| [January 23, 2018] |
 |
TSYS Reports Fourth Quarter and Full Year Earnings
TSYS (NYSE: TSS) today reported results for the fourth quarter and full
year of 2017.
"2017 proved to be a truly exceptional year for our company. We
delivered outstanding financial results, continued to expand our
merchant business with the Cayan acquisition announcement and finished
the year having met or exceeded our goals," said M. Troy Woods,
chairman, president and chief executive officer of TSYS.
Highlights for the fourth quarter of 2017 vs. 2016:
-
Total revenues were $1.3 billion, an increase of 12.5%.
-
Net revenue (non-GAAP), which excludes reimbursable items, interchange
and payment network fees, was $870.6 million, an increase of 10.8%.
-
Net income attributable to TSYS common shareholders was $242.2
million, an increase of 227.5%, which includes $135.9 million of tax
benefit from the Tax Cuts and Jobs Act. Diluted EPS were $1.31, an
increase of 227.4%.
-
Adjusted earnings (non-GAAP) were $151.0 million, an increase of
16.5%. Adjusted diluted EPS (non-GAAP) were $0.82, an increase of
16.5%.
-
Adjusted EBITDA (non-GAAP) was $293.3 million, an increase of 10.0%.
-
3.45 million shares were purchased for $255.0 million.
Highlights for the full year of 2017 vs. 2016:
-
Total revenues were $4.9 billion, an increase of 18.2%.
-
Net revenue (non-GAAP), which excludes reimbursable items, interchange
and payment network fees, was $3.4 billion, an increase of 11.8%.
-
Net income attributable to TSYS common shareholders was $586.2
million, an increase of 83.4%, which includes $135.9 million of tax
benefit from the Tax Cuts and Jobs Act. Diluted EPS were $3.16, an
increase of 82.4%.
-
Adjusted earnings (non-GAAP) were $624.2 million, an increase of
20.9%. Adjusted diluted EPS (non-GAAP) were $3.37, an increase of
20.2%.
-
Adjusted EBITDA (non-GAAP) was $1.2 billion, an increase of 15.1%.
-
3.85 million shares were purchased for $282.6 million.
-
Debt was reduced by $400 million and totaled $800 million over the
past two years.
"We expect the momentum of 2017 to carry over into 2018. We are
projecting strong organic revenue growth as we remain laser focused on
executing on our strategic plan and delivering outstanding results,"
said Woods.
2018 Outlook
On January 1, 2018, TSYS adopted Accounting Standards Codification (ASC)
606 "Revenue from Contracts with Customers" using the modified
retrospective transition method. The 2018 guidance is below and includes
the expected impact of the adoption of the new revenue standard, the
expected impact of the acquisition of Cayan, the expected impact of the
new tax law (the Tax Cuts and Jobs Act) and the expected effective date
of October 2018 of the prepaid rules by the Consumer Financial
Protection Bureau.
|
|
|
|
|
|
|
|
|
|
2018
Financial Outlook
Range(1)
|
|
|
Percent
Change
|
|
(in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues (GAAP)
|
|
$3,850
|
|
to
|
|
$3,950
|
|
|
(22
|
%)
|
|
to
|
|
(20
|
%)
|
|
Net revenue (non-GAAP)
|
|
$3,650
|
|
to
|
|
$3,750
|
|
|
7
|
%
|
|
to
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS (GAAP)
|
|
$2.85
|
|
to
|
|
$2.95
|
|
|
(10
|
%)
|
|
to
|
|
(7
|
%)
|
|
Adjusted diluted EPS attributable to TSYS common shareholders
(non-GAAP)
|
|
$4.10
|
|
to
|
|
$4.20
|
|
|
22
|
%
|
|
to
|
|
25
|
%
|
|
Weighted average diluted shares outstanding
|
|
184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The estimated impact of the adoption of ASC 606 on
TSYS' 2018 Outlook is as follows:
|
|
Total revenues
|
|
|
|
|
|
($1,600)
|
|
to
|
|
($1,575)
|
|
Net revenue
|
|
|
|
|
|
($62)
|
|
to
|
|
($69)
|
|
Diluted EPS
|
|
|
|
|
|
($0.04)
|
|
to
|
|
($0.03)
|
|
Adjusted diluted EPS
|
|
|
|
|
|
($0.04)
|
|
to
|
|
($0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
The most significant impact of adopting ASC 606 in 2018 is primarily the
result of gross versus net presentation of interchange and payment
network fees. In 2018, these fees collected on behalf of the payment
networks and card issuers will be presented "net" of the amounts paid to
them, as opposed to the "gross" presentation for certain of these fees
in 2017.
Conference Call
TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday,
January 23. 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 12 to 15 in the
financial schedules of this release.
About TSYS
TSYS® (NYSE: 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®'.
