SYNIVERSE HOLDINGS INC Form 10-K Annual Report Filed 2018-03-14 Changes

fuel, maintenance, landing fees, trip-related hangar/parking costs and other smaller variable costs.


(10)	Reflects the grant date fair value of Mr. Reich’s option awards ($1,299,321) and the incremental fair value related to the modification of his option awards as of the modification date ($366,039), as described in the Compensation Discussion and Analysis.

2017 Pay Ratio

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Stephen C. Gray, our CEO as of December 31, 2017. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. Given the different methodologies that various companies will use to determine an estimate of their pay ratio, the estimated ratio reported below should not be used as a basis for comparison between companies.

For 2017, our last completed fiscal year, the median of the annual total compensation of all employees of the Company (other than our CEO) was $52,590, and the annual total compensation of our CEO as of December 31, 2017, as reported in the Summary Compensation Table included in this Form 10-K, was $1,818,849. Based on this information, for 2017, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 35 to 1.

To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustment and estimates that we used were as follows:


•	We selected December 31, 2017 as the date upon which we would identify the “median employee.” As of December 31, 2017, we had 2,179 global employees working at the Company and its consolidated subsidiaries.


•	To determine our “median employee” from our employee population, we used a consistently applied compensation definition and chose total taxable wages before deductions for pre-tax items, such as 401(k) contributions, derived from our payroll records.


•	We excluded, under the de minimis exception to the pay ratio rule, all of our employees in each of Singapore (18), Argentina (13), Brazil (12), Mexico (5) and Malaysia (2), which in total are 50 employees out of a total of 2,179 total global employees, or approximately 2% as of December 31, 2017.

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•	For employees located outside the United States, we applied a currency adjustment based on applicable foreign currency exchange rates as of December 31, 2017.


•	We determined that the “median employee” was a full-time, salaried employee located in the United States, with taxable wages before deductions for pre-tax items for the 12-month period ending December 31, 2017 in the amount of $51,812.


•	With respect to the annual total compensation of the “median employee,” we identified and calculated the elements of such employee’s compensation for 2017 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $52,590.


•	With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2017 Summary Compensation Table included in this Annual Report on Form 10-K.

2017 Grants of Plan-Based Awards



		Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)			All Other Stock Awards: Number of Shares of Stock Units(#)(2)	All Other Option Awards: Number of Securities Underlying Options (#)(3)	Exercise or Base Price of Option Awards ($/Sh) (4)	Grant Date Fair Value of Stock and Option Awards ($)(5)
Name	Grant Date	Threshold ($)	Target ($)	Maximum ($)

Mr. Gray		375,000	750,000	1,125,000

Mr. Reich		180,000	360,000	540,000
	8/14/2017				80,000			800,000
	8/14/2017					140,000	10.00	472,699
Mr. Moss		184,000	368,000	552,000
	8/14/2017				100,000			1,000,000
Mr. Powell		99,000	198,000	297,000
	2/9/2017				75,000			750,000
	2/9/2017					230,000	10.00	745,116
Mr. McCarver (6)		—	—	200,000
	11/1/2017				50,000			500,000
	11/1/2017					100,000	10.00	346,871
	2/9/2017					50,000	10.00	161,982


(1)	Represents potential threshold, target and maximum payout opportunities under the annual incentive plan, assuming payout target percentages were effective for the entire year, excluding individual performance qualifiers. Actual amounts earned under the annual incentive plan are reported in the Non-Equity Incentive Plan Compensation column of the Summary Compensation table.


(2)	Reflects restricted stock units with service-based vesting requirements.


(3)	Reflects option awards with service-based vesting requirements.


(4)	The price is the fair value of Syniverse Corporation’s common stock on the grant date.


(5)	Reflects the grant date fair value of the option and restricted stock unit awards, determined in accordance with ASC Topic 718. The assumptions used in the calculation of the grant date fair values of the restricted stock unit and option awards are included in Note 10 to our consolidated financial statements included in this Annual Report on Form 10-K.


(6)	In 2017, Mr. McCarver did not receive a bonus under the AIP mentioned above, instead Mr. McCarver received a $200,000 bonus under the sales incentive plan.

Material Terms of Employment Agreements

Each of the employment agreements with Messrs. Gray, Reich, Moss and RatnerMoss has an initial term of three years, and each of these agreements automatically extend for additional one-year periods unless either party gives prior notice of non-renewal. The initial terms of these employment agreements expire on February 25, 2018, April 1, 2018, January 21, 2019 and June 20, 2019 for Messrs. Gray, Reich, Ratner and Moss, respectively. The agreements provide for a base salary and target annual incentive opportunity discussed above in the Compensation Discussion & Analysis. Additionally, Mr. Gray is also entitled to use of a private jet for his travel to the Company’s headquarters in Tampa, Florida and domestic business outside Tampa. Additionally, pursuant to his employment agreement, Mr. Moss was entitled to a re-location

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agreement, Mr. Moss was entitled to a relocation bonus in an amount equal to $150,000 which is subject to pro rata repayment if he is terminated for cause or he resigns without good reason (as such terms are defined in his employment agreement) prior to June 20, 2017. The employment agreements also specify the payments and benefits to

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which such executives are entitled upon a termination of employment for specified reasons. For more information on the severance benefits provided in the employment agreements, including the definition of a change in control, cause and good reason, and the estimated value of benefits to the NEOs under the employment agreements applicable to them upon a change in control or the termination of their employment as of December 31, 20162017, see “Executive Compensation - Potential Payments Upon Termination of Employment or Change in Control.”

MrMessrs. White doesPowell and McCarver do not have employment agreementagreements with the Company but isare entitled to certain severance benefits pursuant to a letter agreement with the Company.

Outstanding Equity Awards at 20162017 Fiscal Year End



Name	Option Awards						Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)	Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($) (8)
Mr. Gray	30,000	—		—	10.00	4/6/2021
	350,000	—		—	11.25	12/12/2024
	750,000	750,000	(1)	—	11.25	2/25/2025
							175,000	(9)	1,750,000

Mr. Reich	180,000	180,000	(2)	—	11.25	4/1/2025
	—	140,000	(3)	—	10.00	8/14/2027
							132,500	(10)(11)(12)	1,325,000

Mr. Moss	125,000	375,000	(4)	—	10.00	6/20/2026
							150,000	(13)(14)	1,500,000

Mr. Powell	—	230,000	(5)	—	10.00	2/9/2027
							75,000	(15)	750,000

Mr. McCarver	—	50,000	(6)	—	10.00	2/9/2027
	—	100,000	(7)	—	10.00	11/1/2027
							50,000	(16)	500,000


(1)	375,000 options vest on each February 25, 2017, February 25, 2018,2018 and February 25, 2019, provided that the executive remains in continuous service on each applicable vesting date.


(2)	90,000 options vest on each April 1, 2017, April 1, 2018,2018 and April 1, 2019, provided that the executive remains in continuous service on each applicable vesting date.


(3)	12535,000 options vest on each June 20, 2017, June 20August 14, 2018, JuneAugust 2014, 2019, JuneAugust 2014, 2020 and August 14, 2021, provided that the executive remains in continuous service on each applicable vesting date.


(4)	90125,000 options vest on each March 9, 2017, March 9June 20, 2018, MarchJune 920, 2019, March 9and June 20, 2020, provided that the executive remains in continuous service on each applicable vesting date.


(5)	6257,500 options vest on each of October 4, 2017, October 4February 9, 2018, October 4February 9, 2019, October 4February 9, 2020 and February 9, 2021, provided that the executive remains in continuous service on each applicable vesting date.


(6)	Based on fair market value of Syniverse Corporation common stock of $10.00 as of December 31, 2016. 12,500 options vest on each of February 9, 2018, February 9, 2019, February 9, 2020 and February 9, 2021, provided that the executive remains in continuous service on each applicable vesting date.


(7)	25,000 options vest on each of November 1, 2018, November 1, 2019, November 1, 2020 and November 1, 2021, provided that the executive remains in continuous service on each applicable vesting date.


(8)	Based on fair market value of Syniverse Corporation common stock of $10.00 as of December 31, 2017.


(79)	245,000 shares vest on February 25, 2017 and 175,000 shares vest on February 25, 2018, provided that the executive remains in continued service through each applicablesuch vesting date.


(810)	31,500 shares vest on April 1, 2017 and 22,500 shares vest on April 1, 2018, provided that the executive remains in continued service through each applicable vesting date.

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(911)	15,000 shares vest on May 3, 2018 and November 3, 2019, provided that the executive remains in continued service through the vesting date.


(1012)	40,000 shares vest on February 14, 2019 and August 14, 2020, provided that the executive remains in continued service through the vesting date.


(13)	50,000 shares vest on December 20, 2017 and June 20, 2019, provided that the executive remains in continued service through each applicable vesting date.


(1114)	3650,000 shares vest on March 9, 2017, 31,500 shares vest on March 9, 2018 and 22,500 shares vest on March 9, 2019February 14, 2019 and August 14, 2020, provided that the executive remains in continued service through each applicable vesting date.


(1215)	37,500 shares vest on AprilAugust 49, 2018 and October 4, 2019February 9, 2020, provided that the executive remains in continued service through each applicable vesting date.


(16)	25,000 shares vest on May 1, 2019 and November 1, 2020, provided that the executive remains in continued service through each applicable vesting date.

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20162017 Option Exercises and Stock Vested



	Option Awards		Stock Awards
Name	Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($)	Number of Shares Acquired on Vesting (#)	Value Realized on Vesting ($)
Mr. Gray	—	—	245,000	2,450,000
Mr. Reich	—	—	31,500	315,000
Mr. Moss	—	—	50,000	500,000
Mr. Powell	—	—	—	—
Mr. McCarver	—	—	—	—

Potential Payments Upon Termination of Employment or Change in Control

Messrs. Gray, Reich, Moss and RatnerMoss

The employment agreements with Messrs. Gray, Reich, Moss and RatnerMoss specify the payments and benefits to which each are entitled upon a termination of employment for specified reasons. Pursuant to their employment agreements, each executive will be entitled to receive severance benefits if (i) the executive’s employment is terminated by the Company without cause, (ii) the executive resigns for good reason, (iii) the executive’s employment terminates by reason of the Company’s non-renewal of the agreement, (iv) the executive’s employment terminates by reason of his death or disability (other than with respect to Mr. Gray), or (v) the executive’s employment is terminated purportedly for cause but without following the specified procedures for such a termination in the agreement. In each such case, the executive will be entitled to the following benefits: (i) a severance payment equal to one times his then-current base salary, payable in installments over one year; (ii) an amount equal to his target bonus for the then-current fiscal year, payable at such time as the bonus would have been paid absent the executive’s termination of employment; and (iii) payment of the employee-portion of any COBRA premiums for 12 months. In addition, depending upon the date of termination, a portion of the stock options and restricted stock units (RSUs) granted to Messrs. Gray, Reich, and Moss or Ratner, to the extent not already vested, will become vested as described below.

A portion of Mr. Gray’s stock options and RSUs granted in 2015 to the extent not already vested, will become vested, based upon the date of termination, as follows:


•	if the date of termination occurs during the period beginning on February 26, 2016 and ending on February 25, 2017, 50% of the stock option will become vested and exercisable and 75% of the RSUs will automatically become vested;


•	if the date of termination occurs during the period beginning on February 26, 2017 and ending on February 25, 2018, 75% of the stock option2017 and ending on February 25, 2018, 75% of the stock options will become vested and exercisable and 100% of the RSUs will automatically become vested;


•	if the date of termination occurs during the period beginning on February 26, 2018 and ending on February 25, 2019, 100% of the stock optionoptions will become vested and exercisable; and


•	if the date of termination occurs during the 180-day period prior to a change in control of the Company, all of the stock optionoptions will become vested and exercisable and all of the RSUs will automatically become vested.

A portion of Mr. Reich’s stock options and RSUs granted in 2015 to the extent not already vested, will become vested, based upon the date of termination, as follows:


•72	if the date of termination occurs during the period beginning on April 2, 2016 and ending on April 1, 2017, 50% of the stock option will become vested and exercisable and 75% of the RSUs will automatically become vested; Table of Contents


•	if the date of termination occurs during the period beginning on April 2, 2017 and ending on April 1, 2018, 75% of the stock optionoptions granted in 2015 will become vested and exercisable and 100% of the RSUs granted in 2015 will automatically become vested;


•	if the date of termination occurs during the period beginning on April 2, 2018 and ending on April 1, 2019, 100% of the stock optionoptions granted in 2015 will become vested and exercisable; and


•	if the date of termination occurs during the 180-day period prior to a change in control of the Company, all of the stock option will become vested and exercisable and all of the RSUs will automatically become vested.

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A portion of Mr. Reich’s RSUs granted in 2016 to the extent not already vested, will become vested, based upon the date of termination, as follows:


•	if the date of termination occurs during the period beginning on November 2, 2016 and ending on May 2, 2018, 50% of the RSUs will automatically become vested;


•	if the date of termination occurs during the period beginning on May 3, 2018 and ending on November 2, 2019, 100% of the RSUs will automatically become vested; and


•	if the date of termination occurs during the 180-day period prior to a change in control of the Company, all of the RSUsoptions granted in 2015 will become vested and exercisable and all of the RSUs granted in 2015 will automatically become vested.

A portion of Mr. Moss’ stock options granted in 2016 to the extent not already vested, will become vested, based upon the date of termination, as follows:


•	if the date of termination occurs during the period beginning on June 20, 2016 and ending on June 20, 2017, 25% of the stock option will become vested and exercisable;


•	if the date of termination occurs during the period beginning on June 21, 2017 and ending on June 20, 2018, 50% of the stock option21, 2017 and ending on June 20, 2018, 50% of the stock options granted in 2016 will become vested and exercisable;


•	if the date of termination occurs during the period beginning on June 21, 2018 and ending on June 20, 2019, 75% of the stock optionoptions granted in 2016 will become vested and exercisable;


•	if the date of termination occurs during the period beginning on June 21, 2019 and ending on June 20, 2020, 100% of the stock optionoptions granted in 2016 will become vested and exercisable; and


•	if the date of termination occurs during the 180-day period prior to a change in control of the Company, all of the stock optionoptions granted in 2016 will become vested and exercisable and all of the RSUs will automatically become vested.

A portion of Mr. Moss’ RSUs granted in 2016 to the extent not already vested, will become vested, based upon the date of termination, as follows:


•	if the date of termination occurs during the period beginning on June 20, 2016 and ending on December 20, 2017, 50% of the RSUs will automatically become vested;


•	if the date of termination occurs during the period beginning on December 21, 2017 and ending on June 20, 2019, 100% of the RSUsDecember 21, 2017 and ending on June 20, 2019, 100% of the RSUs granted in 2016 will automatically become vested; and


•	if the date of termination occurs during the 180-day period prior to a change in control of the Company, all of the RSUs will automatically become vested.

A portion of Mr. Ratner’s stock options and RSUs granted in 2016 to the extent not already vested, will become vested, based upon the date of termination, as follows:


•	if the date of termination occurs during the period beginning on March 9, 2016 and ending on March 8, 2017, 25% of the stock option will become vested and exercisable and 40% of the RSUs will automatically become vested;


•	if the date of termination occurs during the period beginning on March 9, 2017 and ending on March 8, 2018, 50% of the stock option will become vested and exercisable and 75% of the RSUs will automatically become vested;


•	if the date of termination occurs during the period beginning on March 9, 2018 and ending on March 8, 2019, 75% of the stock option will become vested and exercisable and 100% of the RSUs will automatically become vested;


•	if the date of termination occurs during the period beginning on March 9, 2019 and ending on March 8, 2020, 100% of the stock option will become vested and exercisable; and


•	if the date of termination occurs during the 180-day period prior to a change in control of the Company, all of the stock option will become vested and exercisable and all of the RSUs will automatically become vested.

For purposes of Messrs. Gray, Reich, Mossgranted in 2016 will automatically become vested.

For purposes of Messrs. Gray, Reich and RatnerMoss’s employment agreements, “Cause” generally means the commission of a felony or crime involving moral turpitude or the commission of fraud; conduct tending to bring substantial public disgrace or disrepute on the Company; substantial and repeated failure to perform duties; gross negligence or willful misconduct with respect to the Company; or breach of the executive’s covenants regarding confidentiality, noncompetition, nonsolicitation and/or nondisparagement. “Good Reason” generally means: assigning the executive duties which, in the aggregate, represent a material diminution in executive’s title, authority or responsibilities; reducing the base salary or target bonus of the executive; materially reducing the benefits the executive receives other than as a reduction in benefits generally

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applicable to senior executives of the Company; in connection with a change in control prior to an initial public offering, the failure of the acquiring entity to assume the employment agreement; or, other than with respect to Mr. Gray, requiring the executive to relocate outside of a 50 mile radius from the executive’s current employment location.

In addition, Messrs. Gray, Reich, Moss and RatnerMoss’s employment agreements provide that the executives’ unvested stock options and RSUs will become immediately vested upon a change in control, provided that the executive is employed by us on the date of the change in control. For purposes of Messrs. Gray, Reich, Moss and RatnerMoss’s employment agreements, “Change in Control” generally means any transaction or series of transactions pursuant to which any person or group other than Carlyle in the aggregate acquire(s) (a) beneficial ownership of equity securities of our parent possessing the voting power to elect a majority of the Board of Directors (whether by merger, consolidation, reorganization, combination, sale or transfer of our parent’s equity, securityholder or voting agreement, proxy, power of attorney or otherwise), or (b) all or substantially all of our parent’s assets determined on a consolidated basis.

Pursuant to their employment agreements each of Messrs. Gray, Reich, Moss and RatnerMoss have agreed to limitations on his ability to disclose any of the Company’s confidential information, and acknowledged that all inventions relating to his employment belong to the Company. Messrs. Gray, Reich, Moss and RatnerMoss have also agreed not to compete with us anywhere in the world or to solicit our employees for a period of one year following the termination of his employment with the Company.

Mr. White

Messrs. Powell and McCarver

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Pursuant to a letter agreement with the Company, if Mr. Whiteeach of Messrs. Powell and McCarver’s employment is terminated by the Company without cause, Mr. Whiteeach executive will be entitled to a severance payment equal to one times histhe executive’s then-current base salary, payable in installments over one year. Pursuant to his

Stock Option Agreements and Restricted Stock Unit Award Agreements

Pursuant to their stock option agreements and restricted stock unit award agreements, Mr. Whiteeach of Messrs. Gray, Reich, Moss, Powell and McCarver’s stock options and RSUs will become fully vested and exercisable if his employment is terminated without cause within the 12-month period immediately following a change in control. For purposes of these agreements, “Cause” generally means the failure to substantially perform the executive’s duties; failure to carry out, or comply with any lawful and reasonable directive of the Board of Directors or the executive’s immediate supervisor; the commission, conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony, indictable offense or crime involving moral turpitude; unlawful use or possession of illegal drugs on the Company’s premises or while performing the executive’s duties and responsibilities; or the commission of an act of fraud, embezzlement, misappropriation, misconduct or breach of fiduciary duty against the Company. “Change in Control” has the same meaning as provided above for the employment agreements of Messrs. Gray, Reich, Moss and RatnerMoss.

Summary of Potential Payments Upon Termination of Employment or Upon the Occurrence of a Change in Control

The following table shows the estimated value of benefits to Messrs. Gray, Reich, Moss, RatnerPowell and WhiteMcCarver if their employment had been terminated under the various circumstances described below as of December 31, 20162017, or upon the occurrence of a Change in Control. The amounts shown in the table exclude accrued but unpaid base salary, unreimbursed employment-related expenses, accrued but unpaid vacation pay (which payments and reimbursements would be made to all salaried employees), distributions under our 401(k) retirement plan (which plan is generally available to all of our US-salaried employees), and the value of equity awards that were vested by their terms as of December 31, 20162017.

73 Two of our named executive officers, Messrs. Gray and Moss, terminated employment with the Company following December 31, 2017, and will not be entitled to any severance benefits, except as provided below:


•	Effective February 25, 2018, Mr. Gray ceased to be an employee of Syniverse, but remains a member of the Board of Directors. Our parent adjusted the vesting requirements for Mr. Gray’s unvested stock options, such that the 25% of Mr. Gray’s options that are scheduled to vest after February 25, 2018 will continue to vest so long as Mr. Gray remains a member of the Board of Directors.


•	On February 23, 2018, the Company announced Mr. Moss has decided to leave the Company effective March 16, 2018. In connection with leaving the Company, Mr. Moss will receive the benefits outlined in his employment agreement and described below under “Qualifying Termination (Not in Connection with a Change in Control).”

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	Qualifying Termination (Not in Connection with a Change in Control) ($) (10)		Qualifying Termination (Following or in Connection with a Change in Control) ($) (10)		Termination Other than a Qualifying Termination (Not in Connection with a Change in Control) ($) (10)	Change in Control (Absent Termination)		Disability (11)
Mr. Gray
Salary (1)	750,000		750,000		—	—		—
Bonus (2)	750,000		750,000		—	—		—
COBRA Premium (3)	167		167		—	—		—
Value of Unvested Restricted Stock (4)	1,750,000	(5)	1,750,000	(8)	—	1,750,000	(9)	1,750,000	(5)
Value of Unvested Options (4)	—	(5)	—	(8)	—	—	(9)	—	(5)
TOTAL	3,250,167		3,250,167		—	1,750,000		1,750,000

Mr. Reich
Salary (1)	450,000		450,000		—	—		450,000
Bonus (2)	360,000		360,000		—	—		360,000
COBRA Premium (3)	17,268		17,268		—	—		17,268
Value of Unvested Restricted Stock (4)	225,000	(6)	1,325,000	(8)	—	1,325,000	(9)	225,000	(6)
Value of Unvested Options (4)	—	(6)	—	(8)	—	—	(9)	—	(6)
TOTAL	1,052,268		2,152,268		—	1,325,000		1,052,268

Mr. Moss
Salary (1)	460,000		460,000		—	—		460,000
Bonus (2)	368,000		368,000		—	—		368,000
COBRA Premium (3)	19,030		19,030		—	—		19,030
Value of Unvested Restricted Stock (4)	500,000	(7)	1,500,000	(8)	—	1,500,000	(9)	500,000	(7)
Value of Unvested Options (4)	—	(7)	—	(8)	—	—	(9)	—	(7)
TOTAL	1,347,030		2,347,030		—	1,500,000		1,347,030

Mr. Powell
Salary (1)	330,000		330,000		—	—		—
Bonus (2)	198,000		198,000		—	—		—
COBRA Premium (3)	21,161		21,161		—	—		—
Value of Unvested Restricted Stock (4)	—		750,000	(8)	—	—		—
Value of Unvested Options (4)	—		—	(8)	—	—		—
TOTAL	549,161		1,299,161		—	—		—

Mr. McCarver
Salary (1)	300,000		300,000		—	—		—
COBRA Premium (3)	21,161		21,161		—	—		—
Value of Unvested Restricted Stock (4)	—		500,000	(8)	—	—		—
Value of Unvested Options (4)	—		—	(8)	—	—		—
TOTAL	321,161		821,161		—	—		—


(1)	Reflects the executive’s base salary as of December 31, 20162017 which amount would be payable in installments over one year.


