TSYS Reports Second Quarter Earnings Including TransFirst

COLUMBUS, Ga.--()--TSYS (NYSE: TSS) today reported results for the second quarter of 2016.

Highlights for the second quarter of 2016 include:

  • Total revenues were $1.2 billion, an increase of 66.3% over last year’s $692.7 million.
  • Net revenue, which excludes reimbursable items, interchange and assessment expense, was $794.9 million, an increase of 27.8% over last year’s $622.1 million.
  • GAAP net income attributable to TSYS common shareholders, which includes the expenses of closing the TransFirst acquisition during the quarter, was $69.7 million, a decrease of 15.9% from last year’s $82.8 million. GAAP basic earnings per share (EPS) were $0.38 per share, a decrease of 15.8% from last year’s $0.45.
  • Adjusted EBITDA was $274.0 million, an increase of 32.7% over last year’s $206.5 million. Adjusted earnings were $135.4 million, an increase of 27.8% over last year’s $106.0 million. Adjusted EPS was $0.74, an increase of 27.9% over last year’s $0.58.
  • Cash of $125 million was deployed for accelerated repayments on our bank credit facility.

“We are extremely pleased with the outstanding operational and financial performance for the second quarter as we continue to deliver on our strategic plan. All four segments achieved net revenue growth on a constant currency basis and our consolidated adjusted operating margin expanded by 202 basis points,” said M. Troy Woods, chairman and chief executive officer of TSYS.

“We are also pleased to report that the integration of our TransFirst acquisition this quarter is going very well. TransFirst, along with our legacy merchant business, gives us a commanding leadership position in the merchant acquiring market on which we intend to capitalize,” said Woods.

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, July 26. The conference call can be accessed via simultaneous Internet broadcast 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 are included on pages 9 to 12 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 and related presentations may contain “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 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 risks described in TSYS’ filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. We disclaim 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
2016 2015 Change 2016 2015 Change
 
Total revenues $ 1,151,587 692,652 66.3 % $ 1,890,965 1,354,808 39.6 %
 
Cost of services 837,660 459,960 82.1 1,318,216 909,676 44.9
Selling, general and administrative expenses 178,106   102,090   74.5 285,241   192,034   48.5
Total expenses 1,015,766   562,050   80.7 1,603,457   1,101,710   45.5
 
Operating income 135,821 130,602 4.0 287,508 253,098 13.6
 
Nonoperating expenses (30,061 ) (10,209 ) nm (52,501 ) (19,418 ) nm
 
Income before income taxes, noncontrolling interests and equity in income of equity investments
105,760 120,393 (12.2 ) 235,007 233,680 0.6
Income taxes 40,290   41,597   (3.1 ) 83,719   81,379   2.9
Income before noncontrolling interests and equity in income of equity investments
65,470 78,796 (16.9 ) 151,288 152,301 (0.7 )
Equity in income of equity investments, net of tax 6,278   4,579   37.1 12,868   9,973   29.0
Net income 71,748 83,375 (13.9 ) 164,156 162,274 1.2
Net income attributable to noncontrolling interests (2,040 ) (536 ) nm (3,820 ) (1,680 ) nm
 
Net income attributable to TSYS common shareholders $ 69,708   82,839   (15.9 ) % $ 160,336   160,594   (0.2 ) %
 
Earnings per share (EPS):
Basic EPS $ 0.38   0.45   (15.8 ) % $ 0.87   0.87   0.2 %
 
Diluted EPS $ 0.38   0.45   (15.7 ) % $ 0.87   0.87   0.4 %
 
Weighted average shares outstanding:
(includes participating securities)
Basic 183,724   183,829   183,489   184,153  
Diluted 184,598   185,020   184,336   185,299  
 
Dividends declared per share $ 0.10   0.10   $ 0.20   0.20  
 
 

Non-GAAP measures:

Net revenue $ 794,937   622,084   27.8 % $ 1,466,581   1,217,868   20.4 %
 
Adjusted EPS from continuing operations $ 0.74   0.58   27.9 % $ 1.40   1.11   25.5 %
 
Adjusted EBITDA $ 274,032   206,537   32.7 % $ 504,862   399,991   26.2 %
 
nm = not meaningful
 
 
TSYS
Segment Breakdown
(unaudited)
(in thousands)
                 
