Act, for as long as we are deemed to be controlled by Popular, we will be subject to
supervision and examination by U.S. federal banking regulators, and our activities will be limited to those
permissible for Popular. Furthermore, as a technology service provider to regulated financial institutions, we
are subject to additional regulatory oversight and examination. As a regulated institution, we may be required
to obtain regulatory approval before engaging in certain new activities or businesses, whether organically or
by acquisition.

For so long as we are deemed to be a “subsidiary” of Popular for purposes of the Bank Holding Company Act of
1956 (the “BHC Act”), in other words deemed to be controlled by Popular, we will be subject to regulation and
supervision by the Federal Reserve Board. The BHC Act defines “control” differently than GAAP. As a deemed
subsidiary, we may conduct only those activities that are authorized for our deemed parent, which depend on
whether it is treated as a bank holding company or a financial holding company. The activities that are
permissible for subsidiaries of bank holding companies are those that are treated as closely related to banking;
those that are permissible for subsidiaries of financial holding companies generally include activities that are
financial in nature or complementary to financial activities. In addition, we are subject to regulatory oversight
and examination by the Federal Financial Institution Examination Council because we are a technology service
provider to regulated financial institutions, including Banco Popular.

New lines of business, other new activities, acquisitions that we may wish to commence or undertake in the
future and the manner in which we conduct our business may not be permissible for us under the BHC Act,
Regulation K or other relevant U.S. federal banking laws or may require the approval of the Federal Reserve
Board or any other applicable U.S. federal banking regulator. In addition, deals may take longer, be more costly,
or make us less attractive as a buyer. Additional regulatory requirements may be imposed if Popular is subject to
any enforcement action. More generally, the Federal Reserve Board has broad powers to approve, deny or refuse
to act upon applications or notices submitted by Popular on our behalf with respect to new activities, the
acquisition of businesses or assets, or the reconfiguration of existing operations. Any such action by the Federal
Reserve Board may also depend on our ability to comply with the standards imposed by our regulators. There can
be no assurance that any required regulatory approvals will be obtained. In addition, further restrictions placed on
Popular as a result of supervisory or enforcement actions may restrict us or our activities in certain
circumstances, even if these actions are unrelated to conduct our business.

Changes in laws, regulations and enforcement activities may adversely affect the products and services we
provide and markets in which we operate.

We and our customers are subject to U.S. federal, Puerto Rico and other countries’ laws, rules and regulations
that affect the electronic payments industry. Our customers are subject to numerous laws, rules and regulations
applicable to banks, financial institutions, processors and card issuers in the United States and abroad. We are

24

subject to regulation because of our activities in the countries where we carry them out and because of our
relationship with Popular, and at times we are also affected by the laws, rules and regulations to which our
customers are subject. Failure to comply with any of these laws, rules and regulations may result in the
suspension or revocation of licenses or registrations, the limitation, suspension or termination of service, and/or
the imposition of civil and criminal penalties, including fines which could have an adverse effect on our financial
condition. In addition, even an inadvertent failure by us to comply with laws, rules and regulations, as well as
rapidly evolving social expectations of corporate fairness, could damage our reputation or brands.

Regulation of the electronic payment card industry, including regulations applicable to us and our customers, has
increased significantly in recent years. There is also increasing scrutiny by the U.S. Congress of the manner in
which payment card networks and card issuers set various fees, from which some of our customers derive
significant revenue. For example, on July 21, 2010, the Dodd-Frank Act was signed into law in the United States.
The Durbin Amendment contains requirements relating to payment card networks. To implement this provision,
the Federal Reserve adopted rules which took effect on October 1, 2011 and April 1, 2012. These rules, among
other things, place certain restrictions on the interchange transaction fees that a card issuer can receive for an
electronic debit transaction originated at a merchant and also places various exclusivity prohibitions and routing
requirements on such transactions. To date, the Durbin Amendment has had mixed implications for our business,
but the overall net impact has been positive due to lower interchange costs improving the overall margins of the
business. However, we cannot assure you that this trend will continue, and we believe that any future impact
(positive or negative) resulting from the Durbin Amendment and subsequent developments is uncertain due to
the competitive landscape in which we operate. Further, banking regulators have been strengthening their
examination guidelines with respect to relationships between banks and their third-party service providers, such
as EVERTEC. Any such heightened supervision of our relationship with Popular could have an effect on our
contractual relationship with Popular as well as on the standards applied in the evaluation of our services. See
“Item 1. Business—Government Regulation and Payment Network Rules—Regulatory Reform and Other
Legislative Initiatives.”

Further changes to laws, rules and regulations, or interpretation or enforcement thereof, could have a negative
financial effect on us. We have structured our business in accordance with existing tax laws and interpretations of
such laws. Changes in tax laws or their interpretations could decrease the value of revenues we receive and the
amount of our cash flow and have a material adverse impact on our business.

Our business concentration in Puerto Rico and our business with the government of Puerto Rico expose us to
significant risks.

For the fiscal years ended December 31, 2016 and 2015, approximately 84% and 86%, respectively, of our total
revenues were generated from our operations in Puerto Rico. In addition, some revenues that are generated from
our operations outside Puerto Rico are dependent upon our operations in Puerto Rico. As a result, our financial
condition and results of operations are highly dependent on the economic and political conditions in Puerto Rico,
and could be significantly adversely impacted by adverse economic or political developments in Puerto Rico.

In 2016, the government of Puerto Rico was our second largest customer representing approximately 7% of our
total revenues. Revenues from the government of Puerto Rico come from numerous agencies and public
corporations. We believe a substantial portion of the services we provide to the government of Puerto Rico are
mission-critical or essential. Some of the government-sponsored initiatives we provide are indirectly funded in
part by U.S. federal government programs. The government of Puerto Rico is currently experiencing a fiscal
crisis (as described further in the following risk factor). A federal law adopted in June 2016 creates an Oversight
Board with broad budgetary and financial powers over Puerto Rico’s budget, laws, financial plans and regulation,
and imposes an automatic temporary stay on all litigation against Puerto Rico and its instrumentalities to enforce
or collect claims against the Puerto Rico government. If the Puerto Rico government defaults in payment, delays
or withholds payment to us, we may not be able to enforce our claims against the government until the stay is
lifted and may not be able to recover the full amount on the receivables due to us. In addition, the Puerto Rico

25

government may elect not to renew contracts for our services, or the Oversight Board may decide not to approve
the budget for them. While we believe that the government of Puerto Rico will continue to engage our services
despite the challenging financial situation it is currently facing, a failure of the government to do so or the
Oversight Board to approve the required budget could have a material adverse impact on our financial condition
and results of operations.

In addition, severe weather conditions that are prevalent in tropical climates and other natural disasters, could
negatively affect, among other things, our ability to provide services, as well as our physical locations, property
and equipment, and could have a material adverse effect on our financial condition and results of operations.

A prolongation of the Government of Puerto Rico’s fiscal crisis, or worsening of the crisis, could slow the
Puerto Rico economy, delay Government payments and negatively affect consumer spending.

The Commonwealth of Puerto Rico has been in economic recession since 2006. In August 2015, the government
defaulted for the first time on the Public Finance Corporation bonds. In April 2016, the Puerto Rico governor signed
a debt moratorium law that gave the governor emergency powers to deal with the fiscal crisis, including the ability
to declare a moratorium on any debt payment. On June 30, 2016, the U.S. President signed into law the Puerto Rico
Oversight, Management and Economic Stability Act (PROMESA). PROMESA establishes a fiscal oversight and
management board (the “Oversight Board”) comprised of seven voting members appointed by the President. The
Oversight Board was constituted in September of 2016, has broad budgetary and financial powers over Puerto
Rico’s budget, laws, financial plans and regulations, including the power to approve restructuring agreements with
creditors, file petitions for restructuring and reform the electronic system for the tax collection. The Oversight Board
also has ultimate authority in preparing the Puerto Rico government’s budget and any issuance of future debt by the
government and its instrumentalities. In addition, PROMESA imposes an automatic stay on all litigation against
Puerto Rico and its instrumentalities, as well as any other judicial or administrative actions or proceedings to
enforce or collect claims against the Puerto Rico government. This stay is currently in effect up to May 2017 and
can be extended by the Oversight Board or U.S. District Court of Puerto Rico.

As long as the fiscal crisis endures, the Commonwealth of Puerto Rico and its instrumentalities, subject to the
oversight of the Oversight Board (collectively the “Government”), may be unable to access the capital markets to
place new debt or roll its upcoming maturities, and the Government may reduce spending, impose new taxes, and
take other actions which could slow the economy. A prolonged recession or future fiscal measures may
negatively impact our business. The continuing challenging economic environment could affect our customer
base, depress general consumer spending, and lengthen the Government’s payments, thus increasing our
Government accounts receivables; these outcomes, if realized, could have a material adverse effect on our
business, financial condition and results of operations.

At December 31, 2016, the Company has no direct exposure to the Government’s debt obligations, including
those of its instrumentalities or municipalities. The Company has accounts receivable with the Puerto Rico
government and its agencies amounting to $18.0 million as of December 31, 2016 down from $18.4 million as of
December 31, 2015.

There are risks associated with our presence in international markets, including political or economic
instability.

Our financial performance may be significantly affected by general economic, political and social conditions in
the emerging markets where we operate. Many countries in Latin America have suffered significant economic,
political and social crises in the past, and these events may occur again in the future. Instability in Latin America
has been caused by many different factors, including:

•

•

exposure to foreign exchange variation;

significant governmental influence over local economies;

26

•

•

•

•

substantial fluctuations in economic growth;

high levels of inflation;

exchange controls or restrictions on expatriation of earnings;

high domestic interest rates;

• wage and price controls;

•

•

•

•

changes in governmental economic or tax policies;

imposition of trade barriers;

unexpected changes in regulation which may restrict the movement of funds or result in the deprivation
of contract rights or the taking of property without fair compensation; and

overall political, social and economic instability.

Adverse economic, political and social conditions in the Latin America markets where we operate may create
uncertainty regarding our operating environment, which could have a material adverse effect on our company.

Our business in countries outside the United States and transactions with foreign governments increase our
compliance risks and exposes us to business risks.

Our operations outside the United States could expose us to trade and economic sanctions or other restrictions
imposed by the United States or other local governments or organizations. The U.S. Departments of the Treasury
and Justice (the “Agencies”), the SEC and other federal agencies and authorities have a broad range of civil and
criminal penalties they may seek to impose against corporations and individuals for violations of economic
sanctions laws, the FCPA and other federal statutes. Under economic sanctions laws, the Agencies may seek to
impose modifications to business practices, including cessation of business activities involving sanctioned
countries, and modifications to compliance programs, which may increase compliance costs. In addition, we are
also subject to compliance with local government regulations. If any of the risks described above materialize, it
could adversely impact our business, operating results and financial condition.

These regulations also prohibit improper payments or offers of payments to foreign governments and their
officials and political parties by the United States and other business entities for the purpose of obtaining or
retaining business. We have operations and deal with government entities and financial institutions in countries
known to experience corruption, particularly certain emerging countries in Latin America, and further
international expansion may involve more of these countries. Our activities in these countries create the risk of
unauthorized payments or offers of payments by one of our employees or consultants that could be in violation of
various laws including the FCPA, even though these parties are not always subject to our control. Our existing
safeguards and any future improvements may prove to be less than effective, and our employees or consultants
may engage in conduct for which we may be held responsible. Violations of the FCPA may result in severe
criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business,
operating results and financial condition.

We are also subject to the Export Administration Regulations (“EAR”) administered by the U.S. Department of
Commerce’s Bureau of Industry and Security which regulates the export, re-export and re-transfer abroad of
covered items made or originating in the United States as well as the transfer of covered U.S.-origin technology
abroad. We have adopted an Export Management Compliance Policy, a comprehensive compliance program
under which the goods and technologies that we export are identified and classified under the EAR to make sure
they are being exported in compliance with the requirements of the EAR. However, there can be no assurance
that we have not violated the EAR in past transactions or that our new policies and procedures will prevent us
from violating the EAR in every transaction in which we engage. Any such violations of the EAR could result in
fines, penalties or other sanctions being imposed on us, which could negatively affect our business, operating
results and financial condition.

27

Moreover, some financial institutions refuse, even in the absence of a regulatory requirement, to provide services
to companies operating in certain countries or engaging in certain practices because of concerns that the
compliance efforts perceived to be necessary may outweigh the usefulness of the service relationship. Our
operations outside the United States make it more likely that financial institutions may refuse to conduct business
with us for this type of reason. Any such refusal could negatively affect our business, operating results and
financial condition.

We and our subsidiaries conduct business with financial institutions and/or card payment networks operating
in countries whose nationals, including some of our customers’ customers, engage in transactions in
countries that are the targets of U.S. economic sanctions and embargoes. If we are found to have failed to
comply with applicable U.S. sanctions laws and regulations in these instances, we and our subsidiaries could
be exposed to fines, sanctions and other penalties or other governmental investigations.

We and our subsidiaries conduct business with financial institutions and/or card payment networks operating in
countries whose nationals, including some of our customers’ customers, engage in transactions in countries that
are the target of U.S. economic sanctions and embargoes, including Cuba. As a U.S.-based entity, we and our
subsidiaries are obligated to comply with the economic sanctions regulations administered by OFAC. These
regulations prohibit U.S.-based entities from entering into or facilitating unlicensed transactions with, for the
benefit of, or in some cases involving the property and property interests of, persons, governments, or countries
designated by the U.S. government under one or more sanctions regimes. Failure to comply with these sanctions
and embargoes may result in material fines, sanctions or other penalties being imposed on us or other
governmental investigations. In addition, various state and municipal governments, universities and other
investors maintain prohibitions or restrictions on investments in companies that do business involving sanctioned
countries or entities.

For these reasons, we have established risk-based policies and procedures designed to assist us and our personnel
in complying with applicable U.S. laws and regulations. These policies and procedures include the use of
software to screen transactions we process for evidence of sanctioned-country and persons involvement.
Consistent with a risk-based approach and the difficulties of identifying all transactions of our customers’
customers that may involve a sanctioned country, there can be no assurance that our policies and procedures will
prevent us from violating applicable U.S. laws and regulations in every transaction in which we engage, and such
violations could adversely affect our reputation, business, financial condition and results of operations.

Because we process transactions on behalf of the aforementioned financial institutions through the
aforementioned payment networks, we have processed a limited number of transactions potentially involving
sanctioned countries and there can be no assurances that, in the future, we will not inadvertently process such
transactions. Due to a variety of factors, including technical failures and limitations of our transaction screening
process, conflicts between U.S. and local laws, political or other concerns in certain countries in which we and
our subsidiaries operate, and/or failures in our ability effectively to control employees operating in certain non-
U.S. subsidiaries, we have not rejected every transaction originating from or otherwise involving sanctioned
countries, or persons and there can be no assurances that, in the future, we will not inadvertently fail to reject
such transactions.

On June 25, 2010, EVERTEC Group discovered potential violations of the Cuban Assets Control Regulations
(“CACR”), which are administered by OFAC, which occurred due to an oversight in the activation of screening
parameters for two customers located in Haiti and Belize. Upon discovery of these potential violations,
EVERTEC Group initiated an internal review and submitted an initial notice of voluntary self-disclosure to
OFAC on July 1, 2010. OFAC responded to this initial report with requests for additional information.
EVERTEC Group provided the information requested on September 24, 2010 in its final notice of voluntary self-
disclosure, which also included information on the remedial measures and new and enhanced internal controls
adopted by EVERTEC Group to avoid this situation in the future. These potential violations involved a small
number of processed transactions from Cuba compared to the overall number of transactions processed for these

28

customers during the two-month period in which the screening failures occurred. We cannot predict the timing or
ultimate outcome of the OFAC review, the total costs to be incurred in response to this review, the potential
impact on our personnel, the effect of implementing any further measures that may be necessary to ensure full
compliance with U.S. sanctions regulations, or to what extent, if at all, we could be subject to penalties or other
governmental investigations.

Separately, on September 15, 2010, EVERTEC Group submitted an initial notice of voluntary self-disclosure to
OFAC regarding certain activities of its former Venezuelan subsidiary, EVERTEC de Venezuela, C.A. (which
ceased being a subsidiary of EVERTEC Group after the closing of the Merger and is now known as Tarjetas y
Transacciones en Red TRANRED, C.A. (“Tranred”)) and EVERTEC Group’s Costa Rican subsidiary (which
continues to be a subsidiary of EVERTEC Group after the closing of the Merger). This initial self-disclosure
informed OFAC that these subsidiaries appeared to have been involved in processing Cuba-related credit card
transactions that EVERTEC Group and the subsidiary believed they could not reject under governing local law
and policies, but which nevertheless may not be consistent with the CACR. With respect to EVERTEC Group
and its former Venezuelan subsidiary, we disclosed that they completely ceased processing Cuba-related
transactions for financial institutions operating in Venezuela on September 4, 2010. We also disclosed that
EVERTEC Group’s Costa Rican subsidiary completely ceased processing Cuba-related credit card transactions
for financial institutions operating in Costa Rica in January 2009. In addition, it was also disclosed that
EVERTEC Group’s Costa Rican subsidiary’s switch had served as a conduit through which information about
Cuban-related debit card transactions was transmitted to credit card associations and issuer banks, which made
the decisions to approve or reject the transactions.

On November 15, 2010, EVERTEC Group submitted its final notice of voluntary self-disclosure on these
transactions to OFAC. The final report indicated the measures that we had taken to determine the amount of the
credit transactions relating to Cuba that had not been rejected between 2007 and 2010. In addition, we confirmed
that EVERTEC Group terminated the routing of the Cuban-related debit card transaction information through its
Costa Rican subsidiary on September 30, 2010. While the credit and debit card transactions at issue represent a
small proportion of the overall number of transactions processed for these financial institutions, the transactions
occurred over an extended period of time.

On August 7, 2013, Popular submitted a voluntary self-disclosure to OFAC regarding certain routed debit card
transactions by Tranred between October 2012 and May 2013 that may be in violation of the CACR. The
voluntary self-disclosure also states that transactions constitute a small number of transactions compared to the
overall number of transactions Tranred processed, and are representative of transactions that may have occurred
prior to October 2010 when the entity was subject to the ownership and control of EVERTEC. We have been
advised by Popular that effective May 2013, Tranred implemented a new control filter in its debit card
transactions routing system to prevent the routing by Tranred of any debit card transaction originating in Cuba.

Should OFAC determine that certain activities identified in the voluntary self-disclosures described above
constituted violations of the CACR, civil or criminal penalties could be assessed against EVERTEC Group and/
or its subsidiary. Since November 15, 2010, there have been no communications between OFAC and EVERTEC
Group regarding the transactions included in the above described voluntary self-disclosures.

Popular agreed to specific indemnification obligations with respect to all of the matters described above and
certain other matters, in each case, subject to the terms and conditions contained in the Merger Agreement and/or
contained in the Venezuela Transition Services Agreement, dated September 29, 2010, as amended. However, we
cannot assure you that we will be able to fully collect any claims made with respect to such indemnities or that
Popular and/or Tranred will satisfy its indemnification obligations to us.

29

Our expansion and selective acquisition strategy exposes us to risks, including the risk that we may not be able
to successfully integrate acquired businesses.

As part of our growth strategy, we evaluate opportunities for acquiring complementary businesses that may
supplement our internal growth. However, there can be no assurance that we will be able to identify and purchase
suitable operations. Furthermore, for as long as we are deemed a “subsidiary” of a bank holding company for
purposes of the BHC Act, we may conduct only activities authorized under the BHC Act and the Federal Reserve
Board’s Regulation K and other related regulations for a bank holding company or a financial holding company.
These restrictions may limit our ability to acquire other businesses or enter into other strategic transactions. See
“—For purposes of the BHC Act, for as long as we are deemed to be controlled by Popular, we will be subject to
supervision and examination by U.S. federal banking regulators, and our activities are limited to those
permissible for Popular. Furthermore, as a technology service provider to regulated financial institutions, we are
subject to additional regulatory oversight and examination. As a regulated institution, we may be required to
obtain regulatory approval before engaging in certain new activities or businesses, whether organically or by
acquisition.”

In addition, in connection with any acquisitions, we must comply with U.S. federal and other antitrust and/or
competition law requirements. Further, the success of any acquisition depends in part on our ability to integrate
the acquired company, which may involve unforeseen difficulties and may require a disproportionate amount of
our management’s attention and our financial and other resources. Although we conduct due diligence
investigations prior to each acquisition, there can be no assurance that we will discover all operational
deficiencies or material liabilities of an acquired business for which we may be responsible as a successor owner
or operator. The failure to successfully integrate these acquired businesses or to discover such liabilities could
adversely affect our operating results.

Failure to protect our intellectual property rights and defend ourselves from potential intellectual property
infringement claims may diminish our competitive advantages or restrict us from delivering our services.

Our trademarks, proprietary software, and other intellectual property, including technology/software licenses, are
important to our future success. For example, the ATH trademark and trade name is recognized in Latin America
and the Caribbean. Therefore, such marks represent substantial intangible assets and are important to our
business. Limitations or restrictions on our ability to use such marks or a diminution in the perceived quality
associated therewith could have an adverse impact on the growth of our businesses. We also rely on proprietary
software and technology, including third party software that is used under licenses. It is possible that others will
independently develop the same or similar software or technology, which would permit them to compete with us
more efficiently. Furthermore, if any of the third party software or technology licenses are terminated or
otherwise determined to be unenforceable, then we would have to obtain a comparable license, which may
involve increased license fees and other costs.

Despite our efforts to protect our proprietary or confidential business know-how and other intellectual property
rights, unauthorized parties may attempt to copy or misappropriate certain aspects of our services, infringe upon
our rights, or to obtain and use information that we regard as proprietary. Policing such unauthorized use of our
proprietary rights is often very difficult, and therefore, we are unable to guarantee that the steps we have taken
will prevent misappropriation of our proprietary software/technology or that the agreements entered into for that
purpose will be effective or enforceable in all instances. Misappropriation of our intellectual property or potential
litigation concerning such matters could have a material adverse effect on our results of operations or financial
condition. Our registrations and/or applications for trademarks, copyrights, and patents could be challenged,
invalidated or circumvented by others and may not be of sufficient scope or strength to provide us with
maximum protection or meaningful advantage. If we are unable to maintain the proprietary nature of our
software or technologies, we could lose competitive advantages and our businesses may be materially adversely
affected. Furthermore, the laws of certain foreign countries in which we do business or contemplate doing
business in the future may not protect intellectual property rights to the same extent as do the laws of the United
States or Puerto Rico. Adverse determinations in judicial or administrative proceedings could prevent us from

30

selling our services and products, or prevent us from preventing others from selling competing services, and may
result in a material adverse effect on our business, financial condition and results of operations.

If our applications or services or third party applications upon which we rely are found to infringe the
proprietary rights of others, we may be required to change our business practices and may also become subject
to significant costs and monetary penalties.

As our IT applications and services develop, we are increasingly subject to potential claims for intellectual
property infringement, for example, patent or copyright infringement. Any such claims, even if lacking merit,
could: (i) be expensive and time-consuming to defend; (ii) cause us to cease making, licensing or using software
or applications that incorporate the challenged intellectual property; (iii) require us to redesign our software or
applications, if feasible; (iv) divert management’s attention and resources; and (v) require us to enter into royalty
or licensing agreements in order to obtain the right to use necessary technologies. Unfavorable resolution of these
claims could result in us being restricted from delivering the related service and products, liable for damages, or
otherwise result in a settlement that could be material to us.

The ability to recruit, retain and develop qualified personnel is critical to our success and growth.

All of our businesses function at the intersection of rapidly changing technological, social, economic and
regulatory developments that requires a wide ranging set of expertise and intellectual capital. For us to
successfully compete and grow, we must retain, recruit and develop the necessary personnel who can provide the
needed expertise across the entire spectrum of our intellectual capital needs. In addition, we must develop our
personnel to provide succession plans capable of maintaining continuity in the midst of the inevitable
unpredictability of human capital. However, the market for qualified personnel is competitive and we may not
succeed in recruiting additional personnel or may fail to effectively replace current personnel who depart with
qualified or effective successors. Recruiting and retaining qualified personnel in Puerto Rico is particularly
challenging, given the poor state of the Puerto Rican economy. Our effort to retain and develop personnel may
also result in significant additional expenses, which could adversely affect our profitability. We cannot assure
you that key personnel, including executive officers, will continue to be employed or that we will be able to
attract and retain qualified personnel in the future. Failure to retain or attract key personnel could have a material
adverse effect on us.

Failure to comply with U.S. state and federal antitrust requirements, or the Puerto Rico Anti-Monopoly Act,
and government investigations into our compliance, could adversely affect our business.

Due to our ownership of the ATH network and our merchant acquiring and payment processing business in
Puerto Rico, we are involved in a significant percentage of the debit and credit card transactions conducted in
Puerto Rico each day. Regulatory scrutiny of, or regulatory enforcement action in connection with, compliance
with U.S. state and federal antitrust requirements could potentially have a material adverse effect on our
reputation and business.

In February 2016, the Department of Justice of the Commonwealth of Puerto Rico announced that it initiated a
formal investigation into whether we had engaged in conduct that interferes with free competition with respect to
the products and services we provide within the Commonwealth of Puerto Rico and which conduct could
constitute a violation of the Puerto Rico Anti-Monopoly Act, Law 77 of June 25, 1964. In August 2016, we
received official confirmation that the Puerto Rico Department of Justice had formally closed its investigation
and concluded that we had not engaged in such conduct. However, there can be no assurance that another such
investigation will not be initiated in the future. If there is another such investigation, an adverse finding could
lead to restrictions on our business, or our being required to take action, that has a materially adverse effect on
our financial condition and results of operations. Any such effect, or the perception by investors as to the
likelihood of such an effect, could have a material adverse effect on our stock price.

31

The market for our electronic commerce services is evolving and may not continue to develop or grow rapidly
enough for us to maintain and increase our profitability.

If the number of electronic commerce transactions does not continue to grow or if consumers or businesses do
not continue to adopt our services, it could have a material adverse effect on the profitability of our business,
financial condition and results of operations. We believe future growth in the electronic commerce market will be
driven by the cost, ease-of-use, and quality of products and services offered to consumers and businesses. In
order to consistently increase and maintain our profitability, consumers and businesses must continue to adopt
our services.

Our subsidiary, EVERTEC Group, benefits from a preferential tax exemption grant from the Puerto Rico
Government under the Tax Incentive Act No. 73 of 2008 that imposes certain commitments, conditions and
representations on EVERTEC Group. If EVERTEC Group does not comply with the terms of the grant,
EVERTEC Group may be subject to reduction of the benefits of the grant, tax penalties, other payment
obligations or full revocation of the grant, which could have a material adverse effect on our financial
condition, results of operations and our stock price.

EVERTEC Group has a tax exemption grant under the Tax Incentive Act No. 73 of 2008 from the Government
of Puerto Rico. Under this grant, EVERTEC Group will benefit from a preferential income tax rate of 4% on
industrial development income, as well as from tax exemptions with respect to its municipal and property tax
obligations for certain activities derived from its data processing operations in Puerto Rico. The grant has a term
of 15 years effective as of January 1, 2012 with respect to income tax obligations and July 1, 2013 and January 1,
2013 with respect to municipal and property tax obligations, respectively.

The grant contains customary commitments, conditions and representations that EVERTEC Group will be
required to comply with in order to maintain the grant. The more significant commitments include:
(i) maintaining at least 750 employees in EVERTEC Group’s Puerto Rico data processing operations during
2012 and at least 700 employees for the remaining years of the grant, (ii) investing at least $200.0 million in
building, machinery, equipment or computer programs to be used in Puerto Rico during the effective term of the
grant (to be made over four year capital investment cycles in $50.0 million increments), (iii) an additional best
efforts capital investments requirement of $75.0 million by December 31, 2026 (to be made over four year
capital investment cycles in $20.0 million the first three increments and $15.0 million the last increment); and
(iv) 80% of EVERTEC Group employees must be residents of Puerto Rico. Failure to meet the requirements
could result, among other things, in reductions in the benefits of the grant, tax penalties, other payment
obligations or revocation of the grant in its entirety, which could have a material adverse effect on our financial
condition, results of operations and our stock price.

Risks Related to Our Structure, Governance and Stock Exchange Listing

We are a holding company and rely on dividends and other payments, advances and transfers of funds from
our subsidiaries to meet our obligations and pay any dividends.

We have no direct operations or significant assets other than the ownership of 100% of the membership interest
of Holdings, which in turn has no significant assets other than ownership of 100% of the membership interest of
EVERTEC Group. Because we conduct our operations through our subsidiaries, we depend on those entities for
dividends and other payments to generate the funds necessary to meet our financial obligations, and to pay any
dividends with respect to our common stock. Legal and contractual restrictions in the senior secured credit
facilities and other agreements which may govern future indebtedness of our subsidiaries, as well as the financial
condition and operating requirements of our subsidiaries, may limit our ability to obtain cash from our
subsidiaries. The earnings from, or other available assets of, our subsidiaries may not be sufficient to pay
dividends or make distributions or loans or enable us to pay any dividends on our common stock or other
obligations.

32

Any declaration and payment of future dividends to holders of our common stock may be limited by restrictive
covenants of our debt agreements, and will be at the sole discretion of our Board and will also depend on
many factors.

Any declaration and payment of future dividends to holders of our common stock may be limited by restrictive
covenants of our debt agreements, and will be at the sole discretion of our Board and will depend on many
factors, including our financial condition, earnings, capital requirements, level of indebtedness, statutory and
contractual restrictions applying to the payment of dividends and other considerations that our Board deems
relevant. The terms of our senior secured credit facilities may restrict our ability to pay cash dividends on our
common stock. We are prohibited from paying any cash dividend on our common stock unless we satisfy certain
conditions. The senior secured credit facilities also include limitations on the ability of our subsidiaries to pay
dividends to us. Furthermore, we will be permitted under the terms of our debt agreements to incur additional
indebtedness that may severely restrict or prohibit the payment of dividends. The agreements governing our
current and future indebtedness may not permit us to pay dividends on our common stock.

The requirements of having a class of publicly traded equity securities may strain our resources and distract
management.

Upon completion of our initial public offering in April 2013, we became subject to additional reporting
requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Sarbanes-Oxley Act
of 2002, (the “Sarbanes-Oxley Act”), and the Dodd-Frank Act. The Dodd-Frank Act effects comprehensive
changes to public company governance and disclosures in the United States and subjects us to additional federal
regulation. Some of the regulation mandated under the Dodd-Frank Act has yet to be adopted or implemented.
We cannot predict with any certainty the requirements of the regulations ultimately adopted or how such
regulations will impact the cost of compliance for a company with publicly traded common stock. We are
currently evaluating and monitoring developments with respect to the Dodd-Frank Act and other new and
proposed rules and cannot predict or estimate the amount of the additional costs we may incur or the timing of
such costs. These laws, regulations and standards are subject to varying interpretations, in many cases due to
their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is
provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance
matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to
invest resources to comply with evolving laws, regulations and standards, and this investment may result in
increased general and administrative expenses and a diversion of management’s time and attention from revenue-
generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards
differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice,
regulatory authorities may initiate legal proceedings against us and our business may be harmed. These new rules
and regulations may make it more expensive for us to obtain director and officer liability insurance, and we may
be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could
also make it more difficult for us to attract and retain qualified members of our Board, particularly to serve on
our audit committee, and qualified executive officers.

We are required to maintain effective internal controls over financial reporting, which could place a strain on
our resources, and our failure to do so could require a restatement of our financials and lead to a potential
default under our credit facility or a delisting from NYSE.

The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal
control over financial reporting. These requirements may place a strain on our systems and resources. Under
Section 404 of the Sarbanes-Oxley Act, we are required to include a report of management on our internal
control over financial reporting in this Annual Report on Form 10-K for the year ended December 31, 2016. In
order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control
over financial reporting, significant resources and management oversight is required. This may divert
management’s attention from other business concerns, which could have a material adverse effect on our
business, financial condition, results of operations and cash flows.

33

If we are unable to conclude that our disclosure controls and procedures and internal control over financial
reporting are effective, or if our independent public accounting firm is unable to provide us with an unqualified
report on our internal control over financial reporting in future years, investors may lose confidence in our
financial reports and our stock price may decline. In addition, a material weakness in our internal controls over
financial reporting could lead to the occurrence of material misstatements in our financial statements and we
could be required to restate our financial results. Our failure to file timely and file materially complete and
accurate financial information in our reports with the SEC could lead to a number of adverse consequences,
including a loss of confidence by our investors, a default under our credit facility, or a violation of NYSE’s
listing rules that could lead to our delisting. Any of these results could have a material adverse effect on our
business and results of operations and on the trading price of our common stock.

The price of our common stock may fluctuate significantly and you could lose all or part of your investment.

Volatility in the market price of our common stock may prevent you from being able to sell your common stock
at or above the price you paid for your common stock. The market price for our common stock could fluctuate
significantly for various reasons, including:

•

•

our operating and financial performance and prospects;

changes in earnings estimates or recommendations by securities analysts who track our common stock
or industry;

• market perception of our success, or lack thereof, in pursuing our growth strategy;

• market perception of the challenges of operating a company in Puerto Rico; and

•

sales of common stock by us, our stockholders, Popular or members of our management team.