(2)	Reflects 100% of the executive’s 20172018 target bonus as of December 31, 20162017, payable at such time as the bonus would have been paid absent the executive’s termination of employment.


(3)	Represents an estimated value, based on current rates, for payment of the employee-portion of anyentire COBRA premiums for 12 months.

(4)

For purposes of this calculation, the value of the unvested stock options is based on the difference between the fair market value of our common stock on December 31, 20162017 ($10.00) and the exercise price of the unvested option. Excludes any unvested stock options having an exercise price that is equal to or greater than the fair market value of our common stock on December 31, 20162017 ($10.00). The value of unvested shares of RSUs is based on the fair market value of our common stock on December 31, 20162017 ($10.00).

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(5)	Pursuant to Mr. Gray’s employment agreement, if his date of termination occurs during the period beginning on February 26, 20162017 and ending on February 25, 20172018, 25% of the stock options granted on February 25, 2015 will immediately become vested and exercisable and 3525% of the RSUs granted on February 25, 2015 will become automatically vested.

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(6)	Pursuant to Mr. Reich’s employment agreement, if his date of termination occurs during the period beginning on April 2, 20162017 and ending on April 1, 20172018, 25% of the stock options granted on April 1, 2015 will immediately become vested and exercisable and 3525% of the RSUs granted on April 1, 2015 will become automatically vested.


(7)	Pursuant to Mr. ReichMoss’s employment agreement, if his date of termination occurs during the period beginning on November 2, 2016 and ending on May 2, 2018, 50% of his RSUs granted on November 2, 2016 will automatically become vested.

(8)

Pursuant to Mr. Moss’ employment agreements, if his date of termination occurs during the period beginning on June 20, 2016June 21, 2017 and ending on June 20, 20172018, 25% of the stock options granted on AprilJune 120, 20152016 will immediately become vested and exercisable and if his date of termination occurs during the period beginning on June 20December 21, 20162017 and ending on DecemberJune 20, 20172019, 50% of the RSUs granted on June 20, 2016 will become automatically vested.


(9)	Pursuant to Mr. Ratner’s employment agreement, if his date of termination occurs during the period beginning on March 9, 2016 and ending on March 8, 2017, 25% of the stock options granted on March 9, 2016 will immediately become vested and exercisable and 40% of the RSUs granted on March 9, 2016 will become automatically vested.


(108)	Pursuant to the executiveexecutives’s stock optionaward agreement, if the executiveexecutives’s employment is terminated within the 12-month period immediately following a change in control, all of the executives’ stock options and RSUs automatically become vested and exercisable.


(119)	Messrs. Gray, Reich, Moss and RatnerMoss’s employment agreements provide that the executives’ unvested stock options and RSUs will become immediately vested upon a change in control, provided that the executive is employed by us on the date of the change in control.


(1210)	For purposes of the table, the term “Qualifying Termination” for each executive refers to a termination of employment that would trigger severance payments for such executive as described above in the narrative to this table.


(1311)	If an executive meets the requirements for disability under our long-term disability plan he is also entitled to receive benefits under our long-term disability plan.

Compensation Risk Assessment

We have analyzed the potential risks arising from our compensation policies and practices and determined that there are no such risks that are reasonably likely to have a material adverse effect on the Company.

20162017 Director Compensation

In 20162017, each director not employed by The Carlyle Group or the Company on January 1, 20162017, received an annual retainer of $6075,000. The Chairman of the Audit Committee and the Nominating and Corporate Governance Committee, received an additional $1525,000 and each$15,000, respectively. Each non-Chair member of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee received an additional $7,500. Each director may elect to receive up to fifty percent of his cash fees in the form of shares of our parent’s common stock. In 20152017, no director made such an election. In October 20162017, each director not employed by The Carlyle Group or the Company received a one-time grant of 3015,000 restricted stock units.

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20162017 Director Compensation Table

The following table provides information about the compensation earned by members of the Board of Directors during 20162017:



Name	Fees Earned or Paid in Cash ($)	Stock Awards (1)	Total
James A. Attwood, Jr.	—	—	—
Tony G. Holcombe	82,500	150,000	232,500
Kristen Ankerbrandt	—	—	—
Kevin L. Beebe	97,500	150,000	247,500
Laura Desmond	82,500	150,000	232,500
Julius Genachowski	—	—	—
Stephen C. Gray	—	—	—
Mark J. Johnson (2)	82,500	150,000	232,500
Daniel S. Mead	102,500	150,000	252,500
Raymond A. Ranelli	100,000	150,000	250,000


(1)	Reflects the grant date fair value of restricted stock unit awards granted in the applicable year2017, determined in accordance with the accounting guidance for share-based compensation under ASC Topic 718. The assumptions used in the calculation of the

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grant date fair values of the restricted stock unit awards are included in Note 10 to our consolidated financial statements included in this Annual Report on Form 10-K.


(2)	Mr. Johnson resigned from the Board of Directors in January 2018.

As of December 31, 20162017, the Directors held the number of outstanding option and restricted stock unit awards listed below:



	Number of Securities Underlying Unexercised Options	Option Exercise Price ($)		Option Expiration Date	Number of Restricted Stock Unit Awards
James A. Atwood, Jr.	—	$	—		—
Tony G. Holcombe	50,000	$	10.00	7/1/2021	15,000
Kristen Ankerbrandt	—	$	—		—
Kevin L. Beebe	30,000	$	10.00	4/6/2021	15,000
Laura Desmond	—	$	—		15,000
Julius Genachowski	—	$	—		—
Stephen C. Gray	30,000	$	10.00	4/6/2021	—
Mark J. Johnson (1)	—	$	—		15,000
Daniel S. Mead	—	$	—		15,000
Raymond A. Ranelli	30,000	$	10.00	4/6/2021	15,000


(1)	Mr. Johnson resigned from the Board of Directors in January 2018.


ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

We are an indirect, wholly-owned subsidiary of Syniverse Corporation, a Delaware corporation. All of our outstanding capital stock is owned by The Carlyle Group and certain of its affiliates and co-investors, except as discussed below.

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of February 28, 20172018 for:

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•	each of our named executive officers;


•	each of our directors;


•	all of our named executive officers and directors as a group; and


•	each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock.

We have determined beneficial ownership in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by the footnotes below, to our knowledge, the persons and entities named in the table below have sole voting and sole investment power with respect to all shares of common stock that they beneficially owned, subject to applicable community property laws.

For funds affiliated with the Carlyle group and executive officers and directors in the table, applicable percentage ownership is based on 121,246725,105157 shares of common stock outstanding at February 28, 20172018. The number of shares of common stock beneficially owned by an executive officer or director is based on their outstanding shares of common stock, stock options that are currently exercisable or exercisable within 60 days of February 28, 20172018 and all restricted stock held by such persons as of February 28, 20172018.

Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Syniverse Corporation, 8125 Highwoods Palm Way, Tampa, FL 33647.

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Name of Beneficial Owner	Beneficial Ownership
	Number	Percent
Funds Affiliated with the Carlyle Group (1)	120,000,000	98.6	%
Named Executive Officers:
Stephen C. Gray (2)	1,836,143	1.5	%
Robert F. Reich (3)	451,539	*
Timothy Moss (4)	305,485	*
Norris Powell (5)	132,500	*
Michael McCarver (6)	62,500	*

Directors:
James A. Attwood, Jr.	—	*
Tony G. Holcombe (7)	135,000	*
Kristen Ankerbrandt	—	*
Kevin L. Beebe (8)	169,000	*
Laura Desmond (9)	15,000	*
Julius Genachowski	—	*
Dean Douglas (10)	1,000,000	*
Daniel S. Mead (11)	15,000	*
Raymond A. Ranelli (12)	84,909	*
All executive officers and directors as a group (18 persons) (13)	5,273,294	3.4	%

___________________


*	Less than 1%

(1)

Represents shares held by the following investment funds associated with Carlyle: Carlyle Partners V, L.P., Carlyle Partners V-A, L.P., CP V Coinvestment A, L.P., and CP V Coinvestment B, L.P. and Carlyle Syniverse Co-Investment L.P., which are together referred to as the “Carlyle Funds.” Carlyle Partners, V, L.P. holds 101,609,306 shares, Carlyle Partners V-A, L.P. holds 2,045,017 shares, CP V Coinvestment A, L.P. holds 3,574,000 shares, and CP V Coinvestment B, L.P. holds 731,677 shares and Carlyle Syniverse Co-Investment L.P. holds 12,040,000 shares. Carlyle Group Management L.L.C. is the general partner of The Carlyle Group L.P., which is a publicly traded entity listed on NASDAQ. The Carlyle Group L.P. is the managing member of Carlyle Holdings II GP L.L.C., which is the general partner of Carlyle Holdings II L.P., which is the general partner of TC Group Cayman Investment Holdings, L.P., which is the general partner of TC Group

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Cayman Investment Holdings Sub L.P., which is the managing member of TC Group V, L.L.C., which is the general partner of TC Group V, L.P., which is the general partner of each of the Carlyle Funds. Voting and investment determinations with respect to the shares held by the Carlyle Funds are made by an investment committee of TC Group V, L.P. comprised of the following persons: Daniel D’Aniello, William Conway, David Rubenstein, Kewsong Lee, Louis Gerstner, Allan Holt, Peter Clare, Gregor Boehm and Thomas Mayrhofer. Each member of the investment committee of TC Group V, L.P. disclaims beneficial ownership of such shares. The address of TC Group Cayman Investment Holdings, L.P. and TC Group Cayman Investment Holdings Sub L.P. is c/o Walkers Corporate Services Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9001, Cayman Islands. The address of each of the other persons or entities named in this footnote is c/o The Carlyle Group, 1001 Pennsylvania Ave., N.W., Suite 220 South, Washington, DC 20004.


(2)	Mr. Gray also serves as a director of the Company. Includes 10331,000143 shares owned, 7551,130,000 vested options, 420,000 shares of restricted common stock and 375,000 options that will vest within 60 days of February 28, 20172018.


(3)	Includes 2649,154039 shares owned, 90180,000 vested options, 84132,000 of500 restricted common stockstock units and 90,000 options that will vest within 60 days of February 28, 20172018.


(4)	Includes 10030,485 shares owned, 125,000 shares ofvested options and 150,000 restricted common stockstock units.


(5)	Includes 9075,000 shares of restricted common stock units and 9057,000500 options that will vest within 60 days of February 28, 20172018.


(6)	Includes 7512,500 vested options and 50,000 shares of restricted common stockstock units.


(7)	Includes 5085,000 shares owned, and 50,000 vested options and 30,000 shares of restricted common stock.


(8)	Includes 100139,000 shares owned, and 30,000 vested options and 30,000 shares of restricted common stock.


(9)	Includes 3015,000 shares of restricted common stock.

owned.

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(10)	Includes 20,409 shares owned, 30,000 vested options and 30,000 shares of 1,000,000 restricted common stockstock units.


(11)	Includes 356,723 shares owned, 115,000 shares owned.


(12)	Includes 54,909 shares owned and 30,000 vested options.


(13)	Includes 876,536 shares owned, 2,665128,332166 vested options, 1,264,000 shares of712,759 restricted common stockstock units and 555,000833 options that will vest within 60 days of February 28, 20172018.

Equity Compensation Plan Information

The Company did not have any equity compensation plans in place as of December 31, 20162017. However, the following table provides information as of December 31, 20162017, about the securities that may be issued by our parent under its existing equity compensation plans.



Plan Category	(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(2)	(b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(3)
Equity Compensation Plans Approved by Stockholders (1)	9,867,010	$	10.66	2,500,223
Equity Compensation Plans Not Approved by Stockholders	—	—		—
Total	9,867,010	$	10.66	2,500,223

___________________


(1)	2011 Equity Incentive Plan (the “2011 Plan”).


(2)	Reflects 8,952249,912251 options and 21,050617,000759 restricted stock units outstanding under the 2011 Plan as of December 31, 20162017.


(3)	All of such shares are available for issuance pursuant to grants of full-value stock awards.


ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Procedures for Review, Approval or Ratification of Related Party Transactions

We maintain a related person transactions policy pursuant to which related persons, namely our executives, directors and principal stockholders, and their immediate family members, are not permitted to enter into certain transactions, or materially modify or amend an ongoing transaction, with us, in which the amount involved exceeds $120,000, without the consent of our Audit Committee or any designated member of the Audit Committee. Any request for us to enter into or materially modify or amend certain such transactions is required to be presented to our Audit Committee for review, consideration and approval. All of our directors and executive officers are required to report any such related person transaction. In approving or rejecting the proposed transaction, our Audit Committee will take into account, among other factors it deems appropriate, whether the proposed related person transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. Under the policy, if we should

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discover related person transactions that have not been approved, our Audit Committee will be notified and will determine the appropriate action, including ratification, rescission or amendment of the transaction.

The Company asks its directors to complete a questionnaire each year that is designed to determine, among other things, whether the director is involved in any related person transactions with the Company. In addition, as part of its overall controls process the Company requires each officer of the Company to complete a questionnaire each quarter which specifically asks the officers if they are aware of any related person transactions.

Consulting Agreement with Carlyle

On January 13, 2011, we entered into a ten-year consulting agreement with Carlyle under which we pay Carlyle a fee for consulting services Carlyle provides to us and our subsidiaries. During the year ended December 31, 20162017 we recorded $3.23 million of expenses associated with the consulting fee and the reimbursement of out-of-pocket expenses. During the years ended December 31, 20152016 and 20142015 we recorded $3.2 million and $3.1 million , respectively, of expenses associated with the consulting fee and the reimbursement of out-of-pocket expenses.

Carlyle, from time to time, participates as a debt holder within the syndicate under our Initial Term Loans and Tranche B Term Loans. As of December 31, 2017, Carlyle held $19.4 million and $24.4 million of our Initial Term Loans and Tranche

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B Term Loans, respectively. As of December 31, 2016, Carlyle held $37.2 million and $25.6 million of our Initial Term Loans and Tranche B Term Loans, respectively. As of December 31, 2015, Carlyle held $51.0 million and $20.5 million of our Initial Term Loans and Tranche B Term Loans, respectively.

From time to time, and in the ordinary course of business we may engage other Carlyle portfolio companies as service providers and other Carlyle portfolio companies may engage us as a service provider. Revenues and expenses associated with these related parties were not material during the years ended December 31, 20162017, 20152016 and 20142015.

Employment Agreements

See “Executive Compensation - Compensation Discussion and Analysis - Employment Agreements,” for a description of the employment agreements with our named executive officers.

Director Independence

Information on independence of our Board is included above under Item 10. “Directors, Executive Officers and Corporate Governance-Independence of Board Members.”


ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table presents fees for professional audit and other services rendered by our independent registered certified public accountant, Ernst & Young LLP, for the years ended December 31, 20162017 and 20152016.



	Year Ended December 31,
	2017		2016
Audit fees (1)	$	1,992,525	$	2,010,956
Audit-related fees (2)	708,500		684,392
Tax fees (3)	44,049		50,000
All other (4)	—		—
Fees	$	2,745,074	$	2,745,348

____________________


(1)	Audit fees include fees for our fiscal year-end audit of the consolidated financial statements, statutory audits and review of financial statements included in our Form 10-Q Quarterly Reports.


(2)	Audit-related fees include fees for internal control attestation services and comfort letter procedures in connection with the Exchange Offer.


(3)	Tax fees include fees for professional services rendered in connection with tax compliance.


(4)	All other includes fees for subscription-based accounting research software.

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not included in the above three categories.

Policy on Audit Committee Pre-Approval of Audit, Audit-Related and Permissible Non-Audit Services of the Independent Registered Certified Public Accountants

The Audit Committee’s policy is to pre-approve all audit, audit-related and permissible non-audit services provided by the independent registered certified public accountant in order to assure that the provision of such services does not impair the auditor’s independence. These services may include audit services, audit-related services, tax services and other services. The Audit Committee has adopted pre-approval policies and procedures detailed as to particular services and particular amounts and delegated pre-approval authority to the chairman of the Audit Committee. Under this policy, the decision of any Audit Committee member to whom pre-approval authority has been delegated must be presented to the full Audit Committee at the next scheduled meeting. Management is required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered certified public accountant in accordance with this pre-approval policy. During the years ended December 31, 20162017 and 20152016, all services were pre-approved by the Audit Committee or a designated member of the Audit Committee in accordance with this policy.

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PART IV


ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES



			Page
(a)	1.	Index to Consolidated Financial Statements	82
		Report of Independent Registered Certified Public Accounting Firm	83
		Consolidated Balance Sheets	84
		Consolidated Statements of Operations	85
		Consolidated Statements of Comprehensive Income (Loss)	86
		Consolidated Statements of Changes in Stockholder Equity	87
		Consolidated Statements of Cash Flows	88
		Notes to Consolidated Financial Statements	89
	2.	Financial Statement Schedule
		Schedule II—Valuation and Qualifying Accounts	126
		All other schedules have been omitted since the required information is either not applicable or not present in amounts sufficient to require submission of the schedule, or because the information required is included in our consolidated financial statements or notes thereto.
(b)		Exhibit Index

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

SYNIVERSE HOLDINGS, INC.



Consolidated Financial Statements
Report of Independent Registered Certified Public Accounting Firm	83
Consolidated Balance Sheets	84
Consolidated Statements of Operations	85
Consolidated Statements of Comprehensive Income (Loss)	86
Consolidated Statements of Changes in Stockholder Equity	87
Consolidated Statements of Cash Flows	88
Notes to Consolidated Financial Statements	89

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REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholder of Syniverse Holdings, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Syniverse Holdings, Inc. (the Company) as of December 31, 20162017 and 20152016, and the related consolidated statements of operations, comprehensive income (loss, changes in stockholder equity and), stockholder equity and cash flows for the years then ended, and the related notes and schedules (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2016. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule2017, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’'s management. Our responsibility is to express an opinion on thesethe Company’s financial statements and schedule based on our audits. based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States)PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We, whether due to error or fraud. The Company is not required to have, nor were notwe engaged to perform, an audit of the Company’sits internal control over financial reporting. OurAs part of our audits included considerationwe are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’'s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements. An auditOur audits also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessingincluded evaluating the accounting principles used and significant estimates made by management, andas well as evaluating the overall presentation of the financial statement presentationstatements. We believe that our audits provide a reasonable basis for our opinion.

In our opinion,

We have served as the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Syniverse Holdings, Inc. at December 31, 2016 and 2015, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth thereinCompany’s auditor since 2000.

/S/ Ernst & Young LLP

Tampa, Florida

March 714, 20172018

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SYNIVERSE HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)



	December 31,
	2017			2016
ASSETS
Current assets:
Cash and cash equivalents	$	127,677		$	136,174
Accounts receivable, net of allowances of $16,486 and $21,650, respectively	168,149			166,107
Income taxes receivable	4,134			8,296
Prepaid and other current assets	23,204			28,390
Total current assets	323,164			338,967
Property and equipment, net	93,203			108,782
Capitalized software, net	102,454			143,291
Goodwill	2,314,281			2,272,796
Identifiable intangibles, net	258,986			319,441
Deferred tax assets	3,608			1,338
Investment in unconsolidated subsidiaries	47,258			47,181
Other assets	4,972			8,304
Total assets	$	3,147,926		$	3,240,100
LIABILITIES AND STOCKHOLDER EQUITY
Current liabilities:
Accounts payable	$	20,837		$	30,557
Income taxes payable	4,784			5,049
Accrued liabilities	89,249			107,164
Deferred revenues	5,997			3,014
Current portion of capital lease obligation	6,410			16,354
Current portion of long-term debt, net of original issue discount and deferred financing costs	2,595			1,853
Total current liabilities	129,872			163,991
Long-term liabilities:
Deferred tax liabilities	73,793			112,730
Long-term capital lease obligation, net of current maturities	4,340			8,366
Long-term debt, net of original issue discount and deferred financing costs	1,940,613			1,993,596
Other long-term liabilities	38,901			45,215
Total liabilities	2,187,519			2,323,898
Commitments and contingencies (Note 14)
Stockholder equity:
Common stock $0.01 par value; one thousand shares authorized; issued and outstanding as of December 31, 2017 and 2016	—			—
Additional paid-in capital	1,275,944			1,265,752
Accumulated deficit	(261,615		)	(237,021		)
Accumulated other comprehensive loss	(63,226		)	(120,042		)
Total Syniverse Holdings, Inc. stockholder equity	951,103			908,689
Noncontrolling interest	9,304			7,513
Total equity	960,407			916,202
Total liabilities and stockholder equity	$	3,147,926		$	3,240,100

See accompanying notes to consolidated financial statements.

