This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

TSYS Reports Third Quarter 2013 Adjusted Cash EPS Increased 37.0%

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, October 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

TSYS' financial information includes 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 corresponding 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 and a reconciliation of those measures to the most directly comparable GAAP measures are included on pages 12 to 16 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 SM." 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, Georgia, with local offices spread across the Americas, EMEA and Asia-Pacific. TSYS provides services to more than half of the top 20 international banks, and has been 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 forward-looking statements include, among others, statements regarding TSYS’ goal of reducing its debt to EBITDA ratio, anticipated uses of cash in the future, and the assumptions underlying such statements. 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, TSYS’ ability to integrate NetSpend and other acquisitions and achieve the anticipated growth opportunities and other benefits of the acquisitions; the effect of current domestic and worldwide economic conditions; the material breach of security of any of TSYS’ systems; and risks associated with foreign operations, including adverse developments with respect to foreign currency exchange rates. Additional risks and other factors that could cause actual results or events to differ materially from those contemplated in this release can be found in TSYS’ filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013. 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.

                               
TSYS
Financial Highlights
(unaudited)
(in thousands, except per share data)
         
Three Months Ended Nine Months Ended
September 30, September 30,
Percent Percent
2013 2012 Change 2013 2012 Change
 
Total revenues $ 588,074 468,059 25.6 % $ 1,531,513 1,391,872 10.0 %
 
Cost of services 394,641 315,685 25.0 1,032,856 946,612 9.1
Selling, general and administrative expenses 80,523 61,099 31.8 210,803 176,557 19.4
Merger and acquisition expenses 7,282   382   nm 12,009   882   nm
 
Operating income 105,628 90,893 16.2 275,845 267,821 3.0
 
Nonoperating income (expenses) (545 ) (579 ) 5.9 (147 ) (2,802 ) 94.7
Merger and acquisition expenses - bridge loan facility & bonds (9,789 ) -   na (19,466 ) -   na
 
Income before income taxes, noncontrolling interests
and equity in income of equity investments 95,294 90,314 5.5 256,232 265,019 (3.3 )
Income taxes 30,592   30,228   1.2 78,384   84,336   (7.1 )
Income before noncontrolling interests and
equity in income of equity investments 64,702 60,086 7.7 177,848 180,683 (1.6 )
Equity in income of equity investments 2,792   1,957   42.7 9,357   6,983   34.0
Net income 67,494 62,043 8.8 187,205 187,666 (0.2 )
Net income attributable to noncontrolling interests (3,144 ) (1,731 ) (81.6 ) (8,110 ) (4,248 ) (90.9 )
 
Net income attributable to TSYS common shareholders $ 64,350   60,312   6.7 % $ 179,095   183,418   (2.4 ) %
 
Basic earnings per share (EPS) $ 0.34   0.32   5.8 % $ 0.95   0.97   (2.1 ) %
 
Diluted EPS $ 0.34   0.32   5.5 % $ 0.94   0.97   (2.3 ) %
 
Dividends declared per share $ 0.10   0.10   $ 0.30   0.30  
 
Non-GAAP measures:
Basic EPS excluding NetSpend M&A expenses, net of taxes $ 0.37   0.32   14.7 % $ 1.03   0.97   5.5 %
 
Adjusted cash EPS $ 0.49   0.36   37.0 % $ 1.25   1.09   14.7 %
 
Adjusted EBITDA $ 182,140   137,858   32.1 % $ 449,931   407,499   10.4 %
 
 
nm = not meaningful

 

                             
TSYS
Consolidated Statements of Comprehensive Income
(unaudited)
(in thousands)
             
 
Three Months Ended Nine Months Ended
September 30, September 30,
 
2013 2012 2013 2012
 
Net income $ 67,494 62,043 $ 187,205 187,666
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments 7,222 9,999 (6,489 ) 2,935
Postretirement healthcare plan adjustments 1,113 (1,537 ) 1,423 (1,250 )
Unrealized gain on available-for-sale securities 1,479 -   1,479   -  
Other comprehensive income (loss) 9,814 8,462   (3,587 ) 1,685  
Comprehensive income 77,308 70,505 183,618 189,351
Comprehensive income attributable to
noncontrolling interests 3,228 1,709   6,149   3,844  
Comprehensive income attributable to
TSYS common shareholders $ 74,080 68,796   $ 177,469   185,507  
 