In addition, the stock market has experienced significant price and volume fluctuations in recent years. This
volatility has had a significant impact on the market price of securities issued by many companies, including
companies in our industries. The changes frequently appear to occur without regard to the operating performance
of the affected companies. Hence, the price of our common stock could fluctuate based upon factors that have
little or nothing to do with us, and these fluctuations could materially reduce our share price.

Future sales or the possibility of future sales of a substantial amount of our common stock may depress the
price of shares of our common stock.

We may sell additional shares of common stock in subsequent public offerings or otherwise, including financing
acquisitions. Our amended and restated certificate of incorporation authorizes us to issue 206,000,000 shares of
common stock, of which 72,635,032 are outstanding as of January 31, 2017. All of these shares, other than the
11,654,803 shares held by Popular and the shares held by our officers and directors, are freely transferable
without restriction or further registration under the Securities Act.

In addition, we have filed a Form S-8 under the Securities Act covering 12,089,382 shares of our common stock
reserved for issuance under our Carib Holdings, Inc. 2010 Equity Incentive Plan (or the 2010 Plan), and our
EVERTEC, Inc. 2013 Equity Incentive plan (or the 2013 Plan) and certain options and restricted stock granted
outside of these plans (which we refer to as the Equity Plans), but subject to the terms and conditions of the 2010
Plan. Accordingly, shares of our common stock registered under such registration statement may become
available for sale in the open market upon grants under the Equity Incentive Plans, subject to vesting restrictions,
Rule 144 limitations applicable to our affiliates and the contractual lock-up provisions described below.

We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and
sales of our common stock will have on the market price of our common stock. Sales of substantial amounts of
our common stock (including any shares issued in connection with an acquisition), or the perception that such
sales could occur, may adversely affect prevailing market prices for our common stock.

34

If securities analysts stop publishing research or reports about our company, or if they issue unfavorable
commentary about us or our industry or downgrade our common stock, the price of our common stock could
decline.

The trading market for our common stock will depend in part on the research and reports that third party
securities analysts publish about our company and our industry. One or more analysts could downgrade our
common stock or issue other negative commentary about our company or our industry. In addition, we may be
unable or slow to attract research coverage. Alternatively, if one or more of these analysts cease coverage of our
company, we could lose visibility in the market. As a result of one or more of these factors, the trading price of
our common stock could decline.

The interests of Popular may conflict with or differ from your interests as a stockholder.

Popular has the right to nominate two members of our Board and, therefore, continues to be able to significantly
influence our decisions. The interests of Popular could conflict with your interests as a holder of our common
stock. For example, the concentration of ownership held by Popular, the terms of the Stockholder Agreement and
our organizational documents (including Popular’s quorum rights and consent rights over amendments to our
bylaws) and Popular’s right to terminate certain of its agreements with us in certain situations upon a change of
control of EVERTEC Group, could delay, defer or prevent certain significant corporate actions that you as a
stockholder may otherwise view favorably, including a change of control of us (whether by merger, takeover or
other business combination). See “Certain Relationships and Related Party Transactions” for a description of the
circumstances under which Popular may terminate certain of its agreements with us. A sale of a substantial
number of shares of stock in the future by Popular could cause our stock price to decline.

Our organizational documents and Stockholder Agreement may impede or discourage a takeover, which could
deprive our investors of the opportunity to receive a premium for their shares.

Provisions of our amended and restated certificate of incorporation, amended and restated bylaws and the
Stockholder Agreement may make it more difficult for, or prevent a third party from, acquiring control of us
without the approval of our Board and/or Popular. These provisions include:

•

•

•

•

•

•

a voting agreement pursuant to which Popular agreed to vote its shares in favor of the Popular director
nominees (which, constitute the right to appoint two of our nine directors), directors nominated by a
committee of our Board in accordance with the Stockholder Agreement and the management director
and to remove and replace any such directors in accordance with the terms of the Stockholder
Agreement and applicable law and an agreement by us to take all actions within our control necessary
and desirable to cause the election, removal and replacement of such directors in accordance with the
Stockholder Agreement and applicable law;

requiring that a quorum for the transaction of business at any meeting of the Board (other than a
reconvened meeting with the same agenda as the originally adjourned meeting) consist of (1) a
majority of the total number of directors then serving on the Board and (2) at least one director
nominated by Popular, for so long as it owns, together with its affiliates, 5% or more of our outstanding
common stock;

prohibiting cumulative voting in the election of directors;

authorizing the issuance of “blank check” preferred stock without any need for action by stockholders
other than Popular (as further described below);

prohibiting stockholders from acting by written consent unless the action is taken by unanimous written
consent;

establishing advance notice requirements for nominations for election to our Board or for proposing
matters that can be acted on by stockholders at stockholder meetings, which advance notice
requirements are not applicable to any directors nominated in accordance with the terms of the
Stockholder Agreement.

35

Our issuance of shares of preferred stock could delay or prevent a change in control of us. Our Board has
authority to issue shares of preferred stock, subject to the approval of at least one director nominated by Popular
for so long as it, together with its respective affiliates, owns at least 10% of our outstanding common stock. Our
Board may issue preferred stock in one or more series, designate the number of shares constituting any series,
and fix the rights, preferences, privileges and restrictions thereof, including dividend rights, voting rights, rights
and terms of redemption, redemption price or prices and liquidation preferences of such series. The issuance of
shares of our preferred stock may have the effect of delaying, deferring or preventing a change in control without
further action by the stockholders, even where stockholders are offered a premium for their shares. In addition,
Popular, under and subject to the Stockholder Agreement and our organizational documents, will retain
significant influence over matters requiring board or stockholder approval, including the election of directors.
See “Certain Relationships and Related Party Transactions—Related Party Transactions” Together, our amended
and restated certificate of incorporation, bylaws and Stockholder Agreement could make the removal of
management more difficult and may discourage transactions that otherwise could involve payment of a premium
over prevailing market prices for our common stock. Furthermore, the existence of the foregoing provisions, as
well as the significant common stock owned by Popular and its individual right to nominate a specified number
of directors in certain circumstances, could limit the price that investors might be willing to pay in the future for
shares of our common stock. They could also deter potential acquirers of us, thereby reducing the likelihood that
you could receive a premium for your common stock in an acquisition.

Risks Related to Our Indebtedness

Despite our high indebtedness level, we and our subsidiaries still may be able to incur significant additional
amounts of debt, which could further exacerbate the risks associated with our substantial indebtedness.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future, some of which
may be secured. Although the agreement governing our senior secured credit facilities contain restrictions on the
incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and
exceptions, and under certain circumstances, the amount of indebtedness that could be incurred in compliance
with these restrictions could be substantial.

In addition to the $72 million which was available for borrowing under our revolving credit facility as of
December 31, 2016, the terms of the senior secured credit facilities enable us to increase the amount available
under the term loan and/or revolving credit facilities if we are able to obtain loan commitments from banks and
satisfy certain other conditions. If new debt is added to our and our subsidiaries’ existing debt levels, the related
risks that we face would increase.

If we are unable to comply with covenants in our debt instruments that limit our flexibility in operating our
business, or obligate us to take action such as deliver financial reports, we may default under our debt
instruments and our indebtedness may become due.

The agreement governing the senior secured credit facilities contain, and any future indebtedness we incur may
contain, various covenants that limit our ability to engage in specified types of transactions. These covenants
limit our and our restricted subsidiaries’ ability to, among other things:

•

•

incur additional indebtedness or issue certain preferred shares;

pay dividends on, repurchase or make distributions in respect of our capital stock or make other
restricted payments;

• make certain investments;

•

•

•

sell certain assets;

create liens;

consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

36

•

•

enter into certain transactions with our affiliates; and

designate our subsidiaries as unrestricted subsidiaries.

As a result of these covenants, we are limited in the manner in which we conduct our business and we may be
unable to engage in favorable business activities or finance future operations or capital needs. In addition, the
covenants in the senior secured credit facilities require us to maintain a maximum senior secured leverage ratio
and also limit our capital expenditures. In addition, we are required to comply with certain non-monetary
covenants, including the timely delivery of financial statements that fairly present, in all material respects in
accordance with GAAP, our financial condition and results of operations.

A breach of any of these covenants could result in a default under one or more of these agreements, including as
a result of cross default provisions and, in the case of our revolving credit facility, permit the lenders to cease
making loans to us. Upon the occurrence of an event of default under the senior secured credit facilities, the
lenders could elect to declare all amounts outstanding under the senior secured credit facilities to be immediately
due and payable and terminate all commitments to extend further credit. Such actions by those lenders could
cause cross defaults under our other indebtedness. If we were unable to repay those amounts, the lenders under
our senior secured credit facilities could proceed against the collateral granted to them to secure that
indebtedness. We have pledged a significant portion of our assets as collateral under the senior secured credit
facilities. If the lenders under the senior secured credit facilities accelerate the repayment of borrowings, the
proceeds from the sale or foreclosure upon such assets will first be used to repay debt under our senior secured
credit facilities and we may not have sufficient assets to repay our unsecured indebtedness thereafter. As a result,
our common stock could become worthless.

We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take
other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial
condition and operating performance, which is subject to prevailing economic and competitive conditions and to
certain financial, business and other factors beyond our control. We may not be able to maintain a level of cash
flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our
indebtedness.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to
reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or
refinance our indebtedness. Our ability to restructure or refinance our debt will depend on the condition of the
capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest
rates and may require us to comply with more onerous covenants, which could further restrict our business
operations. The terms of existing or future debt instruments may restrict us from adopting some of these
alternatives. In addition, any failure to make payments of interest and principal on our outstanding indebtedness
on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur
additional indebtedness. These alternative measures may not be successful and may not permit us to meet our
scheduled debt service obligations.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our principal operations are conducted in Puerto Rico. Our principal executive offices are located at Cupey
Center Building, Road 176, Kilometer 1.3, San Juan, Puerto Rico 00926.

37

We own one property in Costa Rica, in the province of San Jose, which is used by our Costa Rican subsidiary for
its payment processing business. We also lease space in 9 other locations across Latin America and the
Caribbean, including our headquarters in San Juan, Puerto Rico and various data centers and office facilities to
meet our sales and operating needs. We believe that our properties are in good operating condition and
adequately serve our current business operations. We also anticipate that suitable additional or alternative space,
including those under lease options, will be available at commercially reasonable terms for future expansion.

Item 3. Legal Proceedings

We are defendants in various lawsuits or arbitration proceedings arising in the ordinary course of business.
Management believes, based on the opinion of legal counsel and other factors, that the aggregate liabilities, if
any, arising from such actions will not have a material adverse effect on the financial condition, results of
operations and the cash flows of the Company.

Item 4. Mine Safety Disclosures

Not applicable.

38

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities

Our common stock trades on the NYSE under the symbol “EVTC”. The following table sets forth the high and
low sales prices of our common stock as reported by the NYSE, for each full quarterly period within the two
most recent fiscal years. As of February 17, 2017, the approximate number of record holders of our common
stock was 202. The closing price as reported on the NYSE of our common stock on such date was
$17.20 per share.

2016
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2015
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Dividends

Price Range

High

Low

$16.63
16.32
17.62
18.60

22.87
23.12
21.71
19.66

$11.27
12.98
15.13
14.15

19.36
20.13
17.42
14.93

We currently have a policy under which we pay a regular quarterly dividend on our common stock, subject to the
declaration thereof each quarter by our Board. The following table provides a detail of dividend information for
2016 and 2015:

Declaration Date

Record Date

Payment Date

February 18, 2015
May 6, 2015
August 5, 2015
November 4, 2015
February 17, 2016
May 11, 2016
July 28, 2016
October 27, 2016

March 2, 2015
May 18, 2015
August 17, 2015
November 16, 2015
February 29, 2016
May 23, 2016
August 9, 2016
November 14, 2016

March 19, 2015
June 5, 2015
September 3, 2015
December 4, 2015
March 17, 2016
June 10, 2016
September 2, 2016
December 2, 2016

Dividend
per share

0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10

Any declaration and payment of future dividends to holders of our common stock will be at the discretion of our
Board and will depend on many factors, including our financial condition, earnings, available cash, business
opportunities, legal requirements, restrictions in our debt agreements and other contracts, capital requirements,
level of indebtedness and other factors that our Board deems relevant. The covenants of our senior secured credit
facilities may limit our ability to pay dividends on our common stock and limit the ability of our subsidiaries to
pay dividends to us if we do not meet required performance metrics contained in our debt agreements. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial
Obligations.”

We are a holding company and have no direct operations. We will only be able to pay dividends from our
available cash on hand and funds received from our subsidiaries, Holdings and EVERTEC Group, whose ability
to make any payments to us will depend upon many factors, including their operating results and cash flows. In
addition, the senior secured credit facilities limit EVERTEC Group’s ability to pay distributions on its equity

39

interests. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Financial Obligations.”

Issuer Purchases of Equity Securities

Period

2/1/2016 - 2/29/2016
6/1/2016 - 6/30/2016
8/1/2016 - 8/31/2016
9/1/2016 - 9/30/2016
11/1/2016 - 11/30/2016
12/1/2016 - 12/31/2016

Total number of
shares purchased

Average price paid
per share

Total shares purchased
as part of a publicly
announced program

Aproximate dollar value of
shares that may yet be
purchased under the
program (1)

212,863
830,516
210,000
625,285
428,863
196,900

11.555
15.827
16.980
16.836
15.701
17.861

212,863
830,516
210,000
625,285
428,863
196,900

2,504,427

$15.950

2,504,427

$80,012,223

(1) On September 24, 2014, the Company announced a stock repurchase program authorizing the purchase of

up to $75 million of the Company’s common stock over the next twelve months. On February 17, 2016, the
Company announced that its Board of Directors approved an increase and extension to the current stock
repurchase program, authorizing the purchase of up to $120 million of the Company’s common stock and
extended the expiration to December, 31 2017.

Securities Authorized for Issuance under Equity Compensation Plans

On September 30, 2010, the board of directors of Holdings adopted the 2010 Plan. Holdings reserved
5,843,208 shares of its Class B Non-Voting Common Stock for issuance upon exercise and grants of stock
options, restricted stock and other equity awards under the Plan. On April 17, 2012, in connection with the
Reorganization, the Company assumed the 2010 Plan and all of the outstanding equity awards issued thereunder
or subject thereto. As a result, each of the then outstanding stock options to purchase shares of Holdings’ Class B
Non-Voting Common Stock became a stock option to purchase the same number and class of shares of the
Company’s Class B Non-Voting Common Stock, in each case on the same terms (including exercise price) as the
original stock option. In connection with our initial public offering in April 2013, all of the outstanding shares of
the Company’s Class B Non-Voting Common Stock and stock options to purchase shares of the Company’s
Class B Non-Voting Common Stock were converted into and deemed exercisable for, respectively, shares of our
common stock on a one-to-one basis. Similarly, each of the then outstanding shares of restricted stock of
Holdings was converted into the same number of shares of restricted stock of the Company.

In connection with our initial public offering, we adopted the 2013 Plan and reserved 5,956,882 shares of our
Common Stock for issuance upon exercise and grants of stock options, restricted stock and other equity awards.
We have filed a Form S-8 under the Securities Act covering 12,089,382 shares of our common stock reserved for
issuance under the Equity Plans and certain options and restricted stock granted outside of the Equity Plans but
subject to the terms and conditions of the 2010 Plan.

40

The following table summarizes equity compensation plans approved by security holders and equity
compensation plans that were not approved by security holders as of December 31, 2016:

Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(A)

Weighted-average
exercise price of
outstanding options,
warrants and rights
(B)

Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (A))
(C)

N/A

20,000

N/A

$6.04

N/A

6,648,508

Plan Category

Equity compensation plans approved by

security holders

Equity compensation plans not approved

by security holders

Stock Performance Graph

The following Performance Graph shall not be deemed incorporated by reference and shall not constitute
soliciting material or otherwise considered filed under the Securities Act of 1933 or the Exchange Act.

The following graph shows a comparison from April 12, 2013 (the date our common stock commenced trading on
the NYSE) through December 31, 2016 of the cumulative total return for our common stock, the S&P 500 Index
and the S&P Technology Index. The graph assumes that $100 was invested on April 12, 2013 in our common stock
and each index and that all dividends were reinvested.

Note that historical stock price performance is not necessarily indicative of future stock price performance.

Comparison of forty-five months cumulative total return of EVERTEC Inc.

$170

$160

$150

$140

$130

$120

$110

$100

$90

$80

$70

4/12/13

6/28/13

9/30/13

12/31/13

3/31/14

6/30/14

9/30/14

12/31/14

3/31/15

6/30/15

9/30/15

12/31/15

3/31/16

6/30/16

9/30/16

12/30/16

EVERTEC, Inc.

S&P 500

S&P Information Technology

41

Item 6. Selected Financial Data

The following table sets forth our selected historical consolidated financial data as of the dates and for the
periods indicated. The selected consolidated financial data as of and for the years ended December 31, 2016,
2015 and 2014 have been derived from the audited consolidated financial statements of EVERTEC, included in
this Annual Report on Form 10-K.

The results of operations for any period are not necessarily indicative of the results to be expected for any future
period. The selected historical consolidated financial data set forth below should be read in conjunction with, and
are qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and the consolidated financial statements and related notes thereto appearing elsewhere in this
Annual Report on Form 10-K.

(Dollar amounts in thousands, except per share data)

2016

2015

2014

2013

2012

Year ended December 31,

Statements of Income Data:
Revenues:
Merchant Acquiring, net
Payment Processing
Business Solutions

Total revenues

Operating costs and expenses
Cost of revenues, exclusive of depreciation and

amortization shown below

Selling, general and administrative expenses
Depreciation and amortization

$ 91,248
111,507
186,752

$ 85,411
108,320
179,797

$ 79,136
104,713
177,939

$ 73,616
100,104
184,682

$ 69,591
95,607
175,437

389,507

373,528

361,788

358,402

340,635

175,809
46,986
59,567

167,916
37,278
64,974

157,537
41,276
65,988

162,980
38,810
70,366

159,183
31,686
71,492

Total operating costs and expenses

282,362

270,168

264,801

272,156

262,361

Income from operations

107,145

103,360

96,987

86,246

78,274

Interest income
Interest expense
(Losses) earnings of equity method investment
Other income (expenses)

Income (loss) before income taxes
Income tax expense (benefit)

Net income (loss)
Less: Net income attributable to non-controlling

interest

Net income (loss) attributable to EVERTEC

377
(24,617)
(52)
544

83,397
8,271

75,126

495
(24,266)
147
2,306

82,042
(3,335)

85,377

328
(25,772)
1,140
2,375

75,058
8,901

66,157

236
(37,417)
935
(75,682)

(25,682)
1,435

320
(54,721)
564
(8,491)

15,946
(59,136)

(27,117)

75,082

90

—

—

—

—

Inc.’s common stockholders

$ 75,036

$ 85,377

$ 66,157

$ (27,117) $ 75,082

Net income (loss) per common share—basic

Net income (loss) per common share—diluted

Cash dividends declared per common share (1)

$

$

$

1.01

1.01

0.40

$

$

$

1.11

1.11

0.40

$

$

$

0.84

0.84

0.40

$

$

$

(0.34) $

(0.34) $

0.20

$

1.03

0.98

4.39

(1) Adjusted to reflect the two for one stock split effective April 1, 2013.

42

(Dollar amounts in thousands)

Balance Sheet Data:
Cash
Total assets
Total long-term liabilities
Total debt
Total equity

2016

2015

2014

2013

2012

December 31,

$ 51,920
885,662
648,324
650,759
108,175

$ 28,747
863,654
662,939
662,699
98,214

$ 32,114
885,321
691,085
681,240
94,840

$ 22,275
918,863
705,872
725,648
87,972

$ 25,634
978,525
759,387
746,787
101,593

43

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations
(“MD&A”) covers: (i) the results of operations for the years ended December 31, 2016, 2015 and 2014; and
(ii) the financial condition as of December 31, 2016 and 2015. See Note 1 of the Audited Consolidated Financial
Statements for additional information about the Company and the basis of presentation of our financial
statements. You should read the following discussion and analysis in conjunction with the financial statements
and related notes appearing elsewhere herein. This MD&A contains forward-looking statements that involve
risks and uncertainties. Our actual results may differ from those indicated in the forward-looking statements. See
“Forward-Looking Statements” for a discussion of the risks, uncertainties and assumptions associated with these
statements.

Overview

EVERTEC is a leading full-service transaction processing business in Latin America, providing a broad range of
merchant acquiring, payment processing and business process management services. According to the September
2016 Nilson Report we are one of the largest merchant acquirers in Latin America based on total number of
transactions and we believe we are the largest merchant acquirer in the Caribbean and Central America. We serve
18 countries in the region from our base in Puerto Rico. We manage a system of electronic payment networks
that process more than two billion transactions annually, and offer a comprehensive suite of services for core
bank processing, cash processing and technology outsourcing. In addition, we own and operate the ATH
network, one of the leading personal identification number (“PIN”) debit networks in Latin America. We serve a
diversified customer base of leading financial institutions, merchants, corporations and government agencies with
“mission-critical” technology solutions that enable them to issue, process and accept transactions securely. We
believe our business is well-positioned to continue to expand across the fast-growing Latin American region.

We are differentiated, in part, by our diversified business model, which enables us to provide our varied customer
base with a broad range of transaction-processing services from a single source across numerous channels and
geographic markets. We believe this single-source capability provides several competitive advantages that will
enable us to continue to penetrate our existing customer base with complementary new services, win new
customers, develop new sales channels and enter new markets. We believe these competitive advantages include:

• Our ability to provide in one package a range of services that traditionally had to be sourced from

different vendors;

• Our ability to serve customers with disparate operations in several geographies with a single integrated

technology solution that enables them to manage their business as one enterprise; and

• Our ability to capture and analyze data across the transaction processing value chain and use that data
to provide value-added services that are differentiated from those offered by pure-play vendors that
serve only one portion of the transaction processing value chain (such as only merchant acquiring or
payment processing).

Our broad suite of services spans the transaction processing value chain and includes a range of front-end
customer-facing solutions such as the electronic capture and authorization of transactions at the point-of-sale, as
well as back-end support services such as the clearing and settlement of transactions and account reconciliation
for card issuers. These include: (i) merchant acquiring services, which enable point of sales (“POS”) and e-
commerce merchants to accept and process electronic methods of payment such as debit, credit, prepaid and
electronic benefit transfer (“EBT”) cards; (ii) payment processing services, which enable financial institutions
and other issuers to manage, support and facilitate the processing for credit, debit, prepaid, automated teller
machines (“ATM”) and EBT card programs; and (iii) business process management solutions, which provide
“mission-critical” technology solutions such as core bank processing, as well as IT outsourcing and cash
management services to financial institutions, corporations and governments. We provide these services through
a highly scalable, end-to-end technology platform that we manage and operate in-house and that generates
significant operating efficiencies that enable us to maximize profitability.

44

We sell and distribute our services primarily through a proprietary direct sales force with established customer
relationships. We are also building a variety of indirect sales channels that enable us to leverage the distribution
capabilities of partners in adjacent markets, including value-added resellers. We continue to pursue joint ventures
and merchant acquiring alliances.

We benefit from an attractive business model, the hallmarks of which are recurring revenue, scalability,
significant operating margins and low capital expenditure requirements. Our revenue is predominantly recurring
in nature because of the mission-critical and embedded nature of the services we provide. In addition, we
generally negotiate multi-year contracts with our customers. Our business model enables us to continue to grow
our business organically without significant incremental capital expenditures.

Separation from and Key Relationship with Popular

Prior to the Merger on September 30, 2010, EVERTEC Group was 100% owned by Popular, the largest financial
institution in the Caribbean, and operated substantially as an independent entity within Popular. After the
consummation of the Merger, Popular retained an approximately 49% indirect ownership interest in EVERTEC
Group and is our largest customer. In connection with, and upon consummation of, the Merger, EVERTEC
Group entered into a 15-year Master Services Agreement, and several related agreements with Popular. Under
the terms of the Master Services Agreement, Popular agreed to continue to use EVERTEC services on an
ongoing exclusive basis, for the duration of the agreement, on commercial terms consistent with those of our
historical relationship. Additionally, Popular granted us a right of first refusal on the development of certain new
financial technology products and services for the duration of the Master Services Agreement. As of
December 31, 2016, Popular retained a 16.05% interest in EVERTEC.

2016 Developments

The Company’s Board of Directors approved regular quarterly dividends of $0.10 per common share in
February, May, July and October of 2016.

On March 1, 2016, the Company completed the purchase of 65% of the share capital of Processa SAS.

On November 4, 2016, EVERTEC Group, together with certain other direct and indirect subsidiaries of the
Company, entered into a third amendment to the Credit Agreement, dated as of April 17, 2013. Among other
things, the amendment to the Credit Agreement extends the maturity of (a) approximately $219 million of the
Borrower’s existing approximately $250 million of term loan A facility to January 17, 2020 and (b) $65 million
of the Borrower’s existing $100 million of revolving credit facility to January 17, 2020. The remaining
approximately $30 million of term loan A facility and the $35 million of revolving credit facility that were not
extended will remain in place and mature as originally scheduled on April 17, 2018.

On December 14, 2016, the Company completed the purchase of certain assets, including the customer
relationship, of Accuprint, Inc., a data management and printing services company in Puerto Rico.

Factors and Trends Affecting the Results of Our Operations

The ongoing migration from cash and paper methods of payment to electronic payments continues to benefit the
transaction- processing industry globally. We believe that the penetration of electronic payments in the markets
in which we operate is significantly lower relative to the U.S. market, and that this ongoing shift will continue to
generate substantial growth opportunities for our business. For example, currently the adoption of banking
products, including electronic payments, in the Latin American and Caribbean region is lower relative to the
mature U.S. and European markets. We believe that the unbanked and underbanked population in our markets
will continue to shrink, and therefore drive incremental penetration and growth of electronic payments in Puerto
Rico and other Latin American regions. We also benefit from the trend for financial institutions and government

45

agencies to outsource technology systems and processes. Many medium- and small-size institutions in the Latin
American markets in which we operate have outdated computer systems and updating these IT legacy systems is
financially and logistically challenging, which presents a business opportunity for us.

Finally, our financial condition and results of operations are, in part, dependent on the economic and general
conditions of the geographies in which we operate.

The Puerto Rico government is experiencing a debt crisis and has defaulted on several of its debt payments,
stating that it is unable to both service its debt and continue to provide essential services to its citizens. An
emergency moratorium on debt payments was implemented by the Puerto Rico government to ensure continuity
of essential services to Puerto Rico citizens. The Puerto Rican government is a large customer of ours and many
Puerto Rican businesses and if it is unable to pay its obligations as they become due or at all, this will likely have
an adverse impact on the island’s economy.

On June 30, 2016, the U.S. President signed into law PROMESA. PROMESA establishes a fiscal oversight and
the Oversight Board comprised of seven voting members appointed by the President. The Oversight Board has
broad budgetary and financial powers over Puerto Rico’s budget, laws, financial plans and regulations, including
the power to approve restructuring agreements with creditors, file petitions for restructuring and reform the
electronic system for the tax collection. The Oversight Board will have ultimate authority in preparing the Puerto
Rico government’s budget and any issuance of future debt by the government and its instrumentalities. In
addition, PROMESA imposes an automatic stay on all litigation against Puerto Rico and its instrumentalities, as
well as any other judicial or administrative actions or proceedings to enforce or collect claims against the Puerto
Rico government. This stay is currently in effect up to May 2017 and can be extended by the Oversight Board or
U.S. District Court of Puerto Rico.

As the solution to the Puerto Rican government’s debt crisis remains unclear, we continue to carefully monitor
our receivables with the government as well as monitor general economic trends to understand the impact the
crisis has on the economy of Puerto Rico and our card payment volumes. To date our receivables with the Puerto
Rican government and overall payment transaction volumes have not been significantly affected by the debt
crisis, however we remain cautious.

We are also concerned that the crisis could further accelerate the ongoing emigration trend of Puerto Rico
residents to the United States, which has a negative impact on the island’s economy and our business.

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with GAAP. In connection with the preparation
of our financial statements, we are required to make estimates and assumptions about future events, and apply
judgments that affect the reported amounts of certain assets and liabilities, and in some instances, the reported
amounts of revenues and expenses during the period.

We base our assumptions, estimates, and judgments on historical experience, current events and other factors that
management believes to be relevant at the time our consolidated financial statements are prepared. However,
because future events are inherently uncertain and their effects cannot be determined with certainty, actual results
could differ from our assumptions and estimates, and such differences could be material. A summary of
significant accounting policies is included in Note 1 of the Audited Consolidated Financial Statements appearing
elsewhere in this Annual Report on Form 10-K. We believe that the following accounting estimates are the most
critical; require the most difficult, subjective or complex judgments; and thus result in estimates that are
inherently uncertain.

46

Revenue Recognition

The Company’s revenue recognition policy follows the guidance from Accounting Standards Codification
(“ASC”) 605 Revenue Recognition; ASC 605-25, Revenue Recognition-Multiple Element Arrangements; and;
ASC 985, Software, which provide guidance on the recognition, presentation, and disclosure of revenue in
consolidated financial statements.

The Company recognizes revenue when the following four criteria are met: (i) persuasive evidence of an
agreement exists, (ii) delivery and acceptance has occurred or services have been rendered, (iii) the selling price
is fixed or determinable, and (iv) collection is reasonably assured. For multiple deliverable arrangements,
EVERTEC evaluates each arrangement to determine if the elements or deliverables within the arrangement
represent separate units of accounting pursuant to ASC 605-25. If the deliverables are determined to be separate
units of accounting, revenues are recognized as units of accounting are delivered and the revenue recognition
criteria are met. If the deliverables are not determined to be separate units of accounting, revenues for the
delivered services are combined into one unit of accounting and recognized (i) over the life of the arrangement if
all services are consistently delivered over such term, or if otherwise, (ii) at the time that all services and
deliverables have been delivered. The selling price for each deliverable is based on vendor specific objective
evidence (“VSOE”) if available, third party evidence (“TPE”) if VSOE is not available, or Management’s best
estimate of selling price (“BESP”) if neither VSOE nor TPE is available. EVERTEC establishes VSOE of selling
price using the price charged when the same element is sold separately. EVERTEC bifurcates or allocates the
arrangement consideration to each of the deliverables based on the relative selling price of each unit of
accounting.

The Company has two main categories of revenues according to the type of transactions EVERTEC enters into
with the Company’s customers: (a) transaction-based fees and (b) fixed fees and time and material.

Transaction-based fees

The Company provides services that generate transaction-based fees. Typically transaction-based fees depend on
factors such as number of accounts or transactions processed. These factors typically consist of a fee per
transaction or item processed, a percentage of dollar volume processed or a fee per account on file, or some
combination thereof. Revenue derived from the transaction-based fee contracts are recognized when the
underlying transaction is processed, which constitutes delivery of service.

Revenues from business contracts in the Company’s Merchant Acquiring segment are primarily comprised of
discount fees charged to the merchants based on the sales amount of transactions processed. Revenues include a
discount fee and membership fees charged to merchants and debit network fees as well as point-of-sale (“POS”)
rental fees. Pursuant to the guidance from ASC 605-45-45, Revenue Recognition–Principal Agent
Considerations, EVERTEC records Merchant Acquiring revenues net of interchange and assessments charged by
the credit and debit card network associations and recognizes such revenues at the time of the sale (when a
transaction is processed).

Payment processing revenues are comprised of revenues related to providing access to the ATH network and
other card networks to financial institutions, and related services. Payment processing revenues also include
revenues from card issuer processing services (such as credit and debit card processing, authorization and
settlement, and fraud monitoring and control to debit or credit card issuers), payment processing services (such as
payment and billing products for merchants, businesses and financial institutions) and EBT (which principally
consists of services to the Puerto Rico government for the delivery of government benefits to participants).
Revenues in EVERTEC’s Payment Processing segment are primarily comprised of fees per transaction processed
or per account on file, or a combination of both, and are recognized at the time transactions are processed or on a
monthly basis for accounts on file.

47

Transaction-based fees within EVERTEC’s Business Solutions segment consist of revenues from business
process management solutions including core bank processing, business process outsourcing, item and cash
processing, and fulfillment. Transaction-based fee revenues generated by the Company’s core bank processing
services are derived from fees based on various factors such as the number of accounts on file (e.g. savings or
checking accounts, loans, etc.), and the number of transactions processed or registered users (e.g. for online
banking services). For services dependent on the number of transactions processed, revenues are recognized as
the underlying transactions are processed. For services dependent on the number of users or accounts on file,
revenues are recognized on a monthly basis based on the number of accounts on file each month. Item and cash
processing revenues are based upon the number of items (e.g. checks) processed and revenues are recognized
when the underlying item is processed. Fulfillment services include technical and operational resources for
producing and distributing variable print documents such as statements, bills, checks and benefits summaries.
Fulfillment revenues are based upon the number pages for printing services and the number of envelopes
processed for mailing services. Revenues are recognized as services are delivered based on a fee per page printed
or envelope mailed, as applicable.