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SYNIVERSE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS)



	Year Ended December 31,
	2017			2016			2015

Revenues	$	793,512		$	781,892		$	861,475
Costs and expenses:
Cost of operations (excluding depreciation and amortization shown separately below)	349,698			355,394			389,163
Sales and marketing	69,916			70,803			76,693
General and administrative	99,919			114,550			135,812
Depreciation and amortization	194,550			208,130			215,167
Employee termination benefits	1,923			869			948
Restructuring	6,198			25,220			387
Acquisition	—			—			111
Other operating income	—			(5,499		)	—
	722,204			769,467			818,281
Operating income	71,308			12,425			43,194
Other income (expense), net:
Interest expense, net	(132,117		)	(122,837		)	(122,726		)
Loss on early extinguishment of debt, net	(5		)	—			—
Equity (loss) income in investees	(404		)	(466		)	36
Other, net	(3,527		)	2,901			(1,093		)
	(136,053		)	(120,402		)	(123,783		)
Loss before benefit from income taxes	(64,745		)	(107,977		)	(80,589		)
Benefit from income taxes	(43,946		)	(42,807		)	(31,277		)
Net loss	(20,799		)	(65,170		)	(49,312		)
Net income attributable to noncontrolling interest	3,795			2,013			1,279
Net loss attributable to Syniverse Holdings, Inc.	$	(24,594	)	$	(67,183	)	$	(50,591	)

See accompanying notes to consolidated financial statements.

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SYNIVERSE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(IN THOUSANDS)



	Year Ended December 31,
	2017			2016			2015
Net loss	$	(20,799	)	$	(65,170	)	$	(49,312	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	56,411			(22,184		)	(53,778		)
Amortization of unrecognized gain (loss) included in net periodic pension cost	712			(386		)	327
Other comprehensive income (loss)	57,123			(22,570		)	(53,451		)
Comprehensive income (loss)	36,324			(87,740		)	(102,763		)
Less: Comprehensive income attributable to noncontrolling interest	4,102			1,899			1,192
Comprehensive income (loss) attributable to Syniverse Holdings, Inc.	$	32,222		$	(89,639	)	$	(103,955	)

See accompanying notes to consolidated financial statements.

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SYNIVERSE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER EQUITY

(IN THOUSANDS)



	Stockholder of Syniverse Holdings, Inc.
	Common Stock
	Shares	Amount		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive (Loss) Income			Noncontrolling Interest			Total
Balance at December 31, 2014	1	$	—	$	1,232,108		$	(119,247	)	$	(44,222	)	$	7,153		$	1,075,792
Net (loss) income	—	—		—			(50,591		)	—			1,279			(49,312		)
Other comprehensive (loss) income
Foreign currency translation adjustment, net of tax benefit of $269	—	—		—			—			(53,691		)	(87		)	(53,778		)
Amortization of unrecognized gain included in net periodic pension cost, net of tax expense of $144	—	—		—			—			327			—			327
Stock-based compensation	—	—		17,262			—			—			—			17,262
Distribution to noncontrolling interest	—	—		—			—			—			(1,211		)	(1,211		)
Contribution from Syniverse Corporation	—	—		769			—			—			—			769
Balance at December 31, 2015	1	—		1,250,139			(169,838		)	(97,586		)	7,134			989,849
Net (loss) income	—	—		—			(67,183		)	—			2,013			(65,170		)
Other comprehensive (loss) income
Foreign currency translation adjustment, net of tax expense of $204	—	—		—			—			(22,070		)	(114		)	(22,184		)
Amortization of unrecognized loss included in net periodic pension cost, net of tax benefit of $171	—	—		—			—			(386		)	—			(386		)
Stock-based compensation	—	—		17,070			—			—			—			17,070
Distribution to noncontrolling interest	—	—		—			—			—			(1,520		)	(1,520		)
Distribution to Syniverse Corporation	—	—		(1,457		)	—			—			—			(1,457		)
Balance at December 31, 2016	1	—		1,265,752			(237,021		)	(120,042		)	7,513			916,202
Net (loss) income	—	—		—			(24,594		)	—			3,795			(20,799		)
Other comprehensive (loss) income
Foreign currency translation adjustment	—	—		—			—			56,104			307			56,411
Amortization of unrecognized gain included in net periodic pension cost, net of tax expense of $304	—	—		—			—			712			—			712
Stock-based compensation	—	—		13,707			—			—			—			13,707
Distribution to noncontrolling interest	—	—		—			—			—			(2,311		)	(2,311		)
Distribution to Syniverse Corporation	—	—		(3,515		)	—			—			—			(3,515		)
Balance at December 31, 2017	1	$	—	$	1,275,944		$	(261,615	)	$	(63,226	)	$	9,304		$	960,407

See accompanying notes to consolidated financial statements.

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SYNIVERSE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)



	Year Ended December 31,
	2017			2016			2015
Cash flows from operating activities
Net loss	$	(20,799	)	$	(65,170	)	$	(49,312	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	194,550			208,130			215,167
Amortization of original issue discount and deferred financing costs	13,272			14,592			13,258
Allowance for credit memos and uncollectible accounts	12,437			17,319			20,942
Deferred income tax benefit	(52,044		)	(51,260		)	(37,669		)
Debt modification costs	9,780			—			177
Loss on early extinguishment of debt, net	5			—			—
Stock-based compensation	14,209			17,070			17,262
Other operating income	—			(5,499		)	—
Other, net	1,576			2,327			(2,152		)
Changes in operating assets and liabilities:
Accounts receivable, net	(10,110		)	9,126			(23,777		)
Income tax receivable or payable	3,628			598			(559		)
Prepaid and other current assets	1,821			(3,747		)	2,941
Accounts payable	(10,292		)	(19,814		)	15,759
Accrued liabilities and deferred revenues	(14,373		)	6,803			(9,611		)
Other assets and other long-term liabilities	2,287			5,643			(588		)
Net cash provided by operating activities	145,947			136,118			161,838
Cash flows from investing activities
Capital expenditures	(61,187		)	(62,887		)	(68,220		)
Investment in unconsolidated subsidiaries	—			(40,479		)	—
Redemption (purchase) of certificate of deposit	506			390			(597		)
Proceeds from divestitures	—			10			2,225
Net cash used in investing activities	(60,681		)	(102,966		)	(66,592		)
Cash flows from financing activities
Proceeds from Revolving Credit Facility	—			15,000			—
Debt issuance costs paid	(1,143		)	—			—
Principal payments on Revolving Credit Facility	—			(15,000		)	(10,000		)
Debt modification costs paid	(9,780		)	—			(177		)
Principal payments on debt	(65,032		)	(36,243		)	—
Payments on capital lease obligation	(17,569		)	(16,450		)	(9,776		)
(Distribution to) contribution from Syniverse Corporation	(3,515		)	(6,456		)	769
Distribution to noncontrolling interest	(2,311		)	(1,520		)	(1,211		)
Net cash used in financing activities	(99,350		)	(60,669		)	(20,395		)
Effect of exchange rate changes on cash	5,587			(2,890		)	2,383
Net (decrease) increase in cash	(8,497		)	(30,407		)	77,234
Cash and cash equivalents at beginning of period	136,174			166,581			89,347
Cash and cash equivalents at end of period	$	127,677		$	136,174		$	166,581

Supplemental noncash investing and financing activities
Assets acquired under capital lease and non-cash financing obligations	$	5,963		$	7,950		$	27,200
Issuance of Syniverse Corporation stock for investment in unconsolidated subsidiaries	—			$	5,000		—
Supplemental cash flow information
Interest paid	$	117,739		$	108,948		$	109,435
Income taxes paid	$	4,651		$	7,857		$	7,624

See accompanying notes to consolidated financial statements.

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SYNIVERSE HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business

Syniverse is the leading global transaction processor that connects MNOs and enterprises in nearly 200 countries, enabling seamless mobile communications across disparate and rapidly evolving networks, devices and applications. We process transactions that include the authorization and delivery of end-user traffic, clearing of billing records and settlement of payments. We also offer a unique portfolio of intelligent policy and charging tools that enable our customers to use the real-time data generated by these transactions to deliver customized services and choices to their end users. Our portfolio of mission-critical services enables our customers to connect to the mobile ecosystem, optimize their businesses and enhance and personalize the mobile experience for their end-users. We process over 4 billion billable transactions daily and settle overapproximately $1615 billion annually between our customers.

We are the leader in LTE roaming and interconnect, offering superior connectivity critical for delivering the advanced mobile experiences end-users have come to expect from 4G and other advanced mobile network technologies, including VoLTE. Our IPX network currently directly connects to nearly half of the global mobile population. We believe our global footprint and operational scale are unmatched in our industry. As a trusted partner with over 2530 years of experience and a history of innovation, we believe we are well positioned to solve the technical, operational and financial complexities of the mobile ecosystem.

Our diverse customer base includes a broad range of participants in the mobile ecosystem, including approximately 1,000900 MNOs and 500450 OTTs and enterprises. Our customers include 9997 of the top 100 MNOs globally, such as Verizon Wireless, América Móvil, Vodafone, Telefónica, China Unicom and Reliance Communications; OTTs, including 3 of the 45 largest social networking sites in the U.S. and one of the largest social networking sites in China; and blue-chip enterprise customers, including the top 3 credit card networks worldwide and 2a multinational hotel brandsbrand.

The mobile experience is a critical and pervasive component of modern life and has become increasingly complex. Mobile devices have evolved from basic cellular phones to include smartphones, tablets, wearables and other connected devices that people now use to conduct an expanding set of activities in real-time, such as streaming videos, posting social media updates, working and shopping. As a result, today’s mobile experience requires seamless and ubiquitous connectivity and coordination between MNOs, OTTs and enterprises across disparate and rapidly evolving networks, devices and applications. The failure to integrate any of these elements can disrupt service, resulting in frustrated end-users, erosion of our customers’ brands and loss of revenue by our customers. Our proprietary services bridge these technological and operational complexities.

Syniverse provides approximately 60 mission-critical services to manage the real-time exchange of information and traffic across the mobile ecosystem, enhance our customers’ brands and provide valuable intelligence about end-users. Our customers demand, and we deliver, high quality service as evidenced by our over 99.999% network availability. Our comprehensive suite of Mobile Transaction Services and Enterprise & Intelligence Solutions includes the services described below.

Mobile Transaction Services: Transaction-based services that are designed to support the long-term success of our MNO customers. Through Mobile Transaction Services, we:


•	Clear, process and exchange end-user billing records.


•	Process and settle payments between participants in the mobile ecosystem.


•	Activate, authenticate and authorize end-user mobile activities.


•	Manage the worldwide routing and delivery of text (SMS), multimedia (MMS) and next generation messaging.


•	Provide data transport services over our global IP data network regardless of technology protocol.


•	Provide intelligent policy and charging tools that enable our customers to use real-time data for improved end-user experience.


•	Provide risk management tools to prevent fraudulent activity on operator networks and identify problem areas in the end to end billing cycle.

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Enterprise & Intelligence Solutions: Services that bridge OTTs and enterprises with MNOs and incorporate our real-time intelligence capabilities to enable all of our customers to serve their end-users. Through Enterprise & Intelligence Solutions, we:


•	Connect enterprises to the mobile ecosystem to allow them to reliably reach and interact with their customers and employees via mobile devices.


•	Bridge OTTs to the mobile ecosystem allowing OTT end-users to seamlessly interact with traditional mobile end-users.


•	Enable enterprises to rapidly execute and optimize their mobile communications initiatives.


•	Provide data analytics and business intelligence solutions designed to measure, enhance and secure the end-user experience for our enterprise customers.


•	Provide solutions to enable MNOs to measure and manage the subscriber experience across networks.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The consolidated financial statements include the accounts of Syniverse Holdings, Inc. and all of its wholly owned subsidiaries and a VIEvariable interest entity (“VIE”) for which Syniverse is deemed to be the primary beneficiary. References to “Syniverse”, “the Company”, “us”, or “we” include all of the consolidated companies. Noncontrolling interest is recognized for the portion of consolidated joint ventures not owned by us. These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and present our financial position, results of operations and cash flows. All significant intercompany balances and transactions have been eliminated.

Use of Estimates

We have prepared our financial statements in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the period. Actual results could differ from those estimates.

Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, service has been rendered or delivery has occurred, the selling price is fixed or determinable and collectability is reasonably assured. The majority of our revenues are derived from transaction-based charges and monthly recurring fees under long-term contracts, typically with three-year terms. From time to time, if a contract expires and we have not previously negotiated a new contract or renewal with the customer, we continue to provide services under the terms of the expired contract as we negotiate new agreements or renewals. A majority of the services and solutions we offer to our customers are provided through applications, connectivity and technology platforms owned and operated by us.

We derive revenues primarily from transaction-based and monthly recurring fees paid to us by our customers for various types of mobile services. A majority of our revenues were generated by transaction-based fees. These fees are based upon the number of records or transactions processed or the size of data records processed or both, and includes tier-based pricing and additional fees for volume above an agreed-upon threshold. Monthly recurring fees are based upon contractual provisions that require set, predictable payments each month. Due to the nature of our services, any single end-user call, data session or message often generates multiple transactions and payments from multiple customers. For all of our transaction-based services, we recognize revenues at the time the transactions are processed. We also recognize fixed fees as revenues on a monthly basis as the related services are performed. We defer revenues and related incremental customer-specific costs for customer implementations and recognize such revenues and related costs on a straight-line basis over the life of the initial customer contract.

Certain of our customer contracts include bundled services and are therefore accounted for as multiple-element arrangements. We evaluate multiple-element arrangements to determine whether the deliverables included in the arrangement represent separate units of accounting. We allocate the arrangement consideration among the separate units of accounting using

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the relative selling price method. Then, we apply the applicable revenue recognition criteria in ASC 605 to each of the separate units of accounting to determine the appropriate period and pattern of recognition.

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Cost of operations

Cost of operations includes data processing costs, network costs, variable costs, such as revenue share service provider arrangements and message termination fees, facilities costs, hardware costs, licensing fees, personnel costs associated with service implementation, training and customer care and off-network database query charges.

Research and Development

Research and development costs are charged to expense as incurred and are included in general and administrative expense in the consolidated statements of operations. For the years ended December 31, 20162017, 20152016 and 20142015, we recorded research and development costs of $1913.43 million, $2119.64 million, and $2421.16 million, respectively.

Stock-Based Compensation

We recognize stock-based compensation expense in the consolidated statements of operations based on the grant-date fair value of Syniverse Corporation’s equity awards. We recognize compensation expense, reduced for estimated forfeitures, under the straight-line method over the requisite service period of the award, which is generally the vesting term of the outstanding stock awards which have service-based vesting. We recognize compensation expense under the accelerated attribution method for performance-based awards expected to vest based on probable satisfaction of the cumulative performance condition. See Note 10 for additional details regarding stock-based compensation.

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. Cash and cash equivalents consists primarily of various deposit accounts that are stated at cost, which approximates fair value.

Customer Accounts

We provide financial settlement services to wireless operators to support the payment of roaming related charges to their roaming network partners. In accordance with our customer contracts, funds are held by us as an agent on behalf of our customers to settle their roaming related charges to other operators. These funds and the corresponding liability are not reflected in our consolidated balance sheets. The off-balance sheet amounts totaled approximately $297372.93 million and $321297.09 million as of December 31, 20162017 and 20152016, respectively.

Accounts Receivable

Accounts receivable are recorded at net realizable value which is the amount we expect to collect on our gross customer trade receivables. We establish an allowance for doubtful accounts that may result from the inability of our customers to pay, as well as for specific receivables from customers with known collection problems due to circumstances such as liquidity or bankruptcy. Collection problems are identified using an aging of receivables analysis based on invoice due dates. Items that are deemed uncollectible are written off against the allowance for uncollectible accounts. We do not require deposits or other collateral from our customers. If actual customer performance were to deteriorate to an extent not expected by us, additional allowances may be required. As of December 31, 20162017 and 20152016, our allowance for doubtful accounts was $79.91 million and $7.19 million, respectively.

We maintain an allowance for credit memos based on our historical activity. These allowances are recorded primarily as the result of price concessions, service level penalties, billing and service disputes and other customer specific matters. Allowances for credit memos are recorded as reductions of accounts receivable and revenues. If our billing discrepancies are not resolved satisfactorily or our customers’ disputes over billing are not resolved satisfactorily, increases to the allowance may be required. As of December 31, 20162017 and 20152016, our allowance for credit memos was $137.74 million and $1713.27 million, respectively.

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Property and Equipment, Net

Property and equipment consists primarily of computer hardware and network equipment, leasehold improvements and furniture and fixtures, which are recorded at cost and depreciated using the straight-line method over their estimated useful lives. Leasehold improvements are depreciated over the shorter of the term of the lease or life of the asset.

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The useful lives of our property and equipment are as follows:



	Average Lives (In Years)
Computers and equipment	3 - 5
Furniture and fixtures	6
Leasehold improvements	2 - 15

When depreciable assets are replaced, retired or otherwise disposed of, the related cost and accumulated depreciation are deducted from the respective accounts and any gains or losses on disposition are recognized in the statement of operations. Repairs and maintenance costs are expensed as incurred.

Capitalized Software Costs

We capitalize the cost of externally purchased software and certain software licenses, internal-use software and developed technology that has a useful life in excess of one year. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they enable the software to perform a task it previously was unable to perform. Software maintenance and training costs are expensed in the period in which they are incurred. Capitalized software and developed technology are amortized using the straight-line method over a period of 3 to 5 years and 3 to 8 years, respectively.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess purchase price of acquired businesses over the fair value of the net assets acquired. Goodwill is not amortized, but is instead tested for impairment, at least annually on October 1, or more frequently if indicators of impairment arise. Goodwill is tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment, referred to as a component. We have not identified any components within our single operating segment and, hence, have a single reporting unit for purposes of our goodwill impairment analysis.

When evaluating goodwill for impairment, the Company may first perform an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. This qualitative assessment is commonly referred to as a "step zero" approach. If, based on the review of the qualitative factors, the Company determines it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, the Company performs a two-stepquantitative impairment test. In connection withIf based on our annual goodwillthis assessment an impairment analysis at October 1, 2016, theexits, a charge is recorded for the excess of the reporting unit’s carrying amount over its fair value of our reporting unit was not substantially in excess ofin the consolidated statement of operations. We performed the quantitative assessment for all periods presented in the consolidated financial statements. We did not record any impairment loss its carrying valueon goodwill for the years ended December 31, 2017, 2016 and 2015. In the future, our reporting unit may be at risk of impairment due to lower operating results caused by volume declines in our CDMA portfolio as well as pricing pressure across many of our other services and other market factors. A goodwill impairment charge would not affect our adjusted EBITDA or free cash flows. We did not record any impairment loss on goodwill for the years ended December 31, 2016, 2015 or 2014.

Indefinite-lived intangible assets are comprised of tradenames and trademarks. Indefinite-lived intangible assets are not amortized, but instead are tested for impairment, at least annually on October 1, or more frequently if indicators of impairment arise. When evaluating indefinite-lived identifiable intangible assess for impairment, the Company may first perform an assessment of qualitative factors to determine whether it is more likely than not that the asset is impaired. If, based on the review of the qualitative factors, the Company determines it is more-likely-than-not that the identifiable intangible asset is impaired, the Company performs a two-stepan impairment test. We did not record any impairment loss on indefinite-lived intangible assets for the years ended December 31, 2016, 2015 or 2014years ended December 31, 2017, 2016 or 2015.

Finite-Lived Identifiable Intangible Assets

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Finite-Lived Identifiable Intangible Assets

Our finite-lived identifiable intangible assets include customer-related intangible assets such as customer relationships and customer contracts as well as a covenant not to compete and non-solicitation agreement associated with our acquisitions. Customer relationships are amortized using either the pattern of consumption method or the straight-line method, depending on which method more accurately reflects the pattern in which the asset is consumed. The pattern of consumption is determined primarily based on forecasted cash flows, which includes estimates for revenues, expenses and customer attrition. We amortize our covenant not to compete and our non-solicitation agreement over their contract terms using the straight-line method.

Impairment of Long-Lived Assets

We evaluate our long-lived assets including property and equipment, capitalized software and intangible assets with finite lives for impairment when events occur that indicate the carrying value of such assets may not be recoverable. We also evaluate the useful life of our assets each reporting period and modify our annual depreciation and/or amortization expense if it is determined that the useful life of an asset or group of assets is different than originally estimated.

If an impairment indicator exists, we perform a comparison of the carrying amount of the assets to the estimated undiscounted future cash flows for the asset or group of assets. If the undiscounted cash flows are less than the long-lived asset’s carrying amount, we recognize an impairment loss based on the excess of the carrying amount of the long-lived asset over its fair value. Expected future cash flows are based on management’s best estimate, utilizing reasonable and supportable assumptions and projections. If actual market conditions are less favorable than those projected by management, asset impairment charges may be required. Management continues to evaluate overall industry and company-specific circumstances and conditions to identify indicators of impairment. Assets to be sold are stated at the lower of the assets’ carrying amount or fair value and depreciation is no longer recognized. We did not record any impairment loss on long-lived assets for the years ended December 31, 2016, 2015 or 2014years ended December 31, 2017, 2016 or 2015.

Income Taxes

We provide for federal, state and foreign income taxes currently payable, as well as for those deferred due to timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enactment date.

We, and our eligible subsidiaries, file a consolidated U.S. federal income tax return. All subsidiaries incorporated outside of the U.S. are consolidated for financial reporting purposes; however, they are not eligible to be included in our consolidated U.S. federal income tax return. Separate provisions for income taxes have been recorded for these entities. We intend to reinvest substantially all of the unremitted earnings of our non-U.S. subsidiaries and postpone their remittance indefinitely. Accordingly, no provision for U.S. income taxes for these non-U.S. subsidiaries was recorded in the accompanying consolidated statements of operations.

Joint Venture Interests

In February 2009, we entered into a joint venture agreement to implement number portability services in India. Our economic interest in the joint venture is 37.5%. We expect to provide India’s telecommunications operators with number portability clearing house and centralized database solutions until March 2019. We consolidate the operations of this joint venture, as we retain the contractual power to direct the activities of this entity which most significantly and directly impact its economic performance. The activity of this joint venture is not significantmaterial to our overall operations. The assets of this joint venture are restricted from the standpoint of Syniverse, in that they are not available for our general business use outside the context of the joint venture. The holders of the liabilities of the joint venture have no recourse to Syniverse.