                                   
TSYS
Earnings Per Share
(unaudited)
(in thousands, except per share data)
             
 
Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended
September 30, 2013 September 30, 2012 September 30, 2013 September 30, 2012
Common Participating Common Participating Common Participating Common Participating
Stock Securities Stock Securities Stock Securities Stock Securities
 
Basic earnings per share:
Net income $ 64,350 60,312 $ 179,095 183,418
Less income allocated to nonvested awards (605 ) 605 (191 ) 191 (968 ) 968 (613 ) 613
Net income allocated to common stock for
EPS calculation ( a ) $ 63,745   605 60,121   191 $ 178,127   968 182,805   613
 
Average common shares outstanding ( b ) 187,726   1,799 187,269   609 187,001   1,034 187,911   642
 
Average common shares and participating securities 189,525   187,878   188,035   188,553  
 
Basic earnings per share ( a )/( b ) $ 0.34   0.34 0.32   0.31 $ 0.95   0.94 0.97   0.96
 
Diluted earnings per share:
Net income $ 64,350 60,312 $ 179,095 183,418
Less income allocated to nonvested awards (601 ) 601 (191 ) 191 (962 ) 962 (611 ) 611
Net income allocated to common stock for
EPS calculation ( c ) $ 63,749   601 60,121   191 $ 178,133   962 182,807   611
 
Average common shares outstanding 187,726 1,799 187,269 609 187,001 1,034 187,911 642
Increase due to assumed issuance of shares related
to common equivalent shares outstanding 1,758     1,218     1,565     1,138    
 
Average common and common
equivalent shares outstanding ( d ) 189,484   1,799 188,487   609 188,566   1,034 189,049   642
 
Average common and common
equivalent shares and participating securities 191,283   189,096   189,600   189,691  
 
Diluted earnings per share ( c )/( d ) $ 0.34   0.33 0.32   0.31 $ 0.94   0.93 0.97   0.95
 

 

 

                                                     
TSYS
Segment Breakdown
(unaudited)
(in thousands)
                           
Three Months Ended September 30, Nine Months Ended September 30,
Change Change
2013 2012 $ % 2013 2012 $ %
Revenues before reimbursable items
North America Services $ 217,257 203,497 13,760 6.8 % $ 637,379 613,111 24,268 4.0 %
International Services 95,399 98,184 (2,785 ) (2.8 ) 281,201 293,722 (12,521 ) (4.3 )
Merchant Services 113,650 107,786 5,864 5.4 335,903 303,842 32,061 10.6
NetSpend 103,706 - 103,706 na 103,706 - 103,706 na
Intersegment revenues (3,001 ) (3,415 ) 414   12.1 (9,429 ) (10,753 ) 1,324   12.3
Revenues before reimbursable items
from external customers $ 527,011   406,052   120,959   29.8 % $ 1,348,760   1,199,922   148,838   12.4 %
 
Total revenues
North America Services $ 252,577 237,625 14,952 6.3 % $ 741,005 717,781 23,224 3.2 %
International Services 100,548 102,691 (2,143 ) (2.1 ) 295,731 306,466 (10,735 ) (3.5 )
Merchant Services 135,616 132,746 2,870 2.2 404,975 383,167 21,808 5.7
NetSpend 103,706 - 103,706 na 103,706 - 103,706 na
Intersegment revenues (4,373 ) (5,003 ) 630   12.6 (13,904 ) (15,542 ) 1,638   10.5
Revenues from external customers $ 588,074   468,059   120,015   25.6 % $ 1,531,513   1,391,872   139,641   10.0 %
 
Depreciation and amortization
North America Services $ 18,764 18,582 182 1.0 % $ 55,060 55,856 (796 ) (1.4 ) %
International Services 11,117 14,182 (3,066 ) (21.6 ) 34,424 41,052 (6,628 ) (16.1 )
Merchant Services 2,890 2,889 0 0.0 9,030 9,385 (355 ) (3.8 )
NetSpend 1,471   -   1,471   na 1,471   -   1,471   na
Segment depreciation and amortization 34,241 35,654 (1,413 ) (4.0 ) 99,984 106,293 (6,309 ) (5.9 )
Acquisition intangible amortization 24,731 6,919 17,812 nm 41,142 18,924 22,218 nm
Corporate admin and other 475   670   (195 ) (29.1 ) 1,364   2,112   (748 ) (35.4 )
Total depreciation and amortization $ 59,447   43,243   16,204   37.5 % $ 142,490   127,329   15,161   11.9 %
 
