Company Website:
http://www.tsys.com
COLUMBUS, Ga. -- (Business Wire)
TSYS (NYSE: TSS) today reported results for the third quarter of 2018.
“We were very pleased to continue our momentum and performance for the
third quarter as all three of our segments delivered exceptional
results. This performance enables us to again raise our guidance for the
year while continuing to invest for the long term,” said M. Troy Woods,
chairman, president and chief executive officer of TSYS.
Highlights for the third quarter of 2018 vs. 2017:
-
Total revenues were $1,015.4 million, a decrease of 18.6%. The
decrease is the result of adopting ASC 606.(1)
-
Net revenue (non-GAAP), which excludes reimbursable items, interchange
and payment network fees, was $964.6 million, an increase of 13.1%.
-
Net income attributable to TSYS common shareholders was $156.0
million, an increase of 26.7%. Diluted EPS were $0.85, an increase of
28.0%.
-
Adjusted earnings (non-GAAP) were $212.4 million, an increase of
30.6%. Adjusted diluted EPS (non-GAAP) were $1.16, an increase of
32.0%.
-
Adjusted EBITDA (non-GAAP) was $348.5 million, an increase of 12.6%.
(1)
|
|
On January 1, 2018, TSYS adopted Accounting Standards Codification
(ASC) 606 “Revenue from Contracts with Customers” using the
modified retrospective transition method. 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 are presented “net” of the amounts paid
to them, as opposed to the “gross” presentation for certain of
these fees in 2017.
|
|
Revised 2018 Outlook |
TSYS’ revised 2018 guidance is as follows:
|
|
|
|
|
|
|
Revised 2018
Financial Outlook
Range(1)(2) |
|
|
Percent
Change
|
(in millions, except per share amounts) | | | | | |
| |
| |
|
| |
| |
| |
Revenue: | | | | | | | | | | | | | | | | |
Total revenues (GAAP)
| | | | |
$
|
3,990
| | |
to
| |
$
|
4,040
| | | |
(19
|
%)
| |
to
| |
(18
|
%)
|
Net revenue (non-GAAP)
| | | | |
$
|
3,790
| | |
to
| |
$
|
3,840
| | | |
11
|
%
| |
to
| |
13
|
%
|
| | | | | | | | | | | | | | | |
|
Earnings per share: | | | | | | | | | | | | | | | | |
Diluted EPS (GAAP)
| | | | |
$
|
3.09
| | |
to
| |
$
|
3.15
| | | |
(2
|
%)
| |
to
| |
0
|
%
|
Adjusted diluted EPS attributable to TSYS common shareholders
(non-GAAP)
| | | | |
$
|
4.41
| | |
to
| |
$
|
4.47
| | | |
31
|
%
| |
to
| |
33
|
%
|
Weighted average diluted shares outstanding
| | | | |
184
| | | | | | | |
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
|
(2) The estimated impact of the adoption of ASC 606(1) on TSYS’
revised 2018 Outlook is as follows:
|
| | | | | | | | | | | | | | | |
|
Total revenues
| | | | | |
($1,700
|
)
| |
to
| | |
($1,675
|
)
| | | | | | | |
Net revenue
| | | | | |
($69
|
)
| |
to
| | |
($62
|
)
| | | | | | | |
Diluted EPS
| | | | | |
($0.04
|
)
| |
to
| | |
($0.03
|
)
| | | | | | | |
Adjusted diluted EPS
| | | | | |
($0.04
|
)
| |
to
| | |
($0.03
|
)
| | | | | | | |
| | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
|
Conference Call
TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday,
October 23. The conference call can be accessed via live webcast 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 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 — for issuers, merchants and consumers. We succeed because we
put people and their needs at the heart of every decision to help them
unlock payment opportunities. It’s an approach we call People-Centered
Payments®.
Our headquarters are located in Columbus, Ga., U.S.A., with
approximately 13,000 team members and local offices across 13 countries.
