[July 22, 2014] |
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TSYS Reports Second Quarter 2014 Total Revenues Increased 30.4%
COLUMBUS, Ga. --(Business Wire)--
TSYS (NYSE: TSS) today reported results for the second quarter of 2014.
Total revenues for the quarter were $602.0 million, an increase of
30.4%. Revenues before reimbursable items were $538.1 million, an
increase of 34.2%. Adjusted EBITDA was $170.9 million, an increase of
22.0%. Income from continuing operations was $59.8 million. Adjusted
earnings per share (EPS) from continuing operations were $0.45, an
increase of 19.8%. On a GAAP basis, basic and diluted EPS from
continuing operations were $0.32.
Total revenues year-to-date were $1.2 billion, an increase of 31.2%.
Revenues before reimbursable items were $1.1 billion, an increase of
35.7%. Adjusted EBITDA was $320.5 million, an increase of 21.6%. Income
from continuing operations was $109.1 million. Adjusted EPS from
continuing operations was $0.83, an increase of 9.2%. On a GAAP basis,
basic and diluted EPS from continuing operations were $0.58.
"We set another milestone this quarter with total revenues of over $600
million for the first time in TSYS' history. It was an outstanding
quarter with our consolidated adjusted operating margin improving 357
basis points over the first quarter to 24.94%," said Philip W.
Tomlinson, chairman and chief executive officer of TSYS.
"Year to date, our free cash flow was $133.7 million, an increase of
$54.9 million, or 69.6% over last year. During the quarter, we deployed
$115.7 million of our capital by repurchasing 3.7 million shares," added
Tomlinson.
Also during the quarter, TSYS announced that Phil Tomlinson will retire
as chief executive officer and that M. Troy Woods has been elected by
the TSYS board of directors as president and chief executive officer,
effective July 31, 2014. Tomlinson will continue to serve as executive
chairman of the board of TSYS until the 2015 Annual Shareholders'
Meeting.
"I am honored to have been chosen to carry the torch at this exciting
time in our history. All of us here at TSYS are stewards of the
tremendous business and cultural legacy we have been given. I feel
particularly accountable for making sure we build on our strong
foundation, grow this company and achieve our vision of being the
leading global payment solutions provider," stated Woods.
Conference Call
TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday,
July 22. The conference call can be accessed via simultaneous Internet
broadcast at tsys.com by clicking on the link under "Webcasts" on
the main homepage. The replay will be archived for 12 months and will be
available approximately 30 minutes after the completion of the call. A
slide presentation to accompany the call will be available by clicking
on the link under "Webcasts" on the main homepage of tsys.com.
Non-GAAP Measures
This press release contains information prepared in conformity with GAAP
as well as non-GAAP information. It is management's intent to provide
non-GAAP financial information to enhance understanding of its
consolidated financial information as prepared in accordance with GAAP.
This non-GAAP information should be considered by the reader in addition
to, but not instead of, the financial statements prepared in accordance
with GAAP. Each non-GAAP financial measure and the most directly
comparable GAAP financial measure are presented so as not to imply that
more emphasis should be placed on the non-GAAP measure. The non-GAAP
financial information presented may be determined or calculated
differently by other companies.
Additional information about non-GAAP financial measures, including, but
not limited to, adjusted EBITDA and adjusted EPS, and a reconciliation
of those measures to the most directly comparable GAAP measures are
included on pages 12 to 14 of this release.
About TSYS
At TSYS® (NYSE: TSS), we believe payments should revolve
around people, not the other way around. We call this belief
"People-Centered Payments®." By putting people at the
center of every decision we make, TSYS supports financial institutions,
businesses and governments in more than 80 countries. Through NetSpend®,
A TSYS Company, we empower consumers with the convenience, security, and
freedom to be self-banked. TSYS offers issuer services and merchant
payment acceptance for credit, debit, prepaid, healthcare and business
solutions.
TSYS' headquarters are located in Columbus, Ga., U.S.A., with local
offices spread across the Americas, EMEA and Asia-Pacific. TSYS is a
member of The Civic 50 and was named one of the 2013 World's Most
Ethical Companies by Ethisphere magazine. TSYS routinely posts all
important information on its website. For more, please visit us at www.tsys.com.
Forward-Looking Statements
This press release contains "forward-looking statements" - that is,
statements related to future, not past, events. Forward-looking
statements often address our expected future business and financial
performance and often contain words such as "expect," "anticipate,"
"intend," "believe," "should," "plan," "potential," "will," "could," and
similar expressions. These statements are based on the current beliefs
and expectations of TSYS' management, are based on management's
assumptions and are subject to significant risks and uncertainties.
Actual results may differ materially from those contemplated by the
forward-looking statements. A number of important factors could cause
actual results or events to differ materially from those contemplated by
our forward-looking statements in this press release. Many of these
factors are beyond TSYS' ability to control or predict. These factors
include, but are not limited to, the risks described in TSYS' filings
with the Securities and Exchange Commission, including our most recent
Annual Report on Form 10-K. We believe these forward-looking statements
are reasonable; however, undue reliance should not be placed on any
forward-looking statements, which are based on current expectations. We
do not assume any obligation to update any forward-looking statements as
a result of new information, future developments or otherwise.
