Attached files
file | filename |
---|---|
8-K - FORM 8-K - TOTAL SYSTEM SERVICES INC | g27747ae8vk.htm |
EX-99.2 - EX-99.2 - TOTAL SYSTEM SERVICES INC | g27747aexv99w2.htm |
Exhibit 99.1
Total System Services, Inc. |
||
One TSYS Way
|
+1.706.649.2307 | |
Post Office Box 2567
|
+1.706.649.5740 | |
Columbus GA 31902-2567
|
www.tsys.com |
For immediate release:
Contact:
Shawn Roberts
TSYS Investor Relations
+1.706.644.6081
shawnroberts@tsys.com
TSYS Investor Relations
+1.706.644.6081
shawnroberts@tsys.com
TSYS Reports Second Quarter 2011 Results
COLUMBUS, Ga., July 26, 2011 TSYS (NYSE: TSS) today reported results for the second quarter
of 2011 with total revenues of $447.6 million, an increase of 3.9% over 2010. Excluding a 2010
termination fee, total revenues were up 6.2%. Basic earnings per share from continuing operations
were $0.28, an increase of 10.1% over 2010, and increased 25.4% excluding the 2010 termination fee.
We continue to see the improvements that we expected in 2011 as evidenced by our year over year
quarterly revenue growth with and without the termination fee. Our North America Services segment
had an increase in revenues before reimbursable items of 3.2% and operating income growth of 13.0%
excluding the 2010 termination fee. In our International Services segment, revenues before
reimbursable items increased 14.1% on a constant currency basis as a result of new business and
organic growth. Our Merchant Services segment had an increase in revenues before reimbursable items
of 1.3% and operating income growth of 10.0%, said Philip W. Tomlinson, chairman and chief
executive officer of TSYS.
For the six months ended June 30, 2011, total revenues increased 3.9% over 2010 and were up 8.1%
excluding 2010 termination fees. Basic earnings per share from continuing operations were $0.53, a
3.0% increase over 2010, and increased 29.8% excluding 2010 termination fees.
Our year to date results confirm our confidence in the improving economic conditions and our
expectation that we will be successful at achieving our full year guidance for 2011. Since the
beginning of 2011, we have deployed approximately $252 million of capital for share repurchases and
acquisitions as we continue to invest in our future growth, said Tomlinson.
Conference Call
TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, July 26. 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.
Page 1 of 11
Non-GAAP Measures
This press release and the financial highlights section of this release contain the non-GAAP
financial measures of revenues and basic EPS excluding revenues from termination fees and revenues
and operating results on a constant currency basis, respectively, to describe TSYS performance.
Management uses these non-GAAP financial measures to better understand and assess TSYS operating
results and financial performance. TSYS believes these non-GAAP financial measures provide
meaningful additional information about TSYS to assist investors in understanding and evaluating
its operating results.
Additional information about non-GAAP financial measures and a reconciliation of those measures to
the most directly comparable GAAP measures are included on pages 10 and 11 of this release.
About TSYS
TSYS (NYSE: TSS) is reshaping a new era in digital commerce, connecting consumers, merchants,
financial institutions, businesses and governments. Through unmatched customer service and industry
insight, TSYS creates a better experience for buyers and sellers, supporting cross-border payments
in more than 85 countries. Offering merchant payment-acceptance solutions as well as services in
credit, debit, prepaid, mobile, chip, healthcare, installments, money transfer and more, TSYS makes
it possible for those in the global marketplace to conduct safe and secure electronic transactions
with trust and convenience.
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.
