10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to

COMMISSION FILE NUMBER 001-35872

EVERTEC, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Puerto Rico	66-0783622
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification number)
Cupey Center Building, Road 176, Kilometer 1.3, San Juan, Puerto Rico	00926
(Address of principal executive offices)	(Zip Code)

(787) 759-9999

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

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  x    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  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in rule 12b-2 of the Exchange Act).

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	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  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

At August 9, 2013, there were 81,909,582 outstanding shares of common stock of EVERTEC, Inc.

TABLE OF CONTENTS

		Page
Part I. FINANCIAL INFORMATION			1
Item 1.	Financial Statements		1
	Unaudited Consolidated Balance Sheets as of June 30, 2013 and December 31, 2012		1
	Unaudited Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income for the three and six months ended June 30, 2013 and 2012		2
	Unaudited Consolidated Statement of Changes in Stockholders’ Equity for the six months ended June 30, 2013		3
	Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012		4
	Notes to Unaudited Consolidated Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		33
Item 4.	Controls and Procedures		34
Part II. OTHER INFORMATION			34
Item 1.	Legal Proceedings		34
Item 1A.	Risk Factors		34
Item 2.	Unregistered Sales of Equity in Securities and Use of Proceeds		35
Item 3.	Defaults Upon Senior Securities		35
Item 4.	Mine Safety Disclosures		35
Item 5.	Other Information		35
Item 6.	Exhibits		35
SIGNATURES			S-1

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q 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;

• our ability to renew our client contracts on terms favorable to us;

• 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;

• 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 despite competition and potential shifts in consumer payment preferences;

• 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, political, administrative or economic conditions;

• the geographical concentration of our business in Puerto Rico;

• 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 federal, state and local regulatory requirements;

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

• other factors discussed in this Report, including in the section entitled “Risk Factors.”

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 “Risk Factors,” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” elsewhere in this Report and in the Company’s Registration Statement on Form S-1 (File No. 333-186487) (as amended the “Registration Statement”). 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.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EVERTEC, Inc. (Unaudited) Consolidated Balance Sheets

(Dollar amounts in thousands, except per share data)

	June 30, 2013		December 31, 2012
Assets
Current Assets:
Cash	$	19,587	$	25,634
Restricted cash		4,983		4,939
Accounts receivable, net		77,662		78,621
Deferred tax asset		—		1,434
Prepaid expenses and other assets		24,623		19,345
Total current assets		126,855		129,973
Investment in equity investee		10,751		11,080
Property and equipment, net		33,031		36,737
Goodwill		373,298		372,307
Other intangible assets, net		384,375		403,170
Other long-term assets		18,971		24,478
Total assets	$	947,281	$	977,745
Liabilities and stockholders’ equity
Current Liabilities:
Accrued liabilities	$	30,257	$	34,609
Accounts payable		25,589		24,482
Unearned income		2,902		1,166
Income tax payable		1,092		2,959
Current portion of long-term debt		19,000		6,052
Short-term borrowings		8,663		26,995
Deferred tax liability, net		1,204		632
Total current liabilities		88,707		96,895
Long-term debt		674,738		730,709
Long-term deferred tax liability, net		16,526		24,614
Other long-term liabilities		633		3,072
Total liabilities		780,604		855,290
Commitments and contingencies (Note 10)
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; 81,876,332 and 72,846,144 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively		819		728
Additional paid-in capital		153,789		52,155
Accumulated earnings		10,951		70,414
Accumulated other comprehensive income (loss)		1,118		(842	)
Total stockholders’ equity		166,677		122,455
Total liabilities and stockholders’ equity	$	947,281	$	977,745

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

1

EVERTEC, Inc. (Unaudited) Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income

(Dollar amounts in thousands, except per share data)

	Three months ended June 30,						Six months ended June 30,
	2013			2012			2013			2012
Revenues
Merchant acquiring, net	$	18,165		$	17,028		$	35,624		$	34,689
Payment processing (from affiliates: $7,298, $7,708, $14,508 and $14,835)		24,285			23,803			48,397			46,702
Business solutions (from affiliates: $35,051, $30,898, $69,496 and $61,015)		46,725			43,541			92,493			85,469
Total revenues		89,175			84,372			176,514			166,860
Operating costs and expenses
Cost of revenues, exclusive of depreciation and amortization shown below		42,257			39,831			82,759			77,572
Selling, general and administrative expenses		12,138			8,477			21,001			17,464
Depreciation and amortization		17,842			17,830			35,417			35,752
Total operating costs and expenses		72,237			66,138			139,177			130,788
Income from operations		16,938			18,234			37,337			36,072
Non-operating (expenses) income
Interest income		49			77			93			199
Interest expense		(9,747	)		(13,254	)		(25,011	)		(24,430	)
Earnings of equity method investment		348			509			625			575
Other expenses:
Loss on extinguishment of debt		(58,464	)		—			(58,464	)		—
Termination of consulting agreements		(16,718	)		—			(16,718	)		—
Other expenses		(2,353	)		(8,397	)		(2,286	)		(10,657	)
Total other expenses		(77,535	)		(8,397	)		(77,468	)		(10,657	)
Total non-operating (expenses) income		(86,885	)		(21,065	)		(101,761	)		(34,313	)
(Loss) income before income taxes		(69,947	)		(2,831	)		(64,424	)		1,759
Income tax (benefit) expense		(5,012	)		(798	)		(4,961	)		258
Net (loss) income		(64,935	)		(2,033	)		(59,463	)		1,501
Other comprehensive (loss) income, net of tax of $18, $7, $18 and $13
Foreign currency translation adjustments		(394	)		1,230			1,960			2,336
Total comprehensive (loss) income	$	(65,329	)	$	(803	)	$	(57,503	)	$	3,837
Net (loss) income per common share - basic	$	(0.82	)	$	(0.03	)	$	(0.78	)	$	0.02
Net (loss) income per common share - diluted	$	(0.82	)	$	(0.03	)	$	(0.78	)	$	0.02

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

2

EVERTEC, Inc. (Unaudited) Consolidated Statement of Changes in Stockholders’ Equity

(Dollar amounts in thousands)

	Number of Shares of Common Stock		Common Stock		Additional Paid-in Capital			Accumulated Earnings			Accumulated Other Comprehensive (Loss) Income			Total Stockholders’ Equity
Balance at December 31, 2012		72,846,144	$	728	$	52,155		$	70,414		$	(842	)	$	122,455
Issuance of common stock upon initial public offering, net of offering costs		6,250,000		63		112,369									112,432
Share-based compensation recognized						5,483									5,483
Tax windfall benefit on exercises of stock options						470									470
Stock options exercised, net of cashless exercise		2,780,188		28		(16,688	)								(16,660	)
Net loss									(59,463	)					(59,463	)
Other comprehensive income												1,960			1,960
Balance at June 30, 2013		81,876,332	$	819	$	153,789		$	10,951		$	1,118		$	166,677

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

3

EVERTEC, Inc. (Unaudited) Consolidated Statements of Cash Flows

(Dollar amounts in thousands)

	Six months ended June 30,
	2013			2012
Cash flows from operating activities
Net (loss) income	$	(59,463	)	$	1,501
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization		35,417			35,752
Amortization of debt issue costs and premium and accretion of discount		2,369			2,427
Write-off of debt issue costs, premium and discount accounted as loss on extinguishment		16,555			—
Provision for doubtful accounts and sundry losses		826			1,173
Deferred tax benefit		(6,251	)		(5,212	)
Share-based compensation		5,483			557
Unrealized (gain) loss of indemnification assets		(19	)		216
Amortization of a contract liability		—			(703	)
Loss on disposition of property and equipment		32			47
Earnings from equity method investment		(625	)		(575	)
Dividend received from equity method investment		500			728
Premium on issuance of long-term debt		—			2,000
(Increase) decrease in assets:
Accounts receivable, net		492			4,247
Prepaid expenses and other assets		(5,417	)		993
Other long-term assets		(323	)		—
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities		(3,347	)		260
Income tax payable		(1,867	)		(1,292	)
Unearned income		1,736			(124	)
Total adjustments		45,561			40,494
Net cash (used in) provided by operating activities		(13,902	)		41,995
Cash flows from investing activities
Net increase in restricted cash		(44	)		(233	)
Intangible assets acquired		(7,927	)		(3,712	)
Property and equipment acquired		(4,384	)		(5,166	)
Proceeds from sales of property and equipment		11			43
Net cash used in investing activities		(12,344	)		(9,068	)
Cash flows from financing activities
Proceeds from initial public offering, net of offering costs of $12,567		112,369			—
Proceeds from issuance of debt		700,000			208,725
Statutory minimum withholding taxes paid on cashless exercises of stock options		(16,688	)		—
Debt issuance costs		(12,077	)		(2,174	)
Repayment of short-term borrowings		(18,332	)		—
Dividends paid		—			(269,772	)
Tax windfall benefits on exercises of stock options		470			—
Issuance of common stock		91			250
Repayment of other financing agreement		(112	)		—
Repayment of long-term debt		(745,522	)		—
Net cash provided by (used in) financing activities		20,199			(62,971	)
Net decrease in cash		(6,047	)		(30,044	)
Cash at beginning of the period		25,634			56,200
Cash at end of the period	$	19,587		$	26,156
Supplemental disclosure of non-cash activities:
Dividend declared not received from equity method investment	$	500		$	1,457

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

4

Notes to Unaudited Consolidated Financial Statements

Note 1 – The Company and Summary of Significant Accounting Policies	6
Note 2 – Recent Accounting Pronouncements	8
Note 3 – Property and Equipment, net	9
Note 4 – Goodwill and Other Intangible Assets	9
Note 5 – Debt and Short-Term Borrowings	11
Note 6 – Financial Instruments and Fair Value Measurements	13
Note 7 – Share-based Compensation	15
Note 8 – Income Tax	15
Note 9 – Net (Loss) Income Per Common Share	17
Note 10 – Commitments and Contingencies	17
Note 11 – Related Party Transactions	18
Note 12 – Segment Information	18
Note 13 – Subsequent Events	20

5

EVERTEC, Inc. Notes to Unaudited 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,” “EVERTEC,” “we,” “us,” or “our”) is the leading full-service transaction processing business in Latin America and the Caribbean. We are based in Puerto Rico and provide a broad range of merchant acquiring, payment processing and business process management services across 19 countries in the region. We process over 1.8 billion transactions annually, and manage the electronic payment network for over 4,100 automated teller machines (“ATM”) and over 104,000 point-of-sale (“POS”) payment terminals. According to the July 2012 Nilson Report, we are the largest merchant acquirer in the Caribbean and Central America and the sixth largest in Latin America based on total number of transactions. We own and operate the ATH network, one of the leading ATM and personal identification number debit networks in Latin America. In addition, we provide a comprehensive suite of services for core bank processing, cash processing and technology outsourcing in the regions we serve. We serve a broad and diversified customer base of leading financial institutions, merchants, corporations and government agencies with ‘mission critical’ technology solutions that are essential to their operations, enabling them to issue, process and accept transactions securely, and we believe that our business is well positioned to continue to expand across the fast growing Latin American region.

Our subsidiaries include EVERTEC Intermediate Holdings, LLC (“Holdings,” formerly known as Carib Holdings, Inc.), EVERTEC Group, LLC (“EVERTEC Group”), EVERTEC Dominicana SAS., EVERTEC Panamá, S.A., EVERTEC Latinoamérica, S.A., EVERTEC Costa Rica, S.A. (“EVERTEC CR”), Tarjetas Inteligentes Internacionales, S.A., EVERTEC Guatemala, S.A. and EVERTEC México Servicios de Procesamiento, S.A. de C.V.

Initial Public Offering

On April 17, 2013, the Company completed its initial public offering (“Initial Public Offering”) of 28,789,943 shares of common stock at a price to the public of $20.00 per share. A total of 6,250,000 shares were offered by the Company and a total of 22,539,943 shares were offered by selling stockholders of the Company, of which 13,739,284 shares were sold by an affiliate of Apollo Global Management, LLC (“Apollo”) and 8,800,659 shares were sold by Popular. The Company used net proceeds of approximately $117.4 million from its sale of shares in the Initial Public Offering and proceeds from borrowings under the 2013 Credit Agreement (as defined in Note 5), together with available cash on hand, to redeem its senior notes (as defined in Note 5) and to refinance its previous senior secured credit facilities.

6

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of EVERTEC, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The preparation of the accompanying unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) 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 unaudited consolidated financial statements. Actual results could differ from these estimates.

In the opinion of management, the accompanying unaudited 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. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from the unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). As these unaudited consolidated financial statements are prepared using the same accounting principles and policies used to prepare the annual financial statements, they should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2012, included in the Company’s Registration Statement on Form S-1 (File No. 333-186487) (as amended, the “Registration Statement”), which was declared effective by the SEC on April 11, 2013. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results of operations for the full year or any future period.

On April 1, 2013, EVERTEC’s Board of Directors declared a two for one stock split of our outstanding Class A and Class B common stock. Accordingly, all shares of outstanding common stock or restricted stock, or shares of common stock underlying outstanding options, and all per share amounts for all periods presented in these consolidated financial statements and notes thereto, have been adjusted retroactively, where applicable, to reflect this stock split, except for the par value of the common stock, which was not adjusted by the stock split and the impact was recorded as additional paid-in capital. Under the certificate of incorporation, as amended by the certificate of amendment, which became effective on April 1, 2013, EVERTEC’s authorized capital consists of 206,000,000 shares of common stock and 2,000,000 shares of preferred stock.

The Consolidated Balance Sheet as of December 31, 2012 was derived from the audited consolidated financial statements for the fiscal year ended December 31, 2012 included in the Registration Statement.

Certain reclassifications have been made to certain prior period notes to the unaudited consolidated financial statements to conform with the presentation in 2013.

Summary of Significant Accounting Policies

Share-based Compensation

Management uses the fair value method of recording stock-based compensation as described in the guidance for stock compensation in ASC topic 718. The fair value of the stock options granted during 2011 and 2012 was estimated using the Black-Scholes-Merton (“BSM”) option pricing model for Tranche A options granted under the EVERTEC, Inc. Amended and Restated 2010 Equity Incentive Plan (the “Equity Incentive Plan”) and the Monte Carlo simulation analysis for Tranche B and Tranche C options.

Upon option exercise, participants may elect to “net share settle”. Rather than requiring the participant to deliver cash to satisfy the exercise price 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, a current tax deduction arises based on the value at the time of exercise. This deduction may exceed the associated deferred tax asset, resulting in a “windfall tax benefit”. The windfall is recognized in the unaudited consolidated balance sheet as an increase to additional paid-in capital, and is included in the unaudited consolidated statement of cash flows as a financing inflow.

7

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Net Income (Loss) Per Common Share

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

Diluted net income (loss) per common share assumes the issuance of all potentially dilutive share equivalents using the treasury stock method.

Note 2 – Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standard Board issued Accounting Standards Update (“ASU”) No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the Emerging Issues Task Force). This ASU addresses when unrecognized tax benefits should be presented as reductions to deferred tax assets for net operating loss carryforwards in the financial statements. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption and retrospective application is permitted. Management does not expect this ASU to impact EVERTEC’s financial statements.

8

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Note 3 – Property and Equipment, net

Property and equipment, net consists of the following:

(Dollar amounts in thousands)	Useful life in years	June 30, 2013			December 31, 2012
Buildings	30	$	1,732		$	2,096
Data processing equipment	3 - 5		60,883			59,901
Furniture and equipment	3 - 20		6,651			6,183
Leasehold improvements	5 - 10		2,430			2,380
			71,696			70,560
Less - accumulated depreciation and amortization			(40,200	)		(35,331	)
Depreciable assets, net			31,496			35,229
Land			1,535			1,508
Property and equipment, net		$	33,031		$	36,737

Depreciation and amortization expense related to property and equipment was $4.1 million and $8.1 million for both the three and six months ended June 30, 2013 and the corresponding 2012 periods.

Note 4 – Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill, allocated by reportable segments, were as follows (See Note 12):

(Dollar amounts in thousands)	Merchant acquiring, net		Payment processing		Business solutions		Total
Balance at December 31, 2012	$	138,121	$	187,028	$	47,158	$	372,307
Foreign currency translation adjustments		—		734		257		991
Balance at June 30, 2013	$	138,121	$	187,762	$	47,415	$	373,298

Goodwill is tested for impairment at least annually using 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.

During 2012, the Company completed the impairment evaluation, as described above, and determined that there are no impairment losses to be recognized during the period. There were no triggering events or changes in circumstances that subsequent to the impairment test would have required an additional impairment evaluation.

9

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

The carrying amount of other intangible assets for the six months ended June 30, 2013 and the year ended December 31, 2012 consisted of the following:

(Dollar amounts in thousands)		June 30, 2013
	Useful life in years	Gross amount		Accumulated amortization			Net carrying amount
Customer relationships	14	$	314,093	$	(61,975	)	$	252,118
Trademark	10 - 15		39,950		(9,526	)		30,424
Software packages	3 - 5		118,438		(62,779	)		55,659
Non-compete agreement	15		56,539		(10,365	)		46,174
Other intangible assets, net		$	529,020	$	(144,645	)	$	384,375
(Dollar amounts in thousands)		December 31, 2012
	Useful life in years	Gross amount		Accumulated amortization			Net carrying amount
Customer relationships	14	$	313,726	$	(50,769	)	$	262,957
Trademark	10 - 15		39,950		(7,794	)		32,156
Software packages	3 - 5		110,478		(50,479	)		59,999
Non-compete agreement	15		56,539		(8,481	)		48,058
Other intangible assets, net		$	520,693	$	(117,523	)	$	403,170

For the three and six months ended June 30, 2013, the Company recorded amortization expense related to other intangibles of $13.7 million and $27.3 million, respectively, compared to $13.7 million and $27.6 million for the corresponding 2012 periods.

The estimated amortization expense of the balances outstanding at June 30, 2013 for the next five years is as follows:

(Dollar amounts in thousands)
Remaining 2013	$	26,531
2014		48,776
2015		44,430
2016		34,685
2017		31,344
2018		29,691

10

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Note 5 – Debt and Short-Term Borrowings

Total debt as of June 30, 2013 and December 31, 2012 was as follows:

(Dollar amounts in thousands)	June 30, 2013		December 31, 2012
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))	$	299,609	$	—
Senior Secured Credit Facility (Term B) due on April 17, 2020 paying interest at a variable interest rate (LIBOR plus applicable margin)(2)		394,129		—
Senior Secured Credit Facility due on September 30, 2016 paying interest at a variable interest rate (LIBOR plus applicable margin)(3)		—		484,414
Senior Secured Revolving Credit Facility paying interest at a variable interest rate		—		14,000
Senior Notes due on October 1, 2018, paying interest semi-annually at a rate of 11% per annum		—		252,347
Other short-term borrowing		8,663		12,995
Total debt	$	702,401	$	763,756

⁽¹⁾  Applicable margin of 2.50% at June 30, 2013.

⁽²⁾  Subject to a minimum rate (“LIBOR floor”) of 0.75% plus applicable margin of 2.75% at June 30, 2013.

⁽³⁾  Subject to a minimum rate (“LIBOR floor”) of 1.50% plus applicable margin of 4.00% at December 31, 2012.

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 which matures on April 17, 2018, a $400.0 million term loan B facility which matures on April 17, 2020 and a $100.0 million revolving credit facility which matures on April 18, 2018. The net proceeds received by EVERTEC Group from the new senior secured credit facilities, together with other cash available to EVERTEC Group, were used to, among other things, refinance EVERTEC Group’s previous senior secured credit facilities and redeem a portion of EVERTEC’s 11% Senior Notes due 2018 (the “senior notes”), as further described below.

As a result of the debt refinancing, EVERTEC Group’s previous senior secured credit facilities were evaluated under ASC 470-50, Debtor’s Accounting for a Modification or Exchange of Debt Instruments (“ASC 470-50”). Accordingly, a portion of the unamortized discount and debt issue costs amounting to $6.4 million and $5.9 million, respectively, were treated as a modification and will be amortized over the term of the new debt using the interest method. The remaining unamortized discount and debt issue costs of $3.4 million and $3.0 million, respectively, were considered to be related to the portion of the debt that was extinguished and written-off.

Senior Notes

On March 29, 2013, EVERTEC Group provided notice to Wilmington Trust, National Association (the “Trustee”) pursuant to the Indenture, dated as of September 30, 2010 (as supplemented by Supplemental Indenture No. 1, dated as of April 17, 2012, Supplemental Indenture No. 2, dated as of May 7, 2012 and Supplemental Indenture No. 3, dated as of May 7, 2012) between EVERTEC Group and EVERTEC Finance Corp. (together, the “Co-Issuers”), the Guarantors named therein and the Trustee (the “Indenture”), that the Co-Issuers had elected to (i) redeem $91.0 million principal amount of their outstanding senior notes, at a redemption price of 111.0%, plus accrued and unpaid interest, on April 29, 2013 (the “Partial Redemption”) and (ii) redeem all of their outstanding senior notes (after giving effect to the redemption of $91.0 million principal amount of the senior notes described in clause (i)) at a redemption price of 100% plus a make-whole premium, plus accrued and unpaid interest, on April 30, 2013 (the “Full Redemption”). On April 17, 2013, the Co-Issuers and the Trustee entered into a Satisfaction and Discharge Agreement whereby EVERTEC Group caused to be irrevocably deposited with the Trustee, to

11

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

satisfy and to discharge the Co-Issuers’ obligations under the Indenture (a) a portion of the net cash proceeds received by the Company in the Initial Public Offering to Holdings, which contributed such proceeds to EVERTEC Group, in an amount sufficient to effect the Partial Redemption on April 29, 2013 and (b) proceeds from the 2013 Credit Agreement described above in an amount sufficient to effect the Full Redemption on April 30, 2013. On April 29, 2013, the Partial Redemption was effected and on April 30, 2013, the Full Redemption was effected.

Based on accounting guidance, the senior notes were considered extinguished. Accordingly, the outstanding premium of $1.8 million and unamortized debt issuance costs of $7.0 million were written-off and presented as a loss on extinguishment of debt. In addition, the redemption premium payments totaling $41.9 million were accounted for as a loss on extinguishment of debt.

New Senior Secured Credit Facilities

Term A

The term loan A has a principal amount of $300.0 million (“Term A Loan”) and 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 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) Base Rate plus an applicable margin ranging from 1.00% to 1.50%. Term A Loan has no interest rate minimum or floor.

Term B

The term loan B has a principal amount of $400.0 million (“Term B Loan”) and 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 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 available unused commitment during the preceding quarter. The commitment fee for the unused portion of this facility ranges from 0.125% to 0.375% based on utilization. As of June 30, 2013, the revolving credit facility was undrawn.

All loans may be prepaid without premium or penalty, except for a 1% premium payable if any of the Term B Loans are refinanced or repriced with debt having a lower effective interest rate on or prior to April 17, 2014.

The new senior secured credit facilities were evaluated under accounting guidance and accordingly, $7.2 million of debt issue costs were capitalized and are being amortized over the term of the new debt using the interest method and $4.9 million of debt issue costs were expensed and are presented as a loss on the extinguishment of debt.

The new senior secured credit facilities contain various restrictive covenants. The Term A Loan and the revolving credit facility (subject to certain exceptions) require us to maintain on a quarterly basis a specified maximum senior secured leverage ratio of up to 6.60 as defined in the 2013 Credit Agreement (total first lien secured debt to adjusted EBITDA). In addition, the 2013 Credit Agreement, among other things: (a) limits our ability and the ability of our subsidiaries to incur additional indebtedness, incur liens, pay dividends or make certain other restricted payments and enter into certain transactions with affiliates; (b) restricts our ability to enter into agreements that would restrict the ability of our subsidiaries to pay dividends or make certain payments to us; and (c) places restrictions on our ability and the ability of our subsidiaries to merge or consolidate with any other person or sell, assign, transfer, convey or otherwise dispose of all or substantially all of our assets. As of June 30, 2013, the Company was in compliance with the applicable restrictive covenants under the 2013 Credit Agreement.