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TSYS
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Financial Highlights
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(unaudited)
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(in thousands, except per share data)
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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Percent
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Percent
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2014
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2013
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Change
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2014
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2013
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Change
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Total revenues
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$
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602,036
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461,860
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30.4
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%
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$
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1,194,883
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910,651
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31.2
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%
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Cost of services
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416,489
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301,627
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38.1
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839,372
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605,996
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38.5
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Selling, general and administrative expenses
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85,602
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64,345
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33.0
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173,616
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130,765
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32.8
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Merger and acquisition expenses
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1,182
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1,246
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(5.1
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)
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2,435
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4,727
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(48.5
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)
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Operating income
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98,763
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94,642
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4.4
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179,460
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169,163
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6.1
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Nonoperating income (expenses)
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(899
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)
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(590
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)
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(52.4
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)
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(1,223
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)
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413
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nm
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Merger and acquisition expenses - bridge loan facility & other
financing
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(9,486
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)
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(6,934
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)
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(36.8
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)
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(18,975
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)
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(9,677
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(96.1
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)
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Income before income taxes, noncontrolling interests
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and equity in income of equity investments
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88,378
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87,118
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1.4
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159,262
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159,899
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(0.4
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)
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Income taxes
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30,771
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29,984
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2.6
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55,106
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47,447
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16.1
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Income before noncontrolling interests and
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equity in income of equity investments
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57,607
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57,134
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0.8
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104,156
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112,452
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(7.4
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)
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Equity in income of equity investments, net of tax
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3,600
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|
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2,749
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31.0
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7,696
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6,565
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17.2
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Income from continuing operations, net of tax
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61,207