For more information, 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, will, could, and similar expressions. These forward-looking
statements include, among others, statements regarding TSYS belief that it will achieve its
financial guidance for 2011, and the assumptions underlying such statements. These statements are
based on the current beliefs and expectations of TSYS management 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 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: adverse developments with respect to entering into contracts with new clients and
retaining current clients; continued consolidation and turmoil in the financial services and other
industries during 2011, including the merger of TSYS clients with entities that are not TSYS
processing clients, the sale of portfolios by TSYS clients to entities that are not TSYS processing
clients and the nationalization or seizure by banking regulators of TSYS clients; TSYS is unable to
control expenses and increase market share both domestically and internationally; TSYS is unable to
manage the impact of slowing economic conditions and consumer spending; the material breach
Page 2 of 11
of security of any of TSYS systems; the impact of potential and completed acquisitions, including
the costs associated therewith and their being more difficult to integrate than anticipated; the
impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on TSYS and on our clients;
changes occur in laws, rules, regulations, credit card association rules or other industry
standards affecting TSYS and our clients that may result in costly new compliance burdens on TSYS
and our clients and lead to a decrease in the volume and/or number of transactions processed; the
costs and effects of litigation, investigations or similar matters or adverse facts and
developments relating thereto; adverse developments with respect to the credit card industry in
general, including a decline in the use of credit cards as a payment mechanism; and internal growth
rates of TSYS existing clients are lower than anticipated whether as a result of unemployment
rates, card delinquencies and charge-off rates or otherwise. Additional risks and other factors
that could cause actual results 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. 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.
more
Page 3 of 11
TSYS Announces Second Quarter 2011 Earnings
Page 4 of 11
Page 4 of 11
TSYS
Financial Highlights
(unaudited)
(in thousands, except per share data)
Financial Highlights
(unaudited)
(in thousands, except per share data)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Total revenues |
$ | 447,554 | 430,887 | 3.9 | % | $ | 876,985 | 844,350 | 3.9 | % | ||||||||||||||
Cost of services |
312,052 | 295,880 | 5.5 | 613,543 | 586,418 | 4.6 | ||||||||||||||||||
Selling, general and administrative expenses |
56,973 | 55,178 | 3.3 | 111,885 | 98,391 | 13.7 | ||||||||||||||||||
Operating income |
78,529 | 79,829 | (1.6 | ) | 151,557 | 159,541 | (5.0 | ) | ||||||||||||||||
Nonoperating expenses |
(841 | ) | (1,172 | ) | 28.2 | (1,568 | ) | (1,433 | ) | (9.4 | ) | |||||||||||||
Income from continuing operations before income
taxes, noncontrolling interests and equity in
income
of equity investments |
77,688 | 78,657 | (1.2 | ) | 149,989 | 158,108 | (5.1 | ) | ||||||||||||||||
Income taxes |
23,658 | 28,272 | (16.3 | ) | 48,815 | 56,369 | (13.4 | ) | ||||||||||||||||
Income from continuing operations before
noncontrolling
interests and equity in income of equity