12

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Note 6 – Financial Instruments and Fair Value Measurements

Recurring Fair Value Measurements

Fair value measurement provisions establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This guidance describes 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 internally-developed models that primarily use market-based inputs including yield curves, interest rates, volatilities, and credit curves, among others. The Company limits 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 following table summarizes fair value measurements by level at June 30, 2013 and December 31, 2012 for assets measured at fair value on a recurring basis:

(Dollar amounts in thousands)	Level 1		Level 2		Level 3		Total
June 30, 2013
Financial assets:
Indemnification assets:
Software cost reimbursement	$	—	$	—	$	4,540	$	4,540
December 31, 2012
Financial assets:
Indemnification assets:
Software cost reimbursement	$	—	$	—	$	6,099	$	6,099

The fair value of financial instruments is the amount at which an asset or obligation could be exchanged in a current transaction between willing parties, other than in a forced liquidation sale. 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.

For those financial instruments with no quoted market prices available, fair values have been estimated using present value calculations or other valuation techniques, as well as management’s best judgment with respect to current economic conditions, including discount rates and estimates of future cash flows.

Indemnification assets include the present value of the expected future cash flows of certain expense reimbursement agreements with Popular. These contracts have termination dates up to September 2015 and were entered into in connection with the Merger. Management prepared estimates of the expected reimbursements to be received from Popular until the termination of the contracts, discounted the estimated future cash flows and recorded the indemnification assets as of the Merger closing date. Payments received during the quarters reduced the indemnification asset balance. The remaining balance was adjusted to reflect its fair value as of June

13

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

30, 2013, therefore resulting in a net unrealized gain of approximately $3,000 and $19,000 for the three and six months ended June 30, 2013, respectively, and an unrealized loss of approximately $41,000 and $0.2 million for the three and six months ended June 30, 2012, respectively, which are reflected within the other expenses caption in the unaudited consolidated statements of (loss) income and comprehensive (loss) income. The current portion of the indemnification assets is included within accounts receivable, net, and the other long-term portion is included within other long-term assets in the accompanying unaudited consolidated balance sheets.

The unobservable inputs related to the Company’s indemnification assets as of June 30, 2013 using the discounted cash flow model include the discount rate of 5.64% and the projected cash flows of $4.8 million.

For indemnification assets a significant increase or decrease in market rates and cash flows could result in a significant impact to the fair value. Also, the credit rating and/or the non-performance credit risk of Popular, which is subjective in nature, also could increase or decrease the sensitivity of the fair value of these assets.

The following table presents the carrying value, as applicable, and estimated fair values for financial instruments at June 30, 2013 and December 31, 2012:

	June 30, 2013				December 31, 2012
(Dollar amounts in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Indemnification assets:
Software cost reimbursement	$	4,540	$	4,540	$	6,099	$	6,099
Financial liabilities:
New senior secured term loans	$	693,738	$	694,900	$	—	$	—
Senior secured term loan		—		—		484,414		497,498
Senior notes		—		—		252,347		275,550

The fair value of the new senior secured term loans at June 30, 2013, as well as the previous senior secured term loan and the senior notes at December 31, 2012 were 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 previous senior secured term loan and senior notes as well as the new senior secured term loans, which are not measured at fair value in the balance sheets, could be categorized as Level 3 in the fair value hierarchy.

The following table provides a summary of the change in fair value of the Company’s Level 3 assets:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Indemnification assets:
Beginning balance	$	5,558		$	6,580		$	6,099		$	7,464
Payments received		(1,021	)		(419	)		(1,578	)		(1,128	)
Unrealized gain (loss) recognized in other expenses		3			(41	)		19			(216	)
Ending balance	$	4,540		$	6,120		$	4,540		$	6,120

14

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Note 7 – Share-based Compensation

The following table summarizes the nonvested stock options activity for the six months ended June 30, 2013:

Nonvested stock options	Shares			Weighted-average exercise prices
Nonvested at December 31, 2012		4,571,258		$	2.16
Vested		(3,436,392	)		2.11
Nonvested at June 30, 2013		1,134,866		$	2.30

Management uses the fair value method of recording stock-based compensation as described in the guidance for stock compensation in ASC topic 718.

The following table summarizes the nonvested restricted shares activity for the six months ended June 30, 2013:

Nonvested restricted shares	Shares			Weighted-average grant date fair  value
Nonvested at December 31, 2012		115,420		$	5.90
Vested		(115,420	)		5.90
Nonvested at June 30, 2013		—		$	—

Share-based compensation recognized was as follows:

	Three months ended June 30,				Six months ended June 30,
(Dollar amounts in thousands)	2013		2012		2013		2012
Share-based compensation recognized, net
Stock options, net of income tax of $488, $40, $500 and $87	$	5,062	$	134	$	5,212	$	291
Restricted shares, net of income tax of $11, $49, $26 and $80		90		163		271		266

Pursuant to the terms of the Equity Incentive Plan, Tranche B options granted to employees and certain 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.

As a result of the Initial Public Offering, the IRR required by the Tranche B and C options was achieved and accordingly, all Tranche B and C options became vested. As a result, the Company recognized a share-based compensation expense of $4.9 million in April 2013.

The maximum unrecognized cost for stock options was $1.5 million as of June 30, 2013 related to Tranche A time vesting options.

Note 8 – Income Tax

The components of income tax (benefit) expense for the three and six months ended June 30, 2013 and 2012 consisted of the following:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Current tax provision	$	1,005		$	3,452		$	1,290		$	5,470
Deferred tax benefit		(6,017	)		(4,250	)		(6,251	)		(5,212	)
Income tax (benefit) expense	$	(5,012	)	$	(798	)	$	(4,961	)	$	258

15

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

The Company conducts operations in Puerto Rico and certain countries throughout the Caribbean and Latin America. As a result, the income tax expense includes the effect of taxes paid to the Puerto Rico government as well as foreign jurisdictions. The following table presents the components of income tax expense (benefit) for the three and six months ended June 30, 2013 and 2012 and its segregation based on location of operations:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Current tax provision
Puerto Rico	$	(122	)	$	3,040		$	256		$	4,950
United States		210			159			429			343
Foreign countries		917			253			605			177
Total currrent tax provision	$	1,005		$	3,452		$	1,290		$	5,470
Deferred tax benefit
Puerto Rico	$	(5,880	)	$	(4,096	)	$	(5,956	)	$	(4,905	)
United States		—			—			(2	)		—
Foreign countries		(137	)		(154	)		(293	)		(307	)
Total deferred tax benefit	$	(6,017	)	$	(4,250	)	$	(6,251	)	$	(5,212	)

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 fully taxable operations of EVERTEC. As a result of this tax rate increase, the deferred taxes were revalued resulting in the Company recognizing additional non-cash income tax expense of $1.4 million for the six months ended June 30, 2013. In addition, Act 40 established a national gross receipts tax based on gross revenues that is included as part of the alternative minimum tax calculation.

The income tax (benefit) 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:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Computed income tax at statutory rates	$	(26,782	)	$	(851	)	$	(25,125	)	$	526
Benefit of net tax-exempt interest income		(53	)		(2	)		(94	)		(4	)
Adjustment to deferred taxes due to changes in enacted tax rate		1,441			—			1,441			—
Differences in tax rates due to multiple jurisdictions		102			99			282			251
Effect of income subject to tax-exemption grant		19,983			(479	)		18,982			(605	)
Reversal of tax uncertainties reserve		—			—			(846	)		(640	)
Fair value adjustment of indemnification assets		—			62			—			364
Effect of net operating losses in foreign entities		(57	)		278			—			278
Other		354			95			399			88
Income tax (benefit) expense	$	(5,012	)	$	(798	)	$	(4,961	)	$	258

The recorded net operating losses (“NOL”) carryforwards differs from the amount of NOL available to the Company for tax purposes due to a windfall tax benefit. This benefit results from tax deductions in excess of previously recorded compensation expense due to differences in fair value of the stock options at the time of the grant versus at the time of the exercise. Although these windfalls are available to the Company, the additional tax benefit associated with the windfall cannot be recognized until the deduction reduces taxes payable. The unused amount of windfall remains as an off-balance sheet item, however it is available to offset future taxable income. Total available gross NOL related to the windfall tax benefit that does not reduce income tax payable in the current year amounted to $59.0 million at June 30, 2013, which will result in a future tax benefit of $8.4 million. This NOL carryforward expires in 2023.

There are no open uncertain tax positions as of June 30, 2013.

16

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Note 9 – Net (Loss) Income Per Common Share

The reconciliation of the numerator and denominator of the (loss) income per common share is as follows:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands, except per share data)	2013			2012			2013			2012
Net (loss) income	$	(64,935	)	$	(2,033	)	$	(59,463	)	$	1,501
Weighted average common shares outstanding		78,928,780			72,672,852			75,849,551			72,659,463
Weighted average potential dilutive common shares(1)(2)		—			—			—			4,243,747
Weighted average common shares outstanding - assuming dilution		78,928,780			72,672,852			75,849,551			76,903,210
Net (loss) income per common share - basic	$	(0.82	)	$	(0.03	)	$	(0.78	)	$	0.02
Net (loss) income per common share - diluted	$	(0.82	)	$	(0.03	)	$	(0.78	)	$	0.02

⁽¹⁾  Potential common shares consist of common stock issuable under the assumed exercise of stock options and restricted stock awards using the treasury stock method.

⁽²⁾  For the three months ended June 30, 2013 and 2012, 3,818,726 and 3,950,989, respectively, potential common shares consisting of common stock under the assumed exercise of stock options and restricted stock awards using the treasury stock method were not included in the computation of the diluted net (loss) income per share since their inclusion would have an antidilutive effect. For the six months ended June 30, 2013, 4,227,114 potential common shares consisting of common stock under the assumed exercise of stock options and restricted stock awards using the treasury stock method were not included in the computation of the diluted net (loss) income per share since their inclusion would have an antidilutive effect.

Note 10 – Commitments and Contingencies

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. Total deferred rent obligation as of June 30, 2013 and December 31, 2012 amounted to $0.3 million and is included within the accounts receivable, net caption in the accompanying unaudited consolidated balance sheets.

Rent expense of office facilities and real estate for the three and six months ended June 30, 2013 amounted to $2.0 million and $4.0 million, respectively, compared to $1.9 million and $3.9 million for the corresponding 2012 periods. Also, rent expense for telecommunications and other equipment for the three and six months ended June 30, 2013 amounted to $1.8 million and $3.5 million, respectively, compared to $1.9 million and $3.7 million for the corresponding 2012 periods.

EVERTEC is a defendant in a number of legal proceedings arising in the ordinary course of business. Based on the opinion of legal counsel and other factors, 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 as a result of 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.

17

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Note 11 – Related Party Transactions

The following table presents the Company’s transactions with related parties for the three and six months ended June 30, 2013 and 2012:

	Three months ended June 30,				Six months ended June 30,
(Dollar amounts in thousands)	2013		2012		2013		2012
Total revenues (1)(2)	$	42,349	$	38,606	$	84,004	$	75,880
Rent and other fees(3)(4)	$	27,212	$	2,663	$	30,072	$	5,822
Interest earned from and charged by affiliate
Interest income	$	23	$	59	$	42	$	157
Interest expense(5)	$	577	$	1,858	$	2,471	$	3,743

⁽¹⁾  Total revenues from Popular as a percentage of revenues were 47%, 45%, 47% and 44% for each of the periods presented above.

⁽²⁾  Includes revenues generated from investee accounted for under the equity method of $0.8 million and $1.7 million for the three and six months ended June 30, 2013, respectively, and $0.9 million and $1.7 million for the corresponding 2012 periods.

⁽³⁾  Includes management fees to equity sponsors amounting to $19.4 million and $20.3 million for the three and six months ended June 30, 2013, respectively, compared to $0.7 million and $2.0 million for the corresponding 2012 periods. Management fees paid during 2013 includes $16.7 million resulting from the termination of the consulting agreements as explained below. Rent and other fees also includes $5.9 million paid to Popular in connection with the redemption premium on the senior notes for the three and six months ended June 30, 2013.

⁽⁴⁾ Includes $4.6 million, $2.7 million, $7.5 million and $5.8 million recorded as selling, general and administrative expenses for each of the periods presented above, and $22.6 million recorded as non-operating expenses for the three and six months ended June 30, 2013 in the unaudited consolidated statement of (loss) income and comprehensive (loss) income.

⁽⁵⁾ Interest expense relates to interest accrued on the senior secured term loan and senior notes held by Popular. As a result of the debt refinancing and the redemption of the senior notes in April 2013, Popular’s participation in such debt was extinguished. See Note 5 for additional information related to the extinguishment of this debt.

On April 17, 2013, EVERTEC entered into a termination agreement with Holdings, EVERTEC Group and Popular and a termination agreement with Holdings, EVERTEC Group and Apollo Management VII, L.P. in connection with the Initial Public Offering (the “Termination Agreements”). The Termination Agreements terminated the consulting agreements (the “Consulting Agreements”), each dated September 30, 2010, entered into by Holdings and EVERTEC Group with each of Popular and Apollo Management, pursuant to which Holdings and EVERTEC Group received certain advisory services from each of Popular and Apollo Management. The Consulting Agreements were terminated in their entirety upon payment of termination fees of approximately $8.5 million to Apollo Management and $8.2 million to Popular, in each case, plus any unreimbursed expenses payable in accordance with the terms of the Termination Agreements.

At June 30, 2013 and December 31, 2012, EVERTEC had the following balances arising from transactions with related parties:

(Dollar amounts in thousands)	June 30, 2013		December 31, 2012
Cash and restricted cash deposits in affiliated bank	$	15,547	$	19,438
Indemnification assets from Popular reimbursement(1)
Accounts receivable	$	2,080	$	2,157
Other long-term assets	$	2,460	$	3,942
Other due/to from affiliate
Accounts receivable	$	20,342	$	19,252
Accounts payable(2)	$	5,481	$	3,845
Other long-term liabilities(2)	$	520	$	2,847
Long-term debt	$	—	$	90,186

⁽¹⁾  Recorded in connection with reimbursements from Popular regarding certain software license fees.

⁽²⁾  Includes an account payable of $0.2 million and $0.4 million and a long-term liability of $0.5 million and $2.8 million for June 30, 2013 and December 31, 2012, respectively, related to the unvested portion of stock options as a result of the equitable adjustment approved by our Board of Directors on December 18, 2012 that will be payable to executive officers and employees upon vesting of stock options.

At June 30, 2013, EVERTEC Group has a credit facility with Popular for $3.6 million, on behalf of EVERTEC CR, under which a letter of credit of a similar amount was issued.

Note 12 – 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. We also charge merchants for other services that are unrelated to the number of transactions or the transaction value.

18

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

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 electronic benefit transfer (“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 consist 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, we are 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 Chief Operating Decision Maker (“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 unaudited 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)	Merchant acquiring, net		Payment processing		Business solutions		Other			Total
Three months ended June 30, 2013
Revenues		18,165		30,603		46,725		(6,318	) (1)		89,175
Income from operations		8,161		11,719		8,784		(11,726	) (2)		16,938
Three months ended June 30, 2012
Revenues		17,028		29,019		43,541		(5,216	) (1)		84,372
Income from operations		7,970		12,756		8,870		(11,362	) (2)		18,234

⁽¹⁾  Represents the elimination of intersegment revenues for services provided by the payment processing segment to the merchant acquiring segment, and other miscellaneous intersegment revenues.

⁽²⁾  Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.

(Dollar amounts in thousands)	Merchant acquiring, net		Payment processing		Business solutions		Other			Total
Six months ended June 30, 2013
Revenues		35,624		59,826		92,493		(11,429	) (1)		176,514
Income from operations		17,395		25,270		19,318		(24,646	) (2)		37,337
Six months ended June 30, 2012
Revenues		34,689		57,248		85,469		(10,546	) (1)		166,860
Income from operations		16,511		25,065		17,950		(23,454	) (2)		36,072

⁽¹⁾  Represents the elimination of intersegment revenues for services provided by the payment processing segment to the merchant acquiring segment, and other miscellaneous intersegment revenues.

⁽²⁾  Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.

19

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

The reconciliation of income from operations to consolidated net income for the three and six months ended June 30, 2013 and 2012 is as follows:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Segment income from operations
Merchant acquiring	$	8,161		$	7,970		$	17,395		$	16,511
Payment processing		11,719			12,756			25,270			25,065
Business solutions		8,784			8,870			19,318			17,950
Total segment income from operations		28,664			29,596			61,983			59,526
Merger related depreciation and amortization and other unallocated expenses(1)		(11,726	)		(11,362	)		(24,646	)		(23,454	)
Income from operations	$	16,938		$	18,234		$	37,337		$	36,072
Interest expense, net		(9,698	)		(13,177	)		(24,918	)		(24,231	)
Earnings of equity method investment		348			509			625			575
Other expenses		(77,535	)		(8,397	)		(77,468	)		(10,657	)
Income tax benefit (expense)		5,012			798			4,961			(258	)
Net (loss) income	$	(64,935	)	$	(2,033	)	$	(59,463	)	$	1,501

⁽¹⁾  Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.

Note 13 – Subsequent Events

The Company evaluated subsequent events through the date that these unaudited consolidated financial statements were issued. There were no subsequent events requiring disclosure other than those disclosed below.

Quarterly Dividend. On August 7, 2013, the Board of Directors of EVERTEC approved a regular quarterly cash dividend of $0.10 per common share. The first quarterly dividend is payable on September 6, 2013 to stockholders of record at the close of business on August 19, 2013.

Grant of Restricted Stock Units. On August 7, 2013, EVERTEC granted to two of its directors restricted stock units with a grant date value of $75,000, in accordance with the Company’s independent director compensation policy.

20

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis (“MD&A”) covers: (i) the results of operations for the three and six months ended June 30, 2013 and 2012, respectively; and (ii) the financial condition as of June 30, 2013. You should read the following discussion and analysis in conjunction with the Audited Consolidated Financial Statements and related notes for the fiscal year ended December 31, 2012, included in the Registration Statement and with the Unaudited Consolidated 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, Inc. and its subsidiaries (collectively the “Company,” “EVERTEC,” “we,” “us,” or “our”) is the leading full-service transaction processing business in Latin America and the Caribbean. We are based in Puerto Rico and provide a broad range of merchant acquiring, payment processing and business process management services across 19 countries in the region. We process over 1.8 billion transactions annually, and manage the electronic payment network for over 4,100 automated teller machines (“ATM”) and over 104,000 point-of-sale (“POS”) payment terminals. According to the July 2012 Nilson Report, we are the largest merchant acquirer in the Caribbean and Central America and the sixth largest in Latin America based on total number of transactions. We own and operate the ATH network, one of the leading ATM and personal identification number debit networks in Latin America. In addition, we provide a comprehensive suite of services for core bank processing, cash processing and technology outsourcing in the regions we serve. We serve a broad and diversified customer base of leading financial institutions, merchants, corporations and government agencies with ‘mission critical’ technology solutions that are essential to their operations, enabling them to issue, process and accept transactions securely, and we believe that 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 which will enable us to continue to penetrate our existing customer base with new, complementary services, win new customers, develop new sales channels and enter new markets. We believe these competitive advantages include:

• Our ability to package and provide a range of services across our customers’ business that often need 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 to provide value-added services that are differentiated from those offered by ‘pure-play’ vendors that only have the technology, capabilities and products to serve one portion of the transaction processing value chain (such as only merchant acquiring or payment processing).

Our broad suite of services span the entire transaction processing value chain and include a range of front-end customer facing solutions as well as back-end support services. These include: (i) merchant acquiring services, which enable POS and e-commerce merchants to accept and process electronic methods of payment such as debit, credit, prepaid and electronic benefits 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, 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 information technology (“IT”) outsourcing and cash management services to financial institutions, enterprises and governments. We provide these services through a highly scalable, end-to-end technology platform that we manage and operate in-house. Our end-to-end technology platform includes solutions that encompass the entire transaction processing value chain. This enables us to provide ‘front-end’ processing services, such as the electronic capture and authorization of transactions at the point-of-sale, and ‘back-end’ services, such as the clearing and settlement of transactions and account reconciliation for card issuers. Our platform provides us with the broad range of capabilities, flexibility and operating leverage that enable us to innovate and develop new services, differentiate ourselves in the marketplace and generate significant operating efficiencies to continue to maximize profitability.

We sell and distribute our services primarily through a proprietary direct sales force with strong customer relationships. We are also increasingly building a variety of indirect sales channels which enable us to leverage the distribution capabilities of partners in adjacent markets, including value-added resellers, joint ventures and merchant acquiring alliances. Given our breadth across the transaction processing value chain, our customer base is highly diversified by size, type and geographic footprint.

21

We benefit from an attractive business model, which is characterized by recurring revenue, significant operating margins and low capital expenditure requirements. Our revenue is recurring in nature because of the mission-critical and embedded nature of the services we provide, the high switching costs associated with these services and the multi-year contracts we negotiate with our customers. Our scalable business model creates significant operating efficiencies. In addition, our business model enables us to continue to grow our business organically without significant additional capital expenditures.

Separation from and Key Relationship with Popular

We have a 25 year operating history in the transaction processing industry. 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. In September 2010, Apollo Global Management, LLC, a leading private equity investor, acquired a 51% interest in EVERTEC Group 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 that runs through 2025.

Factors and Trends Impacting 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. The increased penetration of electronic payments has been a driver for many merchants to offer acceptance of such methods in order to increase customer traffic and drive sales. We believe that the penetration of electronic payments in the markets where we principally 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.

In addition, our revenue is also impacted by the trend in outsourcing of in-house technology systems and processes. The medium and small size institutions in the Latin American markets in which we operate currently face challenges in updating and renewing their IT legacy computer systems, which we believe will continue the trend to outsource in-house technology systems and processes. We believe that our technology and business outsourcing solutions cater to the evolving needs of the financial institution customer base we target, by providing integrated, open, flexible, customer-centric and efficient IT products and services.

We also expect our results of operations to be impacted by regulatory changes which occur as the payments industry has come under increased scrutiny from lawmakers and regulators. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 signed into law in July 2010 is an example of such scrutiny and of changes in laws and regulations that could impact our operating results and financial condition.

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

Recent Accounting Pronouncements

For a description of recent accounting standards, see Note 2 of the Notes to Unaudited Consolidated Financial Statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Overview of Results of Operations

The following briefly describes the components of revenues and expenses as presented in the unaudited consolidated statements of (loss) income and comprehensive (loss) income. Descriptions of the revenue recognition policies are detailed in Note 1 of the Notes to Audited Consolidated Financial Statements included in our Registration Statement.

Merchant acquiring, net. Merchant acquiring revenues consist of revenues 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, revenues include a discount fee 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 cards associations (such as VISA or MasterCard) or payment networks. The discount fee is generally a percentage of the sales amount of a credit or debit card transaction value. We also charge merchants for other services that are unrelated to the number of transactions or the transaction value.

22

Our merchant acquiring business accounted for $18.2 million, or 20.4%, of total revenues and $8.2 million, or 28.5%, of total segment income from operations for the three months ended June 30, 2013, and $35.6 million, or 20.2%, of total revenues and $17.4 million, or 28.0%, of total segment income from operations for the six months ended June 30, 2013.

Payment processing. Payment processing 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 Puerto Rico government for the delivery of government benefits to participants). Our 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, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and leasing of 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.

Our payment processing business accounted for $24.3 million, or 27.2%, of total revenues and $11.7 million, or 40.9%, of total segment income from operations for the three months ended June 30, 2013, and $48.4 million, or 27.4%, of total revenues and $25.3 million, or 40.8%, of total segment income from operations for the six months ended June 30, 2013.

Business solutions. Business solutions revenues consist of revenues from a full 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. We generally enter into one to five year contracts with our private business solutions clients and one year contracts with our government business solutions clients.

In addition, we are a reseller of hardware and software products and these resale transactions are generally one-time transactions. Revenues from sales of hardware or software products are 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.

Our business solutions business accounted for $46.7 million, or 52.4%, of total revenues and $8.8 million, or 30.6%, of total segment income from operations for the three months ended June 30, 2013, and $92.5 million, or 52.4%, of total revenues and $19.3 million, or 31.2%, of total segment income from operations for the six months ended June 30, 2013.

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 primarily consists 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 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 three and six months ended June 30, 2013 and 2012. The following tables and discussion should be read in conjunction with the information contained in our Unaudited Consolidated Financial Statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.

23

Comparison of the three months ended June 30, 2013 and 2012

The following tables present the components of our unaudited consolidated statements of (loss) income and comprehensive (loss) income by business segment and the change in those amounts for the three months ended June 30, 2013 and 2012.