In June 2013, through the MACH Acquisition, we acquired a 45% interest in Link2One, an equity method investee that provides a third party hub that automates all the tests and technical procedures to standardize telecommunications operators' requirements in connection with arrangements for the provision of roaming services. The carrying amount of the investment in the equity method investee as of December 31, 20162017 and 20152016 was $34.56 million and $3.85 million, respectively, and is included in Investment in unconsolidated subsidiaries in the consolidated balance sheets. Revenues recorded from commercial transactions

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in Investment in unconsolidated subsidiaries in the consolidated balance sheets. Revenues recorded from commercial transactions with Link2One, which is a related party toof the Company, were $0.87 million, $0.98 million and $10.29 million during the years ended December 31, 20162017, 20152016 and 20142015, respectively.

In May 2016, we acquired a noncontrolling interest in Vibes Media LLC (“Vibes”) for $45 million. The investment consistsconsisted of $40 million in cash and common shares of Syniverse Corporation valued at $5 million. The carrying amount of the investment in the equity method investee as of December 31, 20162017 wasand 2016 was $42.7 million and $43.7 million , respectively, and is included in Investment in unconsolidated subsidiaries in the consolidated balance sheets. In addition to our investment in Vibes, Syniverse and Vibes will partnerhave partnered to distribute Vibes’ cloud-based mobile marketing software platform. Expenses incurred from commercial transactions with Vibes, which is a related party to the Company, were $5.7 million during the year ended December 31, 2017 and $0.7 million during the period from the investment date through the year ended December 31, 2016.

Fair Value of Financial Instruments

The accounting standard for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. The accounting standard prescribes methods for measuring fair value, establishes a fair value hierarchy based on the inputs used to measure fair value and expands disclosures about fair value measurements. See Note 15 for more information regarding the fair value of financial instruments, including a listing of our assets and liabilities required to be measured or disclosed at fair value on a recurring basis and where they are classified within the hierarchy as of December 31, 20162017 and 20152016.

Foreign Currencies

We have operations in subsidiaries in Europe (primarily the United Kingdom, Germany and Luxembourg), India, the Asia Pacific region and Latin America, each of whose functional currency is their local currency. Gains and losses on transactions denominated in currencies other than the relevant functional currencies are included in Other, net in the consolidated statements of operations. For the years ended December 31, 20162017, 20152016 and 20142015, we recorded a foreign currency transaction gains of(loss) gain of $(3.5) million, $2.9 million and losses of $1.1 million and $2.7 million, respectively.

The assets and liabilities of subsidiaries whose functional currency is other than the U.S. dollar are translated at the period-end rate of exchange. The resulting translation adjustment is recorded as a component of Accumulated other comprehensive loss and is included in Stockholder equity in the consolidated balance sheets. Transaction gains and losses on intercompany balances which are deemed to be of a long-term investment nature are also recorded as a component of Accumulated other comprehensive loss. Revenues and expenses within the consolidated statements of operations are translated at the average rates prevailing during the period.

Segment Information

We have evaluated our portfolio of service offerings, reportable segment and the financial information reviewed by our chief operating decision maker for purposes of making resource allocation decisions. We operate as a single operating segment, as our Chief Executive Officer serving as our chief operating decision maker, reviews financial information on the basis of our consolidated financial results for purposes of making resource allocation decisions.

Revenues by service offerings were as follows:



	Year Ended December 31,
(in thousands)	2017		2016		2015
Mobile Transaction Services	$	634,364	$	649,948	$	731,496
Enterprise & Intelligence Solutions	159,148		131,944		129,979
Revenues	$	793,512	$	781,892	$	861,475

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Revenues by geographic region, based on the “bill to” location on the invoice, were as follows:



	Year Ended December 31,
(in thousands)	2017		2016		2015
North America	$	464,436	$	483,329	$	534,178
Europe, Middle East and Africa	143,264		133,293		143,837
Asia Pacific	124,769		116,960		125,175
Caribbean and Latin America	61,043		48,310		58,285
Revenues	$	793,512	$	781,892	$	861,475

For the years ended December 31, 20162017, 20152016 and 20142015, we derived 5753.06%, 57.80% and 5957.78%, respectively, of our revenues from customers in the United States.

Long-lived assets, which consist of property and equipment, net and capitalized software, net, by geographic location were as follows:



	December 31,
(in thousands)	2017		2016
North America	$	148,566	$	201,753
Europe, Middle East and Africa	33,681		35,624
Asia Pacific	13,016		14,058
Caribbean and Latin America	394		638
Long-lived assets, net	$	195,657	$	252,073

For the years ended December 31, 20162017 and 20152016, 8076.0% and 7480.40%, respectively, of our long-lived assets were located in the United States.

Acquisition

The Acquisition line item in our consolidated statements of operations includes professional services costs, such as legal, tax, audit and transaction advisory costs related to the the Aicent acquisition completed in 2014.

Reclassifications of Prior Year Presentation

We reclassified investments in unconsolidated subsidiaries, which included our equity method investment in Link2One at December 31, 2015, from Other assets to Investments in unconsolidated subsidiaries in the consolidated balance sheets to conform to the current year presentation. The reclassification had no effect on our reported results of operations or cash flows.

3. Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In April 2015May 2017, the FASB issued ASU 20152017-0509, Intangibles-Goodwill and Other-Internal-Use Software - Customer'sStock Compensation - Scope of Modification Accounting for Fees Paid in a Cloud Computing Arrangement, which is included in the ASC in Topic 350718. ASU 20152017-05 provides guidance about whether a cloud computing arrangement includes a software license. The update only applies to internal-use software that a customer obtains access to in a hosting arrangement if the following criteria are met i) the customer has the contractual right to take possession of the software at any time during the hosting period without significant penalty and ii) it is feasible for the customer to either run the software on its own hardware or contract with another party unrelated to the vendor09 clarifies when changes to the terms to host the software. The costs associated with cloud computing arrangements shall be accounted for as a service if the arrangement does not contain a software license or as internal use software if the arrangement is deemed to contain a software license, up toor conditions of a share-based payment award must be accounted for as modifications. The new guidance will allow companies to make certain non-substantive changes to awards without accounting for them as modifications. We early adopted this update on June 30, 2017 and will apply the new guidance prospectively to awards modified after the adoption date. The adoption of this update had no impact on our consolidated financial statements and related disclosures.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which is included in ASC Topic 715. ASU 2017-07 requires employers to recognize the service component of net periodic pension costs in the same income statement line as other employee compensation costs. In addition, other components of net periodic pension costs will be presented separately from the line item that includes the service cost and outside operating income. The update is effective for the amount allocable to software licenseCompany beginning January 1, 2019. We early adopted this update on January 1, 2016 using a prospective approach for new 2017 and prospectively applied the adjustment in 2017 as the adjustment was insignificant to prior periods.

The adoption of this update was not material to our consolidated financial statements and related disclosures.

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arrangements entered into after the effective dateIn January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which is included in ASC Topic 350. ASU 2017-04 simplifies the subsequent measurement of goodwill by requiring impairment charges to be based on the excess of a reporting unit’s carrying amount over its fair value (Step 1 of the goodwill impairment test) and removes step 2 of the test. The update is effective for the Company beginning January 1, 2020. We early adopted this update on January 1, 2017. The adoption of this update had no impact on our consolidated financial statements and related disclosures.

In February 2015March 2016, the FASB issued ASU 20152016-0209, Consolidation - AmendmentsImprovements to the Consolidation AnalysisEmployee Share-Based Payment Accounting, which is included in the ASC in Topic 810718. ASU 20152016-02 amends the consolidation analysis currently required under U.S. GAAP. The update modifies the process used to evaluate whether limited partnerships and similar entities are VIEs or voting interest entities; affects the analysis performed by reporting entities regarding VIEs, particularly those with fee arrangements and related party relationships; and provides a scope exception for certain investment funds. We adopted this update on January 1, 2016. The adoption of this update had no impact on our consolidated financial statements and related disclosures.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern, which is included in the ASC in Topic 205. ASU 2014-15 requires management to evaluate, at each interim and annual reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued, and provide related disclosures. We adopted this update for the year ended December 31, 201609 includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. We adopted this update on January 1, 2017. The adoption of this update had no impact on our consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In January 2017, the FASB issued ASU 2017-06, Simplifying the Test for Goodwill Impairment, which is included in ASC Topic 350. ASU 2017-06 simplifies the subsequent measurement of goodwill by requiring impairment charges to be based on Step 1 of the goodwill impairment test. The update is effective for the Company beginning January 1, 2020. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures.

In November 2016, the FASB issued ASU 2016-18, Restricted Cash, which is included in ASC Topic 230. ASU 2016-18 requires companies to show the change in the total cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The update is effective for the Company beginning January 1, 2018 and will be applied retrospectively to all periods presented. EarlyWe do not expect the adoption is permitted. We are currently assessing the impact of implementingof this guidance to have a material impact on our consolidated financial statements and related disclosures.

In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, which is included in ASC Topic 230. ASU 2016-15 includes multiple provisions intended to simplify various treatments of certain cash receipts and cash payments in the statement of cash flows under ASC Topic 230. The update is effective for the Company beginning January 1, 2018. Early adoption is permitted. The amendments in this update should be applied retrospectively to each period presented. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which is included in the ASC in Topic 326. ASU 2016-13 changes how entities will measure credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. The update will replace the incurred loss approach with an expected credit loss model. It also would require entities to present unrealized losses from available-for-sale debt securities as allowances rather than as a reduction in the amortized cost of the securities. The update is effective for the Company beginning January 1, 2020. We are currently assessing the impact of implementing this guidance on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which is included in the ASC in Topic 718. ASU 2016-09 includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. The update is effective for the Company beginning January 1, 2017. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting, which is included in the ASC in Topic 323. ASU 2016-07 eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. Instead, the equity method of accounting will be applied prospectively from the date significant influence is obtained. The update is effective for the Company beginning January 1, 2017. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related disclosures.

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In February 2016, the FASB issued ASU 2016-02, Leases, which is included in the ASC in Topic 842. ASU 2016-02 is intended to improve financial reporting related to leasing transactions. ASU 2016-02 requires recognition of lease assets and lease transparency and comparability of lease accounting among organizations. For leases with a term greater than 12 months, the amendments require the lease rights and obligations arising from the leasing arrangements, including operating leases, to be recognized as assets and liabilities by lessees for most leaseson the balance sheet. TheHowever, the effect on the statement of comprehensive income and the statement of cash flows is largely unchanged from current GAAP. The update is effective for the Companyamendments also expand the required disclosures surrounding leasing arrangements. The guidance must be applied using a retrospective application method and will be effective for financial statements issued for fiscal years beginning January 1, 2019. Earlyafter December 15, 2018 and interim periods within those years. We will not early adopt this new guidance. Upon adoption, is permittedwe expect our balance sheet to include a right of use asset and liability related to substantially all operating lease arrangements. We are currently assessing the impact of implementing this guidance on our consolidated financial statements and related disclosures.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, , which is included in the ASC in Topic 606. ASU 2014-09 was issued as a converged guidance with the IASB on recognizing revenue in contracts with customers and is intended to improve the financial reporting requirements for revenue from contracts with customers by providing a principle based approach to the recognition of revenue. The update includes a five-step framework with applicable guidance, which supersedes existing revenue recognition guidance. This update is effective for the Company beginning January 1, 2018 and can be applied either retrospectively to each period presented or as a cumulative- effect adjustment as of the date of adoption. Early application using the modified retrospective method. The Company has finalized its review of the standard is permitted beginning January 1, 2017impact of adopting this new guidance. We currently anticipate adoptingwill adopt the standard effective January 1, 2018, using the fullmodified retrospective method such that each prior reporting period reflects the new standard. However, we are continuing to evaluate the impact of the standard, and our adoption method is subject to change. We are currently assessing the impact of implementingwill remain unchanged and the new guidance will only affect the post-adoption period.

We have completed the review of our revenue contracts and the revenue recognition for our broad portfolio of services will remain unchanged. However, the new guidance will change the timing of revenue recognition in certain areas, including for certain implementation and development activities, which are generally highly dependent on, and interrelated with, the

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underlying services. In these cases, the implementation and development activities and the underlying services are accounted for as a single performance obligation and such revenue shall be recognized over time under ASC Topic 606 instead of upon completion under legacy GAAP. In addition, the timing of revenue recognition will change for certain contracts where it is not probable the company will collect substantially all consideration for which revenue is currently recorded on a cash basis. The adoption of this guidance will not have a material impact on our consolidated financial statements and related disclosures. In addition, there will not be a significant change to our systems, processes and internal controls to meet the new standard’s reporting and disclosure requirements.

4. Property and Equipment

Property and equipment, net, consisted of the following:



	December 31,
(in thousands)	2017			2016
Computers and equipment	$	268,924		$	258,549
Computer equipment under capital lease	33,530			30,424
Furniture and fixtures	6,580			6,106
Leasehold improvements	21,647			17,978
	330,681			313,057
Accumulated depreciation	(217,259		)	(189,514		)
Accumulated depreciation of computer equipment under capital lease	(20,219		)	(14,761		)
Property and equipment, net	$	93,203		$	108,782

Depreciation expense related to property and equipment for the years ended December 31, 20162017, 20152016, and 20142015 was $39.8 million, $42.7 million, and $46.0 million and $42.8 million, respectively.

5. Capitalized Software

Capitalized software, net, consisted of the following:



	December 31,
(in thousands)	2017			2016
Capitalized software	$	543,251		$	492,271
Capitalized software licenses under capital leases	48,216			48,216
	591,467			540,487
Accumulated amortization	(447,359		)	(366,922		)
Accumulated amortization of capitalized software under capital lease	(41,654		)	(30,274		)
Capitalized software, net	$	102,454		$	143,291

Amortization expense related to capitalized software for the years ended December 31, 2017, 2016, and 2015 andwas 2014$88.2 million was, $86.4 million, and $82.1 million and $78.0 million, respectively.

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6. Identifiable Intangible Assets and Goodwill

Identifiable intangible assets, net consisted of the following:



	December 31, 2017							December 31, 2016
(in thousands)	Gross carrying amount		Accumulated amortization			Net book value		Gross carrying amount		Accumulated amortization			Net book value
Finite-lived intangible assets:
Customer relationships	$	847,978	$	(671,392	)	$	176,586	$	831,419	$	(594,378	)	$	237,041
Non-solicitation agreement	1,557		(1,557		)	—		1,359		(1,359		)	—
Tradename	1,200		(1,200		)	—		1,200		(1,200		)	—
	850,735		(674,149		)	176,586		833,978		(596,937		)	237,041
Indefinite-lived intangible assets:
Tradename and trademarks	82,400		—			82,400		82,400		—			82,400
Identifiable intangible, net	$	933,135	$	(674,149	)	$	258,986	$	916,378	$	(596,937	)	$	319,441

Customer relationships are amortized using either the pattern of consumption method or the straight-line method, depending on which method more accurately reflects the pattern in which the asset is consumed. The pattern of consumption is determined primarily based on forecasted cash flows, which includes estimates for revenues, expenses and customer attrition. The weighted-average amortization period for customer relationships is 9.9 years.

Amortization expense of identifiable intangible assets, which is included in Depreciation and amortization in the consolidated statements of operations, for the years ended December 31, 2017, 2016, and 2015 andwas 2014$66.6 million was, $79.0 million, and $87.1 million and $116.8 million, respectively.

The estimated amortization expense of intangible assets over the next five years and thereafter is as follows:



(in thousands)
Year ended December 31, 2018	$	55,822
Year ended December 31, 2019	46,202
Year ended December 31, 2020	32,468
Year ended December 31, 2021	15,044
Year ended December 31, 2022	13,544
Thereafter	13,506
Amortization Expense	$	176,586

The following table summarizes the changes in the carrying amount of goodwill for the periods ended December 31, 20162017 and 20152016:



(in thousands)
Balance at December 31, 2015	$	2,286,876
Effect of foreign currency translation	(14,080		)
Balance at December 31, 2016	2,272,796
Effect of foreign currency translation	41,485
Balance at December 31, 2017	$	2,314,281

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7. Detail of Accrued Liabilities

Accrued liabilities consisted of the following:



	December 31,
(in thousands)	2017		2016
Accrued payroll and related benefits	$	28,043	$	37,278
Accrued interest	18,017		26,543
Accrued network and data processing expenses	21,999		13,467
Accrued revenue share expenses	2,228		3,654
Other accrued liabilities	18,962		26,222
Accrued liabilities	$	89,249	$	107,164

8. Debt and Credit Facilities

Our total outstanding debt as of December 31, 20162017 and 20152016 was as follows:



	December 31,
(in thousands)	2017			2016
Senior Credit Facility:
Initial Term Loans, due 2019	$	889,976		$	891,057
Original issue discount	(2,607		)	(4,644		)
Deferred financing costs	(6,449		)	(10,849		)
Tranche B Term Loans, due 2019	662,396			663,200
Original issue discount	(809		)	(1,398		)
Deferred financing costs	(5,833		)	(10,081		)
Senior Notes:
Syniverse Notes, due 2019	41,727			475,000
Deferred financing costs	(322		)	(6,836		)
SFHC Notes, due 2022	369,547			—
Deferred financing costs	(4,418		)	—
Total Debt and Credit Facilities	$	1,943,208		$	1,995,449
Less: Current portion
Long-term debt, current portion	(2,622		)	(1,885		)
Original issue discount, current portion	7			7
Deferred financing costs, current portion	20			25
Current portion of long-term debt, net of original issue discount and deferred financing costs	(2,595		)	(1,853		)
Long-term debt, net of original issue discount and deferred financing costs	$	1,940,613		$	1,993,596

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We expect to make a principal payment of approximately As of $1.9 millionDecember 31, 2017 in March 2017 as required pursuant toand notwithstanding the Excess Cash Flow provision of Credit Agreement (as defined below). Principal2018 Refinancing, the principal maturities of long-term debt for each of the next five years and thereafter arewere as follows:



(in thousands)
Year ended December 31, 2018	$	2,622
Year ended December 31, 2019	1,591,477
Year ended December 31, 2020	—
Year ended December 31, 2021	—
Year ended December 31, 2022 and thereafter	369,547
	$	1,963,646

Amortization of original issue discount and deferred financing fees for the years ended December 31, 2017, 2016, and 2015 andwas 2014$13.3 million was, $14.6 million, and $13.3 million and $12.5 million, respectively, and was related, respectively. Amortization relates to our Senior Credit Facility (as defined below) and our Senior Notes (as defined below) and wereis recorded in interest expense in our consolidated statements of operations.

Senior Credit Facility

On April 23, 2012, we entered into a credit agreement (the “Credit Agreement”) with Buccaneer LLC (as successor by merger to Buccaneer), Barclays Bank PLC, as administrative agent, swing line lender and letters of credit issuer, and the other financial institutions and lenders from time to time party thereto, providing for a senior credit facility (the “Senior Credit Facility”) consisting of (i) a $950.0 million term loan facility (the “Initial Term Loans”); and (ii) a $150.0 million revolving credit facility (the “Revolving Credit Facility”) for the making of revolving loans, swing line loans and issuance of letters of credit.

On June 28, 2013, the Company borrowed $700.0 million of incremental term loans (the “Tranche B Term Loans”), pursuant to an incremental amendment (the “Incremental Amendment”) to itsthe Credit Agreement. The proceeds of the Tranche B Term Loans were used to refinance, in full, the Escrow Term Loans (defined below), a portion of which were indebtedness used to fund the MACH Acquisition.

On August 4, 2014, the Company drew $100.0 million on the Revolving Credit Facility to fund a portion of the Aicent Acquisition. During the three months ended December 31, 2014, the Company paid $90.0 million on the Revolving Credit Facility. The remaining $10.0 million was paid during the three months ended March 31, 2015.

On April 15, 2016, we made principal payments of approximately $36.2 million toward the Initial Term Loans and Tranche B Term Loans as required pursuant to the Excess Cash Flow provision of the Credit Agreement. Commencing on December 31

On March 24, 2018, our2017, we made principal payments of approximately $1.9 million toward the Initial Term Loans and Tranche B Term Loans will resume amortizing in quarterly installments in an amount equal to 0.25%as required pursuant to the Excess Cash Flow provision of the Credit Agreement.

On April 14, 2017, we entered into an amendment (the “Amendment”) to the Credit Agreement governing our Revolving Credit Facility to, among other things, (i) extend the scheduled maturity date of the revolving credit commitments to the earlier of (x) January 15, 2019 and (y) the date of termination in whole of the revolving credit commitments, the letter of credit sublimit, and the swing line facility; provided that (1) in the event that more than $50.0 million of the Syniverse Notes remains outstanding on the date that is 180 days prior to the stated maturity of the Syniverse Notes (the “First Revolver Springing Maturity Date”), the maturity date for the revolving credit facility will be the First Revolver Springing Maturity Date and (2) in the event that more than $50.0 million in aggregate principal amount of any refinancing indebtedness in respect of the Syniverse Notes remains outstanding on the date that is 180 days prior to the stated maturity of such refinancing indebtedness (the “Second Revolver Springing Maturity Date”), the maturity date for the revolving credit facility will be the earlier of the Second Revolver Springing Maturity Date and January 15, 2019, (ii) make certain modifications to the financial maintenance covenant, including, among other things, by increasing the financial maintenance covenant level for so long as certain conditions such as, for example, conditions limiting usage of certain negative covenant baskets, are satisfied and (iii) provide for a flat commitment fee payable to each revolving credit lender of 0.50%. In addition, in connection with the Amendment, we reduced the aggregate revolving credit commitments from $150.0 million to $85.6 million and the letter of credit sublimit from $50.0 million to $40.0 million. Pursuant to the Amendment and subject to the aforementioned conditions, the financial maintenance covenant was modified to require that our consolidated senior secured debt ratio, as of June 30, 2017 and September 30, 2017, be less than or equal to

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6.25:1.00, as of December 31, 2017 and March 31, 2018 be less than or equal to 6.00:1.00 perand, as of June 30, 2018 and the end of each fiscal quarter of the original principal amount thereof, withended thereafter be less than or equal the remaining balance due at the final maturityto 5.75:1.00.