TSYS generated revenue of $4.9 billion in 2017, while processing more
than 27.8 billion transactions. We are a member of The Civic 50 and were
named one of the 2018 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’ revised earnings guidance for 2018
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 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;
conversions of clients’ portfolios do not occur 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 potential for our systems and software
to contain undetected errors, viruses or defects; 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
| | | |
Nine Months Ended
|
| | | | |
September 30,
| | | |
September 30,
|
| | | | | | | | | | |
Percent
| | | | | | | | | |
Percent
|
| | | | |
2018
| | |
2017
| | |
Change
| | | |
2018
| | |
2017
| | |
Change
|
| | | | | | | | | | | | | | | | | | | | |
|
Total revenues
| | | |
$
|
1,015,371
| | | |
1,247,576
| | | |
(18.6
|
)%
| | |
$
|
3,010,121
| | | |
3,654,676
| | | |
(17.6
|
)%
|
| | | | | | | | | | | | | | | | | | | | |
|
Cost of services
| | | | |
624,363
| | | |
898,471
| | | |
(30.5
|
)
| | | |
1,855,546
| | | |
2,638,214
| | | |
(29.7
|
)
|
Selling, general and administrative expenses
| | | | |
175,025
|
| | |
149,413
|
| | |
17.1
| | | | |
541,623
|
| | |
456,339
|
| | |
18.7
| |
Total expenses
| | | | |
799,388
|
| | |
1,047,884
|
| | |
(23.7
|
)
| | | |
2,397,169
|
| | |
3,094,553
|
| | |
(22.5
|
)
|
| | | | | | | | | | | | | | | | | | | | |
|
Operating income
| | | | |
215,983
| | | |
199,692
| | | |
8.2
| | | | |
612,952
| | | |
560,123
| | | |
9.4
| |
| | | | | | | | | | | | | | | | | | | | |
|
Nonoperating expenses
| | | | |
(41,294
|
)
| | |
(28,835
|
)
| | |
(43.2
|
)
| | | |
(120,106
|
)
| | |
(88,780
|
)
| | |
(35.3
|
)
|
| | | | | | | | | | | | | | | | | | | | |
|
Income before income taxes and equity in income of equity
investments
| | | | |
174,689
| | | |
170,857
| | | |
2.2
| | | | |
492,846
| | | |
471,343
| | | |
4.6
| |
Income tax expense
| | | | |
31,112
|
| | |
54,628
|
| | |
(43.0
|
)
| | | |
86,662
|
| | |
153,917
|
| | |
(43.7
|
)
|
Income before equity in income of equity investments
| | | | |
143,577
| | | |
116,229
| | | |
23.5
| | | | |
406,184
| | | |
317,426
| | | |
28.0
| |
Equity in income of equity investments, net of tax
| | | | |
12,383
|
| | |
8,497
|
| | |
45.7
| | | | |
35,313
|
| | |
30,919
|
| | |
14.2
| |
Net income
| | | | |
155,960
| | | |
124,726
| | | |
25.0
| | | | |
441,497
| | | |
348,345
| | | |
26.7
| |
Net income attributable to noncontrolling interests
| | | | |
-
|
| | |
(1,631
|
)
| | |
100.0
| | | | |
(1,261
|
)
| | |
(4,368
|
)
| | |
71.1
| |
| | | | | | | | | | | | | | | | | | | | |
|
Net income attributable to TSYS common shareholders
| | | |
$
|
155,960
|
| | |
123,095
|
| | |
26.7
|
%
| | |
$
|
440,236
|
| | |
343,977
|
| | |
28.0
|
%
|
| | | | | | | | | | | | | | | | | | | | |
|
Earnings per share (EPS):
| | | | | | | | | | | | | | | | | | | | | |
Basic EPS
| | | |
$
|
0.85
|
| | |
0.67
|
| | |
28.0
|
%
| | |
$
|
2.42
|
| | |
1.87
|
| | |
29.4
|
%
|
| | | | | | | | | | | | | | | | | | | | |
|
Diluted EPS
| | | |
$
|
0.85
|
| | |
0.66
|
| | |
28.0
|
%
| | |
$
|
2.40
|
| | |
1.85
|
| | |
29.3
|
%
|
| | | | | | | | | | | | | | | | | | | | |
|
Weighted average shares outstanding:
| | | | | | | | | | | | | | | | | | | | | |
(includes participating securities)
| | | | | | | | | | | | | | | | | | | | | |
Basic
| | | | |
182,428
|
| | |
184,272
|
| | | | | | |
182,140
|
| | |
184,107
|
| | | |
Diluted
| | | | |
183,846
|
| | |
185,809
|
| | | | | | |
183,601
|
| | |
185,472
|
| | | |
| | | | | | | | | | | | | | | | | | | | |
|
Dividends declared per share
| | | |
$
|
0.13
|
| | |
0.13
|
| | |
-
|
%
| | |
$
|
0.39
|
| | |
0.33
|
| | |
18.2
|
%
|
| | | | | | | | | | | | | | | | | | | | |
|
Non-GAAP measures:* | | | | | | | | | | | | | | | | | | | | | |
Net revenue
| | | |
$
|
964,594
|
| | |
852,759
|
| | |
13.1
|
%
| | |
$
|
2,856,639
|
| | |
2,529,719
|
| | |
12.9
|
%
|
| | | | | | | | | | | | | | | | | | | | |
|
Adjusted EBITDA
| | | |
$
|
348,488
|
| | |
309,461
|
| | |
12.6
|
%
| | |
$
|
1,024,431
|
| | |
904,396
|
| | |
13.3
|
%
|
| | | | | | | | | | | | | | | | | | | | |
|
Adjusted earnings
| | | |
$
|
212,412
|
| | |
162,667
|
| | |
30.6
|
%
| | |
$
|
623,795
|
| | |
473,148
|
| | |
31.8
|
%
|
| | | | | | | | | | | | | | | | | | | | |
|
Adjusted diluted EPS
| | | |
$
|
1.16
|
| | |
0.88
|
| | |
32.0
|
%
| | |
$
|
3.40
|
| | |
2.55
|
| | |
33.2
|
%
|
| | | | | | | | | | | | | | | | | | | | |
|
* See reconciliation of non-GAAP measures.