Adjusted segment operating income
North America Services $ 82,274 70,080 12,194 17.4 % $ 229,373 210,658 18,715 8.9 %
International Services 10,729 8,244 2,485 30.1 26,448 22,842 3,606 15.8
Merchant Services 40,230 40,909 (679 ) (1.7 ) 118,521 119,036 (515 ) (0.4 )
NetSpend 31,248   -   31,248   na 31,248   -   31,248   na
Total adjusted segment operating income 164,481 119,233 45,248 37.9 405,590 352,536 53,054 15.0
Acquisition intangible amorization (24,731 ) (6,919 ) (17,812 ) nm (41,142 ) (18,924 ) (22,218 ) nm
NetSpend M&A operating expenses (non-recurring) (7,282 ) - (7,282 ) na (12,009 ) - (12,009 ) na
Corporate admin and other (26,840 ) (21,421 ) (5,419 ) (25.3 ) (76,594 ) (65,791 ) (10,803 ) (16.4 )
Operating income $ 105,628   90,893   14,735   16.2 % $ 275,845   267,821   8,024   3.0 %
 
Other:
Reimbursable items:
North America Services $ 35,320 34,128 1,192 3.5 % $ 103,626 104,670 (1,044 ) (1.0 ) %
International Services 5,149 4,507 642 14.2 14,530 12,744 1,786 14.0
Merchant Services 21,966 24,960 (2,994 ) (12.0 ) 69,072 79,325 (10,253 ) (12.9 )
NetSpend - - - na - - - na
Intersegment revenues (1,372 ) (1,588 ) 216   13.6 (4,475 ) (4,789 ) 314   6.6
Reimbursable items $ 61,063   62,007   (944 ) (1.5 ) % $ 182,753   191,950   (9,197 ) (4.8 ) %
 

 

 

                                       
TSYS
Segment Breakdown
(unaudited)
(in thousands)
               
Other:
 
Volumes: At Change
FTEs (full-time equivalents) 9/30/2013   12/31/2012 $ %
North America Services 4,370 3,964 406 10.2 %
International Services 2,436 2,624 (188 ) (7.2 )
Merchant Services 1,617 1,242 375 30.2
NetSpend 462 - 462 na
Corporate Admin and Other   544     415     129   31.1
FTEs   9,429     8,245     1,184   14.4 %
 
 
Total assets (in thousands)
North America Services $ 3,279,829 1,744,877 1,534,952 88.0 %
International Services 399,368 445,642 (46,274 ) (10.4 )
Merchant Services 685,400 703,725 (18,325 ) (2.6 )
NetSpend 1,624,850 - 1,624,850 na
Intersegment assets   (2,234,561 )   (870,406 )   (1,364,155 ) nm
Total assets $   3,754,886     2,023,838     1,731,048   85.5 %
 
 
Three Months Ended September 30, Nine Months Ended September 30,
Change Change
2013 2012 Inc(Dec) % 2013 2012 Inc(Dec) %
North America Segment:
Accounts on File (AOF) (in millions) 461.4 413.4 48.0 11.6 %
Transactions (in millions) 2,395.8 2,036.6 359.2 17.6 % 6,644.2 5,907.7 736.5 12.5 %
 
International Segment:
AOF (in millions) 59.3 53.0 6.4 12.0 %
Transactions (in millions) 525.5 415.1 110.4 26.6 % 1,452.2 1,200.5 251.7 21.0 %
 
Merchant Segment:
Point-of-sale Transactions (in millions) 1,090.0 1,225.1 (135.1 ) (11.0 ) % 3,325.2 3,724.5 (399.3 ) (10.7 ) %
Dollar sales volume (in millions) $ 10,963.2 $ 9,946.5 $ 1,016.7 10.2 % $ 32,123.2 $ 27,956.5 $ 4,167 14.9 %
 