The Initial Term Loans and the Tranche B Loans (collectively the “Term Loan Facilities”) will mature at the earliest of (i) April 23, 2019, (ii) the date of termination in whole of the commitments under the Term Loan Facilities or (iii) the date the loans under the Term Loan Facilities are declared due and payable in connection with an event of default; provided that (a) in the event that more than $50.0 million of the Syniverse Notes remain outstanding on the date that is 91 days prior to the stated maturity of the Syniverse Notes (the “First Springing Maturity Date”), the maturity date for the Term Loan Facilities will be the First Springing Maturity Date and (b) in the event that more than $50.0 million in aggregate principal amount of any refinancing indebtedness in respect of the Syniverse Notes remains outstanding on the date that is 91 days prior to the stated maturity of such refinancing indebtedness (the “Second Springing Maturity Date”), the maturity date for the Term Loan Facilities will be the earlier of the Second Springing Maturity Date and April 23, 2019.

Our Revolving Credit Facility will mature at the earlier of (i) April 23, 2017 and (ii) the date of termination in whole of the commitments under the Revolving Credit Facility, the letter of credit sublimit, and the swing line facility under the Credit Agreement.

We may voluntarily prepay loans or reduce commitments under our Senior Credit Facility, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty. We must prepay our Term Loan Facilities with the net

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cash proceeds of asset sales, casualty and condemnation events, the incurrence or issuance of indebtedness (other than indebtedness permitted to be incurred under our Senior Credit Facility, unless specifically incurred to refinance a portion of our Senior Credit Facility) and 50% of our excess cash flow, as defined pursuant to the terms of our Senior Credit Facility (such percentage to be subject to a reduction to zero based on the achievement of a net senior secured leverage ratio of 2.75:1.00), in each case, subject to certain reinvestment rights and other exceptions, as well as the right of the lenders to decline certain prepayments.

The following fees are applicable under our Revolving Credit Facility: (i) an unused line fee of 0.50% per annum, subject to an adjustment to 0.25% based on a net senior secured leverage ratio of 1.75:1.00; (ii) a letter of credit participation fee on the aggregate stated amount of each letter of credit available to be drawn equal to the applicable margin for Eurodollar rate loans; (iii) a letter of credit fronting fee equal to 0.125% per annum on the daily amount of each letter of credit available to be drawn; and (iv) certain other customary fees and expenses payable to our letter of credit issuers.

Our obligations under the Senior Credit Facility are (1) guaranteed by Buccaneer LLC and each of our current and future direct and indirect wholly owned domestic subsidiaries (the “Subsidiary Guarantors”) (other than (i) subsidiaries designated as unrestricted, (ii) immaterial subsidiaries, (iii) any subsidiary that is prohibited by applicable law or certain contractual obligations from guaranteeing our Senior Credit Facility or which would require governmental approval to provide a guarantee, (iv) certain holding companies of foreign subsidiaries, (v) not-for-profit subsidiaries, if any, (vi) certain receivables financing subsidiaries, (vii) any subsidiary with respect to which the Company and the administrative agent reasonably agree that the burden, cost or other consequences of providing a guarantee will be excessive in view of the benefits obtained by the lenders therefrom and (viii) any subsidiary whose guaranteeing of the Senior Credit Facility would result in a material adverse tax consequence) and (2) are secured by a first lien on substantially all of our, Buccaneer LLC’s and the Subsidiary Guarantors’ assets, including capital stock of subsidiaries (subject to certain exceptions).

Our Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants include limitations or restrictions on (i) our ability to incur debt, grant liens, enter into fundamental corporate transactions, pay subsidiary distributions, enter into transactions with affiliates, make further negative pledges, sell or otherwise transfer assets, make certain payments, investments or acquisitions, repay certain indebtedness in the event of a change of control, and amend certain debt documents and (ii) the activities engaged in by Buccaneer LLC. The negative covenants are subject to customary exceptions.

There are noThe financial covenants included in the Credit Agreement other than a springing maximum net senior secured leverage ratio of 5.00:1.00, which will bemaintenance covenant, as amended by the Amendment, is tested only for the benefit of the revolvingRevolving Credit Facility lenders and is required to be tested only (i) when, at the end of eachany fiscal quarter, the aggregate amount of any revolving credit loans, any swing line loans or any letter of credit obligations (excluding letter of credit obligations not in excess of $10.0 million and any letters of credit which are cash collateralized to at least 105.0% of their maximum stated amount) outstanding exceeds 25.0% of all commitments under the Revolving Credit Facility andare outstanding, (ii) upon an extension of credit under the Revolving Credit FacilityAgreement in the form of the making of a revolving credit loan or a swing line loan, or the issuance of a letter of credit and (iii) if certain financial maintenance covenant conditions are not satisfied.

As of December 31, 20162017, we were in compliance with all of the covenants contained in the Senior Credit Facility, to the extent such covenants were required to be tested as of December 31, 2016. 2017.

As of December 31, 2017, we had no outstanding balance on our Revolving Credit Facility.

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On March 9, 2018, we completed the refinancing (the “2018 Refinancing”) of our existing first lien credit facility (the “Old First Lien Credit Facility”) with the fifth amendment to the Old First Lien Credit Facility to, among other things, establish a new tranche of term loans maturing on March 9, 2023, in an aggregate principal amount of $1,702 million (the “New First Lien Credit Facility”) and to extend the revolving credit facility (the “New Extended Revolving Credit Facility”) until December 9, 2022. On the same date, we entered into a $220 million second lien term loan facility maturing on March 11, 2024 (the “New Second Lien Credit Facility” and, together with the New First Lien Credit Facility, the “New Credit Facilities”). We used the borrowings under the New Credit Facilities to prepay in full (i) all term loans outstanding under the Old First Lien Credit Facility and (ii) the SFHC Notes. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations -“Liquidity and Capital Resources” for a more detailed discussion of the 2018 Refinancing.

Initial Term Loans

On April 23, 2012, we received net proceeds of $940.5 million under the Initial Term Loans and paid upfront fees of $11.3 million. The proceeds from the Initial Term Loans plus cash on hand were used to repay the Old Senior Credit Facility. We recorded $9.5 million of the upfront fees as an original issue discount to be amortized over the life of the Initial Term Loans using the effective interest method. Since we had no amounts drawn under the Revolving Credit Facility at June 30, 2012, we recorded $1.8 million of the upfront fees as deferred financing costs to be amortized over the life of the Revolving Credit Facility using the effective interest method. We had $15085.06 million of unused commitments under this facility at December 31, 20162017.

On September 23, 2013, we entered into a second amendment (the “Second Amendment”) to the Credit Agreement. Under the Second Amendment, the rate at which the Initial Term Loans under the Credit Agreement bear interest was amended to reduce (i) the margin over the Eurodollar rate from 3.75% to 3.00%, (ii) the margin over the base rate from 2.75% to 2.00%, (iii) the “Eurodollar rate floor” from 1.25% to 1.00% and (iv) the “base rate floor” from 2.25% to 2.00%. The Company recorded $2.8 million of debt extinguishment costs and $1.7 million of debt modification costs associated with the refinancing of the Initial Term Loans.

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Borrowings under our Revolving Credit Facility bear interest at a floating rate which can be, at our option, either (i) a Eurodollar borrowing rate for a specified interest period plus an applicable margin or, (ii) an alternative base rate plus an applicable margin. The applicable margin for loans is 3.75% per annum for Eurodollar loans and 2.75% per annum for base rate loans, subject to an adjustment to 3.50% and 2.50%, respectively, based on a net senior secured leverage ratio of 1.75:1.0.

Commencing on December 31, 2018, our Initial Term Loans will resume amortizing in quarterly installments in an amount equal to 0.25% per quarter of the original principal amount thereof, with the remaining balance due at final maturity.

Tranche B Term Loans

On June 28, 2013, we received net proceeds of $696.5 million under the Tranche B Term Loans, the proceeds of which were used to refinance the senior credit facility consisting of a $700.0 million delayed draw term loan facility (the “Delayed Draw Facility”) in full. We paid upfront fees of $3.5 million associated with the Delayed Draw Facility which were recorded as original issue discount to be amortized over the life of the Tranche B Term Loans using the effective interest method. We incurred $25.2 million of debt issuance costs which were recorded as deferred financing costs to be amortized over the life of the Tranche B Term Loans using the effective interest method.

Borrowings bear interest at a floating rate which can be, at our option, either (i) a Eurodollar borrowing rate for a specified interest period plus an applicable margin or, (ii) an alternative base rate plus an applicable margin, in the case of the Tranche B Term Loans under the Credit Agreement, subject to a Eurodollar rate floor of 1.00% or a base rate floor of 2.00%, as applicable. The applicable margin for the Tranche B Term Loans under our Senior Credit Facility is 3.00% per annum for Eurodollar loans and 2.00% per annum for base rate loans.

Commencing on December 31, 2018, our Tranche B Term Loans will resume amortizing in quarterly installments in an amount equal to 0.25% per quarter of the original principal amount thereof, with the remaining balance due at final maturity.

9.125% senior unsecured notes due 2019Senior Notes

Syniverse Notes

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On December 22, 2010, we issued $475.0 million senior unsecured notes bearing interest at 9.125% per annum that will mature on January 15, 2019 (the “Syniverse Notes”). Interest on the notes is paid on January 15 and July 15 of each year.

The Syniverse Notes are guaranteed on a senior basis by the Subsidiary Guarantors. In addition, we have the ability to designate certain of our subsidiaries as unrestricted subsidiaries pursuant to the terms of the indenture governing our Syniverse Notes, and any subsidiary so designated will not be a guarantor of the notes. The right of noteholders to receive payment on the Syniverse Notes is effectively subordinated to the rights of our existing and future secured creditors.

We may redeem the Syniverse Notes, at our option, in whole at any time or in part from time to time, at 100% of the principal amount of the Syniverse Notes to be redeemed, plus accrued and unpaid interest, if any, to the redemption date.

The Syniverse Notes contain customary negative covenants including, but not limited to, restrictions on our and our restricted subsidiaries’ ability to merge and consolidate, with other companies, incur indebtednesssell, transfer or otherwise dispose of assets, incur additional debt or issue certain preferred shares, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sellon or otherwise transfer assets, optionally prepay certain subordinated indebtednessmake other distributions in respect of Syniverse’s capital stock or make other restricted payments or enter into certain transactions with affiliates. , subject to certain exceptions.

We incurred financing fees of $20.4 million in connection with the issuance of the Syniverse Notes which have been amortized over the term of the notes using the effective interest method.

On January 11, 2017 pursuant to the Exchange Offer, $369.5 million of Syniverse Notes were cancelled. Following the Exchange Offer, $105.5 million aggregate principal amount of the Syniverse Notes were outstanding. On April 25, 2017 and September 18, 2017, we repurchased $16.0 million and $7.7 million aggregate principal amount of the Syniverse Notes, respectively, and submitted them to Wilmington Trust, National Association, as trustee, for cancellation.

Senior Notes Exchange OfferOn December 29, 2017, we redeemed an additional $40.0 million aggregate principal amount of the Syniverse Notes. Pursuant to the indenture governing the Notes, the Notes were redeemed at 100% of the principal amount, plus accrued and unpaid interest. As a result of fewer than $50.0 million aggregate principal amount of the Syniverse Notes remaining outstanding, pursuant to the credit agreement governing the Company’s revolving credit facility and term loan facilities, the “springing maturity date” is no longer applicable. Following the Exchange Offer, the partial repurchases and the redemption, $41.7 million aggregate principal amount of the Syniverse Notes remains outstanding at December 31, 2017.

SFHC Notes

On January 11, 2017, Syniverse Foreign Holdings Corporation (“SFHC”) completed its offer to exchange (the “Exchange Offer”) the Syniverse Notes for new senior unsecured notes issued by SFHC bearing interest at 9.125% per annum that will mature on January 15, 2022 (the “SFHC Notes” and, together with the Syniverse Notes, the “Senior Notes”). Interest on the notes is paid on January 15 and July 15 of each year. Pursuant to the Exchange Offer, SFHC issued $369.5 million of SFHC Notes, and a like amount of Syniverse Notes were canceledcancelled.

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On or after January 15, 2019, SFHC may redeem some or all of the SFHC Notes at any time at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest to, but excluding, the redemption date, if redeemed during the 12-month period commencing on January 15 of the years set forth below:



Period	Redemption Price
2019	104.563	%
2020	102.281	%
2021 and thereafter	100.000	%

If we undertake a repayment, repurchase, redemption or refinancing, in whole or in part, in one or a series of transactions, of the outstanding indebtedness under the Senior Credit Facility and/or the Syniverse Notes or other comprehensive refinancing or recapitalization of our existing debt and/or equity capital structure, or if we experience certain kinds of changes of control, in each case at any time prior to January 15, 2019, we may redeem the SFHC Notes at a redemption price of 101%, plus accrued and unpaid interest, if any, to the redemption date.

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The SFHC Notes are guaranteed on a senior basis by Syniverse and the Subsidiary Guarantors that guarantee the Syniverse Notes. The right of noteholders to receive payment on the SFHC Notes is effectively subordinated to the rights of any future secured creditors of SFHC.

The SFHC Notes contain customary negative covenants including, but not limited to, (i) restrictions on SFHC’s, our and ourits restricted subsidiaries’ ability to merge and consolidate, with other companies, incur indebtednesssell, transfer or otherwise dispose of assets, incur additional debt or issue certain preferred shares, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends (includingon or make other distributions in respect of SFHC’s ability to pay dividendscapital stock or make distributions to Syniverse or our subsidiaries), sell or otherwise transfer assets, optionally prepay certain subordinated indebtedness orother restricted payments, enter into transactions with affiliates. certain transactions with affiliates or designate SFHC’s subsidiaries as unrestricted, subject to certain exceptions, and (ii) restrictions on Syniverse’s and its restricted subsidiaries’ (other than SFHC and its restricted subsidiaries) ability to merge and consolidate, sell, transfer or otherwise dispose of assets, make acquisitions, loans, advances or investments, pay dividends on or make other distributions in respect of Syniverse’s capital stock or make other restricted payments or designate Syniverse’s subsidiaries as unrestricted, subject to certain exceptions.

We incurred debt modification fees of $9.8 million in connection with the Exchange Offer for the year ended December 31, 2017 which is recorded in Interest expense in the consolidated statements of operations.

On March 12, 2018, the SFHC Notes were redeemed in full in connection with the 2018 Refinancing.

9. Employee Benefits

Defined Contribution Benefit Plans

We have a 401(k) plan covering all U.S. employees subject to certain eligibility requirements. Under this plan, a certain percentage of contributions are matched. Contributions made to the 401(k) plan were $43.25 million, $54.2 million and $5.12 million for the years ended December 31, 20162017, 20152016 and 20142015, respectively.

We have defined contribution plans in certain foreign subsidiaries set up in accordance with the local statutory requirements. Contributions made to these plans were $1.20 million, $1.32 million and $1.73 million for the years ended December 31, 20162017, 20152016 and 20142015, respectively.

Pension Plan

We have a noncontributory, unfunded defined benefit retirement plan for certain employees located in Germany. The benefits are based on employees’ annual compensation and plan benefits are paid to employees at least 65 years of age that have been employed a minimum of ten years. We recorded a pension liabilitiesobligation of $1315.62 million and $1213.76 million as of December 31, 20162017 and 20152016, respectively, which areis included in Other long-term liabilities on the consolidated balance sheets.

Assumptions used in determining the benefit obligations for pension and other postretirement plans as of December 31, 2016 and 2015, were as follows:

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The following table provides a reconciliation of the change in our benefit obligation as of December 31, 2016 and 2015:

Net periodic pension cost recognized in the consolidated statements of operations for the periods ended December 31, 2016, 2015 and 2014 included the following components:

Included in Accumulated other comprehensive loss in the consolidated balance sheet as of December 31, 2016 is an actuarial loss of $0.3 million which we expect to record as a component of net periodic pension cost during the year ending December 31, 2017.

The estimated benefit payments for each of the next five years and in aggregate for the five years thereafter are as follows:

10. Stock-Based Compensation

2011 Equity Incentive Plan

Effective April 6, 2011, Syniverse Corporation, our indirect parent, established the 2011 Plan for the employees, consultants and directors of Syniverse Corporation and its subsidiaries. The 2011 Plan provides incentive compensation through grants of incentive or non-qualified stock options, stock purchase rights, restricted stock awards, restricted stock units, or any combination of the foregoing. Syniverse Corporation will issue shares of its common stock to satisfy equity based compensation instruments. Directors have the option to receive shares of common stock in lieu of a portion of their director fee. On May 20,

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2015, the Compensation Committee of the Board of Directors (the “Committee”) approved an amendment to the 2011 Plan to increase the plan shares available by 2,000,000 shares to 14,291,667 shares.

The number of shares and exercise price per share is determined by the Committee for those awards granted. However, the exercise price of any option may not be less than 100% of the fair market value of a share of common stock of Syniverse Corporation on the date of grant and the exercise price of an incentive option awarded to a person who owns stock constituting more than 10% of Syniverse Corporation’s voting power may not be less than 110% of the fair market value on the date of grant. The exercise price of the option is set at the time of grant. Those eligible to participate in the 2011 Plan are limited to employees, consultants and directors (including non-employee directors) of Syniverse Corporation and its subsidiaries selected by the

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Committee, including participants located outside the United States. Determinations made by the Committee under the 2011 Plan need not be uniform and may be made selectively among eligible participants.

In accordance with the 2011 Plan, each option has an exercisable life of no more than 10 years from the date of grant for both non-qualified and incentive stock options. For employee stock options granted prior to 2015, vesting is dependent on both the service of the employee and performance of the Company. The service based portion, based on continued employment, is 75% of each option grant which vests ratably over a five year period on each December 31. The remaining 25% of the option grant vests upon achievement of certain annual and cumulative earnings-based targets. For employee stock options granted in 2015 and 2016after 2014, vesting is solely dependent on the service of the employee and vests ratably over a four year period on the grant date anniversary. Director stock option vesting is dependent on active service of the Board member. These options vest 20% each year on the grant anniversary date. For employee restricted stock awards, vesting is dependent on the service of the employee and grade vests over a three year period on the grant date anniversary.

The fair values of service based stock option grants and restricted stock awards are amortized as compensation expense using the straight-line attribution method over the vesting period of the grants. The fair values of performance based stock option grants are amortized as compensation expense using the accelerated attribution method over the vesting period of the grants. The fair values of stock options as of December 31, 20162017, 20152016 and 20142015 were estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions:



	Years Ended December 31,
	2017	2016	2015
Risk-free interest rate	2.0%	1.4%	1.9%
Volatility factor	29.9%	30.2%	38.2%
Dividend yield	—%	—%	—%
Weighted-average expected life of options (in years)	6.3	6.3	6.4

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of subjective assumptions including the expected stock price volatility. Although we have a history of publicly traded stock, our common stock is 100% indirectly owned by Syniverse Corporation. As such, we used the historical volatility for the Company prior to the Carlyle acquisition through the delist date (January 12, 2011). For the period subsequent to the delist date, we used the average historical volatility factor of comparable companies. We based our assumptions for the expected life of the options on the average of our contractual term and the weighted average option term.

The applicable accounting guidance requires us to estimate potential forfeitures of stock grants and adjust compensation cost recorded accordingly. We estimate our forfeitures based on an average of our historical experience excluding certain option grants for the management team issued in a period of high turnover, which we do not believe is representative of future activity.

The following table summarizes Syniverse Corporation’s stock option activity for the year ended December 31, 2017:



Stock Options	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term in Years	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2016	8,952,912		$	11.04		$	—
Granted	2,138,667		$	10.00
Exercised	—		$	—
Canceled or expired	(2,842,328	)	$	10.97
Outstanding at December 31, 2017	8,249,251		$	10.79	5.28	$	—
Vested and expected to vest at December 31, 2017	7,649,642		$	10.84	6.54	$	—
Exercisable at December 31, 2017	4,374,589		$	10.95	5.27	$	—

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The following table summarizes our stock option activity for the year ended December 31, 2016:

As of December 31, 20162017, there was $1711.09 million of total unrecognized compensation cost related to stock options. The weighted-average recognition period for the remaining unrecognized stock-based compensation expense is approximately 2.65 years.

During the years ended December 31, 20162017, 20152016 and 20142015:


•	the weighted-average fair value per share of stock options granted to employees was $3.2536, $43.5925 and $64.7359, respectively;


•	the total intrinsic value of stock options exercised was $0.10 million, $10.1 million and $1.81 million, respectively; and


•	the total fair value of stock options that vested during the period was $65.98 million, $6.89 million and $6.8.2 million, respectively.

Restricted stock awards of Syniverse Corporation are issued and measured at fair value on the date of grant. Vesting of restricted stock is based solely on time vesting. The following table summarizes ourSyniverse Corporation’s restricted stock activity under the 2011 Plan for the year ended December 31, 20162017:



Restricted Stock	Shares		Weighted- Average Grant-Date Fair Value
Outstanding at December 31, 2016	2,050,000		$	10.59
Granted	767,759		$	10.00
Vested	(764,500	)	$	10.81
Forfeited	(435,500	)	$	10.38
Outstanding at December 31, 2017	1,617,759		$	10.27

As of December 31, 20162017, there was $1610.04 million of total unrecognized compensation cost related to restricted stock awards. The weighted-average recognition period for the remaining unrecognized stock-based compensation expense is approximately 21.09 years.

During the years ended December 31, 20162017, 20152016 and 20142015:


•	the weighted-average fair value per share of restricted stock awards granted to employees was $10.00, $1110.2500 and $1511.0025, respectively; and


•	the total fair value of restricted stock awards that vested during the period was $97.56 million, $09.45 million and $0.34 million, respectively.

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The impact to our Net loss from continuing operations of recording stock-based compensation in the consolidated statement of operations under the 2011 Plan for the year ended December 31, 20162017, 20152016 and 20142015 was as follows:



	Year Ended December 31,
(in thousands)	2017		2016		2015
Cost of operations	$	751	$	627	$	590
Sales and marketing	2,714		3,750		5,343
General and administrative	10,744		12,693		11,329
Stock-based compensation	$	14,209	$	17,070	$	17,262
Tax benefit	$	—	$	827	$	4,372

There was no stock-based compensation cost capitalized into assets for the periods ended December 31, 20162017, 20152016 and 20142015.