|
|
|
|
|
|
|
|
TSYS
|
Segment Breakdown
|
(unaudited)
|
(in thousands) |
|
|
|
| | |
|
| |
|
| |
|
| |
|
| | |
|
| |
|
| |
|
| |
| | | | |
Three Months Ended September 30,
| | | |
Nine Months Ended September 30,
|
| | | | | | | | | | |
Change
| | | | | | | | | |
Change
|
| | | | |
2018
|
|
|
2017
|
|
|
$
|
|
|
%
| | | |
2018
|
|
|
2017
|
|
|
$
|
|
|
%
|
Adjusted operating income by segment:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Issuer Solutions (a)
| | | |
$
|
154,107
| | | |
147,758
| | | |
6,349
| | | |
4.3
|
%
| | |
$
|
456,588
| | | |
428,909
| | | |
27,679
| | | |
6.5
|
%
|
Merchant Solutions (b)
| | | | |
125,153
| | | |
103,275
| | | |
21,878
| | | |
21.2
| | | | |
359,983
| | | |
296,551
| | | |
63,432
| | | |
21.4
| |
Consumer Solutions (c)
| | | | |
49,503
| | | |
48,560
| | | |
943
| | | |
1.9
| | | | |
149,089
| | | |
143,251
| | | |
5,838
| | | |
4.1
| |
Corporate admin and other
| | | | |
(39,911
|
)
| | |
(39,560
|
)
| | |
(351
|
)
| | |
(0.9
|
)
| | | |
(117,477
|
)
| | |
(111,170
|
)
| | |
(6,307
|
)
| | |
(5.7
|
)
|
Adjusted segment operating income (d)
| | | | |
288,852
| | | |
260,033
| | | |
28,819
| | | |
11.1
| | | | |
848,183
| | | |
757,541
| | | |
90,642
| | | |
12.0
| |
Less:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Share-based compensation
| | | | |
12,392
| | | |
8,407
| | | |
3,985
| | | |
47.4
| | | | |
32,916
| | | |
28,462
| | | |
4,454
| | | |
15.6
| |
Cayan and TransFirst M&A and integration expenses
| | | | |
2,887
| | | |
1,052
| | | |
1,835
| | | |
nm
| | | |
19,836
| | | |
10,086
| | | |
9,750
| | | |
96.7
| |
Litigation, claims, judgments or settlements
| | | | |
-
| | | |
26
| | | |
(26
|
)
| | |
(100.0
|
)
| | | |
-
| | | |
1,904
| | | |
(1,904
|
)
| | |
(100.0
|
)
|
Acquisition intangible amortization
| | | | |
57,590
|
|
|
|
50,856
|
|
|
|
6,734
|
| | |
13.2
| | | | |
182,479
|
|
|
|
156,966
|
|
|
|
25,513
|
| | |
16.3
| |
Operating income
| | | | |
215,983
| | | |
199,692
| | | |
16,291
| | | |
8.2
| | | | |
612,952
| | | |
560,123
| | | |
52,829
| | | |
9.4
| |
Nonoperating expenses
| | | | |
(41,294
|
)
|
|
|
(28,835
|
)
|
|
|
(12,459
|
)
| | |
(43.2
|
)
| | | |
(120,106
|
)
|
|
|
(88,780
|
)
|
|
|
(31,326
|
)
| | |
(35.3
|
)
|
Income before income taxes and equity in income of equity
investments
| | | |
$
|
174,689
|
|
|
|
170,857
|
|
|
|
3,832
|
| | |
2.2
|
%
| | |
$
|
492,846
|
|
|
|
471,343
|
|
|
|
21,503
|
| | |
4.6
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Net revenue by segment:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Issuer Solutions (e)
| | | |
$
|
434,332
| | | |
401,074
| | | |
33,258
| | | |
8.3
|
%
| | |
$
|
1,278,921
| | | |
1,181,090
| | | |
97,831
| | | |
8.3
|
%
|
Merchant Solutions (f)
| | | | |
346,309
| | | |
281,819
| | | |
64,490
| | | |
22.9
| | | | |
1,010,101
| | | |
820,968
| | | |
189,133
| | | |
23.0
| |
Consumer Solutions (g)
| | | | |
195,810
|
|
|
|
179,918
|
|
|
|
15,892
|
| | |
8.8
| | | | |
606,591
|
|
|
|
560,448
|
|
|
|
46,143
|
| | |
8.2
| |
Segment net revenue
| | | | |
976,451
| | | |
862,811
| | | |
113,640
| | | |
13.2
| | | | |
2,895,613
| | | |
2,562,506
| | | |
333,107
| | | |
13.0
| |
Less: Intersegment revenues
| | | | |
11,857
|
|
|
|
10,052
|
|
|
|
1,805
|
| | |
18.0