Revenues

	Three months ended June 30,
(Dollar amounts in thousands)	2013		2012		Variance
Merchant acquiring, net	$	18,165	$	17,028	$	1,137	7	%
Payment processing		24,285		23,803		482	2	%
Business solutions		46,725		43,541		3,184	7	%
Total revenues	$	89,175	$	84,372	$	4,803	6	%

Total revenues for the three months ended June 30, 2013 were $89.2 million, representing an increase of $4.8 million or 6% as compared to the corresponding 2012 period.

Merchant acquiring revenues for the three months ended June 30, 2013 were $18.2 million, representing an increase of $1.1 million or 7% as compared to the corresponding 2012 period. The revenue growth in this quarter was primarily due to an increase in transaction volumes.

Payment processing revenues for the three months ended June 30, 2013 were $24.3 million, representing an increase of $0.5 million or 2% as compared to the corresponding 2012 period. The revenue growth comparison in this quarter is impacted by a non-recurring increase in processing volumes during the quarter ended June 30, 2012 related to certain one-time items. Normalizing for these one-time items, revenues in this segment grew 6% versus the prior year.

Business solutions revenues for the three months ended June 30, 2013 were $46.7 million, representing an increase of $3.2 million or 7% as compared to the corresponding 2012 period. Revenue growth was primarily driven by an increase in sales and higher demand for our services.

24

Operating costs and expenses

	Three months ended June 30,
(Dollar amounts in thousands)	2013		2012		Variance
Cost of revenues, exclusive of depreciation and amortization shown below	$	42,257	$	39,831	$	2,426	6	%
Selling, general and administrative expenses		12,138		8,477		3,661	43	%
Depreciation and amortization		17,842		17,830		12	0	%
Total operating costs and expenses	$	72,237	$	66,138	$	6,099	9	%

Total operating costs and expenses for the three months ended June 30, 2013 were $72.2 million, representing an increase of $6.1 million or 9% as compared to the corresponding 2012 period.

Cost of revenues for the three months ended June 30, 2013 were $42.3 million, representing an increase of $2.4 million or 6% as compared to the corresponding 2012 period. The growth in our cost of revenues was primarily due to a $2.0 million increase in product sales within our business solutions segment and a non-cash compensation expense of $1.8 million related to the vesting of all Tranche B and C stock options, partially offset by a $1.4 million decrease in professional services.

Selling, general and administrative expenses for the three months ended June 30, 2013 were $12.1 million, representing an increase of $3.7 million or 43% as compared to the corresponding 2012 period. The increase in our selling, general and administrative expenses was primarily due to a $3.1 million non-cash charge taken in connection with the vesting of all Tranche B and C stock options.

For additional information regarding the share-based compensation expense during the quarter, refer to Note 7 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Income from operations

The following table presents income from operations by reportable segments.

	Three months ended June 30,
(Dollar amounts in thousands)	2013			2012			Variance
Segment income from operations
Merchant acquiring, net	$	8,161		$	7,970		$	191		2	%
Payment processing		11,719			12,756			(1,037	)	-8	%
Business solutions		8,784			8,870			(86	)	-1	%
Total segment income from operations		28,664			29,596			(932	)	-3	%
Merger related depreciation and amortization and other unallocated expenses (1)		(11,726	)		(11,362	)		(364	)	-3	%
Income from operations	$	16,938		$	18,234		$	(1,296	)	-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 for the three months ended June 30, 2013 was $16.9 million, representing a decrease of $1.3 million or 7% as compared to the corresponding 2012 period. The decrease in income from operations was the result of the non-recurring $4.9 million non-cash expense related to the vesting of all Tranche B and C stock options. Excluding this expense, income from operations would have increased by $3.6 million or 20%. This increase was driven by the aforementioned factors impacting our revenues and operating costs and expenses.

See Note 12 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information on the Company’s reportable segments and for a reconciliation of income from operations to net income.

25

Non-operating (expenses) income

	Three months ended June 30,
(Dollar amounts in thousands)	2013			2012			Variance
Non-operating (expenses) income
Interest income	$	49		$	77		$	(28	)	-36	%
Interest expense		(9,747	)		(13,254	)		3,507		26	%
Earnings of equity method investment		348			509			(161	)	-32	%
Other expense		(77,535	)		(8,397	)		(69,138	)	-823	%
Total non-operating (expenses) income	$	(86,885	)	$	(21,065	)	$	(65,820	)	-312	%

Total non-operating expenses for the three months ended June 30, 2013 were $86.9 million, representing an increase of $65.8 million as compared to the corresponding 2012 period. The increase in non-operating expenses in 2013 was primarily driven by $58.5 million related to the extinguishment of debt and $16.7 million related to the termination of the consulting agreements with Apollo and Popular, partially offset by a $3.5 million decrease in interest expense as a result of the debt refinancing during the quarter.

For additional information related to the extinguishment of debt and associated loss, see Note 5 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Income tax benefit

Income tax benefit for the three months ended June 30, 2013 amounted to approximately $5.0 million compared to $0.8 million for the corresponding 2012 period. The increase in income tax benefit was attributable to a higher taxable loss as a result of higher non-operating expenses related to the extinguishment of debt, the termination of the consulting agreements and the vesting of all Tranche B and C stock options, as explained above. This increase was partially offset by the effect of the tax grant received in the fourth quarter of 2012 that reduced our marginal corporate tax rates from 30% to 4% on our industrial development income.

See Note 8 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding income taxes.

Comparison of the six months ended June 30, 2013 and 2012

The following tables present the components of our unaudited consolidated statements of (loss) income and comprehensive (loss) income by business segment and the change in those amounts for the six months ended June 30, 2013 and 2012.

Revenues

	Six months ended June 30,
(Dollar amounts in thousands)	2013		2012		Variance
Merchant acquiring, net	$	35,624	$	34,689	$	935	3	%
Payment processing		48,397		46,702		1,695	4	%
Business solutions		92,493		85,469		7,024	8	%
Total revenues	$	176,514	$	166,860	$	9,654	6	%

Total revenues for the six months ended June 30, 2013 were $176.5 million, representing an increase of $9.7 million or 6% as compared to the corresponding 2012 period.

Merchant acquiring revenues for the six months ended June 30, 2013 were $35.6 million, representing an increase of $0.9 million or 3% as compared to the corresponding 2012 period. The revenue growth for 2013 was primarily due to higher volume, partially offset by certain effects related to the Durbin Amendment which went into effect in the fourth quarter of 2011. Normalizing for the effects related to the Durbin Amendment, revenues in this segment grew 8% versus the prior year.

Payment processing revenues for the six months ended June 30, 2013 were $48.4 million, representing an increase of $1.7 million or 4% as compared to the corresponding 2012 period. The revenue growth comparison is impacted by a non-recurring increase in processing volumes during the quarter ended June 30, 2012 related to certain one-time items. Normalizing for these one-time items, revenues in this segment grew 6% versus the prior year.

26

Business solutions revenues for the six months ended June 30, 2013 were $92.5 million, representing an increase of $7.0 million or 8% as compared to the corresponding 2012 period. Revenue growth was primarily driven by an increase in sales and higher demand for our services.

Operating costs and expenses

	Six months ended June 30,
(Dollar amounts in thousands)	2013		2012		Variance
Cost of revenues, exclusive of depreciation and amortization shown below	$	82,759	$	77,572	$	5,187		7	%
Selling, general and administrative expenses		21,001		17,464		3,537		20	%
Depreciation and amortization		35,417		35,752		(335	)	-1	%
Total operating costs and expenses	$	139,177	$	130,788	$	8,389		6	%

Total operating costs and expenses for the six months ended June 30, 2013 were $139.2 million, representing an increase of $8.4 million or 6% as compared to the corresponding 2012 period.

Cost of revenues for the six months ended June 30, 2013 were $82.8 million, representing an increase of $5.2 million or 7% as compared to the corresponding 2012 period. The growth in our cost of revenues was primarily due to a $4.4 million increase in product sales within our business solutions segment and a non-cash compensation expense of $1.8 million related to the vesting of all Tranche B and C stock options, partially offset by a $1.9 million decrease in professional services.

Selling, general and administrative expenses for the six months ended June 30, 2013 were $21.0 million, representing an increase of $3.5 million or 20% as compared to the corresponding 2012 period. The increase in our selling, general and administrative expenses was primarily due to a $3.1 million non-cash charge taken in connection with the vesting of all Tranche B and C stock options. For additional information, refer to Note 7 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Depreciation and amortization expense for the six months ended June 30, 2013 was $35.4 million, representing a decrease of $0.3 million or 1% as compared to the corresponding 2012 period.

Income from operations

The following table presents income from operations by reportable segments.

	Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			Variance
Segment income from operations
Merchant acquiring, net	$	17,395		$	16,511		$	884		5	%
Payment processing		25,270			25,065			205		1	%
Business solutions		19,318			17,950			1,368		8	%
Total segment income from operations		61,983			59,526			2,457		4	%
Merger related depreciation and amortization and other unallocated expenses (1)		(24,646	)		(23,454	)		(1,192	)	-5	%
Income from operations	$	37,337		$	36,072		$	1,265		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 for the six months ended June 30, 2013 was $37.3 million, representing an increase of $1.3 million or 4% as compared to the corresponding 2012 period. The increase in income from operations was driven by the aforementioned factors impacting our revenues and operating costs and expenses. Excluding the non-recurring $4.9 million non-cash expense related to the vesting of all Tranche B and C stock options, income from operations would have increased by $6.2 million or 17%.

See Note 12 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information on the Company’s reportable segments and for a reconciliation of income from operations to net (loss) income.

27

Non-operating (expenses) income

	Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			Variance
Non-operating (expenses) income
Interest income	$	93		$	199		$	(106	)	-53	%
Interest expense		(25,011	)		(24,430	)		(581	)	-2	%
Earnings of equity method investment		625			575			50		9	%
Other expense		(77,468	)		(10,657	)		(66,811	)	-627	%
Total non-operating (expenses) income	$	(101,761	)	$	(34,313	)	$	(67,448	)	-197	%

Total non-operating expenses for the six months ended June 30, 2013 were $101.8 million, representing an increase of $67.4 million as compared to the corresponding 2012 period. The increase in non-operating expenses in 2013 was primarily driven by aforementioned factors impacting our quarterly results in non-operating (expenses) income.

Income tax (benefit) expense

Income tax benefit for the six months ended June 30, 2013 amounted to approximately $5.0 million compared to an income tax expense of $0.3 million for the corresponding 2012 period. Income tax benefit in the 2013 period was attributable to a taxable loss as a result of higher non-operating expenses related to the extinguishment of debt, the termination of the consulting agreements and the vesting of all Tranche B and C stock options, as explained above. The tax benefit was partially offset by the effect of the tax grant received in the fourth quarter of 2012 that reduced our marginal corporate tax rates from 30% to 4% on our industrial development income.

See Note 8 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding income taxes.

Liquidity and Capital Resources

Our principal source of liquidity is cash generated from operations, while our primary liquidity requirements are the funding of capital expenditures and working capital needs. At June 30, 2013, we had available a $100.0 million revolving credit facility under the senior secured credit facilities, as described above in Note 5 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.

At June 30, 2013, we had cash of $19.6 million of which $9.3 million is in possession of 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. Over the long-term, it is the Company’s intention to reinvest these funds outside Puerto Rico and based on its forecast, the Company’s current liquidity requirements would not require the repatriation of these funds for purposes of funding the Company’s Puerto Rico operations over a long-term period or debt service obligations. However, if in the future the Company determines that there is no longer a need to maintain such cash within its foreign subsidiaries, it may elect to distribute such cash to the Company in Puerto Rico. Distributions from the Company’s foreign subsidiaries to Puerto Rico may be subject to tax withholdings and to other tax consequences.

Our primary use of cash is for operating expenses, working capital requirements, capital expenditures, dividend payments and debt service obligations as they become due.

Based on our current level of operations, we believe our cash flows from operations and available 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 and capital expenditures 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. The following table presents our cash flows from operations.

28

	Six months ended June 30,
(Dollar amounts in thousands)	2013			2012
Cash (used in) provided by operating activities	$	(13,902	)	$	41,995
Cash used in investing activities		(12,344	)		(9,068	)
Cash provided by (used in) financing activities		20,199			(62,971	)
Decrease in cash	$	(6,047	)	$	(30,044	)

Net cash used in operating activities for the six months ended June 30, 2013 was $13.9 million as compared to cash provided by operating activities of $42.0 million for the corresponding 2012 period. The decrease of $55.9 million was primarily attributable to cash used to pay certain amounts related to the redemption of the senior notes and the extinguishment of debt of $41.9 million, and a $16.7 million payment related to the termination of the consulting agreements with Popular and Apollo.

Net cash used in investing activities for the six months ended June 30, 2013 was $12.3 million as compared to $9.1 million for the corresponding period in 2012. The increase in cash used of $3.2 million was primarily due to an increase in the acquisition of software in 2013.

Net cash provided by financing activities for the six months ended June 30, 2013 was $20.2 million as compared to cash used in financing activities of $63.0 million in the corresponding 2012 period. Cash provided by financing activities in 2013 consisted of proceeds from the Initial Public Offering and from the issuance of additional debt amounting to $812.4 million, partially offset by $763.9 million of debt repayment, $12.1 million of debt issuance costs and $16.7 million in taxes paid as a result of cashless exercise of stock options. Cash used in financing activities during 2012 resulted from the payment of dividends of $269.8 million, partially offset by proceeds received from the issuance of debt of $208.7 million.

Capital Resources

Our principal capital expenditures are for hardware and computer software (purchased and internally developed) and additions to property and equipment. We invested approximately $12.3 million and $8.9 million for the six months ended June 30, 2013 and 2012, respectively. Capital expenditures are expected to be funded by cash flows from operations and, if necessary, borrowings under the revolving credit facility.

Financial Obligations

Previous Senior Secured Credit Facilities and Senior Notes

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 which matures on April 17, 2018, a $400.0 million term loan B facility which matures on April 17, 2020 and a $100.0 million revolving credit facility which matures on April 18, 2018. The net proceeds received by EVERTEC Group from the new senior secured credit facilities, together with other cash available to EVERTEC Group, were used to, among other things, refinance EVERTEC Group’s previous senior secured credit facilities and redeem a portion of EVERTEC’s 11% Senior Notes due 2018 (the “senior notes”), as further explained below.

On March 29, 2013, EVERTEC Group provided notice to Wilmington Trust, National Association (the “Trustee”) pursuant to the Indenture, dated as of September 30, 2010 (as supplemented by Supplemental Indenture No. 1, dated as of April 17, 2012, Supplemental Indenture No. 2, dated as of May 7, 2012 and Supplemental Indenture No. 3, dated as of May 7, 2012) between EVERTEC Group and EVERTEC Finance Corp. (together, the “Co-Issuers”), the Guarantors named therein and the Trustee (the “Indenture”), that the Co-Issuers had elected to (i) redeem $91.0 million principal amount of their outstanding senior notes, at a redemption price of 111.0%, plus accrued and unpaid interest, on April 29, 2013 (the “Partial Redemption”) and (ii) redeem all of their outstanding senior notes (after giving effect to the redemption of $91.0 million principal amount of the senior notes described in clause (i)) at a redemption price of 100% plus a make-whole premium of 120%, plus accrued and unpaid interest, on April 30, 2013 (the “Full Redemption”). On April 17, 2013, the Co-Issuers and the Trustee entered into a Satisfaction and Discharge Agreement whereby EVERTEC Group caused to be irrevocably deposited with the Trustee, to satisfy and to discharge the Co-Issuers’ obligations under the Indenture (a) a portion of the net cash proceeds received by the Company in the Initial Public Offering to Holdings, which contributed such proceeds to EVERTEC Group, in an amount sufficient to effect the Partial Redemption on April 29, 2013 and (b) proceeds from the 2013 Credit Agreement described above in an amount sufficient to effect the Full Redemption on April 30, 2013. On April 29, 2013, the Partial Redemption was effected and on April 30, 2013, the Full Redemption was effected.

29

New Senior Secured Credit Facilities

Term A

The term loan A has a principal amount of $300.0 million (“Term A Loan”) and 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 Loans on April 17, 2018. Interest is 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) Base Rate plus an applicable margin ranging from 1.00% to 1.50%. Term A Loan has no interest rate minimum or floor.

Term B

The term loan B has a principal amount of $400.0 million (“Term B Loan”) and 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 Loans on April 17, 2020. Interest is 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 available unused commitment during the preceding quarter. The commitment fee for the unused portion of this facility ranges from 0.125% to 0.375% based on utilization. As of June 30, 2013, the revolving credit facility was undrawn.

All loans may be prepaid without premium or penalty, except for a 1% premium payable if any of the Term B Loans are refinanced or repriced with debt having a lower effective interest rate on or prior to April 17, 2014.

The new senior secured credit facilities allow EVERTEC Group to obtain an incremental amount of term loan and/or revolving credit facility commitments not to exceed the greater of (i) $200,000 and (ii) maximum amount of debt that would not cause EVERTEC Group’s pro forma secured leverage ratio to exceed 4.25 to 1.00.

The revolving credit facility is available for general corporate purposes and includes borrowing capacity available for letters of credit and for short-term borrowings referred to as swing line borrowings. All obligations under the new senior secured credit facilities are unconditionally guaranteed by EVERTEC Intermediate Holdings, LLC and, subject to certain exceptions, each of EVERTEC Group’s existing and future wholly-owned subsidiaries. All obligations under the new senior secured credit facilities, and the guarantees of those obligations, are secured by substantially all of EVERTEC Group’s assets and the assets of the guarantors, subject to certain exceptions.

See Note 5 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.

Other Short-Term Borrowing

In December 2012, we entered into a financing agreement in the ordinary course of business to purchase certain software and related services in the amount of $13.0 million to be repaid in three payments over a term of ten months. As of June 30, 2013, the outstanding balance of this other short-term borrowing was $8.7 million.

Covenant Compliance

The credit facilities contain various restrictive covenants. The Term A Loan and the revolving facility (subject to certain exceptions) require us to maintain on a quarterly basis a specified maximum senior secured leverage ratio of up to 6.60 as defined in the 2013 Credit Agreement (total first lien secured debt to Adjusted EBITDA). In addition, the 2013 Credit Agreement, among other things: (a) limits our ability and the ability of our subsidiaries to incur additional indebtedness, incur liens, pay dividends or make certain other restricted payments and enter into certain transactions with affiliates; (b) restricts our ability to enter into agreements that would restrict the ability of our subsidiaries to pay dividends or make certain payments to us; and (c) places restrictions on our ability and the ability of our subsidiaries to merge or consolidate with any other person or sell, assign, transfer, convey or otherwise dispose of all or substantially all of our assets. However, all of the covenants in these agreements are subject to significant exceptions. As of June 30, 2013, the senior secured leverage ratio was 3.94 to 1.00.

30

In this Quarterly Report on Form 10-Q, 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

We define “EBITDA” as earnings before interest, taxes, depreciation and amortization. We define “Adjusted EBITDA” as EBITDA as further adjusted to exclude unusual items and other adjustments described below. We define “Adjusted Net Income” as net income as 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 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 Credit Agreement 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 cash flows generation by capturing the actual cash taxes paid rather than our tax expense as calculated under GAAP and excludes 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 and Adjusted Net Income are not measurements of liquidity or financial performance under GAAP. You should not consider EBITDA, Adjusted EBITDA and Adjusted Net Income as alternatives to cash flows from operating activities or any other performance measures determined in accordance with GAAP, as indicators of cash flows, as measures of liquidity or as alternatives to operating or net income determined in accordance with GAAP.

31

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

(Dollar amounts in thousands)	Three months ended June 30, 2013			Six months ended June 30, 2013			Twelve months ended June 30, 2013
Net (loss) income	$	(64,935	)	$	(59,463	)	$	16,402
Income tax benefit		(5,012	)		(4,961	)		(64,877	)
Interest expense, net		9,698			24,918			54,698
Depreciation and amortization		17,842			35,417			71,157
EBITDA		(42,407	)		(4,089	)		77,380
Software maintenance reimbursement and other costs (1)		489			1,091			2,213
Equity income (2)		153			(124	)		780
Compensation and benefits (3)		6,218			6,549			7,244
Pro forma cost reduction adjustments (4)		75			150			2,300
Transaction, refinancing and other non-recurring fees (5)		59,645			61,515			65,027
Management fees (6)		19,261			20,109			21,600
Purchase accounting (7)		(3	)		(19	)		(1,201	)
Adjusted EBITDA		43,431			85,182			175,343
Pro forma cost reduction adjustments(8)		(75	)		(150	)		(2,300	)
Operating depreciation and amortization(9)		(8,079	)		(15,894	)		(31,811	)
Cash interest expense, net (10)		(5,434	)		(11,110	)		(38,227	)
Cash income taxes (11)		(969	)		(1,666	)		(3,023	)
Adjusted net income	$	28,874		$	56,362		$	99,982
Adjusted net income per common share:(12)
Basic	$	0.37		$	0.74
Diluted	$	0.35		$	0.70
Shares used in computing adjusted net income per common share:(12)
Basic		78,928,780			75,849,551
Diluted		82,747,507			80,076,665

32

⁽¹⁾  Primarily represents reimbursements received for certain software maintenance expenses as part of the Merger.

⁽²⁾  Represents the elimination of non-cash equity earnings from our 19.99% equity investment in CONTADO, net of cash dividends received.

⁽³⁾  Primarily represents non-cash equity based compensation expense.

⁽⁴⁾  Represents the pro forma effect of the expected net savings primarily in compensation and benefits from the reduction of certain employees, temporary employees and professional services. This pro forma amount was calculated using the net amount of actual expenses for temporary employees and professional services for the twelve month period prior to their replacement, separation and/or elimination net of the incremental cost of the new full-time employees that were hired.

⁽⁵⁾  Represents fees and expenses associated with non-recurring corporate transactions.

⁽⁶⁾  Represents consulting fees paid to Apollo and Popular. In connection with our Initial Public Offering during the second quarter of 2013, our consulting agreements with Apollo and Popular were terminated.

⁽⁷⁾  Represents the elimination of the effects of purchase accounting in connection with certain software related arrangements where EVERTEC receives reimbursements from Popular.

⁽⁸⁾  Represents the elimination of the pro-forma benefits described in note (4) above.

⁽⁹⁾  Represents operating depreciation and amortization expense which excludes amounts generated as a result of the Merger.

⁽¹⁰⁾  For the quarter and six months ended June 30, 2013 represents pro forma cash interest expense assuming EVERTEC’s April 2013 refinancing occurred on January 1, 2013. For the twelve months period, includes the pro forma cash interest expense mentioned above for the 2013 period and for the 2012 period represents interest expense, less interest income, as they appear on our consolidated statements of (loss) income and comprehensive (loss) income, adjusted to exclude non-cash amortization of the debt issue costs, premium and accretion of discount.

⁽¹¹⁾  Represents cash taxes paid for each period presented.

⁽¹²⁾  Share count was adjusted for the 2:1 stock split that occurred on April 1, 2013.

Off Balance Sheet Arrangements

As of June 30, 2013, we had an off balance sheet item of $59.0 million related to the unused amount of windfall that is available to offset future taxable income.

See Note 8 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information related to this off-balance sheet item.

Contractual Obligations

Our contractual obligations changed from those reported at December 31, 2012 in the Registration Statement as a result of the refinancing of EVERTEC Group’s previous senior secured credit facilities and the redemption of the senior notes. On April 17, 2013, EVERTEC Group entered into the 2013 Credit Agreement governing the senior secured credit facilities, consisting of a $300.0 million term loan A facility, a $400.0 million term loan B facility and a $100.0 million revolving credit facility.

The following table reflects contractual obligations under long-term debt as of June 30, 2013.

	Payment due by periods
(Dollar amounts in thousands)	Total		Less than 1 year		1-3 years		3-5 years		After 5 years
Long-term debt (1)	$	828,935	$	41,499	$	81,328	$	302,400	$	403,708

⁽¹⁾  Long-term debt includes the payments of cash interest (based on interest rates as of June 30, 2013 for variable rate debt) and aggregate principal amount of our senior secured credit facilities, as well as commitments fees related to the unused portion of the secured revolving credit facility, as required under the terms of the Credit Agreement.

Item 3. 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 changes in interest rates that will adversely affect the value of our financial assets and liabilities or future cash flows and earnings. Market risk is the potential loss arising from adverse changes in market rates and prices.

Interest rate risk

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 June 30, 2013, under the senior secured credit facilities would increase our annual interest expense by approximately $7.0 million.