Three Months Ended June 30, Six Months Ended June 30,
Change Change
2016   2015   $   % 2016   2015   $ %
Total revenues $ 1,151,587 692,652 458,935 66.3 % $ 1,890,965 1,354,808 536,157 39.6 %
Less reimbursable items 66,137 70,568 (4,431 ) (6.3 ) 133,871 136,940 (3,069 ) (2.2 )
Less interchange & assessments expense 290,513     -     290,513   na 290,513     -     290,513   na
Net revenue $ 794,937     622,084     172,853   27.8 % $ 1,466,581     1,217,868     248,713   20.4 %
 
Net revenue (by segment):
North America Services $ 297,168 287,199 9,969 3.5 % $ 600,809 553,418 47,391 8.6 %
International Services 81,771 83,857 (2,086 ) (2.5 ) 157,125 157,587 (462 ) (0.3 )
Merchant Services 261,467 117,868 143,599 nm 382,079 228,266 153,813 67.4
NetSpend 162,620 141,621 20,999 14.8 347,613 296,695 50,918 17.2
Intersegment revenues (8,089 )   (8,461 )   372   4.4 (21,045 )   (18,098 )   (2,947 ) (16.3 )
Net revenue from external customers $ 794,937     622,084     172,853   27.8 % $ 1,466,581     1,217,868     248,713   20.4 %
 
Depreciation and amortization:
North America Services $ 27,442 24,468 2,974 12.2 % $ 54,925 47,532 7,393 15.6 %
International Services 8,207 8,628 (421 ) (4.9 ) 16,343 17,406 (1,063 ) (6.1 )
Merchant Services 6,806 4,446 2,360 53.1 11,856 8,723 3,133 35.9
NetSpend 3,116     2,622     494   18.8 6,225     4,915     1,310   26.7
Segment depreciation and amortization 45,571 40,164 5,407 13.5 89,349 78,576 10,773 13.7
Acquisition intangible amortization 58,486 22,852 35,634 nm 81,407 46,718 34,689 74.3
Corporate admin and other 912     889     23   2.6 1,796     1,426     370   25.9
Total depreciation and amortization $ 104,969     63,905     41,064   64.3 % $ 172,552     126,720     45,832   36.2 %
 
Adjusted segment operating income:
North America Services $ 112,737 108,385 4,352 4.0 % $ 237,525 210,956 26,569 12.6 %
International Services 15,751 13,353 2,398 18.0 26,040 20,336 5,704 28.0
Merchant Services 89,915 40,690 49,225 nm 128,272 74,805 53,467 71.5
NetSpend 42,481     36,442     6,039   16.6 84,682   71,909   12,773   17.8
Total adjusted segment operating income 260,884 198,870 62,014 31.2 476,519 378,006 98,513 26.1
Acquisition intangible amortization (58,486 ) (22,852 ) (35,634 ) nm (81,407 ) (46,718 ) (34,689 ) (74.3 )
TransFirst M&A operating expenses (20,676 ) - (20,676 ) na (24,078 ) - (24,078 ) na
Share-based compensation (12,566 ) (12,030 ) (536 ) (4.5 ) (20,724 ) (20,173 ) (551 ) (2.7 )
Corporate admin and other (33,335 )   (33,386 )   51   0.2 (62,802 ) (58,017 ) (4,785 ) (8.2 )
Operating income $ 135,821     130,602     5,219   4.0 % $ 287,508   253,098   34,410   13.6 %
 
nm = not meaningful
na = not applicable
 
       
 
TSYS
Condensed Balance Sheet
(unaudited)
(in thousands)
 
June 30, 2016 December 31, 2015
Assets
Current assets:
Cash and cash equivalents $ 465,319 389,328
Accounts receivable, net 396,693 314,705
Other current assets 147,419 154,199
Total current assets 1,009,431 858,232
Goodwill 3,252,118 1,545,424
Other intangible assets, net 1,002,589 328,320
Property, equipment and software, net 746,133 694,968
Other long term assets 466,762 450,951
Total assets $ 6,477,033 3,877,895
 
Liabilities
Current liabilities:
Accounts payable $ 34,428 52,213
Notes payable and capital leases 49,085 53,546
Other current liabilities 279,972 233,173
Total current liabilities 363,485 338,932
Bonds payable, notes payable and capital leases, excluding current portion 3,600,154 1,377,541
Deferred tax liability 411,532 192,445
Other long-term liabilities 93,135 96,885
Total liabilities 4,468,306 2,005,803
Redeemable noncontrolling interest 23,299 23,410
Equity
Shareholders' equity 1,985,428 1,843,018
Noncontrolling interests in consolidated subsidiaries - 5,664
Total equity 1,985,428 1,848,682
Total liabilities and equity $ 6,477,033 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.
 
       
 
TSYS
Selected Cash Flow Highlights
(unaudited)
(in thousands)
 
Six Months Ended June 30,
2016 2015
Cash flows from operating activities:
Net income $ 164,156 162,274
Adjustments to reconcile net income to net cash provided by operating activities:
 
Equity in income of equity investments (12,868 ) (9,973 )
Dividends received from equity investments 808 984
Depreciation and amortization 172,552 126,720
Amortization of debt issuance costs 11,451 917
Share-based compensation 20,724 20,173
Deferred income tax expense(benefit) 18,520 (12,954 )
Other noncash adjustments 21,764 21,401
Changes in operating assets and liabilities (56,227 ) (24,249 )
Net cash provided by operating activities 340,880 285,293
 
Net cash used in investing activities (2,428,856 ) (97,512 )
 
Net cash provided by (used in) financing activities 2,169,545 (126,244 )
 
Cash and cash equivalents:
Effect of exchange rate changes on cash and cash equivalents (5,578 ) (1,342 )
Net increase in cash and cash equivalents 75,991 60,195
Cash and cash equivalents at beginning of period 389,328   289,183  
Cash and cash equivalents at end of period $ 465,319   349,378  
 
Supplemental - Non-GAAP:
Net cash provided by operating activities $ 340,880 285,293
Capital expenditures (81,807 ) (96,552 )
Free cash flow $ 259,073   188,741  
 
 
TSYS
Supplemental Information
(unaudited)
         
Other
Accounts on File (AOF): Total Accounts on File
(in millions)

At
June 2016

 

At
June 2015

 

%
Change

 
Consumer 425.3 400.5 6.2
Commercial 47.0 44.0 7.1
Other 28.8   24.0 19.6
Traditional AOF 501.1 468.5 7.0
Prepaid*/Stored Value 79.5 133.1 (40.3 )
Government Services 84.6 77.1 9.8
Commercial Card Single Use 76.9   72.7 5.8
Total AOF 742.1   751.4 (1.2 )
* Prepaid does not include NetSpend accounts

Growth in Accounts on File (in millions):

     

June 2015 to
June 2016

 

June 2014 to
June 2015

Beginning balance 751.4 572.7
Change in accounts on file due to:
Internal growth of existing clients 51.8 42.4
New clients 32.9 166.1
Purges/Sales (24.0 ) (29.3 )
Deconversions (70.0 )   (0.5 )
Ending balance 742.1     751.4  
Segment data:      
Three Months Ended June 30,
  Change
2016   2015   Inc/(Dec)   %
North America Segment:  
Transactions (in millions) 4,326.6 4,042.2 284.4 7.0 %
 
International Segment:
Transactions (in millions) 658.5 613.9 44.6 7.3 %
 
Merchant Segment:
Point-of-sale transactions (in millions) 1,159.5 1,089.4 70.1 6.4 %
Dollar sales volume (in millions) $ 28,560.8 $ 12,314.8 $ 16,246.0 131.9 %
 
NetSpend Segment:
Gross dollar volume (in millions) $ 6,614.7 $ 5,531.0 $ 1,083.7 19.6 %
 
Six Months Ended June 30,
Change
2016   2015   Inc/(Dec)   %    
North America Segment:
AOF (in millions) 660.9 677.5 (16.6 ) (2.5 ) %
Traditional AOF (in millions) 435.1 405.4 29.7 7.3 %
Transactions (in millions) 8,296.2 7,353.0 943.2 12.8 %
 
International Segment:
AOF (in millions) 81.3 73.9 7.4 10.0 %
Traditional AOF (in millions) 66.0 63.1 3.0 4.7 %
Transactions (in millions) 1,276.9 1,185.9 91.0 7.7 %
 
Merchant Segment:
Point-of-sale transactions (in millions) 2,250.4 2,074.0 176.4 8.5 %
Dollar sales volume (in millions) $ 40,344.2 $ 23,616.4 $ 16,727.8 70.8 %
 
NetSpend Segment:
Gross dollar volume (in millions) $ 15,776.2 $ 13,191.7 $ 2,584.5 19.6 %
 
Direct deposit 90-day active cards (in thousands) 2,192.5 1,879.8 312.7 16.6 %
90-day active cards (in thousands) 4,448.8 3,885.1 563.7 14.5 %
% of 90-day active cards with direct deposit 49.3 % 48.4 %
 
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 2016 financial results using the previous year’s foreign currency exchange rates. On a constant currency basis, TSYS’ total revenues grew 40.4% as compared to a reported GAAP increase of 39.6%.
 
The schedules below also provide a reconciliation of basic EPS, adjusted for the after-tax impact of acquisition intangible amortization, share-based compensation and merger and acquisition costs, to adjusted EPS.
 
The schedules below provide a reconciliation of total revenues to net revenue. Net revenue is defined as total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment networks that are recorded by TSYS as expense.
 
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.
 
The schedules also provide a reconciliation of net income, adjusted for income from discontinued operations, equity in income of equity investments, income taxes, nonoperating expense, depreciation and amortization, share-based compensation, and merger and acquisition expenses, to adjusted EBITDA.
 
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 use 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
2016   2015   Change   2016   2015   Change  
Consolidated
Constant currency (1) $ 1,157,633 692,652 67.1 % $ 1,902,607 1,354,808 40.4 %
Foreign currency impact (2) (6,046 )     - (11,642 )     -
Total revenues $ 1,151,587       692,652 66.3 % $ 1,890,965       1,354,808 39.6 %
 
Constant currency (1) $ 800,586 622,084 28.7 % $ 1,477,432 1,217,868 21.3 %
Foreign currency impact (2) (5,649 )     - (10,851 )     -
Net revenue $ 794,937       622,084 27.8 % $ 1,466,581       1,217,868 20.4 %
 
Constant currency (1) $ 137,848 130,602 5.5 % $ 290,629 253,098 14.8 %
Foreign currency impact (2) (2,027 )     - (3,121 )     -
Operating income $ 135,821       130,602 4.0 % $ 287,508       253,098 13.6 %
 
International Services
Constant currency (1) $ 93,549 89,618 4.4 % $ 180,160 169,420 6.3 %
Foreign currency impact (2) (6,040 )     - (11,578 )     -
Total revenues $ 87,509       89,618 (2.4 ) % $ 168,582       169,420 (0.5 ) %
 
Constant currency (1) $ 87,413 83,857 4.2 % $ 167,911 157,587 6.6 %
Foreign currency impact (2) (5,642 )     - (10,786 )     -
Net revenue $ 81,771       83,857 (2.5 ) % $ 157,125       157,587 (0.3 ) %
 
(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 June 30,   Six Months Ended June 30,  
Percent Percent
2016       2015   Change   2016       2015   Change  
Total revenues $ 1,151,587 692,652 66.3 % $ 1,890,965 1,354,808 39.6 %
Less reimbursable items 66,137 70,568 (6.3 ) 133,871 136,940 (2.2 )
Less interchange & assessments expense 290,513       - na 290,513       - na
Net revenue $ 794,937       622,084 27.8 % $ 1,466,581       1,217,868 20.4 %
 
na = not applicable
 
Reconciliation of GAAP to Non-GAAP
                                       
Adjusted Earnings per Share
(unaudited)
(in thousands, except per share data)
             
Three Months Ended June 30,   Six Months Ended June 30,  
Percent Percent

 

2016   2015   Change   2016   2015   Change

Income from continuing operations attributable to TSYS common shareholders

$ 69,708 82,839 (15.9 ) % $ 160,336 160,594 (0.2 ) %
Adjust for amounts attributable to TSYS common shareholders:
Add: Acquisition intangible amortization $ 58,210 22,576 nm 80,855 46,167 75.1
Add: Share-based compensation 12,557 12,024 4.4 20,707 20,167 2.7
Add: TransFirst M&A expenses* 20,676 - na 33,859 - na
Less: Tax impact of adjustments** (25,735 )   (11,484 ) nm (39,631 )   (22,016 ) (80.0 )
Adjusted earnings $ 135,416     105,955   27.8 % $ 256,126     204,912   25.0 %
 
Basic EPS - Income from continuing operations attributable to TSYS common shareholders
 
As reported (GAAP) $ 0.38     0.45   (15.8 ) % $ 0.87     0.87   0.2 %
 
Adjusted EPS $ 0.74     0.58   27.9 % $ 1.40     1.11   25.5 %
 
Weighted average shares outstanding 183,724     183,829   183,489     184,153  
 

* Costs associated with the TransFirst acquisition and integration which are included in selling, general and administrative expenses and nonoperating 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
2016   2015   Change 2016   2015   Change
Net income $ 71,748 83,375 (13.9 ) % $ 164,156 162,274 1.2 %
Adjust for:
Deduct: Equity in income of equity investments (6,278 ) (4,579 ) (37.1 ) (12,868 ) (9,973 ) (29.0 )
Add: Income taxes 40,290 41,597 (3.1 ) 83,719 81,379 2.9
Add: Nonoperating expense 30,061 10,209 nm 52,501 19,418 nm
Add: Depreciation and amortization 104,969     63,905   64.3 172,552     126,720   36.2
EBITDA $ 240,790 194,507 23.8 % $ 460,060 379,818 21.1 %
Adjust for:
Add: Share-based compensation 12,566 12,030 4.5 20,724 20,173 2.7
Add: TransFirst M&A expenses* 20,676     -   na 24,078     -   na
Adjusted EBITDA $ 274,032     206,537   32.7 % $ 504,862     399,991   26.2 %
 

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

nm = not meaningful
na = not applicable
Reconciliation of GAAP to Non-GAAP
                                     
Segment Operating Margin and Consolidated Adjusted Operating Margin
(unaudited)
(in thousands)
             
Three Months Ended June 30, 2016 Three Months Ended June 30, 2015
Adjusted Segment Adjusted Adjusted Segment Adjusted
Operating Income   Net Revenue     Operating Margin Operating Income   Net Revenue   Operating Margin
North America Services $ 112,737 297,168 37.94 % $ 108,385 287,199 37.74 %
International Services 15,751 81,771 19.26 13,353 83,857 15.92
Merchant Services 89,915 261,467 34.39 40,690 117,868 34.52
NetSpend 42,481 162,620 26.12 36,442 141,621 25.73
Intersegment - (8,089 ) - (8,461 )
Corporate admin and other (33,335 )     (33,386 )    
Subtotal $ 227,549 794,937 28.62 % $ 165,484 622,084 26.60 %
Acquisition intangible amortization (58,486 ) (22,852 )
TransFirst M&A expenses* (20,676 ) -
Share-based compensation (12,566 )     (12,030 )    
Operating income and margin** $ 135,821 794,937 17.09 % $ 130,602 622,084 20.99 %
Reimbursable items 66,137 70,568
Interchange and assessments     290,513       -  
Operating income and margin (US GAAP)
$ 135,821     1,151,587   11.79 % $ 130,602     692,652   18.86 %
 
Six Months Ended June 30, 2016 Six Months Ended June 30, 2015
Adjusted Segment Adjusted Adjusted Segment Adjusted
Operating Income   Net Revenue     Operating Margin Operating Income   Net Revenue   Operating Margin
North America Services $ 237,525 600,809 39.53 % $ 210,956 553,418 38.12 %
International Services 26,040 157,125 16.57 20,336 157,587 12.90
Merchant Services 128,272 382,079 33.57 74,805 228,266 32.77
NetSpend 84,682 347,613 24.36 71,909 296,695 24.24
Intersegment - (21,045 ) - (18,098 )
Corporate admin and other (62,802 )     (58,017 )    
Subtotal $ 413,717 1,466,581 28.21 % $ 319,989 1,217,868 26.27 %
Acquisition intangible amortization (81,407 ) (46,718 )
TransFirst M&A expenses* (24,078 ) -
Share-based compensation (20,724 )     (20,173 )    
Operating income and margin** $ 287,508 1,466,581 19.60 % $ 253,098 1,217,868 20.78 %
Reimbursable items 133,871 136,940
Interchange and assessments     290,513       -  
Operating income and margin (US GAAP)
$ 287,508     1,890,965   15.20 % $ 253,098     1,354,808   18.68 %
 

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

** Operating margin on net revenue.

Contacts

TSYS Investor Relations
Shawn Roberts, +1-706-644-6081
shawnroberts@tsys.com

Release Summary

TSYS (NYSE: TSS) today reported results for the second quarter of 2016.

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Contacts

TSYS Investor Relations
Shawn Roberts, +1-706-644-6081
shawnroberts@tsys.com