Fixed fees and time and material

The Company also provides services that generate a fixed fee per month or fees based on time and expenses
incurred. These services are mostly provided in EVERTEC’s Business Solutions segment. Revenues are
generated from EVERTEC’s core bank solutions, network hosting and management and IT consulting services.

In core bank solutions, the Company mostly provides access to applications and services such as back-up or
recovery, hosting and maintenance that enable a bank to operate the related hosted services accessing the
Company’s IT infrastructure. These contracts generally contain multiple elements or deliverables which are
evaluated by EVERTEC and revenues are recognized according to the applicable guidance. Revenue is derived
from fixed fees charged for the use of hosted services and are recognized on a monthly basis as delivered. Set-up
fees are billed to the customer when the service is rendered; however, they are deferred and recognized as
revenues over the term of the arrangement or the expected period of the customer relationship, whichever is
longer, as set-up services rarely provide value to the customer on a stand-alone basis and are interrelated with the
service to be provided under the contract.

In network hosting and management, EVERTEC provides hosting services for network infrastructure at
EVETEC’s facilities; automated monitoring services; maintenance of call centers; interactive voice response
solutions, among other related services. Revenues are primarily derived from monthly fees as services are
delivered. Set-up fees are billed up-front to the customer when the set-up service is rendered; however, they are
deferred and recognized as revenues over the term of the arrangement or the expected period of the customer
relationship, whichever is longer, as set-up services rarely provide value to the customer on a stand-alone basis
and are interrelated with the service under the contract. There are some arrangements under this line of service
category that may contain undelivered elements. In such cases, the undelivered elements are evaluated and
recognized when the services are delivered or at the time that all deliverables under the contract have been
delivered.

IT consulting services revenue primarily consists of time billings based upon the number of hours dedicated to
each client. Revenue from time billings are recognized as services are delivered.

EVERTEC also charges members of the ATH network an annual membership fee; however, these fees are
deferred and recognized as revenues on a straight-line basis over the year and recorded in the Company’s
Payment Processing segment. In addition, occasionally EVERTEC is a reseller of hardware and software
products and revenues from these resale transactions are recognized when such product is delivered and accepted
by the client.

48

Service level arrangements

The Company’s service contracts may include service level arrangements (“SLA”) generally allowing the
customer to receive a credit for part of the service fee when the Company has not provided the agreed level of
services. The SLA performance obligation is committed on a monthly basis, thus SLA performance is monitored
and assessed for compliance with arrangements on a monthly basis, including determination and accounting for
its economic impact, if any.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price and related costs over the value assigned to net assets
acquired. Goodwill is not amortized, but is tested for impairment at least annually, or more often if events or
circumstances indicate there may be impairment.

For 2016, the Company used a “qualitative assessment” option or “step zero” for the goodwill impairment test
for all of its reporting units. With this process, the Company first assesses whether it is “more likely than not”
that the fair value of a reporting unit is less than its carrying amount. If the answer is no, then the fair value of the
reporting unit does not need to be measured, and step one and step two, as explained below, are bypassed. In
assessing the fair value of a reporting unit, which is based on the nature of the business and reporting unit’s
current and expected financial performance, the Company uses a combination of factors such as industry and
market conditions, overall financial performance and the entity and reporting unit specific events.

In the past, the goodwill impairment test used was a two-step process at each reporting unit level. The first step
used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount,
including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting
unit is not considered impaired and the second step of the impairment test is not necessary. If the carrying
amount of the reporting unit exceeds the fair value, there is an indication of potential impairment and the second
step of the goodwill impairment analysis is required. The second step consists of comparing the implied fair
value of the reporting unit goodwill with the carrying amount of that goodwill.

For the years ended December 31, 2016, 2015 and 2014, no impairment losses associated with goodwill were
recognized.

Other identifiable intangible assets with a definitive useful life are amortized using the straight-line method or an
accelerated method. These intangibles are evaluated periodically for impairment when events or changes in
circumstances indicate that the carrying amount may not be recoverable.

Other identifiable intangible assets with a definitive useful life include a customer relationship, trademark,
software packages and a non-compete agreement acquired during September 2010 when Apollo acquired a 51%
indirect ownership interest in EVERTEC as part of a merger (the “Merger”); a customer relationship asset
acquired in 2015 from a local bank in Puerto Rico, and customer relationship assets acquired as part of business
combination transactions in 2016.

The customer relationship assets were valued using the excess earnings method under the income approach.
Trademark assets were valued using the relief-from-royalty method under the income approach. Software
packages, which include capitalized software development costs, were recorded at cost. The non-compete
agreement was valued based on the estimated impact that theoretical competition would have on revenues and
expenses.

Income Tax

Income taxes are accounted for under the asset and liability method. A temporary difference refers to a difference
between the tax basis of an asset or liability, determined based on recognition and measurement requirements for

49

tax positions, and its reported amount in the financial statements that will result in taxable or deductible amounts
in future years when the reported amount of the asset or liability is recovered or settled, respectively. Deferred
tax assets and liabilities represent the future effects on income taxes that result from temporary differences and
carryforwards that exist at the end of a period. Deferred tax assets and liabilities are measured using enacted tax
rates and provisions of the enacted tax law and are not discounted to reflect the time-value of money. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of
income and comprehensive income in the period that includes the enactment date. A deferred tax valuation
allowance is established if it is considered more likely than not that all or a portion of the deferred tax asset will
not be realized.

The Company recognizes the benefit of uncertain tax positions only if it is more likely than not that the tax
position will be sustained on examination by taxing authorities, based on the technical merits of the position. The
tax benefits recognized in the financial statements from such a position are measured based on the largest benefit
that has a greater than fifty percent likelihood of being realized upon ultimate settlement or disposition of the
underlying issue with the taxing authority. Accordingly, the amount of benefit recognized in the consolidated
financial statements may differ from the amount taken or expected to be taken in the tax return resulting in
unrecognized tax benefits (“UTBs”). The Company recognizes the interest and penalties associated with UTBs as
part of the provision for income taxes on its consolidated statements of income and comprehensive income.
Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheets.

All companies within EVERTEC are legal entities which file separate income tax returns.

Share-based Compensation

The Company estimates the fair value of stock-based awards, on a contemporaneous basis, at the date they are
granted using the Black-Scholes-Merton option pricing model for Tranche A options and the Monte Carlo
simulation analysis for Tranche B and Tranche C options and market based restricted stock units (“RSUs”) using
the following assumptions: (1) stock price; (2) risk-free rate; (3) expected volatility; (4) expected annual dividend
yield and (5) expected term. The risk-free rate is based on the U.S. Constant Maturities Treasury Interest Rate as
of the grant date or the yield of a 2-year or 3-year Treasury bond, as applicable. The expected volatility is based
on a combination of historical volatility and implied volatility from publicly traded companies in the Company’s
industry. The expected annual dividend yield is based on management’s expectations of future dividends as of
the grant date and, in certain cases, assumes that those dividends will be reinvested over the performance period.
The expected term for stock options granted under the 2010 Plan was based on the vesting time of the options.
For the stock options granted under the 2013 Plan, the simplified method was used to estimate the expected term,
given that the Company did not have appropriate exercise data on which to base the estimate nor is exercise data
relating to employees of comparable companies easily obtainable. Performance and time based RSUs and
restricted stock are valued based on the market price of the Company’s stock at the grant date.

Upon option exercise or restricted stock or RSUs release, participants may elect to “net share settle”. Rather than
requiring the participant to deliver cash to satisfy the exercise price, for options exercise, and statutory minimum
tax withholdings, the Company withholds a sufficient number of shares to cover these amounts and delivers the
net shares to the participant. The Company recognizes the associated tax withholding obligation as a reduction of
additional paid-in capital.

As compensation expense is recognized, a deferred tax asset is established. At the time stock options are
exercised, restricted stock or RSUs are released, a current tax deduction arises based on the value at the time of
exercise or release. This deduction may exceed the associated deferred tax asset, resulting in a “windfall tax
benefit”. The windfall is recognized in the consolidated balance sheets as an increase to additional paid-in
capital, and is included in the consolidated statements of cash flows as a financing inflow.

In determining the amount of cash tax savings realized from the excess share-based compensation deductions, the
Company follows the tax law ordering approach. Under this approach, the utilization of excess tax deductions

50

associated with share-based awards is dictated by provision in the tax law that identify the sequence in which
such benefits are utilized for tax purposes.

Recent Accounting Pronouncements

For a description of recent accounting standards, see Note 2 of the Audited Consolidated Financial Statements
included in this Annual Report on Form 10-K.

Non-GAAP Financial Measures

EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per common share, as presented in
this Annual Report on Form 10-K, are supplemental measures of our performance that are not required by, or
presented in accordance with GAAP. They are not measurements of our financial performance under GAAP and
should not be considered as alternatives to total revenues, net income or any other performance measures derived
in accordance with GAAP or as alternatives to cash flows from operating activities as measures of our liquidity.

For more information regarding EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income
per common share, including a quantitative reconciliation of EBITDA, Adjusted EBITDA, Adjusted Net Income
and Adjusted Net Income per common share to the most directly comparable GAAP financial performance
measure, which is net income, see “—Net Income Reconciliation to EBITDA, Adjusted EBITDA, Adjusted Net
Income and Adjusted Net Income per common share” and “—Covenant Compliance” below.

Overview of Results of Operations

The following briefly describes the components of revenues and expenses as presented in the Consolidated
Statements of Income and Comprehensive Income. Descriptions of the revenue recognition policies are detailed
in Note 1 of the Audited Consolidated Financial Statements included in this Annual Report on Form 10-K.

Merchant Acquiring, net. Merchant Acquiring revenue consists of income from services that allow merchants to
accept electronic methods of payment. Our standard merchant contract has an initial term of one or three years,
with automatic one-year renewal periods. In the Merchant Acquiring segment, sources of revenue include a
discount fee (generally a percentage of the sales amount of a credit or debit card transaction value) and
membership fees charged to merchants, debit network fees and rental income from POS devices and other
equipment, net of credit card interchange and assessment fees charged by credit card associations (such as VISA
or MasterCard) or payment networks.

Payment Processing. Payment Processing revenue comprises income related to providing financial institutions
access to the ATH network and other card networks, including related services such as authorization, processing,
management and recording of ATM and POS transactions, and ATM management and monitoring. Payment
Processing revenue also includes income from card processing services for debit or credit issuers, such as credit
and debit card processing, authorization and settlement and fraud monitoring and control services; payment
processing services such as payment and billing products for merchants, businesses and financial institutions; and
EBT, which principally consists of services to the Puerto Rico government for the delivery of government
benefits to participants. Payment products include electronic check processing, automated clearing house
(“ACH”), lockbox, interactive voice response and web-based payments through personalized websites, among
others.

We generally enter into one to five year contracts with our private payment processing clients and one year
contracts with our government payment processing clients. For ATH network and processing services, revenue is
driven mainly by the number of transactions processed. Revenue is derived mainly from network fees,
transaction switching and processing fees, and leasing of POS devices. For card issuer processing, revenue is
dependent mostly upon the number of cardholder accounts on file, transactions and authorizations processed, the

51

number of cards embossed and other processing services. For EBT services, revenue is derived mainly from the
number of beneficiaries on file.

Business Solutions. Business Solutions revenue consists of income from a full suite of business process
management solutions including core bank processing, network hosting and management, IT consulting services,
business process outsourcing, item and cash processing, and fulfillment. We generally enter into one to five year
contracts with our private and government Business Solutions clients.

In addition, we are a reseller of hardware and software products; these resale transactions are generally one-time
transactions. Revenue from sales of hardware or software products is recognized once the following four criteria
are met: (i) evidence of an agreement exists, (ii) delivery and acceptance has occurred or services have been
rendered, (iii) the selling price is fixed or determinable, and (iv) collection of the selling price is reasonably
assured or probable, as applicable.

Cost of revenues. This caption includes the costs directly associated with providing services to customers, as well
as, product and software sales, including software licensing and maintenance costs; telecommunications costs;
personnel and infrastructure costs to develop and maintain applications, operate computer networks and provide
associated customer support; and other operating expenses.

Selling, general and administrative. This caption consists mainly of salaries, wages and related expenses paid to
sales personnel, administrative employees and management, advertising and promotional costs, audit and legal
fees, and other selling expenses.

Depreciation and amortization. This caption consists of our depreciation and amortization expense. Following
the completion of the Merger, our depreciation and amortization expense increased as a result of the purchase
price allocation adjustments to reflect the fair market value and revised useful life assigned to property and
equipment and intangible assets in connection with the Merger.

Results of Operations

The following tables set forth certain consolidated financial information for the years ended December 31, 2016,
2015 and 2014. These tables and the related discussion should be read in conjunction with the information
contained in our Audited Consolidated Financial Statements and the notes thereto included elsewhere in this
Annual Report on Form 10-K.

Comparison of the years ended December 31, 2016 and 2015

The following tables present the components of our audited consolidated statements of income and
comprehensive income by business segment and the change in those amounts for the years ended December 31,
2016 and 2015.

Revenues

(Dollar amounts in thousands)

Merchant Acquiring, net
Payment Processing
Business Solutions

Total revenues

Years ended
December 31,

2016

2015

Variance

$ 91,248
111,507
186,752

$ 85,411
108,320
179,797

$ 5,837
3,187
6,955

$389,507

$373,528

$15,979

7%
3%
4%

4%

Total revenues increased by $16.0 million to $389.5 million when compared with 2015.

52

Merchant Acquiring revenue increased $5.8 million or 7% when compared with the prior year. The revenue
growth was driven by the addition of the FirstBank of Puerto Rico (“FirstBank”) merchant portfolio in the fourth
quarter of 2015, partially offset by a contract change for a merchant acquiring customer to payment processing,
lower average ticket as well as other merchant mix shifts.

Payment Processing revenue increased by $3.2 million or 3% primarily driven by an increase in transactions
processed over the ATH® debit network and revenue related to the Processa acquisition. These increases were
partially offset by a reduction related to the shift in revenue from FirstBank from payment processing to
merchant acquiring in 2016, as well as a decrease in revenues due to a delayed project amounting to
approximately $4.5 million and lower revenues from the government lottery tax contract terminated in the fourth
quarter of 2015.

Business Solutions revenue increased approximately $7.0 million or 4% when compared with 2015. The increase
is primarily driven by revenues from core banking activities related to an increase in volume and new services
provided. In addition, revenues grew modestly in network services, business process outsourcing and IT
Consulting. This growth was partially offset by a decrease in revenue from cash and item processing services.

Operating costs and expenses

Years ended
December 31,

(Dollar amounts in thousands)

2016

2015

Variance

Cost of revenues, exclusive of depreciation and

amortization shown below

Selling, general and administrative expenses
Depreciation and amortization

Total operating costs and expenses

$175,809
46,986
59,567

$167,916
37,278
64,974

$ 7,893
9,708
(5,407)

$282,362

$270,168

$12,194

5%
26%
-8%

5%

Operating costs and expenses increased by $12.2 million or 5% to $282.4 million for the year ended
December 31, 2016. The increase is primarily driven by a $17.6 million increase in cost of revenues and selling
general and administrative expenses, partially offset by a decrease of $5.4 million in depreciation and
amortization.

Cost of revenues increased 5% to $175.8 million and was primarily driven by a $4.9 million increase in expenses
for revenue sharing referral agreements with certain banks in Puerto Rico and increases in equipment expenses,
professional fees and other operating taxes. These increases were partially offset by a $4.5 million decrease in
compensation expense as the prior year period includes severance payments as part of voluntary termination
offers extended to certain employees which included special termination benefits.

Selling, general and administrative expenses increased by $9.7 million primarily driven by a $4.5 million
increase in salaries and benefits including higher share based compensation, coupled with a $3.0 million increase
in professional fees mostly due to costs incurred in connection with the restatement.

Depreciation and amortization expense decreased by $5.4 million or 8% compared with 2015. The decrease
resulted from lower amortization of software packages primarily related to software acquired as part of the
Merger that became fully amortized during the third quarter of 2015.

53

Income from operations

The following table presents income from operations by reportable segments.

(Dollar amounts in thousands)

Segment income from operations
Merchant Acquiring, net
Payment Processing
Business Solutions

Total segment income from operations
Merger related depreciation and amortization and other

unallocated expenses (1)

Income from operations

Years ended
December 31,

2016

2015

Variance

$ 31,051
52,071
56,794

$ 36,466
55,429
50,200

$(5,415)
(3,358)
6,594

-15%
-6%
13%

139,916

142,095

(2,179)

-2%

(32,771)

(38,735)

5,964

-15%

$107,145

$103,360

$ 3,785

4%

(1)

Primarily represents non-operating depreciation and amortization expenses generated as a result of the
Merger and certain non-recurring fees and expenses.

Income from operations increased $3.8 million or 4% compared with 2015. The increase was primarily driven by
Business Solutions as revenues in the segment increased year over year while maintaining operating expenses
relatively stable and reducing depreciation and amortization expenses. In addition, Merger related depreciation
and amortization decreased as some assets were fully amortized towards the end of the prior year. These positive
variances were partially offset by a decrease in income from operations in our Merchant Acquiring segments as a
result of the aforementioned contract change for a merchant acquiring customer to payment processing coupled
with revenues at lower margins from FirstBank. The FirstBank relationship also resulted in increased
amortization expense from the customer relationship intangible asset recognized as part of the acquisition. In
addition, we experience reduced margin contribution due to increased transactions at a lower ticket price and
merchant mix shifts that reduced net revenue. The Payment Processing segment was impacted by the
aforementioned project delay which decreased revenues by approximately $4.5 million coupled with an increase
in depreciation and amortization expense.

See Note 22 of the Audited Consolidated Financial Statements included in this Annual Report on Form 10-K for
additional information on the Company’s reportable segments and for a reconciliation of income from operations
to net income.

Non-operating expenses

Years ended
December 31,

(Dollar amounts in thousands)

2016

2015

Variance

Non-operating income (expenses)
Interest income
Interest expense
(Losses) earnings of equity method investment
Other income, net

Total non-operating expenses

$

377
(24,617)
(52)
544

$
495
(24,266)
147
2,306

$ (118)
(351)
(199)
(1,762)

-24%
1%
-135%
-76%

$(23,748)

$(21,318)

$(2,430)

11%

Total non-operating expenses increased $2.4 million when compared with the prior year. The increase is driven
by the $1.5 million loss on extinguishment recorded as part of the debt refinancing transaction completed in the
fourth quarter of 2016, which is included in Other income, net, coupled with a $0.4 million increase in interest

54

expense and a $0.2 million decrease in earnings from our equity method investment in the Dominican Republic,
Consorcio de Tarjetas Dominicanas, S.A. (“CONTADO”).

Income tax expense (benefit)

Income tax expense for the year ended December 31, 2016 amounted to approximately $8.3 million compared
with an income tax benefit of $3.3 million in 2015. The effective tax rate in 2016 was approximately 10%. The
prior year tax benefit reflects the reversal of tax liability related to an uncertain tax position for which the statute
of limitations expired during the third quarter of 2015.

See Note 18 of the Audited Consolidated Financial Statements included in this Annual Report on Form 10-K for
additional information regarding income taxes.

Comparison of the years ended December 31, 2015 and 2014

The following tables present the components of our audited consolidated statements of income and
comprehensive income by business segment and the change in those amounts for the years ended December 31,
2015 and 2014.

Revenues

(Dollar amounts in thousands)

Merchant Acquiring, net
Payment Processing
Business Solutions

Total revenues

Years ended
December 31,

2015

2014

Variance

$ 85,411
108,320
179,797

$ 79,136
104,713
177,939

$ 6,275
3,607
1,858

$373,528

$361,788

$11,740

8%
3%
1%

3%

Total revenues increased by $11.7 million to $373.5 million when compared with 2014.

Merchant Acquiring revenue increased $6.3 million or 8% when compared with the prior year. The revenue
growth was primarily related to an increase in sales volumes for existing merchants coupled with the addition of
the FirstBank of Puerto Rico (“FirstBank”) merchant portfolio and an overall improvement in spread.

Payment Processing revenue increased by $3.6 million or 3%. Revenue growth was driven mainly by an increase
in ATH and POS network and processing transactions, partially offset by reduced revenues from contracts with
the Puerto Rico government.

Business Solutions revenue increased $1.9 million or 1% when compared with 2014. The increase is primarily
driven by an increase in revenues from core banking activities, partially offset by a decrease in IT Consulting and
IT Management services.

Operating costs and expenses

Years ended
December 31,

(Dollar amounts in thousands)

2015

2014

Variance

Cost of revenues, exclusive of depreciation and

amortization shown below

Selling, general and administrative expenses
Depreciation and amortization

Total operating costs and expenses

$167,916
37,278
64,974

$157,537
41,276
65,988

$10,379
(3,998)
(1,014)

$270,168

$264,801

$ 5,367

7%
-10%
-2%

2%

55

Operating costs and expenses increased by $5.4 million or 2% to $270.2 million for the year ended December 31,
2015. The increase is primarily driven by a $10.4 million increase in cost of revenues, partially offset by a
decrease of $4.0 million and $1.0 million in selling, general and administrative expenses and depreciation and
amortization, respectively.

Cost of revenues increased 7% when compared with 2014. The increase was primarily driven by a $7.4 million
increase in salaries and other benefits as a result of severance payments primarily related to the voluntary
termination offers extended to certain employees during 2015 coupled with an increase in share based
compensation. Other operating expenses increased by $2.3 million primarily driven by an increase in bad debt
expense and operational losses in addition to expenses recorded as a result of the revenue sharing agreement
entered into with FirstBank in connection with the purchase of the merchant portfolio during the fourth quarter of
2015. Additionally, professional fees increased by $1.2 million as a result of an increase in project development
costs related to a card issuing platform initiative.

Selling, general and administrative expenses decreased 10% when compared with the prior year. The decrease
was primarily driven by non-recurring expenses recorded in 2014 amounting to $7.9 million associated to the
CEO succession and acceleration of vesting of certain stock options, and a $1.1 million decrease in professional
expenses related to the debt offering that was withdrawn. This decrease was partially offset by an increase in
salaries related to higher share based compensation and the impact of severance payments made related to the
aforementioned voluntary termination offers.

Depreciation and amortization expense decreased by 2% compared with 2014. The decrease resulted from lower
amortization of software packages.

Income from operations

The following table presents income from operations by reportable segments.

(Dollar amounts in thousands)

Segment income from operations
Merchant Acquiring, net
Payment Processing
Business Solutions

Total segment income from operations
Merger related depreciation and amortization and other

unallocated expenses (1)

Income from operations

Years ended
December 31,

2015

2014

Variance

$ 36,466
55,429
50,200

$ 34,362
58,796
48,299

$ 2,104
(3,367)
1,901

142,095

141,457

638

6%
-6%
4%

0%

(38,735)

(44,470)

5,735

-13%

$103,360

$ 96,987

$ 6,373

7%

(1)

Primarily represents non-operating depreciation and amortization expenses generated as a result of the
Merger and certain non-recurring fees and expenses.

Income from operations increased $6.4 million or 7% compared with 2014. The increase in income from
operations was primarily driven by an increase in income from Merchant Acquiring and Business Solutions,
coupled with a decrease in Merger related depreciation and amortization and other unallocated expenses,
partially offset by a decrease in income from Payment Processing. Merchant Acquiring income increased by
$2.1 million, primarily driven by an increase in sales volume and spread coupled with increased business from
the FirstBank merchant portfolio purchased during the fourth quarter of 2015. Business Solutions income
increased by $1.9 million as a result of an increase in Core Banking revenues primarily from the Doral Bank
consolidation as well as new projects with Popular. Payment Processing income decreased by $3.4 million as a

56

result of certain repricings that occurred during the fourth quarter of 2014 and reduced revenues from contracts
with the Puerto Rico government.

See Note 22 of the Audited Consolidated Financial Statements included in this Annual Report on Form 10-K for
additional information on the Company’s reportable segments and for a reconciliation of income from operations
to net income.

Non-operating expenses

(Dollar amounts in thousands)

2015

2014

Variance

Years ended
December 31,

Non-operating income (expenses)
Interest income
Interest expense
Earnings of equity method investment
Other income (expenses)

Total non-operating expenses

$

495
(24,266)
147
2,306

$

328
(25,772)
1,140
2,375

$ 167
1,506
(993)
(69)

$(21,318)

$(21,929)

$ 611

51%
-6%
-87%
-3%

-3%

Total non-operating expenses decreased $0.6 million when compared with the prior year. The decrease is
primarily driven by a $1.5 million decrease in interest expense mainly as a result of a decrease of 25 basis points
in the interest rate as a result of the senior secured leverage ratio decreasing below 3.50x coupled with a lower
outstanding loan balance. The decrease was partially offset by a $1.0 million decrease in earnings from our
equity method investment in the Dominican Republic, CONTADO.

Income tax (benefit) expense

Income tax benefit for the year ended December 31, 2015 amounted to approximately $3.3 million compared
with an income tax expense of $8.9 million in 2014. The $12.6 million increase in tax benefit is primarily driven
by the reversal of liabilities related to an uncertain tax position for which the statute of limitations expired during
the third quarter of 2015.

See Note 18 of the Notes to Audited Consolidated Financial Statements included in this Annual Report on
Form 10-K for additional information regarding income taxes.

Liquidity and Capital Resources

Liquidity

Our principal source of liquidity is cash generated from operations and our primary liquidity requirements are the
funding of capital expenditures, principal debt repayments and working capital needs. We also have a
$100.0 million revolving credit facility, of which $72 million was available as of December 31, 2016.

At December 31, 2016, we had cash of $51.9 million, of which $35.5 million resides in our subsidiaries located
outside of Puerto Rico for purposes of (i) funding the respective subsidiary’s current business operations and
(ii) funding potential future investment outside of Puerto Rico. We intend to indefinitely reinvest these funds
outside of Puerto Rico, and based on our liquidity forecast, we will not need to repatriate this cash to fund our
Puerto Rico operations or to meet debt-service obligations. However, if in the future we determine that we no
longer need to maintain such cash balances within our foreign subsidiaries, we may elect to distribute such cash
to the Company in Puerto Rico. Distributions from the foreign subsidiaries to Puerto Rico are likely subject to
tax withholding and other tax consequences.

57

Our primary use of cash is for operating expenses, working capital requirements, capital expenditures, dividend
payments, share repurchases, debt service, acquisitions and other transactions as opportunities present
themselves.

Based on our current level of operations, we believe our cash flows from operations and the available senior
secured revolving credit facility will be adequate to meet our liquidity needs for the next twelve months.
However, our ability to fund future operating expenses, dividend payments, capital expenditures, mergers and
acquisitions, and our ability to make scheduled payments of interest, to pay principal on or refinance our
indebtedness and to satisfy any other of our present or future debt obligations will depend on our future operating
performance, which will be affected by general economic, financial and other factors beyond our control.

Comparison of the years ended December 31, 2016 and 2015

The following table presents our cash flows from operations, investing and financing activities for the years
ended December 31, 2016 and 2015:

(Dollar amounts in thousands)

Cash provided by operating activities
Cash used in investing activities
Cash used in financing activities

Increase (decrease) in cash

Years ended December 31,

2016

2015

$168,054
(54,083)
(90,798)

$ 162,419
(53,068)
(112,718)

$ 23,173

$

(3,367)

Net cash provided by operating activities for the year ended December 31, 2016 was $168.1 million, an increase
of $5.6 million compared with 2015. The increase was driven by less cash used to pay accounts payable and
accrued liabilities and an increase in unearned income.

Net cash used in investing activities amounted to $54.1 million, primarily driven by additions to software
amounting to $23.8 million, acquisitions of property and equipment of $18.5 million and the completion of the
Processa and the Accuprint purchase transactions for $15.6 million in cash.

Net cash used in financing activities for the year ended December 31, 2016 amounted to $90.8 million, a
decrease of $21.9 million when compared with the prior year. The decrease is driven by less cash used in the
repurchase of common stock, coupled with an increase in cash provided by short-term borrowings partially offset
by cash paid during the year for amendments made to the Company’s debt agreement, credit amendment fees of
$3.6 million and debt issue costs of $4.8 million.

Comparison of the years ended December 31, 2015 and 2014

The following table presents our cash flows from operations for the years ended December 31, 2015 and 2014:

(Dollar amounts in thousands)

Cash provided by operating activities
Cash used in investing activities
Cash used in financing activities

(Decrease) increase in cash

Years ended December 31,

2015

2014

$ 162,419
(53,068)
(112,718)

$ 139,819
(25,831)
(104,149)

$

(3,367)

$

9,839

Net cash provided by operating activities for the year ended December 31, 2015 was $162.4 million, an increase
of $22.6 million compared with 2014. The increase was driven by higher income from operations in 2015,
coupled with less cash used to pay accounts payable and accrued liabilities.

58

Net cash used in investing activities increased by $27.2 million, primarily driven by the FirstBank merchant
portfolio transaction in which the Company purchased the FirstBank merchant portfolio and certain POS
machines for $11.5 million. In addition, restricted cash increased by $6.1 million.

Net cash used in financing activities for the year ended December 31, 2015 amounted to $112.7 million, an
increase of $8.6 million when compared with the prior year. The increase is driven by more cash used in the
repurchase of common stock, partially offset by less cash used to pay down short term borrowings during the
year.

Capital Resources

Our principal capital expenditures are for hardware and computer software (purchased and internally developed),
additions to property and equipment and business combination transactions, including the purchase of Processa
and Accuprint during 2016 for $15.6 million. In connection with the Accuprint acquisition, we have recorded a
$1.1 million contingent liability to be settled in two years. We invested approximately $57.9 million,
$47.0 million, and $25.6 million for the years ended December 31, 2016, 2015 and 2014, respectively. Capital
expenditures are expected to be funded by cash flow from operations and, if necessary, borrowings under our
revolving credit facility.

Dividend Payments

We currently have a policy under which we pay a regular quarterly dividend on our common stock, subject to the
declaration thereof each quarter by our Board. Refer to the table below for details regarding our dividends in
2016 and 2015:

Declaration Date

Record Date

Payment Date

February 18, 2015
May 6, 2015
August 5, 2015
November 4, 2015
February 17, 2016
May 11, 2016
July 28, 2016
October 27, 2016

March 2, 2015
May 18, 2015
August 17, 2015
November 16, 2015
February 29, 2016
May 23, 2016
August 9, 2016
November 14, 2016

March 19, 2015
June 5, 2015
September 3, 2015
December 4, 2015
March 17, 2016
June 10, 2016
September 2, 2016
December 2, 2016

Dividend
per share

0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10

Stock Repurchase

During 2016, the Company repurchased 2,504,427 shares of the Company’s common stock at a cost of
$39.9 million. The Company funded such repurchase with cash on hand and borrowings under the existing
revolving credit facility.

During 2015, the Company repurchased 3,012,826 shares of the Company’s common stock at a cost of
$54.9 million. The Company funded such repurchase with cash on hand and borrowings under the existing
revolving credit facility.

During the fourth quarter of 2014, the Company repurchased 1,201,194 shares of the Company’s common stock
at a cost of $26.2 million. The Company funded such repurchase with cash on hand and borrowings under the
existing revolving credit facility.

Repurchases may be accomplished through open market transactions, privately negotiated transactions,
accelerated share repurchase programs and other means.

59

Financial Obligations

Senior Secured Credit Facilities

On April 17, 2013, EVERTEC Group entered into a credit agreement (the “2013 Credit Agreement”) governing
the senior secured credit facilities, consisting of a $300.0 million term loan A facility (the “Term A Loan”), a
$400.0 million term loan B facility (the “Term B Loan”) and a $100.0 million revolving credit facility.

Term A Loan

The Term A Loan requires principal payments on the last business day of each quarter equal to (a) 1.250% of the
original principal amount commencing on September 30, 2013 through June 30, 2016; (b) 1.875% of the original
principal amount from September 30, 2016 through June 30, 2017; (c) 2.50% of the original principal amount
from September 30, 2017 through March 31, 2018; and (d) the remaining outstanding principal amount on the
maturity of the Term A Loan on April 17, 2018. Interest is based on EVERTEC Group LLC’s (“EVERTEC
Group”) first lien secured net leverage ratio and payable at a rate equal to, at the Company’s option, either
(a) LIBOR Rate plus an applicable margin ranging from 2.00% to 2.50%, or (b) Alternate Base Rate (“ABR”), as
defined in the 2013 Credit Agreement, plus an applicable margin ranging from 1.00% to 1.50%. The Term A
Loan has no LIBOR or Base Rate minimum or floor.

Term B Loan

The Term B Loan requires principal payments on the last business day of each quarter equal to 0.250% of the
original principal amount commencing on September 30, 2013 and the remaining outstanding principal amount
on the maturity of the Term B Loan on April 17, 2020. Interest is based on EVERTEC Group’s first lien secured
net leverage ratio and payable at a rate equal to, at the Company’s option, either (a) LIBOR Rate plus an
applicable margin ranging from 2.50% to 2.75%, or (b) Base Rate plus an applicable margin ranging from 1.50%
to 1.75%. The LIBOR Rate and Base Rate are subject to floors of 0.75% and 1.75%, respectively.

Revolving Credit Facility

The revolving credit facility has an available balance up to $100.0 million, with an interest rate on loans
calculated the same as the applicable Term A Loan rate. The facility matures on April 17, 2018 and has a
“commitment fee” payable one business day after the last business day of each quarter calculated based on the
daily unused commitment during the preceding quarter. The commitment fee for the unused portion of this
facility ranges from 0.125% to 0.375% and is based on EVERTEC Group’s first lien secured net leverage ratio.

All loans may be prepaid without premium or penalty.

The senior secured credit facilities contain various restrictive covenants. As a result of the Third Amendment (as
defined below), the Term A Loan and the revolving credit facility (subject to certain exceptions) require the
Company to maintain on a quarterly basis a specified maximum senior secured leverage ratio of up to 4.75 to
1.00 as defined in the 2013 Credit Agreement (total first lien secured debt to adjusted EBITDA) until
September 30, 2018 and 4.25 to 1.00 for any fiscal quarter ending thereafter. In addition, the 2013 Credit
Agreement, among other things: (a) limits the Company’s ability and the ability of the Company’s subsidiaries to
incur additional indebtedness, incur liens, pay dividends or make certain other restricted payments, as all net
assets are restricted, and enter into certain transactions with affiliates; (b) restricts the Company’s ability to enter
into agreements that would restrict the ability of the Company’s subsidiaries to pay dividends or make certain
payments to EVERTEC; and (c) places restrictions on the Company’s ability and the ability of the Company’s
subsidiaries to merge or consolidate with any other person or sell, assign, transfer, convey or otherwise dispose
of all or substantially all of the Company’s assets.

60

Amendments to the 2013 Credit Agreement

During the second quarter of 2016, EVERTEC Group, together with certain other direct and indirect subsidiaries
of the Company, entered into a second amendment and waiver to the outstanding Credit Agreement (the “Second
Amendment”). The Company paid each lender that consented to the amendment a fee equal to 0.50% of the
aggregate principal amount of outstanding term loans and revolving commitments held by such lender. The credit
amendment fees paid during the second quarter of 2016 amounted to $3.6 million.

During the fourth quarter of 2016, EVERTEC Group, together with certain other direct and indirect subsidiaries
of the Company, entered into a third amendment (the “Third Amendment”) to the 2013 Credit Agreement. The
Third Amendment extends the maturity of (a) approximately $219 million of EVERTEC Group’s existing
approximately $250 million of Term A loan facility to January 17, 2020 (the “2020 Term A loan”) and
(b) $65 million of EVERTEC Group’s existing $100 million of revolving credit facility to January 17, 2020. The
remaining approximately $30 million of Term A loan (the “2018 Term A loan”) and the $35 million of revolving
credit facility that were not extended will remain in place and mature as originally scheduled on April 17, 2018.
The Term B loan facility will remain in place and mature as originally scheduled on April 17, 2020 (collectively,
the “Senior Secured term loans”).

Under the terms of the Third Amendment, the 2018 Term A Loan amortizes on a basis of 1.875% of the original
principal amount beginning in the third quarter of 2016 and during each of the next three quarters, and 2.50% of
the original principal amount during each of the final three quarters, with the balance payable on the final
maturity date. The 2020 Term A Loan amortizes on a basis of 1.50% of the original principal amount beginning
in the fourth quarter of 2016 and during each of the next five quarters, 1.875% of the original principal amount
during each of the four subsequent quarters, and 2.50% of the original principal amount during each of the final
three quarters, with the balance payable on the final maturity date.

The applicable margin under the 2013 Credit Agreement is based on, at EVERTEC Group’s option, (i) with
respect to any 2018 Term A Loan, 2.50% per annum in the case of any LIBOR Loan and 1.50% per annum in the
case of any ABR Loan subject to reduction based on achievement of specific first lien secured leverage ratios,
(ii) with respect to any 2020 Term A Loan, 2.50% per annum in the case of any LIBOR Loan and 1.50% per
annum in the case of any ABR Loan, (iii) with respect to any Term B Loan, 2.75% per annum in the case of any
LIBOR Loan and 1.75% per annum in the case of any ABR Loan subject to reduction based on achievement of
specific first lien secured leverage ratios, and (iv) with respect to any Revolving Facility Loan, (A) 2.50% per
annum in the case of any LIBOR Loan and (B) 1.50% per annum in the case of any ABR Loan.

The unpaid principal balance at December 31, 2016 of the 2018 Term A Loan, the 2020 Term A Loan and the
Term B Loan was $29.5 million, $216.0 million and $386.0 million, respectively. The additional borrowing
capacity for the Revolving Facility loan at December 31, 2016 was $72.0 million.

See Note 11 of the Audited Consolidated Financial Statements appearing elsewhere in this Annual Report on
Form 10-K for additional information.

Note payable

In December 2014, June 2015, and May 2016, EVERTEC Group entered into non-interest bearing financing
agreements amounting to $4.6 million, $1.1 million and $0.7 million, respectively, and in October 2016 entered
into an interest bearing agreement of $1.1 million, to purchase software. As of December 31, 2016 and 2015, the
outstanding principal balance of the notes payable was $3.4 million and $4.2 million, respectively. The current
portion of these notes is recorded as part of accounts payable and the long-term portion is included in other long-
term liabilities.

61

Interest Rate Swap

As of December 31, 2016 and 2015, the Company has the following interest rate swap agreement converting a
portion of the interest rate exposure on the Company’s Term B loan from variable to fixed:

Effective date

Maturity Date

Notional Amount

Variable Rate

Fixed Rate

January 2017

April 2020

$200 million

1-month LIBOR

1.9225%

The Company has accounted for this transaction as a cash flow hedge. The fair value of the Company’s
derivative instruments is determined using standard valuation models. The significant inputs used in these
models are readily available in public markets, or can be derived from observable market transactions, and
therefore have been classified as Level 2. Inputs used in these standard valuation models for derivative
instruments include the applicable forward rates and discount rates.

As of December 31, 2016 and 2015, the carrying amount of the derivative on the Company’s balance sheet is as
follows:

(Dollar amounts in thousands)

Other long-term liabilities

December 31, 2016

December 31, 2015

$1,964

$515

The cash flow hedge is considered highly effective and no impact on earnings is expected due to hedge
ineffectiveness.

Covenant Compliance

The credit facilities contain various restrictive covenants. The Term A Loan and the revolving facility (subject to
certain exceptions) require EVERTEC Group to maintain on a quarterly basis a specified maximum senior
secured leverage ratio of up to 4.75 to 1.00 as defined in the third amendment to the 2013 Credit Agreement
(total first lien senior secured debt to Adjusted EBITDA) until September 30, 2018 and 4.25 to 1.00 for any fiscal
quarter ending thereafter. In addition, the 2013 Credit Agreement, among other things: (a) limits EVERTEC
Group’s ability and the ability of its subsidiaries to incur additional indebtedness, incur liens, pay dividends or
make certain other restricted payments and enter into certain transactions with affiliates; (b) restricts EVERTEC
Group’s ability to enter into agreements that would restrict the ability of its subsidiaries to pay dividends or make
certain payments to its parent company; and (c) places restrictions on EVERTEC Group’s ability and the ability
of its subsidiaries to merge or consolidate with any other person or sell, assign, transfer, convey or otherwise
dispose of all or substantially all of their assets. However, all of the covenants in these agreements are subject to
significant exceptions. As of December 31, 2016, the senior secured leverage ratio was 3.38 to 1.00. As of the
date of filing of this Form 10-K, except as otherwise disclosed to the Administrative Agent (and for which
corrective action has been taken and publicly disclosed by the Company in its Form 8-K filed with the SEC on
April 14, 2016), no event has occurred that constitutes an Event of Default or Default.

In this Annual Report on Form 10-K, we refer to the term “Adjusted EBITDA” to mean EBITDA as so defined
and calculated for purposes of determining compliance with the senior secured leverage ratio based on the
financial information for the last twelve months at the end of each quarter.

Net Income Reconciliation to EBITDA, Adjusted EBITDA and Adjusted Net Income (Non-GAAP Measures)

We define “EBITDA” as earnings before interest, taxes, depreciation and amortization. We define “Adjusted
EBITDA” as EBITDA further adjusted to exclude unusual items and other adjustments described below. We define
“Adjusted Net Income” as net income adjusted to exclude unusual items and other adjustments described below.

We present EBITDA and Adjusted EBITDA because we consider them important supplemental measures of our
performance and believe they are frequently used by securities analysts, investors and other interested parties in

62

the evaluation of companies in our industry. In addition, our presentation of Adjusted EBITDA is consistent with
the equivalent measurements that are contained in the senior secured credit facilities in testing EVERTEC
Group’s compliance with covenants therein such as the senior secured leverage ratio. We use Adjusted Net
Income to measure our overall profitability because it better reflects our operating performance by excluding the
impact of the non-cash amortization and depreciation that was created as a result of the Merger. In addition, in
evaluating EBITDA, Adjusted EBITDA and Adjusted Net Income, you should be aware that in the future we
may incur expenses such as those excluded in calculating them. Further, our presentation of these measures
should not be construed as an inference that our future operating results will not be affected by unusual or
nonrecurring items.

Some of the limitations of EBITDA, Adjusted EBITDA and Adjusted Net Income are as follows:

•

•

•

•

•

•

they do not reflect cash outlays for capital expenditures or future contractual commitments;

they do not reflect changes in, or cash requirements for, working capital;

although depreciation and amortization are non-cash charges, the assets being depreciated and
amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not
reflect cash requirements for such replacements;

in the case of EBITDA and Adjusted EBITDA, they do not reflect interest expense, or the cash
requirements necessary to service interest, or principal payments, on indebtedness;

in the case of EBITDA and Adjusted EBITDA, they do not reflect income tax expense or the cash
necessary to pay income taxes; and

other companies, including other companies in our industry, may not use EBITDA, Adjusted EBITDA
and Adjusted Net Income or may calculate EBITDA, Adjusted EBITDA and Adjusted Net Income
differently than as presented in this Report, limiting their usefulness as a comparative measure.

EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share are not
measurements of liquidity or financial performance under GAAP. You should not consider EBITDA, Adjusted
EBITDA, Adjusted Net Income and Adjusted Earnings per common share as alternatives to cash flows from
operating activities or any other performance measures determined in accordance with GAAP, as an indicator of
cash flows, as a measure of liquidity or as an alternative to operating or net income determined in accordance
with GAAP.

63

A reconciliation of net income to EBITDA, Adjusted EBITDA and Adjusted Net Income is provided below:

(Dollar amounts in thousands, except per share data)

Net Income
Income tax expense
Interest expense, net
Depreciation and amortization

EBITDA
Software maintenance reimbursement and other costs (1)
Equity income (2)
Compensation and benefits (3)
Transaction, refinancing and other non-recurring fees (4)
Restatement related expenses (5)

Adjusted EBITDA
Operating depreciation and amortization (6)
Cash interest expense, net (7)
Income tax expense (8)
Non-controlling interest (9)

Adjusted Net Income
Net Income per common share (GAAP):
Diluted
Adjusted Earnings per common share (Non-GAAP):
Diluted
Shares used in computing Adjusted Net Income per

common share:

Diluted

Year ended
December 31,
2016

$

$

$

$

75,126
8,271
24,240
59,567

167,204
521
(19)
10,482
7,579
1,837

187,604
(28,468)
(20,468)
(13,752)
(258)

124,658

1.01

1.67

74,473,369

1)

2)

3)

4)

5)

6)

7)

8)

9)

Predominantly represents reimbursements received for certain software maintenance expenses as part of the
Merger.
Represents the elimination of non-cash equity earnings from our 19.99% equity investment in CONTADO,
net of cash dividends received.
Primarily represents share-based compensation and other compensation expense of $6.4 million and
severance payments of $3.7 million for the year ended December 31, 2016.
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit
Agreement, certain fees paid to resolve a software maintenance contract matter, fees paid in connection with
the debt refinancing and a software impairment charge.
Represents consulting, audit and legal expenses incurred as part of the restatement.
Represents operating depreciation and amortization expense, which excludes amounts generated as a result
of the Merger.
Represents interest expense, less interest income, as they appear on our consolidated statements of income
and comprehensive income, adjusted to exclude non-cash amortization of the debt issue costs, premium and
accretion of discount.
Represents income tax expense calculated on adjusted pre-tax income using the applicable GAAP tax rate.
Represents the 35% non-controlling equity interest in Processa, net of amortization for intangibles created
as part of the purchase.

64

Contractual Obligations

The Company’s contractual obligations as of December 31, 2016 are as follows:

(Dollar amounts in thousands)

Long-term debt (1)
Operating leases (2)
Short-term borrowings (3)
Other long-term liabilities

Total

Payment due by periods

Total

$692,604
23,472
28,277
4,448

Less than
1 year

$39,932
6,971
28,277
3,204

1-3 years

3-5 years

After
5 years

$108,098
13,953
—
1,055

$—
$544,574
404
2,144
—
—
189 —

$748,801

$78,384

$123,106

$546,907

$404

(1)

(2)

(3)

Long-term debt includes the payments of cash interest (based on interest rates as of December 31, 2016 for
variable rate debt) and aggregate principal amount of the senior secured term loan facilities, as well as
commitments fees related to the unused portion of our senior secured revolving credit facility, as required
under the terms of the long-term debt agreements.
Includes certain facilities and equipment under operating leases. See Note 21 of the Audited Consolidated
Financial Statements for additional information regarding operating lease obligations.
Excludes the payments of cash interest related to the outstanding portion of the senior secured revolving
credit facility as of December 31, 2016.

The table above excludes other obligations that we may have classified as other long term liabilities in our
consolidated balance sheet, because the timing of the related payments is not determinable or because there is no
contractual obligation associated with the underlying obligations.

Off Balance Sheet Arrangements

In the ordinary course of business, the Company may enter into commercial commitments. As of December 31,
2016, we had an off balance sheet item of $4.2 million related to the unused amount of windfall that is available
to offset future taxable income.

See Note 18 of the Audited Consolidated Financial Statements appearing elsewhere in this Annual Report on
Form 10-K for additional information related to this off balance sheet item.

Seasonality

Our payment businesses generally experiences increased activity during the traditional holiday shopping periods
and around other nationally recognized holidays.

Effect of Inflation

While inflationary increases in certain inputs costs, such as occupancy, labor and benefits, and general
administrative costs, have an impact on our operating results, inflation has had minimal net impact on our
operating results during the last three years as overall inflation has been offset by increased selling process and
cost reduction actions. We cannot assure you, however, that we will not be affected by general inflation in the
future.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks arising from our normal business activities. These market risks principally
involve the possibility of change in interest rates that will adversely affect the value of our financial assets and

65

liabilities or future cash flows and earnings. Market risk is the potential loss arising from adverse changes in
market rates and prices.

Interest rate risks

We issued floating-rate debt which is subject to fluctuations in interest rates. Our senior secured credit facilities
accrue interest at variable rates and only the Term B Loan is subject to floors or minimum rates. A 100 basis
point increase in interest rates over our floor(s) on our debt balances outstanding as of December 31, 2016, under
the senior secured credit facilities would increase our annual interest expense by approximately $4.6 million in
2017. The impact on future interest expense as a result of future changes in interest rates will depend largely on
the gross amount of our borrowings at that time.

In December 2015, we entered into an interest rate swap agreement with a notional amount of $200 million,
which represents approximately 30% of our outstanding debt. Under this agreement, commencing January 1,
2017, we will receive a rate equal to the LIBOR rate applicable to our Term B loan, and pay a fixed rate equal to
1.9225%. The net effect of the swap agreement is to fix the interest rate on $200 million of our Term B loan at
4.4225%, beginning January 1, 2017 and ending when the Term B loan matures, in April 2020.

The interest rate swap exposes us to credit risk in the event that the counterparty to the swap agreement does not
or cannot meet its obligations. The notional amount is used to measure interest to be paid or received and does
not represent the amount of exposure to credit loss. The loss would be limited to the amount that would have
been received, if any, over the remaining life of the swap. The counterparty to the swap is a major financial
institution and we expect the counterparty to be able to perform its obligations under the swap. We use derivative
financial instruments for hedging purposes only and not for trading or speculative purposes

See Note 11 of the Audited Consolidated Financial Statements appearing elsewhere in this Annual Report on
Form 10-K for additional information related to the senior secured credit facilities.

Foreign exchange risk

We conduct business in certain countries in Latin America. Some of this business is conducted in the countries’
local currencies. The resulting foreign currency translation adjustments, from operations for which the functional
currency is other than the U.S. dollar, are reported in accumulated other comprehensive loss in the audited
consolidated balance sheet, except for highly inflationary environments in which the effects would be included in
other operating income in the consolidated statements of income and comprehensive income. At December 31,
2016, the Company had $10.4 million in an unfavorable foreign currency translation adjustment as part of
accumulated other comprehensive loss compared to an unfavorable foreign currency translation adjustment of
$7.1 million at December 31, 2015.

Item 8. Financial Statements and Supplementary Data

The Audited Consolidated Financial Statements, together with EVERTEC’s independent registered public
accounting firms reports, are included herein beginning on page F-1 of this Annual Report on Form 10-K.

66

Selected Quarterly Financial Data

(Dollar amounts in thousands, except per share data)

Revenues
Operating costs and expenses

Income from operations
Non-operating expenses

Income before income taxes
Income tax expense

Net income

Net income attributable to EVERTEC, Inc.’s common

stockholders

Net income per common share—basic

Net income per common share—diluted

(Dollar amounts in thousands, except per share data)

Revenues
Operating costs and expenses

Income from operations
Non-operating expenses

Income before income taxes
Income tax expense (benefit)

Net income

Net income per common share—basic

Net income per common share—diluted

Quarters ended,

March 31,
2016

June 30,
2016

September 30,
2016

December 31,
2016

$95,479
68,913

$97,672
69,480

$94,467
67,460

$101,889
76,509

26,566
(5,523)

21,043
1,876

28,192
(5,157)

23,035
2,801

27,007
(5,657)

21,350
1,639

25,380
(7,411)

17,969
1,955

$19,167

$20,234

$19,711

$ 16,014

$19,148

$20,235

$19,680

$ 15,972

$

$

0.26

0.26

$

$

0.27

0.27

$

$

0.27

0.26

$

$

0.22

0.22

Quarters ended,

March 31,
2015

June 30,
2015

September 30,
2015

December 31,
2015

$91,497
64,481

$93,405
65,958

$92,941
71,467

27,016
(5,697)

21,319
2,775

27,447
(5,236)

22,211
2,645

21,474
(5,485)

15,989
(9,347)

$95,685
68,262

27,423
(4,900)

22,523
592

$18,544

$19,566

$25,336

$21,931

$

$

0.24

0.24

$

$

0.25

0.25

$

$

0.33

0.33

$

$

0.29

0.29

67

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company, under the direction of the Chief Executive Officer and the Chief Financial Officer, has established
disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) that are designed to provide reasonable assurance that information required to be
disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms, and that such
information is accumulated and communicated to management as appropriate to allow timely decisions regarding
required disclosure.

An evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and
procedures pursuant to Rule 13a-15(b) under the Exchange Act as of December 31, 2016 was performed under
the supervision and with the participation of the Company’s management, including the Chief Executive Officer
and Chief Financial Officer. Based upon their evaluation, the Chief Executive Officer and Chief Financial
Officer have concluded that as of December 31, 2016, the Company’s disclosure controls and procedures are
effective.

Changes in Internal Control Over Financial Reporting

There have not been any changes, except as provided below, in the Company’s internal control over financial
reporting that occurred during the quarter ended December 31, 2016 that materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

In our Annual Report on Form 10-K for the year ended December 31, 2015, management identified a material
weakness in our internal control over financial reporting. In response to this material weakness, management
implemented the following remediation actions to address the control deficiency identified in 2015.

• Enhanced control procedures to ensure completeness of documented analyses supporting material tax

positions taken by the company.

• Enhanced monitoring activities over highly technical tax related aspects of material transactions,

including the implementation of formal periodic meetings attended by the Chief Financial Officer,
Finance Director, legal and tax departments to ensure that material tax positions, including uncertain
tax positions, are vetted fully and continuously monitored for appropriate income tax accounting and
disclosure purposes.

Management has determined that the remediation actions discussed above were effectively designed and
demonstrated effective operation for a sufficient period of time to enable the Company to conclude that the 2015
material weakness regarding its internal controls associated with the assessment and monitoring of uncertain tax
positions and potential obligations has been remediated as of December 31, 2016.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as
defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process designed
by, or under the supervision of our Chief Executive Officer and Chief Financial Officer and effected by the
Company’s board of directors, management, and other personnel to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance

68

with generally accepted accounting principles. Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements.

Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being
made only in accordance with authorizations of management and the directors of the firm; and provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of
the firm’s assets that could have a material effect on our financial statements.

The Company’s management assessed the effectiveness of our internal control over financial reporting as of
December 31, 2016. In making this assessment, management used the criteria established in the Internal Control-
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (the “COSO criteria”). Based on this assessment, management has determined that the Company’s
internal control over financial reporting as of December 31, 2016 was effective.

Deloitte & Touche LLP, an independent registered public accounting firm, has audited the consolidated financial
statements as of and for the year ended December 31, 2016, included in this Form 10-K and, as part of the audit,
has issued a report, included as part of Item 8 of this Form 10-K, on the effectiveness of our internal control over
financial reporting as of December 31, 2016.

Item 9B. Other Information

None.

69

Part III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this Item 10 will be included in EVERTEC’s proxy statement, to be filed pursuant to
Regulation 14A within 120 days after the end of the 2016 fiscal year, and is incorporated herein by reference.

Item 11. Executive Compensation

The information required by this Item 11 will be included in EVERTEC’s proxy statement, to be filed pursuant to
Regulation 14A within 120 days after the end of the 2016 fiscal year, and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters

The information required by this Item 12 will be included in EVERTEC’s proxy statement, to be filed pursuant to
Regulation 14A within 120 days after the end of the 2016 fiscal year, and is incorporated herein by reference.

Item 13. Certain Relationships and Related Party Transactions

The information required by this Item 13 will be included in EVERTEC’s proxy statement, to be filed pursuant to
Regulation 14A within 120 days after the end of the 2016 fiscal year, and is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services

The information required by this Item 14 will be included in EVERTEC’s proxy statement, to be filed pursuant to
Regulation 14A within 120 days after the end of the 2016 fiscal year, and is incorporated herein by reference.

Item 15. Exhibits and Financial Statement Schedules

(a) (1) Financial Statements

Part IV

The following consolidated financial statements of EVERTEC, Inc. together with the Report of
Independent Registered Public Accounting Firms, are included in Part II, Item 8, Financial Statements and
Supplementary Data:

• Reports of Independent Registered Public Accounting Firms

• Consolidated Balance Sheets as of December 31, 2016 and 2015

• Consolidated Statements of Income and Comprehensive Income for the years ended December 31,

2016, 2015 and 2014

• Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31,

2016, 2015 and 2014

• Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014

• Notes to Audited Consolidated Financial Statements

(2) Financial Statement Schedules

Schedule I- Parent Company Only Financial Statements

70

(3) Exhibits

Exhibit
No.

2.1

2.2

2.3

2.4

2.5

2.6

3.1

3.2

4.1

4.2

4.3

Description

Agreement and Plan of Merger, dated June 30, 2010, by and among Popular, Inc., AP Carib
Holdings, Ltd., Carib Acquisitions, Inc. and EVERTEC Group, LLC (incorporated by
reference to Exhibit 2.1 of Popular, Inc.’s Current Report on Form 8-K filed on July 8,
2010, File No. 001-34084)

Amendment to the Agreement and Plan of Merger, dated August 5, 2010, by and among
Popular, Inc., AP Carib Holdings, Ltd., Carib Acquisition, Inc. and EVERTEC Group, LLC
(incorporated by reference to Exhibit 2.2 of Registration Statement on Form S-4 of
EVERTEC Group, LLC, filed on April 14, 2011, File No. 333-173504)

Second Amendment to the Agreement and Plan of Merger, dated August 8, 2010, by and
among Popular, Inc., AP Carib Holdings, Ltd., Carib Acquisition, Inc. and EVERTEC
Group, LLC (incorporated by reference to Exhibit 2.1 of Popular, Inc.’s Current Report on
Form 8-K filed on August 12, 2010, File No. 001-34084)

Third Amendment to the Agreement and Plan of Merger, dated September 15, 2010, by and
among Popular, Inc., AP Carib Holdings, Ltd., Carib Acquisition, Inc. and EVERTEC
Group, LLC (incorporated by reference to Exhibit 2.1 of Popular, Inc.’s Current Report on
Form 8-K filed on September 21, 2010, File No. 001-34084)

Fourth Amendment to the Agreement and Plan of Merger, dated September 30, 2010, by
and among Popular, Inc., AP Carib Holdings, Ltd., Carib Acquisition, Inc. and EVERTEC
Group, LLC (incorporated by reference to Exhibit 2.1 of Popular, Inc.’s Current Report on
Form 8-K filed on October 6, 2010, File No. 001-34084)

Letter Agreement re: amendment to Merger Agreement, dated as of July 31, 2013, by and
among Popular, Inc., EVERTEC Group, LLC (on behalf of itself and as successor in
interest to Carib Acquisition, Inc.) and AP Carib Holdings, Ltd. (incorporated by reference
to Exhibit 10.2 of EVERTEC, Inc.’s Current Report on Form 8-K filed on August 6, 2013,
File No. 001-35872)

Amended and Restated Certificate of Incorporation of EVERTEC, Inc. (incorporated by
reference to Exhibit 3.1 of EVERTEC, Inc.’s Current Report on Form 8-K filed on
April 23, 2013, File No. 001-35872)

Amended and Restated Bylaws of EVERTEC, Inc. (incorporated by reference to
Exhibit 3.2 of EVERTEC, Inc.’s Current Report on Form 8-K filed on April 23, 2013, File
No. 001-35872)

Form of common stock certificate of EVERTEC, Inc. (incorporated by reference to
Exhibit 4.9 of EVERTEC, Inc.’s Amendment No. 2 to the Registration Statement on
Form S-1 filed on March 28, 2013, File No. 333-186487)

Stockholder Agreement, dated April 17, 2012, by and among EVERTEC, Inc. and the
holders party thereto (incorporated by reference to Exhibit 99.1 of Popular, Inc.’s Current
Report on Form 8-K filed on April 23, 2012, File No. 001-34084)

First Amendment to the Stockholder Agreement, dated March 27, 2013, by and among
EVERTEC, Inc. and the holders party thereto (incorporated by reference to Exhibit 4.10 of
EVERTEC, Inc.’s Amendment No. 3 to the Registration Statement on Form S-1 filed on
April 2, 2013, File No. 333-186487)

71

4.4

4.5

10.1

10.2

10.3

10.4

10.5++

10.6

10.7

Second Amendment to the Stockholder Agreement, dated June 30, 2013, by and among
EVERTEC, Inc. and the holders party thereto (incorporated by reference to Exhibit 10.1 of
EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on August 14, 2013, File
No. 001-35872)

Third Amendment to the Stockholder Agreement, dated November 13, 2013, by and among
EVERTEC, Inc. and the holders party thereto (incorporated by reference to Exhibit 4.5 of
EVERTEC, Inc.’s Annual Report on Form 10-K filed on March 17, 2014, File
No. 001-35872)

Credit Agreement, dated April 17, 2013, by and among EVERTEC Intermediate Holdings,
LLC, EVERTEC Group, LLC, the lenders party thereto from time to time, JPMorgan Chase
Bank, N.A., as administrative agent, collateral agent swingline lender and L/C issuer,
J.P. Morgan Securities LLC and Goldman Sachs Bank USA, as joint lead arrangers,
J.P. Morgan Securities LLC, Goldman Sachs Bank USA, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and Morgan Stanley Senior
Funding, Inc., as joint bookrunners, Goldman Sachs Bank USA, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Deutsche Bank Securities Inc. and Morgan Stanley Senior
Funding, Inc., as co-syndication agents, and Credit Suisse Securities (USA) LLC and UBS
Securities LLC, as co-documentation agents (incorporated by reference to Exhibit 10.1 of
EVERTEC, Inc.’s Current Report on Form 8-K filed on April 23, 2013, File
No. 001-35872)

Amendment No. 1, dated as of May 14, 2013, to the Credit Agreement, dated as of
April 17, 2013, by and among EVERTEC Intermediate Holdings, LLC, EVERTEC Group,
LLC, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto
(incorporated by reference to Exhibit 10.1 of EVERTEC, Inc.’s Quarterly Report on
Form 10-Q filed on May 15, 2013, File No. 001-35872)

Guarantee Agreement, dated as of April 17, 2013, by and among EVERTEC Group, LLC,
the loan parties identified on the signature pages thereof and JPMorgan Chase Bank, N.A.,
as administrative agent and collateral agent (incorporated by reference to Exhibit 10.2 of
EVERTEC, Inc.’s Current Report on Form 8-K filed on April 23, 2013, File
No. 001-35872)

Collateral Agreement, dated as of April 17, 2013, by and among EVERTEC Intermediate
Holdings, LLC, EVERTEC Group, LLC and each subsidiary of EVERTEC Group, LLC
identified therein and JPMorgan Chase Bank, N.A., as collateral agent (incorporated by
reference to Exhibit 10.3 of EVERTEC, Inc.’s Current Report on Form 8-K filed on
April 23, 2013, File No. 001-35872)

Amended and Restated Master Service Agreement, dated as of September 30, 2010, by and
among Popular, Inc. Banco Popular de Puerto Rico and EVERTEC Group, LLC
(incorporated by reference to Exhibit 10.7 of EVERTEC, Inc.’s Amendment No. 3 to the
Registration Statement on Form S-1 filed on April 2, 2013, File No. 333-186487)

Technology Agreement, made and entered into as of September 30, 2010, by and between
Popular, Inc. and EVERTEC Group, LLC (incorporated by reference to Exhibit 99.4 of
Popular, Inc.’s Current Report on Form 8-K filed on October 6, 2010, File No. 001-34084)

Amended and Restated Independent Sales Organization Sponsorship and Services
Agreement, dated as of September 30, 2010, by and between Banco Popular de Puerto Rico
and EVERTEC Group, LLC (incorporated by reference to Exhibit 10.7 of Registration
Statement on Form S-4 of EVERTEC Group, LLC, filed on April 14, 2011, File
No. 333-173504)

72

10.8

10.9+

10.10+

10.11+

10.12+

10.13

10.14

10.15+

10.16++

10.17++

10.18

10.19

IP Purchase and Sale Agreement, dated June 30, 2010, by and between Popular, Inc. (and
Affiliates and Subsidiaries) and EVERTEC Group, LLC (incorporated by reference to
Exhibit 10.1 of Popular, Inc.’s Current Report on Form 8-K filed on July 8,
2010, File. No. 001-34084)

EVERTEC, Inc. Amended and Restated 2010 Equity Incentive Plan (incorporated by
reference to Exhibit 10.3 of Current Report on Form 8-K of EVERTEC Group, LLC, filed
on April 18, 2012, File No. 333-173504)

EVERTEC, Inc. Amended and Restated Stock Option Agreement, dated as of May 9, 2012,
by and between EVERTEC, Inc. and Carlos J. Ramírez (incorporated by reference to
Exhibit 10.7 of Quarterly Report on Form 10-Q of EVERTEC Group, LLC, filed on
May 15, 2012, File No. 333-173504)

EVERTEC, Inc. Amended and Restated Stock Option Agreement, dated as of May 9, 2012,
by and between EVERTEC, Inc. and Miguel Vizcarrondo (incorporated by reference to
Exhibit 10.9 of Quarterly Report on Form 10-Q of EVERTEC Group, LLC, filed on
May 15, 2012, File No. 333-173504)

EVERTEC, Inc. Amended and Restated Stock Option Agreement, dated as of May 9, 2012,
by and between EVERTEC, Inc. and Miguel Vizcarrondo (incorporated by reference to
Exhibit 10.10 of Quarterly Report on Form 10-Q of EVERTEC Group, LLC, filed on
May 15, 2012, File No. 333-173504)

Tax Payment Agreement, dated as of April 17, 2012, by and among EVERTEC, Inc.,
EVERTEC Intermediate Holdings, LLC and EVERTEC Group, LLC (incorporated by
reference to Exhibit 10.2 of Current Report on Form 8-K of EVERTEC Group, LLC, filed
on April 18, 2012, File No. 333-173504)

Stock Contribution and Exchange Agreement, dated as of April 17, 2012, by and among
EVERTEC Intermediate Holdings, LLC, EVERTEC, Inc., and the holders shares of
common stock of EVERTEC Intermediate Holdings, LLC (incorporated by reference to
Exhibit 10.41 of EVERTEC, Inc.’s Amendment No. 1 to the Registration Statement on
Form S-1 filed on March 14, 2013, File No. 333-186487)

Stock Option Agreement, dated as of August 1, 2012, by and between EVERTEC, Inc. and
Philip E. Steurer (incorporated by reference to Exhibit 10.2 of Quarterly Report on
Form 10-Q of EVERTEC Group, LLC, filed on August 14, 2012, File No. 333-173504)

Amended and Restated ATH Network Participation Agreement, dated as of September 30,
2010, by and between Banco Popular de Puerto Rico and EVERTEC Group, LLC and
service riders related thereto (incorporated by reference to Exhibit 10.48 of EVERTEC,
Inc.’s Registration Statement on Form S-1 filed on February 6, 2013, File No. 333-186487)

ATH Support Agreement, dated as of September 30, 2010, by and between Banco Popular
de Puerto Rico and EVERTEC Group, LLC (incorporated by reference to Exhibit 10.49 of
EVERTEC, Inc.’s Registration Statement on Form S-1 filed on February 6, 2013, File
No. 333-186487)1

Virgin Islands Services Agreement, dated as of September 15, 2010, by and between
EVERTEC Group, LLC and Banco Popular de Puerto Rico (incorporated by reference to
Exhibit 10.54 of EVERTEC, Inc.’s Registration Statement on Form S-1 filed on
February 6, 2013, File No. 333-186487)

Master Lease Agreement, dated as of April 1, 2004, by and between EVERTEC Group,
LLC and Banco Popular de Puerto Rico (incorporated by reference to Exhibit 10.55 of
EVERTEC, Inc.’s Registration Statement on Form S-1 filed on February 6, 2013, File
No. 333-186487)

73

10.20

10.21

10.22

10.23+

10.24

10.25+

10.26+

10.27+

10.28+

10.29+

10.30+

10.31+

First Amendment to Master Lease Agreement, dated as of January 1, 2006, by and between
EVERTEC Group, LLC and Banco Popular de Puerto Rico (incorporated by reference to
Exhibit 10.56 of EVERTEC, Inc.’s Registration Statement on Form S-1 filed on
February 6, 2013, File No. 333-186487)

Second Amendment to Master Lease Agreement, dated as of April 23, 2010, by and
between EVERTEC Group, LLC and Banco Popular de Puerto Rico (incorporated by
reference to Exhibit 10.57 of EVERTEC, Inc.’s Registration Statement on Form S-1 filed
on February 6, 2013, File No. 333-186487)

Third Amendment to Master Lease Agreement, dated as of September 30, 2010, by and
between EVERTEC Group, LLC and Banco Popular de Puerto Rico (incorporated by
reference to Exhibit 10.58 of EVERTEC, Inc.’s Registration Statement on Form S-1 filed
on February 6, 2013, File No. 333-186487)

EVERTEC, Inc. 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.61 to
EVERTEC, Inc.’s Amendment No. 1 to the Registration Statement on Form S-1 filed on
March 14, 2013, File No. 333-186487)

Form of Indemnification Agreement by and among EVERTEC, Inc. and its directors
(incorporated by reference to Exhibit 10.62 of EVERTEC, Inc.’s Amendment No. 1 to the
Registration Statement on Form S-1 filed on March 14, 2013, File No. 333-186487)

Amended and Restated Employment agreement dated July 1, 2014, by and between
EVERTEC Group, LLC and Juan J. Román Jiménez (incorporated by reference to
Exhibit 10.63 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on August 7,
2014, File No. 001-35872)

Amended and Restated Employment agreement dated July 1, 2014, by and between
EVERTEC Group, LLC and Phil Steurer (incorporated by reference to Exhibit 10.66 of
EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on August 7, 2014, File
No. 001-35872)

Form of Restricted Stock Unit Award Agreement for grants of restricted stock units to
directors under the EVERTEC, Inc. 2013 Equity Incentive Plan (incorporated by reference
to Exhibit 10.67 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on November 6,
2014, File No. 001-35872)

Employment Agreement, dated as of October 13, 2014, by and between EVERTEC Group,
LLC and Alan I. Cohen (incorporated by reference to Exhibit 10.68 of EVERTEC, Inc.’s
Quarterly Report on Form 10-Q filed on November 6, 2014, File No. 001-35872)

Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive
Plan, dated October 15, 2014, by and between EVERTEC, Inc. and Alan I. Cohen
(incorporated by reference to Exhibit 10.69 of EVERTEC, Inc.’s Quarterly Report on
Form 10-Q filed on November 6, 2014, File No. 001-35872)

Separation Agreement and General Release, dated as of November 20, 2014, by and
between EVERTEC Group, LLC and Peter Harrington (incorporated by reference to
Exhibit 10.36 of EVERTEC, Inc.’s Form 10-K filed on March 2, 2015, File No. 001-35872)

Amended and Restated Employment Agreement, dated as of December 17, 2014, by and
between EVERTEC Group, LLC, and Morgan M. Schuessler, Jr. (incorporated by reference
to Exhibit 10.37 of EVERTEC, Inc.’s Form 10-K filed on March 2, 2015, File No. 001-
35872)

74

10.32+

10.33+

10.34+

10.35+

10.36+

10.37+

10.38+

10.39+

10.40+

10.41+

10.42+

10.43+

Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan,
dated as of December 17, 2014, by and between EVERTEC, Inc. and Thomas W. Swidarski
(incorporated by reference to Exhibit 10.38 of EVERTEC, Inc.’s Annual Report on Form 10-K filed
on March 2, 2015, File No. 001-35872)

Agreement, dated as of December 17, 2014, by and between EVERTEC, Inc. and Frank G.
D’Angelo, relating to terms of appointment as Interim CEO (incorporated by reference to
Exhibit 10.39 of EVERTEC, Inc.’s Annual Report on Form 10-K filed on March 2, 2015, File No.
001-35872)
Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan,
dated as of January 1, 2015, by and between EVERTEC, Inc. and Frank G. D’Angelo (incorporated
by reference to Exhibit 10.40 of EVERTEC, Inc.’s Annual Report on Form 10-K filed on March 2,
2015, File No. 001-35872)

Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as
of March 6, 2015, by and between EVERTEC, Inc. and Brian J. Smith. (incorporated by reference
to Exhibit 10.41 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on May 11, 2015, File
No. 001-35872)

Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as
of March 6, 2015, by and between EVERTEC, Inc. and Jorge Junquera. (incorporated by reference
to Exhibit 10.42 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on May 11, 2015, File
No. 001-35872)

Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan,
dated as of March 13, 2015, by and between EVERTEC, Inc. and Alan I. Cohen (incorporated by
reference to Exhibit 10.44 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on May 11,
2015, File No. 001-35872)

Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan,
dated as of March 13, 2015, by and between EVERTEC, Inc. and Philip E. Steurer. (incorporated by
reference to Exhibit 10.45 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on May 11,
2015, File No. 001-35872)

Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan,
dated as of March 13, 2015, by and between EVERTEC, Inc. and Miguel Vizcarrondo (incorporated
by reference to Exhibit 10.47 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on May 11,
2015, File No. 001-35872)

Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan,
dated as of March 13, 2015, by and between EVERTEC, Inc. and Carlos J. Ramírez (incorporated
by reference to Exhibit 10.48 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on May 11,
2015, File No. 001-35872)

Amendment No. 1 to the Amended and Restated Employment Agreement, dated as of April 1, 2015,
by and between EVERTEC Group, LLC and Morgan M. Schuessler, Jr. (incorporated by reference
to Exhibit 10.49 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on August 7, 2015, File
No. 001-35872)

Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan,
dated as of April 1, 2015, by and between EVERTEC, Inc. and Morgan M. Schuessler, Jr.
(incorporated by reference to Exhibit 10.50 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q
filed on August 7, 2015, File No. 001-35872)

Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan,
dated as of April 1, 2015, by and between EVERTEC, Inc. and Morgan M. Schuessler, Jr.
(incorporated by reference to Exhibit 10.51 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q
filed on August 7, 2015, File No. 001-35872)

75

10.44+

10.45+

10.46+

10.47+

10.48+

10.49+

10.50+

10.51+

10.52+

10.53+

10.54+

10.55+

Employment Agreement, dated as of May 25, 2015, by and between EVERTEC Group, LLC and
Mariana Lischner Goldvarg (incorporated by reference to Exhibit 10.52 of EVERTEC, Inc.’s
Quarterly Report on Form 10-Q filed on August 7, 2015, File No. 001-35872)

Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan,
dated as of June 1, 2015, by and between EVERTEC, Inc. and Mariana Lischner Goldvarg
(incorporated by reference to Exhibit 10.53 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q
filed on August 7, 2015, File No. 001-35872)
Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as
of June 1, 2015, by and between EVERTEC, Inc. and Frank G. D’Angelo (incorporated by
reference to Exhibit 10.54 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on August 7,
2015, File No. 001-35872)

Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as
of June 1, 2015, by and between EVERTEC, Inc. and Alan H. Schumacher (incorporated by
reference to Exhibit 10.55 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on August 7,
2015, File No. 001-35872)

Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as
of June 1, 2015, by and between EVERTEC, Inc. and Brian J. Smith (incorporated by reference to
Exhibit 10.56 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on August 7, 2015, File
No. 001-35872)

Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as
of June 1, 2015, by and between EVERTEC, Inc. and Jorge Junquera (incorporated by reference to
Exhibit 10.57 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on August 7, 2015, File
No. 001-35872)

Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as
of June 1, 2015, by and between EVERTEC, Inc. and Olga Botero (incorporated by reference to
Exhibit 10.58 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on August 7, 2015, File
No. 001-35872)

Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as
of June 1, 2015, by and between EVERTEC, Inc. and Teresita Loubriel (incorporated by reference
to Exhibit 10.59 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on August 7, 2015, File
No. 001-35872)

Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as
of June 1, 2015, by and between EVERTEC, Inc. and Thomas W. Swidarski (incorporated by
reference to Exhibit 10.60 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on August 7,
2015, File No. 001-35872)

Employment Agreement, dated as of September 1, 2015, by and between EVERTEC Group, LLC
and Peter J. S. Smith (incorporated by reference to Exhibit 10.61 of EVERTEC, Inc.’s Quarterly
Report on Form 10-Q filed on November 6, 2015, File No. 001-35872)

Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan,
dated as of September 1, 2015, by and between EVERTEC, Inc. and Peter J. S. Smith (incorporated
by reference to Exhibit 10.62 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on
November 6, 2015, File No. 001-35872)

Separation Agreement and General Release, dated as of September 1, 2015, by and between
EVERTEC Group, LLC and Eduardo Franco de Camargo (incorporated by reference to
Exhibit 10.63 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on November 6, 2015, File
No. 001-35872)

76

10.56+

10.57+

10.58+

10.59+

10.60+

10.61+

10.62+

10.63+

10.64+

10.65+

10.66+

10.67+

Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan,
dated as of February 19, 2016, by and between EVERTEC Group, LLC and Miguel Vizcarrondo
(incorporated by reference to Exhibit 10.44 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q
filed on May 26, 2016, File No. 001-35872)

Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan,
dated as of February 19, 2016, by and between EVERTEC Group, LLC and Morgan M. Schuessler,
Jr. (incorporated by reference to Exhibit 10.45 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q
filed on May 26, 2016, File No. 001-35872)
Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan,
dated as of February 19, 2016, by and between EVERTEC Group, LLC and Peter J.S. Smith.
(incorporated by reference to Exhibit 10.46 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q
filed on May 26, 2016, File No. 001-35872)

Separation Agreement and General Release, dated as of April 1, 2016, by and between EVERTEC
Group, LLC and Alan Cohen. (incorporated by reference to Exhibit 10.47 of EVERTEC, Inc.’s
Quarterly Report on Form 10-Q filed on May 26, 2016, File No. 001-35872)

Employment Agreement, dated as of April 4, 2016, by and between EVERTEC Group, LLC and
Guillermo Rospigliosi. (incorporated by reference to Exhibit 10.48 of EVERTEC, Inc.’s Quarterly
Report on Form 10-Q filed on May 26, 2016, File No. 001-35872)

Amendment No. 2, dated as of April 14, 2016, to the Credit Agreement, dated as of April 17, 2013,
by and among EVERTEC Intermediate Holdings, LLC, EVERTEC Group, LLC, JPMorgan Chase
Bank, N.A., as administrative agent, and the lenders party thereto (incorporated by reference to
Exhibit 10.1 of Current Report on Form 8-K of EVERTEC Group, LLC, filed on April 15, 2016,
File No. 001-35872)

Restricted Stock Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of
July 29, 2016 by and between EVERTEC Inc. and Frank D’Angelo. (incorporated by reference to
Exhibit 10.49 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on November 3, 2016, File
No. 001-35872)

Restricted Stock Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of
July 29, 2016 by and between EVERTEC Inc. and Thomas W. Swidarski. (incorporated by
reference to Exhibit 10.50 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on
November 3, 2016, File No. 001-35872)

Restricted Stock Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of
July 29, 2016 by and between EVERTEC Inc. and Jorge Junquera. (incorporated by reference to
Exhibit 10.51 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on November 3, 2016, File
No. 001-35872)

Restricted Stock Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of
July 29, 2016 by and between EVERTEC Inc. and Alan H. Schumacher. (incorporated by reference
to Exhibit 10.52 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on November 3, 2016,
File No. 001-35872)

Restricted Stock Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of
July 29, 2016 by and between EVERTEC Inc. and Olga Botero. (incorporated by reference to
Exhibit 10.53 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on November 3, 2016, File
No. 001-35872)

Restricted Stock Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of
July 29, 2016 by and between EVERTEC Inc. and Brian J. Smith. (incorporated by reference to
Exhibit 10.54 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on November 3, 2016, File
No. 001-35872)

77

10.68+

10.69+

10.70+

10.71+

10.72+

10.73

16.1

21.1*

23.1*

23.2*

31.1*

31.2*

32.1**

32.2**

Restricted Stock Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of
July 29, 2016 by and between EVERTEC Inc. and Teresita Loubriel. (incorporated by reference to
Exhibit 10.55 of EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on November 3, 2016, File
No. 001-35872)

Separation Agreement and General Release, dated as of September 9, 2016, by and between
EVERTEC Group, LLC and Arturo Díaz-Abramo. (incorporated by reference to Exhibit 10.56 of
EVERTEC, Inc.’s Quarterly Report on Form 10-Q filed on November 3, 2016, File No. 001-35872)
Amendment No. 3, dated as of November 4, 2016, to the Credit Agreement, dated as of April 17,
2013, by and among EVERTEC Intermediate Holdings, LLC, EVERTEC Group, LLC, JPMorgan
Chase Bank, N.A., as administrative agent, and the lenders party thereto (incorporated by reference
to Exhibit 10.1 of Current Report on Form 8-K of EVERTEC, Inc., filed on November 8, 2016,
File No. 001-35872)

Form of Restricted Stock Unit Award Agreement for grant of Restricted Stock Units to Executive
Officers with Employment Agreements under the EVERTEC, Inc. 2013 Equity Incentive Plan
(incorporated by reference to Exhibit 10.56 of EVERTEC, Inc.’s Annual Report on Form 10-K filed
on May 26, 2016, File No. 001-35872)

Form of Restricted Stock Unit Award Agreement for grant of Restricted Stock Units to Executive
Officers without Employment Agreements under the EVERTEC, Inc. 2013 Equity Incentive Plan
(incorporated by reference to Exhibit 10.57 of EVERTEC, Inc.’s Annual Report on Form 10-K filed
on May 26, 2016, File No. 001-35872)

Share Purchase Promise Agreement (Contrato de Promesa de Compraventa de Acciones), dated as
of February 17, 2017, by and among EVERTEC Group, LLC, Fondo de Inversión Privado Mater,
Inversiones San Bernardo, SpA, Inversiones Supernova SpA, Inversiones y Asesonás Bayona
Limitada, Inversiones Hagerdorn y Morales Limitada, Christian Hagedorn Hitschfeld and
Inversiones Viaimaca Limitada [English Translation] (incorporated by reference to Exhibit 10.1 of
Current Report on Form 8-K of EVERTEC, Inc., filed on February 22, 2017, File No. 001-35872)

Letter from PricewaterhouseCoopers LLP dated March 26, 2015, to the Securities and Exchange
Commission regarding change in certifying accountant (incorporated by reference to Exhibit 16 of
EVERTEC, Inc.’s Current Report on Form 8-K filed on March 26, 2015, File No. 001-35872)

Subsidiaries of EVERTEC, Inc.

Consent of Deloitte & Touche LLP, independent registered public accountants

Consent of PricewaterhouseCoopers LLP, independent registered public accountants

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

78

101.INS XBRL**

Instance document

101.SCH XBRL** Taxonomy Extension Schema

101.CAL XBRL** Taxonomy Extension Calculation Linkbase

101.DEF XBRL** Taxonomy Extension Definition Linkbase

101.LAB XBRL** Taxonomy Extension Label Linkbase

101.PRE XBRL** Taxonomy Extension Presentation Linkbase

*
Filed herewith.
** Furnished herewith.
+
++ Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions

This exhibit is a management contract or a compensatory plan or arrangement.

have been filed separately with the SEC.

79

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant

has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized,

SIGNATURES

Date: February 24, 2017

EVERTEC, Inc.

By: /s/ Morgan M. Schuessler, Jr.
Morgan M. Schuessler, Jr.
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by

the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title

Date

/s/ Morgan M. Schuessler, Jr.
Morgan M. Schuessler, Jr.

Chief Executive Officer (Principal
Executive Officer)

February 24, 2017

/s/ Peter J.S. Smith

Peter J.S. Smith

/s/ Frank G. D’Angelo

Frank G. D’Angelo

/s/ Teresita Loubriel

Teresita Loubriel

/s/ Alan H. Schumacher

Alan H. Schumacher

/s/ Thomas W. Swidarski

Thomas W. Swidarski

/s/ Jorge A. Junquera

Jorge A. Junquera

/s/ Nestor O. Rivera
Nestor O. Rivera

/s/ Olga M. Botero

Olga M. Botero

/s/ Brian J. Smith

Brian J. Smith

Chief Financial Officer (Principal
Financial and Accounting Officer)

February 24, 2017

Chairman of the Board

February 24, 2017

February 24, 2017

February 24, 2017

February 24, 2017

February 24, 2017

February 24, 2017

February 24, 2017

February 24, 2017

Director

Director

Director

Director

Director

Director

Director

80

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Audited Consolidated Financial Statements

Reports of Independent Registered Public Accounting Firms
Consolidated Balance Sheets as of December 31, 2016 and 2015
Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2016,

2015 and 2014

Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2016,

2015 and 2014

Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014
Notes to Audited Consolidated Financial Statements
Schedule I

F-2
F-5

F-6

F-7
F-8
F-9
F-45

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
EVERTEC, Inc.

We have audited the accompanying consolidated balance sheets of EVERTEC, Inc. and subsidiaries (the
“Company”) as of December 31, 2016 and 2015, and the related consolidated statements of income and
comprehensive income, changes in stockholders’ equity, and cash flows for each of the two years in the period
ended December 31, 2016. Our audits also included the financial statement schedule listed in the Index at
Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the financial statements and financial statement
schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial
position of EVERTEC, Inc. and subsidiaries as of December 31, 2016 and 2015, and the results of their
operations and their cash flows for each of the two years in the period ended December 31, 2016, in conformity
with accounting principles generally accepted in the United States of America. Also, in our opinion, such
financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the Company’s internal control over financial reporting as of December 31, 2016, based on the
criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated February 24, 2017 expressed an unqualified
opinion on the Company’s internal control over financial reporting.

/s/ Deloitte & Touche LLP

San Juan, Puerto Rico
February 24, 2017
Stamp No. E242693
affixed to original

F-2

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of EVERTEC, Inc.

In our opinion, the consolidated statement of income and comprehensive income, of changes in stockholders’
equity and of cash flows for the year ended December 31, 2014, present fairly, in all material respects, the results
of operations and cash flows of EVERTEC, INC. and its subsidiaries for the year ended December 31, 2014, in
conformity with accounting principles generally accepted in the United States of America. In addition, in our
opinion, the financial statement schedule listed in the index appearing under Item 15 (a) (2) for the year ended
December 31, 2014 presents fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. These financial statements and financial statement
schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these financial statements and financial statement schedule based on our audit. We conducted our audit of these
financial statements in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

San Juan, Puerto Rico
March 2, 2015, except for the effects of the restatement discussed in Note 1 (not presented herein) to the
consolidated financial statements appearing under Item 8 of the Company’s 2015 annual report on Form 10-K
and the effect of the restatement discussed in Note 1 (not presented herein) to the financial statement schedule
appearing under Item 15 (a) (2) of the Company’s 2015 annual report on Form 10-K, as to which the date is
May 26, 2016

CERTIFIED PUBLIC ACCOUNTANTS (OF PUERTO RICO)
License No. LLP-216 Expires Dec. 1, 2019
Stamp E257025 of the Puerto Rico Society of Certified Public Accountants has been affixed to the file copy of
this report

F-3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
EVERTEC, Inc.

We have audited the internal control over financial reporting of EVERTEC, Inc. and subsidiaries (the
“Company”) as of December 31, 2016, based on criteria established in Internal Control—Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s
management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion
on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the
company’s principal executive and principal financial officers, or persons performing similar functions, and
effected by the company’s board of directors, management, and other personnel to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of
collusion or improper management override of controls, material misstatements due to error or fraud may not be
prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal
control over financial reporting to future periods are subject to the risk that the controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2016, based on the criteria established in Internal Control—Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated financial statements and financial statement schedule as of and for the year
ended December 31, 2016, of the Company and our report dated February 24, 2017 expressed an unqualified
opinion on those financial statements and financial statement schedule.

/s/ Deloitte & Touche LLP

San Juan, Puerto Rico
February 24, 2017
Stamp No. E242694
affixed to Original

F-4

EVERTEC, Inc. Consolidated Balance Sheets
(Dollar amounts in thousands, except share data)

Assets
Current Assets:
Cash
Restricted cash
Accounts receivable, net
Deferred tax asset
Prepaid expenses and other assets

Total current assets
Investment in equity investee
Property and equipment, net
Goodwill
Other intangible assets, net
Long-term deferred tax asset
Other long-term assets

Total assets

Liabilities and stockholders’ equity
Current Liabilities:

Accrued liabilities
Accounts payable
Unearned income
Income tax payable
Current portion of long-term debt
Short-term borrowings

Total current liabilities

Long-term debt
Long-term deferred tax liability
Unearned income—long-term
Other long-term liabilities

Total liabilities

Commitments and contingencies (Notes 18 and 21)
Stockholders’ equity

Preferred stock, par value $0.01; 2,000,000 shares authorized; none

issued

Common stock, par value $0.01; 206,000,000 shares authorized;

72,635,032 shares issued and outstanding at December 31, 2016
(December 31, 2015—74,988,210)

Additional paid-in capital
Accumulated earnings
Accumulated other comprehensive loss, net of tax

Total EVERTEC, Inc stockholders’ equity

Non-controlling interest

Total equity

December 31,
2016

December 31,
2015

$ 51,920
8,112
77,803
—
20,430

158,265
12,252
38,930
370,986
299,119
805
5,305

$ 28,747
11,818
73,715
1,685
18,758

134,723
12,264
34,128
368,133
312,059
—
2,347

$885,662

$863,654

$ 34,243
40,845
4,531
1,755
19,789
28,000

129,163
599,667
14,978
17,303
16,376

777,487

$ 37,308
21,216
2,877
1,350
22,750
17,000

102,501
619,297
20,614
10,939
12,089

765,440

—

—

726
—
116,341
(12,391)

104,676
3,499

108,175

750
9,718
95,328
(7,582)

98,214
—

98,214

Total liabilities and stockholders’ equity

$885,662

$863,654

The accompanying notes are an integral part of these audited consolidated financial statements.

F-5

EVERTEC, Inc. Consolidated Statements of Income and Comprehensive Income
(Dollar amounts in thousands, except per share data)

Revenues
Merchant Acquiring, net
Payment Processing (from affiliates: $32,485, $30,504 and $27,094)
Business Solutions (from affiliates: $143,988, $138,929 and $137,242)

Total revenues

Operating costs and expenses
Cost of revenues, exclusive of depreciation and amortization shown below
Selling, general and administrative expenses
Depreciation and amortization

Total operating costs and expenses

Income from operations

Non-operating income (expenses)
Interest income
Interest expense
(Losses) earnings of equity method investment
Other income, net

Total non-operating expenses

Income before income taxes
Income tax expense (benefit)

Net income
Less: Net income attributable to non-controlling interest

Net income attributable to EVERTEC, Inc.’s common stockholders

Other comprehensive (loss) income, net of tax of $176, $8 and $4

Foreign currency translation adjustments
Loss on cash flow hedge

Years ended December 31,

2016

2015

2014

$ 91,248
111,507
186,752

$ 85,411
108,320
179,797

$ 79,136
104,713
177,939

389,507

373,528

361,788

175,809
46,986
59,567

167,916
37,278
64,974

157,537
41,276
65,988

282,362

270,168

264,801

107,145

103,360

96,987

377
(24,617)
(52)
544

495
(24,266)
147
2,306

328
(25,772)
1,140
2,375

(23,748)

(21,318)

(21,929)

83,397
8,271

75,126
90

75,036
.
(3,360)
(1,449)

82,042
(3,335)

85,377
—

85,377

75,058
8,901

66,157
—

66,157

(545)
(515)

(6,948)
—

Total comprehensive income attributable to EVERTEC, Inc.’s

common stockholders

$ 70,227

$ 84,317

$ 59,209

Net income per common share—basic attributable to EVERTEC, Inc.’s

common stockholders

Net income per common share—diluted attributable to EVERTEC,

Inc.’s common stockholders

Cash dividends declared per share

$

$

$

1.01

1.01

0.40

$

$

$

1.11

$

0.84

1.11

0.40

$

$

0.84

0.40

The accompanying notes are an integral part of these audited consolidated financial statements.

F-6

EVERTEC, Inc. Consolidated Statements of Changes in Stockholders’ Equity
(Dollar amounts in thousands, except share data)

Balance at December 31, 2013

78,286,465

$ 783

$ 80,718 $

6,045

$

426

$ —

$ 87,972

Number of
Shares of
Common
Stock

Common
Stock

Additional
Paid-in
Capital

Accumulated
Earnings

Accumulated
Other
Comprehensive
(Loss) Income

Non-Controlling
Interest

Total
Stockholders’
Equity

Share-based compensation

recognized

Tax windfall benefit on share-based

compensation

Stock options exercised, net of

cashless exercise

Restricted stock units delivered
Repurchase of common stock
Net income
Dividend (1)
Cash dividends paid on common

stock

Cash settlement of stock options
Other comprehensive loss

— —

4,587

— —

3,669

—

—

799,885

8
7,988 —

(1,201,194)

(12)

— —
— —

— —
— —
— —

(1,440)
(26)
(26,185)
—

21

—
—
—
66,157
—

— (31,359)

(1,604)
—

—
—

Balance at December 31, 2014

77,893,144

779

59,740

40,843

Share-based compensation

recognized

Repurchase of common stock
Restricted stock grants and units

delivered, net of cashless exercise

Net income
Cash dividends declared on

common stock

Other comprehensive loss

— —

(3,012,826)

(30)

5,204
(54,919)

—
—

107,892

1
— —

(307)
—

—
85,377

— —
— —

— (30,892)
—

—

Balance at December 31, 2015

74,988,210

750

9,718

95,328

Share-based compensation

recognized

Repurchase of common stock
Stock options exercised, net of

cashless exercise

Restricted stock grants and units
delivered, net of cashless

Net income
Non-controlling interest on

acquisition

Cash dividends declared on

common stock

Dividend reversal for forfeited

options

Other comprehensive loss

— —

(2,504,427)

(25)

6,408
(15,594)

—
(24,327)

8,393 —

(79)

—

142,856

1
— —

(471)
—

—
75,036

— —

—

—

— —

— (29,696)

—

—

—
—
—
—
—

—
—
(6,948)

(6,522)

—
—

—
—

—
(1,060)

(7,582)

—
—

—

—
—

—

—

—

—

—
—
—
—
—

—
—
—

—

—
—

—
—

—
—

—

—
—

—

—
90

4,587

3,669

(1,432)
(26)
(26,197)
66,157
21

(31,359)
(1,604)
(6,948)

94,840

5,204
(54,949)

(306)
85,377

(30,892)
(1,060)

98,214

6,408
(39,946)

(79)

(470)
75,126

3,409

3,409

—

—
—

(29,696)

18
(4,809)

— —
— —

18

—

—
—

—
(4,809)

Balance at December 31, 2016

72,635,032 $726 $ — $116,341

$(12,391)

$3,499

$108,175

(1) Related to dividend declared in 2012 and accrued upon vesting of stock options. Such options were forfeited during

2014.

The accompanying notes are an integral part of these audited consolidated financial statements.

F-7

EVERTEC, Inc. Consolidated Statements of Cash Flows
(Dollar amounts in thousands)

Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization
Amortization of debt issue costs and accretion of discount
Loss on extinguishment of debt
Provision for doubtful accounts and sundry losses
Deferred tax benefit
Share-based compensation
Loss on disposal of property and equipment and other intangibles
Loss on impairment of software
Losses (earnings) of equity method investment
Dividend received from equity method investment
(Increase) decrease in assets:
Accounts receivable, net
Prepaid expenses and other assets
Other long-term assets
Increase (decrease) in liabilities:

Accounts payable and accrued liabilities
Income tax payable
Unearned income
Other long-term liabilities
Total adjustments

Net cash provided by operating activities

Cash flows from investing activities
Net decrease (increase) in restricted cash
Additions to software and purchase of customer relationship
Acquisitions, net of cash acquired
Property and equipment acquired
Proceeds from sales of property and equipment

Net cash used in investing activities

Cash flows from financing activities
Proceeds from issuance of long-term debt
Debt issuance costs
Net increase (decrease) in short-term borrowings
Repayments of borrowings for purchase of equipment and software
Dividends paid
Statutory minimum withholding taxes paid on share-based compensation
Tax windfall benefits on share-based compensation
Issuance of common stock
Repurchase of common stock
Settlement of stock options
Repayment of long-term debt
Credit amendment fees

Net cash used in financing activities

Net increase (decrease) in cash
Cash at beginning of the period
Cash at end of the period

Years ended December 31,

2016

2015

2014

$ 75,126

$ 85,377

$ 66,157

59,567
4,334
1,476
1,990
(4,594)
6,408
453
2,277
52
—

(2,583)
(1,426)
(1,790)

14,594
405
8,018
3,747
92,928
168,054

3,705
(23,819)
(15,600)
(18,450)
81
(54,083)

75,763
(4,830)
11,000
(2,213)
(29,696)
(548)
—
—
(39,946)
—
(96,741)
(3,587)
(90,798)
23,173
28,747
$ 51,920

64,974
3,329
—
2,130
(3,090)
5,204
143
—
(147)
—

(4,482)
(146)
(70)

15,947
(606)
2,207
(8,351)
77,042
162,419

(6,100)
(25,960)
—
(21,022)
14
(53,068)

—
—
(6,000)
(1,542)
(30,921)
(306)
—
—
(54,949)
—
(19,000)
—

65,988
3,094
—
1,360
(3,701)
4,587
734
—
(1,140)
326

(5,587)
65
3,365

(3,925)
1,697
3,571
3,228
73,662
139,819

(285)
(14,707)
—
(10,898)
59
(25,831)

—
—
(27,000)
(1,200)
(31,359)
(2,001)
3,669
543
(26,197)
(1,604)
(19,000)
—

(112,718)
(3,367)
32,114
$ 28,747

(104,149)
9,839
22,275
$ 32,114

Supplemental disclosure of cash flow information:

Cash paid for interest
Cash paid for income taxes

Supplemental disclosure of non-cash activities:

Payable due to vendor related to property and equipment and software

$ 22,535
8,697

$ 21,497
5,682

$ 24,280
976

acquired

3,302

3,638

6,115

The accompanying notes are an integral part of these audited consolidated financial statements.

F-8

Notes to Audited Consolidated Financial Statements

Note 1—The Company and Summary of Significant Accounting Policies

Note 2—Recent Accounting Pronouncements

Note 3—Cash

Note 4—Accounts Receivable, Net

Note 5—Prepaid Expenses and Other Assets

Note 6—Investment in Equity Investee

Note 7—Property and Equipment, net

Note 8—Goodwill

Note 9—Other Intangible Assets, Net

Note 10—Other Long-Term Assets

Note 11—Debt and Short-Term Borrowings

Note 12—Financial Instruments and Fair Value Measurements

Note 13—Other Long-Term Liabilities

Note 14—Equity

Note 15—Share-based Compensation

Note 16—Employee Benefit Plan

Note 17—Total Other Income, Net

Note 18—Income Tax

Note 19—Net Income Per Common Share

Note 20—Related Party Transactions

Note 21—Commitments and Contingencies

Note 22—Segment Information

Note 23—Subsequent Events

F-10

F-17

F-22

F-23

F-23

F-23

F-24

F-24

F-25

F-26

F-26

F-29

F-31

F-31

F-32

F-35

F-35

F-35

F-40

F-40

F-41

F-42

F-44

F-9

EVERTEC, Inc. Notes to Consolidated Financial Statements

Note 1—The Company and Summary of Significant Accounting Policies

The Company

EVERTEC, Inc. (formerly known as Carib Latam Holdings, Inc.) and its subsidiaries (collectively the
“Company,” or “EVERTEC”) is a leading full-service transaction processing business in Latin America and the
Caribbean. The Company is based in Puerto Rico and provides a broad range of merchant acquiring, payment
processing and business process management services across 18 countries in the region. EVERTEC owns and
operates the ATH network, one of the leading automated teller machine (“ATM”) and personal identification
number (“PIN”) debit networks in Latin America. In addition, EVERTEC provides a comprehensive suite of
services for core bank processing, cash processing and technology outsourcing in the regions the Company
serves. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants,
corporations and government agencies with solutions that are essential to their operations, enabling them to issue,
process and accept transactions securely.

Initial Public Offering and Other Public Offerings

On April 17, 2013, the Company completed its initial public offering of 28,789,943 shares of common stock at a
price to the public of $20.00 per share. On September 18, 2013 and December 13, 2013, the Company completed
public offerings of 23,000,000 and 15,233,273 shares, respectively, of the Company’s common stock by Apollo
Global Management, LLC (“Apollo”), Popular, Inc. (“Popular”), and current and former employees. After the
completion of these offerings, Popular owned approximately 11.7 million shares of EVERTEC’s common stock,
or 16.05% as of December 31, 2016, and Apollo no longer owns any of the Company’s common stock.

Basis of Presentation

The consolidated financial statements of EVERTEC have been prepared in accordance with accounting
principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the
accompanying consolidated financial statements, prepared in accordance with GAAP, contain all adjustments, all
of which are normal and recurring in nature, necessary for a fair presentation.

A summary of the most significant accounting policies used in preparing the accompanying consolidated
financial statements is as follows:

Principles of Consolidation

The accompanying consolidated financial statements include the accounts and operations of the Company, which
are presented in accordance with GAAP. The Company consolidates all entities that are controlled by ownership
of a majority voting interest. Intercompany accounts and transactions are eliminated in the consolidated financial
statements.

Use of Estimates

The preparation of the accompanying consolidated financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses
during the reporting period.

Revenue Recognition

The Company’s revenue recognition policy follows the guidance from Accounting Standards Codification
(“ASC”) 605 Revenue Recognition; ASC 605-25, Revenue Recognition—Multiple Element Arrangements; and;
ASC 985, Software, which provide guidance on the recognition, presentation, and disclosure of revenue in
consolidated financial statements.

F-10

EVERTEC, Inc. Notes to Consolidated Financial Statements

The Company recognizes revenue when the following four criteria are met: (i) persuasive evidence of an
agreement exists, (ii) delivery and acceptance has occurred or services have been rendered, (iii) the selling price
is fixed or determinable, and (iv) collection is reasonably assured. For multiple deliverable arrangements,
EVERTEC evaluates each arrangement to determine if the elements or deliverables within the arrangement
represent separate units of accounting pursuant to ASC 605-25. If the deliverables are determined to be separate
units of accounting, revenues are recognized as units of accounting are delivered and the revenue recognition
criteria are met. If the deliverables are not determined to be separate units of accounting, revenues for the
delivered services are combined into one unit of accounting and recognized (i) over the life of the arrangement if
all services are consistently delivered over such term, or if otherwise, (ii) at the time that all services and
deliverables have been delivered. The selling price for each deliverable is based on vendor specific objective
evidence (“VSOE”) if available, third party evidence (“TPE”) if VSOE is not available, or management best
estimate of selling price (“BESP”) if neither VSOE nor TPE is available. EVERTEC establishes VSOE of selling
price using the price charged when the same element is sold separately. EVERTEC bifurcates or allocates the
arrangement consideration to each of the deliverables based on the relative selling price of each unit of
accounting.

The Company has two main categories of revenues according to the type of transactions EVERTEC enters into
with the Company’s customers: (a) transaction-based fees and (b) fixed fees and time and material.

Transaction-based fees

The Company provides services that generate transaction-based fees. Typically transaction-based fees depend on
factors such as number of accounts or transactions processed. These factors typically consist of a fee per
transaction or item processed, a percentage of dollar volume processed or a fee per account on file, or some
combination thereof. Revenue derived from the transaction-based fee contracts are recognized when the
underlying transaction is processed, which constitutes delivery of service.

Revenues from business contracts in the Company’s Merchant Acquiring segment are primarily comprised of
discount fees charged to the merchants based on the sales amount of transactions processed. Revenues include a
discount fee and membership fees charged to merchants and debit network fees as well as point-of-sale (“POS”)
rental fees. Pursuant to the guidance from ASC 605-45-45, Revenue Recognition—Principal Agent
Considerations, EVERTEC records Merchant Acquiring revenues net of interchange and assessments charged by
the credit and debit card network associations and recognizes such revenues at the time of the sale (when a
transaction is processed).

Payment processing revenues are comprised of revenues related to providing access to the ATH network and
other card networks to financial institutions, and related services. Payment processing revenues also include
revenues from card issuer processing services (such as credit and debit card processing, authorization and
settlement, and fraud monitoring and control to debit or credit card issuers), payment processing services (such as
payment and billing products for merchants, businesses and financial institutions) and electronic benefit transfer
(“EBT”) (which principally consists of services to the Puerto Rico government for the delivery of government
benefits to participants). Revenues in EVERTEC’s Payment Processing segment are primarily comprised of fees
per transaction processed or per account on file, or a combination of both, and are recognized at the time
transactions are processed or on a monthly basis for accounts on file.

Transaction-based fees within EVERTEC’s Business Solutions segment consist of revenues from business
process management solutions including core bank processing, business process outsourcing, item and cash
processing, and fulfillment. Transaction-based fee revenues generated by the Company’s core bank processing
services are derived from fees based on various factors such as the number of accounts on file (e.g. savings or
checking accounts, loans, etc.), and the number of transactions processed or registered users (e.g. for online

F-11

EVERTEC, Inc. Notes to Consolidated Financial Statements

banking services). For services dependent on the number of transactions processed, revenues are recognized as
the underlying transactions are processed. For services dependent on the number of users or accounts on file,
revenues are recognized on a monthly basis based on the number of accounts on file each month. Item and cash
processing revenues are based upon the number of items (e.g. checks) processed and revenues are recognized
when the underlying item is processed. Fulfillment services include technical and operational resources for
producing and distributing variable print documents such as statements, bills, checks and benefits summaries.
Fulfillment revenues are based upon the number pages for printing services and the number of envelopes
processed for mailing services. Revenues are recognized as services are delivered based on a fee per page printed
or envelope mailed, as applicable.

Fixed fees and time and material

The Company also provides services that generate a fixed fee per month or fees based on time and expenses
incurred. These services are mostly provided in EVERTEC’s Business Solutions segment. Revenues are
generated from EVERTEC’s core bank solutions, network hosting and management and IT consulting services.

In core bank solutions, the Company mostly provides access to applications and services such as back-up or
recovery, hosting and maintenance that enable a bank to operate the related hosted services accessing the
Company’s IT infrastructure. These contracts generally contain multiple elements or deliverables which are
evaluated by EVERTEC and revenues are recognized according to the applicable guidance. Revenue is derived
from fixed fees charged for the use of hosted services and are recognized on a monthly basis as delivered. Set-up
fees are billed to the customer when the service is rendered; however, they are deferred and recognized as
revenues over the term of the arrangement or the expected period of the customer relationship, whichever is
longer, as set-up services rarely provide value to the customer on a stand-alone basis and are interrelated with the
service to be provided under the contract.

In network hosting and management, EVERTEC provides hosting services for network infrastructure at
EVETEC’s facilities; automated monitoring services; maintenance of call centers; interactive voice response
solutions, among other related services. Revenues are primarily derived from monthly fees as services are
delivered. Set-up fees are billed up-front to the customer when the set-up service is rendered; however, they are
deferred and recognized as revenues over the term of the arrangement or the expected period of the customer
relationship, whichever is longer, as set-up services rarely provide value to the customer on a stand-alone basis
and are interrelated with the service under the contract. There are some arrangements under this line of service
category that may contain undelivered elements. In such cases, the undelivered elements are evaluated and
recognized when the services are delivered or at the time that all deliverables under the contract have been
delivered.

IT consulting services revenue primarily consists of time billings based upon the number of hours dedicated to
each client. Revenue from time billings are recognized as services are delivered.

EVERTEC also charges members of the ATH network an annual membership fee; however, these fees are
deferred and recognized as revenues on a straight-line basis over the year and recorded in the Company’s
Payment Processing segment. In addition, occasionally EVERTEC is a reseller of hardware and software
products and revenues from these resale transactions are recognized when such product is delivered and accepted
by the client.

Service level arrangements

The Company’s service contracts may include service level arrangements (“SLA”) generally allowing the
customer to receive a credit for part of the service fee when the Company has not provided the agreed level of

F-12

EVERTEC, Inc. Notes to Consolidated Financial Statements

services. The SLA performance obligation is committed on a monthly basis, thus SLA performance is monitored
and assessed for compliance with arrangements on a monthly basis, including determination and accounting for
its economic impact, if any.

Investment in Equity Investee

The Company accounts for investments using the equity method of accounting if the investment provides the
Company the ability to exercise significant influence, but not control, over an investee. Significant influence is
generally deemed to exist if the Company has an ownership interest in the voting stock of an investor of between
20 percent and 50 percent, although other factors are considered in determining whether the equity method of
accounting is appropriate. Under this method, the investment, originally recorded at cost, is adjusted to recognize
the Company’s share of net income or losses as they occur. The Company’s share of investee earnings or losses is
recorded, net of taxes, within earnings of equity method investment caption in the consolidated statements of
income and comprehensive income. The Company’s consolidated revenues include fees for services provided to an
investee accounted for under the equity method. Additionally, the Company’s interest in the net asset of its equity
method investee is reflected in the consolidated balance sheets. On the acquisition of the investment any difference
between the cost of the investment and the amount of the underlying equity in net assets of an investee is required to
be accounted as if the investee were a consolidated subsidiary. If the difference is assigned to depreciable or
amortizable assets or liabilities, then the difference should be amortized or accreted in connection with the equity
earnings based on the Company’s proportionate share of the investee’s net income or loss. If the investor is unable
to relate the difference to specific accounts of the investee, the difference should be considered to be goodwill.

The Company considers whether the fair value of its equity method investment has declined below their carrying
value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable.
If the Company considered any such decline to be other than temporary (based on various factors, including
historical financial results, product development activities and the overall health of the investee’s industry), then
the Company would record a write-down to estimated fair value.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation of
property and equipment is computed using the straight-line method and expensed over their estimated useful
lives. Amortization of leasehold improvements is computed over the terms of the respective leases, including
renewal options considered by management to be reasonably assured of being exercised, or the estimated useful
lives of the improvements, whichever is shorter. Costs of maintenance and repairs which do not improve or
extend the life of the respective assets are expensed as incurred.

Impairment on Long-lived Assets

Long-lived assets to be held and used, and long-lived assets to be disposed of, are evaluated for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable.

Capitalization of Software

EVERTEC Group LLC’s (“EVERTEC Group”), EVERTEC’s main operating subsidiary, develops software that
is used in providing processing services to customers. Capitalized software includes purchased software and
internally-developed software and is recognized as software packages within the other intangible assets line item
in the consolidated balance sheets. Capitalization of internally developed software occurs only after the
preliminary project stage is complete and technological feasibility has been achieved, and management’s

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EVERTEC, Inc. Notes to Consolidated Financial Statements

estimation that the likelihood of successful development and implementation reaches a provable level. Tasks that
are generally capitalized are as follows: (a) system design of a chosen path including software configuration and
software interfaces; (b) employee costs directly associated with the internal-use computer software project;
(c) software development (coding) and software and system testing and verification; (d) system installation; and
(e) enhancements that add function and are considered permanent. These tasks are capitalized and amortized
using the straight line method over its estimated useful life, which range from three to ten years and is included
in depreciation and amortization in the consolidated statements of income and comprehensive income.

The Company capitalizes interest costs incurred in the development of software. The amount of interest
capitalized is an allocation of the interest cost incurred during the period required to substantially complete the
asset. The interest rate for capitalization purposes is based on a weighted average rate on the Company’s
outstanding borrowing. For the years ended December 31, 2016, 2015 and 2014, interest cost capitalized
amounted to approximately $0.4 million, $0.3 million and $0.3 million, respectively.

Software and Maintenance Contracts

Software and maintenance contracts are recorded at cost. Amortization of software and maintenance contracts is
computed using the straight-line method and expensed over their estimated useful lives which range from one to
five years and are recognized in cost of revenues in the consolidated statements of income and comprehensive
income.

Software and maintenance contracts are recognized as prepaid expenses and other assets or within other long-
term assets depending on their remaining useful lives.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price and related costs over the value assigned to net assets
acquired. Goodwill is not amortized, but is tested for impairment at least annually, or more often if events or
circumstances indicate there may be impairment.

For 2016, the Company used a “qualitative assessment” option or “step zero” for the goodwill impairment test
for all of its reporting units. With this process, the Company first assesses whether it is “more likely than not”
that the fair value of a reporting unit is less than its carrying amount. If the answer is no, then the fair value of the
reporting unit does not need to be measured, and step one and step two, as explained below, are bypassed. In
assessing the fair value of a reporting unit, which is based on the nature of the business and reporting unit’s
current and expected financial performance, the Company uses a combination of factors such as industry and
market conditions, overall financial performance and the entity and reporting unit specific events.

In the past, the goodwill impairment test used was a two-step process at each reporting unit level. The first step
used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount,
including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting
unit is not considered impaired and the second step of the impairment test is not necessary. If the carrying
amount of the reporting unit exceeds the fair value, there is an indication of potential impairment and the second
step of the goodwill impairment analysis is required. The second step consists of comparing the implied fair
value of the reporting unit goodwill with the carrying amount of that goodwill.

For the years ended December 31, 2016, 2015 and 2014, no impairment losses associated with goodwill were
recognized.

Other identifiable intangible assets with a definitive useful life are amortized using the straight-line method or an
accelerated method. These intangibles are evaluated periodically for impairment when events or changes in
circumstances indicate that the carrying amount may not be recoverable.

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EVERTEC, Inc. Notes to Consolidated Financial Statements

Other identifiable intangible assets with a definitive useful life include a customer relationship, trademark,
software packages and a non-compete agreement acquired during September 2010 when Apollo acquired a 51%
indirect ownership interest in EVERTEC as part of a merger (the “Merger”); a customer relationship asset
acquired in 2015 from a local bank in Puerto Rico, and customer relationship assets acquired as part of business
combination transactions in 2016.

The customer relationship assets were valued using the excess earnings method under the income approach.
Trademark assets were valued using the relief-from-royalty method under the income approach. Software
packages, which include capitalized software development costs, were recorded at cost. The non-compete
agreement was valued based on the estimated impact that theoretical competition would have on revenues and
expenses.

Derivative Instruments and Hedging Activities

The Company uses derivative financial instruments to enhance its ability to manage its exposure to certain
financial and market risks, primarily those related to changes in interest rates. On the date the derivative
instrument contract is entered into, the Company may designate the derivative as (1) a hedge of the fair value of a
recognized asset or liability or an unrecognized firm commitment (“fair value” hedge), (2) a hedge of a
forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or
liability (“cash flow” hedge), or (3) as a “standalone” derivative instrument, including economic hedges that the
Company has not formally documented as a fair value or cash flow hedge. Changes in the fair value of a
derivative that qualifies for cash flow hedge accounting are recognized in Other Comprehensive Income (Loss).
Amounts accumulated in other comprehensive income (loss) are reclassified to earnings when the related cash
outflow affects earnings. Changes in the fair value of a derivative instrument that is highly effective and that is
designated and qualifies as a fair value hedge, along with changes in the fair value of the hedged asset or liability
that is attributable to the hedged risk (including gains or losses on firm commitments), are recorded in current-
period earnings. Similarly, the changes in the fair value of stand-alone derivative instruments or derivatives not
qualifying or designated for hedge accounting are reported in current-period earnings. The Company recognizes
all derivative financial instruments in the Consolidated Balance Sheets as assets or liabilities at fair value. The
Company does not enter into derivative financial instruments for speculative purposes.

Income Tax

Income taxes are accounted for under the asset and liability method. A temporary difference refers to a difference
between the tax basis of an asset or liability, determined based on recognition and measurement requirements for
tax positions, and its reported amount in the financial statements that will result in taxable or deductible amounts
in future years when the reported amount of the asset or liability is recovered or settled, respectively. Deferred
tax assets and liabilities represent the future effects on income taxes that result from temporary differences and
carryforwards that exist at the end of a period. Deferred tax assets and liabilities are measured using enacted tax
rates and provisions of the enacted tax law and are not discounted to reflect the time-value of money. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of
income and comprehensive income in the period that includes the enactment date. A deferred tax valuation
allowance is established if it is considered more likely than not that all or a portion of the deferred tax asset will
not be realized.

The Company recognizes the benefit of uncertain tax positions only if it is more likely than not that the tax
position will be sustained on examination by taxing authorities, based on the technical merits of the position. The
tax benefits recognized in the financial statements from such a position are measured based on the largest benefit
that has a greater than fifty percent likelihood of being realized upon ultimate settlement or disposition of the
underlying issue with the taxing authority. Accordingly, the amount of benefit recognized in the consolidated

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EVERTEC, Inc. Notes to Consolidated Financial Statements

financial statements may differ from the amount taken or expected to be taken in the tax return resulting in
unrecognized tax benefits (“UTBs”). The Company recognizes the interest and penalties associated with UTBs as
part of the provision for income taxes on its consolidated statements of income and comprehensive income.
Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheets.

All companies within EVERTEC are legal entities which file separate income tax returns.

Cash

Cash includes cash on hand and in banks.

Restricted Cash

Restricted cash represents cash received on deposits from participating institutions of the ATH network that has
been segregated for the development of the ATH brand and cash maintained as collateral for a credit facility with
Popular. Also, restricted cash includes certain cash collected from the Ticketpop business and a reserve account
for payment and transaction processing services to merchants. The restrictions of these accounts are based on
contractual provisions entered into with third parties. This cash is maintained in separate accounts at a financial
institution in Puerto Rico.

Allowance for Doubtful Accounts

An allowance for doubtful accounts is provided for based on the estimated uncollectible amounts of the related
receivables. The estimate is primarily based on a review of the current status of specific accounts receivable.
Receivables are considered past due if full payment is not received by the contractual date. Past due accounts are
generally written off against the allowance for doubtful accounts only after all collection attempts have been
exhausted.

Foreign Currency Translation

Assets and liabilities denominated in foreign currencies are translated to U.S. dollars using prevailing rates of
exchange at the end of the period. Revenues, expenses, gains and losses are translated using weighted average
rates for the period. The resulting foreign currency translation adjustment from operations for which the
functional currency is other than the U.S. dollar is reported in accumulated other comprehensive loss. Gains and
losses on transactions denominated in currencies other than the functional currencies are included in determining
net income for the period in which exchange rates change.

Share-based Compensation

The Company estimates the fair value of stock-based awards, on a contemporaneous basis, at the date they are
granted using the Black-Scholes-Merton option pricing model for Tranche A options and the Monte Carlo
simulation analysis for Tranche B and Tranche C options and market based restricted stock units (“RSUs”) using
the following assumptions: (1) stock price; (2) risk-free rate; (3) expected volatility; (4) expected annual dividend
yield and (5) expected term. The risk-free rate is based on the U.S. Constant Maturities Treasury Interest Rate as
of the grant date or the yield of a 2-year or 3-year Treasury bond, as applicable. The expected volatility is based
on a combination of historical volatility and implied volatility from publicly traded companies in the Company’s
industry. The expected annual dividend yield is based on management’s expectations of future dividends as of
the grant date and, in certain cases, assumes that those dividends will be reinvested over the performance period.
The expected term for stock options granted under the 2010 Plan was based on the vesting time of the options.
For the stock options granted under the 2013 Plan, the simplified method was used to estimate the expected term,

F-16

EVERTEC, Inc. Notes to Consolidated Financial Statements

given that the Company did not have appropriate exercise data on which to base the estimate nor is exercise data
relating to employees of comparable companies easily obtainable. Performance and time based RSUs and
restricted stock are valued based on the market price of the Company’s stock at the grant date.

Upon option exercise or restricted stock or RSUs release, participants may elect to “net share settle”. Rather than
requiring the participant to deliver cash to satisfy the exercise price, for options exercise, and statutory minimum
tax withholdings, the Company withholds a sufficient number of shares to cover these amounts and delivers the
net shares to the participant. The Company recognizes the associated tax withholding obligation as a reduction of
additional paid-in capital.

As compensation expense is recognized, a deferred tax asset is established. At the time stock options are
exercised, restricted stock or RSUs are released, a current tax deduction arises based on the value at the time of
exercise or release. This deduction may exceed the associated deferred tax asset, resulting in a “windfall tax
benefit”. The windfall is recognized in the consolidated balance sheets as an increase to additional paid-in
capital, and is included in the consolidated statements of cash flows as a financing inflow.

In determining the amount of cash tax savings realized from the excess share-based compensation deductions, the
Company follows the tax law ordering approach. Under this approach, the utilization of excess tax deductions
associated with share-based awards is dictated by provision in the tax law that identify the sequence in which
such benefits are utilized for tax purposes.

Net Income per Common Share

Basic net income per common share is determined by dividing net income by the weighted-average number of
common shares outstanding during the period.

Diluted net income per common share assumes the issuance of all potentially dilutive share equivalents using the
treasury stock method. For stock options and RSUs it is assumed that the proceeds will be used to buy back
shares. For stock options, such proceeds equal the average unrecognized compensation plus exercise price and
windfall tax benefits. For unvested restricted share units, the proceeds equal the average unrecognized
compensation plus windfall tax benefits.

Note 2—Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In April, 2015, the Financial Accounting Standards Board (“FASB”) issued updated guidance for accounting for
fees paid in a cloud computing arrangement. The amendments in this Update provide guidance to customers
about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement
includes a software license, then the customer should account for the software license element of the arrangement
consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a
software license, the customer should account for the arrangement as a service contract. The guidance will not
change GAAP for a customer’s accounting for service contracts. For public companies, the amendments in this
Update were effective for annual periods, including interim periods within those annual periods, beginning after
December 15, 2015. The Company adopted this guidance on January 1, 2016. Its adoption did not have a
material impact on our results from operations or financial position.

In April 2015, the FASB issued guidance requiring that debt issuance costs related to a recognized debt liability
be presented in the balance sheet as a direct reduction of the carrying amount of the debt liability, consistent with
debt discounts. This guidance was effective for fiscal years beginning after December 15, 2015 and interim

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EVERTEC, Inc. Notes to Consolidated Financial Statements

periods within those fiscal years. The Company adopted the guidance on January 1, 2016 and applied the
standard retrospectively. The balance sheet presented has been adjusted to reflect the period specific effects of
the adoption of the guidance. Specifically, debt issue costs of $6.0 million and $6.4 million for March 31, 2016,
the adoption date, and December 31, 2015, respectively, were reclassified from other long-term assets to long-
term debt within our unaudited Consolidated Condensed Balance Sheets.

In September 2015, the FASB issued updated guidance for Business Combinations and eliminated the
requirement to retrospectively adjust the financial statements for measurement-period adjustments that occur in
periods after a business combination is consummated. This guidance was effective for annual periods and interim
periods within that period beginning after December 15, 2015. The Company adopted this guidance on January 1,
2016 with no impact.

In November 2015, the FASB issued updated guidance to simplify the classification of deferred income taxes.
The amendments in this Update require that deferred tax liabilities and assets be classified as noncurrent in a
classified statement of financial position. The amendments in this Update apply to all entities that present a
classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-
paying component of an entity be offset and presented as a single amount is not affected by the amendments in
this Update. The amendments in this Update are effective for financial statements issued for annual periods
beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is
permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this
Update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all
periods presented. If an entity applies the guidance prospectively, the entity should disclose in the first interim
and first annual period of change, the nature of and reason for the change in accounting principle and a statement
that prior periods were not retrospectively adjusted. If an entity applies the guidance retrospectively, the entity
should disclose in the first interim and first annual period of change the nature of and reason for the change in
accounting principle and quantitative information about the effects of the accounting change on prior periods.
The Company adopted this guidance on its balance sheet at June 30, 2016. The Company applied this guidance
prospectively and the guidance was not retrospectively adjusted on the December 31, 2015 balance sheets. This
guidance was adopted to simplify the presentation of deferred tax assets and liabilities.

Recently issued accounting pronouncements

The FASB has issued the following accounting pronouncements and guidance relevant to the Company’s
operations:

In February 2016, the FASB issued updated guidance for financial reporting about leasing transactions. The
amendments in this Update require a lessee to recognize assets and liabilities for leases with lease terms of more
than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease
by a lessee primarily will depend on its classification as a finance or operating lease. In addition, the Update
requires that both financing and operating leases be recognized on the balance sheet. The guidance also requires
disclosures to help investors and other financial statement users better understand the amount, timing, and
uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative
requirements, providing additional information about the amounts recorded in the financial statements. The
amendments in this Update are effective for public companies for fiscal years beginning after December 15,
2018, including interim periods within those fiscal years. Early application is permitted. The Company is
currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

In March 2016, the FASB issued updated guidance for the effect of derivative contract novations on existing hedge
accounting relationships. This Update clarifies that a change in the counterparty to a derivative instrument that has
been designated as the hedging instrument under Topic 815 does not, in and of itself, require designation of that

F-18

EVERTEC, Inc. Notes to Consolidated Financial Statements

hedging relationship provided that all other hedge accounting criteria (including those in paragraphs 815-20-35-14
through 35-18) continue to be met. For public business entities, the amendments in this Update are effective for
financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those
fiscal years. The Company expects to adopt this guidance with no impact on the consolidated financial statements.

In March 2016, the FASB issued updated guidance to simplify the transition to the equity method of accounting.
The amendments in this Update affect all entities that have an investment that becomes qualified for the equity
method of accounting as it eliminates the requirement that an investor adjust the investment, results of
operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect
during all previous periods that the investment had been held. The amendments require that the equity method
investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s
previously held interest and adopt the equity method of accounting as of the date the investment becomes
qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no
retroactive adjustment of the investment is required. The amendments in this Update are effective for all entities
for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The
amendments should be applied prospectively upon their effective date to increases in the level of ownership
interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted.
The Company expects to adopt this guidance if and when an investment becomes qualified for the equity method
of accounting.

In March 2016, the FASB issued updated guidance for revenue from contracts with customers’ principal versus
agent considerations (reporting gross versus net). The amendments clarify the implementation guidance on
principal versus agent considerations and are intended to improve the operability and understandability of the
implementation guidance. The amendments in this Update affect the guidance in Accounting Standards Update
2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and
transition requirements for the amendments in this Update are the same as the effective date and transition
requirements of Update 2014-09. The Company is currently evaluating the impact of the adoption of this
guidance on its consolidated financial statements.

In March 2016, the FASB issued updated guidance for accounting for employee share based payments. The areas
for simplification in this Update involve several aspects of the accounting for share-based payment transactions,
including the income tax consequences, classification of awards as either equity or liabilities, and classification
on the statement of cash flows. For public business entities, the amendments in this Update are effective for
annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early
adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in
an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that
interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The
Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial
statements.

In June 2016, the FASB issued updated guidance for the measurement of credit losses on financial instruments.
The amendments in this Update require a financial asset (or a group of financial assets) measured at amortized
cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a
valuation account that is deducted from the amortized cost basis of the financial asset or assets to present the net
carrying value at the amount expected to be collected on the financial asset. The measurement of expected credit
losses is based on relevant information about past events, including historical experience, current conditions, and
reasonable and supportable forecasts that affect the collectibility of the reported amount. An entity must use
judgment in determining the relevant information and estimation methods that are appropriate in its
circumstances. The amendments in this Update are effective for fiscal years beginning after December 15, 2019,
including interim periods within those fiscal years. All entities may adopt the amendments in this Update earlier

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EVERTEC, Inc. Notes to Consolidated Financial Statements

as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. An
entity will apply the amendments in this Update through a cumulative-effect adjustment to retained earnings as of
the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective
approach). The Company is currently evaluating the impact of the adoption of this guidance on its consolidated
financial statements, if any.

In August 2016, the FASB issued updated guidance for the classification of certain cash receipts and cash
payments on the statement of cash flows. The amendments in this update provide specific guidance for the
classification of eight issues: debt prepayment or extinguishment costs; settlement of zero-coupon debt
instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective
interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds
from the settlement of an insurance claim; proceeds from the settlement of corporate-owned life insurance
policies, including bank-owned life insurance policies; distributions received from equity method investees;
beneficial interests in securitization transactions; and separately identifiable cash flows and applications of the
predominance principle. The amendments in this Update are effective for public business entities for fiscal years
beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted,
including adoption in an interim period. If an entity early adopts the amendments in an interim period, any
adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity
that elects early adoption must adopt all of the amendments in the same period. The amendments in this Update
should be applied using a retrospective transition method to each period presented. If it is impracticable to apply
the amendments retrospectively for some of the issues, the amendments for those issues would be applied
prospectively as of the earliest date practicable. The Company is currently evaluating the impact of the adoption
of this guidance on its consolidated financial statements, if any.

In October 2016, the FASB issued updated guidance for tax treatment of intra-entity transfers of assets other than
inventory. Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset
transfer until the asset has been sold to an outside party. The Board decided that an entity should recognize the
income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs.
Consequently, the amendments in this Update eliminate the exception for an intra-entity transfer of an asset other
than inventory. The amendments in this Update do not include new disclosure requirements; however, existing
disclosure requirements might be applicable when accounting for the current and deferred income taxes for an
intra-entity transfer of an asset other than inventory. For public business entities, the amendments in this Update
are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods
within those annual reporting periods. Early adoption is permitted for all entities as of the beginning of an annual
reporting period for which financial statements (interim or annual) have not been issued or made available for
issuance. The amendments in this Update should be applied on a modified retrospective basis through a
cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The
Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial
statements.

In October 2016, the FASB issued updated guidance for the consolidation of variable interest entities (“VIEs”)
for which interests are held through related parties that are under common control. The amendments in this
Update affect reporting entities that are required to evaluate whether they should consolidate a VIE within the
Variable Interest Entities Subsections of Subtopic 810-10, Consolidation—Overall, in certain situations
involving entities under common control. Specifically, the amendments change the evaluation of whether a
reporting entity is the primary beneficiary of a VIE by changing how a reporting entity that is a single decision
maker of a VIE treats indirect interests in the entity held through related parties that are under common control
with the reporting entity. The amendments in this Update are effective for public business entities for fiscal years
beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is
permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period,

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EVERTEC, Inc. Notes to Consolidated Financial Statements

any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The
Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial
statements, if any.

In November 2016, the FASB issued guidance regarding the classification of transactions involving restricted
cash on the statement of cash flows. The amendments in this Update require that a statement of cash flows
explain the change during the period in the total of cash, cash equivalents, and amounts generally described as
restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and
restricted cash equivalents should be included with cash and cash equivalents when reconciling the
beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in
this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and
interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If
an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the
beginning of the fiscal year that includes that interim period. The amendments in this Update should be applied
using a retrospective transition method to each period presented. The Company will adopt this guidance on its
consolidated statement of cash flows.

In January 2017, the FASB issued guidance clarifying the definition of a business with the objective of adding
guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or
disposals) of assets or businesses. The definition of a business affects many areas of accounting including
acquisitions, disposals, goodwill, and consolidation. The amendments in this Update provide a screen to
determine when a set is not a business. The screen requires that when substantially all of the fair value of the
gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar
identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further
evaluated. The amendments in this Update are effective for public business entities for fiscal years beginning
after December 15, 2017, including interim periods within those fiscal years. The amendments in this Update
should be applied prospectively on or after the effective date. Early application of the amendments in this Update
is allowed in specific circumstances. The Company will adopt this guidance on future acquisitions.

In January 2017, the FASB issued updated guidance to simplify the test for goodwill impairment. The
amendments in this Update modify the concept of impairment from the condition that exists when the carrying
amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a
reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the
implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if
that reporting unit had been acquired in a business combination. Because these amendments eliminate Step 2
from the goodwill impairment test, they should reduce the cost and complexity of evaluating goodwill for
impairment. The amendments in this Update are effective for annual and interim goodwill impairment tests
performed in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual
goodwill impairment tests performed on testing dates after January 1, 2017. The Company is evaluating the
impact of the adoption of this guidance on future goodwill impairment tests.

Accounting pronouncements issued prior to 2016 and not yet adopted

During 2014, the FASB issued new guidance for revenue from contracts with customers, which requires an entity
to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or
services to customers and also includes changes in the accounting for customer contract acquisition costs and
fulfilment costs. During 2016, the FASB issued several additional updates that amended the proposed guidance.
These new standards will replace most existing revenue recognition guidance in U.S. GAAP, and are effective
for public reporting companies for interim and annual periods beginning after December 15, 2017. The standards
permit two methods of adoption: retrospectively to each prior reporting period presented (retrospective method),

F-21

EVERTEC, Inc. Notes to Consolidated Financial Statements

or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial
application (the cumulative catch-up transition method). The effective date for the Company is January 1, 2018.
Management has not yet determined what transition method will be used.

Management is currently in the process of evaluating the potential impact this new guidance will have on the
Company’s financial statements. Management has not completed this evaluation and therefore, cannot conclude
whether the guidance will have a significant impact on the financial statements at this time. However, based on
preliminary work completed at this time, Management is considering the implications that the new standard may
have in the following areas:

• Under the new standards, certain implementation costs and other fulfilment costs, such as direct labor for
contract set-up activities, that are expensed as incurred under current policies, will be capitalized and
amortized over the contract term and anticipated renewal periods.

• The period of amortization of contract acquisition costs (e.g., sales commissions) may change. Under
current policies, sales commissions are expensed over the initial term of a contract. Under the new
standards, these are required to be amortized over the initial contract term plus any anticipated renewal
periods if there is no commensurate commission paid for the renewal periods.

• Under current policies, upfront activities (such as setup activities) are not generally analyzed to determine

whether they have standalone value because the contingent revenue cap under the existing revenue guidance
would prohibit allocation of hosting revenue to that upfront activity. Under the new standards, the
contingent revenue cap no longer exists, so certain upfront activities included in the implementation process
will need to be evaluated to determine whether they qualify as separate units of accounting. If they are
separate units of accounting, then revenue would be allocated to the upfront activity, recognized as those
activities are performed, rather than over the hosting period.

• Where the Company charges upfront fees for implementation or set-up activities, including fees charged in
pre-production periods, the period over which these fees will be recognized may in some cases be shorter
than our current practice.

•

For certain software license arrangements, the Company currently uses a ratable, or over time, revenue
recognition method for software licensing arrangements where vendor specific objective evidence (VSOE)
of the maintenance portion of the arrangement does not exist. Under the new standards, Management
expects the timing of revenue recognition to be accelerated because Management anticipates that the license
revenue portion will be recognized at a point in time upon software license delivery.

At this time, Management is not able to reasonably estimate the impact that adoption is expected to have.

The Company’s implementation process is ongoing. Significant activities that are in process are the calculation
of the transition adjustment, drafting and approval of new accounting policies, and design and implementation of
new processes and systems to accommodate the new policies and to compile the information for the enhanced
disclosures under the new standards.

Note 3—Cash

At December 31, 2016 and 2015, the Company’s cash amounted to $51.9 million and $28.7 million, respectively,
which is mostly deposited in interest bearing deposit accounts within financial institutions. As of December 31,
2016 and 2015, total cash from subsidiaries located outside of Puerto Rico amounted to $35.5 million and
$16.4 million, respectively. Cash deposited in an affiliate financial institution amounted to $7.8 million and
$12.1 million as of December 31, 2016 and 2015, respectively.

F-22

EVERTEC, Inc. Notes to Consolidated Financial Statements

Note 4—Accounts Receivable, Net

Accounts receivable, net consisted of the following:

(Dollar amounts in thousands)

Trade
Due from affiliates, net
Settlement assets
Other

Less: allowance for doubtful accounts

Accounts receivable, net

December 31,

2016

2015

$52,663
20,971
5,938
144
(1,913)

$52,652
16,886
6,304
123
(2,250)

$77,803

$73,715

At December 31, 2016 and 2015, the Company had receivables from the government of Puerto Rico amounting
to $18.0 million and $18.4 million, respectively, included as part of Trade receivables.

The Company records settlement assets that result from timing differences in the Company’s settlement
processes with merchants, financial institutions, and credit card associations related to merchant and card
transaction processing. The amounts are generally collected or paid the following business day.

Note 5—Prepaid Expenses and Other Assets

Prepaid expenses and other assets consisted of the following:

(Dollar amounts in thousands)

Software licenses and maintenance contracts
Deferred project costs
Guarantee deposits
Insurance
Prepaid income taxes
Taxes other than income
Postage
Other

December 31,

2016

2015

$ 8,302
3,113
3,396
1,272
1,362
1,358
296
1,331

$ 6,526
4,067
2,404
1,313
1,259
1,042
751
1,396

Prepaid expenses and other assets

$20,430

$18,758

Note 6—Investment in Equity Investee

Consorcio de Tarjetas Dominicanas, S.A. (“CONTADO”) is the largest merchant acquirer and ATM network in
the Dominican Republic. The Company uses the equity method of accounting to account for its equity interest in
CONTADO. As a result of the acquisition in 2011 of CONTADO’s 19.99% equity interest, the Company
calculated an excess cost of the investment in CONTADO over the amount of underlying equity in net assets of
approximately $9.0 million, which was mainly attributed to customer relationships, trademark and goodwill
intangibles. The Company’s excess basis allocated to amortizable assets is recognized on a straight-line basis
over the lives of the appropriate intangibles. Amortization expense for each of the years ended December 31,
2016, 2015 and 2014 amounted to approximately $0.3 million, and was recorded within earnings (losses) of
equity method investment in the consolidated statements of income and comprehensive income. The Company
recognized a loss of $0.1 million for December 31, 2016 and earnings of $0.1 million and $1.1 million as equity
in CONTADO’s net income, net of amortization, in the consolidated statements of income and comprehensive

F-23

EVERTEC, Inc. Notes to Consolidated Financial Statements

income for the years ended 2015 and 2014, respectively. For the year ended December 31, 2014, the Company
received $0.3 million in dividends from CONTADO. No dividends were received during 2015 or 2016.

CONTADO fiscal year ends December 31 and is reported in the consolidated statements of income and
comprehensive income for the period subsequent to the acquisition date on a one month lag. No significant
events occurred in CONTADO’s operations subsequent to November 30, 2016 that would have materially
affected the Company’s reported results.

Note 7—Property and Equipment, Net

Property and equipment, net consisted of the following:

(Dollar amounts in thousands)

Buildings
Data processing equipment
Furniture and equipment
Leasehold improvements

Less—accumulated depreciation and amortization

Depreciable assets, net

Land

Property and equipment, net

Useful life
in years

30
3 - 5
3 - 20
5 - 10

December 31,

2016

$

1,559
105,052
7,311
3,057

$

2015

1,606
94,523
8,170
3,649

116,979
(79,431)

107,948
(75,244)

37,548
1,382

32,704
1,424

$ 38,930

$ 34,128

Depreciation and amortization expense related to property and equipment was $14.2 million, $15.1 million and
$15.5 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Note 8—Goodwill

The changes in the carrying amount of goodwill, allocated by reportable segments, were as follows (See Note 22):

(Dollar amounts in thousands)

Balance at December 31, 2014

Foreign currency translation adjustments

Balance at December 31, 2015

Goodwill attributable to acquisition
Foreign currency translation adjustments

Merchant
acquiring, net

Payment
processing

$138,121
—

138,121
—
—

$184,228
(732)

183,496
4,991
(1,799)

Business
solutions

$46,488
28

46,516
—
(339)

Total

$368,837
(704)

368,133
4,991
(2,138)

Balance at December 31, 2016

$138,121

$186,688

$46,177

$370,986

Goodwill is tested for impairment on an annual basis, or more often if events or circumstances indicate there may
be impairment. For 2016, the Company used the qualitative assessment option or step zero process. Using this
process, the Company first assesses whether it is “more likely than not” that the fair value of a reporting unit is
less than its carrying amount. For 2015, the Company used a two-step process at each reporting unit level. The
first step (“Step 1”) compares the estimated fair value of the reporting units to their carrying values, including
goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not
considered impaired and the second step of the impairment test is unnecessary. If needed, the second step

F-24

EVERTEC, Inc. Notes to Consolidated Financial Statements

(“Step 2”) consists of comparing the implied fair value of the reporting units with the carrying amount of that
goodwill.

The Company conducted a qualitative assessment of each reporting unit’s fair value, or step zero process, as of
August 31, 2016. As part of the Company’s qualitative assessment, EVERTEC considered the results for the
Company’s 2015 impairment test (which indicated that the fair value of each reporting unit was in excess of it
carrying amount by 120.9%—145.5%) as well as current market conditions and changes in the carrying amount
of the Company’s reporting units that occurred subsequent to the 2015 impairment test. Based on the results of
this qualitative assessment, EVERTEC believes the fair value of goodwill for each of the Company’s reporting
units continues to exceed their respective carrying amounts and concluded that it was not necessary to conduct
the two-step goodwill impairment test. Accordingly, no impairment losses for the period were recognized.

Note 9—Other Intangible Assets, Net

The carrying amount of other intangible assets consisted of the following:

(Dollar amounts in thousands)

December 31, 2016

Customer relationships
Trademark
Software packages
Non-compete agreement

Useful life
in years

Gross
amount

Accumulated
amortization

Net carrying
amount

8 - 14
10 - 15
3 - 10
15

$334,455
39,950
176,267
56,539

$(141,829)
(21,650)
(121,055)
(23,558)

$192,626
18,300
55,212
32,981

Other intangible assets, net

$607,211

$(308,092)

$299,119

(Dollar amounts in thousands)

December 31, 2015

Customer relationships
Trademark
Software packages
Non-compete agreement

Useful life
in years

Gross
amount

Accumulated
amortization

Net carrying
amount

10 - 14
10 - 15
3 - 10
15

$322,632
39,950
155,611
56,539

$(117,963)
(18,186)
(106,735)
(19,789)

$204,669
21,764
48,876
36,750

Other intangible assets, net

$574,732

$(262,673)

$312,059

The Company completed two acquisitions in 2016 that were not significant, individually or in the aggregate, a
65% equity interest in Processa, S.A.S, a Colombian payment processing company for $6.4 million, including a
customer relationship of $3.1 million, and Accuprint, Inc, a data management and printing services company for
$9.7 million, including a customer relationship of $9.1 million. In connection with the Accurpint, Inc purchase,
the Company has recorded a contingent liability of $1.1 million. The results of operations and financial position
of these entities are included in the Consolidated Financial Statements from and after the date of acquisition.
During 2015, the Company acquired a customer relationship amounting to $10.0 million.

Amortization expense related to intangibles, including software packages, was $45.4 million, $49.9 million and
$50.5 million for the years ended December 31, 2016, 2015 and 2014, respectively. Amortization expense related
to software packages was $14.3 million, $20.1 million and $21.0 million for the years ended December 31, 2016,
2015 and 2014, respectively. During the year ended December 31, 2016, the Company recognized an impairment

F-25

EVERTEC, Inc. Notes to Consolidated Financial Statements

loss of $2.3 million related to software. The estimated amortization expenses of balances outstanding at
December 31, 2016 for the next five years are as follows:

(Dollar amounts in thousands)
2017
2018
2019
2020
2021

$43,723
39,516
36,247
33,621
32,465

Note 10—Other Long-Term Assets

As of December 31, 2016, other long-term assets included $1.9 million related to deferred debt-issuance costs
related to the revolving credit facility, $2.3 million related to the long-term portion of certain software and
maintenance contracts and $1.1 million relating to the long-term portion of certain lease receivables.

As of December 31, 2015, other long-term assets included $1.3 million related to deferred debt-issuance costs
related to the revolving credit facility and $1.7 million related to the long-term portion of certain software and
maintenance contracts.

Note 11—Debt and Short-Term Borrowings

Total debt was as follows:

(Dollar amounts in thousands)

Senior Secured Credit Facility (Term A) due on April 17, 2018 paying
interest at a variable interest rate (London InterBank Offered Rate
(“LIBOR”) plus applicable margin (1)(3))

Senior Secured Credit Facility (2018 Term A) due on April 17, 2018 paying

interest at a variable interest rate (London InterBank Offered Rate
(“LIBOR”) plus applicable margin (1)(3))

Senior Secured Credit Facility (2020 Term A) due on January 17, 2020

paying interest at a variable interest rate (London InterBank Offered Rate
(“LIBOR”) plus applicable margin (3)(4))

Senior Secured Credit Facility (Term B) due on April 17, 2020 paying

interest at a variable interest rate (LIBOR plus applicable margin (2)(3))

Senior Secured Revolving Credit Facility (6)
Note Payable due on October 1, 2017 (3)
Note Payable due on July 31, 2017 (3)
Note Payable due on August 31, 2019 (5)
Note Payable due on April 30, 2021 (3)

Total debt

December 31,

2016

2015

$ —

$260,324

28,721

212,661

378,074
28,000
1,524
357
890
532

—

—

381,723
17,000
2,967
685
—
—

$650,759

$662,699

(1) Applicable margin of 2.25% at December 31, 2016 and 2015.
(2)

Subject to a minimum rate (“LIBOR floor”) of 0.75% applicable margin of 2.50% at December 31, 2016
and 2015, respectively.

(3) Net of unaccreted discount and unamortized debt issue costs, as applicable.
(4) Applicable margin of 2.50% at December 31, 2016.
(5)

Fixed interest rate of 7.50%.

(6) Applicable margin of 2.50% and 2.25% at December 31, 2016 and 2015, respectively.

F-26

EVERTEC, Inc. Notes to Consolidated Financial Statements

The following table presents contractual principal payments for the next five years:

(Dollar amounts in thousands)
2017
2018
2019
2020
2021

$ 50,162
46,953
24,924
540,820
45

Senior Secured Credit Facilities

On April 17, 2013, EVERTEC Group entered into a credit agreement (the “2013 Credit Agreement”) governing
the senior secured credit facilities, consisting of a $300.0 million term loan A facility (the “Term A Loan”), a
$400.0 million term loan B facility (the “Term B Loan”) and a $100.0 million revolving credit facility.

Term A Loan

The Term A Loan requires principal payments on the last business day of each quarter equal to (a) 1.250% of the
original principal amount commencing on September 30, 2013 through June 30, 2016; (b) 1.875% of the original
principal amount from September 30, 2016 through June 30, 2017; (c) 2.50% of the original principal amount
from September 30, 2017 through March 31, 2018; and (d) the remaining outstanding principal amount on the
maturity of the Term A Loan on April 17, 2018. Interest is based on EVERTEC Group first lien secured net
leverage ratio and payable at a rate equal to, at the Company’s option, either (a) LIBOR Rate plus an applicable
margin ranging from 2.00% to 2.50%, or (b) Alternate Base Rate (“ABR”), as defined in the 2013 Credit
Agreement, plus an applicable margin ranging from 1.00% to 1.50%. The Term A Loan has no LIBOR or Base
Rate minimum or floor.

Term B Loan

The Term B Loan requires principal payments on the last business day of each quarter equal to 0.250% of the
original principal amount commencing on September 30, 2013 and the remaining outstanding principal amount
on the maturity of the Term B Loan on April 17, 2020. Interest is based on EVERTEC Group’s first lien secured
net leverage ratio and payable at a rate equal to, at the Company’s option, either (a) LIBOR Rate plus an
applicable margin ranging from 2.50% to 2.75%, or (b) Base Rate plus an applicable margin ranging from 1.50%
to 1.75%. The LIBOR Rate and Base Rate are subject to floors of 0.75% and 1.75%, respectively.

Revolving Credit Facility

The revolving credit facility has an available balance up to $100.0 million, with an interest rate on loans
calculated the same as the applicable Term A Loan rate. The facility matures on April 17, 2018 and has a
“commitment fee” payable one business day after the last business day of each quarter calculated based on the
daily unused commitment during the preceding quarter. The commitment fee for the unused portion of this
facility ranges from 0.125% to 0.375% and is based on EVERTEC Group’s first lien secured net leverage ratio.

All loans may be prepaid without premium or penalty.

The senior secured credit facilities contain various restrictive covenants. As a result of the Third Amendment (as
defined below), the Term A Loan and the revolving credit facility (subject to certain exceptions) require the
Company to maintain on a quarterly basis a specified maximum senior secured leverage ratio of up to 4.75 to
1.00 as defined in the 2013 Credit Agreement (total first lien secured debt to adjusted EBITDA) until

F-27

EVERTEC, Inc. Notes to Consolidated Financial Statements

September 30, 2018 and 4.25 to 1.00 for any fiscal quarter ending thereafter. In addition, substantially all of the
Company’s assets are pledged to secure the Company’s obligations under the 2013 Credit agreement and, among
other things, the 2013 Credit Agreement: (a) limits the Company’s ability and the ability of the Company’s
subsidiaries to incur additional indebtedness, incur liens, pay dividends or make certain other restricted
payments, as all net assets are restricted, and enter into certain transactions with affiliates; (b) restricts the
Company’s ability to enter into agreements that would restrict the ability of the Company’s subsidiaries to pay
dividends or make certain payments to EVERTEC; and (c) places restrictions on the Company’s ability and the
ability of the Company’s subsidiaries to merge or consolidate with any other person or sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the Company’s assets.

Amendments to the 2013 Credit Agreement

During the second quarter of 2016, EVERTEC Group, together with certain other direct and indirect subsidiaries
of the Company, entered into a second amendment and waiver to the outstanding Credit Agreement (the “Second
Amendment”). The Company paid each lender that consented to the amendment a fee equal to 0.50% of the
aggregate principal amount of outstanding term loans and revolving commitments held by such lender. The credit
amendment fees paid during the second quarter of 2016 amounted to $3.6 million.

During the fourth quarter of 2016, EVERTEC Group, together with certain other direct and indirect subsidiaries
of the Company, entered into a third amendment (the “Third Amendment”) to the 2013 Credit Agreement. The
Third Amendment extends the maturity of (a) approximately $219 million of EVERTEC Group’s existing
approximately $250 million of Term A loan facility to January 17, 2020 (the “2020 Term A loan”) and (b) $65
million of EVERTEC Group’s existing $100 million of revolving credit facility to January 17, 2020. The
remaining approximately $30 million of Term A loan (the “2018 Term A loan”) and the $35 million of revolving
credit facility that were not extended will remain in place and mature as originally scheduled on April 17, 2018.
The Term B loan facility will remain in place and mature as originally scheduled on April 17, 2020 (collectively,
the “Senior Secured term loans”).

Under the terms of the Third Amendment, the 2018 Term A Loan amortizes on a basis of 1.875% of the original
principal amount beginning in the third quarter of 2016 and during each of the next three quarters, and 2.50% of
the original principal amount during each of the final three quarters, with the balance payable on the final
maturity date. The 2020 Term A Loan amortizes on a basis of 1.50% of the original principal amount beginning
in the fourth quarter of 2016 and during each of the next five quarters, 1.875% of the original principal amount
during each of the four subsequent quarters, and 2.50% of the original principal amount during each of the final
three quarters, with the balance payable on the final maturity date.

The applicable margin under the 2013 Credit Agreement is based on, at EVERTEC Group’s option, (i) with
respect to any 2018 Term A Loan, 2.50% per annum in the case of any LIBOR Loan and 1.50% per annum in the
case of any ABR Loan subject to reduction based on achievement of specific first lien secured leverage ratios,
(ii) with respect to any 2020 Term A Loan, 2.50% per annum in the case of any LIBOR Loan and 1.50% per
annum in the case of any ABR Loan, (iii) with respect to any Term B Loan, 2.75% per annum in the case of any
LIBOR Loan and 1.75% per annum in the case of any ABR Loan subject to reduction based on achievement of
specific first lien secured leverage ratios, and (iv) with respect to any Revolving Facility Loan, (A) 2.50% per
annum in the case of any LIBOR Loan and (B) 1.50% per annum in the case of any ABR Loan.

The unpaid principal balance at December 31, 2016 of the 2018 Term A Loan, the 2020 Term A Loan and the
Term B Loan was $29.5 million, $216.0 million and $386.0 million, respectively. The additional borrowing
capacity for the Revolving Facility loan at December 31, 2016 was $72.0 million.

F-28

EVERTEC, Inc. Notes to Consolidated Financial Statements

Notes payable

In December 2014, June 2015, and May 2016, EVERTEC Group entered into non-interest bearing financing
agreements amounting to $4.6 million, $1.1 million and $0.7 million, respectively, and in October 2016 entered
into an interest bearing agreement of $1.1 million, to purchase software. As of December 31, 2016 and 2015, the
outstanding principal balance of the notes payable was $3.4 million and $4.2 million, respectively. The current
portion of these notes is recorded as part of accounts payable and the long-term portion is included in other long-
term liabilities.

Interest Rate Swap

As of December 31, 2016 and 2015, the Company has the following interest rate swap agreement converting a
portion of the interest rate exposure on the Company’s Term B loan from variable to fixed:

Effective date

Maturity Date

Notional Amount

Variable Rate

Fixed Rate

January 2017

April 2020

$200 million

1-month LIBOR

1.9225%

The Company has accounted for this transaction as a cash flow hedge. The fair value of the Company’s
derivative instruments is determined using standard valuation models. The significant inputs used in these
models are readily available in public markets, or can be derived from observable market transactions, and
therefore have been classified as Level 2. Inputs used in these standard valuation models for derivative
instruments include the applicable forward rates and discount rates.

As of December 31, 2016 and 2015, the carrying amount of the derivative on the Company’s balance sheets is as
follows:

(Dollar amounts in thousands)

Other long-term liabilities

December 31, 2016

December 31, 2015

$1,964

$515

The cash flow hedge is considered highly effective and no impact on earnings is expected due to hedge
ineffectiveness.

Note 12—Financial Instruments and Fair Value Measurements

Recurring Fair Value Measurements

Fair value measurement provisions establish a fair value hierarchy that requires an entity to maximize the use of
observable inputs and minimize the use of unobservable inputs when measuring fair value. These provisions
describe three levels of input that may be used to measure fair value:

Level 1: Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the
measurement date.

Level 2: Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability
through corroboration with market data at the measurement date.

Level 3: Unobservable inputs that reflect management’s best estimate of what market participants would use in
pricing the asset or liability at the measurement date.

The Company uses observable inputs when available. Fair value is based upon quoted market prices when
available. If market prices are not available, the Company may employ models that mostly use market-based
inputs including yield curves, interest rates, volatilities, and credit curves, among others. The Company limits

F-29

EVERTEC, Inc. Notes to Consolidated Financial Statements

valuation adjustments to those deemed necessary to ensure that the financial instrument’s fair value adequately
represents the price that would be received or paid in the marketplace. Valuation adjustments may include
consideration of counterparty credit quality and liquidity as well as other criteria. The estimated fair value
amounts are subjective in nature and may involve uncertainties and matters of significant judgment for certain
financial instruments. Changes in the underlying assumptions used in estimating fair value could affect the
results. The fair value measurement levels are not indicative of risk of investment.

The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. Fair value estimates are
made at a specific point in time based on the type of financial instrument and relevant market information. Many
of these estimates involve various assumptions and may vary significantly from amounts that could be realized in
actual transactions. The following table summarizes fair value measurements by level at December 31, 2016 and
2015, for assets and liabilities measured at fair value on a recurring basis:

(Dollar amounts in thousands)

December 31, 2016
Financial liabilities:

Interest rate swap

December 31, 2015
Financial liabilities:

Interest rate swap

Derivative Instruments

Level 1

Level 2

Level 3

Total

$—

$1,964

$—

$1,964

—

515

—

515

The fair value of the Company’s derivative instrument is determined using a standard valuation model. The
significant inputs used in these models are readily available in public markets, or can be derived from observable
market transactions, and therefore have been classified as Level 2. Inputs used in these standard valuation models
for derivative instruments include the applicable forward rates and discount rates. The discount rates are based on
the historical LIBOR Swap rates.

The following table presents the carrying value, as applicable, and estimated fair values for financial instruments
at December 31, 2016 and 2015:

(Dollar amounts in thousands)

Financial liabilities:

Interest rate swap
Senior secured Term A Loan
Senior secured Term B Loan
2018 Term A Loan
2020 Term A Loan

December 31,

2016

2015

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value

$

1,964
—
378,074
28,721
212,661

$

1,964
—
383,491
29,268
213,872

$

515
260,324
381,723
—
—

$

515
250,688
373,749
—
—

The fair value of the senior secured term loans at December 31, 2016 and 2015 was obtained using the prices
provided by third party service providers. Their pricing is based on various inputs such as: market quotes, recent
trading activity in a non-active market or imputed prices. Also, the pricing may include the use of an algorithm
that could take into account movement in the general high yield market, among other variants.

The senior secured term loans, which are not measured at fair value in the balance sheets, if measured, would be
categorized as Level 3 in the fair value hierarchy.

F-30

EVERTEC, Inc. Notes to Consolidated Financial Statements

There were no transfers in or out of Level 3 during the years ended December 31, 2016, 2015 and 2014.

Note 13—Other Long Term Liabilities

As of December 31, 2016, other long-term liabilities mainly consists of unrecognized tax benefit liabilities and
the long-term portion of notes payables of $14.4 million and derivative liability of $2.0 million.

As of December 31, 2015, other long-term liabilities mainly consists of unrecognized tax benefit liabilities and
the long-term portion of notes payables of $11.6 million and derivative liability of $0.5 million.

Note 14—Equity

The Company is authorized to issue up to 206,000,000 shares of common stock of $0.01 par value. At
December 31, 2016 and 2015, the Company had 72,635,032 and 74,988,210 shares outstanding, respectively.
The Company is also authorized to issue 2,000,000 shares of $0.01 par value preferred stock. As of
December 31, 2016, no shares of preferred stock have been issued.

Stock Repurchase

In 2016, 2015 and 2014, the Company repurchased a total of 2.5 million, 3.0 million and 1.2 million shares,
respectively, at a cost of $39.9 million, $54.9 million and $26.2 million, respectively. The Company funded such
repurchases with cash on hand and borrowings to the existing revolving credit facility. As of December 31, 2016,
2015 and 2014, the repurchased shares were permanently retired.

Dividends

EVERTEC pays a regular quarterly dividend on the Company’s common stock, subject to the declaration thereof
each quarter by the Company’s Board of Directors. The Company’s dividend activity in 2016 and 2015 was as
follows:

Declaration Date

Record Date

Payment Date

February 18, 2015
May 6, 2015
August 5, 2015
November 4, 2015
February 17, 2016
May 11, 2016
July 28, 2016
October 27, 2016

March 2, 2015
May 18, 2015
August 17, 2015
November 16, 2015
February 29, 2016
May 23, 2016
August 9, 2016
November 14, 2016

March 19, 2015
June 5, 2015
September 3, 2015
December 4, 2015
March 17, 2016
June 10, 2016
September 2, 2016
December 2, 2016

Dividend
per share

0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10

F-31

EVERTEC, Inc. Notes to Consolidated Financial Statements

Accumulated Other Comprehensive loss

The following tables provides a summary of the changes in the balances of accumulated other comprehensive
loss for the years ended December 31, 2016 and 2015:

Foreign Currency
Translation
Adjustments

$ (6,522)
(545)

(7,067)
(3,360)

Cash Flow Hedge

Total

$ —

(515)

(515)
(1,449)

$ (6,522)
(1,060)

(7,582)
(4,809)

$(10,427)

$(1,964)

$(12,391)

Balance—December 31, 2014
Additions:

Balance—December 31, 2015
Additions:

Balance—December 31, 2016

Note 15—Share-based Compensation

Equity Incentive Plans

On September 30, 2010, Holdings Board of Directors adopted the Carib Holdings, Inc. 2010 Equity Incentive
Plan (the “2010 Plan”) to grant stock options, rights to purchase shares, restricted stock units and other stock-
based rights to employees, directors, consultants and advisors. On April 17, 2012, in connection with the
Company’s reorganization, EVERTEC, Inc. assumed the 2010 Plan and all of the outstanding equity awards
issued thereunder or subject thereto. EVERTEC, Inc. reserved 5,843,208 shares of its common stock for issuance
upon exercise and grants of stock options, restricted stock and other equity awards under the 2010 Plan.

In connection with the Company’s initial public offering, the Company adopted the EVERTEC, Inc. 2013 Equity
Incentive Plan (the “2013 Plan” and, together with the 2010 Plan, the “Equity Incentive Plans”). Under the 2013
Plan, 5,956,882 shares of its common stock are reserved for issuance upon exercise and grants of stock options,
restricted stocks and other equity awards. In connection with the adoption of the 2013 Plan, the 2010 Plan
remains in effect. However, no new awards will be granted under the 2010 Plan. The Equity Incentive Plans have
a contractual term of ten years.

Long-term Incentive Plan

In the first quarter of 2015, the Compensation Committee of the Board of Directors approved grants of restricted
stock units (“RSUs”) to executives and certain employees pursuant to the 2015 Long-Term Incentive Program
(“LTIP”) under the terms of our 2013 Equity Incentive Plan. Under the LTIP, the Company granted restricted
stock units to eligible participants as time-based awards and/or performance-based awards.

In the first quarter of 2016, the Compensation Committee of the Board of Directors approved grants of RSUs to
executives and certain employees pursuant to the 2016 Long-Term Incentive Program (“2016 LTIP”) under the
terms of our 2013 Equity Incentive Plan. Under the 2016 LTIP, the Company granted restricted stock units to
eligible participants as time-based awards and/or performance-based awards.

The vesting of the RSUs is dependent upon service, market, and/or performance conditions as defined in the
grants. Employees that received time-based awards with service conditions are entitled to receive a specific
number of shares of the Company’s common stock on the vesting date if the employee is providing services to
the Company on the vesting date. Time-based awards vest over a period of three years in substantially equal
installments commencing on the start of the fiscal year during which the RSUs were granted or on the grant date
and ending on January 1st of each year for the 2015 LTIP and in mid-February of each year for the 2016 LTIP.

F-32

EVERTEC, Inc. Notes to Consolidated Financial Statements

Employees that received awards with market conditions are entitled to receive a specific number of shares of the
Company’s common stock on the vesting date if the Company’s total shareholder return (“TSR”) target relative
to a specified group of industry peer companies is achieved. Employees that received awards with performance
conditions are entitled to receive a specific number of shares of the Company’s common stock on the vesting
date if the Cumulative Annual Growth Rate (“CAGR”) of Diluted EPS target is achieved. Performance and
market-based awards vest at the end of the performance period which commenced on the start of the fiscal year
during which the RSUs were granted and ends on January 1, 2018 for 2015 LTIP and February 2019 for 2016
LTIP. Awards are forfeited if the employee voluntarily ceases to be employed by the Company prior to vesting.

The following table summarizes the stock options activity for the years ended December 31, 2016, 2015 and 2014:

Outstanding at December 31, 2013

Granted
Forfeitures
Exercised(1)
Repurchased

Outstanding at December 31, 2014

Expired
Forfeitures

Outstanding at December 31, 2015

Forfeitures
Exercised
Expired

Outstanding at December 31, 2016

Exercisable at December 31, 2016

Shares

1,285,536
100,000
(31,164)
(945,040)
(93,332)

316,000
(50,000)
(126,000)

140,000
(33,333)
(20,000)
(66,667)

20,000

—

Weighted-average
exercise prices

$ 4.77
24.01
1.30
1.96
4.83

$19.56
23.36
18.81

$18.88
24.01
6.04
24.01

$ 6.04

$ —

(1) As of December 31, 2016 and 2014, the total intrinsic value of options exercised amounted to $0.2 million

and $19.3 million, respectively.

The following table presents information about fully vested stock options for the years ended December 31,
2016, 2015 and 2014:

Vested stock options (1)(2)(3)

Years ended December 31,

2016

Weighted
average
exercise price

2015

Weighted
average
exercise price

Shares

2014

Weighted
average
exercise price

Shares

$—

33,333

$24.01

766,995

$3.75

Shares

—

(1) At December 31, 2015, there is no intrinsic value for vested stock options as the options are out-of-the-

(2)

(3)

money. For December 31, 2014, the aggregate intrinsic value amounted to $14.0 million.
The weighted average contractual term of fully vested options is 8.16 years and 6.06 years as of
December 31, 2015 and 2014, respectively.
The fair value of vested stock options at December 31, 2015 and 2014 amounted to $1.4 million and
$17.0 million, respectively.

F-33

EVERTEC, Inc. Notes to Consolidated Financial Statements

Management uses the fair value method of recording stock-based compensation as described in the guidance for
stock compensation in ASC topic 718. No stock options were granted in 2016 and 2015. The fair value of stock
options granted during 2014, was estimated using the Black-Scholes-Merton (“BSM”) option pricing model, with
the following assumptions:

Stock Price
Risk-free rate
Expected volatility
Expected annual dividend yield
Expected term

Year ended December 31,
2014

Stock options granted
under the 2013 Plan

$24.01 per share

1.80%
36.98%
1.63%

6 years

The risk-free rate is based on the U.S. Constant Maturities Treasury Interest Rate as of the grant date. The
expected volatility is based on a combination of historical volatility and implied volatility from public trade
companies in the Company’s industry. The expected annual dividend yield is based on management’s
expectations of future dividends as of the grant date. The expected term for stock options granted under the 2010
Plan was based on the vesting time of the options. For the stock options granted under the 2013 Plan, the
simplified method was used to estimate the expected term.