33

See Note 5 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information related to our 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 income (loss) in the unaudited consolidated balance sheets, except for highly inflationary environments in which the effects would be included in other operating income in the consolidated statements of (loss) income and comprehensive (loss) income. At June 30, 2013, the Company had $1.1 million in a favorable foreign currency translation adjustment as part of accumulated other comprehensive income (loss) compared to an unfavorable foreign currency translation adjustment of $0.8 million at December 31, 2012.

Item 4. 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 ensure 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.

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. Based upon their evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2013, the Company’s disclosure controls and procedures are effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2013 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. 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 aggregated 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 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in the Registration Statement, other than as described below:

The following risk factor set forth in the Registration Statement is deleted: “We currently have no plans to pay regular dividends on our common stock, so you may not receive funds without selling your common stock.” and replaced with the risk factor set forth below:

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 of Directors 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 of Directors 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 of Directors 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.

34

Additionally, the below risk factor set forth in the Registration Statement is revised as follows:

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 the U.S. Department of the Treasury’s Office of Foreign Assets Control (“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, LLC 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, LLC 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, LLC 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, LLC 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 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, LLC 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, LLC after the closing of the Merger and is now known as Tarjetas y Transacciones en Red TRANRED, C.A. (“Tranred”)) and one of EVERTEC, LLC’s Costa Rican subsidiaries (which continues to be a subsidiary of EVERTEC, LLC 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, LLC and the subsidiaries 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, LLC and its former Venezuelan subsidiary, we disclosed that they completely ceased processing Cuba-related credit card transactions for financial institutions operating in Venezuela on September 4, 2010. We also disclosed that EVERTEC, LLC’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, LLC’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, LLC 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, LLC 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 2010 and May 2013 that may be in violation of the CACR. The voluntary self-disclosure also states that these 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 transaction 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, LLC and/or its subsidiaries. Since the November 15, 2010 submission by EVERTEC, LLC, there have been no communications between OFAC and EVERTEC, LLC 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 dated June 30, 2010 as amended 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.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number	Description
10.1*	Second Amendment to Stockholder Agreement, dated June 30, 2013, among EVERTEC, Inc. and the holders party thereto.
10.2*	Resignation Agreement, dated August 1, 2013 and effective as of August 7, 2013, by and between EVERTEC, Inc. and Felix M. Villamil Pagani.
10.3*	Amendment to Stock Option Agreement, dated August 1, 2013, by and between EVERTEC, Inc. and Felix M. Villamil Pagani.
10.4*	Form of EVERTEC, Inc. 2013 Equity Incentive Plan Restricted Stock Unit Award Agreement.
10.5	Agreement for Termination of Transition Services Agreement, dated as of July 31, 2013, by and among Popular, Inc., EVERTEC Group, LLC and TARJETAS Y TRANSACCIONES EN RED TRANRED, C.A. (incorporated by reference to Exhibit 10.1 of Current Report on Form 8-K filed August 6, 2013, File No. 001-35872)
10.6	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 Current Report on Form 8-K filed August 6, 2013, File No. 001-35872)
31.1*	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a)
31.2*	Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a)
32.1**	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350
32.2**	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
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.

*** Pursuant to applicable securities laws and regulations, the Company is deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and is not subject to liability under any anti-fraud provisions of the federal securities laws as long as the Company has made a good faith attempt to comply with the submission requirements and promptly amends the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. Users of this data are advised that, pursuant to Rule 406T, these interactive data files are deemed not filed and otherwise are not subject to liability.

35

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	EVERTEC, Inc. (Registrant)
Date: August 14, 2013	By:	/s/ Peter Harrington
		Peter Harrington Chief Executive Officer
Date: August 14, 2013	By:	/s/ Juan J. Román
		Juan J. Román Chief Financial Officer

S-1

EX-10.1

Exhibit 10.1

EXECUTION VERSION

SECOND AMENDMENT TO THE STOCKHOLDER AGREEMENT

This Amendment (this “Amendment”), dated as of June 30, 2013, is made by EVERTEC, Inc. (f.k.a. Carib Latam Holdings, Inc.), a corporation organized under the laws of the Commonwealth of Puerto Rico (the “Company”), AP Carib Holdings, Ltd., an exempted company organized under the laws of the Cayman Islands (“Apollo”), and Popular, Inc., a corporation organized under the laws of the Commonwealth of Puerto Rico (“Popular”). Capitalized terms used and not otherwise defined herein have the meanings set forth in the Stockholder Agreement (as defined below).

WHEREAS, the Company, Apollo, Popular, and the other Holders are parties to that certain Stockholder Agreement, dated as of April 17, 2012, as amended by the First Amendment to the Stockholder Agreement dated as of March 27, 2013 (as so amended, the “Stockholder Agreement”);

WHEREAS, Section 12(h) of the Stockholder Agreement provides, among other things, that the Stockholder Agreement may be amended by the Company from time to time with the written consent of (a) Holders holding at least a majority of the Class A Shares then outstanding and (b) for so long as a Principal Stockholder’s Proportionate Percentage is at least 10%, such Principal Stockholder;

WHEREAS, Apollo and Popular collectively own a majority of the issued and outstanding Class A Shares, and Apollo, Popular and the Company desire to amend certain provisions of the Stockholder Agreement as set forth in this Amendment.

NOW, THEREFORE, in consideration of the covenants and agreements contained herein and in the Stockholder Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

A. Amendments to the Stockholder Agreement. The Stockholder Agreement is hereby amended as follows:

1. Section 2(d) – Composition. Effective as of the date hereof, Section 2(d) of the Stockholder Agreement is hereby amended as follows:

(a) Subclause (vi) of Section 2(d) shall be amended and restated as follows:

“(vi) if the number of Directors nominated pursuant to the foregoing clauses (ii) through (v) is less than eight, then a committee of the Board comprised of all Directors other than the Director or Directors who are to be replaced by Independent Replacement Directors because the Holder or Holders who nominated such Directors have lost the right to nominate such Directors pursuant to this Section 2 (the “Independent Replacement Director Selection Committee”), shall have the right to (A) nominate Independent Replacement Directors to fill

such vacancies, which nominations must be reasonably acceptable to each Principal Stockholder so long as such Principal Stockholder’s Proportionate Percentage is 5% or more, and (B) remove any Independent Replacement Directors at any time and for any reason; provided that (1) nothing in this Agreement shall affect the right of holders of a majority of the outstanding Common Shares to remove any Independent Replacement Director with or without cause or the right of any holder of outstanding Common Shares to nominate a person for election as a Director (whether to fill a vacancy or otherwise) at any meeting of the stockholders in accordance with applicable Law, the Certificate of Incorporation and the Company’s bylaws; (2) the Independent Replacement Director Selection Committee shall act by the vote of a majority of all of its members (including any vacancies) in nominating and removing the Independent Replacement Directors; (3) except in connection with nominations for the annual meeting of the Holders or any special meeting of the Holders for which the notice of such meeting sets forth that the business to be conducted shall include the election of directors (and in the case of such a special meeting, solely to the extent of the number of directors so indicated to be elected), the Independent Replacement Director Selection Committee shall only nominate a person to be an Independent Replacement Director to the extent there exists, at such time, a vacancy on the Board; and (z) the Independent Replacement Director Selection Committee shall, in connection with nominating any person to be an Independent Replacement Director, indicate the order in which each Independent Replacement Director shall be automatically removed if the number of Independent Directors pursuant to this Section 2(d)(vi) decreases; and”

2. Section 2(g) – Term: Removal and Replacement. Effective as of the date hereof, Section 2(g) of the Stockholder Agreement is hereby amended and restated follows:

“(g) Term: Removal and Replacement. Each Principal Stockholder and each of its Partial Rights Transferees agrees to vote all of its Common Shares and to take all other necessary or desirable actions within its control (whether in such Holder’s capacity as a Holder or otherwise, and including, without limitation, attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings), and the Company will, as promptly as practicable, take all necessary and desirable actions within its control (including, without limitation, calling special meetings of the Board and the Holders), so that each of the nominees designated in Section 2(d) or Section 2(e) will be elected as Directors at any annual or special meeting of the Holders (or by written consent in lieu of a meeting of the Holders), and each Director so elected will serve until their successors are duly elected and qualified pursuant to the terms of this Agreement or until their earlier death, disability, resignation or removal (with cause or without cause). Subject to applicable Law, no Director may be removed without the consent of the Holder who is entitled to nominate such individual as a Director pursuant this Agreement. Subject to applicable Law, a Director may only be removed at the direction of the party that is entitled to nominate such Director and, except as set forth in Section 2(d)(vi) and applicable Law, the vacancy created by any former Director may only be filled by a nominee of the party that was entitled to nominate such former Director. Each Principal Stockholder and each of its Partial Rights Transferees agrees to vote all of its Common Shares and to take all other necessary or desirable actions within its control (whether in such Holder’s capacity as a Holder or otherwise, and including, without limitation, attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings), and the Company will, as promptly as practicable, take all

2

necessary and desirable actions within its control (including, without limitation, calling special meetings of the Board and the Holders), so that each Director shall be removed as directed by the Holder entitled to nominate such Director. Furthermore, each Principal Stockholder and each of its Partial Rights Transferees shall vote all of its Common Shares to cause the individual then entitled to be the Management Director to be a member of the Board, including removing any person previously elected as the Management Director and no longer entitled to hold such position in accordance with this Agreement. In the event that a person serving as the Management Director loses the right pursuant to Section 2(d) to serve in such capacity, the Board (by majority vote of the Directors then in office, even in less than a quorum) may remove such person from the Board. Subject to the foregoing, in the event a vacancy is created on the Board by reason of the death, disability, resignation or removal (with cause or without cause) of any Director, each Principal Stockholder and each of its Partial Rights Transferees hereby agrees that such vacancy may be filled by a majority vote of the Directors then in office, even if less than a quorum, or by a sole remaining Director, and any Director so chosen shall hold office for the remainder of the full term in which such vacancy occurs; provided, that, any person chosen to fill such vacancy shall be selected in accordance with the procedures set forth in this Section 2. Subject to applicable Law, the Company and each Principal Stockholder and each of its Partial Rights Transferees shall fill any vacancies on the Board in accordance with this Section 2, as soon as practicable following the date such vacancy is created.”

3. Section 6(b) – Excluded Securities. Effective as of the date hereof, Section 6(b) of the Stockholder Agreement is hereby amended as follows:

(a) Subclause (ii)(A) of Section 6(b) shall be amended and restated as follows:

“(A) securities of the Company, including any options, warrants or other securities convertible into or exercisable or exchangeable for any such securities, issued pursuant to the Management Long-Term Compensation Plan, in an aggregate amount (inclusive of any such securities that have been converted into, exercised or exchanged for voting securities) at any time outstanding not to exceed (on an as-converted, exercised or exchanged basis) 2,921,604 Common Shares, and”

4. Section 12 (h) – Amendments. Effective as of the date hereof, Section 12(h) of the Stockholder Agreement is hereby amended and restated as follows:

“(h) Amendments. Other than with respect to amendments to Schedule I attached hereto, which may be amended by the Company to reflect additional Holders, this Agreement may not be amended, supplemented or modified without the written consent of (x) the Holders holding at least a majority of the Class A Shares held by all of the Holders at the time of such amendment and (y) for so long as any Principal Stockholder’s Proportionate Percentage is at least 10%, such Principal Stockholder; provided, however, that (i) any such amendment, modification or supplement that by its terms affects the rights or obligations of any Holder in a manner that is materially adverse and substantially different relative to other Holders shall not be enforceable against such Holder without the written consent of such Holder, and (ii) the written consent of the Company shall be required, in the event that any such amendment, modification or supplement imposes a burden or obligation on the Company or adversely affects a benefit or right of the Company under this Agreement.”

3

5. Annex I – ACTIONS REQUIRING SPECIAL APPROVAL. Effective as of the date hereof, Annex I of the Stockholder Agreement is hereby amended as follows:

(a) Item 9 of Annex I shall be amended and restated as follows:

“9. any engagement by the Company or any Subsidiary of the Company, directly or indirectly, in one or a series of related transactions with (i) any Principal Stockholder, (ii) any Affiliate of a Principal Stockholder, (iii) any Person in which a Principal Stockholder or any of its Affiliates holds more than 50% of such Person’s equity securities or (iv) any executive management employee of the Company, other than (A) dividends and other distributions on shares of the Company’s capital stock, (B) in the case of clauses (ii), (iii) or (iv) above, transactions that are entered into on arm’s length terms in the ordinary course of business, and (C) in accordance with any agreement executed and delivered on the date of this Agreement with the consent of Apollo and Popular;”

B. Miscellaneous. This Amendment and the Stockholder Agreement, together, contain the complete agreement among the Company and the Holders and supersede any prior understandings, agreements, letters of intent, or representations by or among such parties, written or oral, to the extent they relate to the subject matter hereof. Except as specifically amended hereby, the Stockholder Agreement, as amended hereby, shall remain in full force and effect. The terms and provisions of Section 12 of the Stockholder Agreement are incorporated herein by reference as if set forth herein in their entirety and shall apply mutatis mutandis to this Amendment.

*        *        *         *        *

4

IN WITNESS WHEREOF, the Company has executed or caused this Amendment to be executed as of the date first written above.

EVERTEC, INC.
By:	/s/ Philip E. Steurer
Name:	Philip E. Steurer
Title:	Executive Vice President and Chief Operating Officer

[Signature Page to the Second Amendment to the Stockholder Agreement]

PRINCIPAL STOCKHOLDERS:
AP CARIB HOLDINGS, LTD.
By:	Apollo Management VII, L.P.,
	its sole director
By:	AIF VII Management, LLC,
	its general partner
By:	/s/ Scott Ross
Name:
Title:
POPULAR, INC.
By:	/s/ Ivan Pagani
Name:	Ivan Pagani
Title:	SVP

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Félix M. Villamil Pagani
Name:	Félix M. Villamil Pagani

The spouse of the above signed Management Holder hereby executes this Amendment to acknowledge (a) the fairness of this Amendment and (b) that binding such spouse’s community interest, if any, in the Common Shares and any other securities referred to in this Amendment to the terms of this Amendment is in such spouse’s best interest.

SPOUSE OF MANAGEMENT HOLDER
By:	/s/ Lourdes Durán
Name:	Lourdes Durán

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Carlos J. Ramírez
Name:	Carlos J. Ramírez

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Jorge Rafael Hernández Gonzalez
Name:	Jorge Rafael Hernández Gonzalez

The spouse of the above signed Management Holder hereby executes this Amendment to acknowledge (a) the fairness of this Amendment and (b) that binding such spouse’s community interest, if any, in the Common Shares and any other securities referred to in this Amendment to the terms of this Amendment is in such spouse’s best interest.

SPOUSE OF MANAGEMENT HOLDER
By:	/s/ Soraya Cheleuitte
Name:	Soraya Cheleuitte

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Luis Gerardo Alvarado
Name:	Luis Gerardo Alvarado

The spouse of the above signed Management Holder hereby executes this Amendment to acknowledge (a) the fairness of this Amendment and (b) that binding such spouse’s community interest, if any, in the Common Shares and any other securities referred to in this Amendment to the terms of this Amendment is in such spouse’s best interest.

SPOUSE OF MANAGEMENT HOLDER
By:	/s/ Alexandra Villalobos Montero
Name:	Alexandra Villalobos Montero

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Miguel Vizcarrondo
Name:	Miguel Vizcarrondo

The spouse of the above signed Management Holder hereby executes this Amendment to acknowledge (a) the fairness of this Amendment and (b) that binding such spouse’s community interest, if any, in the Common Shares and any other securities referred to in this Amendment to the terms of this Amendment is in such spouse’s best interest.

SPOUSE OF MANAGEMENT HOLDER
By:	/s/ Jackeline Cardona
Name:	Jackeline Cardona

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Raúl Aponte
Name:	Raúl Aponte

The spouse of the above signed Management Holder hereby executes this Amendment to acknowledge (a) the fairness of this Amendment and (b) that binding such spouse’s community interest, if any, in the Common Shares and any other securities referred to in this Amendment to the terms of this Amendment is in such spouse’s best interest.

SPOUSE OF MANAGEMENT HOLDER
By:	/s/ Madeline Fontanés
Name:	Madeline Fontanés

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Ramón Luis Meléndez
Name:	Ramón Luis Meléndez

The spouse of the above signed Management Holder hereby executes this Amendment to acknowledge (a) the fairness of this Amendment and (b) that binding such spouse’s community interest, if any, in the Common Shares and any other securities referred to in this Amendment to the terms of this Amendment is in such spouse’s best interest.

SPOUSE OF MANAGEMENT HOLDER
By:	/s/ Ana M. Hernández Colón
Name:	Ana M. Hernández Colón

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ José Luis Casas
Name:	José Luis Casas

The spouse of the above signed Management Holder hereby executes this Amendment to acknowledge (a) the fairness of this Amendment and (b) that binding such spouse’s community interest, if any, in the Common Shares and any other securities referred to in this Amendment to the terms of this Amendment is in such spouse’s best interest.

SPOUSE OF MANAGEMENT HOLDER
By:	/s/ Emi Escribá
Name:	Emi Escribá

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Miguel Angel Mercado Morales
Name:	Miguel Angel Mercado Morales

The spouse of the above signed Management Holder hereby executes this Amendment to acknowledge (a) the fairness of this Amendment and (b) that binding such spouse’s community interest, if any, in the Common Shares and any other securities referred to in this Amendment to the terms of this Amendment is in such spouse’s best interest.

SPOUSE OF MANAGEMENT HOLDER
By:	/s/ Marena Rodríguez
Name:	Marena Rodríguez

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Luisa Wert Serrano
Name:	Luisa Wert Serrano

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Luis A Munoz Zavala
Name:	Luis A Munoz Zavala

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Wanda Betancourt Diaz
Name:	Wanda Betancourt Diaz

The spouse of the above signed Management Holder hereby executes this Amendment to acknowledge (a) the fairness of this Amendment and (b) that binding such spouse’s community interest, if any, in the Common Shares and any other securities referred to in this Amendment to the terms of this Amendment is in such spouse’s best interest.

SPOUSE OF MANAGEMENT HOLDER
By:	/s/ Joseph Albino
Name:	Joseph Albino

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Lilia Sylvette Ramos Figueroa
Name:	Lilia Sylvette Ramos Figueroa

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Luis Cabrera
Name:	Luis Cabrera

The spouse of the above signed Management Holder hereby executes this Amendment to acknowledge (a) the fairness of this Amendment and (b) that binding such spouse’s community interest, if any, in the Common Shares and any other securities referred to in this Amendment to the terms of this Amendment is in such spouse’s best interest.

SPOUSE OF MANAGEMENT HOLDER
By:	/s/ Elisa Sánchez Colberg
Name:	Elisa Sánchez Colberg

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:
Name:	James Gonzalez, Jr.

The spouse of the above signed Management Holder hereby executes this Amendment to acknowledge (a) the fairness of this Amendment and (b) that binding such spouse’s community interest, if any, in the Common Shares and any other securities referred to in this Amendment to the terms of this Amendment is in such spouse’s best interest.

SPOUSE OF MANAGEMENT HOLDER
By:
Name:	María Lizardi

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Juan Jose Roman Jimenez
Name:	Juan Jose Roman Jimenez

The spouse of the above signed Management Holder hereby executes this Amendment to acknowledge (a) the fairness of this Amendment and (b) that binding such spouse’s community interest, if any, in the Common Shares and any other securities referred to in this Amendment to the terms of this Amendment is in such spouse’s best interest.

SPOUSE OF MANAGEMENT HOLDER
By:	/s/ Maday Viera
Name:	Maday Viera

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Miguel Arocho
Name:	Miguel Arocho

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Marcelino Zayas
Name:	Marcelino Zayas

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Maria Gois
Name:	Maria Gois

The spouse of the above signed Management Holder hereby executes this Amendment to acknowledge (a) the fairness of this Amendment and (b) that binding such spouse’s community interest, if any, in the Common Shares and any other securities referred to in this Amendment to the terms of this Amendment is in such spouse’s best interest.

SPOUSE OF MANAGEMENT HOLDER
By:	/s/ Renzo Pilotta
Name:	Renzo Pilotta

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Peter Harrington
Name:	Peter Harrington

[Signature Page to the Second Amendment to the Stockholder Agreement]

Thomas M. White 2006 Trust
By:
Name:	Trustee

[Signature Page to the Second Amendment to the Stockholder Agreement]

By:	/s/ Philip E. Steurer
Name:	Philip E. Steurer

[Signature Page to the Second Amendment to the Stockholder Agreement]

EX-10.2

Exhibit 10.2

EVERTEC, Inc.

Cupey Center Building

Road 176, Kilometer 1.3

San Juan, Puerto Rico 00926

August 1, 2013

Félix M. Villamil Pagani

c/o EVERTEC, Inc.

Cupey Center Building

Road 176, Kilometer 1.3

San Juan, Puerto Rico 00926

Dear Félix:

This letter will serve as confirmation of the terms of your resignation as Vice Chairman of the Board of Directors (the “Board”) of EVERTEC, Inc. (the “Company”). Other than as specifically set forth below in this letter, you acknowledge and agree that you are not entitled to any other payments or benefits from the Company and its affiliates in connection with your service with the Company and affiliates and the termination thereof, including, without limitation, pursuant to that certain Confidential Modification Agreement and General Release, effective as of February 22, 2012 (the “Modification Agreement”).

1. Resignation. You hereby resign, and the Company hereby accepts your resignation, as Vice Chairman of the Board effective as of August 7, 2013 (the “Effective Date”). In addition, you hereby resign from all other positions you hold with the Company and its affiliates, including, without limitation, as a consultant and as a member of the Board and as a member of the board of directors or similar governing body of the Company’s affiliates. For the avoidance of doubt, by accepting your resignation hereunder, the Company hereby waives any required notice period under the Modification Agreement.

2. Final Payment. The Company will pay you a lump sum amount equal to $25,000 (the “Final Payment”), which represents the accrued but unpaid portion of the annual fee payable to you under the Modification Agreement. The Final Payment will be paid to you within ten (10) days following the Effective Date in full satisfaction of the Company’s obligations to you under the Modification Agreement.

3. Stock Options. As of the date hereof, you have 38,955 stock options which were granted to you pursuant to the terms of the Company’s Amended and Restated 2010 Equity Incentive Plan (the “Plan”) and that certain Amended and Restated Stock Option Agreement dated as of May 9, 2012 (the “Option Agreement”). Your stock options will accelerate and vest on the Effective Date. All other terms of your stock options will continue to be governed by the Plan and your Option Agreement.

4. Pension Benefits. Any pension benefits to which you may be entitled will be governed by the terms of the applicable plan documents.

Please acknowledge your understanding of, and agreement with, the foregoing by signing below.

EVERTEC, Inc.
By:	/s/ Juan J. Roman
	Name: Juan J. Roman
	Title: Chief Financial Officer

I, Félix M. Villamil Pagani, understand and am in agreement with the foregoing, and hereby resign from any and all positions I hold with EVERTEC, Inc. and its affiliates, including, without limitation, as Vice Chairman of the Board of Directors of EVERTEC, Inc., effective as of August 7, 2013.

/s/ Félix M. Villamil Pagani

Félix M. Villamil Pagani

Dated: August 1, 2013

EX-10.3

Exhibit 10.3

AMENDMENT TO STOCK OPTION AGREEMENT

This AMENDMENT (“Amendment”) is entered into as of August 1, 2013, by and between EVERTEC, Inc. (f/k/a Carib Latam Holdings, Inc.) a corporation organized and existing under the laws of the Commonwealth of Puerto Rico (the “Company”), and Félix M. Villamil Pagani (the “Participant” and together with the Company, the “Parties”).

WITNESSETH:

WHEREAS, the Company and the Participant have previously entered into an Amended and Restated Stock Option Agreement, dated as of May 9, 2012 (the “Option Agreement”), pursuant to which the Company granted to the Participant options to purchase Common Shares of the Company, subject to the terms and conditions set forth in the Option Agreement and in the EVERTEC, Inc. Amended and Restated 2010 Equity Incentive Plan (the “Plan”);

WHEREAS, the Parties desire to amend certain terms of the Option Agreement as set forth herein; and

WHEREAS, capitalized terms used but not otherwise defined in this Amendment shall have the meanings ascribed to such terms in the Option Agreement or the Plan.

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree as follows:

1. Section 1 of the Option Agreement is hereby amended by deleting the number “77,910” and inserting the number “38,955” in its place and by deleting the term “$2.59” and inserting the term “$1.295” in its place.