investments |
54,030 | 50,385 | 7.2 | 101,174 | 101,739 | (0.6 | ) | |||||||||||||||||
Equity in income of equity investments |
617 | 2,366 | (73.9 | ) | 2,885 | 3,259 | (11.5 | ) | ||||||||||||||||
Income from continuing operations, net of tax |
54,647 | 52,751 | 3.6 | 104,059 | 104,998 | (0.9 | ) | |||||||||||||||||
Loss from discontinued operations, net of tax |
| (273 | ) | nm | | (701 | ) | nm | ||||||||||||||||
Net income |
54,647 | 52,478 | 4.1 | 104,059 | 104,297 | (0.2 | ) | |||||||||||||||||
Net income attributable to noncontrolling interests |
(900 | ) | (2,774 | ) | 67.6 | (1,522 | ) | (3,267 | ) | 53.4 | ||||||||||||||
Net income attributable to TSYS common shareholders |
$ | 53,747 | 49,704 | 8.1 | % | $ | 102,537 | 101,030 | 1.5 | % | ||||||||||||||
Basic earnings per share: |
||||||||||||||||||||||||
Income from continuing operations to TSYS
common shareholders |
$ | 0.28 | 0.25 | 10.1 | % | $ | 0.53 | 0.52 | 3.0 | % | ||||||||||||||
Loss from discontinued operations to TSYS
common shareholders |
| (0.00 | ) | nm | | (0.00 | ) | nm | ||||||||||||||||
Net income attributable to TSYS common
shareholders |
$ | 0.28 | 0.25 | 10.8 | % | $ | 0.53 | 0.51 | 3.7 | % | ||||||||||||||
Diluted earnings per share: |
||||||||||||||||||||||||
Income from continuing operations to TSYS
common shareholders |
$ | 0.28 | 0.25 | 10.0 | % | $ | 0.53 | 0.52 | 2.8 | % | ||||||||||||||
Loss from discontinued operations to TSYS
common shareholders |
| (0.00 | ) | nm | | (0.00 | ) | nm | ||||||||||||||||
Net income attributable to TSYS common
shareholders |
$ | 0.28 | 0.25 | 10.5 | % | $ | 0.53 | 0.51 | 3.5 | % | ||||||||||||||
Dividends declared per share |
$ | 0.07 | 0.07 | $ | 0.14 | 0.14 | ||||||||||||||||||
Amounts attributable to TSYS common shareholders: |
||||||||||||||||||||||||
Income from continuing operations, net of tax |
$ | 53,747 | 49,977 | 7.5 | % | $ | 102,537 | 101,731 | 0.8 | % | ||||||||||||||
(Loss) income from discontinued operations, net
of tax |
| (273 | ) | nm | | (701 | ) | nm | ||||||||||||||||
Net income |
$ | 53,747 | 49,704 | 8.1 | % | $ | 102,537 | 101,030 | 1.5 | % | ||||||||||||||
nm = not meaningful |
- more -
TSYS Announces Second Quarter 2011 Earnings
Page 5 of 11
Page 5 of 11
TSYS
Earnings Per Share
(unaudited)
(in thousands, except per share data)
Earnings Per Share
(unaudited)
(in thousands, except per share data)
Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | |||||||||||||||||||||||||||||
Common | Participating | Common | Participating | Common | Participating | Common | Participating | |||||||||||||||||||||||||
Stock | Securities | Stock | Securities | Stock | Securities | Stock | Securities | |||||||||||||||||||||||||
Basic Earnings per share: |
||||||||||||||||||||||||||||||||
Net income |
$ | 53,747 | 49,704 | $ | 102,537 | 101,030 | ||||||||||||||||||||||||||
Less income allocated to nonvested awards |
(191 | ) | 191 | (250 | ) | 250 | (383 | ) | 383 | (514 | ) | 514 | ||||||||||||||||||||
Net income allocated to common stock for
EPS calculation ( a ) |
$ | 53,556 | 191 | 49,454 | 250 | $ | 102,154 | 383 | 100,516 | 514 | ||||||||||||||||||||||
Average common shares outstanding ( b ) |
191,935 | 690 | 196,346 | 998 | 192,390 | 727 | 196,253 | 1,007 | ||||||||||||||||||||||||
Average common shares and participating
securities |
192,625 | 197,344 | 193,117 | 197,260 | ||||||||||||||||||||||||||||
Basic Earnings per share ( a )/( b ) |
$ | 0.28 | 0.28 | 0.25 | 0.25 | $ | 0.53 | 0.53 | 0.51 | 0.51 | ||||||||||||||||||||||
Diluted Earnings per share: |