NetSpend Segment:
Gross Dollar Volume (in millions) $ 3,780.9 $ - $ 3,780.9 na $ 3,780.9 $ - $ 3,780.9 na
 
90-Day Active Cards (in thousands) 2,767.3 - 2,767.3 na
Direct Deposit 90-Day Active Cards (in thousands) 1,261.1 - 1,261.1 na
% of 90-Day Active Cards with Direct Deposit 45.6 % 45.6 %
 

 

     
 
             
TSYS
Balance Sheet
(unaudited)
(in thousands)
Sep 30, 2013 Dec 31, 2012
Assets
Current assets:
Cash and cash equivalents $ 396,860 247,612
Restricted cash 530 282
Accounts receivable, net 261,595 247,083
Deferred income tax assets 14,604 9,825
Prepaid expenses and other current assets 86,993 69,924
   
Total current assets 760,582 574,726
Goodwill 1,545,784 518,344
Property and equipment, net 259,865 260,389
Computer software, net 320,928 226,917
Contract acquisition costs, net 173,840 161,267
Other intangible assets, net 500,870 130,054
Equity investments, net 89,964 87,764
Deferred income tax assets, net 5,843 5,334
Other assets 97,210 59,043
   
Total assets $ 3,754,886   2,023,838  
 
Liabilities
Current liabilities:
Accounts payable $ 44,119 63,370
Current portion of borrowings 27,688 27,361
Current portion of obligations under capital leases 23,153 13,263
Accrued salaries and employee benefits 29,502 26,243
Other current liabilities 173,190 100,282
   
Total current liabilities 297,652 230,519
Long-term borrowings, excluding current portion 1,494,397 174,859
Deferred income tax liabilities 220,846 48,074
Obligations under capital leases, excluding current portion 10,322 17,155
Other long-term liabilities 67,417 68,791
   
Total liabilities 2,090,634   539,398  
Redeemable noncontrolling interest 39,303   39,505  
Equity
Shareholders' equity:
Common stock 20,280 20,247
Additional paid-in capital 162,111 141,793
Accumulated other comprehensive income (loss), net (220 ) 1,408
Treasury stock (248,998 ) (287,301 )
Retained earnings 1,671,595   1,549,063  
Total shareholders' equity 1,604,768   1,425,210  
Noncontrolling interests in consolidated subsidiaries 20,181   19,725  
Total equity 1,624,949   1,444,935  
Total liabilities and equity $ 3,754,886   2,023,838  
 
   
           
TSYS
Cash Flow
(unaudited)
(in thousands)
Nine Months Ended September 30,
2013 2012
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 187,205 187,666
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in income of equity investments (9,357 ) (6,983 )
Dividends received from equity investments 8,595 7,523
Net loss on foreign currency translation 612 2,259
Depreciation and amortization 142,490 127,329
Amortization of debt issuance costs 6,775 180
Amortization of bond discount 131 -
Changes in fair value of private equity investments (1,227 ) -
Share-based compensation 19,587 12,348
Excess tax benefit from share-based payment arrangements (2,727 ) (1,236 )
Provisions for bad debt expense and billing
adjustments 2,193 813
Charges for transaction processing provisions 8,545 1,348
Provision for fraud and other losses 6,398 -
Deferred income tax expense 25,784 (2,355 )
Loss on disposal of equipment, net 78 77
Changes in operating assets and liabilities:
Restricted cash (132 ) -
Accounts receivable (6,721 ) 1,730
Prepaid expenses, other current assets and other long-term assets (12,478 ) 4,406
Accounts payable (41,055 ) 6,688
Accrued salaries and employee benefits (9,552 ) (13,567 )
Other current liabilities and other long-term liabilities (17,659 ) 5,761  
Net cash provided by operating activities 307,486   333,987  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net (24,897 ) (24,296 )
Additions to licensed computer software from vendors (34,412 ) (19,385 )
Additions to internally developed computer software (22,519 ) (15,202 )
Cash used in acquisitions, net of cash acquired (1,314,660 ) (66,250 )
Purchase of private equity investments (1,146 ) (2,370 )
Additions to contract acquisition costs (36,824 ) (25,700 )
Net cash used in investing activities (1,434,457 ) (153,203 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term borrowings and
capital lease obligations (82,644 ) (188,395 )
Proceeds from borrowings of long-term borrowings 1,395,661 158,633
Proceeds from exercise of stock options 27,488 9,451
Excess tax benefit from share-based payment arrangements 2,727 1,236
Repurchase of common stock under plans and tax withholding (6,267 ) (61,556 )
Debt issuance costs (13,471 ) (1,996 )
Subsidiary dividends paid to noncontrolling shareholders (5,897 ) (2,797 )
Dividends paid on common stock (37,514 ) (56,719 )
Net cash provided by (used in) financing activities 1,280,082   (142,143 )
 