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11. Employee Termination Benefits and Restructuring

The following table summarizes the activity in our employee termination benefit liabilities for the years ended December 31, 20162017, 20152016 and 20142015:



	Balance at										Balance at
	Beginning										End
(in thousands)	of Period		Additions		Payments			Adjustments			of Period
Year ended December 31, 2017	$	1,131	$	1,923	$	(1,852	)	$	32		$	1,234
Year ended December 31, 2016	$	1,836	$	869	$	(1,570	)	$	(4	)	$	1,131
Year ended December 31, 2015	$	4,179	$	948	$	(3,256	)	$	(35	)	$	1,836

Employee termination benefits represents non-retirement post-employment benefit costs including severance, benefits and other employee related costs that are unrelated to a restructuring plan.

The following table summarizes the activity in our restructuring liabilities for the years ended December 31, 20162017, 20152016 and 20142015:



	December 31, 2016										December 31, 2017
(in thousands)	Balance		Additions			Payments			Adjustments		Balance
December 2016 Plan	$	6,450	$	2,187		$	(7,758	)	$	58	$	937
March 2016 Plan	4,981		4,190			(7,592		)	—		1,579
October 2014 Plan	3,720		(179		)	(3,373		)	107		275
Total	$	15,151	$	6,198		$	(18,723	)	$	165	$	2,791

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	December 31, 2015											December 31, 2016
(in thousands)	Balance		Additions			Payments			Adjustments			Balance
December 2016 Plan	$	—	$	6,766		$	(317	)	$	1		$	6,450
March 2016 Plan	—		19,144			(14,136		)	(27		)	4,981
October 2014 Plan	8,195		(660		)	(3,663		)	(200		)	3,672
December 2010 Plan	492		(30		)	(419		)	5			48
Total	$	8,687	$	25,220		$	(18,535	)	$	(221	)	$	15,151



	December 31, 2014											December 31, 2015
	Balance		Additions			Payments			Adjustments			Balance
October 2014 Plan	$	14,622	$	578		$	(6,126	)	$	(879	)	$	8,195
December 2011 Plan	262		(191		)	(71		)	—			—
December 2010 Plan	547		—			—			(55		)	492
Total	$	15,431	$	387		$	(6,197	)	$	(934	)	$	8,687

In December 2016, we implemented a restructuring plan (the “December 2016 restructuring plan”) to realign costs and expenses with revenue trends across our portfolio. As a result of this plan, we incurred severance related costs of $69.80 million which is included in Restructuring expense in the consolidated statements of operations. We have paid $08.31 million related to this plan as of December 31, 20162017 and anticipate nearly all remaining cash outlays to take place during 20172018.

In March 2016, we implemented a restructuring plan (the “March 2016 restructuring plan”) to realign costs and expenses with revenue trends across our portfolio, reducing costs associated with certain of our legacy products and services to provide

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for increased investment in our growth businesses. As a result of this plan, we incurred severance related costs of $14.4 million and contract termination costs of $49.80 million related to the exit of data center leases. We have paid $1421.17 million related to this plan as of December 31, 20162017 and anticipate nearly all remaining cash outlays to take place during 20172018.

In October 2014, we implemented a restructuring plan to realign costs and expenses with revenue trends across our portfolio. As a result of this plan, we incurred severance related costs of $14.1 million and contract termination costs of $3.7 million related to the exit of leased facilities, data centers and networking services. We have paid $12.8 million related to this plan as of December 31, 2016.

12. Income Taxes

On December 22, 2017, the United States enacted comprehensive tax legislation called the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code including reducing the US federal corporate tax rate from 35% to 21%, requiring a mandatory transition tax on unremitted foreign earnings, moving from a worldwide to a territorial tax system and placing potential limits on the deductibility of interest expense. We have recorded a deferred income tax benefit of $36.8 million related to the revaluation of the Company’s net deferred tax assets and liabilities at the December 22, 2017 enactment date using the new 21% statutory rate. The calculation of the one-time transition tax is based on our total post-1986 deferred foreign income held in cash and other assets. Due to the timing of the enactment and the complexity of the Tax Act, the Company is unable to estimate a reasonable range of its post-1986 deferred foreign income and the related one-time impact associated with the mandatory transition tax. In addition, we continue to assess the other provisions of the Tax Act and will provide additional disclosures in the quarterly report on Form 10-Q for the period ending March 31, 2018.

The components of Benefit from income taxes are as follows:



	Year Ended December 31,
	2017			2016			2015
Current:
Federal	$	(47	)	$	—		$	(1,669	)
Foreign	7,729			8,352			8,660
State and local	416			104			(141		)
	8,098			8,456			6,850
Deferred
Federal	(59,477		)	(46,124		)	(34,419		)
Foreign	(2,696		)	(1,558		)	(2,010		)
State and local	10,129			(3,581		)	(1,698		)
	(52,044		)	(51,263		)	(38,127		)
Benefit from income taxes	$	(43,946	)	$	(42,807	)	$	(31,277	)

The difference between the effective income tax rate and the United States federal income tax rate is summarized as follows:

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The Benefit from income taxes differs from amounts computed by applying the U.S. statutory rate of 35% to loss before benefit from income taxes as follows:



	Year Ended December 31,
	2017		2016		2015
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
State and local income tax, net of federal tax benefit	4.3		2.7		0.3
Impact of foreign tax rates	13.7		18.5		33.8
Foreign withholding and audit	(5.5	)	(2.6	)	(4.4	)
Tax credits	(2.3	)	1.3		—
Changes to uncertain tax positions	20.0		1.2		0.2
Impact of the Tax Act	56.8		—		—
Changes in measurement of deferred tax liabilities and other	0.9		(15.9	)	1.3
Change in valuation allowance	(49.9	)	4.7		(28.5	)
Unrealized gain (loss)	—		(0.1	)	5.0
Nondeductible stock-based compensation	(4.3	)	(4.8	)	(1.8	)
Other, net	(0.8	)	(0.4	)	(2.1	)
	67.9	%	39.6	%	38.8	%

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate, was $2711.39 million, $3027.23 million and $3130.52 million at December 31, 20162017, 20152016 and 20142015, respectively. Uncertain tax positions are included in other long-term liabilities on the consolidated balance sheets. A rollforward of the beginning and ending amount of uncertain tax positions is as follows:



	Year Ended December 31,
(in thousands)	2017			2016			2015
Balance at beginning of period	$	83,535		$	73,497		$	67,185
Additions based on tax positions related to the current year	20,149			16,147			13,679
Additions for tax positions of prior years	8,814			—			2,727
Reductions for tax positions of prior years	(1,641		)	(3,369		)	(7,430		)
Reductions for tax positions effectively settled	(10,328		)	—			—
Reductions for lapse of statute of limitations	(2,263		)	(2,740		)	(2,664		)
Balance at end of period	$	98,266		$	83,535		$	73,497

We recognize accrued interest and penalties related to uncertain tax positions as a component of Benefit from income taxes. Accrued interest and penalties was $2.3 million, $2.3 million and $2.21.3 million as of December 31, 2016, 20152017 and 2014$2.3 million, respectively for each of the periods ended December 31, 2016 and 2015, in the consolidated balance sheets. Expense (benefit) for interest and penalties was $(1.0.1) million, $(0.1) million and $(0.5)1 million for the years ended December 31, 20162017, 20152016 and 20142015, respectively, in the consolidated statements of operations. Included in the additions for 2015 is $0.6 million related to the Aicent acquisition.

We conduct business globally and file income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as the United States. Tax years 20112014 through 20162017 are subject to examination by the federal taxing authorities. Tax years 20042006 through 20162017 are subject to examination by the state taxing authorities. In our international tax jurisdictions, tax years 2007 or later remain open in all of our major international tax jurisdictions. We are currently under audit by the Internal Revenue Service of the United States for the Successor periods (as discussed in Item 6. “Selected Financial Data”) ended December 31, 2011, 2012 and 2013.

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The Company's non-U.S. subsidiaries had $87125.70 million in cumulative undistributed earnings as of December 31, 20162017. As mentioned above, this does not include the effects of the mandatory transition tax. This amount represents the post-income tax earnings under U.S. GAAP adjusted for previously taxed income. The earnings from the Company's non-U.S. subsidiaries are considered to be indefinitely reinvested. Accordingly, no provision for tax has been made in the accompanying consolidated financial statements. Further, a determination of the unrecognized deferred tax liability is not practicable. Any future distribution of these non-U.S. earnings may subject the Company to both U.S. federal and state income taxes, as adjusted for non-U.S. tax credits, and withholding taxes payable to various non-U.S. countries.

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The components of Loss before benefit from income taxes are as follows:



	Year Ended December 31,
(in thousands)	2017			2016			2015
United States	$	(120,123	)	$	(141,565	)	$	(111,192	)
Foreign	55,378			33,588			30,603
	$	(64,745	)	$	(107,977	)	$	(80,589	)

Deferred income tax assets and liabilities are recorded due primarily to different carrying amounts for financial and income tax reporting purposes arising from cumulative temporary differences. Significant components of deferred tax assets (liabilities) are shown in the following table:



	December 31,
(in thousands)	2017			2016
Deferred tax assets (liabilities):
Intangibles	$	(116,000	)	$	(184,266	)
Property & equipment	(8,269		)	(27,523		)
Interest	4,159			(3,679		)
Employee benefit accruals	11,832			18,378
Accrued expenses	5,390			7,538
Deferrals	1,697			1,353
Software development costs	(7,863		)	(11,071		)
Net operating loss carryforwards	153,394			181,376
Other, net	4,685			7,179
	49,025			(10,715		)
Less: Valuation allowance	(119,210		)	(100,677		)
Deferred tax liabilities, net	$	(70,185	)	$	(111,392	)

The activity in deferred tax assets includes the deferred tax impact of foreign currency translation adjustments and actuarial gains associated with our defined benefit pension plan totaling $0.1 million and $1.4(0.3) million to increasedecrease the deferred tax asset on accumulated other comprehensive (loss) income for the yearsyear ended December 31, 2015 and 2014, respectively. There was no December 31, 2017. There was no change in our deferred tax asset associated with foreign currency translation adjustments and actuarial gains associated with our defined pension plan during the year ended December 31, 2016.

Our deferred tax assets include net accumulated foreign net operating losses (NOLs) of $174188.35 million, net accumulated federal NOLs of $5937.03 million and net accumulated state NOLs of $1115.60 million at December 31, 20162017. The foreign NOLs remain available indefinitely to offset future taxable income in specific jurisdictions subject to applicable tax laws and regulations while. U.S. federal and state NOLs in specific jurisdictions will expire if not utilized between tax years 20172018 and 20362037. The deferred tax assets also include federal and state tax credit carry forwards of $43.52 million and $1.31 million, respectively, at December 31, 20162017. The federal credits will expire if not utilized between tax years between 2022 and 2036. The majority of the state credits have an indefinite carryforward period.

We continue to maintain a valuation allowance for deferred tax assets primarily associated with certain foreign NOLs. We have determined that it is more likely than not that we will realize the benefit of our net deferred tax assets for which we have not established a valuation allowance. The total amount of valuation allowance on our deferred tax assets was $100119.72 million and $125100.17 million at December 31, 2016 and 2015, respectively. The change is primarily related

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December 31, 2017 and 2016, respectively. The change is primarily related to losses in jurisdictions with existing valuation allowances offset by the impact of enacted foreign tax rates changes and, the translation of foreign currencies, and the establishment of a full valuation allowance on U.S. net deferred tax assets previously discussed.

Certain intangible assets and goodwill arising from our prior acquisition activities have tax deductible basis. However, these assets were subsequently recorded at fair value in prior periods in accordance with the applicable accounting guidance for

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business combinations as it relates to the Merger. We believe the tax benefits for these historical assets will continue in future periods and are included in our deferred tax liabilities.

13. Concentration of Business

Financial instruments that subject us to concentrations of credit risk are limited to our trade receivables from major customers and cash. One customer represented more than 10% of accounts receivable as of December 31, 20162017 and 20152016. Our cash is placed with high credit quality financial institutions.

Our two largest customers, Verizon Wireless and AT&T Mobility, generated 1714.76% and 10.12%, respectively, of total revenues for the year ended December 31, 20162017. For the year ended years endedDecember 31, 2016, Verizon Wireless and AT&T Mobility contributed 17.7% and 10.1% of total revenues, respectively. For the year ended December 31, 2015 and 2014, Verizon Wireless contributed 20.2% and 20.3% of total revenues, respectively.

No other customer represented more than 10% of revenues for the periods presented, although a significant amount of our remaining revenues were generated from services provided to a small number of other customers.

14. Commitments and Contingencies

Leasing Arrangements

We lease certain facilities and equipment for use in our operations. We record operating lease expense on a straight-line basis over the term of the lease after taking into consideration rent holidays, rent escalations and leasehold incentives. Total rent expense under operating leases was $11.40 million, $1211.84 million and $1512.58 million for the years ended December 31, 20162017, 20152016 and 20142015, respectively. These leases contain various renewal options that could extend the terms of the leases beyond 2022 at our option.

Interest rates for our capital leases range from 1.4% to 6.9.0% with maturity dates between January 20172018 and October 2022.

As of December 31, 20162017, the aggregate future minimum lease commitments under non-cancelable leases were as follows:



(in thousands)	Capital Leases		Operating Leases
Year ended December 31, 2018	$	6,700	$	10,276
Year ended December 31, 2019	4,005		7,575
Year ended December 31, 2020	413		6,835
Year ended December 31, 2021	15		5,798
Year ended December 31, 2022	5		5,582
Thereafter	—		21,466
Total future minimum lease payments	$	11,138	$	57,532
Less: amount representing interest	388
Present value of net minimum lease payments	10,750
Less: current portion	6,410
Long-term obligations under capital leases at December 31, 2017	$	4,340

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Contingencies

We are currently a party to various claims and legal actions that arise in the ordinary course of business. We believe such claims and legal actions, individually and in the aggregate, will not have a material adverse effect on our business, financial condition, results of operations or cash flows. As of December 31, 20162017, we have considered all of the claims and disputes of which we are aware and have provided for probable losses, which are not material to the consolidated financial statements.

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15. Fair Value Measurements

The accounting standards for fair value require disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs. The three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows:

Level 1—Quoted prices for identical assets and liabilities in active markets.

Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Unobservable inputs for the asset or liability.

Transfers between levels are determined at the end of the reporting period. No transfers between levels have been recognized for the years ended December 31, 20162017 and 20152016.

Cash, accounts receivable, accounts payable and accrued liabilities are reflected in the consolidated financial statements at their carrying value, which approximate their fair value due to their short maturity.

From time to time, we measure certain assets at fair value on a non-recurring basis, specifically long-lived assets evaluated for impairment. We estimate the fair value of our long-lived assets using company-specific assumptions which would be categorized within Level 2 of the fair value hierarchy. We did not have any impairment losses for the years ended December 31, 20162017, 20152016 and 20142015.

During the year ended December 31, 20162016, we recorded a $5.5 million gain related to a one-time transfer of certain data center equipment from a vendor to Syniverse at no cost. The non-cash gain was measured at fair value using current prices for similar assets (Level 2 input) and is included in Other operating income in the accompanying consolidated statements of operations.

The carrying amounts and fair values of our long-term debt excluding original issuance discount and deferred financing costs as of December 31, 20162017 and 20152016 were as follows:



	December 31, 2017				December 31, 2016
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Initial Term Loans	$	889,976	$	874,401	$	891,057	$	788,585
Tranche B Term Loans	$	662,396	$	650,804	$	663,200	$	583,616
Syniverse Notes	$	41,727	$	41,414	$	475,000	$	418,000
SFHC Notes	$	369,547	$	378,786	$	—	$	—

The fair values of the Initial Term Loans, the Tranche B Term Loans and the Syniverse Notes were based upon quoted market prices in inactive markets for similar instruments (Level 2).

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16. Quarterly Financial Information (Unaudited)

The following table summarizes quarterly financial results for the year ended December 31, 20162017:



	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
(in thousands)	2017			2017			2017			2017
Revenues	$	185,848		$	194,507		$	207,009		$	206,148
Gross Profit	$	99,812		$	106,016		$	116,526		$	121,460
Operating income	$	6,951		$	15,257		$	23,205		$	25,895
Net (loss) income	$	(23,903	)	$	(15,732	)	$	(24,956	)	$	43,792
Net (loss) income attributable to Syniverse Holdings, Inc.	$	(24,662	)	$	(16,363	)	$	(25,765	)	$	42,196

The following table summarizes quarterly financial results for the year ended December 31, 20152016:



	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
(in thousands)	2016			2016			2016			2016
Revenues	$	194,444		$	197,718		$	196,617		$	193,113
Gross Profit	$	99,305		$	108,191		$	108,324		$	110,678
Operating (loss) income	$	(17,856	)	$	8,270		$	18,169		$	3,842
Net loss	$	(15,789	)	$	(14,624	)	$	(17,163	)	$	(17,594	)
Net loss attributable to Syniverse Holdings, Inc.	$	(16,242	)	$	(15,106	)	$	(17,621	)	$	(18,214	)

17. Related Party Transactions

Consulting Agreement with Carlyle

On January 13, 2011, we entered into a ten-year consulting agreement with Carlyle under which we pay Carlyle a fee for consulting services Carlyle provides to us and our subsidiaries. During the yearyears ended December 31, 20162017, 2016 and 2015 we recorded $3.3 million, $3.2 million of expenses associated with the consulting fee and the reimbursement of out-of-pocket expenses. During the years ended December 31, 2015 and 2014 we recordedand $3.1 million , respectively, of expenses associated with the consulting fee and the reimbursement of out-of-pocket expenses.

Carlyle, from time to time, participates as a debt holder within the syndicate under our Initial Term Loans and Tranche B Term Loans. As of December 31, 20162017, Carlyle held $3719.24 million and $2524.64 million of our Initial Term Loans and Tranche B Term Loans, respectively. As of December 31, 20152016, Carlyle held $5137.02 million and $2025.56 million of our Initial Term Loans and Tranche B Term Loans, respectively.

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18. Supplemental Consolidating Financial Information

On December 22, 2010, Syniverse issued $475.0 million of Syniverse Notes guaranteed on a joint and several basis by each of its existing and future domestic restricted subsidiaries that guarantee the Senior Credit Facilityour senior secured credit facilities (collectively, the “Subsidiary Guarantors”). Such guarantees are irrevocable, full, unconditional and joint and several. On January 11, 2017, pursuant to the Exchange Offer, SFHC issued $369.5 million SFHC Notes and a like amount of Syniverse Notes were cancelled. The SFHC Notes are unconditionally guaranteed on a joint and several basis by Syniverse and the Subsidiary Guarantors. SFHC is a wholly-owned indirect subsidiary of Syniverse that holds no material assets other than the equity interests of substantially all of Syniverse’s foreign subsidiaries. SFHC and its subsidiaries are not guarantors of the Senior Credit Facility or the Syniverse Notes.

The following tables set forthWe have presented supplemental consolidating balance sheets, statements of operations, statements of comprehensive income (loss) income and statements of cash flows for the year ended December 31, 2016 for (i) Syniverse, (ii) the Subsidiary Guarantors, (iii) SFHC and its subsidiaries on a combined basis (the “SFHC Group Non-Guarantors”), (iv) all other direct and indirect subsidiaries of Syniverse on a combined basis (the “Other Non-Guarantors” and, together with the SFHC Group Non-Guarantors, the “Non-Guarantors”), (v) Syniverse Holdings, Inc., which we refer to in this footnote only as Syniverse, Inc., the subsidiary guarantors and the eliminations necessary to arrive atsubsidiary non-guarantors for all periods presented to reflect the information forguarantor structure under the total Non-Guarantors on a combined basis, (vi) the Non-Guarantors on a combined basis and (vii) the eliminations necessary to arrive at the information for Syniverse and all of its subsidiaries on a consolidated basis and for the years ended December 31, 2015 and 2014 for (i) Syniverse, (ii) the Subsidiary Guarantors, (iii) the Non-Guarantors and (iv) the eliminations necessary to arrive at the information for Syniverse and all of its subsidiaries on a consolidated basisSenior Notes. The supplemental financial information reflects the investment of Syniverse, Inc. using the equity method of accounting.

The Company is presenting the tables below in order to comply with the covenantscovenant contained in the indentures for bothindenture of the Syniverse Notes and the SFHC Notes.