Our headquarters are located in Columbus, Ga., U.S.A., with
approximately 11,800 team members and local offices spread across 13
countries. TSYS generated revenue of $4.9 billion in 2017. 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 the expectation that the momentum of 2017
will carry over into 2018, the projected strong organic revenue growth
and TSYS' earnings guidance for 2018 total revenues, net revenue,
diluted EPS and adjusted diluted EPS, and the assumptions underlying
such statements, including with respect to TSYS' earnings guidance for
2018 those set forth under the caption "2018 Outlook" above. 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 recently completed Cayan 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, including its effective date; 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
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
1,273,289
|
|
|
1,132,224
|
|
|
12.5
|
|
%
|
|
$
|
4,927,965
|
|
|
4,170,077
|
|
|
18.2
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
|
939,106
|
|
|
826,332
|
|
|
13.6
|
|
|
|
|
3,577,320
|
|
|
2,993,062
|
|
|
19.5
|
|
|
|
Selling, general and administrative expenses
|
|
|
160,262
|
|
|
175,345
|
|
|
(8.6
|
)
|
|
|
|
616,601
|
|
|
603,633
|
|
|
2.1
|
|
|
|
Total expenses
|
|
|
1,099,368
|
|
|
1,001,677
|
|
|
9.8
|
|
|
|
|
4,193,921
|
|
|
3,596,695
|
|
|
16.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
173,921
|
|
|
130,547
|
|
|
33.2
|
|
|
|
|
734,044
|
|
|
573,382
|
|
|
28.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating expenses*
|
|
|
(27,702
|
)
|
|
(30,125
|
)
|
|
8.0
|
|
|
|
|
(116,482
|
)
|
|
(112,350
|
)
|
|
(3.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes and equity in income of equity
investments
|
|
|
146,219
|
|
|
100,422
|
|
|
45.6
|
|
|
|
|
617,562
|
|
|
461,032
|
|
|
34.0
|
|
|
|
Income tax (benefit)/expense
|
|
|
(88,039
|
)
|
|
33,209
|
|
|
nm
|
|
|
|
|
65,878
|
|
|
161,175
|
|
|
(59.1
|
)
|
|
|
Income before equity in income of equity investments
|
|
|
234,258
|
|
|
67,213
|
|
|
nm
|
|
|
|
|
551,684
|
|
|
299,857
|
|
|
84.0
|
|
|
|
Equity in income of equity investments, net of tax*
|
|
|
9,613
|
|
|
7,162
|
|
|
34.2
|
|
|
|
|
40,532
|
|
|
26,115
|
|
|
55.2
|
|
|
|
Net income
|
|
|
243,871
|
|
|
74,375
|
|
|
nm
|
|
|
|
|
592,216
|
|
|
325,972
|
|
|
81.7
|
|
|
|
Net income attributable to noncontrolling interests
|
|
|
(1,663
|
)
|
|
(425
|
)
|
|
nm
|
|
|
|
|
(6,031
|
)
|
|
(6,334
|
)
|
|
4.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to TSYS common shareholders
|
|
$
|
242,208
|
|
|
73,950
|
|
|
nm
|
|
%
|
|
$
|
586,185
|
|
|
319,638
|
|
|
83.4
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (EPS):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
$
|
1.33
|
|
|
0.40
|
|
|
nm
|
|
%
|
|
$
|
3.19
|
|
|
1.74
|
|
|
83.3
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$
|
1.31
|
|
|
0.40
|
|
|
nm
|
|
%
|
|
$
|
3.16
|
|
|
1.73
|
|
|
82.4
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(includes participating securities)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
182,661
|
|
|
183,665
|
|
|
|
|
|
|
|
183,745
|
|
|
183,655
|
|
|
|
|
|
Diluted
|
|
|
184,639
|
|
|
184,533
|
|
|
|
|
|
|
|
185,430
|
|
|
184,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share
|
|
$
|
0.13
|
|
|
0.10
|
|
|
30.0
|
|
%
|
|
$
|
0.46
|
|
|
0.40
|
|
|
15.0
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP measures:**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
870,613
|
|
|
785,709
|
|
|
10.8
|
|
%
|
|
$
|
3,400,332
|
|
|
3,041,876
|
|
|
11.8
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
293,277
|
|
|
266,547
|
|
|
10.0
|
|
%
|
|
$
|
1,197,673
|
|
|
1,040,551
|
|
|
15.1
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
|
|
$
|
151,036
|
|
|
129,620
|
|
|
16.5
|
|
%
|
|
$
|
624,183
|
|
|
516,419
|
|
|
20.9
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted EPS
|
|
$
|
0.82
|
|
|
0.70
|
|
|
16.5
|
|
%
|
|
$
|
3.37
|
|
|
2.80
|
|
|
20.2
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Certain prior year amounts have been reclassified between
nonoperating expenses and equity in income of equity investments,
net of tax.
