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8-K - 8-K - TOTAL SYSTEM SERVICES INCtss-20170124x8k.htm

 

 

Exhibit 99.1

 

Picture 15

 

 

 

Picture 13

Total System Services, Inc.

One TSYS Way

P.O. Box 2567

Columbus, GA, 31902-2567

tel

fax

web

+1.706.649.2307

+1.706.649.5740

www.tsys.com

 

 

Picture 1

 

TSYS Reports Fourth Quarter and Full Year Earnings

Provides 2017 Guidance

 

 

COLUMBUS, Ga., January 24, 2017 —  TSYS (NYSE: TSS) today reported results for the fourth quarter and full year of 2016.

“2016 was truly an exceptional year in the history of our company.  We delivered record financial results, completed our largest acquisition in TransFirst that doubled the size of our Merchant business, and finished the year with results in all four segments having met or exceeded our goals,“ said M. Troy Woods, chairman and chief executive officer of TSYS.

 

Highlights for the fourth quarter of 2016 include:

·

Total revenues were $1.1 billion, an increase of 57.9% over last year’s $716.8 million.

 

·

Net revenue (non-GAAP), which excludes reimbursable items, interchange and assessment expense, was $785.7 million, an increase of 21.8% over last year’s $645.1 million.

 

·

Income from continuing operations attributable to TSYS common shareholders was $74.0 million, a decrease of 9.2% from last year’s $81.4 million. Basic earnings per share (EPS) from continuing operations were $0.40 per share, a decrease of 9.3% from last year’s $0.44.

 

·

Adjusted earnings from continuing operations (non-GAAP) were $129.6 million, an increase of 24.7% over last year’s $103.9 million.  4th quarter ’16 adjusted EPS from continuing operations (non-GAAP) was $0.71, an increase of 24.5% over last year’s $0.57.

 

·

Adjusted EBITDA (non-GAAP) was $266.5 million, an increase of 36.7% over last year’s $195.0 million.

 


 

Page 2 of 16

 

 

Total System Services, Inc.

One TSYS Way

P.O. Box 2567

Columbus, GA, 31902-2567

tel

fax

web

+1.706.649.2307

+1.706.649.5740

www.tsys.com

 

 

Highlights for the full year of 2016 include:

·

Total revenues were $4.2 billion, an increase of 50.0% over last year’s $2.8 billion.

 

·

Net revenue (non-GAAP), which excludes reimbursable items, interchange and assessment expense, was $3.0 billion, an increase of 21.7% over last year’s $2.5 billion.

 

·

Income from continuing operations attributable to TSYS common shareholders was $319.6 million, a decrease of 11.9% from last year’s $362.6 million. Basic EPS was $1.74 per share, a decrease of 11.6% from last year’s $1.97.

 

·

Adjusted earnings from continuing operations (non-GAAP) were $516.4 million, an increase of 14.2% over last year’s $452.1 million.  Adjusted EPS from continuing operations (non-GAAP) was $2.81, an increase of 14.5% over last year’s $2.46.

 

·

Adjusted EBITDA (non-GAAP) was $1.0 billion, an increase of 24.8% over last year’s $833.9 million.

 

“We expect the momentum of 2016 to continue in 2017.   We are projecting strong organic revenue growth and double digit earnings growth as we remain laser focused on executing our strategic plans and delivering outstanding results,” said Woods.

 

2017 Segment Changes

As a result of combining our North America and International segments, TSYS has included in the financial schedules of this release a schedule recasting its 2016 and 2015 quarterly segment results as if its Issuer Solutions Segment was combined for all of 2016 and 2015.

2017 Outlook

Beginning in 2017, TSYS will provide adjusted EPS figures based upon diluted shares to be more comparative to our industry peers. The 2017 guidance is below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017 Financial

 

 

 

 

(in millions, except per share amounts)

 

 

 

Outlook Range

 

Percent Change

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Total revenues (GAAP)

 

 

$

4,750

to

$

4,850

 

14%

to

16%

Net revenue (non-GAAP)

 

 

$

3,275

to

$

3,325

 

8%

to

11%

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (EPS)

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (GAAP)

 

 

$

2.14

to

$

2.21

 

23%

to

28%

Adjusted diluted EPS attributable to TSYS common shareholders (non-GAAP)

 

 

$

3.05

to

$

3.15

 

9%

to

12%

Average diluted weighted shares

 

 

 

 

185

 

 

 

 

 

 

 

 

 


 

Page 3 of 16

 

 

Total System Services, Inc.

One TSYS Way

P.O. Box 2567

Columbus, GA, 31902-2567

tel

fax

web

+1.706.649.2307

+1.706.649.5740

www.tsys.com

 

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, January 24. The conference call can be accessed via simultaneous Internet broadcast on the “Investor Relations” section of TSYS’ website at investors.tsys.com where an accompanying slide presentation will also be available. The replay will be archived for 12 months and will be available approximately 30 minutes after the completion of the call.

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, net revenue, adjusted earnings, adjusted EBITDA and adjusted EPS, and a reconciliation of those measures to the most directly comparable GAAP measures is included on pages 11 to 15 in the financial schedules of this release.

About TSYS

TSYS® (nyse: tss) unlocks opportunities in payments for payment providers, businesses and consumers. Our headquarters are in Columbus, Georgia, USA, and we operate in more than 80 countries with local offices across the Americas, EMEA and Asia-Pacific.

We provide seamless, secure and innovative solutions across the payments spectrum — from issuer processing and merchant acquiring to prepaid program management — delivered through partnership and expertise. We succeed because we put people, and their needs, at the heart of every decision. It’s an approach we call ‘People-Centered Payments®’.

Our industry is changing every day — and we’re leading the way toward the payments of tomorrow. We routinely post all important information on our website. For more, visit us at 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’ earnings guidance for 2017 total revenues, net revenue, diluted EPS and adjusted diluted EPS, and the

 


 

Page 4 of 16

 

 

Total System Services, Inc.

One TSYS Way

P.O. Box 2567

Columbus, GA, 31902-2567

tel

fax

web

+1.706.649.2307

+1.706.649.5740

www.tsys.com

 

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, the material breach of security of any of TSYS’ systems; TSYS’ ability to integrate acquisitions and achieve the anticipated growth opportunities and other benefits of the acquisitions, particularly the TransFirst acquisition; the effect of current domestic and worldwide economic conditions; risks associated with foreign operations, including adverse developments with respect to foreign currency exchange rates, and in particular with respect to the current environment, adverse developments with respect to foreign currency exchange rates as a result of the United Kingdom’s decision to leave the European Union (Brexit); expenses incurred associated with the signing of a significant client; TSYS does not convert clients’ portfolios as scheduled; the deconversion of a significant client; changes occur in laws, rules, regulations, credit card association rules, prepaid industry 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 or limit the types and amounts of fees that can be charged to customers, and in particular the CFPB’s new rule regarding prepaid financial products; the costs and effects of litigation, investigations or similar matters or adverse facts and developments relating thereto; adverse developments with respect to the payment card industry in general, including a decline in the use of cards as a payment mechanism; and growth rates of TSYS’ existing clients are lower than anticipated or attrition rates of existing clients are higher than anticipated. 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. 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. TSYS disclaims any obligation to update any forward-looking statements as a result of new information, future developments or otherwise except as required by law.

 

Contacts:

Cyle Mims

TSYS Media Relations

+1.706.644.3110

cylemims@tsys.com

 

Shawn Roberts

TSYS Investor Relations

+1.706.644.6081

shawnroberts@tsys.com

— more —

 

 


 

TSYS Announces Fourth Quarter 2016 Earnings

Page 5 of 16

 

__________________________________________________________________________________

TSYS

Financial Highlights

(unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31,

 

December 31,

 

 

 

 

 

 

 

Percent

 

 

 

 

 

 

Percent

 

 

  

2016

  

2015

  

Change

    

2016

  

2015

  

Change

 

Total revenues

 

$

1,132,224

 

716,843

 

57.9

$

4,170,077

 

2,779,541

 

50.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

 

826,332

 

489,040

 

69.0

 

 

2,993,062

 

1,855,181

 

61.3

 

Selling, general and administrative expenses

 

 

175,345

 

109,898

 

59.6

 

 

603,633

 

390,253

 

54.7

 

Total expenses

 

 

1,001,677

 

598,938

 

67.2

 

 

3,596,695

 

2,245,434

 

60.2

 

Operating income

 

 

130,547

 

117,905

 

10.7

 

 

573,382

 

534,107

 

7.4

 

Nonoperating expenses

 

 

(29,662)

 

(9,237)

 

nm

 

 

(112,168)

 

(37,219)

 

nm

 

Income before income taxes, noncontrolling interests and equity in income of equity investments

 

 

100,885

 

108,668

 

(7.2)

 

 

461,214

 

496,888

 

(7.2)

 

Income taxes

 

 

33,209

 

32,160

 

3.3

 

 

161,175

 

151,364

 

6.5

 

Income before noncontrolling interests and equity in income of equity investments

 

 

67,676

 

76,508

 

(11.5)

 

 

300,039

 

345,524

 

(13.2)

 

Equity in income of equity investments, net of tax

 

 

6,699

 

6,797

 

(1.4)

 

 

25,933

 

22,106

 

17.3

 

Income from continuing operations, net of tax

 

 

74,375

 

83,305

 

(10.7)

 

 

325,972

 

367,630

 

(11.3)

 

Gain from discontinued operations, net of tax

 

 

 —

 

1,411

 

nm

 

 

 —

 

1,411

 

nm

 

Net income

 

 

74,375

 

84,716

 

(12.2)

 

 

325,972

 

369,041

 

(11.7)

 

Net income attributable to noncontrolling interests

 

 

(425)

 

(1,888)

 

77.5

 

 

(6,334)

 

(4,997)

 

(26.8)

 

Net income attributable to TSYS common shareholders

 

$

73,950

 

82,828

 

(10.7)

%  

$

319,638

 

364,044

 

(12.2)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (EPS):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations to TSYS common shareholders

 

$

0.40

 

0.44

 

(9.3)

%

$

1.74

 

1.97

 

(11.6)

%

Gain from discontinued operations to TSYS common shareholders

 

 

 -

 

0.01

 

nm

 

 

 -

 

0.01

 

nm

 

Basic EPS

 

$

0.40

 

0.45

 

(10.8)

%  

$

1.74

 

1.98

 

(12.0)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations to TSYS common shareholders

 

$

0.40

 

0.44

 

(9.2)

%

$

1.73

 

1.96

 

(11.5)

%

Gain from discontinued operations to TSYS common shareholders

 

 

 -

 

0.01

 

nm

 

 

 -

 

0.01

 

nm

 

Diluted EPS

 

$

0.40

 

0.45

 

(10.7)

%  

$

1.73

 

1.97

 

(11.8)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(includes participating securities)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

183,665

 

183,376

 

 

 

 

183,655

 

184,082

 

 

 

Diluted

 

 

184,533

 

184,581

 

 

 

 

184,448

 

185,239

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

$

0.10

 

0.10

 

 

 

$

0.40

 

0.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts attributable to TSYS common shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations, net of tax

 

$

73,950

 

81,417

 

(9.2)

%

$

319,638

 

362,633

 

(11.9)

%

Gain from discontinued operations, net of tax

 

 

 -

 

1,411

 

nm

 

 

 -

 

1,411

 

nm

 

Net income

 

$

73,950

 

82,828

 

(10.7)

%

$

319,638

 

364,044

 

(12.2)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP measures:*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

785,709

 

645,095

 

21.8

%  

$

3,041,876

 

2,499,349

 

21.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

266,547

 

195,031

 

36.7

%  

$

1,040,551

 

833,920

 

24.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EPS

 

$

0.71

 

0.57

 

24.5

%  

$

2.81

 

2.46

 

14.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* See reconciliation of non-GAAP measures.

nm = not meaningful

- more –

 


 

TSYS Announces Fourth Quarter 2016 Earnings

Page 6 of 16

 

____________________________________________________________________________________________________

TSYS

Segment Breakdown

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

 

 

 

 

 

 

Change

 

 

 

 

 

 

Change

 

 

    

2016

    

2015

    

$

    

%

    

2016

    

2015

    

$

    

%

 

Operating income (a)

 

$

130,547

 

117,905

 

12,642

 

10.7

%    

$

573,382

 

534,107

 

39,275

 

7.4

%

Share-based compensation

 

 

9,937

 

10,080

 

(143)

 

(1.4)

 

 

43,728

 

41,548

 

2,180

 

5.2

 

TransFirst M&A expenses

 

 

2,267

 

 —

 

2,267

 

na 

 

 

28,175

 

 —

 

28,175

 

na 

 

Litigation, claims, judgments or settlements

 

 

21,719

 

 —

 

21,719

 

na 

 

 

21,719

 

 —

 

21,719

 

na 

 

Acquisition intangible amortization

 

 

55,243

 

22,920

 

32,323

 

nm 

 

 

189,991

 

92,522

 

97,469

 

nm 

 

Adjusted operating income (b)

 

$

219,713

 

150,905

 

68,808

 

45.6

%  

$

856,995

 

668,177

 

188,818

 

28.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted segment operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America Services (c)

 

$

117,296

 

104,162

 

13,134

 

12.6

%  

$

468,251

 

429,064

 

39,187

 

9.1

%

International Services (d)

 

 

15,210

 

21,381

 

(6,171)

 

(28.9)

 

 

56,774

 

60,087

 

(3,313)

 

(5.5)

 

Merchant Services (e)

 

 

88,539

 

33,033

 

55,506

 

nm 

 

 

307,595

 

150,225

 

157,370

 

nm 

 

NetSpend (f)

 

 

34,834

 

28,614

 

6,220

 

21.7

 

 

160,371

 

137,837

 

22,534

 

16.3

 

Corporate admin and other

 

 

(36,166)

 

(36,285)

 

119

 

0.3

 

 

(135,996)

 

(109,036)

 

(26,960)

 

(24.7)

 

Adjusted segment operating income

 

$

219,713

 

150,905

 

68,808

 

45.6

%  

$

856,995

 

668,177

 

188,818

 

28.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues (g)

 

$

1,132,224

 

716,843

 

415,381

 

57.9

%  

$

4,170,077

 

2,779,541

 

1,390,536

 

50.0

%

Less: reimbursable items

 

 

62,354

 

71,748

 

(9,394)

 

(13.1)

 

 

259,543

 

280,192

 

(20,649)

 

(7.4)

 

Revenue before reimbursable items

 

 

1,069,870

 

645,095

 

424,775

 

65.8

 

 

3,910,534

 

2,499,349

 

1,411,185

 

56.5

 

Less: interchange and assessments expenses

 

 

284,161

 

 —

 

284,161

 

na 

 

 

868,658

 

 —

 

868,658

 

na 

 

Net revenue (h)

 

 

785,709

 

645,095

 

140,614

 

21.8

 

 

3,041,876

 

2,499,349

 

542,527

 

21.7

 

Intersegment revenues

 

 

10,379

 

8,383

 

1,996

 

23.8

 

 

39,880

 

33,481

 

6,399

 

19.1

 

Segment net revenue

 

$

796,088

 

653,478

 

142,610

 

21.8

%  

$

3,081,756

 

2,532,830

 

548,926

 

21.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment net revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America Services (i)

 

$

304,450

 

300,265

 

4,185

 

1.4

%  

$

1,206,013

 

1,147,254

 

58,759

 

5.1

%

International Services (j)

 

 

77,061

 

87,126

 

(10,065)

 

(11.6)

 

 

313,631

 

331,159

 

(17,528)

 

(5.3)

 

Merchant Services (k)

 

 

253,960

 

122,053

 

131,907

 

nm 

 

 

898,533

 

474,040

 

424,493

 

89.5

 

NetSpend (l)

 

 

160,617

 

144,034

 

16,583

 

11.5

 

 

663,579

 

580,377

 

83,202

 

14.3

 

Segment net revenue

 

$

796,088

 

653,478

 

142,610

 

21.8

%  

$

3,081,756

 

2,532,830

 

548,926

 

21.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment revenue before reimbursable items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America Services

 

$

304,450

 

300,265

 

4,185

 

1.4

%  

$

1,206,013

 

1,147,254

 

58,759

 

5.1

%

International Services

 

 

77,061

 

87,126

 

(10,065)

 

(11.6)

 

 

313,631

 

331,159

 

(17,528)

 

(5.3)

 

Merchant Services

 

 

538,121

 

122,053

 

416,068

 

nm 

 

 

1,767,191

 

474,040

 

1,293,151

 

nm 

 

NetSpend

 

 

160,617

 

144,034

 

16,583

 

11.5

 

 

663,579

 

580,377

 

83,202

 

14.3

 

Segment revenue before reimbursable items

 

$

1,080,249

 

653,478

 

426,771

 

65.3

%  

$

3,950,414

 

2,532,830

 

1,417,584

 

56.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin (GAAP) (a)/(g)

 

 

11.53%

 

16.45%

 

 

 

 

 

 

13.75%

 

19.22%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating margin on net revenue (b)/(h)

 

 

27.96%

 

23.39%

 

 

 

 

 

 

28.17%

 

26.73%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted segment operating margin on net revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America Services(c)/(i)

 

 

38.53%

 

34.69%

 

 

 

 

 

 

38.83%

 

37.40%

 

 

 

 

 

International Services (d)/(j)

 

 

19.74%

 

24.54%

 

 

 

 

 

 

18.10%

 

18.14%

 

 

 

 

 

Merchant Services (e)/(k)

 

 

34.86%

 

27.06%

 

 

 

 

 

 

34.23%

 

31.69%

 

 

 

 

 

NetSpend (f)/(l)

 

 

21.69%

 

19.87%

 

 

 

 

 

 

24.17%

 

23.75%

 

 

 

 

 


nm = not meaningful

na = not applicable

- more –

 

 


 

TSYS Announces Fourth Quarter 2016 Earnings

Page 7 of 16

 

 

TSYS

Segment Breakdown

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

 

Twelve Months Ended December 31,

 

 

 

 

 

 

 

Change

 

 

 

 

 

 

Change

 

 

    

2016

    

2015

    

$

    

%

    

 

2016

    

2015

    

$

    

%

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America Services

 

$

27,878

 

26,712

 

1,166

 

4.4

%

XX

$

110,343

 

99,544

 

10,799

 

10.8

%

International Services

 

 

7,572

 

8,808

 

(1,236)

 

(14.0)

 

 

 

30,966

 

34,892

 

(3,926)

 

(11.3)

 

Merchant Services

 

 

6,851

 

4,874

 

1,977

 

40.6

 

 

 

25,553

 

18,268

 

7,285

 

39.9

 

NetSpend

 

 

3,667

 

3,139

 

528

 

16.8

 

 

 

13,133

 

10,686

 

2,447

 

22.9

 

Segment depreciation and amortization

 

 

45,968

 

43,533

 

2,435

 

5.6

 

 

 

179,995

 

163,390

 

16,605

 

10.2

 

Acquisition intangible amortization

 

 

55,243

 

22,920

 

32,323

 

nm 

 

 

 

189,991

 

92,522

 

97,469

 

nm 

 

Corporate admin and other

 

 

866

 

593

 

273

 

46.0

 

 

 

3,560

 

2,352

 

1,208

 

51.4

 

Total depreciation and amortization

 

$

102,077

 

67,046

 

35,031

 

52.2

%

 

$

373,546

 

258,264

 

115,282

 

44.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment statistical data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transactions (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America Services:

 

 

4,482.7

 

4,264.9

 

217.8

 

5.1

%

 

 

17,140.3

 

15,774.5

 

1,365.8

 

8.7

%

International Services:

 

 

742.1

 

661.7

 

80.4

 

12.2

 

 

 

2,717.8

 

2,473.6

 

244.2

 

9.9

 

Total transactions

 

 

5,224.8

 

4,926.6

 

298.2

 

6.1

%

 

 

19,858.1

 

18,248.1

 

1,610.0

 

8.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts on file (AOF) (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America Services:

 

 

 

 

 

 

 

 

 

 

 

 

662.8

 

654.1

 

8.7

 

1.3

%

International Services:

 

 

 

 

 

 

 

 

 

 

 

 

88.7

 

78.5

 

10.2

 

13.0

 

Total AOF

 

 

 

 

 

 

 

 

 

 

 

 

751.5

 

732.5

 

19.0

 

2.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Traditional accounts on file (AOF) (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America Services:

 

 

 

 

 

 

 

 

 

 

 

 

454.1

 

415.1

 

39.0

 

9.4

%

International Services:

 

 

 

 

 

 

 

 

 

 

 

 

67.7

 

65.1

 

2.6

 

4.1

 

Total Traditional AOF

 

 

 

 

 

 

 

 

 

 

 

 

521.8

 

480.2

 

41.6

 

8.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merchant Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Point-of-sale transactions (in millions)

 

 

1,120.5

 

1,075.2

 

45.3

 

4.2

%

 

 

4,548.1

 

4,266.5

 

281.6

 

6.6

%

Dollar sales volume (in millions)

 

$

28,710.2

 

12,401.1

 

16,309.1

 

nm 

%

 

$

97,735.1

 

48,072.7

 

49,662.4

 

nm 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NetSpend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross dollar volume (in millions)

 

$

6,579.1

 

5,692.0

 

887.1

 

15.6

%

 

$

28,722.3

 

24,274.9

 

4,447.4

 

18.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct deposit 90-day active cards (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

2,136.0

 

1,895.0

 

241.0

 

12.7

%

90-day active cards (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

4,295.0

 

3,894.1

 

400.9

 

10.3

%

% of 90-day active cards with direct deposit

 

 

 

 

 

 

 

 

 

 

 

 

49.7%

 

48.7%

 

 

 

 

 


nm = not meaningful

- more –

 

 


 

TSYS Announces Fourth Quarter 2016 Earnings

Page 8 of 16

 

 

TSYS

Condensed Balance Sheet

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

    

December 31, 2016

    

December 31, 2015

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

425,354

 

389,328

Accounts receivable, net

 

 

432,847

 

314,705

Other current assets

 

 

164,488

 

154,199

Total current assets

 

 

1,022,689

 

858,232

Goodwill

 

 

3,270,952

 

1,545,424

Other intangible assets, net

 

 

906,676

 

328,320

Property, equipment and software, net

 

 

705,533

 

694,968

Other long term assets

 

 

460,327

 

450,951

Total assets

 

$

6,366,177

 

3,877,895

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

38,712

 

52,213

Notes payable and capital leases

 

 

50,727

 

53,546

Other current liabilities

 

 

330,914

 

233,173

Total current liabilities

 

 

420,353

 

338,932

Bonds payable, notes payable and capital leases, excluding current portion

 

 

3,313,276

 

1,377,541

Deferred tax liability

 

 

419,552

 

192,445

Other long-term liabilities

 

 

88,983

 

96,885

Total liabilities

 

 

4,242,164

 

2,005,803

Redeemable noncontrolling interest

 

 

24,093

 

23,410

Equity

 

 

 

 

 

Shareholders' equity

 

 

2,099,920

 

1,843,018

Noncontrolling interests in consolidated subsidiaries

 

 

 -

 

5,664

Total equity

 

 

2,099,920

 

1,848,682

Total liabilities and equity

 

$

6,366,177

 

3,877,895

 

Note: TSYS adopted Accounting Standards Update (ASU) 2015-03 “Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Cost” on January 1, 2016. This ASU requires TSYS to present debt issuance costs in the balance sheet as a direct deduction from the carrying amount of the corresponding debt liability, consistent with debt discounts. All prior periods presented have been restated for this ASU.

 

TSYS also adopted ASU 2015-17 “Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes” on January 1, 2016. This ASU requires the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. All prior periods presented have been restated for this ASU.

 

- more -

 


 

TSYS Announces Fourth Quarter 2016 Earnings

Page 9 of 16

 

 

TSYS

Selected Cash Flow Highlights

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended December 31,

 

    

2016

    

2015

Cash flows from operating activities:

 

 

 

 

 

Net income

 

$

325,972

 

369,041

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

  Gain on disposal of subsidiaries

 

 

 -

 

(3,568)

Equity in income of equity investments

 

 

(25,933)

 

(22,106)

Dividends received from equity investments

 

 

15,246

 

12,097

Depreciation and amortization

 

 

373,546

 

258,264

Amortization of debt issuance costs

 

 

13,570

 

1,841

Share-based compensation

 

 

43,728

 

41,548

Deferred income tax expense (benefit)

 

 

7,435

 

(4,083)

Other noncash adjustments

 

 

51,357

 

24,728

Changes in operating assets and liabilities

 

 

(87,012)

 

(77,568)

Net cash provided by operating activities

 

 

717,909

 

600,194

 

 

 

 

 

 

Net cash used in investing activities

 

 

(2,492,876)

 

(202,184)

 

 

 

 

 

 

Net cash provided by (used in) financing activities

 

 

1,822,190

 

(290,754)

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(11,197)

 

(7,111)

Net increase in cash and cash equivalents

 

 

36,026

 

100,145

Cash and cash equivalents at beginning of period

 

 

389,328

 

289,183

Cash and cash equivalents at end of period

 

$

425,354

 

389,328

 

- more –

 

 


 

TSYS Announces Fourth Quarter 2016 Earnings

Page 10 of 16

 

 

TSYS

Supplemental Information

(unaudited)

 

 

Other

(AOF):

 

 

 

 

 

 

 

 

 

Total Accounts on File

 

 

At

 

At

 

%

(in millions)

    

December 2016

    

December 2015

    

Change

Consumer

 

442.9

 

408.2

 

8.5

Commercial

 

47.9

 

45.4

 

5.4

Other

 

31.0

 

26.6

 

16.8

Traditional AOF

 

521.8

 

480.2

 

8.7

Prepaid*/Stored Value

 

57.8

 

97.2

 

(40.5)

Government Services

 

88.7

 

79.3

 

11.7

Commercial Card Single Use

 

83.2

 

75.8

 

9.8

Total AOF

 

751.5

 

732.5

 

2.6

 

*   Prepaid does not include NetSpend accounts

 

 


 

 

 

 

 

 

 

Growth in Accounts on File (in millions):

 

 

 

 

 

 

December 2015 to

 

December 2014 to

 

    

December 2016

    

December 2015

Beginning balance

 

732.5

 

616.7

Change in accounts on file due to:

 

 

 

 

Internal growth of existing clients

 

53.1

 

42.2

New clients

 

27.8

 

145.6

Purges/Sales

 

(12.9)

 

(29.0)

Deconversions

 

(49.0)

 

(43.0)

Ending balance

 

751.5

 

732.5

 

 

 

- more -

 

 


 

TSYS Announces Fourth Quarter 2016 Earnings

Page 11 of 16

 

Reconciliation of GAAP to Non-GAAP Financial Measures

 

Non-GAAP Measures

 

The schedules below provide a reconciliation of revenues and operating results on a constant currency basis to reported revenues and operating income. This non-GAAP measure presents fourth quarter 2016 financial results using the previous year’s foreign currency exchange rates. On a constant currency basis, TSYS’ total revenues for 2016 grew 51.6% as compared to a reported GAAP increase of 50.0%.

 

The schedules below also provide a reconciliation of EPS to Adjusted EPS.

 

The schedules below also provide a reconciliation of net income to EBITDA to Adjusted EBITDA.

 

The schedules below also provide a reconciliation of cash flows from operating activities and capital expenditures to free cash flow.

 

The schedules below also provide a reconciliation of 2017 guidance of total revenues to net revenue and diluted EPS to adjusted diluted EPS. TSYS has also provided historical diluted EPS and adjusted diluted 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.

 

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 measures of other companies due to potential inconsistencies in the method of calculation.

 

TSYS believes that its provision of non-GAAP financial measures provides investors with important 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 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 Fourth Quarter 2016 Earnings

Page 12 of 16

 

Reconciliation of GAAP to Non-GAAP

 

 

Constant Currency Comparison

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

 

 

 

 

 

Percent

 

 

 

 

 

 

Percent

 

 

    

2016

    

2015

    

Change

    

2016

    

2015

    

Change

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Constant currency (1)

 

$

1,148,810

 

716,843

 

60.3

%  

$

4,212,598

 

2,779,541

 

51.6

%

Foreign currency impact (2)

 

 

(16,586)

 

 —

 

 

 

 

(42,521)

 

 —

 

 

 

Total revenues

 

$

1,132,224

 

716,843

 

57.9

%  

$

4,170,077

 

2,779,541

 

50.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Constant currency (1)

 

$

801,145

 

645,095

 

24.2

%  

$

3,081,534

 

2,499,349

 

23.3

%

Foreign currency impact (2)

 

 

(15,436)

 

 —

 

 

 

 

(39,658)

 

 —

 

 

 

Net revenue

 

$

785,709

 

645,095

 

21.8

%  

$

3,041,876

 

2,499,349

 

21.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Constant currency (1)

 

$

137,738

 

117,905

 

16.8

%  

$

589,934

 

534,107

 

10.5

%

Foreign currency impact (2)

 

 

(7,191)

 

 —

 

 

 

 

(16,552)

 

 —

 

 

 

Operating income

 

$

130,547

 

117,905

 

10.7

%  

$

573,382

 

534,107

 

7.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Constant currency (1)

 

$

99,180

 

93,128

 

6.5

%  

$

378,512

 

354,725

 

6.7

%

Foreign currency impact (2)

 

 

(16,618)

 

 —

 

 

 

 

(42,535)

 

 —

 

 

 

Total revenues

 

$

82,562

 

93,128

 

(11.3)

%  

$

335,977

 

354,725

 

(5.3)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Constant currency (1)

 

$

92,531

 

87,126

 

6.2

%  

$

353,303

 

331,159

 

6.7

%

Foreign currency impact (2)

 

 

(15,470)

 

 —

 

 

 

 

(39,672)

 

 —

 

 

 

Net revenue

 

$

77,061

 

87,126

 

(11.6)

%  

$

313,631

 

331,159

 

(5.3)

%

 


(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.

 

 

Net Revenue

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

 

Twelve Months Ended December 31,

 

 

 

 

 

Percent

 

 

 

 

 

 

Percent

 

2016

    

2015

    

Change

    

    

2016

    

2015

    

Change

Total revenues

$

1,132,224

 

716,843

 

57.9

%

 

$

4,170,077

 

2,779,541

 

50.0

Less: reimbursable items

 

62,354

 

71,748

 

(13.1)

 

 

 

259,543

 

280,192

 

(7.4)

Revenue before reimbursable items

 

1,069,870

 

645,095

 

65.8

 

 

 

3,910,534

 

2,499,349

 

56.5

Less; interchange and assessments expenses

 

284,161

 

 -

 

            na 

 

 

 

868,658

 

 -

 

            na 

Net revenue

$

785,709

 

645,095

 

21.8

%

 

$

3,041,876

 

2,499,349

 

21.7

na = not applicable

- more -

 


 

TSYS Announces Fourth Quarter 2016 Earnings

Page 13 of 16

 

 

Reconciliation of GAAP to Non-GAAP

 

 

Adjusted Earnings per Share

(unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

 

 

 

 

 

Percent

 

 

 

 

 

Percent

 

 

    

2016

    

2015

    

Change

    

2016

    

2015

    

Change

 

Income from continuing operations attributable to TSYS common shareholders

 

 

$

73,950

 

81,417

 

(9.2)

%  

$

319,638

 

362,633

 

(11.9)

%

Adjust for amounts attributable to TSYS common shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Acquisition intangible amortization

 

$

54,967

 

22,645

 

nm 

 

$

188,887

 

91,418

 

nm 

 

Add: Share-based compensation

 

 

9,925

 

10,076

 

(1.5)

 

 

43,691

 

41,535

 

5.2

 

Add: TransFirst M&A expenses*

 

 

2,268

 

 —

 

na 

 

 

37,957

 

 —

 

na 

 

Add: Litigation, claims, judgments or settlements**

 

 

19,913

 

 —

 

na 

 

 

19,913

 

 —

 

na 

 

Less: Tax impact of adjustments***

 

 

(31,403)

 

(10,208)

 

nm 

 

 

(93,667)

 

(43,474)

 

nm 

 

Adjusted earnings

 

$

129,620

 

103,930

 

24.7

%  

$

516,419

 

452,112

 

14.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic EPS - Income from continuing operations attributable to TSYS common shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported (GAAP)

 

$

0.40

 

0.44

 

(9.3)

%  

$

1.74

 

1.97

 

(11.6)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EPS

 

$

0.71

 

0.57

 

24.5

%  

$

2.81

 

2.46

 

14.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

183,665

 

183,376

 

 

 

 

183,655

 

184,082

 

 

 

 


*Costs associated with the TransFirst acquisition and integration which are included in selling, general and administative expenses and     nonoperating expenses.

**   Litigation settlement or settlement discussions and related legal expenses in the 4th quarter.

***  Certain of these merger and acquisition costs are nondeductible for income tax purposes. Income tax impact includes a discrete item as a result of the acquisition.

 

Adjusted EBITDA

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

 

 

 

 

 

 

Percent

 

 

 

 

 

 

Percent

 

 

    

2016

    

2015

    

Change

    

2016

    

2015

    

Change

 

Net income

 

$

74,375

 

84,716

 

(12.2)

%  

$

325,972

 

369,041

 

(11.7)

%

Adjust for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Income from discontinued operations

 

 

 —

 

(1,411)

 

nm 

 

 

 —

 

(1,411)

 

nm 

 

Less: Equity in income of equity investments

 

 

(6,699)

 

(6,797)

 

1.4

 

 

(25,933)

 

(22,106)

 

(17.3)

 

Add: Income taxes

 

 

33,209

 

32,160

 

3.3

 

 

161,175

 

151,364

 

6.5

 

Add: Nonoperating expense

 

 

29,662

 

9,237

 

nm 

 

 

112,168

 

37,219

 

nm 

 

Add: Depreciation and amortization

 

 

102,077

 

67,046

 

52.2

 

 

373,546

 

258,264

 

44.6

 

EBITDA

 

$

232,624

 

184,951

 

25.8

%  

$

946,928

 

792,371

 

19.5

%

Adjust for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add: Share-based compensation

 

 

9,937

 

10,080

 

(1.4)

 

 

43,728

 

41,549

 

5.2

 

Add: TransFirst M&A expenses*

 

 

2,267

 

 —

 

na 

 

 

28,176

 

 —

 

na 

 

Add: Litigation, claims, judgments or settlements

 

 

21,719

 

 —

 

na 

 

 

21,719

 

 —

 

na 

 

Adjusted EBITDA

 

$

266,547

 

195,031

 

36.7

%  

$

1,040,551

 

833,920

 

24.8

%


*     Costs associated with the TransFirst acquisition and integration that are included in selling, general and administative expenses.

 

nm = not meaningful

na = not applicable

- more –

 

 


 

TSYS Announces Fourth Quarter 2016 Earnings

Page 14 of 16

 

Reconciliation of GAAP to Non-GAAP

 

 

Free Cash Flow

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

Free cash flow:

 

December 31,

 

 

 

2016

 

2015

 

 

 

 

 

 

 

Net cash provided by operating activities (GAAP)

$

717,909

 

600,194

 

Capital expenditures

 

(142,573)

 

(203,315)

 

Free cash flow (non-GAAP)

$

575,336

 

396,879

 

 

 

Guidance Summary

(unaudited)

(in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues (GAAP)

$

4,750

to

$

4,850

 

14%

to

16%

 

 

 

 

 

 

 

 

 

 

 

 

Less: reimbursable items, interchange and assessment expenses

 

1,475

to

 

1,475

 

 

 

 

 

Net revenue (non-GAAP)

$

3,275

to

$

3,375

 

8%

to

11%

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (EPS) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (GAAP)

$

2.14

to

$

2.21

 

23%

to

28%

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition intangible amortization, share-based compensation, litigation, claims, judgments or settlements and TransFirst M&A expenses, less the tax impact of adjustments

 

0.91

to

 

0.94

 

 

 

 

 

Adjusted diluted EPS attributable to TSYS common shareholders * (non-GAAP)

$

3.05

to

$

3.15

 

9%

to

12%

 

 

 

 

 

 

 

 

 

 

 

 

* Average diluted weighted shares

 

 

185

 

 

 

 

 

 

 

 

 


 

TSYS Announces Fourth Quarter 2016 Earnings

Page 15 of 16

 

Reconciliation of GAAP to Non-GAAP

Adjusted Diluted Earnings per Share

(unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

 

2016

 

 

 

Q1

Q2

Q3

Q4

YTD

 

 

Q1

Q2

Q3

Q4

YTD

Income from continuing operations attributable to TSYS common shareholders

 

$

77,755
82,839
120,622
81,417
362,633

 

$

90,628
69,708
85,352
73,950
319,638

Adjust for amounts attributable to TSYS common shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Add: Acquisition intangible amortization

 

$

23,590
22,576
22,607
22,645
91,418

 

$

22,645
58,210
53,065
54,967
188,887

  Add: Share-based compensation

 

 

8,144
12,024
11,291
10,076
41,535

 

 

8,150
12,557
13,059
9,925
43,691

  Add: TransFirst M&A expenses

 

 