The following table summarizes the nonvested restricted shares and RSUs activity for the years ended
December 31, 2016, 2015 and 2014:

Nonvested restricted shares and RSUs

Nonvested at December 31, 2013

Granted
Vested

Nonvested at December 31, 2014

Granted
Vested
Forfeited

Nonvested at December 31, 2015

Granted
Vested
Forfeited

Nonvested at December 31, 2016

Shares

9,133
23,252
(9,133)

23,252
596,238
(94,550)
(33,214)

491,726
907,320
(154,820)
(31,862)

1,212,364

Weighted-average
grant date fair value

$26.64
22.04
24.64

$22.04
22.24
21.33
23.61

$22.32
12.02
20.97
18.61

$14.88

Share-based compensation recognized was as follows:

(Dollar amounts in thousands)

Share-based compensation recognized, net Stock options

Restricted shares and RSUs

Years ended December 31,

2016

2015

2014

$
60
6,355

$ 192
5,010

$4,305
282

Pursuant to the terms of the 2010 Plan, Tranche A stock options will generally vest in five equal installments,
except for some grants as specified in the stock agreement, Tranche B options granted to employees and certain

F-34

EVERTEC, Inc. Notes to Consolidated Financial Statements

directors would vest at such time as the Investor Internal Rate of Return (“IRR”) equals or exceeds 25%, except
for one grant that vests upon a 20% IRR, based on cash proceeds received by Apollo Investment Fund VII, L.P.
(the “Investor”), and Tranche C options would vest at such time as the IRR equals or exceeds 30% based on cash
proceeds received by the Investor.

The unrecognized share-based compensation expense related to the stock options was not significant at
December 31, 2016.

At December 31, 2016, the maximum unrecognized cost for restricted stock and RSUs was $11.3 million. The
cost is expected to be recognized over a weighted average period of 1.79 years.

Note 16—Employee Benefit Plan

EVERTEC, Inc. Puerto Rico Savings and Investment plan (“the EVERTEC Savings Plan”) was established, as a
defined contribution savings plan qualified under section 1165(e) of the Puerto Rico Internal Revenue Code.
Investments in the plan are participant directed, and employer matching contributions are determined based on
specific provisions of the EVERTEC Savings Plan. Employees are fully vested in the employer’s contributions
after five years of service. For the years ended December 31, 2016, 2015 and 2014, the costs incurred under the
plan amounted to approximately $0.7 million, $0.8 million and $0.6 million, respectively.

Note 17—Total Other Income, Net

For the year ended December 31, 2016, other income (expenses) is primarily comprised of $1.9 million in
foreign currency transaction gains and $1.5 million loss on the extinguishment of debt (Note 11).

For the year ended December 31, 2015, other income (expenses) is primarily comprised of $1.2 million in
foreign currency transaction gains, $0.2 million in gains related to adjustments made to software indemnification
assets during the year, $0.4 million in sales rebates granted to EVERTEC and a $0.2 million gain related to
certain refurbished POS machines.

For the year ended December 31, 2014, other income (expenses) is primarily comprised of $2.6 million in
foreign currency transaction gains and a $0.4 million in expenses related to adjustments made to software
indemnification assets as a result of certain maintenance contract cancellations during the year.

Note 18—Income Tax

On April 17, 2012, EVERTEC Group and Holdings were converted from a Puerto Rico corporation into Puerto
Rico limited liability companies to benefit from changes to the Puerto Rico Income Tax Code allowing limited
liability companies to be treated as partnerships that are pass-through entities for Puerto Rico tax purposes. As a
result of these conversions and subsequent elections to be treated as partnerships, EVERTEC Group’s and
Holding’s taxable income flows through to EVERTEC, Inc.

EVERTEC Group, Holdings and EVERTEC, Inc. entered into a Tax Payment Agreement pursuant to which
EVERTEC Group is obligated to make certain payments to Holdings or EVERTEC, Inc. for taxable periods or
portions thereof occurring on or after April 17, 2012 (the “Effective Date”). Under the Tax Payment Agreement,
EVERTEC Group will make payments with respect to any and all taxes (including estimated taxes) imposed
under the laws of Puerto Rico, the United States of America and any other jurisdiction or any political (including
municipal) subdivision or authority or agency in Puerto Rico, the United States of America or such other
jurisdiction, that would have been imposed on EVERTEC Group if EVERTEC Group had been a corporation for
tax purposes of that jurisdiction, together with all interest and penalties with respect thereto (“Taxes”), reduced

F-35

EVERTEC, Inc. Notes to Consolidated Financial Statements

by taking into account any applicable net operating losses or other tax attributes of Holdings or EVERTEC, Inc.
that reduce Holdings’ or EVERTEC, Inc.’s taxes in such period. The Tax Payment Agreement provides that the
payments thereunder shall not exceed the net amount of Taxes that Holdings and EVERTEC, Inc. actually owe to
the appropriate taxing authority for a taxable period. Further, the Tax Payment Agreement provides that if
Holdings or EVERTEC, Inc. receives a tax refund attributable to any taxable period or portion thereof occurring
on or after the Effective Date, EVERTEC, Inc. shall be required to recalculate the payment for such period
required to be made by EVERTEC Group to Holdings or EVERTEC, Inc. If the payment, as recalculated, is less
than the amount of the payment EVERTEC Group already made to Holdings or EVERTEC, Inc. in respect of
such period, Holdings or EVERTEC, Inc. shall promptly make a payment to EVERTEC Group in the amount of
such difference.

The components of income tax expense (benefit) consisted of the following:

(Dollar amounts in thousands)

Current tax provision (benefit)
Deferred tax benefit

Income tax expense (benefit)

Years ended December 31,

2016

2015

2014

$12,865
(4,594)

$ (245)
(3,090)

$12,602
(3,701)

$ 8,271

$(3,335)

$ 8,901

The Company conducts operations in Puerto Rico and certain countries throughout the Caribbean and Latin
America. As a result, the income tax expense (benefit) includes the effect of taxes paid to the Puerto Rico
government as well as foreign jurisdictions. The following table presents the segregation of income tax expense
(benefit) based on location of operations:

(Dollar amounts in thousands)

Income before income tax provision (benefit)
Puerto Rico
United States
Foreign countries

Years ended December 31,
2015

2014

2016

$70,899
2,670
9,828

$73,327
1,879
6,836

$61,759
2,131
11,168

Total income before income tax provision (benefit)

$83,397

$82,042

$75,058

Current tax provision (benefit)
Puerto Rico
United States
Foreign countries

7,072
567
5,226

(3,500)
413
2,842

8,090
(517)
5,029

Total current tax provision (benefit)

$12,865

$ (245)

$12,602

Deferred tax benefit
Puerto Rico
United States
Foreign countries

Total deferred tax benefit

(2,874)
(259)
(1,461)

(2,169)
(114)
(807)

(1,933)
(124)
(1,644)

$ (4,594)

$ (3,090)

$ (3,701)

Taxes payable to foreign countries by EVERTEC’s subsidiaries will be paid by such subsidiary and the
corresponding liability and expense will be presented in EVERTEC’s consolidated financial statements.

On June 30, 2013, the Governor of Puerto Rico signed into law Act 40, effective as of January 1, 2013, which
increased the maximum corporate income tax rate from 30% to 39%. This rate increase is only applicable to the

F-36

EVERTEC, Inc. Notes to Consolidated Financial Statements

fully taxable operations of EVERTEC in Puerto Rico. In addition, Act 40 established a national gross receipts tax
based on gross revenues that is included as part of the alternative minimum tax (“AMT”) calculation. On July 1,
2014, the Governor enacted Act 77 introducing a number of substantial amendments, including a deduction for
the national gross receipts tax instead of including it as part of the computation of the AMT as previously
required by Act 40 . On December 22, 2014 the Governor enacted law Act 238 providing a number of technical
amendments to Act 77 including the elimination the national gross receipts tax for years 2015 and forward.

As of December 31, 2016, the Company has $34.0 million of unremitted earnings from foreign subsidiaries. The
Company has not recognized a deferred tax liability on undistributed earnings for the Company’s foreign
subsidiaries, because these earnings are intended to be indefinitely reinvested. The amount of the unrecognized
deferred tax liability depends on judgment required to analyze the withholding tax due, the applicable tax law
and factual circumstances in effect at the time of any such distributions, therefore, EVERTEC believes it is not
practicable at this time to reliably determine the amount of unrecognized deferred tax liability related to the
Company’s undistributed earnings. If circumstances change and it becomes apparent that some or all of the
undistributed earnings of a subsidiary will be remitted and income taxes have not been recognized by the parent
entity, the parent entity shall accrue as an expense of the current period income taxes attributable to that
remittance.

On October 19, 2012, EVERTEC Group was granted an additional tax exemption under the Tax Incentive Act
No. 73 of 2008. Under this grant, EVERTEC Group will benefit from a preferential income tax rate on industrial
development income, as well as from tax exemptions with respect to its municipal and property tax obligations
for certain activities derived from its data processing operations in Puerto Rico. The grant has a term of 15 years
effective as of January 1, 2012 with respect to income tax obligations and July 1, 2013 and January 1, 2013 with
respect to municipal and property tax obligations, respectively.

The grant establishes a base taxable income amount with respect to EVERTEC Group’s industrial development
income, which amount will continue to be subject to the ordinary income tax rate under existing law. Applicable
taxable income in excess of the established base taxable income amount will be subject to a preferential rate of
4%. The base taxable income amount will be ratably reduced to zero by the fourth taxable year at which point all
of EVERTEC Group’s applicable industrial development income will be taxed at the preferential rate of 4% for
the remaining period of the grant.

The grant contains customary commitments, conditions and representations that EVERTEC Group will be
required to comply with in order to maintain the grant. The more significant commitments include:
(i) maintaining at least 750 employees in EVERTEC Group’s Puerto Rico data processing operations during
2012 and at least 700 employees for the remaining years of the grant, (ii) investing at least $200.0 million in
building, machinery, equipment or computer programs to be used in Puerto Rico during the effective term of the
grant (to be made over four year capital investment cycles in $50.0 million increments); and (iii) 80% of
EVERTEC Group employees must be residents of Puerto Rico. Failure to meet the requirements could result,
among other things, in reductions in the benefits of the grant or revocation of the grant in its entirety, which
could result in EVERTEC, Inc. paying additional taxes or other payments relative to what such parties would be
required to pay if the full benefits of the grant are available.

On October 11, 2011, the Puerto Rico Government approved a grant under Tax Incentive Law No. 73 of 2008,
retroactively to December 1, 2009. Under this grant, activities derived from consulting and data processing
services provided outside Puerto Rico are subject to a preferred rate that declines gradually from 7% to 4% by
December 1, 2013. After this date, the rate remains at 4% until its expiration in November 30, 2024.

In addition, EVERTEC Group has a base tax rate of 7% on income derived from certain development and
installation service in excess of a determined income for a 10-year period from January 1, 2008.

F-37

EVERTEC, Inc. Notes to Consolidated Financial Statements

The following table presents the components of the Company’s deferred tax assets and liabilities:

(Dollar amounts in thousands)

Deferred tax assets (“DTA”)
Allowance for doubtful accounts
Unearned Income
Investment in equity investee
Alternative minimum tax
Share based compensation
Debt Issuance Costs
General Reserves
Derivative liability
Other temporary assets

Total gross deferred tax assets

Deferred tax liabilities (“DTL”)
Deferred compensation
Difference between the assigned values and the tax basis

of assets and liabilities recognized in purchase

Total gross deferred tax liabilities

Deferred tax liability, net

December 31,

2016

2015

$

265
2,023
385
176
697
127
474
172
704

5,023

$

420
1,315
292
400
379
—
87
—
592

3,485

$ 1,458

$ 1,270

17,738

19,196

21,144

22,414

$(14,173)

$(18,929)

Pursuant to the provision of the PR Code, net operating losses (“NOL”) can be carried forward for a period of
seven, ten or twelve taxable years, depending on the taxable year generated. The Company incurred NOLs during
2010, which will expire in 2022, and in 2013, that will expire in 2023. Act 72 of May 29, 2015, limited the
amount of NOLs deduction to 80% for regular tax and 70% for AMT for the taxable year ended December 31,
2016. At December 31, 2016, the Company has $4.4 million NOL carryforwards for tax purposes available to
offset future taxable income. As a result of certain realization requirements of ASC 718, the table of deferred tax
assets and liabilities does not include certain windfall tax benefit as of December 31, 2016, and December 31,
2015, that arose directly from tax deductions related to equity compensation greater than compensation
recognized for financial reporting. Equity will be increased by $4.2 million if and when such windfall tax benefit
is ultimately realized. The Company uses tax law ordering when determining when windfall tax benefits have
been realized.

The Company recognizes the benefit of uncertain tax positions only if it is more likely than not that the tax
position will be sustained on examination by taxing authorities, based on the technical merits of the position. The
tax benefits recognized in the financial statements from such a position are measured based on the largest benefit
that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

The following is a tabular reconciliation of the total amounts of UTBs:

(Dollar amounts in thousands)

Balance, beginning of year
Gross increases—tax positions in prior period
Gross decreases—tax positions in prior period
Lapse of statute of limitations

Balance, end of year

F-38

Years ended December 31,

2016

2015

2014

$12,847
—
(345)
(283)

$19,859
53

—
(7,065)

$20,616
—
(757)
—

12,219

12,847

19,859

EVERTEC, Inc. Notes to Consolidated Financial Statements

As of December 31, 2016, 2015 and 2014, approximately $12.2 million for all years would affect the Company’s
effective income tax rate, if recognized.

The Company recognizes interest and penalties related to UTB as part of income tax expense. During the years
ended December 31, 2016, 2015 and 2014, the Company recognized an income tax expense of $0.7 million, an
income tax benefit of $2.0 million and an income tax expense of $1.2 million, respectively, related to interest and
penalties. The amount accrued for interest and penalties at December 31, 2016 and 2015 was $2.0 million, and
$1.3 million, respectively. The Company estimates that it is reasonably possible that the liability for uncertain tax
position relating to the net operating loss created by transaction costs will decrease by no more than $4.5 million
in the next twelve months as a result of the expiration of the statute of limitations. The Company believes it has
sufficient accruals for contingent tax liabilities.

In connection with tax return examinations, contingencies can arise that generally result from different
interpretations of tax laws and regulations as they pertain to the amount, timing or inclusion of revenues and
expenses in taxable income, or the ability to utilize tax credits to reduce income taxes payable. While it is
probable, based on the potential outcome of the Company’s Puerto Rico and foreign tax examinations or the
expiration of the statute of limitations for specific jurisdictions, that the liability for UTBs may increase or
decrease within the next twelve months, the Company does not expect any such change would have a material
effect on our financial condition, results of operations or cash flow.

The Company and its subsidiaries are subject to Puerto Rico income tax as well as income tax of multiple foreign
jurisdictions. A significant majority of the income tax is from Puerto Rico with a statute of limitations of four
years after filing the income tax returns; therefore, the income tax returns for 2012, 2013, 2014, and 2015 are
currently open for examination.

The income tax expense differs from the amount computed by applying the Puerto Rico statutory income tax rate
to the income before income taxes as a result of the following:

(Dollar amounts in thousands)

Computed income tax at statutory rates
Benefit of net tax-exempt interest income
Differences in tax rates due to multiple jurisdictions
Tax (benefit) expense due to a change in estimate
Adjustment to deferred taxes due to changes in enacted tax rate

and tax grant

Effect of net disallowed operating losses in foreign entities
Effect of income subject to tax-exemption grant
Unrecognized tax benefit
Other

Income tax expense (benefit)

Years ended December 31,

2016

2015

2014

$ 32,525
(52)
32
258

$ 31,996
(284)
37
(201)

$ 29,435

—
(942)
(916)

—
—
(24,866)
373
1

—
103
(23,375)
(11,626)
15

(731)
83
(19,858)
1,830
—

$ 8,271

$ (3,335)

$ 8,901

F-39

EVERTEC, Inc. Notes to Consolidated Financial Statements

Note 19—Net Income Per Common Share

The reconciliation of the numerator and the denominator of the earnings per common share is as follows:

Years ended December 31,

(Dollar amounts in thousands, except per share data)

2016

2015

2014

Net income attributable to EVERTEC, Inc.’s common

stockholders

Less: non-forfeitable dividends on restricted stock

Net income available to common shareholders

$

$

75,036
12

75,024

$

$

85,377
9

85,368

$

$

66,157
—

66,157

Weighted average common shares outstanding
Weighted average potential dilutive common shares (1)

74,132,863
340,506

77,066,459
114,664

78,337,152
553,987

Weighted average common shares outstanding—

assuming dilution

Net income per common share—basic

Net income per common share—diluted

74,473,369

77,181,123

78,891,139

$

$

1.01

1.01

$

$

1.11

1.11

$

$

0.84

0.84

(1)

Potential common shares consist of common stock issuable under the assumed exercise of stock options,
restricted stock and RSUs awards using the treasury stock method.

Refer to Note 14 for a detail of dividends declared and paid during 2016 and 2015.

Note 20—Related Party Transactions

The following table presents the Company’s transactions with related parties for each of the periods presented
below:

(Dollar amounts in thousands)

Total revenues (1)(2)

Cost of revenues

Rent and other fees

Interest earned from and charged by affiliate

Interest income

Years ended December 31,

2016

2015

2014

$176,473

$169,433

$164,336

$

$

$

2,180

8,110

211

$

$

$

1,701

7,880

206

$

$

$

1,946

7,928

197

(1)

(2)

Total revenues from Popular as a percentage of revenues were 45% for each of the periods presented above.
Includes revenues generated from investee accounted for under the equity method of $2.1 million,
$2.1 million and $2.5 million for the years ended December 31, 2016, 2015 and 2014, respectively.

F-40

EVERTEC, Inc. Notes to Consolidated Financial Statements

At December 31, 2016 and 2015, the Company had the following balances arising from transactions with related
parties:

(Dollar amounts in thousands)

December 31,

2016

2015

Cash and restricted cash deposits in affiliated bank

$15,918

$23,872

Other due/to from affiliate
Accounts receivable

Prepaid expenses and other assets

Other long-term assets

Accounts payable

Unearned income

Other long-term liabilities

$21,461

$20,196

$

$

699

554

$

867

$ —

$ 6,300

$ 2,687

$14,383

$11,970

$ —

$

14

The balance of cash and restricted cash deposits in an affiliated bank was included within the cash and restricted
cash line items in the accompanying consolidated balance sheets. Due from affiliates mainly included the
amounts outstanding related to processing and information technology services billed to Popular subsidiaries
according to the terms of the Master Services Agreement (“MSA”) under which EVERTEC Group has a contract
to provide such services for at least 15 years on an exclusive basis for the duration of the agreement on
commercial terms consistent with historical pricing practices among the parties. This amount was included in the
accounts receivable, net in the consolidated balance sheets.

Note 21—Commitments and Contingencies

The Company leases certain facilities and equipment under operating leases. Most leases contain renewal options
for varying periods. Future minimum rental payments on such operating leases at December 31, 2016 are as
follows:

(Dollar amounts in thousands)

2017
2018
2019
2020
2021 and thereafter

Unrelated
parties

Related party

Minimum future
rentals to related
parties and
unrelated parties

$402
124
67
—
—

$593

$ 6,569
6,775
6,987
2,144
404

$22,879

$ 6,971
6,899
7,054
2,144
404

$23,472

Certain lease agreements contain provisions for future rent increases. The total amount of rental payments due
over the lease term is being charged to rent expense on the straight-line method over the term of the lease. The
difference between rent expense recorded and the amount paid is recorded as a deferred rent obligation. There
was no deferred rent obligation as of December 31, 2016.

Rent expense of office facilities and real estate for the years ended December 31, 2016, 2015 and 2014 amounted
to $8.2 million, $8.1 million and $8.2 million, respectively. Also, rent expense for telecommunications and other
equipment for the years ended December 31, 2016, 2015 and 2014 amounted to $6.2 million, $5.4 million and
$6.1 million, respectively.

F-41

EVERTEC, Inc. Notes to Consolidated Financial Statements

EVERTEC is a defendant in a number of legal proceedings arising in the ordinary course of business. Based on
the opinion of legal counsel, management believes that the final disposition of these matters will not have a
material adverse effect on the business, results of operations or financial condition of the Company. The
Company has identified certain claims in which a loss may be incurred, but in the aggregate the loss would be
minimal. For other claims, where the proceedings are in an initial phase, the Company is unable to estimate the
range of possible loss for such legal proceedings. However, the Company at this time believes that any loss
related to these latter claims will not be material.

Note 22—Segment Information

The Company operates in three business segments: Merchant Acquiring, Payment Processing and Business
Solutions.

The Merchant Acquiring segment consists of revenues from services that allow merchants to accept electronic
methods of payment. In the Merchant Acquiring segment, revenues include a discount fee and membership fees
charged to merchants, debit network fees and rental fees from POS devices and other equipment, net of credit
card interchange and assessment fees charged by credit cards associations (such as VISA or MasterCard) or
payment networks. The discount fee is generally a percentage of the transaction value. EVERTEC also charges
merchants for other services that are unrelated to the number of transactions or the transaction value.

The Payment Processing segment revenues are comprised of revenues related to providing access to the ATH
network and other card networks to financial institutions, including related services such as authorization,
processing, management and recording of ATM and POS transactions, and ATM management and monitoring.
Payment Processing revenues also include revenues from card processing services (such as credit and debit card
processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment
processing services (such as payment and billing products for merchants, businesses and financial institutions)
and EBT (which principally consist of services to the government of Puerto Rico for the delivery of benefits to
participants).

For ATH network and processing services, revenues are primarily driven by the number of transactions
processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and the
leasing POS devices. For card issuer processing, revenues are primarily dependent upon the number of
cardholder accounts on file, transactions and authorizations processed, the number of cards embossed and other
processing services. For EBT services, revenues are primarily derived from the number of beneficiaries on file.

The Business Solutions segment consists of revenues from a full suite of business process management solutions
in various product areas such as core bank processing, network hosting and management, IT professional
services, business process outsourcing, item processing, cash processing, and fulfillment. Core bank processing
and network services revenues are derived in part from a recurrent fee and from fees based on the number of
accounts on file (i.e. savings or checking accounts, loans, etc.) or computer resources utilized. Revenues from
other processing services within the Business Solutions segment are generally volume-based and depend on
factors such as the number of accounts processed. In addition, EVERTEC is a reseller of hardware and software
products and these resale transactions are generally one-time transactions.

The Company’s business segments are organized based on the nature of products and services. The CODM
reviews their separate financial information to assess performance and to allocate resources.

Management evaluates the operating results of each of its reportable segments based upon revenues and
operating income. Segment asset disclosure is not used by the CODM as a measure of segment performance
since the segment evaluation is driven by earnings. As such, segment assets are not disclosed in the notes to the
accompanying consolidated financial statements.

F-42

EVERTEC, Inc. Notes to Consolidated Financial Statements

The following tables set forth information about the Company’s operations by its three business segments for the
periods indicated:

(Dollar amounts in thousands)

Year ended December 31, 2016

Revenues
Income from operations
Year ended December 31, 2015

Revenues
Income from operations
Year ended December 31, 2014

Revenues
Income from operations

Merchant
Acquiring, net

Payment
Processing

Business
Solutions

Other

Total

$91,248
31,051

85,411
36,466

79,136
34,362

$144,366 $186,752 $(32,859) (1) $389,507
107,145

(32,771) (2)

52,071

56,794

136,566
55,429

179,797
50,200

(28,246) (1)
(38,735) (2)

373,528
103,360

131,381
58,796

177,939
48,299

(26,668) (1)
(44,470) (2)

361,788
96,987

(1) Represents the elimination of intersegment revenues for services provided by the Payment Processing

(2)

segment to the Merchant Acquiring segment, and other miscellaneous intersegment revenues.
Primarily represents non-operating depreciation and amortization expenses generated as a result of the
Merger and certain non-recurring fees and expenses.

The reconciliation of income from operations to consolidated net income is as follows:

(Dollar amounts in thousands)

Segment income from operations

Merchant Acquiring
Payment Processing
Business Solutions

Total segment income from operations
Merger related depreciation and amortization and

Years ended December 31,

2016

2015

2014

$ 31,051
52,071
56,794

$ 36,466
55,429
50,200

$ 34,362
58,796
48,299

139,916

142,095

141,457

other unallocated expenses (1)

(32,771)

(38,735)

(44,470)

Income from operations

$107,145

$103,360

$ 96,987

Interest expense, net
Earnings of equity method investment
Other income (expenses)
Income tax (expense) benefit

Net income

(24,240)
(52)
544
(8,271)

(23,771)
147
2,306
3,335

(25,444)
1,140
2,375
(8,901)

$ 75,126

$ 85,377

$ 66,157

(1)

Primarily represents non-operating depreciation and amortization expenses generated as a result of the
Merger and certain non-recurring fees and expenses.

F-43

EVERTEC, Inc. Notes to Consolidated Financial Statements

The geographic segment information below is classified based on the geographic location of the Company’s
subsidiaries:

(Dollar amounts in thousands)

Revenues (1)

Puerto Rico
Caribbean
Latin America

Total revenues

Years ended December 31,

2016

2015

2014

$326,073
16,272
47,162

$322,319
12,154
39,055

$313,228
13,752
34,808

$389,507

$373,528

$361,788

(1) Revenues are based on subsidiaries’ country of domicile.

Major customers

For the years ended December 31, 2016, 2015 and 2014, the Company had one major customer which accounted
for approximately $174.4 million or 45%, $167.3 million or 45% and $161.8 million or 45%, respectively, of
total revenues. See Note 20.

The Company’s next largest customer, the Government of Puerto Rico, consolidating all individual agencies and
public corporations, represented 7%, 9% and 10% of the Company’s total revenues for the years ended
December 31, 2016, 2015 and 2014, respectively.

Note 23—Subsequent Events

On February 17, 2017, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.10 per
share on the Company’s outstanding shares of common stock. The Board anticipates declaring this dividend in
future quarters on a regular basis; however future declarations of dividends are subject to board of directors’
approval and may be adjusted as business needs or market conditions change. The cash dividend of $0.10 per
share will be paid on March 20, 2017 to stockholders of record as of the close of business on March 1, 2017.

On the same day, EVERTEC Group entered into a share purchase promise agreement (Contrato de Promesa de
Compraventa de Acciones) by and among Fondo de Inversión Privado Mater, Inversiones San Bernardo SpA,
Inversiones Supernova SpA, Inversiones y Asesorías Bayona Limitada, Inversiones Hagerdorn y Morales
Limitada, Christian Hagedorn Hitschfeld and Inversiones Vaimaca Limitada (the “Selling Shareholder”) to
purchase directly or indirectly 100% of the share capital of EFT Group S.A., a Chilean-based company known
commercially as PayGroup at a purchase price of approximately CLP 26,918 million, or approximately US $42
million at current exchange rates, subject to customary adjustments. PayGroup is a payment processing and
software company serving primarily financial institutions throughout Latin America.

The transaction is subject to customary closing conditions, including receipt of US federal bank regulatory
approval, and a special provision that allows the selling shareholders to terminate the transaction if US federal
bank regulatory approval has not been secured by June 12, 2017, in which case EVERTEC must pay a penalty of
approximately US $2 million. Receipt of US federal bank regulatory approval is dependent on factors outside the
control of EVERTEC. There is no assurance that such approval will be obtained by June 12, 2017 or at all.

F-44

Schedule I

EVERTEC, Inc. Condensed Financial Statements
Parent Company Only

Condensed Balance Sheets

(Dollar amounts in thousands)

Assets
Current assets:
Cash
Accounts receivable, net
Prepaid expenses and other assets
Prepaid income tax
Deferred tax asset

Total current assets

Investment in subsidiaries, at equity

Total assets

Liabilities and stockholders’ equity
Current liabilities:

Accrued liabilities
Accounts payable
Income tax payable

Total current liabilities

Long-term deferred tax liability, net
Other long-term liabilities

Total liabilities

Stockholders’ equity:
Common stock
Additional paid-in capital
Accumulated earnings
Accumulated other comprehensive loss, net of tax

Total equity

Total liabilities and stockholders’ equity

F-45

December 31,

2016

2015

$

$

3,278
—
377
21
—

1,673
2,068
109
—
849

3,676
126,227

4,699
119,605

$129,903

$124,304

$

1,697
79

—

1,776
11,641
11,810

25,227

$

221
47
1,111

1,379
15,484
9,227

26,090

726
—
116,341
(12,391)

104,676

750
9,718
95,328
(7,582)

—

$129,903

$124,304

Schedule I

Condensed Statements of Income and Comprehensive Income

(Dollar amounts in thousands)

Non-operating income (expenses)
Equity in earnings of subsidiaries
Interest income
Other expenses

Income before income taxes
Income tax (benefit) expense

Net income

Other comprehensive (loss) income, net of tax
Foreign currency translation adjustments
Loss on cash flow hedge

Total comprehensive income

Condensed Statements of Cash Flows

(Dollar amounts in thousands)

Cash flows from operating activities

Cash flows from financing activities
Dividends paid
Repurchase of common stock
Statutory minimum withholding taxes paid on share-based compensation
Tax windfall benefits on share-based compensation
Issuance of common stock
Settlement of stock options

Net cash used in financing activities

Net increase in cash
Cash at beginning of the period

Cash at end of the period

Years ended December 31,

2016

2015

2014

$75,373
244
(1,351)

$81,161
232
(1,686)

$74,081
227
(1,994)

74,266
(770)

79,707
(5,670)

72,314
6,157

75,036

85,377

66,157

(3,360)
(1,449)

(545)
(515)

(6,948)
—

$70,227

$84,317

$59,209

Years ended December 31,

2016

2015

2014

$ 71,795

$ 86,237

$ 57,276

(29,696)
(39,946)
(548)
—
—
—

(30,921)
(54,949)
(306)
—
—
—

(31,359)
(26,197)
(2,001)
3,669
543
(1,604)

(70,190)

(86,176)

(56,949)

1,605
1,673

61
1,612

327
1,285

$ 3,278

$ 1,673

$ 1,612

F-46

Shareholder Information
Corporate Headquarters - Puerto Rico
Road #176 km 1.3 Cupey Bajo 
Río Piedras, Puerto Rico 00926

PO Box 364527 - San Juan, Puerto Rico 00936-4527
t. 787.759.9999  f. 787.250.7356
www.evertecinc.com

Form 10-K
Evertec®(cid:15)(cid:3)(cid:44)(cid:81)(cid:70)(cid:17)(cid:3)(cid:75)(cid:68)(cid:86)(cid:3)(cid:192)(cid:79)(cid:72)(cid:71)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:56)(cid:17)(cid:54)(cid:17)(cid:3)(cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)and 
Exchange Commission (SEC) an Annual Report on 
Form 10-K for the year ended December 31, 2016. The 
(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:1163)(cid:86)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:54)(cid:40)(cid:38)(cid:3)(cid:192)(cid:79)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:80)(cid:68)(cid:92)(cid:3)(cid:69)(cid:72)(cid:3)
accessed at www.sec.gov or at www.evertecinc.com, 
Investor Relations section, SEC Filings link.

Investor Relations
Kay Sharpton,Vice President of Investor Relations
t. 787.773.5442
ksharpton@evertecinc.com

Annual Meeting of Stockholders
The Annual Meeting of Stockholders will be held on
May 25, 2017 at 9:00 a.m. local time at the
Ritz-Carlton Hotel, Ritz-Carlton Ballroom IV
6961 Ave. Gobernadores - Carolina, Puerto Rico 00979

Independent Registered Public
Accounting Firm
Deloitte & Touche LLP
350 Chardón Ave., Ste 700
San Juan, Puerto Rico 00918-2140
t. 787.282.5300 - www.deloitte.com

Transfer Agent and Registrar
Computershare 
PO Box 43078 - Providence, RI 02940-3078
t. 800.568.3476 - www.computershare.com

Common Stock Listing
The company’s common stock is listed on the New York 
Stock Exchange (NYSE) under the symbol EVTC.

Board of Directors and Board Committees
Frank G. D’Angelo, 
Chairman of the Board
Morgan M. Schuessler, Jr.,

(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:192)(cid:70)(cid:72)(cid:85)(cid:3)
Olga Botero,
Director 
Jorge A. Junquera,
Director 
Teresita Loubriel,
Director 
Néstor Obie Rivera,
Director
Alan H. Schumacher,
Director
Brian J. Smith,
Director
Thomas W. Swidarski,
Director

Executive Officers

Morgan M. Schuessler, Jr.,

(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:192)(cid:70)(cid:72)(cid:85)
Peter J.S. Smith,
Executive Vice President,

(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:50)(cid:73)(cid:192)(cid:70)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:55)(cid:85)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:85)
Mariana Goldvarg,
President for Latin America
Carlos J. Ramírez,
Executive Vice President,
Business Solutions
Miguel Vizcarrondo,
Executive Vice President,
Merchant Acquiring and Payment Processing
Philip E. Steurer,
Executive Vice President,

(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:50)(cid:73)(cid:192)(cid:70)(cid:72)(cid:85)
Guilllermo Rospigliosi,
Executive Vice President,
Product, Marketing and Innovation
Luis A. Rodríguez,
General Counsel and Executive Vice President,
Corporate Development and Strategy

committee key:

Audit              Compensation              Information              Nominating                  Denote

Technology

and Corporate

Committee Chair

Governance