|
|
|
** See reconciliation of non-GAAP measures.
|
|
|
nm = not meaningful
|
|
|
|
|
|
|
|
TSYS
|
|
Segment Breakdown
|
|
(unaudited)
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Twelve Months Ended December 31,
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
|
|
Change
|
|
|
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|
|
Adjusted operating income by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer Solutions (a)
|
|
$
|
145,671
|
|
|
132,506
|
|
|
13,165
|
|
|
9.9
|
|
%
|
|
$
|
574,580
|
|
|
525,025
|
|
|
49,555
|
|
|
9.4
|
|
%
|
|
Merchant Solutions (b)
|
|
|
94,915
|
|
|
88,539
|
|
|
6,376
|
|
|
7.2
|
|
|
|
|
391,466
|
|
|
307,595
|
|
|
83,871
|
|
|
27.3
|
|
|
|
Netspend (c)
|
|
|
38,831
|
|
|
34,834
|
|
|
3,997
|
|
|
11.5
|
|
|
|
|
182,082
|
|
|
160,371
|
|
|
21,711
|
|
|
13.5
|
|
|
|
Corporate admin and other
|
|
|
(37,395
|
)
|
|
(36,166
|
)
|
|
(1,229
|
)
|
|
(3.4
|
)
|
|
|
|
(148,564
|
)
|
|
(135,996
|
)
|
|
(12,568
|
)
|
|
(9.2
|
)
|
|
|
Adjusted segment operating income (d)
|
|
|
242,022
|
|
|
219,713
|
|
|
22,309
|
|
|
10.2
|
|
|
|
|
999,564
|
|
|
856,995
|
|
|
142,569
|
|
|
16.6
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
|
13,946
|
|
|
9,937
|
|
|
4,009
|
|
|
40.3
|
|
|
|
|
42,409
|
|
|
43,728
|
|
|
(1,319
|
)
|
|
(3.0
|
)
|
|
|
TransFirst and Cayan M&A and integration expenses
|
|
|
3,281
|
|
|
2,267
|
|
|
1,014
|
|
|
44.7
|
|
|
|
|
13,367
|
|
|
28,176
|
|
|
(14,809
|
)
|
|
(52.6
|
)
|
|
|
Litigation, claims, judgments or settlements
|
|
|
43
|
|
|
21,719
|
|
|
(21,676
|
)
|
|
(99.8
|
)
|
|
|
|
1,947
|
|
|
21,719
|
|
|
(19,772
|
)
|
|
(91.0
|
)
|
|
|
Acquisition intangible amortization
|
|
|
50,831
|
|
|
55,243
|
|
|
(4,412
|
)
|
|
(8.0
|
)
|
|
|
|
207,797
|
|
|
189,990
|
|
|
17,807
|
|
|
9.4
|
|
|
|
Operating income
|
|
|
173,921
|
|
|
130,547
|
|
|
43,374
|
|
|
33.2
|
|
|
|
|
734,044
|
|
|
573,382
|
|
|
160,662
|
|
|
28.0
|
|
|
|
Nonoperating expenses
|
|
|
(27,702
|
)
|
|
(30,125
|
)
|
|
2,423
|
|
|
8.0
|
|
|
|
|
(116,482
|
)
|
|
(112,350
|
)
|
|
(4,132
|
)
|
|
(3.7
|
)
|
|
|
Income before income taxes and equity in income of equity
investments
|
|
$
|
146,219
|
|
|
100,422
|
|
|
45,797
|
|
|
45.6
|
|
%
|
|
$
|
617,562
|
|
|
461,032
|
|
|
156,530
|
|
|
34.0
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer Solutions (e)
|
|
$
|
413,869
|
|
|
380,446
|
|
|
33,423
|
|
|
8.8
|
|
%
|
|
$
|
1,594,959
|
|
|
1,515,462
|
|
|
79,497
|
|
|
5.2
|
|
%
|
|
Merchant Solutions (f)
|
|
|
282,714
|
|
|
253,960
|
|
|
28,754
|
|
|
11.3
|
|
|
|
|
1,103,682
|
|
|
898,533
|
|
|
205,149
|
|
|
22.8
|
|
|
|
Netspend (g)
|
|
|
186,422
|
|
|
160,617
|
|
|
25,805
|
|
|
16.1
|
|
|
|
|
746,870
|
|
|
663,579
|
|
|
83,291
|
|
|
12.6
|
|
|
|
Segment net revenue
|
|
|
883,005
|
|
|
795,023
|
|
|
87,982
|
|
|
11.1
|
|
|
|
|
3,445,511
|
|
|
3,077,574
|
|
|
367,937
|
|
|
12.0
|
|
|
|
Less: Intersegment revenues
|
|
|
12,392
|
|
|
9,314
|
|
|
3,078
|
|
|
33.0
|
|
|
|
|
45,179
|
|
|
35,698
|
|
|
9,481
|
|
|
26.6
|
|
|
|
Net revenue (h)
|
|
|
870,613
|
|
|
785,709
|
|
|
84,904
|
|
|
10.8
|
|
|
|
|
3,400,332
|
|
|
3,041,876
|
|
|
358,456
|
|
|
11.8
|
|
|
|
Add: reimbursable items, interchange and payment network fees
|
|
|
402,676
|
|
|
346,515
|
|
|
56,161
|
|
|
16.2
|
|
|
|
|
1,527,633
|
|
|
1,128,201
|
|
|
399,432
|
|
|
35.4
|
|
|
|
Total revenues
|
|
$
|
1,273,289
|
|
|
1,132,224
|
|
|
141,065
|
|
|
12.5
|
|
%
|
|
$
|
4,927,965
|
|
|
4,170,077
|
|
|
757,888
|
|
|
18.2