CASH AND CASH EQUIVALENTS:
Effect of exchange rate changes on cash and cash equivalents (3,862 ) 1,591  
Net increase in cash and cash equivalents 149,248 40,232
Cash and cash equivalents at beginning of period 247,612   316,337  
Cash and cash equivalents at end of period $ 396,860   356,569  
 

 

 

                 
 
 
Supplemental Information:
Accounts on File
Total
(in millions) September

2013

  September

2012

  %

Change

 
Consumer Credit 224.2 195.0 15.0
Retail 26.8   24.1 11.2
Total Consumer 251.0 219.1 14.6
Commercial 38.9 36.3 7.2
Other 16.9   11.1 52.5
Subtotal 306.7 266.4 15.1
Prepaid/Stored Value 110.7 114.3 (3.1 )
Government Services 61.6 48.8 26.2
Commercial Card Single Use 41.6   36.8 13.0
Total AOF 520.7   466.4 11.7
 
 
 
Growth in Accounts on File (in millions):  
September 2012 to

September 2013

September 2011 to

September 2012

Beginning balance 466.4 392.4
Change in accounts on file due to:
Internal growth of existing clients 36.5 30.3
New clients 63.8 75.5
Purges/Sales (45.4 ) (29.0 )
Deconversions (0.6 )         (2.8 )      
Ending balance 520.7           466.4        
 

 

 

   
 
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 year-to-date 2013 financial results using the previous year’s foreign currency exchange rates. On a year-to-date constant currency basis, TSYS’ total revenues grew 11.2% as compared to a reported GAAP increase of 10.0%.
 
The schedule below also provides a reconciliation of basic EPS, excluding merger and acquisition costs, net of taxes, to basic EPS, and operating income, excluding merger and acquisition costs, to operating income. On a year-to-date basis, TSYS’ basic EPS excluding merger and acquisition costs grew 5.5% as compared to a reported GAAP decrease of 2.1%.
 
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 cash EPS.
 
The schedule below also provides a reconciliation of segment operating income, adjusted for the impact of acquisition intangible amortization.
 
The schedule also provides a reconciliation of net income, adjusted for 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 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 September 30,

Nine Months Ended September 30,

Percent Percent
2013 2012 Change 2013 2012 Change
Consolidated
Constant currency (1) $ 594,470 468,059 27.0 % $ 1,548,296 1,391,872 11.2 %
Foreign currency (2) (6,396 ) - (16,783 ) -
Total revenues $ 588,074   468,059 25.6 % $ 1,531,513   1,391,872 10.0 %
 
Constant currency (1) $ 533,297 406,052 31.3 % $ 1,365,215 1,199,922 13.8 %
Foreign currency (2) (6,286 ) - (16,455 ) -
Total revenues before reimbursable items $ 527,011   406,052 29.8 % $ 1,348,760   1,199,922 12.4 %
 
Constant currency (1) $ 106,459 90,893 17.1 % $ 277,856 267,821 3.7 %
Foreign currency (2) (831 ) - (2,011 ) -
Operating income $ 105,628   90,893 16.2 % $ 275,845   267,821 3.0 %
 
International Services
Constant currency (1) $ 107,050 102,691 4.2 % $ 312,715 306,466 2.0 %
Foreign currency (2) (6,502 ) - (16,984 ) -
Total revenues $ 100,548   102,691 (2.1 ) % $ 295,731   306,466 (3.5 ) %
 
(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 September 30, Nine Months Ended September 30,
Percent Percent
2013 2012 Change 2013 2012 Change
Total Revenues $ 588,074 468,059 25.6 % $ 1,531,513 1,391,872 10.0 %
Reimbursable Items 61,063   62,007 (1.5 ) 182,753   191,950 (4.8 )
Revenues Before Reimbursable Items $ 527,011   406,052 29.8 % $ 1,348,760   1,199,922 12.4 %
 