2. Section 2(a) of the Option Agreement is hereby deleted in its entirety and replaced with the following:

“General. Subject to the terms and conditions set forth herein and the Plan, 38,955 Options will vest on August 7, 2013.”

3. Section 4 of the Option Agreement is hereby deleted in its entirety and replaced with the following:

“Post-Termination Exercisability. Subject to Section 2(a) above, the Options shall remain exercisable until the expiration of the Option Term.”

4. Except as expressly modified by this Amendment, the terms and conditions set forth in the Option Agreement shall remain in full force and effect. Nothing in this Amendment is intended to affect the Participant’s right to receive the cash payment in respect of the Options related to the extraordinary dividend payment by the Company on December 18, 2012 (the “Option Payment”). The Option Payment will be made in accordance with that certain letter from the Company to the Participant dated as of December 18, 2012 without giving effect to the April 2013 stock split.

5. This Amendment shall be governed and construed in accordance with the laws of the Commonwealth of Puerto Rico, without giving effect to any choice of law or conflicting provision or rule (whether of the Commonwealth of Puerto Rico or any other jurisdiction) that would cause the laws of any jurisdiction other than the Commonwealth of Puerto Rico to be applied.

6. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above.

EVERTEC, INC.
By:	/s/ Juan J. Roman
	Name: Juan J. Roman
	Title: Chief Financial Officer
PARTICIPANT
By:	/s/ Félix M. Villamil Pagani
	Félix M. Villamil Pagani

EX-10.4

Exhibit 10.4

EVERTEC, INC.

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT, made as of this [__] day of August, 2013 (the “Date of Grant”), by and between EVERTEC, Inc. (the “Company”) and [            ] (the “Participant”).

W I T N E S S E T H

WHEREAS, the Company maintains the EVERTEC, Inc. 2013 Equity Incentive Plan (the “Plan”);

WHEREAS, Section 9 of the Plan authorizes the issuance of restricted stock units with respect to the common shares, par value $0.01 per share, of the Company (“Restricted Stock Units”); and

WHEREAS, in connection with the Participant’s service as a member of the Board, the Company desires to award to the Participant [            ] Restricted Stock Units, subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties hereto hereby agree as follows:

1. Basis for Award. This Award is made under the Plan pursuant to Section 9 thereof for services to be rendered to the Company by the Participant as a member of the Board.

2. Restricted Stock Units Awarded.

(a) The Company hereby awards to the Participant, in the aggregate, [            ] Restricted Stock Units, which shall be subject to the terms of the Plan and this Agreement. Each Restricted Stock Unit represents the unfunded and unsecured promise of the Company to deliver to the Participant one Common Share on the Settlement Date (as defined below).

(b) The Restricted Stock Units shall be credited to a separate account maintained for the Participant on the books of the Company (the “Account”). The Award shall vest and be settled in accordance with Section 3 hereof.

3. Vesting and Settlement. The Restricted Stock Units shall vest and become non-forfeitable on the first anniversary of the Date of Grant (the “Vesting Date”); provided, that, the Participant is then providing service to the Company. The Company shall issue and deliver to the Participant one Common Share for each vested Restricted Stock Unit (the “RSU Shares”) (and upon such settlement, the Restricted Stock Units shall cease to be credited to the Account) on the sixtieth (60^th) day following the Vesting Date (such date, the “Settlement Date”) and upon such settlement the Company shall enter the Participant’s name as a shareholder of record with respect to the RSU Shares on the books of the Company.

4. Dividend Equivalents. If the Company pays a cash dividend on its outstanding Common Shares for which the Record Date (for purposes of this Agreement, the “Record Date” is the date on which shareholders of record are determined for purposes of paying the cash dividend on Common Shares) occurs after the Date of Grant but prior to the Vesting Date, the Participant shall receive a lump sum cash payment on the Settlement Date equal to the aggregate amount of the cash dividends paid by the Company on a single Common Share multiplied by the number of Restricted Stock Units awarded under this Agreement that are unvested and unpaid as of each applicable Record Date.

5. Restrictions. The Award granted hereunder may not be sold, pledged or otherwise transferred (other than by will or the laws of descent and distribution or as otherwise permitted by the Committee) and may not be subject to lien, garnishment, attachment or other legal process. The Participant acknowledges and agrees that, with respect to each Restricted Stock Unit credited to his Account, the Participant has no voting rights with respect to the Company unless and until such Restricted Stock Unit is settled in RSU Shares pursuant to Section 3 hereof.

6. Stockholder Agreement. Notwithstanding anything herein to the contrary, in no event will RSU Shares be delivered upon vesting and settlement of the Restricted Stock Units unless and until the Participant executes an Adoption Agreement pursuant to which Participant will become bound by the terms and conditions set forth in that certain Stockholder Agreement, dated April 17, 2012, as may be amended from time to time, by and among the Company and the stockholders of the Company, which in all events shall be within thirty (30) days following the Vesting Date.

7. Compliance with Laws and Regulations. The issuance and transfer of RSU Shares shall be subject to compliance by the Company and the Participant with all applicable requirements of securities laws and with all applicable requirements of any stock exchange on which the Company’s Common Shares may be listed at the time of such issuance or transfer.

8. General Assets. All amounts credited to the Participant’s Account under this Agreement shall continue for all purposes to be part of the general assets of the Company. The Participant’s interest in the Account shall make the Participant only a general, unsecured creditor of the Company.

9. Rights as Shareholder. Upon and following the Settlement Date, the Participant shall be the record owner of the RSU Shares unless and until such shares are sold or otherwise disposed of, and as record owner shall be entitled to all rights of a shareholder of the Company (including voting rights). Prior to the Settlement Date, the Participant shall not be deemed for any purpose to be the owner of the Common Shares underlying the Restricted Stock Units subject to the Award, other than with respect to the Participant’s right to receive payment pursuant to Section 4 hereof.

2

10. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Puerto Rico applicable to contracts to be performed therein.

11. Plan. Except as otherwise provided herein, or unless the context clearly indicates otherwise, capitalized terms herein which are defined in the Plan have the same definitions as provided in the Plan. The terms and provisions of the Plan are incorporated herein by reference, and the Participant hereby acknowledges receiving a copy of the Plan. In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Agreement, this Agreement shall govern and control.

12. Taxes. Upon settlement of the Award in accordance with Section 3 hereof, the Participant shall recognize taxable income in respect of the Award and the Company shall report such income to the appropriate taxing authorities in respect of the Award as it determines to be necessary and appropriate. The Participant shall be responsible for payment of any taxes due on income in respect of the Award. For purposes hereof, Common Shares shall be valued at Fair Market Value.

13. Notice. Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided, that, unless and until some other address be so designated, all notices or communications by the Participant to the Company shall be mailed or delivered to the Company at its principal office, and all notices or communications by the Company to the Participant may be given to the Participant personally or may be mailed to him/her at his/her address as recorded in the records of the Company.

14. Section 409A. Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and applied so that the payments and benefits set forth herein either shall either be exempt from the requirements of Code Section 409A, or shall comply with the requirements of Code Section 409A, and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be exempt from or in compliance with Code Section 409A. If the Participant notifies the Company (with specificity as to the reason therefor) that the Participant believes that any provision of this Agreement would cause the Participant to incur any additional tax or interest under Code Section 409A or the Company independently makes such determination, the Company shall, after consulting with the Participant, reform such provision (or award of compensation or benefit) to attempt to comply with or be exempt from Code Section 409A through good faith modifications to the minimum extent reasonably appropriate. To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Participant and the Company without violating the provisions of Section 409A. Notwithstanding the foregoing, none of the Company, its Affiliates, officers, directors, employees, or agents guarantees that this Agreement complies with, or is exempt from, the requirements of Code Section 409A and none of the foregoing shall have any liability for the failure of this Agreement to comply with, or be exempt from, such requirements.

3

15. No Right to Continued Service. Nothing in this Agreement shall be deemed by implication or otherwise to impose any limitation on any right of the Company or an Affiliate to terminate the Participant’s service.

16. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision shall be severable and enforceable to the extent permitted by law.

17. Entire Agreement. This Agreement and the Plan contain the entire agreement between the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations in respect thereto. No change, modification or waiver of any provision of this Agreement shall be valid unless in writing and signed by the parties hereto.

18. Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Participant or the Company to the Committee for review. The resolution of such a dispute by the Committee shall be binding on the Company and the Participant.

19. Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

[signature page follows]

4

IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the date first set forth above.

EVERTEC, INC.
By:
	Name:
	Title:
PARTICIPANT
By:
	Name:

EX-31.1

EXHIBIT 31.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a)

I, Peter Harrington, certify that:

1. I have reviewed this report on Form 10-Q of EVERTEC, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2013	/s/ Peter Harrington
	Peter Harrington
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a)

I, Juan J. Román, certify that:

1. I have reviewed this report on Form 10-Q of EVERTEC, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2013	/s/ Juan J. Román
	Juan J. Román
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification Pursuant to 18 U.S.C. Section 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 , the undersigned officer of EVERTEC Group, LLC (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2013	/s/ Peter Harrington
	Peter Harrington
	Chief Executive Officer

EX-32.2

EXHIBIT 32.2

Certification Pursuant to 18 U.S.C. 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of EVERTEC Group, LLC (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2013	/s/ Juan J. Román
	Juan J. Román
	Chief Financial Officer

XML

Net (Loss) Income Per Common Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Net (Loss) Income Per Common Share

Note 9 – Net (Loss) Income Per Common Share

The reconciliation of the numerator and denominator of the (loss) income per common share is as follows:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands, except per share data)	2013			2012			2013			2012
Net (loss) income	$	(64,935	)	$	(2,033	)	$	(59,463	)	$	1,501
Weighted average common shares outstanding		78,928,780			72,672,852			75,849,551			72,659,463
Weighted average potential dilutive common shares(1)(2)		—			—			—			4,243,747
Weighted average common shares outstanding - assuming dilution		78,928,780			72,672,852			75,849,551			76,903,210
Net (loss) income per common share - basic	$	(0.82	)	$	(0.03	)	$	(0.78	)	$	0.02
Net (loss) income per common share - diluted	$	(0.82	)	$	(0.03	)	$	(0.78	)	$	0.02

⁽¹⁾  Potential common shares consist of common stock issuable under the assumed exercise of stock options and restricted stock awards using the treasury stock method.

⁽²⁾  For the three months ended June 30, 2013 and 2012, 3,818,726 and 3,950,989, respectively, potential common shares consisting of common stock under the assumed exercise of stock options and restricted stock awards using the treasury stock method were not included in the computation of the diluted net (loss) income per share since their inclusion would have an antidilutive effect. For the six months ended June 30, 2013, 4,227,114 potential common shares consisting of common stock under the assumed exercise of stock options and restricted stock awards using the treasury stock method were not included in the computation of the diluted net (loss) income per share since their inclusion would have an antidilutive effect.

XML

Income Tax - Additional Information (Detail) (USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013
Income Tax Disclosure [Line Items]
Adjustment to deferred taxes due to changes in enacted tax rate	$ 1,441,000	$ 1,441,000
Future realized windfall tax benefit	8,400,000	8,400,000
Net operating loss carried forward expires		Dec. 31, 2023
Total available gross net operating loss	59,000,000	59,000,000
Open tax uncertainty positions	$ 0	$ 0
Minimum
Income Tax Disclosure [Line Items]
Corporate income tax		30.00%
Maximum
Income Tax Disclosure [Line Items]
Corporate income tax		39.00%

XML

Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Revenues
Merchant acquiring, net	$ 18,165	$ 17,028	$ 35,624	$ 34,689
Payment processing (from affiliates: $7,298, $7,708, $14,508 and $14,835)	24,285	23,803	48,397	46,702
Business solutions (from affiliates: $35,051, $30,898, $69,496 and $61,015)	46,725	43,541	92,493	85,469
Total revenues	89,175	84,372	176,514	166,860
Operating costs and expenses
Cost of revenues, exclusive of depreciation and amortization shown below	42,257	39,831	82,759	77,572
Selling, general and administrative expenses	12,138	8,477	21,001	17,464
Depreciation and amortization	17,842	17,830	35,417	35,752
Total operating costs and expenses	72,237	66,138	139,177	130,788
Income from operations	16,938	18,234	37,337	36,072
Non-operating (expenses) income
Interest income	49	77	93	199
Interest expense	(9,747)	(13,254)	(25,011)	(24,430)
Earnings of equity method investment	348	509	625	575
Other expenses:
Loss on extinguishment of debt	(58,464)		(58,464)
Termination of consulting agreements	(16,718)		(16,718)
Other expenses	(2,353)	(8,397)	(2,286)	(10,657)
Total other expenses	(77,535)	(8,397)	(77,468)	(10,657)
Total non-operating (expenses) income	(86,885)	(21,065)	(101,761)	(34,313)
(Loss) income before income taxes	(69,947)	(2,831)	(64,424)	1,759
Income tax (benefit) expense	(5,012)	(798)	(4,961)	258
Net (loss) income	(64,935)	(2,033)	(59,463)	1,501
Other comprehensive (loss) income, net of tax of $18, $7, $18 and $13 Foreign currency translation adjustments	(394)	1,230	1,960	2,336
Total comprehensive (loss) income	$ (65,329)	$ (803)	$ (57,503)	$ 3,837
Net (loss) income per common share - basic	$ (0.82)	$ (0.03)	$ (0.78)	$ 0.02
Net (loss) income per common share - diluted	$ (0.82)	$ (0.03)	$ (0.78)	$ 0.02

XML

Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2013

Accounting Changes And Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 2 – Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standard Board issued Accounting Standards Update (“ASU”) No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the Emerging Issues Task Force). This ASU addresses when unrecognized tax benefits should be presented as reductions to deferred tax assets for net operating loss carryforwards in the financial statements. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption and retrospective application is permitted. Management does not expect this ASU to impact EVERTEC’s financial statements.

XML

Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Changes in Carrying Amount of Goodwill Allocated by Reportable Segments

The changes in the carrying amount of goodwill, allocated by reportable segments, were as follows (See Note 12):

(Dollar amounts in thousands)	Merchant acquiring, net		Payment processing		Business solutions		Total
Balance at December 31, 2012	$	138,121	$	187,028	$	47,158	$	372,307
Foreign currency translation adjustments		—		734		257		991
Balance at June 30, 2013	$	138,121	$	187,762	$	47,415	$	373,298

Carrying Amount of Other Intangible Assets

The carrying amount of other intangible assets for the six months ended June 30, 2013 and the year ended December 31, 2012 consisted of the following:

(Dollar amounts in thousands)		June 30, 2013
	Useful life in years	Gross amount		Accumulated amortization			Net carrying amount
Customer relationships	14	$	314,093	$	(61,975	)	$	252,118
Trademark	10 - 15		39,950		(9,526	)		30,424
Software packages	3 - 5		118,438		(62,779	)		55,659
Non-compete agreement	15		56,539		(10,365	)		46,174
Other intangible assets, net		$	529,020	$	(144,645	)	$	384,375
(Dollar amounts in thousands)		December 31, 2012
	Useful life in years	Gross amount		Accumulated amortization			Net carrying amount
Customer relationships	14	$	313,726	$	(50,769	)	$	262,957
Trademark	10 - 15		39,950		(7,794	)		32,156
Software packages	3 - 5		110,478		(50,479	)		59,999
Non-compete agreement	15		56,539		(8,481	)		48,058
Other intangible assets, net		$	520,693	$	(117,523	)	$	403,170

Schedule of Estimated Amortization Expense

The estimated amortization expense of the balances outstanding at June 30, 2013 for the next five years is as follows:

(Dollar amounts in thousands)
Remaining 2013	$	26,531
2014		48,776
2015		44,430
2016		34,685
2017		31,344
2018		29,691

XML

Reconciliation of Numerator and Denominator of Earnings Per Common Share (Parenthetical) (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013
Earnings Per Share [Abstract]
Common shares excluded from the calculation of diluted net (loss) income per share	3,818,726	3,950,989	4,227,114

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 10 – Commitments and Contingencies

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. Total deferred rent obligation as of June 30, 2013 and December 31, 2012 amounted to $0.3 million and is included within the accounts receivable, net caption in the accompanying unaudited consolidated balance sheets.

Rent expense of office facilities and real estate for the three and six months ended June 30, 2013 amounted to $2.0 million and $4.0 million, respectively, compared to $1.9 million and $3.9 million for the corresponding 2012 periods. Also, rent expense for telecommunications and other equipment for the three and six months ended June 30, 2013 amounted to $1.8 million and $3.5 million, respectively, compared to $1.9 million and $3.7 million for the corresponding 2012 periods.

EVERTEC is a defendant in a number of legal proceedings arising in the ordinary course of business. Based on the opinion of legal counsel and other factors, 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 as a result of 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.

XML

Share-based Compensation Recognized (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation recognized, net			$ 4,900
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation recognized, net	5,062	134	5,212	291
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation recognized, net	$ 90	$ 163	$ 271	$ 266

XML

Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Commitments And Contingencies Disclosure [Abstract]
Total deferred rent obligation	$ 0.3		$ 0.3		$ 0.3
Rent expense of office facilities and real estate	2.0	1.9	4.0	3.9
Rent expense for telecommunications and other equipment	$ 1.8	$ 1.9	$ 3.5	$ 3.7

XML

Goodwill and Other Intangible Assets - Schedule of Estimated Amortization Expense (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Goodwill And Intangible Assets Disclosure [Abstract]
Remaining 2013	$ 26,531
2014	48,776
2015	44,430
2016	34,685
2017	31,344
2018	$ 29,691

XML

Share-based Compensation (Tables)

6 Months Ended

Jun. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Non Vested Stock Option Activity

The following table summarizes the nonvested stock options activity for the six months ended June 30, 2013:

Nonvested stock options	Shares			Weighted-average exercise prices
Nonvested at December 31, 2012		4,571,258		$	2.16
Vested		(3,436,392	)		2.11
Nonvested at June 30, 2013		1,134,866		$	2.30

Nonvested Restricted Shares Activity

The following table summarizes the nonvested restricted shares activity for the six months ended June 30, 2013:

Nonvested restricted shares	Shares			Weighted-average grant date fair  value
Nonvested at December 31, 2012		115,420		$	5.90
Vested		(115,420	)		5.90
Nonvested at June 30, 2013		—		$	—

Share-Based Compensation Recognized

Share-based compensation recognized was as follows:

	Three months ended June 30,				Six months ended June 30,
(Dollar amounts in thousands)	2013		2012		2013		2012
Share-based compensation recognized, net
Stock options, net of income tax of $488, $40, $500 and $87	$	5,062	$	134	$	5,212	$	291
Restricted shares, net of income tax of $11, $49, $26 and $80		90		163		271		266

XML

Financial Instruments and Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements for Assets at Fair Value on Recurring Basis

The following table summarizes fair value measurements by level at June 30, 2013 and December 31, 2012 for assets measured at fair value on a recurring basis:

(Dollar amounts in thousands)	Level 1		Level 2		Level 3		Total
June 30, 2013
Financial assets:
Indemnification assets:
Software cost reimbursement	$	—	$	—	$	4,540	$	4,540
December 31, 2012
Financial assets:
Indemnification assets:
Software cost reimbursement	$	—	$	—	$	6,099	$	6,099

Carrying Value and Estimated Fair Values for Financial Instruments

The following table presents the carrying value, as applicable, and estimated fair values for financial instruments at June 30, 2013 and December 31, 2012:

	June 30, 2013				December 31, 2012
(Dollar amounts in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Indemnification assets:
Software cost reimbursement	$	4,540	$	4,540	$	6,099	$	6,099
Financial liabilities:
New senior secured term loans	$	693,738	$	694,900	$	—	$	—
Senior secured term loan		—		—		484,414		497,498
Senior notes		—		—		252,347		275,550

Summary of Change in Fair Value of Level Three Assets

The following table provides a summary of the change in fair value of the Company’s Level 3 assets:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Indemnification assets:
Beginning balance	$	5,558		$	6,580		$	6,099		$	7,464
Payments received		(1,021	)		(419	)		(1,578	)		(1,128	)
Unrealized gain (loss) recognized in other expenses		3			(41	)		19			(216	)
Ending balance	$	4,540		$	6,120		$	4,540		$	6,120

XML

Summary of Non Vested Stock Option Activity (Detail) (Stock Options, USD $)	6 Months Ended
	Jun. 30, 2013
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non vested shares, Beginning Balance	4,571,258
Non vested shares, Vested	(3,436,392)
Non vested shares, Ending Balance	1,134,866
Non vested weighted average exercise prices, Beginning Balance	$ 2.16
Non vested weighted average exercise prices, Vested	$ 2.11
Non vested weighted average exercise prices, Ending Balance	$ 2.30

XML

Property and Equipment, Net - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Property Plant And Equipment [Abstract]
Depreciation and amortization expense related to property and equipment	$ 4.1	$ 4.1	$ 8.1	$ 8.1

XML

Debt and Short-Term Borrowings (Parenthetical) (Detail)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
LIBOR Floor
Debt Instrument [Line Items]
Margin interest rate		1.50%
Alternate Base Rate
Debt Instrument [Line Items]
Margin interest rate		4.00%
Senior Notes
Debt Instrument [Line Items]
Debt, maturity date	Oct. 01, 2018	Oct. 01, 2018
Debt, interest rate	11.00%	11.00%
Debt, interest payment term	Semi-annually	Semi-annually
Senior Secured Credit Facility | Term A due on April 17, 2018 [Member]
Debt Instrument [Line Items]
Debt, maturity date	Apr. 17, 2018	Apr. 17, 2018
Margin interest rate	2.50%
Senior Secured Credit Facility | Term B due on April 17, 2020 [Member]
Debt Instrument [Line Items]
Debt, maturity date	Apr. 17, 2020	Apr. 17, 2020
Senior Secured Credit Facility | Term B due on April 17, 2020 [Member] | LIBOR Floor
Debt Instrument [Line Items]
Margin interest rate	0.75%
Senior Secured Credit Facility | Term B due on April 17, 2020 [Member] | Alternate Base Rate
Debt Instrument [Line Items]
Margin interest rate	2.75%
Senior Secured Credit Facility due on September 30, 2016 paying interest at a variable interest rate (LIBOR plus margin)
Debt Instrument [Line Items]
Debt, maturity date	Sep. 30, 2016	Sep. 30, 2016

XML

Share-based Compensation Recognized (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation, tax benefit	$ 488	$ 40	$ 500	$ 87
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation, tax benefit	$ 11	$ 49	$ 26	$ 80

XML

Segment Information (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Information about Operations by Business Segments

The following tables set forth information about the Company’s operations by its three business segments for the periods indicated:

(Dollar amounts in thousands)	Merchant acquiring, net		Payment processing		Business solutions		Other			Total
Three months ended June 30, 2013
Revenues		18,165		30,603		46,725		(6,318	) (1)		89,175
Income from operations		8,161		11,719		8,784		(11,726	) (2)		16,938
Three months ended June 30, 2012
Revenues		17,028		29,019		43,541		(5,216	) (1)		84,372
Income from operations		7,970		12,756		8,870		(11,362	) (2)		18,234

⁽¹⁾  Represents the elimination of intersegment revenues for services provided by the payment processing segment to the merchant acquiring segment, and other miscellaneous intersegment revenues.

⁽²⁾  Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.

(Dollar amounts in thousands)	Merchant acquiring, net		Payment processing		Business solutions		Other			Total
Six months ended June 30, 2013
Revenues		35,624		59,826		92,493		(11,429	) (1)		176,514
Income from operations		17,395		25,270		19,318		(24,646	) (2)		37,337
Six months ended June 30, 2012
Revenues		34,689		57,248		85,469		(10,546	) (1)		166,860
Income from operations		16,511		25,065		17,950		(23,454	) (2)		36,072

⁽¹⁾  Represents the elimination of intersegment revenues for services provided by the payment processing segment to the merchant acquiring segment, and other miscellaneous intersegment revenues.

⁽²⁾  Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.