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment operating margin on segment net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer Solutions (a)/(e)
|
|
|
35.2
|
%
|
|
34.8
|
%
|
|
|
|
|
|
|
|
36.0
|
%
|
|
34.6
|
%
|
|
|
|
|
|
|
Merchant Solutions (b)/(f)
|
|
|
33.6
|
%
|
|
34.9
|
%
|
|
|
|
|
|
|
|
35.5
|
%
|
|
34.2
|
%
|
|
|
|
|
|
|
Netspend (c)/(g)
|
|
|
20.8
|
%
|
|
21.7
|
%
|
|
|
|
|
|
|
|
24.4
|
%
|
|
24.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment operating margin on net revenue (d)/(h)
|
|
|
27.8
|
%
|
|
28.0
|
%
|
|
|
|
|
|
|
|
29.4
|
%
|
|
28.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TSYS
|
|
Segment Breakdown
|
|
(unaudited)
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Twelve Months Ended December 31,
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
|
|
Change
|
|
|
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|
|
|
Depreciation and amortization by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer Solutions
|
|
$
|
38,627
|
|
35,450
|
|
3,177
|
|
|
9.0
|
|
%
|
|
$
|
147,914
|
|
|
141,309
|
|
|
6,605
|
|
4.7
|
|
%
|
|
Merchant Solutions
|
|
|
7,487
|
|
6,851
|
|
636
|
|
|
9.3
|
|
|
|
|
29,477
|
|
|
25,553
|
|
|
3,924
|
|
15.4
|
|
|
|
Netspend
|
|
|
3,782
|
|
3,667
|
|
115
|
|
|
3.1
|
|
|
|
|
15,838
|
|
|
13,133
|
|
|
2,705
|
|
20.6
|
|
|
|
Depreciation and amortization
|
|
|
49,896
|
|
45,968
|
|
3,928
|
|
|
8.5
|
|
|
|
|
193,229
|
|
|
179,995
|
|
|
13,234
|
|
7.4
|
|
|
|
Acquisition intangible amortization
|
|
|
50,831
|
|
55,243
|
|
(4,412
|
)
|
|
(8.0
|
)
|
|
|
|
207,797
|
|
|
189,990
|
|
|
17,807
|
|
9.4
|
|
|
|
Corporate admin and other
|
|
|
1,358
|
|
866
|
|
492
|
|
|
56.8
|
|
|
|
|
4,880
|
|
|
3,561
|
|
|
1,319
|
|
37.0
|
|
|
|
Total depreciation and amortization
|
|
$
|
102,085
|
|
102,077
|
|
8
|
|
|
0.0
|
|
%
|
|
$
|
405,906
|
|
|
373,546
|
|
|
32,360
|
|
8.7
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment statistical data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total transactions (in millions)
|
|
|
5,863.5
|
|
5,224.8
|
|
638.7
|
|
|
12.2
|
|
%
|
|
|
21,575.6
|
|
|
19,858.1
|
|
|
1,717.5
|
|
8.6
|
|
%
|
|
Total Accounts on file (AOF) (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
797.5
|
|
|
751.5
|
|
|
46.0
|
|
6.1
|
|
%
|
|
Total Traditional AOF (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
571.9
|
|
|
521.8
|
|
|
50.1
|
|
9.6
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merchant Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Point-of-sale transactions (in millions)
|
|
|
1,221.8
|
|
1,120.5
|
|
101.3
|
|
|
9.0
|
|
%
|
|
|
4,844.1
|
|
|
4,548.1
|
|
|
296.0
|
|
6.5
|
|
%
|
|
Dollar sales volume (in millions)
|
|
$
|
32,439.0
|
|
28,710.2
|
|
3,728.8
|
|
|
13.0
|
|
%
|
|
$
|
124,165.1
|
|
|
97,735.1
|
|
|
26,430.0
|
|
27.0
|
|
%
|
|
Segment net revenue per transaction
|
|
$
|
0.231
|
|
0.227
|
|
0.005
|
|
|
2.1
|
|
%
|
|
$
|
0.228
|
|
|
0.198
|
|
|
0.030
|
|
15.3
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Netspend
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross dollar volume (in millions)
|
|
$
|
7,579.7
|
|
6,579.1
|
|
1,000.6
|
|
|
15.2
|
|
%
|
|
$
|
32,034.8
|
|
|
28,722.3
|
|
|
3,312.5
|
|
11.5
|
|
%
|
|
Direct deposit 90-day active cards (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
2,395.1
|
|
|
2,136.0
|
|
|
259.1
|
|
12.1
|
|
%
|
|
90-day active cards (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
4,902.9
|
|
|
4,295.0
|
|
|
607.9
|
|
14.2
|
|
%
|
|
% of 90-day active cards with direct deposit
|
|
|
|
|
|
|
|
|
|
|
|
|
48.9
|
%