 

 

             
 
Reconciliation of GAAP to Non-GAAP
                                     
Operating Income and Basic EPS Excluding Merger and Acquisition Costs (M&A)
(unaudited)
(in thousands, except per share data)
 
Three Months Ended September 30, Nine Months Ended September 30,
Percent Percent
2013 2012 Change 2013 2012 Change
Operating income $ 105,628 90,893 16.2 % $ 275,845 267,821 3.0 %
Add: NetSpend M&A operating expenses (non-recurring) 7,282 - na 12,009 - na
Operating income excluding merger and acquisition costs $ 112,910 90,893 24.2 % $ 287,854 267,821 7.5 %
 
Percent Percent
2013 2012 Change 2013 2012 Change
Net income attributable to TSYS common shareholders (a) $ 64,350 60,312 6.7 % $ 179,095 183,418 (2.4 ) %
Add: NetSpend M&A expenses, net of taxes* (non-recurring) 5,424 - na 13,934 - na
Net income attributable to TSYS common shareholders (c) $ 69,774 60,312 15.7 % $ 193,029 183,418 5.2 %
 
Average common shares outstanding (b) 189,525 187,878 188,035 188,553
 
Basic earnings per share ( a )/( b ) $ 0.34 0.32 5.8 % $ 0.95 0.97 (2.1 ) %
 
Basic earnings per share excluding merger and acquisition
expenses ( c )/( b ) $ 0.37 0.32 14.7 % $ 1.03 0.97 5.5 %
 
 
* - Certain merger and acquisition costs are nondeductible for income tax purposes
 

 

 

         
 
Reconciliation of GAAP to Non-GAAP
                                           
Adjusted Cash Earnings
(unaudited)
(in thousands, except per share data)
 
Three Months Ended September 30, Nine Months Ended September 30,
Percent Percent
2013   2012   Change 2013   2012   Change
Net income attributable to TSYS common shareholders (a) $ 64,350 60,312 6.7 % $ 179,095 183,418 (2.4 ) %
 
Adjust for amounts attributable to TSYS common shareholders:
Add: Acquisition intangible amortization, net of taxes $ 16,420 4,383 nm % $ 27,532 12,746 nm %
Add: Share-based compensation, net of taxes 6,635   2,489

 

nm % 13,622   8,480 60.6 %
Cash earnings 87,405 67,184 30.1 % 220,250 204,644 7.6 %
Add: NetSpend M&A expenses, net of taxes* (non-recurring) 5,424   - na % 13,934   - na %
Cash earnings adjusted $ 92,829   67,184 38.2 % $ 234,184   204,644 14.4 %
 
Basic EPS - Net income attributable to TSYS Common Shareholders
As reported (GAAP) $ 0.34   0.32 $ 0.95   0.97
 
Adjust for amounts attributable to TSYS common shareholders:
Add: Acquisition intangible amortization, net of taxes 0.09 0.02 0.15 0.07
Add: Share-based compensation, net of taxes 0.04   0.01 0.07   0.05
Cash earnings per share 0.46 0.36 1.17 1.09
Add: NetSpend M&A expenses, net of taxes* (non-recurring) 0.03   - 0.07   -
Adjusted cash EPS ** $ 0.49   0.36 $ 1.25   1.09
 
Average common shares and participating securities 189,525   187,878 188,035   188,553
 
* Certain merger and acquisition costs are nondeductible for income tax purposes
** Adjusted cash EPS amounts may not total due to rounding.
                                           
Adjusted EBITDA
(unaudited)
(in thousands)
 
Three Months Ended September 30, Nine Months Ended September 30,
Net income $ 67,494 62,043 8.8 % $ 187,205 187,666 (0.2 ) %
Adjust for:
Deduct: Equity in income of equity investments (2,792

)

 

(1,957

)

 

(42.7 ) % (9,357

)

 

(6,983

)

 