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CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 20162017

(IN THOUSANDS)



	Syniverse			Subsidiary Guarantors		Subsidiary Non-Guarantors			Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	53,243	$	74,434		$	—		$	127,677
Accounts receivable, net of allowances	—			120,369		47,780			—			168,149
Accounts receivable - affiliates	2,071,648			1,716,547		57,954			(3,846,149		)	—
Income taxes receivable	—			231		3,903			—			4,134
Prepaid and other current assets	686			13,856		8,662			—			23,204
Total current assets	2,072,334			1,904,246		192,733			(3,846,149		)	323,164
Property and equipment, net	—			70,355		22,848			—			93,203
Capitalized software, net	—			78,212		24,242			—			102,454
Goodwill	—			1,922,230		392,051			—			2,314,281
Identifiable intangibles, net	—			218,332		40,654			—			258,986
Deferred tax assets	21,749			—		3,608			(21,749		)	3,608
Investment in unconsolidated subsidiaries	—			42,676		4,582			—			47,258
Other assets	29			2,719		2,224			—			4,972
Investment in subsidiaries	2,152,970			178,693		—			(2,331,663		)	—
Total assets	$	4,247,082		$	4,417,463	$	682,942		$	(6,199,561	)	$	3,147,926

LIABILITIES AND STOCKHOLDER EQUITY
Current liabilities:
Accounts payable	$	—		$	14,834	$	6,003		$	—		$	20,837
Accounts payable - affiliates	1,715,046			2,094,598		36,504			(3,846,148		)	—
Income taxes payable	—			242		4,542			—			4,784
Accrued liabilities	2,853			43,484		42,912			—			89,249
Deferred revenues	—			3,975		2,022			—			5,997
Current portion of capital lease obligation	—			6,311		99			—			6,410
Current portion of long-term debt, net of original issue discount	2,595			—		—			—			2,595
Total current liabilities	1,720,494			2,163,444		92,082			(3,846,148		)	129,872
Long-term liabilities:
Deferred tax liabilities	—			84,186		11,356			(21,749		)	73,793
Long-term capital lease obligation, net of current maturities	—			4,229		111			—			4,340
Long-term debt, net of current portion and original issue discount	1,575,484			—		365,129			—			1,940,613
Other long-term liabilities	—			12,634		26,267			—			38,901
Total liabilities	3,295,978			2,264,493		494,945			(3,867,897		)	2,187,519
Commitments and contingencies
Stockholder equity:
Common stock	—			—		—			—			—
Additional paid-in capital	1,214,927			1,919,497		368,464			(2,226,944		)	1,275,944
(Accumulated deficit) retained earnings	(262,853		)	232,940		(125,858		)	(105,844		)	(261,615		)
Accumulated other comprehensive (loss) income	(970		)	533		(63,913		)	1,124			(63,226		)
Total Syniverse Holdings, Inc. stockholder equity	951,104			2,152,970		178,693			(2,331,664		)	951,103
Noncontrolling interest	—			—		9,304			—			9,304
Total equity	951,104			2,152,970		187,997			(2,331,664		)	960,407
Total liabilities and stockholder equity	$	4,247,082		$	4,417,463	$	682,942		$	(6,199,561	)	$	3,147,926

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CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 20162017

(IN THOUSANDS)

116



	Syniverse			Subsidiary Guarantors			Subsidiary Non-Guarantors			Adjustments			Consolidated
Revenues	$	—		$	605,976		$	187,536		$	—		$	793,512
Costs and expenses:
Cost of operations (excluding depreciation and amortization shown separately below)	—			319,011			30,687			—			349,698
Sales and marketing	—			46,876			23,040			—			69,916
General and administrative	—			67,136			32,783			—			99,919
Depreciation and amortization	—			158,237			36,313			—			194,550
Employee termination benefits	—			694			1,229			—			1,923
Restructuring	—			5,994			204			—			6,198
	—			597,948			124,256			—			722,204
Operating income	—			8,028			63,280			—			71,308
Other income (expense), net:
Income (loss) from equity investment	160,415			12,157			—			(172,572		)	—
Interest (expense) income, net	(88,439		)	(607		)	(43,071		)	—			(132,117		)
Interest income (expense) - affiliate	—			10			(10		)	—			—
Loss on early extinguishment of debt, net	(5		)	—			—			—			(5		)
Equity income in investee	—			(1,053		)	649			—			(404		)
Other, net	(83,078		)	81,150			(1,599		)	—			(3,527		)
	(11,107		)	91,657			(44,031		)	(172,572		)	(136,053		)
(Loss) income before provision for (benefit from) income taxes	(11,107		)	99,685			19,249			(172,572		)	(64,745		)
Provision for (benefit from) income taxes	13,487			(60,730		)	3,297			—			(43,946		)
Net (loss) income	(24,594		)	160,415			15,952			(172,572		)	(20,799		)
Net income attributable to noncontrolling interest	—			—			3,795			—			3,795
Net (loss) income attributable to Syniverse Holdings, Inc.	$	(24,594	)	$	160,415		$	12,157		$	(172,572	)	$	(24,594	)

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CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME

FOR THE YEAR ENDED DECEMBER 31, 2017

(IN THOUSANDS)



	Syniverse			Subsidiary Guarantors		Subsidiary Non-Guarantors		Adjustments			Consolidated
Net (loss) income	$	(24,594	)	$	160,415	$	15,952	$	(172,572	)	$	(20,799	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—			—		56,411		—			56,411
Amortization of unrecognized loss included in net periodic pension cost	—			—		712		—			712
Other comprehensive income	—			—		57,123		—			57,123
Comprehensive (loss) income	(24,594		)	160,415		73,075		(172,572		)	36,324
Less: comprehensive income attributable to noncontrolling interest	—			—		4,102		—			4,102
Comprehensive (loss) income attributable to Syniverse Holdings, Inc.	$	(24,594	)	$	160,415	$	68,973	$	(172,572	)	$	32,222

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CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2017

(IN THOUSANDS)



	Syniverse			Subsidiary Guarantors			Subsidiary Non-Guarantors			Adjustments			Consolidated
Cash flows from operating activities
Net cash provided by operating activities	68,547			11,524			65,876			—			145,947
Cash flows from investing activities
Capital expenditures	—			(47,253		)	(13,934		)	—			(61,187		)
Redemption of certificate of deposit	—			697			(191		)	—			506
Capital contribution to subsidiary	—			(453		)	—			453			—
Return of capital from subsidiary	—			16,000			—			(16,000		)	—
Receipts on intercompany notes	—			12,000			—			(12,000		)	—
Net cash used in investing activities	—			(19,009		)	(14,125		)	(27,547		)	(60,681		)
Cash flows from financing activities
Debt issuance costs paid	—			(1,143		)	—			—			(1,143		)
Debt modification costs paid	—			(9,780		)	—			—			(9,780		)
Principal payments on long-term debt	(65,032		)	—			—			—			(65,032		)
Payments on capital lease obligation	—			(16,992		)	(577		)	—			(17,569		)
Distribution to Syniverse Corporation	(3,515		)	—			—			—			(3,515		)
Capital contribution from parent	—			—			453			(453		)	—
Payments on intercompany notes	—			—			(12,000		)	12,000			—
Dividends paid	—			—			(16,000		)	16,000			—
Distribution to noncontrolling interest	—			—			(2,311		)	—			(2,311		)
Net cash (used in) provided by financing activities	(68,547		)	(27,915		)	(30,435		)	27,547			(99,350		)
Effect of exchange rate changes on cash	—			—			5,587			—			5,587
Net (decrease) increase in cash	—			(35,400		)	26,903			—			(8,497		)
Cash and cash equivalents at beginning of period	—			88,643			47,531			—			136,174
Cash and cash equivalents at end of period	$	—		$	53,243		$	74,434		$	—		$	127,677

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CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2016

(IN THOUSANDS)



	Syniverse			Subsidiary Guarantors		Subsidiary Non-Guarantors			Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	88,643	$	47,531		$	—		$	136,174
Accounts receivable, net of allowances	—			122,479		43,628			—			166,107
Accounts receivable - affiliates	2,056,771			1,460,905		52,007			(3,569,683		)	—
Interest receivable - affiliates	—			25		—			(25		)	—
Income taxes receivable	—			2,255		6,041			—			8,296
Prepaid and other current assets	—			14,378		14,012			—			28,390
Total current assets	2,056,771			1,688,685		163,219			(3,569,708		)	338,967
Property and equipment, net	—			84,771		24,011			—			108,782
Capitalized software, net	—			116,981		26,310			—			143,291
Goodwill	—			1,922,343		350,453			—			2,272,796
Identifiable intangibles, net	—			270,900		48,541			—			319,441
Long-term note receivable - affiliates	—			12,000		—			(12,000		)	—
Deferred tax assets	55,587			—		1,338			(55,587		)	1,338
Investment in unconsolidated subsidiaries	—			43,730		3,451			—			47,181
Other assets	—			6,311		1,993			—			8,304
Investment in subsidiaries	2,279,683			484,037		—			(2,763,720		)	—
Total assets	$	4,392,041		$	4,629,758	$	619,316		$	(6,401,015	)	$	3,240,100

LIABILITIES AND STOCKHOLDER EQUITY
Current liabilities:
Accounts payable	$	—		$	22,795	$	7,762		$	—		$	30,557
Accounts payable - affiliates	1,461,626			2,075,563		32,494			(3,569,683		)	—
Income taxes payable	—			194		4,855			—			5,049
Accrued liabilities	26,277			45,747		35,140			—			107,164
Accrued interest - affiliates	—			—		25			(25		)	—
Deferred revenues	—			1,529		1,485			—			3,014
Current portion of capital lease obligation	—			16,279		75			—			16,354
Current portion of long term debt, net of original issue discount	1,853			—		—			—			1,853
Total current liabilities	1,489,756			2,162,107		81,836			(3,569,708		)	163,991
Long-term liabilities:
Long-term note payable - affiliates	—			—		12,000			(12,000		)	—
Deferred tax liabilities	—			158,339		9,978			(55,587		)	112,730
Long-term capital lease obligation, net of current maturities	—			8,209		157			—			8,366
Long-term debt, net of current portion and original issue discount	1,993,596			—		—			—			1,993,596
Other long-term liabilities	—			21,420		23,795			—			45,215
Total liabilities	3,483,352			2,350,075		127,766			(3,637,295		)	2,323,898
Commitments and contingencies
Stockholder equity:
Common stock	—			—		—			—			—
Additional paid-in capital	1,147,920			2,208,012		484,795			(2,574,975		)	1,265,752
(Accumulated deficit) retained earnings	(238,261		)	71,138		119,970			(189,868		)	(237,021		)
Accumulated other comprehensive (loss) income	(970		)	533		(120,728		)	1,123			(120,042		)
Total Syniverse Holdings, Inc. stockholder equity	908,689			2,279,683		484,037			(2,763,720		)	908,689
Noncontrolling interest	—			—		7,513			—			7,513
Total equity	908,689			2,279,683		491,550			(2,763,720		)	916,202
Total liabilities and stockholder equity	$	4,392,041		$	4,629,758	$	619,316		$	(6,401,015	)	$	3,240,100

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CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2016

(IN THOUSANDS)



	Syniverse			Subsidiary Guarantors			Subsidiary Non-Guarantors			Adjustments			Consolidated
Revenues	$	—		$	610,777		$	171,115		$	—		$	781,892
Costs and expenses:
Cost of operations (excluding depreciation and amortization shown separately below)	—			329,998			25,396			—			355,394
Sales and marketing	—			44,299			26,504			—			70,803
General and administrative	—			76,010			38,540			—			114,550
Depreciation and amortization	—			170,821			37,309			—			208,130
Employee termination benefits	—			820			49			—			869
Restructuring	—			18,649			6,571			—			25,220
Other Operating Income	—			(5,499		)	—			—			(5,499		)
	—			635,098			134,369			—			769,467
Operating (loss) income	—			(24,321		)	36,746			—			12,425
Other income (expense), net:
(Loss) income from equity investment	(20,698		)	41,388			—			(20,690		)	—
Interest (expense) income, net	(122,610		)	(898		)	671			—			(122,837		)
Interest income (expense) - affiliate	54			25			(79		)	—			—
Equity income in investee	—			(829		)	363			—			(466		)
Other, net	30,817			(25,875		)	(2,041		)	—			2,901
	(112,437		)	13,811			(1,086		)	(20,690		)	(120,402		)
(Loss) income before (benefit from) provision for income taxes	(112,437		)	(10,510		)	35,660			(20,690		)	(107,977		)
(Benefit from) provision for income taxes	(45,254		)	10,188			(7,741		)	—			(42,807		)
Net (loss) income	(67,183		)	(20,698		)	43,401			(20,690		)	(65,170		)
Net income attributable to noncontrolling interest	—			—			2,013			—			2,013
Net (loss) income attributable to Syniverse Holdings, Inc.	$	(67,183	)	$	(20,698	)	$	41,388		$	(20,690	)	$	(67,183	)

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CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME

FOR THE YEAR ENDED DECEMBER 31, 2016

(IN THOUSANDS)



	Syniverse			Subsidiary Guarantors			Subsidiary Non-Guarantors			Adjustments			Consolidated
Net (loss) income	$	(67,183	)	$	(20,698	)	$	43,401		$	(20,690	)	$	(65,170	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of income tax expense of $204	—			—			(22,184		)	—			(22,184		)
Amortization of unrecognized loss included in net periodic pension cost, net of income tax benefit of $171	—			—			(386		)	—			(386		)
Other comprehensive loss	—			—			(22,570		)	—			(22,570		)
Comprehensive (loss) income	(67,183		)	(20,698		)	20,831			(20,690		)	(87,740		)
Less: comprehensive income attributable to noncontrolling interest	—			—			1,899			—			1,899
Comprehensive (loss) income attributable to Syniverse Holdings, Inc.	$	(67,183	)	$	(20,698	)	$	18,932		$	(20,690	)	$	(89,639	)

117121

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CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2016

(IN THOUSANDS)



	Syniverse			Subsidiary Guarantors			Subsidiary Non-Guarantors			Adjustments			Consolidated
Cash flows from operating activities
Net cash provided by (used in) operating activities	38,021			129,019			3,573			(34,495		)	136,118
Cash flows from investing activities
Capital expenditures	—			(51,217		)	(11,670		)	—			(62,887		)
Investment in unconsolidated subsidiaries	—			(40,479		)	—			—			(40,479		)
Redemption of certificate of deposit	—			107			283			—			390
Proceeds from sale of divestitures	—			10			—			—			10
Intercompany notes	—			(12,000		)	—			12,000			—
Receipts on intercompany notes	4,917			—			—			(4,917		)	—
Net cash provided by (used in) investing activities	4,917			(103,579		)	(11,387		)	7,083			(102,966		)
Cash flows from financing activities
Proceeds from Revolving Credit Facility	15,000			—			—			—			15,000
Payments on Revolving Credit Facility	(15,000		)	—			—			—			(15,000		)
Principal payments on long term debt	(36,243		)	—			—			—			(36,243		)
Payments on capital lease obligation	—			(16,382		)	(68		)	—			(16,450		)
Distribution to Syniverse Corporation	(6,456		)	—			—			—			(6,456		)
Proceeds on intercompany notes	—			—			12,000			(12,000		)	—
Payments on intercompany notes	—			—			(4,917		)	4,917			—
Dividends paid	—			—			(34,495		)	34,495			—
Distribution to noncontrolling interest	—			—			(1,520		)	—			(1,520		)
Net cash (used in) provided by financing activities	(42,699		)	(16,382		)	(29,000		)	27,412			(60,669		)
Effect of exchange rate changes on cash	(239		)	—			(2,651		)	—			(2,890		)
Net increase (decrease) in cash	—			9,058			(39,465		)	—			(30,407		)
Cash and cash equivalents at beginning of period	—			79,585			86,996			—			166,581
Cash and cash equivalents at end of period	$	—		$	88,643		$	47,531		$	—		$	136,174

118

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CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2015

(IN THOUSANDS)

119122

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CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2015

(IN THOUSANDS)

120

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CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME

FOR THE YEAR ENDED DECEMBER 31, 2015

(IN THOUSANDS)

121

Table of Contents

CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2015

(IN THOUSANDS)

122

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CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2014

(IN THOUSANDS)



	Syniverse			Subsidiary Guarantors			Subsidiary Non-Guarantors			Adjustments			Consolidated
Revenues	$	—		$	670,089		$	191,386		$	—		$	861,475
Costs and expenses:
Cost of operations (excluding depreciation and amortization shown separately below)	—			351,361			37,802			—			389,163
Sales and marketing	—			46,526			30,167			—			76,693
General and administrative	—			92,535			43,277			—			135,812
Depreciation and amortization	—			173,004			42,163			—			215,167
Employee termination benefits	—			583			365			—			948
Restructuring	—			1,403			(1,016		)	—			387
Acquisition	—			111			—			—			111
	—			665,523			152,758			—			818,281
Operating income	—			4,566			38,628			—			43,194
Other income (expense), net:
(Loss) income from equity investment	(37,361		)	31,061			—			6,300			—
Interest (expense) income, net	(122,354		)	(873		)	501			—			(122,726		)
Interest income (expense) - affiliate	192			—			(192		)	—			—
Equity income in investee	—			—			36			—			36
Other, net	63,627			(55,454		)	281,925			(291,191		)	(1,093		)
	(95,896		)	(25,266		)	282,270			(284,891		)	(123,783		)
(Loss) income before (benefit from) provision for income taxes	(95,896		)	(20,700		)	320,898			(284,891		)	(80,589		)
(Benefit from) provision for income taxes	(44,039		)	5,083			7,679			—			(31,277		)
Net (loss) income	(51,857		)	(25,783		)	313,219			(284,891		)	(49,312		)
Net income attributable to noncontrolling interest	—			—			1,279			—			1,279
Net (loss) income attributable to Syniverse Holdings, Inc.	$	(51,857	)	$	(25,783	)	$	311,940		$	(284,891	)	$	(50,591	)

123

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CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME

FOR THE YEAR ENDED DECEMBER 31, 20142015

(IN THOUSANDS)



	Syniverse			Subsidiary Guarantors			Subsidiary Non-Guarantors			Adjustments			Consolidated
Net (loss) income	$	(51,857	)	$	(25,783	)	$	313,219		$	(284,891	)	$	(49,312	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of income tax benefit of $269	—			—			(53,778		)	—			(53,778		)
Amortization of unrecognized loss included in net periodic pension cost, net of income tax expense of $144	—			—			327			—			327
Other comprehensive loss	—			—			(53,451		)	—			(53,451		)
Comprehensive (loss) income	(51,857		)	(25,783		)	259,768			(284,891		)	(102,763		)
Less: comprehensive income attributable to noncontrolling interest	—			—			1,192			—			1,192
Comprehensive (loss) income attributable to Syniverse Holdings, Inc.	$	(51,857	)	$	(25,783	)	$	258,576		$	(284,891	)	$	(103,955	)

124

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CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 20142015

(IN THOUSANDS)



	Syniverse			Subsidiary Guarantors			Subsidiary Non-Guarantors			Adjustments		Consolidated
Cash flows from operating activities
Net cash provided by operating activities	9,408			102,548			49,882			—		161,838
Cash flows from investing activities
Capital expenditures	—			(51,834		)	(16,386		)	—		(68,220		)
Purchase of certificate of deposit	—			(148		)	(449		)	—		(597		)
Proceeds from sale of Divestment Business	—			3			2,222			—		2,225
Net cash used in investing activities	—			(51,979		)	(14,613		)	—		(66,592		)
Cash flows from financing activities
Payments on Revolving Credit Facility	(10,000		)	—			—			—		(10,000		)
Debt issuance costs paid	(177		)	—			—			—		(177		)
Payments on capital lease obligation	—			(9,669		)	(107		)	—		(9,776		)
Distribution to Syniverse Corporation	769			—			—			—		769
Distribution to noncontrolling interest	—			—			(1,211		)	—		(1,211		)
Net cash used in financing activities	(9,408		)	(9,669		)	(1,318		)	—		(20,395		)
Effect of exchange rate changes on cash	—			—			2,383			—		2,383
Net decrease in cash	—			40,900			36,334			—		77,234
Cash and cash equivalents at beginning of period	—			38,685			50,662			—		89,347
Cash and cash equivalents at end of period	$	—		$	79,585		$	86,996		$	—	$	166,581

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SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

SYNIVERSE HOLDINGS, INC.

(IN THOUSANDS)



					Write-offs of
	Balance at		Charged to		Uncollectible			Balance at
	Beginning		Costs and		Accounts and			End
Description	of Period		Expenses		Other			of Period
Allowance for doubtful accounts:
Year ended December 31, 2015	$	8,900	$	2,934	$	(4,729	)	$	7,105
Year ended December 31, 2016	$	7,105	$	2,453	$	(1,652	)	$	7,906
Year ended December 31, 2017	$	7,906	$	2,661	$	(1,506	)	$	9,061



	Balance at		Charged to		Credit Memos			Balance at
	Beginning		Costs and		Issued			End
Description	of Period		Expenses		and Other			of Period
Allowance for credit memos:
Year ended December 31, 2015	$	16,708	$	18,008	$	(17,478	)	$	17,238
Year ended December 31, 2016	$	17,238	$	14,866	$	(18,360	)	$	13,744
Year ended December 31, 2017	$	13,744	$	9,776	$	(16,095	)	$	7,425



	Balance at		Charged to								Balance
	Beginning		Costs and								at end
Description	of Period		Expenses (1)			Acquisition		Other (2)			of Period
Valuation allowance for deferred income taxes:
Year ended December 31, 2015	$	126,330	$	14,793		$	—	$	(15,993	)	$	125,130
Year ended December 31, 2016	$	125,130	$	(18,006	)	$	—	$	(6,447	)	$	100,677
Year ended December 31, 2017	$	100,677	$	(2,196	)	$	—	$	20,729		$	119,210

____________________


(1)	Recognition and reduction of valuation allowances


(2)	Adjustments related to the Aicent Acquisition


(3)	Adjustments primarily related to foreign exchange translation

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 714, 20172018.