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59,883
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2.2
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111,852
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119,017
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(6.0
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Income from discontinued operations, net of tax
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50,133
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678
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nm
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51,113
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693
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nm
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Net income
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111,340
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60,561
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83.8
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162,965
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119,710
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36.1
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Net income attributable to noncontrolling interests
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(1,436
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)
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(2,845
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49.5
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(3,759
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(4,965
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)
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24.3
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Net income attributable to TSYS common shareholders
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$
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109,904
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57,716
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90.4
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%
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|
|
|
$
|
159,206
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|
|
114,745
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38.7
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%
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Basic earnings per share:
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Income from continuing operations to TSYS
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common shareholders*
|
$
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0.32
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|
|
0.31
|
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|
|
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3.6
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%
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|
|
$
|
0.58
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|
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0.62
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(5.8
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)
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%
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Gain (Loss) from discontinued operations to TSYS
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common shareholders*
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0.27
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(0.00
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)
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nm
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0.27
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(0.01
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)
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nm
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Basic earnings per share (EPS)
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$
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0.59
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|
|
0.31
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|
|
91.8
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%
|
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|
|
$
|
0.85
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|
|
|
|
0.61
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|
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38.9
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%
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Diluted earnings per share:
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Income from continuing operations to TSYS
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common shareholders*
|
$
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0.32
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|
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0.31
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|
|
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3.1
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%
|
|
|
|
$
|
0.58
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|
|
0.61
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(6.2
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)
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%
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Gain (Loss)from discontinued operations to TSYS
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
common shareholders*
|
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0.27
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|
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(0.00
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)
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|
|
nm
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|
0.26
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|
|
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(0.01
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)
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|
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nm
|
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Diluted EPS
|
$
|
0.58
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|
|
|
|
0.31
|
|
|
|
|
90.7
|
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%
|
|
|
|
$
|
0.84
|
|
|
|
|
0.61
|
|
|
|
|
38.3
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%
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
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Dividends declared per share
|
$
|
0.10
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|
|
|
0.10
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|
|
|
|
|
|
|
|
|
$
|
0.20
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|
|
|
|
0.20
|
|
|
|
|
|
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|
|
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|
|
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|