| | | | |
38,974
|
|
|
|
32,787
|
|
|
|
6,187
|
| | |
18.9
| |
Net revenue (h)
| | | | |
964,594
| | | |
852,759
| | | |
111,835
| | | |
13.1
| | | | |
2,856,639
| | | |
2,529,719
| | | |
326,920
| | | |
12.9
| |
Add: reimbursable items, interchange and payment network fees
| | | | |
50,777
|
|
|
|
394,817
|
|
|
|
(344,040
|
)
| | |
(87.1
|
)
| | | |
153,482
|
|
|
|
1,124,957
|
|
|
|
(971,475
|
)
| | |
(86.4
|
)
|
Total revenues
| | | |
$
|
1,015,371
|
|
|
|
1,247,576
|
|
|
|
(232,205
|
)
| | |
(18.6
|
)%
| | |
$
|
3,010,121
|
|
|
|
3,654,676
|
|
|
|
(644,555
|
)
| | |
(17.6
|
)%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Adjusted segment operating margin on segment net revenue:
| | | | | | | | | | | | | | | | | | | | | |
Issuer Solutions (a)/(e)
| | | | |
35.5
|
%
|
|
|
36.8
|
%
| | | | | | | | | |
35.7
|
%
|
|
|
36.3
|
%
| | | | | | |
Merchant Solutions (b)/(f)
| | | | |
36.1
|
%
|
|
|
36.6
|
%
| | | | | | | | | |
35.6
|
%
|
|
|
36.1
|
%
| | | | | | |
Consumer Solutions (c)/(g)
| | | | |
25.3
|
%
|
|
|
27.0
|
%
| | | | | | | | | |
24.6
|
%
|
|
|
25.6
|
%
| | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Adjusted segment operating margin on net revenue (d)/(h)
| | | | |
29.9
|
%
|
|
|
30.5
|
%
| | | | | | | | | |
29.7
|
%
|
|
|
29.9
|
%
| | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
nm = not meaningful
|
|
|
|
|
|
|
TSYS
|
Segment Breakdown
|
(unaudited)
|
(in thousands) |
|
|
|
| | |
|
| |
|
| |
|
| |
|
| | |
|
| |
|
| |
|
| |
| | | | |
Three Months Ended September 30,
| | | |
Nine Months Ended September 30,
|
| | | | | | | | | | |
Change
| | | | | | | | | |
Change
|
| | | | |
2018
|
|
|
2017
|
|
|
$
|
|
|
%
| | | |
2018
|
|
|
2017
|
|
|
$
|
|
|
%
|
Depreciation and amortization by segment:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Issuer Solutions
| | | |
$
|
30,411
| | |
36,699
| | |
(6,288
|
)
| | |
(17.1
|
)%
| | |
$
|
88,382
| | | |
109,287
| | | |
(20,905
|
)
| | |
(19.1
|
)%
|
Merchant Solutions
| | | | |
8,014
| | |
7,588
| | |
426
| | | |
5.6
| | | | |
23,362
| | | |
21,990
| | | |
1,372
| | | |
6.2
| |
Consumer Solutions
| | | | |
4,303
|
|
|
3,785
|
|
|
518
|
| | |
13.7
| | | | |
12,875
|
|
|
|
12,057
|
|
|
|
818
|
| | |
6.8
| |
Depreciation and amortization
| | | | |
42,728
| | |
48,072
| | |
(5,344
|
)
| | |
(11.1
|
)
| | | |
124,619
| | | |
143,334
| | | |
(18,715
|
)
| | |
(13.1
|
)
|
Acquisition intangible amortization
| | | | |
57,590
| | |
50,856
| | |
6,734
| | | |
13.2
| | | | |
182,479
| | | |
156,966
| | | |
25,513
| | | |
16.3
| |
Corporate admin and other
| | | | |
1,014
|
|
|
1,356
|
|
|
(342
|
)
| | |
(25.2
|
)
| | | |
2,912
|
|
|
|
3,521
|
|
|
|
(609
|
)
| | |
(17.3
|
)
|
Total depreciation and amortization*
| | | |
$
|
101,332
|
|
|
100,284
|
|
|
1,048
|
| | |
1.0
|
%
| | |
$
|
310,010
|
|
|
|
303,821
|
|
|
|
6,189
|
| | |
2.0
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
*Client incentive/contract asset amortization and contract cost
asset amortization are no longer included in depreciation and
amortization due to the adoption of ASC 606 on January 1, 2018
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Segment statistical data: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Issuer Solutions | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total transactions (in millions) | | | | |