(34.0 ) %
Add: Income taxes 30,592 30,228 1.2 % 78,384 84,336 (7.1 ) %
Add: Nonoperating expense 10,334 579 nm % 19,613 2,802 nm %
Add: Depreciation and amortization 59,447   43,243 37.5 % 142,490   127,329 11.9 %
EBITDA 165,075 134,136 23.1 % 418,335 395,150 5.9 %
Adjust for:
Add: Share-based compensation 9,784 3,722 nm % 19,587 12,349 58.6 %
Add: NetSpend M&A operating expenses (non-recurring) 7,282   - na % 12,009   - na %
Adjusted EBITDA $ 182,140   137,858 32.1 % $ 449,931   407,499 10.4 %
 

 

 

 

                 
Reconciliation of GAAP to Non-GAAP
 
Adjusted Segment Operating Income
(unaudited)

(in thousands)

Three Months Ended Nine Months Ended
Mar 31, Jun 30, Sep 30, Sep 30,
2013 2013 2013 2013
Adjusted segment operating income
North America Services $ 67,202 $ 79,896 $ 82,274 $ 229,373
International Services 7,147 8,572 10,729 26,448
Merchant Services 37,338 40,953 40,230 118,521
NetSpend   -     -     31,248     31,248  
Total adjusted segment operating income 111,688 129,421 164,481 405,590
Adjust for:
Acquisition intangible amortization (8,532 ) (7,879 ) (24,731 ) (41,142 )
NetSpend M&A operating expenses (non-recurring) (3,481 ) (1,246 ) (7,282 ) (12,009 )
Corporate administration and other   (24,772 )   (24,982 )   (26,840 )   (76,594 )
Operating income $ 74,903   $ 95,314   $ 105,628   $ 275,845  
                     
Three Months Ended Nine Months Ended   YTD
Mar 31, Jun 30, Sep 30, Dec 31, Sep 30, Dec 31,
2012 2012 2012 2012 2012 2012
Adjusted segment operating income
North America Services $ 68,347 $ 72,231 $ 70,080 $ 78,835 $ 210,658 $ 289,493
International Services 4,637 9,962 8,244 6,584 22,843 29,427
Merchant Services 39,684 38,443 40,909 37,248 119,036 156,284
NetSpend   -     -     -     -     -     -  
Total adjusted segment operating income 112,668 120,635 119,233 122,667 352,537 475,203
Adjust for:
Acquisition intangible amortization (5,989 ) (6,015 ) (6,919 ) (7,340 ) (18,924 ) (26,264 )
NetSpend M&A operating expenses (non-recurring) - - - - - -
Corporate administration and other   (21,848 )   (22,524 )   (21,421 )   (25,495 )   (65,792 )   (91,287 )
Operating income $ 84,831   $ 92,096   $ 90,893   $ 89,831   $ 267,821   $ 357,652  
 
Segment Depreciation and Amortization
(unaudited)

(in thousands)

Three Months Ended Nine Months Ended
Mar 31, Jun 30, Sep 30, Sep 30,
2013 2013 2013 2013
Depreciation and amortization
North America Services $ 18,083 $ 18,213 $ 18,764 $ 55,060
International Services 12,331 10,976 11,117 34,424
Merchant Services 3,142 2,998 2,890 9,030
NetSpend   -     -     1,471     1,471  
Segment depreciation and amortization 33,555 32,188 34,241 99,984
Acquisition intangible amortization 8,532 7,879 24,731 41,142
Corporate administration and other   410     479     475     1,364  
Total depreciation and amortization $ 42,498   $ 40,546   $ 59,447   $ 142,490  
                     
Three Months Ended Nine Months Ended   YTD
Mar 31, Jun 30, Sep 30, Dec 31, Sep 30, Dec 31,
2012 2012 2012 2012 2012 2012
Depreciation and amortization
North America Services $ 18,453 $ 18,821 $ 18,582 $ 18,816 $ 55,856 $ 74,673
International Services 12,387 14,483 14,182 13,980 41,052 55,033
Merchant Services 3,320 3,175 2,889 2,699 9,385 12,083
NetSpend   -     -     -     -     -     -  
Segment depreciation and amortization 34,160 36,479 35,654 35,495 106,293 141,789
Acquisition intangible amortization 5,989 6,015 6,919 7,340 18,924 26,264
Corporate administration and other   723     719     669     446     2,112     2,558  
Total depreciation and amortization $ 40,873   $ 43,213   $ 43,243   $ 43,281   $ 127,329   $ 170,610  
 

 





2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs