TSS
$64.95
Total System Services
$.05
.08%
Earnings Details
2nd Quarter June 2017
Tuesday, July 25, 2017 4:00:01 PM
Tweet Share Watch
Summary

TSYS Raises Guidance, but Remains In-line with Estimates

Total System Services (TSS) reported 2nd Quarter June 2017 earnings of $0.82 per share on revenue of $1.2 billion. The consensus earnings estimate was $0.76 per share on revenue of $1.2 billion. Revenue grew 6.1% on a year-over-year basis.

The company said it expects 2017 non-GAAP earnings of $3.22 to $3.38 per share on revenue of $4.809 billion to $4.889 billion. The company's previous guidance was earnings of $3.16 to $3.26 per share on revenue of $4.77 billion to $4.87 billion and the current consensus earnings estimate is $3.24 per share on revenue of $4.82 billion for the year ending December 31, 2017.

Total System Services Inc is a payment solutions provider that provides services to financial & nonfinancial institutions. It services are divided into four operating segments North America Services, Merchant Services, International Services & NetSpend.

Results
Reported Earnings
$0.82
Earnings Whisper
-
Consensus Estimate
$0.76
Reported Revenue
$1.22 Bil
Revenue Estimate
$1.21 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

TSYS Reports Second Quarter Earnings

TSYS (TSS) today reported results for the second quarter of 2017.

"Our second quarter results were outstanding driven by solid revenue growth that converted into very strong operating income and diluted earnings per share (EPS). These results are all organic as this is the first quarter that the TransFirst acquisition is in both quarters reflecting the execution of our strategic goals," said M. Troy Woods, chairman and chief executive officer of TSYS.

"With our strong cash flow, we reduced our debt another $125 million during the quarter bringing our year to date reduction to $225 million. We are also pleased to announce that we are increasing our quarterly dividend by 30% to $0.13 per share from $0.10 per share and raising our revenue and EPS guidance," said Woods.

Highlights for the second quarter of 2017 vs. 2016:

-- Total revenues were $1.2 billion, an increase of 6.1%.

Net revenue (non-GAAP), which excludes reimbursable items, interchange and assessment expenses, was $844.1 million, an increase of 6.2%.

Net income attributable to TSYS common shareholders was $115.0 million, an increase of 65.0%. Diluted EPS were $0.62, an increase of 64.3%.

Adjusted earnings (non-GAAP) were $158.2 million, an increase of 16.8%. Adjusted diluted EPS (non-GAAP) were $0.85, an increase of 16.4%.

-- Adjusted EBITDA (non-GAAP) was $307.7 million, an increase of 12.3%.

Dividend Increase

TSYS’ Board of Directors approved a 30% increase in the regular quarterly dividend payable on TSYS common stock from $0.10 per share to $0.13 per share, payable on October 2, 2017 to shareholders of record as of the close of business on September 21, 2017.

2017 Revised Outlook

The 2017 revised guidance is below.

2017 Revised
Financial Outlook Range
Percent
Change
(in millions, except per share amounts)
Revenue:
Total revenues (GAAP)
$4,809
to
$4,889
15%
to
17%
Net revenue (non-GAAP)
$3,315
to
$3,395
9%
to
12%
Earnings per share:
Diluted EPS (GAAP)
$2.30
to
$2.38
33%
to
37%
Adjusted diluted EPS attributable to TSYS common shareholders
$3.22
to
$3.30
15%
to
18%
(non-GAAP)
Weighted average diluted shares outstanding
185

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, July 25. 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 diluted EPS, and a reconciliation of those measures to the most directly comparable GAAP measures is included on pages 11 to 14 in the financial schedules of this release.

About TSYS

TSYS(R) (TSS) is a leading global payments provider, offering seamless, secure and innovative solutions across the payments spectrum -- from issuer processing and merchant acquiring to prepaid program management. We succeed because we put people, and their needs, at the heart of every decision. It’s an approach we call ’People-Centered Payments(R)’.

Our headquarters are located in Columbus, Ga., U.S.A., with approximately 11,500 team members and local offices spread across 13 countries. TSYS generated revenue of $4.2 billion in 2016, while processing more than 25.5 billion transactions. We are a member of The Civic 50 and were named one of the 2017 World’s Most Ethical Companies by Ethisphere magazine. TSYS is a member of the S&P 500 and routinely posts all important information on its website. For more, visit 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 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.

TSYS
Financial Highlights
(unaudited)
(in thousands, except per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
Percent
Percent
2017
2016
Change
2017
2016
Change
Total revenues
$ 1,222,375
1,151,587
6.1 %
$ 2,407,100
1,890,965
27.3 %
Cost of services*
877,887
841,923
4.3
1,739,744
1,326,430
31.2
Selling, general and administrative expenses*
151,240
173,843
(13.0 )
306,925
277,027
10.8
Total expenses
1,029,127
1,015,766
1.3
2,046,669
1,603,457
27.6
Operating income
193,248
135,821
42.3
360,431
287,508
25.4
Nonoperating expenses*
(30,042 )
(29,760 )
(0.9 )
(59,945 )
(51,857 )
(15.6 )
Income before income taxes and equity in income of equity
163,206
106,061
53.9
300,486
235,651
27.5
investments
Income taxes
56,207
40,290
39.5
99,289
83,719
18.6
Income before equity in income of equity investments
106,999
65,771
201,197
151,932
Equity in income of equity investments, net of tax*
9,513
5,977
59.2
22,422
12,224
83.4
Net income
116,512
71,748
62.4
223,619
164,156
36.2
Net income attributable to noncontrolling interests
(1,498 )
(2,040 )
26.6
(2,737 )
(3,820 )
28.4
Net income attributable to TSYS common shareholders
$
115,014
69,708
65.0 %
$
220,882
160,336
37.8 %
Earnings per share (EPS):
Basic EPS
$
0.62
0.38
64.6 %
$
1.20
0.87
37.3 %
Diluted EPS
$
0.62
0.38
64.3 %
$
1.19
0.87
37.2 %
Weighted average shares outstanding:
(includes participating securities)
Basic
184,153
183,724
184,019
183,489
Diluted
185,286
184,598
185,122
184,335
Dividends declared per share
$
0.10
0.10
$
0.20
0.20
Non-GAAP measures:**
Net revenue
$
844,068
794,937
6.2 %
$ 1,676,960
1,466,581
14.3 %
Adjusted EBITDA
$
307,698
274,032
12.3 %
$
594,935
504,862
17.8 %
Adjusted earnings
$
158,215
135,416
16.8 %
$
310,480
256,126
21.2 %
Adjusted diluted EPS
$
0.85
0.73
16.4 %
$
1.68
1.39
20.7 %
* Certain prior year amounts have been reclassified between
nonoperating expenses and equity in income of equity investments,
net of tax and between income of equity investments, net of tax and
between cost of services and selling, general and administrative
expenses.
** See reconciliation of non-GAAP measures.
TSYS
Segment Breakdown
(unaudited)
(in thousands)
Three Months Ended June 30,
Six Months Ended June 30,
Change
Change
2017
2016
$
%
2017
2016
$
%
Adjusted operating income by segment:
Issuer Solutions (a)
$
147,277
128,493
18,784
14.6 %
$
281,150
263,570
17,580
6.7 %
Merchant Solutions (b)
101,996
89,915
12,081
13.4
193,275
128,272
65,003
50.7
Netspend (c)
46,044
42,481
3,563
8.4
94,692
84,682
10,010
11.8
Corporate admin and other
(36,036 )
(33,340 )
(2,696 )
(8.1 )
(71,608 )
(62,808 )
(8,800 )
(14.0 )
Adjusted segment operating income (d)
259,281
227,549
31,732
13.9
497,509
413,716
83,793
20.3
Less:
Share-based compensation
11,008
12,566
(1,558 )
(12.4 )
20,055
20,723
(668 )
(3.2 )
TransFirst M&A and integration expenses
4,165
20,676
(16,511 )
(79.9 )
9,034
24,078
(15,044 )
(62.5 )
Litigation, claims, judgments or settlements
(83 )
-
(83 )
na
1,878
-
1,878
na
Acquisition intangible amortization
50,943
58,486
(7,543 )
(12.9 )
106,111
81,407
24,704
30.3
Operating income
193,248
135,821
57,427
42.3
360,431
287,508
72,923
25.4
Nonoperating expenses, net
(30,042 )
(29,760 )
(282 )
(0.9 )
(59,945 )
(51,857 )
(8,088 )
(15.6 )
Income before income taxes and equity in income of equity
$
163,206
106,061
57,145
53.9 %
$
300,486
235,651
64,835
27.5 %
investments
Net revenue by segment:
Issuer Solutions (f)
$
392,760
377,862
14,898
3.9 %
$
780,015
755,871
24,144
3.2 %
Merchant Solutions (g)
278,588
261,467
17,121
6.5
539,149
382,079
157,070
41.1
Netspend (h)
183,065
162,620
20,445
12.6
380,530
347,613
32,917
9.5
Segment net revenue
854,413
801,949
52,464
6.5
1,699,694
1,485,563
214,131
14.4
Less: Intersegment revenues
10,345
7,012
3,333
47.5
22,734
18,982
3,752
19.8
Net revenue (i)
844,068
794,937
49,131
6.2
1,676,960
1,466,581
210,379
14.3
Add: reimbursable items, interchange and assessments expenses
378,307
356,650
21,657
6.1
730,140
424,384
305,756
72.0
Total revenues
$ 1,222,375
1,151,587
70,788
6.1 %
$ 2,407,100
1,890,965
516,135
27.3 %
Adjusted segment operating margin on segment net revenue:
Issuer Solutions (a)/(f)
37.5 %
34.0 %
36.0 %
34.9 %
Merchant Solutions (b)/(g)
36.6 %
34.4 %
35.9 %
33.6 %
Netspend (c)/(h)
25.2 %
26.1 %
24.9 %
24.4 %
Adjusted segment operating margin on net revenue: (d)/(i)
30.7 %
28.6 %
29.7 %
28.2 %
na = not applicable
TSYS
Segment Breakdown
(unaudited)
(in thousands)
Three Months Ended June 30,
Six Months Ended June 30,
Change
Change
2017
2016
$
%
2017
2016
$
%
Depreciation and amortization by segment:
Issuer Solutions
$
35,735
35,649
86
0.2 %
$
72,588
71,268
1,320
1.9 %
Merchant Solutions
7,380
6,805
575
8.4
14,402
11,856
2,546
21.5
Netspend
4,180
3,116
1,064
34.1
8,272
6,224
2,048
32.9
Depreciation and amortization
47,295
45,570
1,725
3.8
95,262
89,348
5,914
6.6
Acquisition intangible amortization
50,943
58,486
(7,543 )
(12.9 )
106,111
81,407
24,704
30.3
Corporate admin and other
1,121
913
208
22.8
2,164
1,797
367
20.4
Total depreciation and amortization
$
99,359
104,969
(5,610 )
(5.3 )%
$
203,537
172,552
30,985
18.0 %
Segment statistical data:
Issuer Solutions
Total transactions (in millions)
5,340.6
4,985.1
355.5
7.1 %
10,217.2
9,573.1
644.1
6.7 %
Total Accounts on file (AOF) (in millions)
773.6
742.1
31.5
4.2 %
Total Traditional AOF (in millions)
542.0
501.1
40.9
8.2 %
Merchant Solutions
Point-of-sale transactions (in millions)
1,233.5
1,159.5
74.0
6.4 %
2,361.3
2,250.4
110.9
4.9 %
Dollar sales volume (in millions)
$ 31,127.5
28,560.8
2,566.7
9.0 %
$ 60,247.9
40,344.2
19,903.7
49.3 %
Segment net revenue per transaction
$
0.226
0.225
0.001
0.2 %
$
0.228
0.170
0.058
34.5 %
Netspend
Gross dollar volume (in millions)
$
7,605.5
6,614.7
990.8
15.0 %
$ 17,212.8
15,776.2
1,436.6
9.1 %
Direct deposit 90-day active cards (in thousands)
2,416.7
2,192.5
224.2
10.2 %
90-day active cards (in thousands)
4,964.9
4,448.8
516.1
11.6 %
% of 90-day active cards with direct deposit
48.7 %
49.3 %
TSYS
Condensed Balance Sheet
(unaudited)
(in thousands)
June 30, 2017
December 31, 2016
Assets
Current assets:
Cash and cash equivalents
$
427,589
425,354
Accounts receivable, net
442,094
432,847
Other current assets
156,297
164,488
Total current assets
1,025,980
1,022,689
Goodwill
3,271,975
3,270,952
Software and other intangible assets, net
1,213,871
1,329,864
Property and equipment, net
280,636
282,345
Other long term assets
481,619
460,327
Total assets
$ 6,274,081
6,366,177
Liabilities
Current liabilities:
Accounts payable
$
52,095
38,712
Current portion of long-term borrowings and capital leases
573,075
50,727
Other current liabilities
315,077
330,914
Total current liabilities
940,247
420,353
Long-term borrowings and capital leases, excluding current portion
2,564,068
3,313,276
Deferred income tax liabilities
402,088
419,552
Other long-term liabilities
90,040
88,983
Total liabilities
3,996,443
4,242,164
Redeemable noncontrolling interest
13,102
24,093
Equity
2,264,536
2,099,920
Total liabilities and equity
$ 6,274,081
6,366,177
TSYS
Selected Cash Flow Highlights
(unaudited)
(in thousands)
Six Months Ended June 30,
2017
2016
Cash flows from operating activities:
Net income
$
223,619
164,156
Adjustments to reconcile net income to net cash provided by
operating activities:
Equity in income of equity investments, net of tax
(22,422 )
(12,224 )
Dividends received from equity investments
943
808
Depreciation and amortization
203,537
172,552
Amortization of debt issuance costs
2,163
11,451
Share-based compensation
20,055
20,724
Deferred income tax (benefit) expense
(18,191 )
18,519
Other noncash adjustments
38,248
21,449
Changes in operating assets and liabilities
(47,160 )
(58,354 )
Net cash provided by operating activities
400,792
339,081
Purchases of property and equipment
(26,739 )
(20,669 )
Additions to licensed computer software from vendors
(10,568 )
(11,379 )
Additions to internally developed computer software
(13,581 )
(18,484 )
Additions to contract acquisition costs
(14,655 )
(31,276 )
Cash used in acquisitions, net of cash acquired
-
(2,345,438 )
Other investing activities
(759 )
(1,730 )
Net cash used in investing activities
(66,302 )
(2,428,976 )
(234,093 )
(435,953 )
Principal payments on long-term borrowings and capital lease
obligations
Proceeds from long-term borrowings
-
2,666,295
Debt issuance costs
-
(26,554 )
Purchase of noncontrolling interests
(70,000 )
(5,878 )
Dividends paid on common stock
(36,734 )
(36,622 )
Proceeds from exercise of stock options
8,987
9,737
Other financing activities
(3,909 )
(829 )
Net cash (used in) provided by financing activities
(335,749 )
2,170,196
Cash and cash equivalents:
Effect of exchange rate changes on cash and cash equivalents
3,494
(4,310 )
Net increase in cash and cash equivalents
2,235
75,991
Cash and cash equivalents at beginning of period
425,354
389,328
Cash and cash equivalents at end of period
$
427,589
465,319
Supplemental
Capital expenditures
$
65,543
81,808
Free cash flow (non-GAAP)*
$
335,249
257,273
* See reconciliation of non-GAAP measures.
TSYS
Supplemental Information
(unaudited)
Other
AOF:
Total Accounts on File
(in millions)
At
At
%
June 2017
June 2016
Change
Consumer
457.0
425.3
7.4
Commercial
51.5
47.0
9.6
Other
33.5
28.8
16.2
Traditional AOF
542.0
501.1
8.2
Prepaid*/Stored Value
50.6
79.5
(36.3 )
Government Services
91.3
84.6
7.9
Commercial Card Single Use
89.7
76.9
16.6
Total AOF
773.6
742.1
4.2
* Prepaid does not include Netspend accounts
Growth in Accounts on File (in millions):
June 2016 to
June 2015 to
June 2017
June 2016
Beginning balance
742.1
751.4
Change in accounts on file due to:
Internal growth of existing clients
53.1
51.8
New clients
23.7
32.9
Purges/Sales
(23.3 )
(24.0 )
Deconversions
(22.0 )
(70.0 )
Ending balance
773.6
742.1
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 second quarter
and year-to-date 2017 financial results using the previous year’s
foreign currency exchange rates. On a constant currency basis, TSYS’
total year-to-date revenues for the second quarter of 2017 grew
28.4% as compared to a reported GAAP increase of 27.3%.
The schedules below also provide a reconciliation of diluted EPS to
adjusted diluted EPS.
The schedules below also provide a reconciliation of net income 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.
The tax rate used in the calculation of adjusted diluted 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.
Reconciliation of GAAP to Non-GAAP
Constant Currency Comparison
(unaudited)
(in thousands)
Three Months Ended June 30,
Six Months Ended June 30,
Percent
Percent
2017
2016
Change
2017
2016
Change
Consolidated
Constant currency (1)
$ 1,232,358
1,151,587
7.0 %
$ 2,428,207
1,890,965
28.4 %
Foreign currency impact (2)
(9,983 )
-
(21,107 )
-
Total revenues
$ 1,222,375
1,151,587
6.1 %
$ 2,407,100
1,890,965
27.3 %
Constant currency (1)
$
853,368
794,937
7.4 %
$ 1,696,600
1,466,581
15.7 %
Foreign currency impact (2)
(9,300 )
-
(19,640 )
-
Net revenue
$
844,068
794,937
6.2 %
$ 1,676,960
1,466,581
14.3 %
Constant currency (1)
$
197,922
135,821
45.7 %
$
369,893
287,508
28.7 %
Foreign currency impact (2)
(4,674 )
-
(9,462 )
-
Operating income
$
193,248
135,821
42.3 %
$
360,431
287,508
25.4 %
Issuer Solutions
Constant currency (1)
$
452,597
429,864
5.3 %
$
900,832
859,577
4.8 %
Foreign currency impact (2)
(9,961 )
-
(21,079 )
-
Total revenues
$
442,636
429,864
3.0 %
$
879,753
859,577
2.3 %
Constant currency (1)
$
402,038
377,862
6.4 %
$
799,627
755,871
5.8 %
Foreign currency impact (2)
(9,278 )
-
(19,612 )
-
Segment net revenue
$
392,760
377,862
3.9 %
$
780,015
755,871
3.2 %
(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 June 30,
Six Months Ended June 30,
Percent
Percent
2017
2016
Change
2017
2016
Change
Total revenues
$ 1,222,375
1,151,587
6.1 %
$ 2,407,100
1,890,965
27.3 %
Less: reimbursable items, interchange and assessments expenses
378,307
356,650
6.1
730,140
424,384
72.0
Net revenue
$
844,068
794,937
6.2 %
$ 1,676,960
1,466,581
14.3 %
Reconciliation of GAAP to Non-GAAP
Adjusted Diluted Earnings per Share
(unaudited)
(in thousands, except per share data)
Three Months Ended June 30,
Six Months Ended June 30,
Percent
Percent
2017
2016
Change
2017
2016
Change
Net income attributable to TSYS common shareholders
$ 115,014
69,708
65.0 %
$ 220,882
160,336
37.8 %
Adjust for amounts attributable to TSYS common shareholders:
Add: Acquisition intangible amortization
$
50,783
58,210
(12.8 )
$ 105,785
80,855
30.8
Add: Share-based compensation
11,009
12,557
(12.3 )
20,051
20,707
(3.2 )
Add: TransFirst M&A expenses*
4,149
20,676
(79.9 )
8,973
33,859
(73.5 )
Add: Litigation, claims, judgments or settlements**
(83 )
-
na
1,878
-
na
Less: Tax impact of adjustments***
(22,657 )
(25,735 )
12.0
(47,089 )
(39,631 )
(18.8 )
Adjusted earnings
$ 158,215
135,416
16.8 %
$ 310,480
256,126
21.2 %
Diluted EPS - Net income attributable to TSYS common
shareholders
As reported (GAAP)
$
0.62
0.38
64.3 %
$
1.19
0.87
37.2 %
Adjusted diluted EPS
$
0.85
0.73
16.4 %
$
1.68
1.39
20.7 %
Weighted average diluted shares outstanding
185,286
184,598
185,122
184,335
* Costs associated with the TransFirst acquisition and integration
that are included in selling, general and administrative expenses
and nonoperating expenses.
** Litigation settlement or settlement discussions and related legal
expenses.
*** 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 June 30,
Six Months Ended June 30,
Percent
Percent
2017
2016
Change
2017
2016
Change
Net income
$ 116,512
71,748
62.4 %
$ 223,619
164,156
36.2 %
Adjust for:
Less: Equity in income of equity investments
(9,513 )
(5,977 )
(59.2 )
(22,422 )
(12,224 )
(83.4 )
Add: Income taxes
56,207
40,290
39.5
99,289
83,719
18.6
Add: Interest expense, net
29,537
30,770
(4.0 )
59,310
53,065
11.8
Add: Depreciation and amortization
99,359
104,969
(5.3 )
203,537
172,552
18.0
Less: (Gain)/loss on foreign currency translations
513
(960 )
nm
824
(1,469 )
nm
Less: Other nonoperating (income)/expenses
(8 )
(50 )
84.0
(189 )
261
nm
Add: Share-based compensation
11,008
12,566
(12.4 )
20,055
20,724
(3.2 )
Add: TransFirst M&A expenses*
4,166
20,676
(79.9 )
9,034
24,078
(62.5 )
Add: Litigation, claims, judgments or settlements
(83 )
-
na
1,878
-
na
Adjusted EBITDA
$ 307,698
274,032
12.3 %
$ 594,935
504,862
17.8 %
* Costs associated with the TransFirst acquisition and integration
that are included in selling, general and administrative expenses.
nm = not meaningful
na = not applicable
Reconciliation of GAAP to Non-GAAP
Free Cash Flow
(unaudited)
(in thousands)
Six Months Ended
Free cash flow:
June 30,
2017
2016
Net cash provided by operating activities (GAAP)
$ 400,792
339,081
Capital expenditures
(65,543 )
(81,808 )
Free cash flow (non-GAAP)
$ 335,249
257,273
Revised Guidance Summary
(unaudited)
(in millions, except per share data)
Revenue:
2017
% Change
Total revenues (GAAP)
$
4,809
to
$
4,889
15 %
to
17 %
Less: reimbursable items, interchange and assessments expenses
1,494
to
1,494
Net revenue (non-GAAP)
$
3,315
to
$
3,395
9 %
to
12 %
Earnings per share (EPS):
Diluted EPS (GAAP)
$
2.30
to
$
2.38
33 %
to
37 %
Acquisition intangible amortization, share-based compensation,
0.92
to
0.92
litigation, claims, judgments or settlements and TransFirst M&A
expenses, less the tax impact of adjustments
Adjusted diluted EPS attributable to TSYS common shareholders*
$
3.22
to
$
3.30
15 %
to
18 %
(non-GAAP)
* Weighted average diluted shares outstanding
185

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170725006455r1&sid=cmtx6&distro=nx&

View source version on businesswire.com: http://www.businesswire.com/news/home/20170725006455/en/

SOURCE: TSYS"> <Property FormalName="PrimaryTwitterHandle" Value="@TSYS_TSS

TSYS
Media Relations:
Cyle Mims, 706-644-3110
cylemims@tsys.com
or
Investor Relations:
Shawn Roberts, 706-644-6081
shawnroberts@tsys.com