6,154.7
| | |
5,494.9
| | |
659.8
| | | |
12.0
|
%
| | | |
17,752.7
| | | |
15,712.1
| | | |
2,040.6
| | | |
13.0
|
%
|
Total Accounts on file (AOF) (in millions) | | | | | | | | | | | | | | | | | |
823.7
| | | |
797.3
| | | |
26.4
| | | |
3.3
|
%
|
Total Traditional AOF (in millions) | | | | | | | | | | | | | | | | | |
594.4
| | | |
562.1
| | | |
32.3
| | | |
5.8
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Merchant Solutions | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Point-of-sale transactions (in millions) | | | | |
1,533.9
| | |
1,260.9
| | |
273.0
| | | |
21.7
|
%
| | | |
4,371.9
| | | |
3,622.2
| | | |
749.7
| | | |
20.7
|
%
|
Dollar sales volume (in millions) | | | |
$
|
40,910.2
| | |
31,478.2
| | |
9,432.0
| | | |
30.0
|
%
| | |
$
|
118,539.0
| | | |
91,726.1
| | | |
26,812.9
| | | |
29.2
|
%
|
Segment net revenue per transaction
| | | |
$
|
0.226
| | |
0.223
| | |
0.002
| | | |
1.0
|
%
| | |
$
|
0.231
| | | |
0.227
| | | |
0.004
| | | |
1.9
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Consumer Solutions | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gross dollar volume (in millions) | | | |
$
|
8,053.2
| | |
7,242.3
| | |
810.9
| | | |
11.2
|
%
| | |
$
|
26,083.7
| | | |
24,455.1
| | | |
1,628.6
| | | |
6.7
|
%
|
Direct deposit 90-day active cards (in thousands) | | | | | | | | | | | | | | |
2,503.7
| | | |
2,315.3
| | | |
188.4
| | | |
8.1
|
%
|
90-day active cards (in thousands) | | | | | | | | | | | | | | | | | |
4,948.3
| | | |
4,697.2
| | | |
251.1
| | | |
5.3
|
%
|
% of 90-day active cards with direct deposit
| | | | | | | | | | | | | | | | | |
50.6
|
%
| | |
49.3
|
%
| | | | | | |
|
|
|
|
|
|
TSYS
|
Condensed Balance Sheet
|
(unaudited)
|
(in thousands) |
|
|
|
| | |
|
| |
| | | | |
September 30, 2018
| | |
December 31, 2017
|
Assets | | | | | | | | |
Current assets:
| | | | | | | | |
Cash and cash equivalents
| | | |
$
|
484,581
| | |
450,357
|
Accounts receivable, net
| | | | |
485,722
| | |
412,322
|
Contract assets
| | | | |
32,604
| | |
-
|
Other current assets
| | | | |
197,010
| | |
216,565
|
Total current assets
| | | | |
1,199,917
| | |
1,079,244
|
Goodwill
| | | | |
4,113,669
| | |
3,264,071
|
Software and other intangible assets, net
| | | | |
1,296,431
| | |
1,110,861
|
Property and equipment, net
| | | | |
372,900
| | |
325,218
|
Contract assets - long-term
| | | | |
49,956
| | |
-
|
Contract cost assets - long-term
| | | | |
147,732
| | |
258,665
|
Other long term assets
| | | | |
292,439
| | |
293,630
|
Total assets
| | | |
$
|
7,473,044
| | |
6,331,689
|
| | | | | | | |
|
Liabilities | | | | | | | | |
Current liabilities:
| | | | | | | | |
Accounts payable
| | | |
$
|
59,770
| | |
62,310
|
Current portion of long-term borrowings, capital leases and
license agreements
| | | | |
21,171
| | |
565,812
|
Contract liabilities
| | | | |
50,673
| | |
52,913
|
Other current liabilities
| | | | |
335,557
| | |
308,057
|
Total current liabilities
| | | | |
467,171
| | |
989,092
|
Long-term borrowings, capital leases and license agreements,
excluding current portion
| | | | |
3,874,815
| | |
2,628,002
|
Deferred income tax liabilities
| | | | |
394,119
| | |
238,317
|
Contract liabilities - long-term
| | | | |
21,730
| | |
48,526
|
Other long-term liabilities
| | | | |
75,027
| | |
71,070
|
Total liabilities
| | | | |
4,832,862
| | |
3,975,007
|
Redeemable noncontrolling interest | | | | |
-
| | |
115,689
|
Equity | | | | |
2,640,182
| | |
2,240,993
|
Total liabilities and equity
| | | |
$
|
7,473,044
| | |
6,331,689
|
|
|
|
|
|
|
TSYS
|
Selected Cash Flow Highlights
|
(unaudited)
|
(in thousands) |
|
|
| | |
| |
| | | |
Nine Months Ended September 30,
|
| | | |
2018
| |
2017
|
Cash flows from operating activities: | | | | | | |
Net income
| | |
$
|
441,497
| | |
348,345
| |
Adjustments to reconcile net income to net cash provided by
operating activities:
| | | | | | |
Equity in income of equity investments, net of tax
| | | |
(35,313
|
)
| |
(30,919
|
)
|
Dividends received from equity investments
| | | |
24,921
| | |
20,589
| |
Depreciation and amortization
| | | |
310,010
| | |
303,821
| |
Amortization of debt issuance costs
| | | |
3,668
| | |
3,247
| |
Share-based compensation
| | | |
32,916
| | |
28,462
| |
Deferred income tax expense (benefit)
| | | |
21,173
| | |
(46,435
|
)
|
Other noncash adjustments
| | | |
63,541
| | |
55,764
| |
Changes in operating assets and liabilities
| | | |
(109,905
|
)
| |
(23,446
|
)
|
Net cash provided by operating activities | | | |
752,508
|
| |
659,428
|
|
| | | | | |
|
Purchases of property and equipment
| | | |
(77,841
|
)
| |
(42,572
|
)
|
Additions to licensed computer software from vendors
| | | |
(32,496
|
)
| |
(23,114
|
)
|
Additions to internally developed computer software
| | | |
(29,692
|
)
| |
(22,011
|
)
|
Additions to contract acquisition costs
| | | |
-
| | |
(21,662
|
)
|
Cash used in acquisitions, net of cash acquired
| | | |
(1,051,629
|
)
| |
-
| |
Other investing activities
| | | |
(5,670
|
)
| |
(1,436
|
)
|
Net cash used in investing activities | | | |
(1,197,328
|
)
| |
(110,795
|
)
|
| | | | | |
|
Principal payments on long-term borrowings, capital lease
obligations and license agreements
| | | |
(2,807,187
|
)
| |
(415,788
|
)
|
Proceeds from long-term borrowings
| | | |
3,477,000
| | |
-
| |
Debt issuance costs
| | | |
(16,004
|
)
| |
-
| |
Purchase of noncontrolling interests
| | | |
(126,000
|
)
| |
(70,000
|
)
|
Dividends paid on common stock
| | | |
(70,897
|
)
| |
(55,151
|
)
|
Proceeds from exercise of stock options
| | | |
31,024
| | |
15,499
| |
Repurchase of common stock
| | | |
(443
|
)
| |
(27,895
|
)
|
Other financing activities
| | | |
(3,778
|
)
| |
(5,216
|
)
|
Net cash provided by (used in) financing activities | | | |
483,715
|
| |
(558,551
|
)
|
| | | | | |
|
Cash, cash equivalents and restricted cash: | | | | | | |
Effect of exchange rate changes on cash, cash equivalents and
restricted cash
| | | |
(3,639
|
)
| |
5,589
|
|
Net increase in cash, cash equivalents and restricted cash
| | | |
35,256
| | |
(4,329
|
)
|
Cash, cash equivalents and restricted cash at beginning of period
| | | |
451,370
|
| |
425,810
|
|
Cash, cash equivalents and restricted cash at end of period
| | |
$
|
486,626
|
| |
421,481
|
|
| | | | | |
|
Supplemental | | | | | | |
Capital expenditures
| | |
$
|
140,029
|
| |
109,359
|
|
Free cash flow (non-GAAP)*
| | |
$
|
612,479
|
| |
550,069
|
|
| | | | | |
|
* See reconciliation of non-GAAP measures.