|
|
49.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TSYS
|
|
Condensed Balance Sheet
|
|
(unaudited)
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
450,357
|
|
425,354
|
|
Accounts receivable, net
|
|
|
412,322
|
|
432,847
|
|
Other current assets
|
|
|
176,770
|
|
164,488
|
|
Total current assets
|
|
|
1,039,449
|
|
1,022,689
|
|
Goodwill
|
|
|
3,264,071
|
|
3,270,952
|
|
Software and other intangible assets, net
|
|
|
1,106,741
|
|
1,329,864
|
|
Property and equipment, net
|
|
|
325,218
|
|
282,345
|
|
Other long term assets
|
|
|
552,672
|
|
460,327
|
|
Total assets
|
|
$
|
6,288,151
|
|
6,366,177
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
58,191
|
|
38,712
|
|
Current portion of long-term borrowings, capital leases and license
agreements
|
|
|
565,812
|
|
50,727
|
|
Other current liabilities
|
|
|
328,478
|
|
330,914
|
|
Total current liabilities
|
|
|
952,481
|
|
420,353
|
|
Long-term borrowings, capital leases and license agreements,
excluding current portion
|
|
|
2,628,002
|
|
3,313,276
|
|
Deferred income tax liabilities
|
|
|
238,317
|
|
419,552
|
|
Other long-term liabilities
|
|
|
112,670
|
|
88,983
|
|
Total liabilities
|
|
|
3,931,470
|
|
4,242,164
|
|
Redeemable noncontrolling interest
|
|
|
14,283
|
|
24,093
|
|
Equity
|
|
|
2,342,398
|
|
2,099,920
|
|
Total liabilities and equity
|
|
$
|
6,288,151
|
|
6,366,177
|
|
|
|
|
|
|
|
|
|
|
TSYS
|
|
Selected Cash Flow Highlights
|
|
(unaudited)
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31,
|
|
|
|
|
2017
|
|
2016
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
592,216
|
|
|
325,972
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
Equity in income of equity investments, net of tax
|
|
|
(40,532
|
)
|
|
(26,115
|
)
|
|
Dividends received from equity investments
|
|
|
20,589
|
|
|
15,246
|
|
|
Depreciation and amortization
|
|
|
405,906
|
|
|
373,546
|
|
|
Amortization of debt issuance costs
|
|
|
4,307
|
|
|
13,570
|
|
|
Share-based compensation
|
|
|
42,409
|
|
|
43,728
|
|
|
Deferred income tax (benefit) expense
|
|
|
(172,488
|
)
|
|
7,435
|
|
|
Other noncash adjustments
|
|
|
78,498
|
|
|
52,169
|
|
|
Changes in operating assets and liabilities
|
|
|
(74,413
|
)
|
|
(87,522
|
)
|
|
Net cash provided by operating activities
|
|
|
856,492
|
|
|
718,029
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(70,039
|
)
|
|
(51,132
|
)
|
|
Additions to licensed computer software from vendors
|
|
|
(25,916
|
)
|
|
(11,551
|
)
|
|
Additions to internally developed computer software
|
|
|
(30,265
|
)
|
|
(34,043
|
)
|
|
Additions to contract acquisition costs
|
|
|
(69,806
|
)
|
|
(45,847
|
)
|
|
Cash used in acquisitions, net of cash acquired
|
|
|
-
|
|
|
(2,345,493
|
)
|
|
Other investing activities
|
|
|
(2,718
|
)
|
|
(4,930
|
)
|
|
Net cash used in investing activities
|
|
|
(198,744
|
)
|
|
(2,492,996
|
)
|
|
|
|
|
|
|
|
|
Principal payments on long-term borrowings, capital lease
obligations and license agreements
|
|
|
(421,306
|
)
|
|
(724,084
|
)
|
|
Proceeds from long-term borrowings
|
|
|
200,000
|
|
|
2,666,295
|
|
|
Debt issuance costs
|
|
|
-
|
|
|
(26,555
|
)
|
|
Purchase of noncontrolling interests
|
|
|
(70,000
|
)
|
|
(5,878
|
)
|
|
Dividends paid on common stock
|
|
|
(79,017
|
)
|
|
(73,378
|
)
|
|
Proceeds from exercise of stock options
|
|
|
21,832
|
|
|
11,708
|
|
|
Repurchase of common stock
|
|
|
(284,237
|
)
|
|
(30,275
|
)
|
|
Other financing activities
|
|
|
(5,997
|
)
|
|
4,357
|
|
|
Net cash (used in) provided by financing activities
