EX-99.2 4 exhibit992.htm SUPPLEMENTAL INFORMATION PREPARED FOR USE WITH THE PRESS RELEASE

Exhibit 99.2

TSYS Announces Earnings for 2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 5 of 10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TSYS
Financial Highlights
(Unaudited)
(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

 

 

 

 

Percentage

 

 

 

 

 

 

Percentage

 

 

 

2007

 

2006

 

Change

 

 

2007

 

2006

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronic payment processing services

$

244,840

 

232,301

 

5.4

%

$

475,004

 

453,362

 

4.8

%

Merchant acquiring services

 

64,277

 

65,820

 

(2.3)

 

 

124,957

 

129,769

 

(3.7)

 

Other services

 

54,977

 

44,670

 

23.1

 

 

107,744

 

89,212

 

20.8

 

Revenues before reimbursables

 

364,094

 

342,791

 

6.2

 

 

707,705

 

672,343

 

5.3

 

Reimbursable items

 

96,061

 

86,374

 

11.2

 

 

182,053

 

169,112

 

7.7

 

Total revenues

 

460,155

 

429,165

 

7.2

 

 

889,758

 

841,455

 

5.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries & other personnel expense

 

145,532

 

120,433

 

20.8

 

 

285,974

 

241,763

 

18.3

 

Net occupancy & equipment expense

 

67,953

 

75,703

 

(10.2)

 

 

134,089

 

151,053

 

(11.2)

 

Other operating expenses

 

54,693

 

61,924

 

(11.7)

 

 

106,047

 

122,939

 

(13.7)

 

Expenses before reimbursable items

 

268,178

 

258,060

 

3.9

 

 

526,110

 

515,755

 

2.0

 

Reimbursable items

 

96,061

 

86,374

 

11.2

 

 

182,053

 

169,112

 

7.7

 

Total operating expenses

 

364,239

 

344,434

 

5.8

 

 

708,163

 

684,867

 

3.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

95,916

 

84,731

 

13.2

 

 

181,595

 

156,588

 

16.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

6,159

 

3,425

 

79.8

 

 

11,647

 

5,933

 

96.3

 

Interest expense

 

(366)

 

(85)

 

nm

 

 

(576)

 

(129)

 

nm

 

Loss on foreign currency translation, net

 

(845)

 

(363)

 

(132.8)

 

 

(162)

 

(87)

 

(86.2)

 

Dividend income

 

44

 

-

 

nm

 

 

58

 

-

 

nm

 

Other income

 

4,992

 

2,977

 

67.7

 

 

10,967

 

5,717

 

91.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes, minority interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and equity in income of equity investments

 

100,908

 

87,708

 

15.0

 

 

192,562

 

162,305

 

18.6

 

Income taxes

 

35,603

 

31,148

 

14.3

 

 

70,495

 

56,113

 

25.6

 

Income before minority interest and equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in income of equity investments

 

65,305

 

56,560

 

15.5

 

 

122,067

 

106,192

 

14.9

 

Minority interest

 

(602)

 

(173)

 

nm

 

 

(952)

 

(264)

 

nm

 

Equity in income of equity investments

 

985

 

1,019

 

(3.3)

 

 

1,845

 

1,871

 

(1.4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

65,688

 

57,406

 

14.4

%

$

122,960

 

107,799

 

14.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

0.33

 

0.29

 

14.7

%

$

0.63

 

0.55

 

14.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

$

0.33

 

0.29

 

14.5

%

$

0.62

 

0.55

 

14.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend declared per share

$

0.07

 

0.07

 

 

 

$

0.14

 

0.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares outstanding

 

196,693

 

197,093

 

 

 

 

196,591

 

197,089

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common and common

 

 

 

 

 

 

 

 

 

 

 

 

 

 

equivalent shares outstanding

 

197,147

 

197,330

 

 

 

 

197,081

 

197,334

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

nm = not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- more -

 

 

 


 

TSYS Announces Earnings for 2007

 

 

 

 

 

 

 

 

 

 

 

 

Page 6 of 10

 

 

 

 

 

 

 

 

 

 

 

 

TSYS
Segment Breakdown
(Unaudited)
(In thousands)

 

 

 

 

Three Months Ended June 30, 2007

 

Three Months Ended June 30, 2006

 