||||||||||||||||||||||||||||||||
Net income |
$ | 53,747 | 49,704 | $ | 102,537 | 101,030 | ||||||||||||||||||||||||||
Less income allocated to nonvested awards |
(190 | ) | 190 | (250 | ) | 250 | (382 | ) | 382 | (514 | ) | 514 | ||||||||||||||||||||
Net income allocated to common stock for
EPS calculation ( c ) |
$ | 53,557 | 190 | 49,454 | 250 | $ | 102,155 | 382 | 100,516 | 514 | ||||||||||||||||||||||
Average common shares outstanding |
191,935 | 690 | 196,346 | 998 | 192,390 | 727 | 196,253 | 1,007 | ||||||||||||||||||||||||
Increase due to assumed issuance of shares
related
to common equivalent shares outstanding |
459 | 85 | 366 | 87 | ||||||||||||||||||||||||||||
Average common and common
equivalent shares outstanding ( d ) |
192,394 | 690 | 196,431 | 998 | 192,756 | 727 | 196,340 | 1,007 | ||||||||||||||||||||||||
Average common and common
equivalent shares and participating securities |
193,084 | 197,429 | 193,483 | 197,347 | ||||||||||||||||||||||||||||
Diluted Earnings per share ( c )/( d ) |
$ | 0.28 | 0.28 | 0.25 | 0.25 | $ | 0.53 | 0.53 | 0.51 | 0.51 | ||||||||||||||||||||||
- more -
TSYS Announces Second Quarter 2011 Earnings
Page 6 of 11
Page 6 of 11
TSYS
Segment Breakdown
(unaudited)
(in thousands)
Segment Breakdown
(unaudited)
(in thousands)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
Change | Change | |||||||||||||||||||||||||||||||
2011 | 2010 | $ | % | 2011 | 2010 | $ | % | |||||||||||||||||||||||||
Revenues before reimbursable items |
||||||||||||||||||||||||||||||||
North America Services |
$ | 198,775 | 202,061 | (3,286 | ) | (1.6) | % | 393,365 | 417,371 | (24,006 | ) | (5.8 | )% | |||||||||||||||||||
International Services |
93,778 | 74,769 | 19,009 | 25.4 | % | 181,198 | 151,050 | 30,148 | 20.0 | % | ||||||||||||||||||||||
Merchant Services |
93,041 | 91,889 | 1,152 | 1.3 | % | 179,560 | 148,661 | 30,899 | 20.8 | % | ||||||||||||||||||||||
Intersegment revenues |
(5,383 | ) | (5,980 | ) | 597 | 10.0 | % | (11,269 | ) | (11,682 | ) | 413 | 3.5 | % | ||||||||||||||||||
Revenues before reimbursable items
from external customers |
$ | 380,211 | 362,739 | 17,472 | 4.8 | % | 742,854 | 705,400 | 37,454 | 5.3 | % | |||||||||||||||||||||
Total revenues |
||||||||||||||||||||||||||||||||
North America Services |
$ | 233,903 | 236,810 | (2,907 | ) | (1.2) | % | 464,461 | 491,038 | (26,577 | ) | (5.4 | )% | |||||||||||||||||||
International Services |
97,670 | 77,987 | 19,683 | 25.2 | % | 188,380 | 157,379 | 31,001 | 19.7 | % | ||||||||||||||||||||||
Merchant Services |
123,084 | 123,906 | (822 | ) | (0.7) | % | 238,840 | 211,225 | 27,615 | 13.1 | % | |||||||||||||||||||||
Intersegment revenues |
(7,103 | ) | (7,816 | ) | 713 | 9.1 | % | (14,696 | ) | (15,292 | ) | 596 | 3.9 | % | ||||||||||||||||||
Revenues from external customers |
$ | 447,554 | 430,887 | 16,667 | 3.9 | % | 876,985 | 844,350 | 32,635 | 3.9 | % | |||||||||||||||||||||
Depreciation and amortization |
||||||||||||||||||||||||||||||||
North America Services |
$ | 19,926 | 18,891 | 1,035 | 5.5 | % | 39,392 | 39,294 | 98 | 0.2 | % | |||||||||||||||||||||
International Services |
11,960 | 8,597 | 3,363 | 39.1 | % | 23,668 | 17,192 | 6,476 | 37.7 | % | ||||||||||||||||||||||
Merchant Services |
9,313 | 12,253 | (2,940 | ) | (24.0) | % | 18,460 | 20,791 | (2,331 | ) | (11.2 | )% | ||||||||||||||||||||
Corporate Admin |
768 | 611 | 157 | 25.7 | % | 1,515 | 1,593 | (78 | ) | (4.9 | )% | |||||||||||||||||||||
Total depreciation and amortization |
$ | 41,967 | 40,352 | 1,615 | 4.0 | % | 83,035 | 78,870 | 4,165 | 5.3 | % | |||||||||||||||||||||
Segment operating income |
||||||||||||||||||||||||||||||||
North America Services |
$ | 64,068 | 66,218 | (2,150 | ) | (3.2) | % | 119,268 | 136,006 | (16,738 | ) | (12.3 | )% | |||||||||||||||||||
International Services |
10,122 | 11,673 | (1,551 | ) | (13.3) | % | 21,147 | 22,956 | (1,809 | ) | (7.9 | )% | ||||||||||||||||||||
Merchant Services |
25,708 | 23,367 | 2,341 | 10.0 | % | 52,631 | 41,223 | 11,408 | 27.7 | % | ||||||||||||||||||||||
Corporate Admin |
(21,369 | ) | (21,429 | ) | 60 | 0.3 | % | (41,489 | ) | (40,644 | ) | (845 | ) | (2.1 | )% | |||||||||||||||||
Operating income |
$ | 78,529 | 79,829 | (1,300 | ) | (1.6) | % | 151,557 | 159,541 | (7,984 | ) | (5.0 | )% | |||||||||||||||||||
Other: |
||||||||||||||||||||||||||||||||
Reimbursable items: |
||||||||||||||||||||||||||||||||
North America Services |
$ | 35,128 | 34,749 | 379 | 1.1 | % | 71,096 | 73,667 | (2,571 | ) | (3.5 | )% | ||||||||||||||||||||
International Services |
3,892 | 3,218 | 674 | 20.9 | % | 7,183 | 6,329 | 854 | 13.5 | % | ||||||||||||||||||||||
Merchant Services |
30,043 | 32,017 | (1,974 | ) | (6.2) | % | 59,280 | 62,563 | (3,283 | ) | (5.2 | )% | ||||||||||||||||||||
Intersegment revenues |
(1,719 | ) | (1,836 | ) | 117 | 6.4 | % | (3,428 | ) | (3,609 | ) | 181 | 5.0 | % | ||||||||||||||||||
Reimbursable items |
$ | 67,344 | 68,148 | (804 | ) | (1.2) | % | 134,131 | 138,950 | (4,819 | ) | (3.5 | )% | |||||||||||||||||||
Volumes: |
||||||||||||||||||||||||||||||||
FTEs (continuing operations) |
||||||||||||||||||||||||||||||||
North America Services |
4,327 | 4,433 | (106 | ) | (2.4 | )% | ||||||||||||||||||||||||||
International Services |
2,217 | 1,921 | 296 | 15.4 | % | |||||||||||||||||||||||||||
Merchant Services |
1,185 | 1,096 | 89 | 8.1 | % | |||||||||||||||||||||||||||
Corporate Admin |
380 | 330 | 50 | 15.2 | % | |||||||||||||||||||||||||||
FTEs |
8,109 | 7,780 | 329 | 4.2 | % | |||||||||||||||||||||||||||
At | Change | |||||||||||||||||||||||||||||||
Total assets (in thousands) |
6/30/2011 | 12/31/2010 | $ | % | ||||||||||||||||||||||||||||
North America Services |
1,605,973 | 1,632,882 | (26,909 | ) | (1.6 | )% | ||||||||||||||||||||||||||
International Services |
434,458 | 408,880 | 25,578 | 6.3 | % | |||||||||||||||||||||||||||
Merchant Services |
492,929 | 460,750 | 32,179 | 7.0 | % | |||||||||||||||||||||||||||
Intersegment assets |
(701,082 | ) | (550,251 | ) | (150,831 | ) | (27.4 | )% | ||||||||||||||||||||||||
Total assets |
1,832,278 | 1,952,261 | (119,983 | ) | (6.1 | )% | ||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
Change | Change | |||||||||||||||||||||||||||||||
2011 | 2010 | Inc(Dec) | % | 2011 | 2010 | Inc(Dec) | % | |||||||||||||||||||||||||
North America Segment: |
||||||||||||||||||||||||||||||||
Accounts on File (AOF) (in millions) |
328.3 | 290.7 | 37.6 | 12.9 | % | |||||||||||||||||||||||||||
Transactions (in millions) |
1,795.1 | 1,563.7 | 231.4 | 14.8 | % | 3,421.9 | 3,021.9 | 400.0 | 13.2 | % | ||||||||||||||||||||||
International Segment: |
||||||||||||||||||||||||||||||||
AOF (in millions) |
47.8 | 42.1 | 5.6 | 13.4 | % | |||||||||||||||||||||||||||
Transactions (in millions) |
340.6 | 297.9 | 42.8 | 14.4 | % | 666.6 | 579.1 | 87.5 | 15.1 | % | ||||||||||||||||||||||
Merchant Segment: |
||||||||||||||||||||||||||||||||
Point-of-sale Transactions (in millions) |
1,269.0 | 1,420.5 | (151.5 | ) | (10.7 | )% | 2,475.8 | 2,734.8 | (258.9 | ) | (9.5) | % |
-more-
TSYS Announces Second Quarter 2011 Earnings
Page 7 of 11
Page 7 of 11
TSYS
Balance Sheet
(in thousands)
Balance Sheet
(in thousands)
Jun 30, 2011 | Dec 31, 2010 | |||||||
(unaudited) | (unaudited) | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 263,334 | 394,795 | |||||
Restricted cash |
18 | 434 | ||||||
Accounts receivable, net |
226,327 | 238,283 | ||||||
Deferred income tax assets |
12,090 | 11,090 | ||||||
Prepaid expenses and other current assets |
85,892 | 77,211 | ||||||
Total current assets |
587,661 | 721,813 | ||||||
Property and equipment, net |
293,637 | 300,102 | ||||||
Computer software, net |
228,521 | 246,424 | ||||||
Contract acquisition costs, net |
167,450 | 166,251 | ||||||
Goodwill |
357,151 | 320,399 | ||||||
Equity investments, net |
81,951 | 77,127 | ||||||
Other intangible assets, net |
85,596 | 83,118 | ||||||
Other assets |
30,311 | 37,027 | ||||||
Total assets |
$ | 1,832,278 | 1,952,261 | |||||
Liabilities |
||||||||
Current liabilities: |
||||||||
Current portion of notes payable |
$ | 38,813 | 39,557 | |||||
Accrued salaries and employee benefits |
19,457 | 27,414 | ||||||
Accounts payable |
29,189 | 36,068 | ||||||
Current portion of obligations under capital leases |
13,293 | 13,191 | ||||||
Other current liabilities |
128,452 | 111,040 | ||||||
Total current liabilities |
229,204 | 227,270 | ||||||
Notes payable, excluding current portion |
188,102 | 194,703 | ||||||
Deferred income tax liabilities |
189 | 42,547 | ||||||
Obligations under capital leases, excluding current portion |
25,913 | 30,573 | ||||||
Other long-term liabilities |
60,212 | 53,363 | ||||||
Total liabilities |
503,620 | 548,456 | ||||||
Redeemable noncontrolling interest |
| 146,000 | ||||||
Equity |
||||||||
Shareholders equity: |
||||||||
Common stock |
20,140 | 20,133 | ||||||
Additional paid-in capital |
136,072 | 119,722 | ||||||
Accumulated other comprehensive income, net |
8,334 | (2,585 | ) | |||||
Treasury stock |
(149,194 | ) | (115,449 | ) | ||||
Retained earnings |
1,294,877 | 1,219,303 | ||||||
Total shareholders equity |
1,310,229 | 1,241,124 | ||||||
Noncontrolling interests in consolidated subsidiaries |
18,429 | 16,681 | ||||||
Total equity |
1,328,658 | 1,257,805 | ||||||
Total liabilities and equity |
$ | 1,832,278 | 1,952,261 | |||||
-more-
TSYS Announces Second Quarter 2011 Earnings
Page 8 of 11
Page 8 of 11
TSYS
Cash Flow
(unaudited)
(in thousands)
Cash Flow
(unaudited)
(in thousands)
Six Months Ended June 30, | ||||||||
2011 | 2010 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net income |
$ | 104,059 | 104,297 | |||||
Adjustments to reconcile net income to net cash
provided by operating activities: |
||||||||
Equity in income of equity investments |
(2,885 | ) | (3,259 | ) | ||||
Dividends received from equity investments |
13 | 2,698 | ||||||
Net loss (gain) on currency translation adjustments |
574 | 136 | ||||||
Depreciation and amortization |
83,035 | 78,966 | ||||||
Amortization of debt issuance costs |
77 | 77 | ||||||
Share-based compensation |
8,644 | 7,956 | ||||||
Excess tax benefit from share-based payment arrangements |
(54 | ) | (111 | ) | ||||
Asset impairments |
1,298 | | ||||||
Provisions for (recoveries of) bad debt expense and billing
adjustments |
873 | (366 | ) | |||||
Charges for transaction processing provisions |
2,632 | 2,109 | ||||||
Deferred income tax expense (benefit) |
(9,738 | ) | 7,754 | |||||
(Gain) loss on disposal of equipment, net |
(1,429 | ) | 11 | |||||
Gain on disposal of subsidiary |
| (131 | ) | |||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