|
Certain prior year amounts have changed due to the adoption of ASU
2016-18 "Statement of Cash Flows (Topic 230): Restricted
Cash," which requires that a statement of cash flows explain the
change in the total of cash, cash equivalents, and amounts generally
described as restricted cash or restricted cash equivalents.
|
|
|
|
|
|
|
TSYS
|
Supplemental Information
|
(unaudited)
|
| |
|
|
|
|
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
|
| | | | | | | | | | | | | |
|
| | | | | | | | | | | | | |
|
Other | | | | | | | | | | | | | |
AOF: | | | | | | |
Total Accounts on File
|
(in millions) | | | | | | |
At
September 2018
|
|
|
At
September 2017
|
|
|
%
Change
|
Consumer
| | | | | | |
499.3
| | | |
474.7
| | | |
5.2
| |
Commercial
| | | | | | |
55.6
| | | |
52.8
| | | |
5.3
| |
Other
| | | | | | |
39.5
|
|
|
|
34.6
|
| | |
14.3
| |
Traditional AOF
| | | | | | |
594.4
| | | |
562.1
| | | |
5.8
| |
Prepaid*/Stored Value
| | | | | | |
17.1
| | | |
50.6
| | | |
(66.3
|
)
|
Government Services
| | | | | | |
98.0
| | | |
92.1
| | | |
6.4
| |
Commercial Card Single Use
| | | | | | |
114.2
|
|
|
|
92.5
|
| | |
23.4
| |
Total AOF
| | | | | | |
823.7
|
|
|
|
797.3
|
| | |
3.3
| |
* Prepaid does not include Netspend accounts. |
| | | | | | | | | | | | | |
|
Growth in Accounts on File (in
millions): | | | | | | | | | | | | | |
| | | | | | |
| | |
|
| | | | | | |
September 2017 to
September 2018
|
|
|
September 2016 to
September 2017
| | | |
Beginning balance
| | | | | | |
797.3
| | | |
738.8
| | | | |
Change in accounts on file due to:
| | | | | | | | | | | | | |
|
Internal growth of existing clients
| | | | | | |
54.1
| | | |
53.2
| | | | |
|
New clients
| | | | | | |
32.3
| | | |
29.5
| | | | |
|
Purges/Sales
| | | | | | |
(39.3
|
)
| | |
(23.6
|
)
| | | |
|
Deconversions
| | | | | | |
(20.7
|
)
|
|
|
(0.6
|
)
| | | |
Ending balance
| | | | | | |
823.7
|
|
|
|
797.3
|
| | | |
|
|
|
|
|
|
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 third quarter
2018 and year-to-date financial results using the previous year’s
foreign currency exchange rates. On a constant currency basis, TSYS’
total year-to-date revenues for the third quarter of 2018 were lower
18.0% as compared to a reported GAAP decrease of 17.6%.