|
|
|
(638,725
|
)
|
|
1,822,190
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
5,980
|
|
|
(11,197
|
)
|
|
Net increase in cash and cash equivalents
|
|
|
25,003
|
|
|
36,026
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
425,354
|
|
|
389,328
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
450,357
|
|
|
425,354
|
|
|
|
|
|
|
|
|
|
Supplemental
|
|
|
|
|
|
|
Capital expenditures
|
|
$
|
196,026
|
|
|
142,573
|
|
|
Free cash flow (non-GAAP)*
|
|
$
|
660,466
|
|
|
575,456
|
|
|
|
|
|
|
|
|
|
* See reconciliation of non-GAAP measures.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TSYS
|
|
Supplemental Information
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
AOF:
|
|
|
Total Accounts on File
|
|
(in millions)
|
|
|
At
December 2017
|
|
|
At
December 2016
|
|
%
Change
|
|
Consumer
|
|
|
481.3
|
|
|
|
442.9
|
|
|
8.7
|
|
|
Commercial
|
|
|
54.2
|
|
|
|
47.9
|
|
|
13.2
|
|
|
Other
|
|
|
36.4
|
|
|
|
31.0
|
|
|
17.4
|
|
|
Traditional AOF
|
|
|
571.9
|
|
|
|
521.8
|
|
|
9.6
|
|
|
Prepaid*/Stored Value
|
|
|
38.6
|
|
|
|
57.8
|
|
|
(33.3
|
)
|
|
Government Services
|
|
|
95.0
|
|
|
|
88.7
|
|
|
7.2
|
|
|
Commercial Card Single Use
|
|
|
92.0
|
|
|
|
83.2
|
|
|
10.7
|
|
|
Total AOF
|
|
|
797.5
|
|
|
|
751.5
|
|
|
6.1
|
|
|
* Prepaid does not include Netspend accounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth in Accounts on File (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
December 2016 to
December 2017
|
|
|
December 2015 to
December 2016
|
|
|
|
Beginning balance
|
|
|
751.5
|
|
|
|
732.5
|
|
|
|
|
Change in accounts on file due to:
|
|
|
|
|
|
|
|
|
|
|
Internal growth of existing clients
|
|
53.1
|
|
|
|
53.1
|
|
|
|
|
|
New clients
|
|
29.8
|
|
|
|
27.8
|
|
|
|
|
|
Purges/Sales
|
|
(36.4
|
)
|
|
|
(12.9
|
)
|
|
|
|
|
Deconversions
|
|
(0.5
|
)
|
|
|
(49.0
|
)
|
|
|
|
Ending balance
|
|
|
797.5
|
|
|
|
751.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
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 fourth quarter of 2017 grew
18.5% as compared to a reported GAAP increase of 18.2%.
|
|
|
|
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 2018 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 December 31,
|
|
|
|
Twelve Months Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant currency (1)
|
|
$
|
1,267,420
|
|
1,132,224
|
|
11.9
|
%
|
|
$
|
4,943,433
|
|
|
4,170,077
|
|
18.5
|
%
|
|
Foreign currency impact (2)
|
|
|
5,869
|
|
-
|
|
|
|
|
|
(15,468
|
)
|
|
-
|
|
|
|
|
Total revenues
|
|
|
$
|
1,273,289
|
|
1,132,224
|
|
12.5
|
%
|
|
$
|
4,927,965
|
|
|
4,170,077
|
|
18.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant currency (1)
|
|
$
|
865,131
|
|
785,709
|
|
10.1
|
%
|
|
$
|
3,414,749
|
|
|
3,041,876
|
|
12.3
|
%
|
|
Foreign currency impact (2)
|
|
|
5,482
|
|
-
|
|
|
|
|
|
(14,417
|
)
|
|
-
|
|
|
|
|
Net revenue
|
|
|
$
|
870,613
|
|
785,709
|
|
10.8
|
%
|
|
$
|
3,400,332
|
|
|
3,041,876
|
|
11.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant currency (1)
|
|
$
|
172,499
|
|
130,547
|
|
32.1
|
%
|
|
$
|
742,966
|
|
|
573,382
|
|
29.6
|
%
|
|
Foreign currency impact (2)
|
|
|
1,422
|
|
-
|
|
|
|
|
|
(8,922
|
)
|
|
-
|
|
|
|
|
Operating income
|
|
|
$
|
173,921
|
|
130,547
|
|
33.2
|
%
|
|
$
|
734,044
|
|
|
573,382
|
|
28.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant currency (1)
|
|
$
|
461,735
|
|
430,555
|
|
7.2
|
%
|
|
$
|
1,816,232
|
|
|
1,719,211
|
|
5.6
|
%
|
|
Foreign currency impact (2)
|
|
|
5,903
|
|
-
|
|
|
|
|
|
(15,378
|