 

 

Domestic-
based
support
services

International-
based
support
services

Merchant
acquiring
services

Consolidated

 

Domestic-
based
support
services

International-
based
support
services

Merchant
acquiring
services

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues before reimbursables

$

254,340

58,043

58,234

370,617

 

253,313

34,145

60,144

347,602

 

 

Intersegment revenues

 

(5,754)

(372)

(397)

(6,523)

 

(4,778)

-

(33)

(4,811)

 

 

Revenues before reimbursables

 

 

 

 

 

 

 

 

 

 

 

 

from external customers

$

248,586

57,671

57,837

364,094

 

248,535

34,145

60,111

342,791

 

 

Total revenues

$

333,872

60,733

74,114

468,719

 

325,106

40,326

70,736

436,168

 

 

Intersegment revenues

 

(7,795)

(372)

(397)

(8,564)

 

(6,970)

-

(33)

(7,003)

 

 

Revenues from external customers

$

326,077

60,361

73,717

460,155

 

318,136

40,326

70,703

429,165

 

 

Depreciation and amortization

$

25,748

5,507

6,755

38,010

 

31,692

4,795

6,499

42,986

 

 

Intersegment expenses

$

2,982

(3,727)

(7,821)

(8,566)

 

6,591

(5,531)

(8,046)

(6,986)

 

 

Segment operating income

$

68,860

10,872

16,184

95,916

 

66,780

3,204

14,747

84,731

 

 

Income before income taxes,

 

 

 

 

 

 

 

 

 

 

 

 

minority interest and equity

 

 

 

 

 

 

 

 

 

 

 

 

income of equity investments

 

75,275

9,053

16,580

100,908

 

70,001

2,389

15,318

87,708

 

 

Income tax expense

$

27,404

2,235

5,964

35,603

 

23,443

1,926

5,779

31,148

 

 

Equity in income of equity investments

$

-

985

-

985

 

-

1,019

-

1,019

 

 

Net Income

$

48,172

6,900

10,616

65,688

 

46,712

1,155

9,539

57,406

 

 

Identifiable assets

 

1,582,154

337,571

182,751

2,102,476

 

 

 

 

 

 

 

Intersegment eliminations

 

(396,490)

(1,302)

(185)

(397,977)

 

 

 

 

 

 

 

Total assets

 

1,185,664

336,269

182,566

1,704,499

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2007

 

Six Months Ended June 30, 2006

 

 

 

 

Domestic-
based
support
services

International-
based
support
services

Merchant
acquiring
services

Consolidated

 

Domestic-
based
support
services

International-
based
support
services

Merchant
acquiring
services

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Revenues before reimbursables

$

495,309

111,006

113,052

719,367

 

497,756

64,858

119,006

681,620

 

 

Intersegment revenues

 

(10,535)

(595)

(532)

(11,662)

 

(9,212)

-

(65)

(9,277)

 

 

Revenues before reimbursables

 

 

 

 

 

 

 

 

 

 

 

 

from external customers

$

484,774

110,411

112,520

707,705

 

488,544

64,858

118,941

672,343

 

 

Total revenues

$

648,329

116,134

140,998

905,461

 

637,936

76,572

141,068

855,576

 

 

Intersegment revenues

 

(14,576)

(595)

(532)

(15,703)

 

(14,056)

-

(65)

(14,121)

 

 

Revenues from external customers

$

633,753

115,539

140,466

889,758

 

623,880

76,572

141,003

841,455

 

 

Depreciation and amortization

$

51,715

11,307

13,585

76,607

 

63,603

8,773

13,772

86,148

 

 

Intersegment expenses

$

6,389

(6,965)

(15,123)

(15,699)

 

15,282

(13,105)

(16,265)

(14,088)

 

 

Segment operating income

$

130,447

23,001

28,147

181,595

 

127,745

4,083

24,760

156,588

 

 

Income before income taxes,

 

 

 

 

 

 

 

 

 

 

 

 

minority interest and equity

 

 

 

 

 

 

 

 

 

 

 

 

income of equity investments

 

142,967

20,530

29,065

192,562

 

133,481

3,116

25,708

162,305

 

 

Income tax expense

$

53,653

6,407

10,435

70,495

 

43,914

2,493

9,706

56,113

 

 

Equity in income of equity investments

$

-

1,845

-

1,845

 

-

1,871

-

1,871

 

 

Net Income

$

89,734

14,596

18,630

122,960

 

89,531

2,266

16,002

107,799

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note:

Revenues from domestic-based services include electronic payment processing services and other services provided from the UnitedStates to clients domiciled in the United States or other countries. Revenues from international-based services include electronic payment processing services and other services provided from outside the United States to clients based mainly outside the United States .Revenues from merchant processing services include TSYS Acquiring’s merchant acquiring and related services.