19,410 | (2,698 | ) | |||||
Prepaid expenses, other current assets and other long-term assets |
4,508 | (25,383 | ) | |||||
Accounts payable |
(13,239 | ) | 27,276 | |||||
Accrued salaries and employee benefits |
(11,489 | ) | (14,031 | ) | ||||
Other current liabilities and other long-term liabilities |
13,005 | 10,407 | ||||||
Net cash provided by operating activities |
199,294 | 195,708 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Purchases of property and equipment, net |
(12,543 | ) | (17,189 | ) | ||||
Additions to licensed computer software from vendors |
(5,882 | ) | (20,812 | ) | ||||
Additions to internally developed computer software |
(9,242 | ) | (9,406 | ) | ||||
Proceeds from sale of tradename |
4,500 | | ||||||
Cash used in acquisitions, net of cash acquired |
(45,287 | ) | (148,531 | ) | ||||
Additions to contract acquisition costs |
(16,007 | ) | (19,888 | ) | ||||
Net cash used in investing activities |
(84,461 | ) | (215,826 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Principal payments on long-term debt borrowings and
capital lease obligations |
(14,494 | ) | (7,858 | ) | ||||
Proceeds from exercise of stock options |
1,339 | 378 | ||||||
Excess tax benefit from share-based payment arrangements |
54 | 111 | ||||||
Repurchase of common stock |
(35,700 | ) | (1,075 | ) | ||||
Purchase of noncontrolling interests |
(174,050 | ) | | |||||
Subsidiary dividends paid to noncontrolling shareholders |
(448 | ) | (250 | ) | ||||
Dividends paid on common stock |
(27,129 | ) | (27,605 | ) | ||||
Net cash used in financing activities |
(250,428 | ) | (36,299 | ) | ||||
CASH AND CASH EQUIVALENTS: |
||||||||
Effect of exchange rate changes on cash and cash equivalents |
4,134 | (5,545 | ) | |||||
Net increase (decrease) in cash and cash equivalents |
(131,461 | ) | (61,962 | ) | ||||
Cash and cash equivalents at beginning of period |
394,795 | 449,955 | ||||||
Cash and cash equivalents at end of period |
$ | 263,334 | 387,993 | |||||
-more-
TSYS Announces Second Quarter 2011 Earnings
Page 9 of 11
Page 9 of 11
Supplemental Information:
Accounts on File | ||||||||||||
Total | ||||||||||||
June | June | % | ||||||||||
(in millions) | 2011 | 2010 | Change | |||||||||
Consumer Credit |
187.6 | 180.9 | 3.7 | |||||||||
Government Services |
30.0 | 27.0 | 11.3 | |||||||||
Retail |
23.7 | 23.6 | 0.4 | |||||||||
Total Consumer |
241.3 | 231.5 | 4.2 | |||||||||
Commercial |
55.2 | 48.2 | 14.7 | |||||||||
Other |
6.7 | 5.5 | 20.1 | |||||||||
Subtotal |
303.2 | 285.2 | 6.3 | |||||||||
Prepaid/Stored Value |
72.8 | 47.6 | 53.1 | |||||||||
Total AOF |
376.0 | 332.8 | 13.0 | |||||||||
Growth in Accounts on File (in millions):
June 2010 to | June 2009 to | |||||||
June 2011 | June 2010 | |||||||
Beginning balance |
332.8 | 349.5 | ||||||
Change in accounts on file due to: |
||||||||
Internal growth of
existing clients |
26.3 | 22.5 | ||||||
New clients |
33.0 | 31.4 | ||||||
Purges/Sales |
(14.7 | ) | (41.2 | ) | ||||
Deconversions |
(1.4 | ) | (29.4 | ) | ||||
Ending balance |
376.0 | 332.8 | ||||||
-more-
TSYS Announces Second Quarter 2011 Earnings
Page 10 of 11
Page 10 of 11
Reconciliation of GAAP to Non-GAAP
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
2011 financial results using the previous years foreign currency
exchange rates. On a year-to-date constant currency basis, TSYS
total revenues grew 3.9% as compared to a reported GAAP increase of
2.4%. The schedule below also provides a reconciliation of revenues
and basic EPS excluding revenues from termination fees.
The non-GAAP financial measures of constant currency and revenues
and basic EPS excluding revenues from termination fees, with
respect to year to date revenues and basic EPS presented by TSYS,
are utilized by management to better understand and assess TSYS
operating results and financial performance. TSYS also uses the
non-GAAP financial measures to evaluate and assess TSYS financial
performance against budget, as well as to evaluate financial
performance for executive and management compensation purposes.
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.
-more-
TSYS Announces Second Quarter 2011 Earnings
Page 11 of 11
Page 11 of 11
Reconciliation of GAAP to Non-GAAP
Constant Currency Comparison
(unaudited)
(in thousands)
Constant Currency Comparison
(unaudited)
(in thousands)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Consolidated |
||||||||||||||||||||||||
Constant currency (1) |
$ | 438,806 | 430,887 | 1.8 | % | $ | 864,801 | 844,350 | 2.4 | % | ||||||||||||||
Foreign currency (2) |
8,748 | | 12,184 | | ||||||||||||||||||||
Total revenues |
$ | 447,554 | 430,887 | 3.9 | % | $ | 876,985 | 844,350 | 3.9 | % | ||||||||||||||
Constant currency (1) |
$ | 77,793 | 79,829 | (2.6) | % | $ | 150,029 | 159,541 | (6.0) | % | ||||||||||||||
Foreign currency (2) |
736 | | 1,528 | | ||||||||||||||||||||
Operating income |
$ | 78,529 | 79,829 | (1.6) | % | $ | 151,557 | 159,541 | (5.0) | % | ||||||||||||||
International Services |
||||||||||||||||||||||||
Constant currency (1) |
$ | 85,335 | 74,769 | 14.1 | % | |||||||||||||||||||
Foreign currency (2) |
8,443 | | ||||||||||||||||||||||
Total revenues before
reimbursable items |
$ | 93,778 | 74,769 | 25.4 | % | |||||||||||||||||||
(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. |
Revenue and BASIC EPS Excluding Termination Fees
(unaudited)
(in thousands except per share data)
(unaudited)
(in thousands except per share data)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
Percent | Percent | |||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Consolidated |
||||||||||||||||||||||||
Total Revenues |
$ | 447,554 | 430,887 | 3.9 | % | $ | 876,985 | 844,350 | 3.9 | % | ||||||||||||||
Less: |
||||||||||||||||||||||||
Termination Fees |
| 9,528 | | 32,667 | ||||||||||||||||||||
Total revenues excluding
termination fees |
$ | 447,554 | 421,359 | 6.2 | % | $ | 876,985 | 811,683 | 8.0 | % | ||||||||||||||
Income from continuing
operations, net of tax,
available to TSYS common
shareholders |
$ | 53,747 | 49,977 | 7.5 | % | $ | 102,537 | 101,731 | 0.8 | % | ||||||||||||||
Less: |
||||||||||||||||||||||||
Termination Fees, net of tax |
| 6,085 | | 21,011 | ||||||||||||||||||||
Income from continuing
operations, net of tax,
available to TSYS common
shareholders,
excluding termination fees |
$ | 53,747 | 43,892 | 22.5 | % | $ | 102,537 | 80,720 | 27.0 | % | ||||||||||||||
Average common shares and
participating securities |
192,625 | 197,344 | 193,117 | 197,260 | ||||||||||||||||||||
BASIC EPS Income from
continuing operations, net of
tax, available to TSYS
common shareholders |
$ | 0.28 | 0.25 | 10.1 | % | $ | 0.53 | 0.52 | 3.0 | % | ||||||||||||||
Less: |
||||||||||||||||||||||||
Termination Fees, net of tax |
| 0.03 | | 0.11 | ||||||||||||||||||||
BASIC EPS Income from
continuing operations, net of
tax, excluding termination fees
available to TSYS common
shareholders |
$ | 0.28 | 0.22 | 25.4 | % | $ | 0.53 | 0.41 | 29.8 | % | ||||||||||||||
Note: Earnings per share may not foot due to rounding.
- ### -