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|
|
|
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Amounts attributable to TSYS common shareholders:
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|
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|
|
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|
|
|
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Income from continuing operations, net of tax
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$
|
59,771
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|
|
|
|
58,096
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|
|
|
|
2.9
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|
%
|
|
|
|
$
|
109,092
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|
|
|
|
116,000
|
|
|
|
|
(6.0
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)
|
%
|
Gain (Loss) from discontinued operations, net of tax
|
|
50,133
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|
|
|
|
(380
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)
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|
|
nm
|
|
|
|
|
|
50,114
|
|
|
|
|
(1,255
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)
|
|
|
|
nm
|
|
Net income
|
$
|
109,904
|
|
|
|
|
57,716
|
|
|
|
|
90.4
|
|
%
|
|
|
|
$
|
159,206
|
|
|
|
|
114,745
|
|
|
|
|
38.7
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS from continuing operations
|
$
|
0.45
|
|
|
|
|
0.37
|
|
|
|
|
19.8
|
|
%
|
|
|
|
$
|
0.83
|
|
|
|
|
0.76
|
|
|
|
|
9.2
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$
|
170,894
|
|
|
|
|
140,105
|
|
|
|
|
22.0
|
|
%
|
|
|
|
$
|
320,489
|
|
|
|
|
263,551
|
|
|
|
|
21.6
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
|
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|
|
nm = not meaningful
|
* EPS amounts may not total due to rounding.
|
|
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|
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|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
TSYS
|
Consolidated Statements of Comprehensive Income
|
(unaudited)
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
111,340
|
|
|
|
60,561
|
|
|
|
|
$
|
162,965
|
|
|
|
119,710
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments as a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
result of discontinued operations
|
|
3,514
|
|
|
|
-
|
|
|
|
|
|
3,514
|
|
|
|
-
|
|
|
Foreign currency translation adjustments
|
|
3,627
|
|
|
|
(1,064
|
)
|
|
|
|
|
5,207
|
|
|
|
(13,711
|
)
|
|
Postretirement healthcare plan adjustments
|
|
371
|
|
|
|
155
|
|
|
|
|
|
296
|
|
|
|
310
|
|
|
Unrealized gain on available-for-sale securities
|
|
(612
|
)
|
|
|
-
|
|
|
|
|
|
(42
|
)
|
|
|
-
|
|
Other comprehensive income (loss)
|
|
6,900
|
|
|
|
(909
|
)
|
|
|
|
|
8,975
|
|
|
|
(13,401
|
)
|
Comprehensive income
|
|
118,240
|
|
|
|
59,652
|
|
|
|
|
|
171,940
|
|
|
|
106,309
|
|
Comprehensive income attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
noncontrolling interests
|
|
1,152
|
|
|
|
2,455
|
|
|
|
|
|
3,979
|
|
|
|
2,922
|
|
Comprehensive income attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TSYS common shareholders
|
$
|
117,088
|
|
|
|
57,197
|
|
|
|
|
$
|
167,961
|
|
|
|
103,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TSYS
|
Earnings Per Share
|
(unaudited)
|
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
Six Months Ended
|
|
|
June 30, 2014
|
|
June 30, 2013
|
|
|
June 30, 2014
|
|
June 30, 2013
|
|
|
Common
|
|
Participating
|
|
Common
|
|
Participating
|
|
|
Common
|
|
Participating
|
|
Common
|
|
Participating
|
|
|
Stock
|
|
Securities
|
|
Stock
|
|
Securities
|
|
|
Stock
|
|
Securities
|
|
Stock
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to TSYS common shareholders
|
$
|
109,904
|
|
|
|
|
57,716
|
|
|
|
|
$
|
159,206
|
|
|
|
|
114,745
|
|
|
|
Less income allocated to nonvested awards
|
|
(1,102
|
)
|
|
1,102
|
|
(175
|
)
|
|
175
|
|
|
(1,633
|
)
|
|
1,633
|
|
(385
|
)
|
|
385
|
Net income allocated to common stock for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS calculation ( a )
|
$
|
108,802
|
|
|
1,102
|
|
57,541
|
|
|
175
|
|
$
|
157,573
|
|
|
1,633
|
|
114,360
|
|
|
385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding ( b )
|
|
184,491
|
|
|
1,882
|
|
187,147
|
|
|
591
|
|
|
185,123
|
|
|
1,935
|
|
186,633
|
|
|
644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares and participating securities
|
186,373
|
|
|
|
|
187,738
|
|
|
|
|
|
187,058
|
|
|
|
|
187,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share ( a )/( b )
|
$
|
0.59
|
|
|
0.59
|
|
0.31
|
|
|
0.30
|
|
$
|
0.85
|
|
|
0.84
|
|
0.61
|
|
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to TSYS common shareholders
|
$
|
109,904
|
|
|
|
|
57,716
|
|
|
|
|
$
|
159,206
|
|
|
|
|
114,745
|
|
|
|
Less income allocated to nonvested awards
|
|
(1,092
|
)
|
|
1,092
|
|
(175
|
)
|
|
175
|
|
|
(1,617
|
)
|
|
1,617
|
|
(382
|
)
|
|
382
|
Net income allocated to common stock for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS calculation ( c )
|
$
|
108,812
|
|
|
1,092
|
|
57,541
|
|
|
175
|
|
$
|
157,589
|
|
|
1,617
|
|
114,363
|
|
|
382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding
|
|
184,491
|
|
|
1,882
|
|
187,147
|
|
|
591
|
|
|
185,123
|
|
|
1,935
|
|
186,633
|
|
|
644
|
Increase due to assumed issuance of shares related
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to common equivalent shares outstanding
|
|
1,994
|
|
|
|
|
981
|
|
|
|
|
|
2,379
|
|
|
|
|
1,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common and common
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equivalent shares outstanding ( d )
|
|
186,485
|
|
|
1,882
|
|
188,128
|
|
|
591
|
|
|
187,502
|
|
|
1,935
|
|
188,209
|
|
|
644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common and common
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equivalent shares and participating securities
|
|
188,367
|
|
|
|
|
188,719
|
|
|
|
|
|
189,437
|
|
|
|
|
188,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share ( c )/( d )
|
$
|
0.58
|
|
|
0.58
|
|
0.31
|
|
|
0.30
|
|
$
|
0.84
|
|
|
0.84
|
|
0.61
|
|
|
0.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TSYS
|
Segment Breakdown
|
(unaudited)
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
Change
|
|
|
|
|
Change
|
|
|
|
|
2014
|
|
2013
|
|
$
|
|
|
%
|
|
|
|
2014
|
|
2013
|
|
$
|
|
|
%
|
|
|
Revenues before reimbursable items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Services
|
$
|
|
233,217
|
|
214,526
|
|
18,691
|
|
|
8.7
|
|
%
|
$
|
457,585
|
|
420,122
|
|
37,463
|
|
|
8.9
|
|
%
|
International Services
|
|
|
84,732
|
|
76,626
|
|
8,106
|
|
|
10.6
|
|
|
|
161,505
|
|
153,013
|
|
8,492
|
|
|
5.5
|
|
|
Merchant Services
|
|
|
108,335
|
|
112,952
|
|
(4,617
|
)
|
|
(4.1
|
)
|
|
|
212,960
|
|
222,253
|
|
(9,293
|
)
|
|
(4.2
|
)
|
|
NetSpend
|
|
|
116,833
|
|
-
|
|
116,833
|
|
|
na
|
|
|
249,473
|
|
-
|
|
249,473
|
|
|
na
|
|
Intersegment revenues
|
|
|
(5,050
|
)
|
(3,175
|
)
|
(1,875
|
)
|
|
(59.1
|
)
|
|
|
(10,705
|
)
|
(6,428
|
)
|
(4,277
|
)
|
|
(66.5
|
)
|
|
Revenues before reimbursable items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from external customers
|
$
|
|
538,067
|
|
400,929
|
|
137,138
|
|
|
34.2
|
|
%
|
$
|
1,070,818
|
|
788,960
|
|
281,858
|
|
|
35.7
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Services
|
$
|
|
273,324
|
|
248,640
|
|
24,684
|
|
|
9.9
|
|
%
|
$
|
535,502
|
|
488,429
|
|
47,073
|
|
|
9.6
|
|
%
|
International Services
|
|
|
90,466
|
|
81,504
|
|
8,962
|
|
|
11.0
|
|
|
|
172,844
|
|
162,395
|
|
10,449
|
|
|
6.4
|
|
|
Merchant Services
|
|
|
128,017
|
|
136,458
|
|
(8,441
|
)
|
|
(6.2
|
)
|
|
|
250,707
|
|
269,359
|
|
(18,652
|
)
|
|
(6.9
|
)
|
|
NetSpend
|
|
|
116,833
|
|
-
|
|
116,833
|
|
|
na
|
|
|
249,473
|
|
-
|
|
249,473
|
|
|
na
|
|
Intersegment revenues
|
|
|
(6,604
|
)
|
(4,742
|
)
|
(1,862
|
)
|
|
(39.3
|
)
|
|
|
(13,643
|
)
|
(9,532
|
)
|
(4,111
|
)
|
|
(43.1
|
)
|
|
Revenues from external customers
|
$
|
|
602,036
|
|
461,860
|
|
140,176
|
|
|
30.4
|
|
%
|
$
|
1,194,883
|
|
910,651
|
|
284,232
|
|
|
31.2
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Services
|
$
|
|
20,928
|
|
18,213
|
|
2,715
|
|
|
14.9
|
|
%
|
$
|
41,204
|
|
36,296
|
|
4,908
|
|
|
13.5
|
|
%
|
International Services
|
|
|
9,761
|
|
9,450
|
|
311
|
|
|
3.3
|
|
|
|
19,566
|
|
20,149
|
|
(583
|
)
|
|
(2.9
|
)
|
|
Merchant Services
|
|
|
3,567
|
|
2,998
|
|
569
|
|
|
19.0
|
|
|
|
6,967
|
|
6,140
|
|
827
|
|
|
13.5
|
|
|
NetSpend
|
|
|
1,890
|
|
-
|
|
1,890
|
|
|
na
|
|
|
3,625
|
|
-
|
|
3,625
|
|
|
na
|
|
Segment depreciation and amortization
|
|
|
36,146
|
|
30,661
|
|
5,485
|
|
|
17.9
|
|
|
|
71,362
|
|
62,585
|
|
8,777
|
|
|
14.0
|
|
|
Acquisition intangible amortization
|
|
|
24,282
|
|
7,879
|
|
16,403
|
|
|
nm
|
|
|
48,595
|
|
16,411
|
|
32,184
|
|
|
nm
|
|
Corporate admin and other
|
|
|
533
|
|
466
|
|
67
|
|
|
14.4
|
|
|
|
1,038
|
|
861
|
|
177
|
|
|
20.6
|
|
|
Total depreciation and amortization
|
$
|
|
60,961
|
|
39,006
|
|
21,955
|
|
|
56.3
|
|
%
|
$
|
120,995
|
|
79,857
|
|
41,138
|
|
|
51.5
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment operating income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Services
|
$
|
|
84,578
|
|
81,318
|
|
3,260
|
|
|
4.0
|
|
%
|
$
|
159,155
|
|
150,066
|
|
9,089
|
|
|
6.1
|
|
%
|
International Services
|
|
|
11,743
|
|
7,693
|
|
4,050
|
|
|
52.6
|
|
|
|
16,299
|
|
14,554
|
|
1,745
|
|
|
12.0
|
|
|
Merchant Services
|
|
|
32,896
|
|
41,302
|
|
(8,406
|
)
|
|
(20.4
|
)
|
|
|
63,064
|
|
78,938
|
|
(15,874
|
)
|
|
(20.1
|
)
|
|
NetSpend
|
|
|
30,703
|
|
-
|
|
30,703
|
|
|
na
|
|
|
59,421
|
|
-
|
|
59,421
|
|
|
na
|
|
Total adjusted segment operating income
|
|
159,920
|
|
130,313
|
|
29,607
|
|
|
22.7
|
|
|
|
297,939
|
|
243,558
|
|
54,381
|
|
|
22.3
|
|
|
Acquisition intangible amortization
|
|
|
(24,282
|
)
|
(7,879
|
)
|
(16,403
|
)
|
|
nm
|
|
|
(48,595
|
)
|
(16,411
|
)
|
(32,184
|
)
|
|
nm
|
|
NetSpend M&A operating expenses
|
|
|
(1,182
|
)
|
(1,246
|
)
|
64
|
|
|
5.1
|
|
|
|
(2,435
|
)
|
(4,727
|
)
|
2,292
|
|
|
48.5
|
|
|
Share-based compensation
|
|
|
(9,988
|
)
|
(5,211
|
)
|
(4,777
|
)
|
|
(91.7
|
)
|
|
|
(17,599
|
)
|
(9,804
|
)
|
(7,795
|
)
|
|
(79.5
|
)
|
|
Corporate admin and other
|
|
|
(25,705
|
)
|
(21,335
|
)
|
(4,370
|
)
|
|
(20.5
|
)
|
|
|
(49,850
|
)
|
(43,453
|
)
|
(6,397
|
)
|
|
(14.7
|
)
|
|
Operating income
|
$
|
|
98,763
|
|
94,642
|
|
4,121
|
|
|
4.4
|
|
%
|
$
|
179,460
|
|
169,163
|
|
10,297
|
|
|
6.1
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reimbursable items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Services
|
$
|
|
40,107
|
|
34,114
|
|
5,993
|
|
|
17.6
|
|
%
|
$
|
77,917
|
|
68,307
|
|
9,610
|
|
|
14.1
|
|
%
|
International Services
|
|
|
5,734
|
|
4,878
|
|
856
|
|
|
17.5
|
|
|
|
11,339
|
|
9,382
|
|
1,957
|
|
|
20.9
|
|
|
Merchant Services
|
|
|
19,682
|
|
23,506
|
|
(3,824
|
)
|
|
(16.3
|
)
|
|
|
37,747
|
|
47,106
|
|
(9,359
|
)
|
|
(19.9
|
)
|
|
NetSpend
|
|
|
-
|
|
-
|
|
-
|
|
|
na
|
|
|
-
|
|
-
|
|
-
|
|
|
na
|
|
Intersegment revenues
|
|
|
(1,554
|
)
|
(1,567
|
)
|
13
|
|
|
0.8
|
|
|
|
(2,938
|
)
|
(3,104
|
)
|
166
|
|
|
5.3
|
|
|
Reimbursable items
|
$
|
|
63,969
|
|
60,931
|
|
3,038
|
|
|
5.0
|
|
%
|
$
|
124,065
|
|
121,691
|
|
2,374
|
|
|
2.0
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TSYS
|
Segment Breakdown
|
(unaudited)
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
|
|
|
Change
|
|
FTEs (full-time equivalents)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/30/2014
|
|
|
|
|
6/30/2013
|
|
|
|
|
#
|
|
|
|
%
|
|
|
North America Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,673
|
|
|
|
|
4,252
|
|
|
|
|
421
|
|
|
|
9.9
|
|
%
|
International Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,382
|
|
|
|
|
2,287
|
|
|
|
|
95
|
|
|
|
4.2
|
|
|
Merchant Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,593
|
|
|
|
|
1,599
|
|
|
|
|
(6
|
)
|
|
|
(0.4
|
)
|
|
NetSpend
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
536
|
|
|
|
|
-
|
|
|
|
|
536
|
|
|
|
na
|
|
Corporate Admin and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
594
|
|
|
|
|
483
|
|
|
|
|
111
|
|
|
|
23.0
|
|
|
FTEs - Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,778
|
|
|
|
|
8,621
|
|
|
|
|
1,157
|
|
|
|
13.4
|
|
%
|
Discontinued Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
91
|
|
|
|
|
(91
|
)
|
|
|
na
|
|
FTEs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,778
|
|
|
|
|
8,712
|
|
|
|
|
1,066
|
|
|
|
12.2
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
|
|
|
Change
|
|
Total assets (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/30/2014
|
|
|
|
|
12/31/2013
|
|
|
|
|
$
|
|
|
|
%
|
|
|
North America Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
3,258,409
|
|
|
|
|
3,215,333
|
|
|
|
|
43,076
|
|
|
|
1.3
|
|
%
|
International Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
356,610
|
|
|
|
|
417,379
|
|
|
|
|
(60,769
|
)
|
|
|
(14.6
|
)
|
|
Merchant Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
696,325
|
|
|
|
|
676,592
|
|
|
|
|
19,733
|
|
|
|
2.9
|
|
|
NetSpend
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,566,358
|
|
|
|
|
1,596,150
|
|
|
|
|
(29,792
|
)
|
|
|
(1.9
|
)
|
|
Intersegment assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,199,793
|
)
|
|
|
|
(2,218,886
|
)
|
|
|
|
19,093
|
|
|
|
0.9
|
|
|
Total assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
3,677,909
|
|
|
|
|
3,686,568
|
|
|
|
|
(8,659
|
)
|
|
|
(0.2
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
Inc(Dec)
|
|
|
%
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
Inc(Dec)
|
|
|
%
|
North America Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts on File (AOF) (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
510.3
|
|
|
|
|
430.7
|
|
|
|
|
79.6
|
|
|
|
18.5
|
|
%
|
Transactions (in millions)
|
|
|
|
2,696.7
|
|
|
|
2,235.0
|
|
|
|
461.7
|
|
|
|
20.7
|
|
%
|
|
|
|
|
5,024.3
|
|
|
|
|
4,248.4
|
|
|
|
|
775.9
|
|
|
|
18.3
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AOF (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62.3
|
|
|
|
|
58.0
|
|
|
|
|
4.4
|
|
|
|
7.5
|
|
%
|
Transactions (in millions)
|
|
|
|
558.1
|
|
|
|
492.4
|
|
|
|
65.7
|
|
|
|
13.3
|
|
%
|
|
|
|
|
1,076.0
|
|
|
|
|
926.3
|
|
|
|
|
149.7
|
|
|
|
16.2
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merchant Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Point-of-sale Transactions (in millions)
|
|
|
1,045.1
|
|
|
|
1,136.0
|
|
|
|
(90.9
|
)
|
|
|
(8.0
|
)
|
%
|
|
|
|
|
2,027.3
|
|
|
|
|
2,235.1
|
|
|
|
|
(207.8
|
)
|
|
|
(9.3
|
)
|
%
|
Dollar sales volume (in millions)
|
|
|
$
|
11,796.5
|
|
|
$
|
11,028.0
|
|
|
$
|
768.5
|
|
|
|
7.0
|
|
%
|
|
|
|
$
|
22,576.3
|
|
|
|
$
|
21,160.0
|
|
|
|
$
|
1,416.3
|
|
|
|
6.7
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NetSpend Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Dollar Volume (in millions)
|
|
|
$
|
4,634.8
|
|
|
$
|
3,948.0
|
|
|
$
|
686.8
|
|
|
|
17.4
|
|
%
|
|
|
|
$
|
11,202.0
|
|
|
|
$
|
9,326.7
|
|
|
|
$
|
1,875.3
|
|
|
|
20.1
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90-Day Active Cards (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,388.0
|
|
|
|
|
3,092.3
|
|
|
|
|
295.7
|
|
|
|
9.6
|
|
|
Direct Deposit 90-Day Active Cards (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,600.7
|
|
|
|
|
1,361.4
|
|
|
|
|
239.3
|
|
|
|
17.6
|
|
|
% of 90-Day Active Cards with Direct Deposit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47.2
|
%
|
|
|
|
44.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TSYS
|
Balance Sheet
|
(unaudited)
|
(in thousands)
|
|
|
Jun 30, 2014
|
Dec 31, 2013
|
Assets
|
|
|
|
Current assets:
|
|
|
|
Cash and cash equivalents
|
$
|
250,957
|
|
247,700
|
|
Accounts receivable, net
|
|
281,338
|
|
255,773
|
|
Deferred income tax assets
|
|
12,082
|
|
14,158
|
|
Prepaid expenses and other current assets
|
|
103,558
|
|
95,109
|
|
Current assets of discontinued operations
|
|
4,003
|
|
41,193
|
|
|
|
|
|
Total current assets
|
|
651,938
|
|
653,933
|
|
Goodwill
|
|
1,550,817
|
|
1,541,574
|
|
Other intangible assets, net
|
|
442,661
|
|
481,419
|
|
Computer software, net
|
|
353,459
|
|
363,880
|
|
Property and equipment, net
|
|
274,507
|
|
259,968
|
|
Contract acquisition costs, net
|
|
211,007
|
|
184,828
|
|
Equity investments, net
|
|
99,634
|
|
94,133
|
|
Deferred income tax assets, net
|
|
394
|
|
3,972
|
|
Other assets
|
|
93,492
|
|
87,146
|
|
Long-Term assets of discontinued operations
|
|
-
|
|
15,715
|
|
|
|
|
|
Total assets
|
$
|
3,677,909
|
|
3,686,568
|
|
|
|
|
|
Liabilities
|
|
|
|
Current liabilities:
|
|
|
|
Accounts payable
|
$
|
44,078
|
|
33,651
|
|
Current portion of borrowings
|
|
34,383
|
|
34,257
|
|
Accrued salaries and employee benefits
|
|
26,814
|
|
38,339
|
|
Current portion of obligations under capital leases
|
|
8,777
|
|
22,662
|
|
Other current liabilities
|
|
204,837
|
|
159,170
|
|
Current liabilities of discontinued operations
|
|
4,003
|
|
9,136
|
|
|
|
|
|
Total current liabilities
|
|
322,892
|
|
297,215
|
|
Long-term borrowings, excluding current portion
|
|
1,411,217
|
|
1,428,251
|
|
Deferred income tax liabilities
|
|
194,203
|
|
228,727
|
|
Obligations under capital leases, excluding current portion
|
7,075
|
|
7,500
|
|
Other long-term liabilities
|
|
94,858
|
|
81,600
|
|
Long-term liabilities of discontinued operations
|
|
-
|
|
1,197
|
|
|
|
|
|
Total liabilities
|
|
2,030,245
|
|
2,044,490
|
|
Redeemable noncontrolling interest
|
|
22,210
|
|
39,652
|
|
Equity
|
|
|
|
Shareholders' equity:
|
|
|
|
Common stock
|
|
20,279
|
|
20,279
|
|
Additional paid-in capital
|
|
158,415
|
|
165,841
|
|
Accumulated other comprehensive income, net
|
|
12,504
|
|
3,749
|
|
Treasury stock
|
|
(412,669
|
)
|
(326,996
|
)
|
Retained earnings
|
|
1,839,904
|
|
1,718,204
|
|
Total shareholders' equity
|
|
1,618,433
|
|
1,581,077
|
|
Noncontrolling interests in consolidated subsidiaries
|
|
7,021
|
|
21,349
|
|
Total equity
|
|
1,625,454
|
|
1,602,426
|
|
Total liabilities and equity
|
$
|
3,677,909
|
|
3,686,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TSYS
|
Cash Flow
|
(unaudited)
|
(in thousands)
|
|
|
Six Months Ended June 30,
|
|
|
2014
|
|
2013
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
Net income
|
$
|
162,965
|
|
119,710
|
Adjustments to reconcile net income to net cash
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
Equity in income of equity investments
|
|
(7,696)
|
|
(6,565)
|
Dividends received from equity investments
|
|
-
|
|
1,016
|
Loss (Gain) on foreign currency
|
|
1,964
|
|
(72)
|
Depreciation and amortization
|
|
122,393
|
|
83,043
|
Amortization of debt issuance costs
|
|
906
|
|
6,315
|
Amortization of bond discount
|
|
190
|
|
39
|
Changes in fair value of private equity investments
|
|
(234)
|
|
(1,227)
|
Share-based compensation
|
|
17,599
|
|
9,804
|
Excess tax benefit from share-based compensation
|
|
(5,771)
|
|
(2,040)
|
Provisions for bad debt expense and billing adjustments
|
|
1,307
|
|
1,541
|
Charges for transaction processing provisions
|
|
2,966
|
|
7,093
|
Provision for fraud and other losses
|
|
21,535
|
|
-
|
Deferred income tax expense
|
|
(8,474)
|
|
20,420
|
Loss on disposal of equipment, net
|
|
8
|
|
55
|
Gain on disposal of subsidiaries
|
|
(85,310)
|
|
-
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
(24,885)
|
|
(8,031)
|
Prepaid expenses, other current assets and other long-term assets
|
|
(16,869)
|
|
(24,911)
|
Accounts payable
|
|
3,306
|
|
(34,602)
|
Accrued salaries and employee benefits
|
|
(11,506)
|
|
(7,989)
|
Other current liabilities and other long-term liabilities
|
|
65,048
|
|
(6,351)
|
Net cash provided by operating activities
|
|
239,442
|
|
157,248
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
Purchases of property and equipment, net
|
|
(37,152)
|
|
(13,701)
|
Additions to licensed computer software from vendors
|
|
(7,729)
|
|
(27,711)
|
Additions to internally developed computer software
|
|
(21,271)
|
|
(12,522)
|
Proceeds from dispositions, net of expenses paid and cash disposed
|
|
45,049
|
|
-
|
Purchase of private equity investments
|
|
(813)
|
|
(1,006)
|
Additions to contract acquisition costs
|
|
(39,623)
|
|
(24,506)
|
Net cash used in investing activities
|
|
(61,539)
|
|
(79,446)
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
Principal payments on long-term borrowings and
|
|
|
|
|
capital lease obligations
|
|
(34,467)
|
|
(20,073)
|
Proceeds from borrowings of long-term borrowings
|
|
-
|
|
1,095,661
|
Proceeds from exercise of stock options
|
|
22,284
|
|
19,449
|
Excess tax benefit from share-based compensation
|
|
5,771
|
|
2,040
|
Repurchase of common stock under plans and tax withholding
|
|
(120,848)
|
|
(6,268)
|
Debt issuance costs
|
|
-
|
|
(13,018)
|
Purchase of noncontrolling interests
|
|
(37,500)
|
|
-
|
Subsidiary dividends paid to noncontrolling shareholders
|
|
(5,182)
|
|
(4,139)
|
Dividends paid on common stock
|
|
(37,633)
|
|
(18,758)
|
Net cash (used in) provided by financing activities
|
|
(207,575)
|
|
1,054,894
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS:
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
2,399
|
|
(6,099)
|
Net (decrease) increase in cash and cash equivalents
|
|
(27,273)
|
|
1,126,597
|
Cash and cash equivalents at beginning of period
|
|
278,230
|
|
247,612
|
Cash and cash equivalents at end of period
|
|
250,957
|
|
1,374,209
|
Less cash and cash equivalents of
|
|
|
|
|
discontinued operations at end of period
|
|
-
|
|
25,234
|
Cash and cash equivalents of continuing operations at end of period
|
$
|
250,957
|
|
1,348,975
|
|
|
|
|
|
|
|
|
|
|
Supplemental Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts on File
|
|
|
|
|
|
|
|
Total
|
(in millions)
|
|
|
|
|
|
|
|
June 2014
|
|
June 2013
|
|
% Change
|
Consumer Credit
|
|
|
|
|
|
|
|
246.5
|
|
|
208.5
|
|
18.2
|
Retail
|
|
|
|
|
|
|
|
27.9
|
|
|
25.9
|
|
8.0
|
Total Consumer
|
|
|
|
|
|
|
|
274.4
|
|
|
234.4
|
|
17.1
|
Commercial
|
|
|
|
|
|
|
|
40.4
|
|
|
38.6
|
|
4.9
|
Other
|
|
|
|
|
|
|
|
20.4
|
|
|
15.3
|
|
32.7
|
Subtotal
|
|
|
|
|
|
|
|
335.2
|
|
|
288.3
|
|
16.3
|
Prepaid/Stored Value
|
|
|
|
|
|
|
|
117.7
|
|
|
102.8
|
|
14.4
|
Government Services
|
|
|
|
|
|
|
|
65.6
|
|
|
60.6
|
|
8.4
|
Commercial Card Single Use
|
|
|
|
|
|
|
|
54.2
|
|
|
37.0
|
|
46.4
|
Total AOF
|
|
|
|
|
|
|
|
572.7
|
|
|
488.7
|
|
17.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth in Accounts on File (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
June 2013 to June 2014
|
|
|
June 2012 to June 2013
|
|
|
Beginning balance
|
|
488.7
|
|
|
|
|
|
|
440.1
|
|
|
|
|
|
Change in accounts on file due to:
|
|
|
|
|
|
|
|
|
|
|
|
Internal growth of existing clients
|
38.4
|
|
|
|
|
|
|
35.2
|
|
|
|
|
|
|
New clients
|
71.9
|
|
|
|
|
|
|
76.1
|
|
|
|
|
|
|
Purges/Sales
|
(25.4
|
)
|
|
|
|
|
|
(62.7
|
)
|
|
|
|
|
|
Deconversions
|
(0.9
|
)
|
|
|
|
|
|
(0.0
|
)
|
|
|
|
|
Ending balance
|
|
572.7
|
|
|
|
|
|
|
488.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
|
|
|
Non-GAAP Measures
|
|
|
|
The schedule below provides a reconciliation of revenues and
operating results on a constant currency basis to reported revenues
and operating income. This non-GAAP measure presents second quarter
2014 financial results using the previous year's foreign currency
exchange rates. On a full year constant currency basis, TSYS' total
revenues grew 29.9% as compared to a reported GAAP increase of 31.2%.
|
|
|
|
The schedule below also provides a reconciliation of basic EPS,
adjusted for the after-tax impact of acquisition intangible
amortization, share-based compensation and merger and acquisition
costs, to adjusted EPS.
|
|
|
|
The tax rate used in the calculation of adjusted EPS for the quarter
and year is equal to an estimate of our annual effective tax rate on
GAAP income. This effective rate is estimated annually and may be
adjusted during the year to take into account events or trends that
materially impact the effective tax rate including, but not limited
to, significant changes resulting from tax legislation, material
changes in the mix of revenues and expenses by entity and other
significant events.
|
|
|
|
The schedule also provides a reconciliation of net income, adjusted
for income from discontinued operations, equity in income of equity
investments, income taxes, nonoperating expense, depreciation and
amortization, share-based compensation, and merger and acquisition
expenses, to adjusted EBITDA.
|
|
|
|
TSYS believes that non-GAAP financial measures are important to
enable investors to understand and evaluate its ongoing operating
results. Accordingly, TSYS includes non-GAAP financial measures when
reporting its financial results to shareholders and potential
investors in order to provide them with an additional tool to
evaluate TSYS' ongoing business operations. TSYS believes that the
non-GAAP financial measures are representative of comparative
financial performance that reflects the economic substance of TSYS'
current and ongoing business operations.
|
|
|
|
Although non-GAAP financial measures are often used to measure TSYS'
operating results and assess its financial performance, they are not
necessarily comparable to similarly titled captions of other
companies due to potential inconsistencies in the method of
calculation.
|
|
|
|
TSYS believes that its use of non-GAAP financial measures provides
investors with the same key financial performance indicators that
are utilized by management to assess TSYS' operating results,
evaluate the business and make operational decisions on a
prospective, going-forward basis. Hence, management provides
disclosure of non-GAAP financial measures to give shareholders and
potential investors an opportunity to see TSYS as viewed by
management, to assess TSYS with some of the same tools that
management utilizes internally and to be able to compare such
information with prior periods. TSYS believes that the presentation
of GAAP financial measures alone would not provide its shareholders
and potential investors with the ability to appropriately analyze
its ongoing operational results, and therefore expected future
results. TSYS therefore believes that inclusion of non-GAAP
financial measures provides investors with additional information to
help them better understand its financial statements just as
management utilizes these non-GAAP financial measures to better
understand the business, manage budgets and allocate resources.
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency Comparison
|
(unaudited)
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
Percent
|
|
|
|
|
Percent
|
|
|
|
|
2014
|
2013
|
Change
|
|
|
2014
|
2013
|
Change
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
Constant currency (1)
|
$
|
594,799
|
461,860
|
28.8
|
%
|
$
|
1,183,283
|
910,651
|
29.9
|
|
%
|
Foreign currency (2)
|
|
7,237
|
-
|
|
|
|
11,600
|
-
|
|
|
Total revenues
|
$
|
602,036
|
461,860
|
30.4
|
%
|
$
|
1,194,883
|
910,651
|
31.2
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant currency (1)
|
$
|
531,303
|
400,929
|
32.5
|
%
|
$
|
1,060,005
|
788,960
|
34.4
|
|
%
|
Foreign currency (2)
|
|
6,764
|
-
|
|
|
|
10,813
|
-
|
|
|
Total revenues before reimbursable items
|
$
|
538,067
|
400,929
|
34.2
|
%
|
$
|
1,070,818
|
788,960
|
35.7
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant currency (1)
|
$
|
95,381
|
94,642
|
0.8
|
%
|
$
|
173,533
|
169,163
|
2.6
|
|
%
|
Foreign currency (2)
|
|
3,382
|
-
|
|
|
|
5,927
|
-
|
|
|
Operating income
|
$
|
98,763
|
94,642
|
4.4
|
%
|
$
|
179,460
|
169,163
|
6.1
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
International Services
|
|
|
|
|
|
|
|
|
|
|
Constant currency (1)
|
$
|
83,300
|
81,504
|
2.2
|
%
|
$
|
161,434
|
162,395
|
(0.6
|
)
|
%
|
Foreign currency (2)
|
|
7,166
|
-
|
|
|
|
11,410
|
-
|
|
|
Total revenues
|
$
|
90,466
|
81,504
|
11.0
|
%
|
$
|
172,844
|
162,395
|
6.4
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects current period results on a non-GAAP basis as if
foreign currency rates did not change from the comparable prior year
period.
|
(2) Reflects the impact of calculated changes in foreign currency
rates from the comparable period.