 

 

 

 

 

- more -

 

 

 

 

 

 

 


 

TSYS Announces Earnings for 2007

 

 

 

Page 7 of 10

 

 

 

 

 

 

 

TSYS

Balance Sheet

(In thousands)

 

 

June 30, 2007

Dec 31, 2006

 

 

(unaudited)

(audited)

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

452,194

389,123

Restricted cash

 

41,744

31,568

Accounts receivable, net

 

253,640

246,637

Deferred income tax assets

 

26,853

21,556

Prepaid expenses and other current assets

 

58,520

55,832

Total current assets

 

832,951

744,716

Property and equipment, net

 

272,560

271,321

Computer software, net

 

198,193

216,450

Contract acquisition costs, net

 

159,829

167,449

Goodwill, net

 

141,973

133,337

Equity investments, net

 

62,795

62,064

Other intangible assets, net

 

14,456

21,314

Other assets

 

21,742

17,590

Total assets

$

1,704,499

1,634,241

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

31,024

31,589

Accrued salaries and employee benefits

 

48,819

80,697

Current portion of notes payable and obligations under capital leases

 

6,008

3,156

Other current liabilities

 

160,818

180,345

Total current liabilities

 

246,669

295,787

Deferred income tax liabilities

 

75,468

75,019

Obligations under notes payable and capital leases excluding current portion

 

9,634

3,625

Other long-term liabilities

 

36,706

36,221

Total liabilities

 

368,477

410,652

Minority interest in consolidated subsidiary

 

7,022

6,229

Shareholders' Equity:

 

 

 

Common stock

 

19,920

19,868

Additional paid-in capital

 

81,317

66,677

Treasury stock

 

(34,312)

(35,233)

Accumulated other comprehensive income

 

23,317

20,641

Retained earnings

 

1,238,758

1,145,407

Total shareholders' equity

 

1,329,000

1,217,360

Total liabilities and shareholders' equity

$

1,704,499

1,634,241

 

 

 

 

 

 

 

 

- more -

 

 

 


 

TSYS Announces Earnings for 2007

 

 

 

 

Page 8 of 10

 

 

 

 

 

 

 

 

 

TSYS

 

Cash Flow

 

(Unaudited)

 

(In thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2007

2006

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

Net income

$

122,960

107,799

 

Adjustments to reconcile net income to net cash provided by

 

 

 

 

operating activities:

 

 

 

 

Minority interests in consolidated subsidiaries' net income

 

952

264

 

Equity in income of equity investments

 

(1,845)

(1,871)

 

Dividends received from equity investments

 

2,994

2,371

 

Loss on currency translation adjustments, net

 

162

87

 

Depreciation and amortization

 

76,607

86,148

 

Share-based compensation

 

6,596

4,445

 

Impairment of developed software/contract acquisition costs

 

620

-

 

Provisions for bad debt expense and billing

 

 

 

 

adjustments

 

148

224

 

Charges for transaction processing provisions

 

437

7,501

 

Deferred income tax benefit

 

(2,760)

(17,041)

 

Loss on disposal of equipment, net

 

23

105

 

(Increase) decrease in:

 

 

 

 

Accounts receivable

 

(6,150)

(4,442)

 

Prepaid expenses, other current assets and other long-term assets

 

(8,921)

3,830

 

Increase (decrease) in:

 

 

 

 

Accounts payable

 

(814)

451

 

Accrued salaries and employee benefits

 

(31,870)

(41,590)

 

Excess tax benefit from share-based payment arrangements

 

(3,869)

-

 

Other current liabilities and other long-term liabilities

 

(35,764)

(17,338)

 

Net cash provided by operating activities

 

119,506

130,943

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment, net

 

(21,438)

(14,306)

 

Additions to licensed computer software from vendors

 

(4,810)

(4,437)

 

Additions to internally developed computer software

 

(7,458)

(8,999)

 

Cash used in acquisitions

 

(472)

-

 

Additions to contract acquisition costs

 

(9,542)

(22,339)

 

Net cash used in investing activities

 

(43,720)

(50,081)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from borrowings of long-term debt

 

6,805

-

 

Principal payments on long-term debt borrowings and

 

 

 

 

capital lease obligations

 

(1,744)

(1,060)

 

Proceeds from exercise of stock options

 

5,112

-

 

Excess tax benefit from share-based payment arrangements

 

3,869

-

 

Dividends paid on common stock

 

(27,598)

(23,683)

 

Net cash used in financing activities

 

(13,556)

(24,743)

 

Effect of exchange rate changes on cash and cash equivalents

 

841

1,795

 

Net increase in cash and cash equivalents

 

63,071

57,914

 

Cash and cash equivalents at beginning of year

 

389,123

237,569

 

Cash and cash equivalents at end of period

$

452,194

295,483

 

 

 

 

 

 

 

 

 

 

 

- more -

 

 

 

 

 

 

 

 


 

 

TSYS Announces Earnings for 2007

 

 

 

 

 

 

 

 

 

 

Page 9 of 10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Geographic Area Data:

 

 

 

 

 

 

 

 

 

 

 

 

The following geographic area data represents revenues for the three months ended June 30 based on where the client is domiciled:

 

 

 

Three Months Ended June 30,

 

 

 

(dollars in millions):

 

2007

%

 

 

2006

%

 

% Chg

 

 

 

United States

$

362.5

 

78.8

%

 

$

360.3

83.9

 

%

0.6

%

 

 

Europe

 

49.0

 

10.7

 

 

 

36.2

8.4

 

 

35.6

 

 

 

Canada

 

30.8

 

6.7

 

 

 

24.0

5.6

 

 

28.3

 

 

 

Japan

 

6.1

 

1.3

 

 

 

4.5

1.1

 

 

35.0

 

 

 

Mexico

 

3.3

 

0.7

 

 

 

2.9

0.7

 

 

13.7

 

 

 

Other

 

8.5

 

1.8

 

 

 

1.3

0.3

 

 

nm

 

 

 

 

$

460.2

 

100.0

%

 

$

429.2

100.0

 

%

7.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following geographic area data represents revenues for the six months ended June 30 based on where the client is domiciled:

 

 

 

Six Months Ended June 30,

 

 

(dollars in millions):

 

2007

%

 

 

2006

%

 

% Chg

 

 

United States

$

700.3

 

78.7

%

 

$

710.2

84.4

 

%

(1.4)

%

 

Europe

 

95.0

 

10.7

 

 

 

68.9

8.2

 

 

37.9

 

 

Canada

 

60.8

 

6.8

 

 

 

46.1

5.5

 

 

31.9

 

 

Japan

 

11.4

 

1.3

 

 

 

8.4

1.0

 

 

35.9

 

 

Mexico

 

6.5

 

0.7

 

 

 

5.4

0.6

 

 

21.6

 

 

Other

 

15.8

 

1.8

 

 

 

2.5

0.3

 

 

nm

 

 

 

$

889.8

 

100.0

%

 

$

841.5

100.0

 

%

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Geographic Area Revenue by Operating Segment:

 

 

 

 

 

 

 

 

The following table reconciles segment revenues to revenues by reporting segment for the three months ended June 30:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

 

 

Domestic-based

 

 

International-based

 

Merchant acquiring

 

 

 

 

support services

 

 

support services

 

services

 

 

(dollars in millions):

 

2007

2006

 

 

2007

2006

 

2007

2006

 

 

United States

$

289.1

 

289.9

 

 

 

-

 

-

 

 

73.4

 

70.4

 

 

 

Europe

 

0.4

 

0.3

 

 

 

48.6

 

35.9

 

 

-

 

-

 

 

 

Canada

 

30.7

 

23.9

 

 

 

-

 

-

 

 

0.1

 

0.1

 

 

 

Japan

 

-

 

-

 

 

 

6.1

 

4.5

 

 

-

 

-

 

 

 

Mexico

 

3.3

 

2.9

 

 

 

-

 

-

 

 

-

 

-

 

 

 

Other

 

2.6

 

1.1

 

 

 

5.7

 

-

 

 

0.2

 

0.2

 

 

 

 

$

326.1

 

318.1

 

 

 

60.4

 

40.4

 

 

73.7

 

70.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table reconciles segment revenues to revenues by reporting segment for the six months ended June 30:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

 

Domestic-based

 

 

International-based

 

Merchant acquiring

 

 

 

support services

 

 

support services

 

services

 

(dollars in millions):

 

2007

2006

 

 

2007

2006

 

2007

2006

 

 

United States

$

560.5

 

569.8

 

 

-

 

-

 

 

139.8

 

140.4

 

 

 

Europe

 

0.9

 

0.7

 

 

94.1

 

68.2

 

 

-

 

-

 

 

 

Canada

 

60.5

 

45.8

 

 

-

 

-

 

 

0.3

 

0.3

 

 

 

Japan

 

-

 

-

 

 

11.4

 

8.4

 

 

-

 

-

 

 

 

Mexico

 

6.5

 

5.4

 

 

-

 

-

 

 

-

 

-

 

 

 

Other

 

5.4

 

2.2

 

 

10.0

 

-

 

 

0.4

 

0.3

 

 

 

 

$

633.8

 

623.9

 

 

115.5

 

76.6

 

 

140.5

 

141.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

nm = not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- more -

 

 

 

 


 

TSYS Announces Earnings for 2007

 

 

 

 

 

 

 

 

 

Page 10 of 10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Information:

 

 

 

 

 

 

 

 

 

 

 

Accounts on File at June 30,

 

(in millions)

 

2007

%

 

2006

%

 

% Change

 

Consumer

 

277.0

 

63.1

%

241.2

 

65.8

%

14.9

%

Retail

 

57.3

 

13.0

 

36.8

 

10.1

 

55.6

 

Commercial

 

35.0

 

8.0

 

31.4

 

8.6

 

11.3

 

Government services/EBT

 

21.9

 

5.0

 

19.6

 

5.3

 

12.1

 

Stored Value

 

42.9

 

9.8

 

29.3

 

8.0

 

46.5

 

Debit

 

5.1

 

1.1

 

8.2

 

2.2

 

(38.3)

 

 

 

439.2

 

100.0

%

366.5

 

100.0

%

19.8

%

 

 

 

 

 

 

 

 

 

 

(in millions)

 

June 30, 2007

 

 

June 30, 2006

 

 

% Change

 

QTD Average Accounts on File

 

433.6

 

 

 

415.8

 

 

 

4.3

%

YTD Average Accounts on File

 

426.0

 

 

 

427.5

 

 

 

(0.4)

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts on File at June 30,

 

(in millions)

 

2007

%

 

2006

%

 

% Change

 

Domestic

 

368.0

 

83.8

%

308.5

 

84.2

%

19.3

%

International

 

71.2

 

16.2

 

58.0

 

15.8

 

22.7

 

 

 

439.2

 

100.0

%

366.5

 

100.0

%

19.8

%

 

 

 

 

 

 

 

 

 

 

Note: The accounts on file between domestic and international is based on the geographic domicile of processing clients.

 

 

Growth in Accounts on File (in millions):

 

 

 

 

 

 

 

 

 

 

June 2006 to
June 2007

 

 

June 2005 to
June 2006

 

 

 

Beginning balance

 

366.5

 

 

 

388.6

 

 

 

 

Change in accounts on file due to:

 

 

 

 

 

 

 

 

 

 

Internal growth of existing clients

 

33.1

 

 

 

36.5

 

 

 

 

New clients

 

105.5

 

 

 

40.0

 

 

 

 

Purges/Sales

 

(14.0)

 

 

 

(12.3)

 

 

 

 

Deconversions

 

(51.9)

 

 

 

(86.3)

 

 

 

 

Ending balance

 

439.2

 

 

 

366.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of Employees (FTEs):

 

2007

 

 

2006

 

 

 

At June 30,

 

6,773

 

 

 

6,542

 

 

 

 

Quarterly average for period ended June 30,

 

6,783

 

 

 

6,540

 

 

 

 

YTD average for period ended June 30,

 

6,755

 

 

 

6,592

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

###