Annual report pursuant to Section 13 and 15(d)

SEGMENT INFORMATION

v3.21.1
SEGMENT INFORMATION
12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Segment Information SEGMENT INFORMATION
The Company has three reportable segments that are reviewed by the Company's chief operating decision maker ("CODM"), who is the Company's President, Chief Executive Officer and Chairman. The Consumer Payments operating segment is one reportable segment. The Commercial Payments and Institutional Services (aka Managed Services) operating segments are aggregated into one reportable segment, Commercial Payments. The Integrated Partners operating segment is one reportable segment.

Prior to second quarter of 2019, the Integrated Partners operating segment was aggregated with the Commercial Payments and Institutional Services operating segments and reported as one aggregated reportable segment, Commercial Payments. As of the second quarter of 2019, the Integrated Partners operating segment is no longer aggregated into the Commercial Payments operating segment. All comparative periods have been adjusted to reflect the current three reportable segments.
More information about our three reportable segments:

Consumer Payments – represents consumer-related services and offerings including merchant acquiring and transaction processing services including the proprietary MX enterprise suite. Either through acquisition of merchant portfolios or through resellers, the Company becomes a party or enters into contracts with a merchant and a sponsor bank. Pursuant to the contracts, for each card transaction, the sponsor bank collects payment from the credit, debit or other payment card issuing bank, net of interchange fees due to the issuing bank, pays credit card association (e.g., Visa, MasterCard) assessments and pays the transaction fee due to the Company for the suite of processing and related services it provides to merchants, with the remainder going to the merchant.

Commercial Payments – represents services provided to certain enterprise customers, including outsourced sales force to those customers and accounts payable automation services to commercial customers.
Integrated Partners - represents payment adjacent services that are provided primarily to the rental real estate and rental storage, medical and hospitality industries. Integrated Partners had no material operations prior to 2018 and sold a significant portion of its business in September 2020.

Corporate includes costs of corporate functions and shared services not allocated to our reportable segments.

Information on segments and reconciliations to consolidated revenues, consolidated income (loss) from operations, and consolidated depreciation and amortization are as follows for the years presented:
Year Ended December 31,
(in thousands) 2020 2019 2018
Revenues:
Consumer Payments $ 367,816  $ 330,599  $ 347,013 
Commercial Payments 20,922  25,980  27,056 
Integrated Partners 15,604  15,275  1,753 
Consolidated revenues $ 404,342  $ 371,854  $ 375,822 
Income (loss) from operations:
Consumer Payments $ 38,392  $ 32,237  $ 47,002 
Commercial Payments 923  (891) (952)
Integrated Partners 1,404  725  (1,969)
   Corporate (19,858) (24,887) (27,688)
Consolidated income from operations $ 20,861  $ 7,184  $ 16,393 
Depreciation and amortization:
Consumer Payments $ 35,002  $ 32,842  $ 17,945 
Commercial Payments 306  323  557 
Integrated Partners 4,299  4,398  145 
   Corporate 1,168  1,529  1,093 
Consolidated depreciation and amortization $ 40,775  $ 39,092  $ 19,740 
A reconciliation of total income from operations of reportable segments to the Company's net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. is provided in the following table:
Year Ended December 31,
(in thousands) 2020 2019 2018
Total income from operations of reportable segments $ 40,719  $ 32,071  $ 44,081 
Less Corporate (19,858) (24,887) (27,688)
Less interest expense (44,839) (40,653) (29,935)
Less debt modification and extinguishment expense (1,899) —  (2,043)
Add gain on sale of business 107,239  —  — 
Add (less) other, net 596  710  (4,741)
Income tax (expense) benefit (10,899) (830) 2,490 
     Net income (loss) 71,059  (33,589) (17,836)
Less earnings attributable to non-controlling interests (45,398) —  — 
Net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. $ 25,661  $ (33,589) $ (17,836)


Total assets, all located in the United States, by reportable segment reconciled to consolidated assets as of December 31, 2020 and 2019 were as follows:
(in thousands) As of December 31,
2020 2019
Consumer Payments $ 261,675  $ 274,136 
Commercial Payments 81,106  45,152 
Integrated Partners 3,991  74,386 
Corporate 71,057  70,831 
Total consolidated assets $ 417,829  $ 464,505 

Assets in Corporate at December 31, 2020 and 2019 primarily represent prepaid expenses and other current assets; property, equipment and software; and net deferred income tax assets. Substantially all assets related to business operations are assigned to one of the Company's three reportable segments even though some of those assets result in Corporate expenses.