Reconciliation of Income from Operations to Consolidated and Combined Net Income

The reconciliation of income from operations to consolidated net income for the three and six months ended June 30, 2013 and 2012 is as follows:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Segment income from operations
Merchant acquiring	$	8,161		$	7,970		$	17,395		$	16,511
Payment processing		11,719			12,756			25,270			25,065
Business solutions		8,784			8,870			19,318			17,950
Total segment income from operations		28,664			29,596			61,983			59,526
Merger related depreciation and amortization and other unallocated expenses(1)		(11,726	)		(11,362	)		(24,646	)		(23,454	)
Income from operations	$	16,938		$	18,234		$	37,337		$	36,072
Interest expense, net		(9,698	)		(13,177	)		(24,918	)		(24,231	)
Earnings of equity method investment		348			509			625			575
Other expenses		(77,535	)		(8,397	)		(77,468	)		(10,657	)
Income tax benefit (expense)		5,012			798			4,961			(258	)
Net (loss) income	$	(64,935	)	$	(2,033	)	$	(59,463	)	$	1,501

⁽¹⁾  Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.

XML

Information about Operations by Business Segments (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Segment Reporting Information [Line Items]
Revenues	$ 89,175		$ 84,372		$ 176,514		$ 166,860
Income from operations	16,938		18,234		37,337		36,072
Merchant acquiring
Segment Reporting Information [Line Items]
Revenues	18,165		17,028		35,624		34,689
Income from operations	8,161		7,970		17,395		16,511
Payment processing
Segment Reporting Information [Line Items]
Revenues	30,603		29,019		59,826		57,248
Income from operations	11,719		12,756		25,270		25,065
Business solutions
Segment Reporting Information [Line Items]
Revenues	46,725		43,541		92,493		85,469
Income from operations	8,784		8,870		19,318		17,950
Other
Segment Reporting Information [Line Items]
Revenues	(6,318)	[1]	(5,216)	[1]	(11,429)	[1]	(10,546)	[1]
Income from operations	$ (11,726)	[2]	$ (11,362)	[2]	$ (24,646)	[2]	$ (23,454)	[2]

[1] Represents the elimination of intersegment revenues for services provided by the payment processing segment to the merchant acquiring segment, and other miscellaneous intersegment revenues.

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

XML

Segment Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2013 Segment
Segment Reporting [Abstract]
Number of operating business segments	3

XML

Financial Instruments and Fair Value Measurements - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Fair Value Disclosures [Abstract]
Termination dates of contracts end			Sep. 30, 2015
Unrealized gain (loss) recognized in other expenses	$ 3,000	$ (41,000)	$ 19,000	$ (200,000)
Unobservable inputs related to the Company's indemnification assets, discount rate			5.64%
Projected cash flows			$ 4,800,000

XML

Debt and Short-Term Borrowings (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Total Debt

Total debt as of June 30, 2013 and December 31, 2012 was as follows:

(Dollar amounts in thousands)	June 30, 2013		December 31, 2012
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))	$	299,609	$	—
Senior Secured Credit Facility (Term B) due on April 17, 2020 paying interest at a variable interest rate (LIBOR plus applicable margin)(2)		394,129		—
Senior Secured Credit Facility due on September 30, 2016 paying interest at a variable interest rate (LIBOR plus applicable margin)(3)		—		484,414
Senior Secured Revolving Credit Facility paying interest at a variable interest rate		—		14,000
Senior Notes due on October 1, 2018, paying interest semi-annually at a rate of 11% per annum		—		252,347
Other short-term borrowing		8,663		12,995
Total debt	$	702,401	$	763,756

⁽¹⁾  Applicable margin of 2.50% at June 30, 2013.

⁽²⁾  Subject to a minimum rate (“LIBOR floor”) of 0.75% plus applicable margin of 2.75% at June 30, 2013.

⁽³⁾  Subject to a minimum rate (“LIBOR floor”) of 1.50% plus applicable margin of 4.00% at December 31, 2012.

XML

Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (USD $) In Thousands, except Share data	Total	Common Stock	Additional Paid-in Capital	Accumulated Earnings	Accumulated Other Comprehensive (Loss) Income
Beginning Balance, Value at Dec. 31, 2012	$ 122,455	$ 728	$ 52,155	$ 70,414	$ (842)
Beginning Balance, Shares at Dec. 31, 2012	72,846,144	72,846,144
Issuance of common stock upon initial public offering, net of offering costs	112,432	63	112,369
Issuance of common stock upon initial public offering, net of offering costs, Shares		6,250,000
Share-based compensation recognized	5,483		5,483
Tax windfall benefit on exercises of stock options	470		470
Stock options exercised, net of cashless exercise	(16,660)	28	(16,688)
Stock options exercised, net of cashless exercised, Shares		2,780,188
Net loss	(59,463)			(59,463)
Other comprehensive income	1,960				1,960
Ending Balance, Value at Jun. 30, 2013	$ 166,677	$ 819	$ 153,789	$ 10,951	$ 1,118
Ending Balance, Shares at Jun. 30, 2013	81,876,332	81,876,332

XML

Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Statement Of Cash Flows [Abstract]
Proceeds from initial public offering, net of cost of offering	$ 12,567

XML

Property and Equipment, net

6 Months Ended

Jun. 30, 2013

Property Plant And Equipment [Abstract]

Property and Equipment, net

Note 3 – Property and Equipment, net

Property and equipment, net consists of the following:

(Dollar amounts in thousands)	Useful life in years	June 30, 2013			December 31, 2012
Buildings	30	$	1,732		$	2,096
Data processing equipment	3 - 5		60,883			59,901
Furniture and equipment	3 - 20		6,651			6,183
Leasehold improvements	5 - 10		2,430			2,380
			71,696			70,560
Less - accumulated depreciation and amortization			(40,200	)		(35,331	)
Depreciable assets, net			31,496			35,229
Land			1,535			1,508
Property and equipment, net		$	33,031		$	36,737

Depreciation and amortization expense related to property and equipment was $4.1 million and $8.1 million for both the three and six months ended June 30, 2013 and the corresponding 2012 periods.

XML

The Company and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

The Company and Summary of Significant Accounting Policies

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,” “EVERTEC,” “we,” “us,” or “our”) is the leading full-service transaction processing business in Latin America and the Caribbean. We are based in Puerto Rico and provide a broad range of merchant acquiring, payment processing and business process management services across 19 countries in the region. We process over 1.8 billion transactions annually, and manage the electronic payment network for over 4,100 automated teller machines (“ATM”) and over 104,000 point-of-sale (“POS”) payment terminals. According to the July 2012 Nilson Report, we are the largest merchant acquirer in the Caribbean and Central America and the sixth largest in Latin America based on total number of transactions. We own and operate the ATH network, one of the leading ATM and personal identification number debit networks in Latin America. In addition, we provide a comprehensive suite of services for core bank processing, cash processing and technology outsourcing in the regions we serve. We serve a broad and diversified customer base of leading financial institutions, merchants, corporations and government agencies with ‘mission critical’ technology solutions that are essential to their operations, enabling them to issue, process and accept transactions securely, and we believe that our business is well positioned to continue to expand across the fast growing Latin American region.

Our subsidiaries include EVERTEC Intermediate Holdings, LLC (“Holdings,” formerly known as Carib Holdings, Inc.), EVERTEC Group, LLC (“EVERTEC Group”), EVERTEC Dominicana SAS., EVERTEC Panamá, S.A., EVERTEC Latinoamérica, S.A., EVERTEC Costa Rica, S.A. (“EVERTEC CR”), Tarjetas Inteligentes Internacionales, S.A., EVERTEC Guatemala, S.A. and EVERTEC México Servicios de Procesamiento, S.A. de C.V.

Initial Public Offering

On April 17, 2013, the Company completed its initial public offering (“Initial Public Offering”) of 28,789,943 shares of common stock at a price to the public of $20.00 per share. A total of 6,250,000 shares were offered by the Company and a total of 22,539,943 shares were offered by selling stockholders of the Company, of which 13,739,284 shares were sold by an affiliate of Apollo Global Management, LLC (“Apollo”) and 8,800,659 shares were sold by Popular. The Company used net proceeds of approximately $117.4 million from its sale of shares in the Initial Public Offering and proceeds from borrowings under the 2013 Credit Agreement (as defined in Note 5), together with available cash on hand, to redeem its senior notes (as defined in Note 5) and to refinance its previous senior secured credit facilities.

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of EVERTEC, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The preparation of the accompanying unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) 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 unaudited consolidated financial statements. Actual results could differ from these estimates.

In the opinion of management, the accompanying unaudited 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. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from the unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). As these unaudited consolidated financial statements are prepared using the same accounting principles and policies used to prepare the annual financial statements, they should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2012, included in the Company’s Registration Statement on Form S-1 (File No. 333-186487) (as amended, the “Registration Statement”), which was declared effective by the SEC on April 11, 2013. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results of operations for the full year or any future period.

On April 1, 2013, EVERTEC’s Board of Directors declared a two for one stock split of our outstanding Class A and Class B common stock. Accordingly, all shares of outstanding common stock or restricted stock, or shares of common stock underlying outstanding options, and all per share amounts for all periods presented in these consolidated financial statements and notes thereto, have been adjusted retroactively, where applicable, to reflect this stock split, except for the par value of the common stock, which was not adjusted by the stock split and the impact was recorded as additional paid-in capital. Under the certificate of incorporation, as amended by the certificate of amendment, which became effective on April 1, 2013, EVERTEC’s authorized capital consists of 206,000,000 shares of common stock and 2,000,000 shares of preferred stock.

The Consolidated Balance Sheet as of December 31, 2012 was derived from the audited consolidated financial statements for the fiscal year ended December 31, 2012 included in the Registration Statement.

Certain reclassifications have been made to certain prior period notes to the unaudited consolidated financial statements to conform with the presentation in 2013.

Summary of Significant Accounting Policies

Share-based Compensation

Management uses the fair value method of recording stock-based compensation as described in the guidance for stock compensation in ASC topic 718. The fair value of the stock options granted during 2011 and 2012 was estimated using the Black-Scholes-Merton (“BSM”) option pricing model for Tranche A options granted under the EVERTEC, Inc. Amended and Restated 2010 Equity Incentive Plan (the “Equity Incentive Plan”) and the Monte Carlo simulation analysis for Tranche B and Tranche C options.

Upon option exercise, participants may elect to “net share settle”. Rather than requiring the participant to deliver cash to satisfy the exercise price 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, a current tax deduction arises based on the value at the time of exercise. This deduction may exceed the associated deferred tax asset, resulting in a “windfall tax benefit”. The windfall is recognized in the unaudited consolidated balance sheet as an increase to additional paid-in capital, and is included in the unaudited consolidated statement of cash flows as a financing inflow.

Net Income (Loss) Per Common Share

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

Diluted net income (loss) per common share assumes the issuance of all potentially dilutive share equivalents using the treasury stock method.

XML

Debt and Short-Term Borrowings - Additional Information (Detail) (USD $)	6 Months Ended			1 Months Ended			6 Months Ended																	1 Months Ended		6 Months Ended	12 Months Ended
	Jun. 30, 2013	Apr. 17, 2013 Secured Term Loan A [Member]	Apr. 17, 2013 Secured Term Loan B [Member]	Apr. 17, 2013 Revolving Credit Facility due on April 18, 2018 paying interest at a variable interest rate	Apr. 17, 2013 Revolving Credit Facility due on April 18, 2018 paying interest at a variable interest rate Minimum	Apr. 17, 2013 Revolving Credit Facility due on April 18, 2018 paying interest at a variable interest rate Maximum	Jun. 30, 2013 Senior Secured Credit Facilities	Jun. 30, 2013 New Senior Secured Term Loan A	Jun. 30, 2013 New Senior Secured Term Loan A Commencing On September 30, 2013 To June 2016	Jun. 30, 2013 New Senior Secured Term Loan A Commencing On September 30, 2016 To June 30, 2017	Jun. 30, 2013 New Senior Secured Term Loan A Commencing On September 30, 2017 To March 31, 2018	Jun. 30, 2013 New Senior Secured Term Loan A LIBOR Floor Minimum	Jun. 30, 2013 New Senior Secured Term Loan A LIBOR Floor Maximum	Jun. 30, 2013 New Senior Secured Term Loan A Base Rate Minimum	Jun. 30, 2013 New Senior Secured Term Loan A Base Rate Maximum	Jun. 30, 2013 New Senior Secured Term Loan B	Jun. 30, 2013 New Senior Secured Term Loan B Minimum	Jun. 30, 2013 New Senior Secured Term Loan B Maximum	Jun. 30, 2013 New Senior Secured Term Loan B LIBOR Floor Minimum	Jun. 30, 2013 New Senior Secured Term Loan B LIBOR Floor Maximum	Jun. 30, 2013 New Senior Secured Term Loan B Base Rate Minimum	Jun. 30, 2013 New Senior Secured Term Loan B Base Rate Maximum	Jun. 30, 2013 New senior secured credit facilities	Apr. 29, 2013 Senior Notes	Apr. 30, 2013 Senior Notes	Jun. 30, 2013 Senior Notes	Dec. 31, 2012 Senior Notes
Debt Instrument [Line Items]
Secured credit facilities		$ 300,000,000	$ 400,000,000	$ 100,000,000				$ 300,000,000								$ 400,000,000
Unamortized discount							6,400,000
Debt issuance cost							5,900,000																7,200,000
Unamortized discount written off							3,400,000
Debt issuance cost written off							3,000,000																4,900,000			7,000,000
Satisfaction and Discharge of Indenture description																										(i)) at a redemption price of 100% plus a make-whole premium, plus accrued and unpaid interest, on April 30, 2013 (the “Full Redemption”). On April 17, 2013, the Co-Issuers and the Trustee entered into a Satisfaction and Discharge Agreement whereby EVERTEC Group caused to be irrevocably deposited with the Trustee, to satisfy and to discharge the Co-Issuers’ obligations under the Indenture (a) a portion of the net cash proceeds received by the Company in the Initial Public Offering to Holdings, which contributed such proceeds to EVERTEC Group, in an amount sufficient to effect the Partial Redemption on April 29, 2013 and (b) proceeds from the Credit Agreement described above in an amount sufficient to effect the Full Redemption on April 30, 2013. On April 29, 2013, the Partial Redemption was effected and on April 30, 2013, the Full Redemption was effected.
Principal amount of outstanding, redemption value																										91,000,000
Percentage of redemption price																								111.00%	100.00%
Debt instrument premium																										1,800,000
Debt redemption premium																										$ 41,900,000
Original principal amount									1.25%	1.875%	2.50%					0.25%
Maturity Date				Apr. 18, 2018				Apr. 17, 2018								Apr. 17, 2020										Oct. 01, 2018	Oct. 01, 2018
LIBOR rate and base rate percentage												2.00%	2.50%	1.00%	1.50%		0.75%	1.75%	2.50%	2.75%	1.50%	1.75%
Debt instrument description																LIBOR Rate and Base Rate are subject to floors at 0.75% and 1.75%, respectively
commitment fee for the unused portion					0.125%	0.375%
Premium Payable on loans	1.00%
Maximum secured leverage ratio	6.60

XML

Income Tax (Tables)

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Components of Income Tax Expense (Benefit)

The components of income tax (benefit) expense for the three and six months ended June 30, 2013 and 2012 consisted of the following:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Current tax provision	$	1,005		$	3,452		$	1,290		$	5,470
Deferred tax benefit		(6,017	)		(4,250	)		(6,251	)		(5,212	)
Income tax (benefit) expense	$	(5,012	)	$	(798	)	$	(4,961	)	$	258

Segregation Income Tax Expense (Benefit) Based on Location of Operations

The following table presents the components of income tax expense (benefit) for the three and six months ended June 30, 2013 and 2012 and its segregation based on location of operations:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Current tax provision
Puerto Rico	$	(122	)	$	3,040		$	256		$	4,950
United States		210			159			429			343
Foreign countries		917			253			605			177
Total currrent tax provision	$	1,005		$	3,452		$	1,290		$	5,470
Deferred tax benefit
Puerto Rico	$	(5,880	)	$	(4,096	)	$	(5,956	)	$	(4,905	)
United States		—			—			(2	)		—
Foreign countries		(137	)		(154	)		(293	)		(307	)
Total deferred tax benefit	$	(6,017	)	$	(4,250	)	$	(6,251	)	$	(5,212	)

Income Tax Expense (benefit) Differs from Computed Income Tax at Statutory Rates

The income tax (benefit) 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:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Computed income tax at statutory rates	$	(26,782	)	$	(851	)	$	(25,125	)	$	526
Benefit of net tax-exempt interest income		(53	)		(2	)		(94	)		(4	)
Adjustment to deferred taxes due to changes in enacted tax rate		1,441			—			1,441			—
Differences in tax rates due to multiple jurisdictions		102			99			282			251
Effect of income subject to tax-exemption grant		19,983			(479	)		18,982			(605	)
Reversal of tax uncertainties reserve		—			—			(846	)		(640	)
Fair value adjustment of indemnification assets		—			62			—			364
Effect of net operating losses in foreign entities		(57	)		278			—			278
Other		354			95			399			88
Income tax (benefit) expense	$	(5,012	)	$	(798	)	$	(4,961	)	$	258

XML

The Company and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended			1 Months Ended
	Jun. 30, 2013 Facility Country Transactions	Jun. 30, 2012	Dec. 31, 2012	Apr. 17, 2013 EVERTEC Common Stock	Apr. 17, 2013 Stockholders Common Stock	Apr. 17, 2013 Apollo Common Stock	Apr. 17, 2013 Popular Common Stock	Apr. 17, 2013 IPO Common Stock	Apr. 17, 2013 IPO 2013 Credit Agreement
Company And Summary Of Significant Accounting Policies [Line Items]
Number of countries where the Company provides a broad range of merchant acquiring, payment processing and business process management services	19
Number of transactions processed annually	1,800,000,000
Number of ATM's	4,100
Number of point-of-sale terminals	104,000
Shares for Initial Public Offering				6,250,000	22,539,943	13,739,284	8,800,659	28,789,943
Sale of Stock Price Per Share								$ 20.00
Net proceeds from Initial Public Offering	$ 91	$ 250							$ 117,400
Authorized common stock to issue	206,000,000		206,000,000
Authorized preferred stock to issue	2,000,000		2,000,000

XML

Carrying Amount of Other Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Acquired Finite-Lived Intangible Assets [Line Items]
Gross amount	$ 529,020	$ 520,693
Accumulated amortization	(144,645)	(117,523)
Net carrying amount	384,375	403,170
Customer Relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years	14 years	14 years
Gross amount	314,093	313,726
Accumulated amortization	(61,975)	(50,769)
Net carrying amount	252,118	262,957
Trademarks
Acquired Finite-Lived Intangible Assets [Line Items]
Gross amount	39,950	39,950
Accumulated amortization	(9,526)	(7,794)
Net carrying amount	30,424	32,156
Trademarks | Minimum
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years	10 years	10 years
Trademarks | Maximum
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years	15 years	15 years
Software packages
Acquired Finite-Lived Intangible Assets [Line Items]
Gross amount	118,438	110,478
Accumulated amortization	(62,779)	(50,479)
Net carrying amount	55,659	59,999
Software packages | Minimum
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years	3 years	3 years
Software packages | Maximum
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years	5 years	5 years
Noncompete Agreements
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years	15 years	15 years
Gross amount	56,539	56,539
Accumulated amortization	(10,365)	(8,481)
Net carrying amount	$ 46,174	$ 48,058

XML

Reconciliation of Numerator and Denominator of Earnings Per Common Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Earnings Per Share [Abstract]
Net (loss) income	$ (64,935)		$ (2,033)		$ (59,463)		$ 1,501
Weighted average common shares outstanding	78,928,780		72,672,852		75,849,551		72,659,463
Weighted average potential dilutive common shares		[1],[2]		[1],[2]		[1],[2]	4,243,747	[1],[2]
Weighted average common shares outstanding - assuming dilution	78,928,780		72,672,852		75,849,551		76,903,210
Net (loss) income per common share - basic	$ (0.82)		$ (0.03)		$ (0.78)		$ 0.02
Net (loss) income per common share - diluted	$ (0.82)		$ (0.03)		$ (0.78)		$ 0.02

[1] Potential common shares consist of common stock issuable under the assumed exercise of stock options and restricted stock awards using the treasury stock method.

[2] For the three months ended June 30, 2013 and 2012, 3,818,726 and 3,950,989, respectively, potential common shares consisting of common stock under the assumed exercise of stock options and restricted stock awards using the treasury stock method were not included in the computation of the diluted net (loss) income per share since their inclusion would have an antidilutive effect. For the six months ended June 30, 2013, 4,227,114 potential common shares consisting of common stock under the assumed exercise of stock options and restricted stock awards using the treasury stock method were not included in the computation of the diluted net (loss) income per share since their inclusion would have an antidilutive effect.

XML

Share-based Compensation - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation expenses	$ 4,900,000
Tranche A
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum unrecognized cost for stock options	$ 1,500,000
Tranche B
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Investor internal rate of return, percentage	25.00%
Tranche C
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Investor internal rate of return, percentage	30.00%
Tranche B and C
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option vesting condition	Pursuant to the terms of the Equity Incentive Plan, Tranche B options granted to employees and certain 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.
One Grant | Tranche B
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Investor internal rate of return, percentage	20.00%

XML

Summary of Change in Fair Value of Level Three Assets (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Indemnification assets:
Unrealized gain (loss) recognized in other expenses	$ (3)	$ 41	$ (19)	$ 200
Long-term portion of certain indemnification asset
Indemnification assets:
Beginning balance	5,558	6,580	6,099	7,464
Payments received	(1,021)	(419)	(1,578)	(1,128)
Unrealized gain (loss) recognized in other expenses	3	(41)	19	(216)
Ending balance	$ 4,540	$ 6,120	$ 4,540	$ 6,120

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Preferred stock par value	$ 0.01	$ 0.01
Preferred stock authorized	2,000,000	2,000,000
Preferred stock issued	0	0
Common stock par value	$ 0.01	$ 0.01
Common stock authorized	206,000,000	206,000,000
Common stock issued	81,876,332	72,846,144
Common stock outstanding	81,876,332	72,846,144

XML

Financial Instruments and Fair Value Measurements

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Financial Instruments and Fair Value Measurements

Note 6 – Financial Instruments and Fair Value Measurements

Recurring Fair Value Measurements

Fair value measurement provisions establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This guidance describes 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 internally-developed models that primarily use market-based inputs including yield curves, interest rates, volatilities, and credit curves, among others. The Company limits 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 following table summarizes fair value measurements by level at June 30, 2013 and December 31, 2012 for assets measured at fair value on a recurring basis:

(Dollar amounts in thousands)	Level 1		Level 2		Level 3		Total
June 30, 2013
Financial assets:
Indemnification assets:
Software cost reimbursement	$	—	$	—	$	4,540	$	4,540
December 31, 2012
Financial assets:
Indemnification assets:
Software cost reimbursement	$	—	$	—	$	6,099	$	6,099

The fair value of financial instruments is the amount at which an asset or obligation could be exchanged in a current transaction between willing parties, other than in a forced liquidation sale. 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.

For those financial instruments with no quoted market prices available, fair values have been estimated using present value calculations or other valuation techniques, as well as management’s best judgment with respect to current economic conditions, including discount rates and estimates of future cash flows.

Indemnification assets include the present value of the expected future cash flows of certain expense reimbursement agreements with Popular. These contracts have termination dates up to September 2015 and were entered into in connection with the Merger. Management prepared estimates of the expected reimbursements to be received from Popular until the termination of the contracts, discounted the estimated future cash flows and recorded the indemnification assets as of the Merger closing date. Payments received during the quarters reduced the indemnification asset balance. The remaining balance was adjusted to reflect its fair value as of June 30, 2013, therefore resulting in a net unrealized gain of approximately $3,000 and $19,000 for the three and six months ended June 30, 2013, respectively, and an unrealized loss of approximately $41,000 and $0.2 million for the three and six months ended June 30, 2012, respectively, which are reflected within the other expenses caption in the unaudited consolidated statements of (loss) income and comprehensive (loss) income. The current portion of the indemnification assets is included within accounts receivable, net, and the other long-term portion is included within other long-term assets in the accompanying unaudited consolidated balance sheets.

The unobservable inputs related to the Company’s indemnification assets as of June 30, 2013 using the discounted cash flow model include the discount rate of 5.64% and the projected cash flows of $4.8 million.

For indemnification assets a significant increase or decrease in market rates and cash flows could result in a significant impact to the fair value. Also, the credit rating and/or the non-performance credit risk of Popular, which is subjective in nature, also could increase or decrease the sensitivity of the fair value of these assets.