SYNIVERSE HOLDINGS, INC.
By:		/S/ ROBERT F. REICH
		Robert F. Reich Executive Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated:



Signatures	Capacity	Dates

/S/ STEPHEN C. GRAYDEAN DOUGLAS	President and Chief Executive Officer; and Director	March 714, 20172018
Stephen C. GrayDean Douglas	(Principal Executive Officer)
/S/ ROBERT F. REICH	Executive Vice President and Chief Financial Officer	March 714, 20172018
Robert F. Reich	(Principal Financial and Accounting Officer)
/S/ JAMES A. ATTWOOD, JR.	Chairman of the Board of Directors	March 714, 20172018
James A. Attwood, Jr.
/S/ TONY G. HOLCOMBE	Vice Chairman of the Board of Directors	March 714, 20172018
Tony G. Holcombe
/S/ KRISTEN ANKERBRANDT	Director	March 714, 20172018
Kristen Ankerbrandt
/S/ KEVIN L. BEEBE	Director	March 714, 20172018
Kevin L. Beebe
/S/ LAURA DESMOND	Director	March 714, 20172018
Laura Desmond
/S/ JULIUS GENACHOWSKI	Director	March 714, 20172018
Julius Genachowski
/S/ MARKSTEPHEN JC. JOHNSONGRAY	Director	March 714, 20172018
MarkStephen JC. JohnsonGray
/S/ DANIEL S. MEAD	Director	March 714, 20172018
Daniel S. Mead
/S/ RAYMOND A. RANELLI	Director	March 714, 2017
Raymond A. Ranelli

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EXHIBIT INDEX



Exhibit No.			Description
3.1			Third Amended and Restated Certificate of Incorporation of Syniverse Holdings, Inc. (1)
3.2			Amended and Restated Bylaws of Syniverse Holdings, Inc. (1)
4.1			Indenture, dated as of December 22, 2010, among Buccaneer Merger Sub, Inc. (which merged into Syniverse Holdings, Inc.) and Wilmington Trust, National Association, as successor by merger to Wilmington Trust FSB, as trustee governing the 9.125% Senior Notes due 2019 (1)
4.2			First Supplemental Indenture, dated January 13, 2011, among Syniverse Holdings, Inc., the subsidiary guarantors party thereto and Wilmington Trust, National Association, as successor by merger to Wilmington Trust FSB, as trustee governing the 9.125% Senior Notes due 2019 (5)
4.3			Second Supplemental Indenture, dated July 29, 2013, among Syniverse Holdings, Inc., the new subsidiary guarantors party thereto and Wilmington Trust, National Association, as successor by merger to Wilmington Trust FSB, as trustee governing the 9.125% Senior Notes due 2019 (13)
4.4			Third Supplemental Indenture, dated June 12, 2014, among Syniverse Holdings, Inc., the new subsidiary guarantor party thereto and Wilmington Trust, National Association, as successor by merger to Wilmington Trust FSB, as trustee governing the 9.125% Senior Notes due 2019 (13)
4.5			Fourth Supplemental Indenture, dated September 16, 2014, among Syniverse Holdings, Inc., the new subsidiary guarantors party thereto and Wilmington Trust, National Association, as successor by merger to Wilmington Trust FSB, as trustee governing the 9.125% Senior Notes due 2019 (13)
4.6			Form of 9.125% Senior Notes due 2019 (included in Exhibit 4.1 hereto)
4.7			Indenture, dated as of January 11, 2017, among Syniverse Foreign Holdings Corporation, Syniverse Holdings, Inc. as guarantor, the subsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee governing the 9.125% Senior Notes due 2022 (14)
4.8			First Supplemental Indenture, dated as of January 11, 2017, among Syniverse Foreign Holdings Corporation, Syniverse Holdings, Inc., as guarantor, the subsidiary guarantors party thereto and Wilmington Trust, National Association, as Trustee, providing for the issuance of notes in series. (14)
4.9			Form of 9.125% Senior Notes due 2022 (included in Exhibit 4.7 hereto)
4.10			Registration Rights Agreement relating to the 9.125% Senior Notes due 2022, dated as of January 11, 2017, among Syniverse Foreign Holdings Corporation, Syniverse Holdings, Inc., the guarantors party thereto and Goldman, Sachs & Co., as Dealer Manager. (14)
*#10.1			Employment Agreement, dated January 21, 2016, among Syniverse Corporation and David H. Ratner
*#10.2			Employment Agreement, dated June 20, 2016, among Syniverse Corporation and Timothy Moss
#10.3			Employment Agreement, dated as of February 25, 2015 among Syniverse Corporation and Stephen C. Gray (8)
#10.4			Employment Agreement, dated as of March 19, 2015 among Syniverse Corporation and Robert F. Reich (9)
#10.5			Amendment, dated as of May 20, 2015, to the Employment Agreement, dated as of March 19, 2015 among Syniverse Corporation and Robert F. Reich (10)
#10.6			Second Amendment, dated as of August 31, 2015, to the Employment Agreement, dated as of March 19, 2015 among Syniverse Corporation and Robert F. Reich (11)
#10.7			2011 Equity Incentive Plan of Syniverse Corporation (formerly known as the 2001 Equity Incentive Plan of Buccaneer Holdings, Inc.) (6)
#10.8			Second Amendment to the 2011 Equity Incentive Plan of Syniverse Corporation (formerly known as the 2011 Equity Plan of Buccaneer Holdings, Inc.) (10)
#10.9			Third Amendment to the 2011 Equity Incentive Plan of Syniverse Corporation (formerly known as the 2011 Equity Plan of Buccaneer Holdings, Inc.) (12)
#10.10			Form of Stock Option Agreement for 2011 Equity Incentive Plan (1)
#10.11			Form of Updated Stock Option Agreement for 2011 Equity Incentive Plan (10)
#10.12			Management Stockholders Agreement, dated April 6, 2011, by and among Buccaneer Holdings, Inc., certain Carlyle entities named therein, and certain individual stockholders who become parties thereto from time to time in accordance with the terms thereof (1)
#10.13			Form of Director Indemnification Agreement (1)
10.14			Credit Agreement, dated April 23, 2012 by and among Syniverse Holdings, Inc., Buccaneer Holdings, Inc., Barclays Bank PLC, as administrative agent, swing line lender and l/c issuer, and the other financial institutions and lenders from time to time party thereto (2)

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Exhibit No.			Description
10.15			Subsidiary Guaranty, dated April 23, 2012, by the Subsidiary Guarantors party thereto (2)
10.16			Holdings Guaranty, dated April 23, 2012, by Buccaneer Holdings, Inc. (13)
10.17			Security Agreement, dated April 23, 2012, by and among Syniverse Holdings, Inc., Buccaneer Holdings, Inc. and the Subsidiary Guarantors party thereto, and Barclays Bank PLC, as administrative agent (2)
10.18			Incremental Commitment Amendment, dated as of June 28, 2013, to the Credit Agreement by and among Syniverse Holdings, Inc., Buccaneer Holdings Inc., Barclays Bank PLC as administrative agent, swing line lender and l/c issuer, and the other financial institutions and lenders from time to time party thereto (3)
10.19			Second Amendment, dated as of September 23, 2013, by and among Syniverse Holdings, Inc., Buccaneer Holdings, Inc., the financial institutions and lenders from time to time party thereto and Barclays Bank PLC as administrative agent (4)
10.20			Third Amendment to the Credit Agreement, dated as of March 6, 2015, by and among Syniverse Holdings, Inc., Buccaneer Holdings, LLC, the financial institutions and lenders from time to time party thereto and Barclays Bank PLC as administrative agent (7)
#10.21			Form of Restricted Stock Award Agreement for 2011 Equity Incentive Plan (5)
#10.22			Form of Restricted Stock Unit Award Agreement for 2011 Equity Incentive Plan (10)
#10.23			Form of Updated Restricted Stock Unit Award Agreement for 2011 Equity Incentive Plan (12)
*12.1			Statement regarding computation of ratio of earnings to fixed charges
*21.1			List of subsidiaries of Syniverse Holdings, Inc.
*31.1			Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.
*31.2			Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.
**32.1			Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.
**32.2			Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.
101			The following financial information from Syniverse Holdings, Inc.’s Annual Report on Form 10-K for the period ended December 31, 2016, filed with the SEC, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Loss, (iv) the Consolidated Statement of Changes in Stockholders Equity, (v) the Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.

2018

Raymond A. Ranelli

127

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EXHIBIT INDEX



Exhibit No.			Description
3.1			Third Amended and Restated Certificate of Incorporation of Syniverse Holdings, Inc. (1)
3.2			Second Amended and Restated Bylaws of Syniverse Holdings, Inc. (16)
4.1			Indenture, dated as of December 22, 2010, among Buccaneer Merger Sub, Inc. (which merged into Syniverse Holdings, Inc.) and Wilmington Trust, National Association, as successor by merger to Wilmington Trust FSB, as trustee governing the 9.125% Senior Notes due 2019 (1)
4.2			First Supplemental Indenture, dated January 13, 2011, among Syniverse Holdings, Inc., the subsidiary guarantors party thereto and Wilmington Trust, National Association, as successor by merger to Wilmington Trust FSB, as trustee governing the 9.125% Senior Notes due 2019 (5)
4.3			Second Supplemental Indenture, dated July 29, 2013, among Syniverse Holdings, Inc., the new subsidiary guarantors party thereto and Wilmington Trust, National Association, as successor by merger to Wilmington Trust FSB, as trustee governing the 9.125% Senior Notes due 2019 (13)
4.4			Third Supplemental Indenture, dated June 12, 2014, among Syniverse Holdings, Inc., the new subsidiary guarantor party thereto and Wilmington Trust, National Association, as successor by merger to Wilmington Trust FSB, as trustee governing the 9.125% Senior Notes due 2019 (13)
4.5			Fourth Supplemental Indenture, dated September 16, 2014, among Syniverse Holdings, Inc., the new subsidiary guarantors party thereto and Wilmington Trust, National Association, as successor by merger to Wilmington Trust FSB, as trustee governing the 9.125% Senior Notes due 2019 (13)
4.6			Form of 9.125% Senior Notes due 2019 (included in Exhibit 4.1 hereto)
#10.1			Employment Agreement, dated January 21, 2016, among Syniverse Corporation and David H. Ratner (14)
#10.2			Separation Agreement, dated as of May 15, 2017, among Syniverse Corporation and David H. Ratner (17)
#10.3			Employment Agreement, dated June 20, 2016, among Syniverse Corporation and Timothy Moss (14)
#10.4			Employment Agreement, dated as of February 25, 2015 among Syniverse Corporation and Stephen C. Gray (8)
*#10.5			Employment Agreement, dated as of January 9, 2018 among Syniverse Corporation and Dean Douglas
#10.6			Employment Agreement, dated as of March 19, 2015 among Syniverse Corporation and Robert F. Reich (9)
#10.7			Amendment, dated as of May 20, 2015, to the Employment Agreement, dated as of March 19, 2015 among Syniverse Corporation and Robert F. Reich (10)
#10.8			Second Amendment, dated as of August 31, 2015, to the Employment Agreement, dated as of March 19, 2015 among Syniverse Corporation and Robert F. Reich (11)
#10.9			2011 Equity Incentive Plan of Syniverse Corporation (formerly known as the 2001 Equity Incentive Plan of Buccaneer Holdings, Inc.) (6)
#10.10			Second Amendment to the 2011 Equity Incentive Plan of Syniverse Corporation (formerly known as the 2011 Equity Plan of Buccaneer Holdings, Inc.) (10)
#10.11			Third Amendment to the 2011 Equity Incentive Plan of Syniverse Corporation (formerly known as the 2011 Equity Plan of Buccaneer Holdings, Inc.) (18)
#10.12			Form of Stock Option Agreement for 2011 Equity Incentive Plan (1)
#10.13			Form of Updated Stock Option Agreement for 2011 Equity Incentive Plan (10)
#10.14			Management Stockholders Agreement, dated April 6, 2011, by and among Buccaneer Holdings, Inc., certain Carlyle entities named therein, and certain individual stockholders who become parties thereto from time to time in accordance with the terms thereof (1)
#10.15			Form of Director Indemnification Agreement (1)
10.16			Credit Agreement, dated April 23, 2012 by and among Syniverse Holdings, Inc., Buccaneer Holdings, Inc., Barclays Bank PLC, as administrative agent, swing line lender and l/c issuer, and the other financial institutions and lenders from time to time party thereto (2)
10.17			Subsidiary Guaranty, dated April 23, 2012, by the Subsidiary Guarantors party thereto (2)
10.18			Holdings Guaranty, dated April 23, 2012, by Buccaneer Holdings, Inc. (13)
10.19			Security Agreement, dated April 23, 2012, by and among Syniverse Holdings, Inc., Buccaneer Holdings, Inc. and the Subsidiary Guarantors party thereto, and Barclays Bank PLC, as administrative agent (2)
10.20			Incremental Commitment Amendment, dated as of June 28, 2013, to the Credit Agreement by and among Syniverse Holdings, Inc., Buccaneer Holdings Inc., Barclays Bank PLC as administrative agent, swing line lender and l/c issuer, and the other financial institutions and lenders from time to time party thereto (3)

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Exhibit No.			Description
10.21			Second Amendment, dated as of September 23, 2013, by and among Syniverse Holdings, Inc., Buccaneer Holdings, Inc., the financial institutions and lenders from time to time party thereto and Barclays Bank PLC as administrative agent (4)
10.22			Third Amendment to the Credit Agreement, dated as of March 6, 2015, by and among Syniverse Holdings, Inc., Buccaneer Holdings, LLC, the financial institutions and lenders from time to time party thereto and Barclays Bank PLC as administrative agent (7)
10.23			Fourth Amendment to the Credit Agreement, dated as of April 10, 2017, by and among Syniverse Holdings, Inc., Buccaneer Holdings, LLC, the financial institutions and lenders from time to time party thereto and Barclays Bank PLC as administrative agent (15)
10.24			Fifth Amendment to the Credit Agreement, dated as of March 9, 2018, by and among Syniverse Holdings, Inc., Buccaneer Holdings, LLC, the financial institutions and lenders party thereto and Barclays Bank PLC as administrative agent (19)
10.25			Second Lien Credit Agreement, dated March 9, 2018 by and among Syniverse Holdings, Inc., Buccaneer Holdings, LLC, Barclays Bank PLC, as administrative agent and the other lenders from time to time party thereto (19)
10.26			Second Lien Security Agreement, dated March 9, 2018, by and among Syniverse Holdings, Inc., Buccaneer Holdings, LLC and the Subsidiary Guarantors party thereto, and Barclays Bank PLC, as administrative agent (19)
10.27			Second Lien Holdings Guaranty, dated March 9, 2018, by Buccaneer Holdings, LLC (19)
10.28			Second Lien Subsidiary Guaranty, dated March 9, 2018, by the Subsidiary Guarantors party thereto (19)
10.29			Intercreditor Agreement, dated March 9, 2018, by and between Barclays Bank PLC, as First Lien Agent, and Barclays Bank PLC, as Second Lien Agent. (19)
#10.30			Form of Restricted Stock Award Agreement for 2011 Equity Incentive Plan (5)
#10.31			Form of Restricted Stock Unit Award Agreement for 2011 Equity Incentive Plan (10)
#10.32			Form of Updated Restricted Stock Unit Award Agreement for 2011 Equity Incentive Plan (12)
*12.1			Statement regarding computation of ratio of earnings to fixed charges
*21.1			List of subsidiaries of Syniverse Holdings, Inc.
*31.1			Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.
*31.2			Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.
**32.1			Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.
**32.2			Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.
101			The following financial information from Syniverse Holdings, Inc.’s Annual Report on Form 10-K for the period ended December 31, 2017, filed with the SEC, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Loss, (iv) the Consolidated Statement of Changes in Stockholders Equity, (v) the Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.

Notes:


(1)	Incorporated by reference from the Registrants’ Registration Statement on Form S-4 (Registration No. 333-176382) filed by Syniverse Holdings, Inc. and the co-registrants named therein on August 18, 2011.


(2)	Incorporated by reference from the Current Report on Form 8-K filed by Syniverse Holdings, Inc. on April 26, 2012.


(3)	Incorporated by reference from the Quarterly Report on Form 10-Q filed by Syniverse Holdings, Inc. on August 14, 2013.


(4)	Incorporated by reference from the Quarterly Report on Form 10-Q filed by Syniverse Holdings, Inc. on November 13, 2013.


(5)	Incorporated by reference from the Annual Report on Form 10-K filed by Syniverse Holdings, Inc. on March 25, 2014.


(6)	Incorporated by reference from the Quarterly Report on Form 10-Q filed by Syniverse Holdings, Inc. on May 14, 2014.


(7)	Incorporated by reference from the Current Report on Form 8-K filed by Syniverse Holdings, Inc. on March 9, 2015.


(8)	Incorporated by reference from the Current Report on Form 8-K filed by Syniverse Holdings, Inc. on February 25, 2015.


(9)	Incorporated by reference from the Current Report on Form 8-K filed by Syniverse Holdings, Inc. on March 20, 2015.


(10)	Incorporated by reference from the Quarterly Report on Form 10-Q filed by Syniverse Holdings, Inc. on August 12, 2015.


(11)	Incorporated by reference from the Quarterly Report on Form 10-Q filed by Syniverse Holdings, Inc. on November 9, 2015.


(12)	Incorporated by reference from the Quarterly Report on Form 10-Q filed by Syniverse Holdings, Inc. on August 11, 2016.

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(13)	Incorporated by reference from the Current Report on Form 8-K filed by Syniverse Holdings, Inc. on January 9, 2017.


(14)	Incorporated by reference from the Current Report on Form 8-K filed by Syniverse Holdings, Inc. on January 13, 2017.

Annual Report on Form 10-K filed by Syniverse Holdings, Inc. on March 7, 2017.


(15)	Incorporated by reference from the Current Report on Form 8-K filed by Syniverse Holdings, Inc. on April 11, 2017.


(16)	Incorporated by reference from the Quarterly Report on Form 10-Q filed by Syniverse Holdings, Inc. on May 10, 2017.


(17)	Incorporated by reference from the Quarterly Report on Form 10-Q filed by Syniverse Holdings, Inc. on August 9, 2017.


(18)	Incorporated by reference from the Current Report on Form 8-K filed by Syniverse Holdings, Inc. on February 15, 2018.


(19)	Incorporated by reference from the Current Report on Form 8-K filed by Syniverse Holdings, Inc. on March 13, 2018.


*	Filed herewith


**	Furnished herewith


#	Management contract or compensatory plan or arrangement

129130



Delaware	30-0041666
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)



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



Term	Definition
2011 Plan	2011 Equity Incentive Plan
4G	Fourth generation
A2P	Application to Peer
ASC	Accounting Standards Codification
ASU	Accounting Standards Update
Carlyle	Investment funds affiliated with The Carlyle Group
CDMA	Code division multiple access
CNAM	Caller name directory
EIS	Enterprise & Intelligence Solutions
E.U.	European Union
FASB	Financial Accounting Standards Board
FCC	Federal Communications Commission
FCPA	Foreign Corrupt Practices Act
GMAC	Guideline merged and acquired company
GPC	Guideline public company
GSM	Global system for mobiles
GSMA	Global System for Mobile Communications Association
IASB	International Accounting Standards Board
IPX	Interworking packet exchange
LTE	Long-term evolution
M2M	Machine-to-machine
MNO	Mobile network operator
MTS	Mobile Transaction Services
MVNO	Mobile virtual network operators
NOL	Net operating loss
OFAC	The Office of Foreign Assets Control of the U.S. Department of the Treasury
OTT	Over-the-top provider
SEC	Securities and Exchange Commission
SS7	Signaling System 7
U.S.	United States of America
U.S. GAAP	Accounting principles generally accepted in the United States
VIE	Variable interest entity
VoIP	Voice over IP
VoLTE	Voice over LTE



	Year ended December 31,				2017 compared to 2016
(in thousands)	2017		2016		$ change			% change
Cost of operations:
Headcount and related costs	$	80,604	$	97,115	$	(16,511	)	(17.0	)%
Variable costs	142,728		119,898		22,830			19.0	%
Data processing, hosting and support costs	69,980		77,592		(7,612		)	(9.8	)%
Network costs	44,877		45,600		(723		)	(1.6	)%
Other operating related costs	11,509		15,189		(3,680		)	(24.2	)%
Cost of operations	$	349,698	$	355,394	$	(5,696	)	(1.6	)%



	Year ended December 31,				2016 compared to 2015
(in thousands)	2016		2015		$ change			% change
Cost of operations:
Headcount and related costs	$	97,115	$	108,205	$	(11,090	)	(10.2	)%
Variable costs	119,898		111,880		8,018			7.2	%
Data processing, hosting and support costs	77,592		92,425		(14,833		)	(16.0	)%
Network costs	45,600		62,585		(16,985		)	(27.1	)%
Other operating related costs	15,189		14,068		1,121			8.0	%
Cost of operations	$	355,394	$	389,163	$	(33,769	)	(8.7	)%


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


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



		Page
	PART I
Item 1.	Business	7
Item 1A.	Risk Factors	18
Item 1B.	Unresolved Staff Comments	31
Item 2.	Properties	31
Item 3.	Legal Proceedings	32
Item 4.	Mine Safety Disclosures	32
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	33
Item 6.	Selected Financial Data	33
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	55
Item 8.	Financial Statements and Supplementary Data	56
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	56
Item 9A.	Controls and Procedures	56
Item 9B.	Other Information	57
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	58
Item 11.	Executive Compensation	62
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	77
Item 13.	Certain Relationships and Related Transactions and Director Independence	79
Item 14.	Principal Accounting Fees and Services	80
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	81
Signatures		127
Exhibit Index		128


•	system failures or delays which could harm our reputation;


•	we do not control the networks over which many of our services are transmitted;


•	our reliance on third-party providers for communications software, hardware and infrastructure;


•	security breaches which could result in significant liabilities;


•	our ability to acquire and integrate complementary business and technologies;


•	our ability to adapt quickly to technological and other changes;


•	our newly offered services may not perform as anticipated;


•	the failure to achieve or sustain desired pricing levels;


•	political instability in certain countries where we operate;


•	our ability to achieve desired organic growth;


•	consolidation among, or network buildouts by, customers could cause us to lose transaction volume and affect pricing;


•	our customers may develop in-house solutions and no longer use our services;


•	our compliance with anti-corruption laws and regulations;


•	our ability to receive and retain licenses or authorizations required to conduct our business internationally, including in countries targeted by economic sanctionslimited business in countries targeted by economic sanctions which could harm our reputation;


•	unfavorable general economic conditions in the United States or in other major global markets;


•	additional costs and liabilities for maintaining privacy compliance;


•	our failure to generate the capital necessary to expand our operations and invest in new services;


•	changes in the regulatory landscape affecting us and our customers;


•	additional costsour ability to attract and liabilities for maintaining customer privacy;retain key personnel;


•	failure to protect our intellectual property rights or claims by third parties that we infringe on their intellectual property rightsor are in violation of their intellectual property rights;


•	the effects of our substantial indebtedness and the limitations contained in the agreements governing such indebtednessmaintain effective internal controls over financial reporting;


•	the significant influence Carlyle has over corporate decisions;


•	Ability to operate across and translate between all network technology types, including 2G, 3G, 4G, LTE and Wi-Fi, device types such as smartphones, tablets and PCs, and business models introduced by new entrants to the mobile ecosystem.


•	Market-leading proprietary technology applications and robust global networks with network availability exceeding 99.999%.


•	Platform integration into and trusted deep relationships with approximately 1,000900 MNOs and 500450 OTTs and enterprises in nearly 200 countries.


•	Ability to independently monitor and enforce complex contractual arrangements between our customers.


•	Access to a unique portfolio of real-time data and the ability to produce analytical insights from this data enabling our customers to enhance their end-user experience.


•	Build upon our extensive access to transaction data, mobile ecosystem expertise and deep trusted relationships with our existing customers to increase the number of services sold to them.


•	Deepen our existing relationships with our international customers by cross-selling a more diverse set of services to our existing customers outside of North America.


•	Build relationships with new customers by capitalizing on our globally recognized reputation for customer service, reliability and innovation.