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues Before Reimbursable Items
|
(unaudited)
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
Percent
|
|
|
|
|
Percent
|
|
|
|
|
2014
|
2013
|
Change
|
|
|
2014
|
2013
|
Change
|
|
Total revenues
|
$
|
602,036
|
461,860
|
30.4
|
%
|
$
|
1,194,883
|
910,651
|
31.2
|
|
%
|
Reimbursable items
|
|
63,969
|
60,931
|
5.0
|
|
|
124,065
|
121,691
|
2.0
|
|
|
Revenues before reimbursable items
|
$
|
538,067
|
400,929
|
34.2
|
%
|
$
|
1,070,818
|
788,960
|
35.7
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings per Share
|
(unaudited)
|
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
Percent
|
|
Income from continuing operations attributable to
|
|
2014
|
|
2013
|
|
|
Change
|
|
|
|
2014
|
|
2013
|
|
|
Change
|
|
TSYS common shareholders
|
$
|
59,771
|
|
58,096
|
|
|
90.4
|
|
%
|
|
$
|
109,092
|
|
116,000
|
|
|
(6.0
|
)
|
%
|
Adjust for amounts attributable to TSYS common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Acquisition intangible amortization, net of taxes
|
$
|
15,799
|
|
5,048
|
|
|
nm
|
%
|
|
|
31,612
|
|
10,538
|
|
|
nm
|
%
|
Add: Share-based compensation, net of taxes
|
|
6,584
|
|
3,573
|
|
|
84.3
|
|
%
|
|
|
11,601
|
|
6,719
|
|
|
72.7
|
|
%
|
Add: NetSpend M&A expenses, net of taxes*
|
|
1,122
|
|
3,288
|
|
|
(65.9
|
)
|
%
|
|
|
2,325
|
|
8,510
|
|
|
(72.7
|
)
|
%
|
Adjusted earnings
|
$
|
83,276
|
|
70,005
|
|
|
19.0
|
|
%
|
|
$
|
154,630
|
|
141,767
|
|
|
9.1
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS - Income from continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TSYS common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported (GAAP)
|
$
|
0.32
|
|
0.31
|
|
|
3.6
|
|
%
|
|
$
|
0.58
|
|
0.62
|
|
|
(5.8
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjust for amounts attributable to TSYS common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Acquisition intangible amortization, net of taxes
|
|
0.08
|
|
0.03
|
|
|
nm
|
%
|
|
|
0.17
|
|
0.06
|
|
|
nm
|
%
|
Add: Share-based compensation, net of taxes
|
|
0.04
|
|
0.02
|
|
|
85.8
|
|
%
|
|
|
0.06
|
|
0.04
|
|
|
72.7
|
|
%
|
Add: NetSpend M&A expenses, net of taxes*
|
|
0.01
|
|
0.02
|
|
|
(65.7
|
)
|
%
|
|
|
0.01
|
|
0.05
|
|
|
(72.7
|
)
|
%
|
Adjusted EPS **
|
|
$
|
0.45
|
|
0.37
|
|
|
19.8
|
|
%
|
|
$
|
0.83
|
|
0.76
|
|
|
9.2
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares and participating securities
|
|
186,373
|
|
187,738
|
|
|
|
|
|
|
187,058
|
|
187,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Certain merger and acquisition costs are nondeductible for income
tax purposes
|
|
** Adjusted EPS amounts may not total due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
(unaudited)
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
2014
|
|
2013
|
|
|
Change
|
|
|
|
2014
|
|
2013
|
|
|
Change
|
|
Net income
|
|
$
|
111,340
|
|
60,561
|
|
|
83.8
|
|
%
|
|
$
|
162,965
|
|
119,710
|
|
|
36.1
|
|
%
|
Adjust for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deduct: Income from discontinued operations
|
|
(50,133
|
)
|
(678
|
)
|
|
nm
|
%
|
|
|
(51,113
|
)
|
(693
|
)
|
|
nm
|
%
|
Deduct: Equity in income of equity investments
|
|
(3,600
|
)
|
(2,749
|
)
|
|
(31.0
|
)
|
%
|
|
|
(7,696
|
)
|
(6,565
|
)
|
|
(17.2
|
)
|
%
|
Add: Income taxes
|
|
30,771
|
|
29,984
|
|
|
2.6
|
|
%
|
|
|
55,106
|
|
47,447
|
|
|
16.1
|
|
%
|
Add: Nonoperating expense
|
|
10,385
|
|
7,524
|
|
|
38.0
|
|
%
|
|
|
20,198
|
|
9,264
|
|
|
nm
|
%
|
Add: Depreciation and amortization
|
|
60,961
|
|
39,006
|
|
|
56.3
|
|
%
|
|
|
120,995
|
|
79,857
|
|
|
51.5
|
|
%
|
EBITDA
|
|
|
159,724
|
|
133,648
|
|
|
19.5
|
|
%
|
|
|
300,455
|
|
249,020
|
|
|
20.7
|
|
%
|
Adjust for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Share-based compensation
|
|
9,988
|
|
5,211
|
|
|
91.7
|
|
%
|
|
|
17,599
|
|
9,804
|
|
|
79.5
|
|
%
|
Add: NetSpend M&A operating expenses*
|
|
1,182
|
|
1,246
|
|
|
(5.1
|
)
|
%
|
|
|
2,435
|
|
4,727
|
|
|
(48.5
|
)
|
%
|
Adjusted EBITDA
|
$
|
170,894
|
|
140,105
|
|
|
22.0
|
|
%
|
|
$
|
320,489
|
|
263,551
|
|
|
21.6
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
nm = not meaningful
|
* Excludes share-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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