 -

 -

 -

 -

 -

 

 

13,183
20,676
1,830
2,268
37,957

  Add: Litigation, claims, judgments or settlements

 

 

 -

 -

 -

 -

 -

 

 

 -

 -

 -

19,913
19,913

  Less: Tax impact of adjustments

 

 

(10,532)
(11,484)
(11,250)
(10,208)
(43,474)

 

 

(13,896)
(25,735)
(22,633)
(31,403)
(93,667)

Adjusted earnings

 

$

98,957
105,955
143,270
103,930
452,112

 

$

120,710
135,416
130,673
129,620
516,419

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS - Income from continuing operations attributable to TSYS common shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported (GAAP)

 

$

0.42
0.45
0.65
0.44
1.96

 

$

0.49
0.38
0.46
0.40
1.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted diluted EPS

 

$

0.53
0.57
0.77
0.56
2.44

 

$

0.66
0.73
0.71
0.70
2.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average diluted weighted shares

 

 

185,563
185,020
185,281
184,581
185,239

 

 

183,886
184,598
184,640
184,533
184,448

 

 

 

- more –

 


 

TSYS Announces Fourth Quarter 2016 Earnings

Page 16 of 16

 

 

 

TSYS

Segment Breakdown Recast for New Segment Structure

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

 

2016

 

 

 

Q1

Q2

Q3

Q4

YTD

 

 

Q1

Q2

Q3

Q4

YTD

Operating income (a)

$

 

122,496
130,602
163,104
117,905
534,107

 

$

151,687
135,821
155,327
130,547
573,382

Share-based compensation

 

 

8,143
12,030
11,295
10,080
41,548

 

 

8,158
12,566
13,069
9,937
43,730

TransFirst M&A expenses

 

 

 -

 -

 -

 -

 -

 

 

3,401
20,676
1,830
2,267
28,174

Litigation, claims, judgments or settlements

 

 

 -

 -

 -

 -

 -

 

 

 -

 -

 -

21,719
21,719

Acquisition intangible amortization

 

 

23,867
22,852
22,883
22,920
92,522

 

 

22,921
58,486
53,341
55,243
189,991

Adjusted operating income (b)

$

 

154,506
165,484
197,282
150,905
668,177

 

$

186,167
227,549
223,567
219,713
856,996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted segment operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Issuer Solutions (c)

$

 

109,553
121,738
132,316
125,543
489,151

 

$

135,077
128,493
128,949
132,506
525,025

  Merchant Services (d)

 

 

34,115
40,690
42,387
33,033
150,225

 

 

38,357
89,915
90,784
88,539
307,595

  NetSpend (e)

 

 

35,467
36,442
37,315
28,614
137,837

 

 

42,201
42,481
40,856
34,834
160,372

Corporate admin and other

 

 

(24,629)
(33,386)
(14,736)
(36,285)
(109,036)

 

 

(29,468)
(33,340)
(37,022)
(36,166)
(135,996)

Adjusted segment operating income

$

 

154,506
165,484
197,282
150,905
668,177

 

$

186,167
227,549
223,567
219,713
856,996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues (f)

$

 

662,156
692,652
707,890
716,843
2,779,541

 

$

739,378
1,151,587
1,146,889
1,132,224
4,170,078

Less: reimbursable items, interchange and assessments expenses

 

 

66,372
70,568
71,504
71,748
280,192

 

 

67,734
356,649
357,302
346,517
1,128,202

  Net revenue (g)

 

 

595,784
622,084
636,386
645,095
2,499,349

 

 

671,644
794,938
789,587
785,707
3,041,876

  Intersegment revenues

 

 

8,569
7,256
5,950
7,207
28,982

 

 

11,969
7,011
7,401
9,316
35,697

   Segment net revenue

$

 

604,353
629,340
642,336
652,302
2,528,331

 

$

683,613
801,949
796,988
795,023
3,077,573

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment net revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Issuer Solutions (h)

$

 

338,881
369,851
378,967
386,215
1,473,914

 

$

378,009
377,862
379,145
380,446
1,515,462

  Merchant Services (i)

 

 

110,398
117,868
123,721
122,053
474,040

 

 

120,612
261,467
262,494
253,960
898,533

  NetSpend (j)

 

 

155,074
141,621
139,648
144,034
580,377

 

 

184,992
162,620
155,349
160,617
663,578

       Segment net revenue

$

 

604,353
629,340
642,336
652,302
2,528,331

 

$

683,613
801,949
796,988
795,023
3,077,573

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin (GAAP) (a)/(g)

 

 

18.50%
18.86%
23.04%
16.45%
19.22%

 

 

20.52%
11.79%
13.54%
11.53%
13.75%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating margin on net revenue (b)/(h)

 

 

25.93%
26.60%
31.00%
23.39%
26.73%

 

 

27.72%
28.62%
28.31%
27.96%
28.17%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted segment operating margin on net revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuer Solutions(c)/(h)

 

 

32.33%
32.92%
34.91%
32.51%
33.19%

 

 

35.73%
34.01%
34.01%
34.83%
34.64%

Merchant Services (d)/(i)

 

 

30.90%
34.52%
34.26%
27.06%
31.69%

 

 

31.80%
34.39%
34.59%
34.86%
34.23%

NetSpend (e)/(j)

 

 

22.87%
25.73%
26.72%
19.87%
23.75%

 

 

22.81%
26.12%
26.30%
21.69%
24.17%

 

 

- ### -