)
|
|
-
|
|
|
|
|
Total revenues
|
|
|
$
|
467,638
|
|
430,555
|
|
8.6
|
%
|
|
$
|
1,800,854
|
|
|
1,719,211
|
|
4.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant currency (1)
|
|
$
|
408,353
|
|
380,446
|
|
7.3
|
%
|
|
$
|
1,609,285
|
|
|
1,515,462
|
|
6.2
|
%
|
|
Foreign currency impact (2)
|
|
|
5,516
|
|
-
|
|
|
|
|
|
(14,326
|
)
|
|
-
|
|
|
|
|
Segment net revenue
|
|
$
|
413,869
|
|
380,446
|
|
8.8
|
%
|
|
$
|
1,594,959
|
|
|
1,515,462
|
|
5.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 December 31,
|
|
|
|
Twelve Months Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
Total revenues
|
|
|
$
|
1,273,289
|
|
1,132,224
|
|
12.5
|
%
|
|
$
|
4,927,965
|
|
|
4,170,077
|
|
18.2
|
%
|
|
Less: reimbursable items, interchange and payment network fees
|
|
|
402,676
|
|
346,515
|
|
16.2
|
|
|
|
1,527,633
|
|
|
1,128,201
|
|
35.4
|
|
|
Net revenue
|
|
|
$
|
870,613
|
|
785,709
|
|
10.8
|
%
|
|
$
|
3,400,332
|
|
|
3,041,876
|
|
11.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP
|
|
|
|
Adjusted Diluted Earnings per Share
|
|
(unaudited)
|
|
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
Twelve Months Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
Net income attributable to TSYS common shareholders (GAAP)
|
|
$
|
242,208
|
|
|
73,950
|
|
|
nm
|
|
%
|
|
$
|
586,185
|
|
|
319,638
|
|
|
83.4
|
|
%
|
|
Adjust for amounts attributable to TSYS common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Acquisition intangible amortization
|
|
$
|
50,683
|
|
|
54,967
|
|
|
(7.8
|
)
|
|
|
$
|
207,172
|
|
|
188,887
|
|
|
9.7
|
|
|
|
Add: Share-based compensation
|
|
|
13,944
|
|
|
9,925
|
|
|
40.5
|
|
|
|
|
42,399
|
|
|
43,691
|
|
|
(3.0
|
)
|
|
|
Add: TransFirst and Cayan M&A expenses*
|
|
|
3,281
|
|
|
2,268
|
|
|
44.7
|
|
|
|
|
13,306
|
|
|
37,957
|
|
|
(64.9
|
)
|
|
|
Add: Litigation, claims, judgments or settlements**
|
|
|
43
|
|
|
19,913
|
|
|
(99.8
|
)
|
|
|
|
1,947
|
|
|
19,913
|
|
|
(90.2
|
)
|
|
|
Less: Tax impact of adjustments***
|
|
|
(23,252
|
)
|
|
(31,403
|
)
|
|
26.0
|
|
|
|
|
(90,955
|
)
|
|
(93,667
|
)
|
|
2.9
|
|
|
|
Less: Impact of Tax Cuts and Jobs Act****
|
|
|
(135,871
|
)
|
|
-
|
|
|
na
|
|
|
|
|
(135,871
|
)
|
|
-
|
|
|
na
|
|
|
|
Adjusted earnings (non-GAAP)
|
|
$
|
151,036
|
|
|
129,620
|
|
|
16.5
|
|
%
|
|
$
|
624,183
|
|
|
516,419
|
|
|
20.9
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS - Net income attributable to TSYS common
shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported (GAAP)
|
|
$
|
1.31
|
|
|
0.40
|
|
|
nm
|
|
%
|
|
$
|
3.16
|
|
|
1.73
|
|
|
82.4
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted EPS (non-GAAP)
|
|
$
|
0.82
|
|
|
0.70
|
|
|
16.5
|
|
%
|
|
$
|
3.37
|
|
|
2.80
|
|
|
20.2
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding
|
|
|
184,639
|
|
|
184,533
|
|
|
|
|
|
|
|
185,430
|
|
|
184,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Costs associated with the TransFirst and Cayan acquisition and
integration that are both 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 acquisitions.
|
|
****On December 22, 2017, President Trump signed into law the Tax
Cuts and Jobs Act (the "Tax Act"). Based on its preliminary
analysis of the Tax Act, including the reduction in the federal
corporate income tax rate, TSYS estimates that it will receive an
additional, non-recurring income tax benefit of approximately
$135.9 million due to the reduction of certain deferred tax
liabilities and the repatriation of foreign earnings as a result
of the Tax Act.