The following table presents the carrying value, as applicable, and estimated fair values for financial instruments at June 30, 2013 and December 31, 2012:

	June 30, 2013				December 31, 2012
(Dollar amounts in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Indemnification assets:
Software cost reimbursement	$	4,540	$	4,540	$	6,099	$	6,099
Financial liabilities:
New senior secured term loans	$	693,738	$	694,900	$	—	$	—
Senior secured term loan		—		—		484,414		497,498
Senior notes		—		—		252,347		275,550

The fair value of the new senior secured term loans at June 30, 2013, as well as the previous senior secured term loan and the senior notes at December 31, 2012 were 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 previous senior secured term loan and senior notes as well as the new senior secured term loans, which are not measured at fair value in the balance sheets, could be categorized as Level 3 in the fair value hierarchy.

The following table provides a summary of the change in fair value of the Company’s Level 3 assets:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Indemnification assets:
Beginning balance	$	5,558		$	6,580		$	6,099		$	7,464
Payments received		(1,021	)		(419	)		(1,578	)		(1,128	)
Unrealized gain (loss) recognized in other expenses		3			(41	)		19			(216	)
Ending balance	$	4,540		$	6,120		$	4,540		$	6,120

XML

Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
Payment processing revenue from affiliates	$ 7,298	$ 7,708	$ 14,508	$ 14,835
Business solutions revenue from affiliates	35,051	30,898	69,496	61,015
Other comprehensive income, income tax expense	$ 18	$ 7	$ 18	$ 13

XML

Transactions with Related Parties (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Transaction [Abstract]
Total revenues	$ 42,349	[1],[2]	$ 38,606	[1],[2]	$ 84,004	[1],[2]	$ 75,880	[1],[2]
Rent and other fees	27,212	[3],[4]	2,663	[3],[4]	30,072	[3],[4]	5,822	[3],[4]
Interest earned from and charged by affiliate
Interest income	23		59		42		157
Interest expense	$ 577	[5]	$ 1,858	[5]	$ 2,471	[5]	$ 3,743	[5]

[1] Total revenues from Popular as a percentage of revenues were 47%, 45%, 47% and 44% for each of the periods presented above.

[2] Includes revenues generated from investee accounted for under the equity method of $0.8 million and $1.7 million for the three and six months ended June 30, 2013, respectively, and $0.9 million and $1.7 million for the corresponding 2012 periods.

[3] Includes management fees to equity sponsors amounting to $19.4 million and $20.3 million for the three and six months ended June 30, 2013, respectively, compared to $0.7 million and $2.0 million for the corresponding 2012 periods. Management fees paid during 2013 includes $16.7 million resulting from the termination of the consulting agreements as explained below. Rent and other fees also includes $5.9 million paid to Popular in connection with the redemption premium on the senior notes for the three and six months ended June 30, 2013.

[4] Includes $4.6 million, $2.7 million, $7.5 million and $5.8 million recorded as selling, general and administrative expenses for each of the periods presented above, and $22.6 million recorded as non-operating expenses for the three and six months ended June 30, 2013 in the unaudited consolidated statement of (loss) income and comprehensive (loss) income.

[5] Interest expense relates to interest accrued on the senior secured term loan and senior notes held by Popular. As a result of the debt refinancing and the redemption of the senior notes in April 2013, Popular's participation in such debt was extinguished. See Note 5 for additional information related to the extinguishment of this debt.

XML

Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current Assets:
Cash	$ 19,587	$ 25,634
Restricted cash	4,983	4,939
Accounts receivable, net	77,662	78,621
Deferred tax asset		1,434
Prepaid expenses and other assets	24,623	19,345
Total current assets	126,855	129,973
Investment in equity investee	10,751	11,080
Property and equipment, net	33,031	36,737
Goodwill	373,298	372,307
Other intangible assets, net	384,375	403,170
Other long-term assets	18,971	24,478
Total assets	947,281	977,745
Current Liabilities:
Accrued liabilities	30,257	34,609
Accounts payable	25,589	24,482
Unearned income	2,902	1,166
Income tax payable	1,092	2,959
Current portion of long-term debt	19,000	6,052
Short-term borrowings	8,663	26,995
Deferred tax liability, net	1,204	632
Total current liabilities	88,707	96,895
Long-term debt	674,738	730,709
Long-term deferred tax liability, net	16,526	24,614
Other long-term liabilities	633	3,072
Total liabilities	780,604	855,290
Commitments and contingencies (Note 10)
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; 81,876,332 and 72,846,144 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively	819	728
Additional paid-in capital	153,789	52,155
Accumulated earnings	10,951	70,414
Accumulated other comprehensive income (loss)	1,118	(842)
Total stockholders' equity	166,677	122,455
Total liabilities and stockholders' equity	$ 947,281	$ 977,745

XML

Components of Income Tax Expense (Benefit) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Tax Disclosure [Abstract]
Current tax provision	$ 1,005	$ 3,452	$ 1,290	$ 5,470
Deferred tax benefit	(6,017)	(4,250)	(6,251)	(5,212)
Income tax (benefit) expense	$ (5,012)	$ (798)	$ (4,961)	$ 258

XML

Net (Loss) Income Per Common Share (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Schedule of Reconciliation of Numerator and Denominator of Earning Per Common Share

The reconciliation of the numerator and denominator of the (loss) income per common share is as follows:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands, except per share data)	2013			2012			2013			2012
Net (loss) income	$	(64,935	)	$	(2,033	)	$	(59,463	)	$	1,501
Weighted average common shares outstanding		78,928,780			72,672,852			75,849,551			72,659,463
Weighted average potential dilutive common shares(1)(2)		—			—			—			4,243,747
Weighted average common shares outstanding - assuming dilution		78,928,780			72,672,852			75,849,551			76,903,210
Net (loss) income per common share - basic	$	(0.82	)	$	(0.03	)	$	(0.78	)	$	0.02
Net (loss) income per common share - diluted	$	(0.82	)	$	(0.03	)	$	(0.78	)	$	0.02

⁽¹⁾  Potential common shares consist of common stock issuable under the assumed exercise of stock options and restricted stock awards using the treasury stock method.

⁽²⁾  For the three months ended June 30, 2013 and 2012, 3,818,726 and 3,950,989, respectively, potential common shares consisting of common stock under the assumed exercise of stock options and restricted stock awards using the treasury stock method were not included in the computation of the diluted net (loss) income per share since their inclusion would have an antidilutive effect. For the six months ended June 30, 2013, 4,227,114 potential common shares consisting of common stock under the assumed exercise of stock options and restricted stock awards using the treasury stock method were not included in the computation of the diluted net (loss) income per share since their inclusion would have an antidilutive effect.

XML

Property and Equipment, net (Tables)

6 Months Ended

Jun. 30, 2013

Property Plant And Equipment [Abstract]

Property and Equipment, Net

Property and equipment, net consists of the following:

(Dollar amounts in thousands)	Useful life in years	June 30, 2013			December 31, 2012
Buildings	30	$	1,732		$	2,096
Data processing equipment	3 - 5		60,883			59,901
Furniture and equipment	3 - 20		6,651			6,183
Leasehold improvements	5 - 10		2,430			2,380
			71,696			70,560
Less - accumulated depreciation and amortization			(40,200	)		(35,331	)
Depreciable assets, net			31,496			35,229
Land			1,535			1,508
Property and equipment, net		$	33,031		$	36,737

XML

Carrying Value and Estimated Fair Values for Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Indemnification assets:
Software costs reimbursement, Carrying Amount	$ 4,540	$ 6,099
Financial liabilities:
Senior secured term loan, Carrying Amount		484,414
Senior notes, Carrying Amount		252,347
Indemnification assets:
Software cost reimbursement, Fair Value	4,540	6,099
Financial liabilities:
secured term loan, Fair Value		497,498
Senior notes, Fair Value		275,550
New Senior Secured Term Loan
Financial liabilities:
Senior secured term loan, Carrying Amount	693,738
Financial liabilities:
secured term loan, Fair Value	$ 694,900

XML

Income Tax Expense (benefit) Differs from Computed Income Tax at Statutory Rates (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Tax Disclosure [Abstract]
Computed income tax at statutory rates	$ (26,782)	$ (851)	$ (25,125)	$ 526
Benefit of net tax-exempt interest income	(53)	(2)	(94)	(4)
Adjustment to deferred taxes due to changes in enacted tax rate	1,441		1,441
Differences in tax rates due to multiple jurisdictions	102	99	282	251
Effect of income subject to tax-exemption grant	19,983	(479)	18,982	(605)
Reversal of tax uncertainties reserve			(846)	(640)
Fair value adjustment of indemnification assets		62		364
Effect of net operating losses in foreign entities	(57)	278		278
Other	354	95	399	88
Income tax (benefit) expense	$ (5,012)	$ (798)	$ (4,961)	$ 258

XML

Reconciliation of Income from Operations to Consolidated and Combined Net Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Segment income from operations
Income from operations	$ 16,938		$ 18,234		$ 37,337		$ 36,072
Interest expense, net	(9,698)		(13,177)		(24,918)		(24,231)
Earnings of equity method investment	348		509		625		575
Other expenses	(77,535)		(8,397)		(77,468)		(10,657)
Income tax benefit (expense)	5,012		798		4,961		(258)
Net (loss) income	(64,935)		(2,033)		(59,463)		1,501
Merchant acquiring
Segment income from operations
Income from operations	8,161		7,970		17,395		16,511
Payment processing
Segment income from operations
Income from operations	11,719		12,756		25,270		25,065
Business solutions
Segment income from operations
Income from operations	8,784		8,870		19,318		17,950
Total segment income from operations
Segment income from operations
Income from operations	28,664		29,596		61,983		59,526
Other
Segment income from operations
Income from operations	$ (11,726)	[1]	$ (11,362)	[1]	$ (24,646)	[1]	$ (23,454)	[1]

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

XML

Debt and Short-Term Borrowings (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Debt Instrument [Line Items]
Senior Notes due on October 1, 2018, paying interest semi-annually at a rate of 11% per annum			$ 252,347
Other short-term borrowing	8,663		12,995
Total debt	702,401		763,756
Senior Secured Credit Facility | Term A due on April 17, 2018 [Member]
Debt Instrument [Line Items]
Credit facility	299,609	[1]
Senior Secured Credit Facility | Term B due on April 17, 2020 [Member]
Debt Instrument [Line Items]
Credit facility	394,129	[2]
Senior Secured Credit Facility due on September 30, 2016 paying interest at a variable interest rate (LIBOR plus margin)
Debt Instrument [Line Items]
Credit facility			484,414	[3]
Senior Secured Revolving Credit Facility paying interest at a variable interest rate
Debt Instrument [Line Items]
Credit facility			$ 14,000

[1] Applicable margin of 2.50% at June 30, 2013.

[2] Subject to a minimum rate ("LIBOR floor") of 0.75% plus applicable margin of 2.75% at June 30, 2013.

[3] Subject to a minimum rate ("LIBOR floor") of 1.50% plus applicable margin of 4.00% at December 31, 2012.

XML

Changes in Carrying Amount of Goodwill Allocated by Reportable Segments (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Goodwill [Line Items]
Goodwill, Beginning Balance	$ 372,307
Foreign currency translation adjustments	991
Goodwill, Ending Balance	373,298
Merchant acquiring
Goodwill [Line Items]
Goodwill, Beginning Balance	138,121
Foreign currency translation adjustments
Goodwill, Ending Balance	138,121
Payment processing
Goodwill [Line Items]
Goodwill, Beginning Balance	187,028
Foreign currency translation adjustments	734
Goodwill, Ending Balance	187,762
Business solutions
Goodwill [Line Items]
Goodwill, Beginning Balance	47,158
Foreign currency translation adjustments	257
Goodwill, Ending Balance	$ 47,415

XML

Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) In Millions, unless otherwise specified		3 Months Ended		6 Months Ended
	Dec. 31, 2012	Jun. 30, 2013 Other Intangible Assets	Jun. 30, 2012 Other Intangible Assets	Jun. 30, 2013 Other Intangible Assets	Jun. 30, 2012 Other Intangible Assets
Goodwill [Line Items]
Impairment losses	$ 0
Amortization expense for intangible assets		$ 13.7	$ 13.7	$ 27.3	$ 27.6

XML

Debt and Short-Term Borrowings

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Debt and Short-Term Borrowings

Note 5 – Debt and Short-Term Borrowings

Total debt as of June 30, 2013 and December 31, 2012 was as follows:

(Dollar amounts in thousands)	June 30, 2013		December 31, 2012
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))	$	299,609	$	—
Senior Secured Credit Facility (Term B) due on April 17, 2020 paying interest at a variable interest rate (LIBOR plus applicable margin)(2)		394,129		—
Senior Secured Credit Facility due on September 30, 2016 paying interest at a variable interest rate (LIBOR plus applicable margin)(3)		—		484,414
Senior Secured Revolving Credit Facility paying interest at a variable interest rate		—		14,000
Senior Notes due on October 1, 2018, paying interest semi-annually at a rate of 11% per annum		—		252,347
Other short-term borrowing		8,663		12,995
Total debt	$	702,401	$	763,756

⁽¹⁾  Applicable margin of 2.50% at June 30, 2013.

⁽²⁾  Subject to a minimum rate (“LIBOR floor”) of 0.75% plus applicable margin of 2.75% at June 30, 2013.

⁽³⁾  Subject to a minimum rate (“LIBOR floor”) of 1.50% plus applicable margin of 4.00% at December 31, 2012.

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 which matures on April 17, 2018, a $400.0 million term loan B facility which matures on April 17, 2020 and a $100.0 million revolving credit facility which matures on April 18, 2018. The net proceeds received by EVERTEC Group from the new senior secured credit facilities, together with other cash available to EVERTEC Group, were used to, among other things, refinance EVERTEC Group’s previous senior secured credit facilities and redeem a portion of EVERTEC’s 11% Senior Notes due 2018 (the “senior notes”), as further described below.

As a result of the debt refinancing, EVERTEC Group’s previous senior secured credit facilities were evaluated under ASC 470-50, Debtor’s Accounting for a Modification or Exchange of Debt Instruments (“ASC 470-50”). Accordingly, a portion of the unamortized discount and debt issue costs amounting to $6.4 million and $5.9 million, respectively, were treated as a modification and will be amortized over the term of the new debt using the interest method. The remaining unamortized discount and debt issue costs of $3.4 million and $3.0 million, respectively, were considered to be related to the portion of the debt that was extinguished and written-off.

Senior Notes

On March 29, 2013, EVERTEC Group provided notice to Wilmington Trust, National Association (the “Trustee”) pursuant to the Indenture, dated as of September 30, 2010 (as supplemented by Supplemental Indenture No. 1, dated as of April 17, 2012, Supplemental Indenture No. 2, dated as of May 7, 2012 and Supplemental Indenture No. 3, dated as of May 7, 2012) between EVERTEC Group and EVERTEC Finance Corp. (together, the “Co-Issuers”), the Guarantors named therein and the Trustee (the “Indenture”), that the Co-Issuers had elected to (i) redeem $91.0 million principal amount of their outstanding senior notes, at a redemption price of 111.0%, plus accrued and unpaid interest, on April 29, 2013 (the “Partial Redemption”) and (ii) redeem all of their outstanding senior notes (after giving effect to the redemption of $91.0 million principal amount of the senior notes described in clause (i)) at a redemption price of 100% plus a make-whole premium, plus accrued and unpaid interest, on April 30, 2013 (the “Full Redemption”). On April 17, 2013, the Co-Issuers and the Trustee entered into a Satisfaction and Discharge Agreement whereby EVERTEC Group caused to be irrevocably deposited with the Trustee, to satisfy and to discharge the Co-Issuers’ obligations under the Indenture (a) a portion of the net cash proceeds received by the Company in the Initial Public Offering to Holdings, which contributed such proceeds to EVERTEC Group, in an amount sufficient to effect the Partial Redemption on April 29, 2013 and (b) proceeds from the 2013 Credit Agreement described above in an amount sufficient to effect the Full Redemption on April 30, 2013. On April 29, 2013, the Partial Redemption was effected and on April 30, 2013, the Full Redemption was effected.

Based on accounting guidance, the senior notes were considered extinguished. Accordingly, the outstanding premium of $1.8 million and unamortized debt issuance costs of $7.0 million were written-off and presented as a loss on extinguishment of debt. In addition, the redemption premium payments totaling $41.9 million were accounted for as a loss on extinguishment of debt.

New Senior Secured Credit Facilities

Term A

The term loan A has a principal amount of $300.0 million (“Term A Loan”) and 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 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) Base Rate plus an applicable margin ranging from 1.00% to 1.50%. Term A Loan has no interest rate minimum or floor.

Term B

The term loan B has a principal amount of $400.0 million (“Term B Loan”) and 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 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 available unused commitment during the preceding quarter. The commitment fee for the unused portion of this facility ranges from 0.125% to 0.375% based on utilization. As of June 30, 2013, the revolving credit facility was undrawn.

All loans may be prepaid without premium or penalty, except for a 1% premium payable if any of the Term B Loans are refinanced or repriced with debt having a lower effective interest rate on or prior to April 17, 2014.

The new senior secured credit facilities were evaluated under accounting guidance and accordingly, $7.2 million of debt issue costs were capitalized and are being amortized over the term of the new debt using the interest method and $4.9 million of debt issue costs were expensed and are presented as a loss on the extinguishment of debt.

The new senior secured credit facilities contain various restrictive covenants. The Term A Loan and the revolving credit facility (subject to certain exceptions) require us to maintain on a quarterly basis a specified maximum senior secured leverage ratio of up to 6.60 as defined in the 2013 Credit Agreement (total first lien secured debt to adjusted EBITDA). In addition, the 2013 Credit Agreement, among other things: (a) limits our ability and the ability of our subsidiaries to incur additional indebtedness, incur liens, pay dividends or make certain other restricted payments and enter into certain transactions with affiliates; (b) restricts our ability to enter into agreements that would restrict the ability of our subsidiaries to pay dividends or make certain payments to us; and (c) places restrictions on our ability and the ability of our subsidiaries to merge or consolidate with any other person or sell, assign, transfer, convey or otherwise dispose of all or substantially all of our assets. As of June 30, 2013, the Company was in compliance with the applicable restrictive covenants under the 2013 Credit Agreement.

XML

Related Party Transactions - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Related Party Transaction [Line Items]
Letter of credit issued by Popular	$ 3.6
Apollo
Related Party Transaction [Line Items]
Termination fee	8.5
Popular
Related Party Transaction [Line Items]
Termination fee	$ 8.2

XML

Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Transactions with Related Parties

The following table presents the Company’s transactions with related parties for the three and six months ended June 30, 2013 and 2012:

	Three months ended June 30,				Six months ended June 30,
(Dollar amounts in thousands)	2013		2012		2013		2012
Total revenues (1)(2)	$	42,349	$	38,606	$	84,004	$	75,880
Rent and other fees(3)(4)	$	27,212	$	2,663	$	30,072	$	5,822
Interest earned from and charged by affiliate
Interest income	$	23	$	59	$	42	$	157
Interest expense(5)	$	577	$	1,858	$	2,471	$	3,743

⁽¹⁾  Total revenues from Popular as a percentage of revenues were 47%, 45%, 47% and 44% for each of the periods presented above.

⁽²⁾  Includes revenues generated from investee accounted for under the equity method of $0.8 million and $1.7 million for the three and six months ended June 30, 2013, respectively, and $0.9 million and $1.7 million for the corresponding 2012 periods.

⁽³⁾  Includes management fees to equity sponsors amounting to $19.4 million and $20.3 million for the three and six months ended June 30, 2013, respectively, compared to $0.7 million and $2.0 million for the corresponding 2012 periods. Management fees paid during 2013 includes $16.7 million resulting from the termination of the consulting agreements as explained below. Rent and other fees also includes $5.9 million paid to Popular in connection with the redemption premium on the senior notes for the three and six months ended June 30, 2013.

⁽⁴⁾ Includes $4.6 million, $2.7 million, $7.5 million and $5.8 million recorded as selling, general and administrative expenses for each of the periods presented above, and $22.6 million recorded as non-operating expenses for the three and six months ended June 30, 2013 in the unaudited consolidated statement of (loss) income and comprehensive (loss) income.

⁽⁵⁾ Interest expense relates to interest accrued on the senior secured term loan and senior notes held by Popular. As a result of the debt refinancing and the redemption of the senior notes in April 2013, Popular’s participation in such debt was extinguished. See Note 5 for additional information related to the extinguishment of this debt.

Related Party Transactions

At June 30, 2013 and December 31, 2012, EVERTEC had the following balances arising from transactions with related parties:

(Dollar amounts in thousands)	June 30, 2013		December 31, 2012
Cash and restricted cash deposits in affiliated bank	$	15,547	$	19,438
Indemnification assets from Popular reimbursement(1)
Accounts receivable	$	2,080	$	2,157
Other long-term assets	$	2,460	$	3,942
Other due/to from affiliate
Accounts receivable	$	20,342	$	19,252
Accounts payable(2)	$	5,481	$	3,845
Other long-term liabilities(2)	$	520	$	2,847
Long-term debt	$	—	$	90,186

⁽¹⁾  Recorded in connection with reimbursements from Popular regarding certain software license fees.

⁽²⁾  Includes an account payable of $0.2 million and $0.4 million and a long-term liability of $0.5 million and $2.8 million for June 30, 2013 and December 31, 2012, respectively, related to the unvested portion of stock options as a result of the equitable adjustment approved by our Board of Directors on December 18, 2012 that will be payable to executive officers and employees upon vesting of stock options.

XML

Fair Value Measurements for Assets at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Indemnification assets:
Software cost reimbursement	$ 4,540	$ 6,099
Fair Value, Measurements, Recurring | Level 1
Indemnification assets:
Software cost reimbursement
Fair Value, Measurements, Recurring | Level 2
Indemnification assets:
Software cost reimbursement
Fair Value, Measurements, Recurring | Level 3
Indemnification assets:
Software cost reimbursement	$ 4,540	$ 6,099

XML

Income Tax

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax

Note 8 – Income Tax

The components of income tax (benefit) expense for the three and six months ended June 30, 2013 and 2012 consisted of the following:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Current tax provision	$	1,005		$	3,452		$	1,290		$	5,470
Deferred tax benefit		(6,017	)		(4,250	)		(6,251	)		(5,212	)
Income tax (benefit) expense	$	(5,012	)	$	(798	)	$	(4,961	)	$	258

The Company conducts operations in Puerto Rico and certain countries throughout the Caribbean and Latin America. As a result, the income tax expense includes the effect of taxes paid to the Puerto Rico government as well as foreign jurisdictions. The following table presents the components of income tax expense (benefit) for the three and six months ended June 30, 2013 and 2012 and its segregation based on location of operations:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Current tax provision
Puerto Rico	$	(122	)	$	3,040		$	256		$	4,950
United States		210			159			429			343
Foreign countries		917			253			605			177
Total currrent tax provision	$	1,005		$	3,452		$	1,290		$	5,470
Deferred tax benefit
Puerto Rico	$	(5,880	)	$	(4,096	)	$	(5,956	)	$	(4,905	)
United States		—			—			(2	)		—
Foreign countries		(137	)		(154	)		(293	)		(307	)
Total deferred tax benefit	$	(6,017	)	$	(4,250	)	$	(6,251	)	$	(5,212	)

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 fully taxable operations of EVERTEC. As a result of this tax rate increase, the deferred taxes were revalued resulting in the Company recognizing additional non-cash income tax expense of $1.4 million for the six months ended June 30, 2013. In addition, Act 40 established a national gross receipts tax based on gross revenues that is included as part of the alternative minimum tax calculation.

The income tax (benefit) 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:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Computed income tax at statutory rates	$	(26,782	)	$	(851	)	$	(25,125	)	$	526
Benefit of net tax-exempt interest income		(53	)		(2	)		(94	)		(4	)
Adjustment to deferred taxes due to changes in enacted tax rate		1,441			—			1,441			—
Differences in tax rates due to multiple jurisdictions		102			99			282			251
Effect of income subject to tax-exemption grant		19,983			(479	)		18,982			(605	)
Reversal of tax uncertainties reserve		—			—			(846	)		(640	)
Fair value adjustment of indemnification assets		—			62			—			364
Effect of net operating losses in foreign entities		(57	)		278			—			278
Other		354			95			399			88
Income tax (benefit) expense	$	(5,012	)	$	(798	)	$	(4,961	)	$	258

The recorded net operating losses (“NOL”) carryforwards differs from the amount of NOL available to the Company for tax purposes due to a windfall tax benefit. This benefit results from tax deductions in excess of previously recorded compensation expense due to differences in fair value of the stock options at the time of the grant versus at the time of the exercise. Although these windfalls are available to the Company, the additional tax benefit associated with the windfall cannot be recognized until the deduction reduces taxes payable. The unused amount of windfall remains as an off-balance sheet item, however it is available to offset future taxable income. Total available gross NOL related to the windfall tax benefit that does not reduce income tax payable in the current year amounted to $59.0 million at June 30, 2013, which will result in a future tax benefit of $8.4 million. This NOL carryforward expires in 2023.

There are no open uncertain tax positions as of June 30, 2013.

XML

Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 4 – Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill, allocated by reportable segments, were as follows (See Note 12):

(Dollar amounts in thousands)	Merchant acquiring, net		Payment processing		Business solutions		Total
Balance at December 31, 2012	$	138,121	$	187,028	$	47,158	$	372,307
Foreign currency translation adjustments		—		734		257		991
Balance at June 30, 2013	$	138,121	$	187,762	$	47,415	$	373,298

Goodwill is tested for impairment at least annually using 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.

During 2012, the Company completed the impairment evaluation, as described above, and determined that there are no impairment losses to be recognized during the period. There were no triggering events or changes in circumstances that subsequent to the impairment test would have required an additional impairment evaluation.

The carrying amount of other intangible assets for the six months ended June 30, 2013 and the year ended December 31, 2012 consisted of the following:

(Dollar amounts in thousands)		June 30, 2013
	Useful life in years	Gross amount		Accumulated amortization			Net carrying amount
Customer relationships	14	$	314,093	$	(61,975	)	$	252,118
Trademark	10 - 15		39,950		(9,526	)		30,424
Software packages	3 - 5		118,438		(62,779	)		55,659
Non-compete agreement	15		56,539		(10,365	)		46,174
Other intangible assets, net		$	529,020	$	(144,645	)	$	384,375
(Dollar amounts in thousands)		December 31, 2012
	Useful life in years	Gross amount		Accumulated amortization			Net carrying amount
Customer relationships	14	$	313,726	$	(50,769	)	$	262,957
Trademark	10 - 15		39,950		(7,794	)		32,156
Software packages	3 - 5		110,478		(50,479	)		59,999
Non-compete agreement	15		56,539		(8,481	)		48,058
Other intangible assets, net		$	520,693	$	(117,523	)	$	403,170

For the three and six months ended June 30, 2013, the Company recorded amortization expense related to other intangibles of $13.7 million and $27.3 million, respectively, compared to $13.7 million and $27.6 million for the corresponding 2012 periods.

The estimated amortization expense of the balances outstanding at June 30, 2013 for the next five years is as follows:

(Dollar amounts in thousands)
Remaining 2013	$	26,531
2014		48,776
2015		44,430
2016		34,685
2017		31,344
2018		29,691

XML

Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities
Net (loss) income	$ (59,463)	$ 1,501
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	35,417	35,752
Amortization of debt issue costs and premium and accretion of discount	2,369	2,427
Write-off of debt issue costs, premium and discount accounted as loss on extinguishment	16,555
Provision for doubtful accounts and sundry losses	826	1,173
Deferred tax benefit	(6,251)	(5,212)
Share-based compensation	5,483	557
Unrealized (gain) loss of indemnification assets	(19)	216
Amortization of a contract liability		(703)
Loss on disposition of property and equipment	32	47
Earnings from equity method investment	(625)	(575)
Dividend received from equity method investment	500	728
Premium on issuance of long-term debt		2,000
(Increase) decrease in assets:
Accounts receivable, net	492	4,247
Prepaid expenses and other assets	(5,417)	993
Other long-term assets	(323)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities	(3,347)	260
Income tax payable	(1,867)	(1,292)
Unearned income	1,736	(124)
Total adjustments	45,561	40,494
Net cash (used in) provided by operating activities	(13,902)	41,995
Cash flows from investing activities
Net increase in restricted cash	(44)	(233)
Intangible assets acquired	(7,927)	(3,712)
Property and equipment acquired	(4,384)	(5,166)
Proceeds from sales of property and equipment	11	43
Net cash used in investing activities	(12,344)	(9,068)
Cash flows from financing activities
Proceeds from initial public offering, net of offering costs of $12,567	112,369
Proceeds from issuance of debt	700,000	208,725
Statutory minimum withholding taxes paid on cashless exercises of stock options	(16,688)
Debt issuance costs	(12,077)	(2,174)
Repayment of short-term borrowings	(18,332)
Dividends paid		(269,772)
Tax windfall benefits on exercises of stock options	470
Issuance of common stock	91	250
Repayment of other financing agreement	(112)
Repayment of long-term debt	(745,522)
Net cash provided by (used in) financing activities	20,199	(62,971)
Net decrease in cash	(6,047)	(30,044)
Cash at beginning of the period	25,634	56,200
Cash at end of the period	19,587	26,156
Supplemental disclosure of non-cash activities:
Dividend declared not received from equity method investment	$ 500	$ 1,457

XML

Segregation of Income Tax Expense (Benefit) Based on Location of Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Current tax provision
Current tax provision, Puerto Rico	$ (122)	$ 3,040	$ 256	$ 4,950
Current tax provision, United States	210	159	429	343
Current tax provision, Foreign countries	917	253	605	177
Total current tax provision	1,005	3,452	1,290	5,470
Deferred tax benefit
Deferred tax benefit, Puerto Rico	(5,880)	(4,096)	(5,956)	(4,905)
Deferred tax benefit, United States			(2)
Deferred tax benefit, Foreign countries	(137)	(154)	(293)	(307)
Total deferred tax benefit	$ (6,017)	$ (4,250)	$ (6,251)	$ (5,212)

XML

Nonvested Restricted Shares Activity (Detail) (Restricted Shares, USD $)	6 Months Ended
	Jun. 30, 2013
Restricted Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning balance	115,420
Vested	(115,420)
Ending balance
Weighted-average grant date fair value, beginning balance	$ 5.90
Vested	$ 5.90
Ending balance

XML

Property and Equipment, Net (Detail) (USD $) In Thousands, unless otherwise specified			6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Buildings	Jun. 30, 2013 Data Processing Equipment Minimum	Jun. 30, 2013 Data Processing Equipment Maximum	Jun. 30, 2013 Furniture and Equipment Minimum	Jun. 30, 2013 Furniture and Equipment Maximum	Jun. 30, 2013 Leasehold Improvements Minimum	Jun. 30, 2013 Leasehold Improvements Maximum
Property, Plant and Equipment [Line Items]
Useful life in years			30 years	3 years	5 years	3 years	20 years	5 years	10 years
Buildings	$ 1,732	$ 2,096
Data processing equipment	60,883	59,901
Furniture and equipment	6,651	6,183
Leasehold improvements	2,430	2,380
Property and equipment	71,696	70,560
Less - accumulated depreciation and amortization	(40,200)	(35,331)
Depreciable assets, net	31,496	35,229
Land	1,535	1,508
Property and equipment, net	$ 33,031	$ 36,737

XML

Subsequent Events - Additional Information (Detail) (Subsequent Events, USD $)	1 Months Ended
	Aug. 07, 2013 Director
Common Stock
Subsequent Event [Line Items]
Cash dividend approved per common share	$ 0.10
Restricted Stock Units
Subsequent Event [Line Items]
Directors restricted stock units with a grant date value	$ 75,000
Number of directors	2

XML

Transactions with Related Parties (Parenthetical) (Detail) (USD $)	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Related Party Transaction [Line Items]
Management fee paid for termination of consulting agreement	$ 16,718,000				$ 16,718,000
Rent and other fees	27,212,000	[1],[2]	2,663,000	[1],[2]	30,072,000	[1],[2]	5,822,000	[1],[2]
Selling general and administrative expense	12,138,000		8,477,000		21,001,000		17,464,000
Non operating expense	(86,885,000)		(21,065,000)		(101,761,000)		(34,313,000)
Popular
Related Party Transaction [Line Items]
Total revenues from Popular	47.00%		45.00%		47.00%		44.00%
Rent and other fees	5,900,000				5,900,000
Related Party Transactions
Related Party Transaction [Line Items]
Revenues generated from investees accounted for under equity method	800,000		900,000		1,700,000		1,700,000
Management fees to equity sponsors	19,400,000		700,000		20,300,000		2,000,000
Selling general and administrative expense	4,600,000		2,700,000		7,500,000		5,800,000
Non operating expense	$ 22,600,000				$ 22,600,000

[1] Includes management fees to equity sponsors amounting to $19.4 million and $20.3 million for the three and six months ended June 30, 2013, respectively, compared to $0.7 million and $2.0 million for the corresponding 2012 periods. Management fees paid during 2013 includes $16.7 million resulting from the termination of the consulting agreements as explained below. Rent and other fees also includes $5.9 million paid to Popular in connection with the redemption premium on the senior notes for the three and six months ended June 30, 2013.

[2] Includes $4.6 million, $2.7 million, $7.5 million and $5.8 million recorded as selling, general and administrative expenses for each of the periods presented above, and $22.6 million recorded as non-operating expenses for the three and six months ended June 30, 2013 in the unaudited consolidated statement of (loss) income and comprehensive (loss) income.

XML

Related Party Transactions

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Note 11 – Related Party Transactions

The following table presents the Company’s transactions with related parties for the three and six months ended June 30, 2013 and 2012:

	Three months ended June 30,				Six months ended June 30,
(Dollar amounts in thousands)	2013		2012		2013		2012
Total revenues (1)(2)	$	42,349	$	38,606	$	84,004	$	75,880
Rent and other fees(3)(4)	$	27,212	$	2,663	$	30,072	$	5,822
Interest earned from and charged by affiliate
Interest income	$	23	$	59	$	42	$	157
Interest expense(5)	$	577	$	1,858	$	2,471	$	3,743

⁽¹⁾  Total revenues from Popular as a percentage of revenues were 47%, 45%, 47% and 44% for each of the periods presented above.

⁽²⁾  Includes revenues generated from investee accounted for under the equity method of $0.8 million and $1.7 million for the three and six months ended June 30, 2013, respectively, and $0.9 million and $1.7 million for the corresponding 2012 periods.

⁽³⁾  Includes management fees to equity sponsors amounting to $19.4 million and $20.3 million for the three and six months ended June 30, 2013, respectively, compared to $0.7 million and $2.0 million for the corresponding 2012 periods. Management fees paid during 2013 includes $16.7 million resulting from the termination of the consulting agreements as explained below. Rent and other fees also includes $5.9 million paid to Popular in connection with the redemption premium on the senior notes for the three and six months ended June 30, 2013.

⁽⁴⁾ Includes $4.6 million, $2.7 million, $7.5 million and $5.8 million recorded as selling, general and administrative expenses for each of the periods presented above, and $22.6 million recorded as non-operating expenses for the three and six months ended June 30, 2013 in the unaudited consolidated statement of (loss) income and comprehensive (loss) income.

⁽⁵⁾ Interest expense relates to interest accrued on the senior secured term loan and senior notes held by Popular. As a result of the debt refinancing and the redemption of the senior notes in April 2013, Popular’s participation in such debt was extinguished. See Note 5 for additional information related to the extinguishment of this debt.

On April 17, 2013, EVERTEC entered into a termination agreement with Holdings, EVERTEC Group and Popular and a termination agreement with Holdings, EVERTEC Group and Apollo Management VII, L.P. in connection with the Initial Public Offering (the “Termination Agreements”). The Termination Agreements terminated the consulting agreements (the “Consulting Agreements”), each dated September 30, 2010, entered into by Holdings and EVERTEC Group with each of Popular and Apollo Management, pursuant to which Holdings and EVERTEC Group received certain advisory services from each of Popular and Apollo Management. The Consulting Agreements were terminated in their entirety upon payment of termination fees of approximately $8.5 million to Apollo Management and $8.2 million to Popular, in each case, plus any unreimbursed expenses payable in accordance with the terms of the Termination Agreements.

At June 30, 2013 and December 31, 2012, EVERTEC had the following balances arising from transactions with related parties:

(Dollar amounts in thousands)	June 30, 2013		December 31, 2012
Cash and restricted cash deposits in affiliated bank	$	15,547	$	19,438
Indemnification assets from Popular reimbursement(1)
Accounts receivable	$	2,080	$	2,157
Other long-term assets	$	2,460	$	3,942
Other due/to from affiliate
Accounts receivable	$	20,342	$	19,252
Accounts payable(2)	$	5,481	$	3,845
Other long-term liabilities(2)	$	520	$	2,847
Long-term debt	$	—	$	90,186

⁽¹⁾  Recorded in connection with reimbursements from Popular regarding certain software license fees.

⁽²⁾  Includes an account payable of $0.2 million and $0.4 million and a long-term liability of $0.5 million and $2.8 million for June 30, 2013 and December 31, 2012, respectively, related to the unvested portion of stock options as a result of the equitable adjustment approved by our Board of Directors on December 18, 2012 that will be payable to executive officers and employees upon vesting of stock options.

At June 30, 2013, EVERTEC Group has a credit facility with Popular for $3.6 million, on behalf of EVERTEC CR, under which a letter of credit of a similar amount was issued.

XML

Share-based Compensation

6 Months Ended

Jun. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share-based Compensation

Note 7 – Share-based Compensation

The following table summarizes the nonvested stock options activity for the six months ended June 30, 2013:

Nonvested stock options	Shares			Weighted-average exercise prices
Nonvested at December 31, 2012		4,571,258		$	2.16
Vested		(3,436,392	)		2.11
Nonvested at June 30, 2013		1,134,866		$	2.30

Management uses the fair value method of recording stock-based compensation as described in the guidance for stock compensation in ASC topic 718.

The following table summarizes the nonvested restricted shares activity for the six months ended June 30, 2013:

Nonvested restricted shares	Shares			Weighted-average grant date fair  value
Nonvested at December 31, 2012		115,420		$	5.90
Vested		(115,420	)		5.90
Nonvested at June 30, 2013		—		$	—

Share-based compensation recognized was as follows:

	Three months ended June 30,				Six months ended June 30,
(Dollar amounts in thousands)	2013		2012		2013		2012
Share-based compensation recognized, net
Stock options, net of income tax of $488, $40, $500 and $87	$	5,062	$	134	$	5,212	$	291
Restricted shares, net of income tax of $11, $49, $26 and $80		90		163		271		266

Pursuant to the terms of the Equity Incentive Plan, Tranche B options granted to employees and certain 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.

As a result of the Initial Public Offering, the IRR required by the Tranche B and C options was achieved and accordingly, all Tranche B and C options became vested. As a result, the Company recognized a share-based compensation expense of $4.9 million in April 2013.

The maximum unrecognized cost for stock options was $1.5 million as of June 30, 2013 related to Tranche A time vesting options.

XML

The Company and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

The Company

The Company

EVERTEC, Inc. (formerly known as Carib Latam Holdings, Inc.) and its subsidiaries (collectively the “Company,” “EVERTEC,” “we,” “us,” or “our”) is the leading full-service transaction processing business in Latin America and the Caribbean. We are based in Puerto Rico and provide a broad range of merchant acquiring, payment processing and business process management services across 19 countries in the region. We process over 1.8 billion transactions annually, and manage the electronic payment network for over 4,100 automated teller machines (“ATM”) and over 104,000 point-of-sale (“POS”) payment terminals. According to the July 2012 Nilson Report, we are the largest merchant acquirer in the Caribbean and Central America and the sixth largest in Latin America based on total number of transactions. We own and operate the ATH network, one of the leading ATM and personal identification number debit networks in Latin America. In addition, we provide a comprehensive suite of services for core bank processing, cash processing and technology outsourcing in the regions we serve. We serve a broad and diversified customer base of leading financial institutions, merchants, corporations and government agencies with ‘mission critical’ technology solutions that are essential to their operations, enabling them to issue, process and accept transactions securely, and we believe that our business is well positioned to continue to expand across the fast growing Latin American region.

Our subsidiaries include EVERTEC Intermediate Holdings, LLC (“Holdings,” formerly known as Carib Holdings, Inc.), EVERTEC Group, LLC (“EVERTEC Group”), EVERTEC Dominicana SAS., EVERTEC Panamá, S.A., EVERTEC Latinoamérica, S.A., EVERTEC Costa Rica, S.A. (“EVERTEC CR”), Tarjetas Inteligentes Internacionales, S.A., EVERTEC Guatemala, S.A. and EVERTEC México Servicios de Procesamiento, S.A. de C.V.

Initial Public Offering

Initial Public Offering

On April 17, 2013, the Company completed its initial public offering (“Initial Public Offering”) of 28,789,943 shares of common stock at a price to the public of $20.00 per share. A total of 6,250,000 shares were offered by the Company and a total of 22,539,943 shares were offered by selling stockholders of the Company, of which 13,739,284 shares were sold by an affiliate of Apollo Global Management, LLC (“Apollo”) and 8,800,659 shares were sold by Popular. The Company used net proceeds of approximately $117.4 million from its sale of shares in the Initial Public Offering and proceeds from borrowings under the 2013 Credit Agreement (as defined in Note 5), together with available cash on hand, to redeem its senior notes (as defined in Note 5) and to refinance its previous senior secured credit facilities.

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of EVERTEC, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The preparation of the accompanying unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) 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 unaudited consolidated financial statements. Actual results could differ from these estimates.

In the opinion of management, the accompanying unaudited 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. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from the unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). As these unaudited consolidated financial statements are prepared using the same accounting principles and policies used to prepare the annual financial statements, they should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2012, included in the Company’s Registration Statement on Form S-1 (File No. 333-186487) (as amended, the “Registration Statement”), which was declared effective by the SEC on April 11, 2013. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results of operations for the full year or any future period.

On April 1, 2013, EVERTEC’s Board of Directors declared a two for one stock split of our outstanding Class A and Class B common stock. Accordingly, all shares of outstanding common stock or restricted stock, or shares of common stock underlying outstanding options, and all per share amounts for all periods presented in these consolidated financial statements and notes thereto, have been adjusted retroactively, where applicable, to reflect this stock split, except for the par value of the common stock, which was not adjusted by the stock split and the impact was recorded as additional paid-in capital. Under the certificate of incorporation, as amended by the certificate of amendment, which became effective on April 1, 2013, EVERTEC’s authorized capital consists of 206,000,000 shares of common stock and 2,000,000 shares of preferred stock.

The Consolidated Balance Sheet as of December 31, 2012 was derived from the audited consolidated financial statements for the fiscal year ended December 31, 2012 included in the Registration Statement.

Certain reclassifications have been made to certain prior period notes to the unaudited consolidated financial statements to conform with the presentation in 2013.

Share-based Compensation

Share-based Compensation

Management uses the fair value method of recording stock-based compensation as described in the guidance for stock compensation in ASC topic 718. The fair value of the stock options granted during 2011 and 2012 was estimated using the Black-Scholes-Merton (“BSM”) option pricing model for Tranche A options granted under the EVERTEC, Inc. Amended and Restated 2010 Equity Incentive Plan (the “Equity Incentive Plan”) and the Monte Carlo simulation analysis for Tranche B and Tranche C options.

Upon option exercise, participants may elect to “net share settle”. Rather than requiring the participant to deliver cash to satisfy the exercise price 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, a current tax deduction arises based on the value at the time of exercise. This deduction may exceed the associated deferred tax asset, resulting in a “windfall tax benefit”. The windfall is recognized in the unaudited consolidated balance sheet as an increase to additional paid-in capital, and is included in the unaudited consolidated statement of cash flows as a financing inflow.

Net Income (Loss) Per Common Share

Net Income (Loss) Per Common Share

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

Diluted net income (loss) per common share assumes the issuance of all potentially dilutive share equivalents using the treasury stock method.

XML

Segment Information

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Information

Note 12 – 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. We also charge 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 electronic benefit transfer (“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 consist 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, we are 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 Chief Operating Decision Maker (“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 unaudited 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)	Merchant acquiring, net		Payment processing		Business solutions		Other			Total
Three months ended June 30, 2013
Revenues		18,165		30,603		46,725		(6,318	) (1)		89,175
Income from operations		8,161		11,719		8,784		(11,726	) (2)		16,938
Three months ended June 30, 2012
Revenues		17,028		29,019		43,541		(5,216	) (1)		84,372
Income from operations		7,970		12,756		8,870		(11,362	) (2)		18,234

⁽¹⁾  Represents the elimination of intersegment revenues for services provided by the payment processing segment to the merchant acquiring segment, and other miscellaneous intersegment revenues.

⁽²⁾  Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.

(Dollar amounts in thousands)	Merchant acquiring, net		Payment processing		Business solutions		Other			Total
Six months ended June 30, 2013
Revenues		35,624		59,826		92,493		(11,429	) (1)		176,514
Income from operations		17,395		25,270		19,318		(24,646	) (2)		37,337
Six months ended June 30, 2012
Revenues		34,689		57,248		85,469		(10,546	) (1)		166,860
Income from operations		16,511		25,065		17,950		(23,454	) (2)		36,072

⁽¹⁾  Represents the elimination of intersegment revenues for services provided by the payment processing segment to the merchant acquiring segment, and other miscellaneous intersegment revenues.

⁽²⁾  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 for the three and six months ended June 30, 2013 and 2012 is as follows:

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2013			2012			2013			2012
Segment income from operations
Merchant acquiring	$	8,161		$	7,970		$	17,395		$	16,511
Payment processing		11,719			12,756			25,270			25,065
Business solutions		8,784			8,870			19,318			17,950
Total segment income from operations		28,664			29,596			61,983			59,526
Merger related depreciation and amortization and other unallocated expenses(1)		(11,726	)		(11,362	)		(24,646	)		(23,454	)
Income from operations	$	16,938		$	18,234		$	37,337		$	36,072
Interest expense, net		(9,698	)		(13,177	)		(24,918	)		(24,231	)
Earnings of equity method investment		348			509			625			575
Other expenses		(77,535	)		(8,397	)		(77,468	)		(10,657	)
Income tax benefit (expense)		5,012			798			4,961			(258	)
Net (loss) income	$	(64,935	)	$	(2,033	)	$	(59,463	)	$	1,501

⁽¹⁾  Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 09, 2013
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Trading Symbol	EVTC
Entity Registrant Name	EVERTEC, Inc.
Entity Central Index Key	0001559865
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		81,909,582

XML

Subsequent Events

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

Subsequent Events

Note 13 – Subsequent Events

The Company evaluated subsequent events through the date that these unaudited consolidated financial statements were issued. There were no subsequent events requiring disclosure other than those disclosed below.

Quarterly Dividend. On August 7, 2013, the Board of Directors of EVERTEC approved a regular quarterly cash dividend of $0.10 per common share. The first quarterly dividend is payable on September 6, 2013 to stockholders of record at the close of business on August 19, 2013.

Grant of Restricted Stock Units. On August 7, 2013, EVERTEC granted to two of its directors restricted stock units with a grant date value of $75,000, in accordance with the Company’s independent director compensation policy.

XML

Related Party Transactions (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Related Party Transaction [Line Items]
Accounts payable	$ 5,481	[1]	$ 3,845	[1]
Other long-term liabilities	520	[1]	2,847	[1]
Unvested Stock Options
Related Party Transaction [Line Items]
Accounts payable	200		400
Other long-term liabilities	$ 500		$ 2,800

[1] Includes an account payable of $0.2 million and $0.4 million and a long-term liability of $0.5 million and $2.8 million for June 30, 2013 and December 31, 2012, respectively, related to the unvested portion of stock options as a result of the equitable adjustment approved by our Board of Directors on December 18, 2012 that will be payable to executive officers and employees upon vesting of stock options.

XML

Related Party Transactions (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Related Party Transactions [Abstract]
Cash and restricted cash deposits in affiliated bank	$ 15,547		$ 19,438
Indemnification assets from Popular reimbursement
Accounts receivable	2,080	[1]	2,157	[1]
Other long-term assets	2,460	[1]	3,942	[1]
Other due/to from affiliate
Accounts receivable	20,342		19,252
Accounts payable	5,481	[2]	3,845	[2]
Other long-term liabilities	520	[2]	2,847	[2]
Long-term debt			$ 90,186

[1] Recorded in connection with reimbursements from Popular regarding certain software license fees.

[2] Includes an account payable of $0.2 million and $0.4 million and a long-term liability of $0.5 million and $2.8 million for June 30, 2013 and December 31, 2012, respectively, related to the unvested portion of stock options as a result of the equitable adjustment approved by our Board of Directors on December 18, 2012 that will be payable to executive officers and employees upon vesting of stock options.