|
|
|
|
Adjusted EBITDA
|
|
(unaudited)
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
Twelve Months Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
Net income (GAAP) (a)
|
|
$
|
243,871
|
|
|
74,375
|
|
|
nm
|
|
%
|
|
$
|
592,216
|
|
|
325,972
|
|
|
81.7
|
|
%
|
|
Adjust for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Equity in income of equity investments
|
|
|
(9,613
|
)
|
|
(7,162
|
)
|
|
(34.2
|
)
|
|
|
|
(40,532
|
)
|
|
(26,115
|
)
|
|
(55.2
|
)
|
|
|
Less: Income tax (benefit)/expense
|
|
|
(88,039
|
)
|
|
33,209
|
|
|
nm
|
|
|
|
|
65,878
|
|
|
161,175
|
|
|
(59.1
|
)
|
|
|
Add: Interest expense, net
|
|
|
28,217
|
|
|
29,823
|
|
|
(5.4
|
)
|
|
|
|
116,028
|
|
|
113,523
|
|
|
2.2
|
|
|
|
Add: Depreciation and amortization
|
|
|
102,085
|
|
|
102,077
|
|
|
0.0
|
|
|
|
|
405,906
|
|
|
373,546
|
|
|
8.7
|
|
|
|
Less: (Gain)/loss on foreign currency translations
|
|
|
(343
|
)
|
|
(84
|
)
|
|
nm
|
|
|
|
|
907
|
|
|
(1,748
|
)
|
|
nm
|
|
|
|
Less: Other nonoperating (income)/expenses
|
|
|
(172
|
)
|
|
386
|
|
|
nm
|
|
|
|
|
(453
|
)
|
|
575
|
|
|
nm
|
|
|
|
Add: Share-based compensation
|
|
|
13,947
|
|
|
9,937
|
|
|
40.4
|
|
|
|
|
42,409
|
|
|
43,728
|
|
|
(3.0
|
)
|
|
|
Add: TransFirst and Cayan M&A expenses*
|
|
|
3,281
|
|
|
2,267
|
|
|
44.7
|
|
|
|
|
13,367
|
|
|
28,176
|
|
|
(52.6
|
)
|
|
|
Add: Litigation, claims, judgments or settlements
|
|
|
43
|
|
|
21,719
|
|
|
(99.8
|
)
|
|
|
|
1,947
|
|
|
21,719
|
|
|
(91.0
|
)
|
|
|
Adjusted EBITDA (non-GAAP) (b)
|
|
$
|
293,277
|
|
|
266,547
|
|
|
10.0
|
|
%
|
|
$
|
1,197,673
|
|
|
1,040,551
|
|
|
15.1
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues (c)
|
|
$
|
1,273,289
|
|
|
1,132,224
|
|
|
|
|
|
|
$
|
4,927,965
|
|
|
4,170,077
|
|
|
|
|
|
|
Net income margin on total revenues (GAAP) (a)/(c)
|
|
|
19.2
|
%
|
|
6.6
|
%
|
|
|
|
|
|
|
12.0
|
%
|
|
7.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue (d)
|
|
$
|
870,613
|
|
|
785,709
|
|
|
|
|
|
|
$
|
3,400,332
|
|
|
3,041,876
|
|
|
|
|
|
|
Adjusted EBITDA margin on net revenue (non-GAAP) (b)/(d)
|
|
|
33.7
|
%
|
|
33.9
|
%
|
|
|
|
|
|
|
35.2
|
%
|
|
34.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Costs associated with the TransFirst and Cayan acquisition and
integration that are both 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)
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
Free cash flow:
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities (GAAP)
|
|
$
|
856,492
|
|
|
|
|
|
718,029
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(196,026
|
)
|
|
|
|
|
(142,573
|
)
|
|
|
|
|
|
|
|
|
Free cash flow (non-GAAP)
|
|
$
|
660,466
|
|
|
|
|
|
575,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance Summary
|
|
(unaudited)
|
|
(in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
2018(1)
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues (GAAP)
|
|
$
|
3,850
|
|
|
to
|
|
$
|
3,950
|
|
|
(22.0
|
%)
|
|
to
|
|
(20.0
|
%)
|
|
|
Less: reimbursable items, interchange and payment network fees
|
|
|
200
|
|
|
to
|
|
|
200
|
|
|
|
|
|
|
|
|
|
Net revenue (non-GAAP)
|
|
$
|
3,650
|
|
|
to
|
|
$
|
3,750
|
|
|
7.0
|
%
|
|
to
|
|
10.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (EPS):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS (GAAP)
|
|
$
|
2.85
|
|
|
to
|
|
$
|
2.95
|
|
|
(10.0
|
%)
|
|
to
|
|
(7.0
|
%)
|
|
|
Acquisition intangible amortization, share-based compensation,
litigation, claims, judgments or settlements and for TransFirst
and Cayan M&A expenses, less the tax impact of adjustments
|
|
|
1.25
|
|
|
to
|
|
|
1.25
|
|
|
|
|
|
|
|
|
|
Adjusted diluted EPS attributable to TSYS common shareholders*
(non-GAAP)
|
|
$
|
4.10
|
|
|
to
|
|
$
|
4.20
|
|
|
22.0
|
%
|
|
to
|
|
25.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Weighted average diluted shares outstanding
|
|
|
184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The estimated impact of the adoption of ASC 606 on TSYS' 2018
Outlook is as follows: Total revenues ($1,600) to ($1,575), Net
revenue ($62) to ($69), Diluted EPS and Adjusted diluted EPS of
($0.04) to ($0.03). The most significant impact of adopting ASC
606 in 2018 is primarily the result of gross versus net
presentation of interchange and payment network fees. In 2018,
these fees collected on behalf of the payment networks and card
issuers will be presented "net" of the amounts paid to them, as
opposed to the "gross" presentation for certain of these fees in
2017.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180123006403/en/
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