|
| |
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 revised
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 September 30,
| | | |
Nine Months Ended September 30,
|
| | | | | | | | | | | | |
Percent
| | | | | | | | | |
Percent
|
| | | | | | |
2018
|
|
|
2017
|
|
|
Change
| | | |
2018
|
|
|
2017
|
|
|
Change
|
Consolidated | | | | | | | | | | | | | | | | | | | | | | |
Constant currency (1)
| | | |
$
|
1,017,279
| | | |
1,247,576
| | |
(18.5
|
)%
| | |
$
|
2,995,442
| | |
3,654,676
| | |
(18.0
|
)%
|
Foreign currency impact (2)
| | | | |
(1,908
|
)
|
|
|
-
| | | | | | |
14,679
|
|
|
-
| | | |
Total revenues
| | | |
$
|
1,015,371
|
|
|
|
1,247,576
| | |
(18.6
|
)%
| | |
$
|
3,010,121
|
|
|
3,654,676
| | |
(17.6
|
)%
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Constant currency (1)
| | | |
$
|
966,416
| | | |
852,759
| | |
13.3
|
%
| | |
$
|
2,842,948
| | |
2,529,719
| | |
12.4
|
%
|
Foreign currency impact (2)
| | | | |
(1,822
|
)
|
|
|
-
| | | | | | |
13,691
|
|
|
-
| | | |
Net revenue
| | | |
$
|
964,594
|
|
|
|
852,759
| | |
13.1
|
%
| | |
$
|
2,856,639
|
|
|
2,529,719
| | |
12.9
|
%
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Constant currency (1)
| | | |
$
|
215,968
| | | |
199,692
| | |
8.2
|
%
| | |
$
|
607,630
| | |
560,123
| | |
8.5
|
%
|
Foreign currency impact (2)
| | | | |
15
|
|
|
|
-
| | | | | | |
5,322
|
|
|
-
| | | |
Operating income
| | | |
$
|
215,983
|
|
|
|
199,692
| | |
8.2
|
%
| | |
$
|
612,952
|
|
|
560,123
| | |
9.4
|
%
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Issuer Solutions | | | | | | | | | | | | | | | | | | | | | |
Constant currency (1)
| | | |
$
|
436,263
| | | |
401,074
| | |
8.8
|
%
| | |
$
|
1,265,346
| | |
1,181,090
| | |
7.1
|
%
|
Foreign currency impact (2)
| | | | |
(1,931
|
)
|
|
|
-
| | | | | | |
13,575
|
|
|
-
| | | |
Segment net revenue
| | | |
$
|
434,332
|
|
|
|
401,074
| | |
8.3
|
%
| | |
$
|
1,278,921
|
|
|
1,181,090
| | |
8.3
|
%
|
| | | | | | | | | | | | | | | | | | | | | | |
|
(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 September 30,
| | | |
Nine Months Ended September 30,
|
| | | | | | | | | | | | |
Percent
| | | | | | | | | |
Percent
|
| | | | | | |
2018
|
|
|
2017
|
|
|
Change
| | | |
2018
|
|
|
2017
|
|
|
Change
|
Total revenues
| | | |
$
|
1,015,371
| | | |
1,247,576
| | |
(18.6
|
)%
| | |
$
|
3,010,121
| | |
3,654,676
| | |
(17.6
|
)%
|
Less: reimbursable items, interchange and payment network fees
| | | | |
50,777
|
|
|
|
394,817
| | |
(87.1
|
)
| | | |
153,482
|
|
|
1,124,957
| | |
(86.4
|
)
|
Net revenue
| | | |
$
|
964,594
|
|
|
|
852,759
| | |
13.1
|
%
| | |
$
|
2,856,639
|
|
|
2,529,719
| | |
12.9
|
%
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Reconciliation of GAAP to Non-GAAP |
|
Adjusted Diluted Earnings per Share
|
(unaudited)
|
(in thousands, except per share data) |
| |
|
| | |
|
|
| |
Three Months Ended September 30,
|
|
| |
Nine Months Ended September 30,
|
| | | | | | | |
|
| |
|
|
Percent
| | | | |
|
| |
|
|
Percent
|
| | | | | | |
2018
|
|
|
2017
|
|
|
Change
| | | |
2018
|
|
|
2017
|
|
|
Change
|
Net income attributable to | | | | | | | | | | | | | | | | | | | | | | |
TSYS common shareholders (GAAP) | | | |
$
|
155,960
| | | |
123,095
| | | |
26.7
|
%
| | |
$
|
440,236
| | | |
343,977
| | | |
28.0
|
%
|
Adjust for amounts attributable to TSYS common shareholders:
| | | | | | | | | | | | | | | | | | | | | | |
Add: Acquisition intangible amortization
| | | |
$
|
57,555
| | | |
50,704
| | | |
13.5
| | | |
$
|
182,373
| | | |
156,489
| | | |
16.5
| |
Add: Share-based compensation
| | | | |
12,391
| | | |
8,404
| | | |
47.4
| | | | |
32,913
| | | |
28,455
| | | |
15.7
| |
Add: Cayan and TransFirst M&A expenses*
| | | | |
2,887
| | | |
1,052
| | | |
nm
| | | | |
19,836
| | | |
10,025
| | | |
97.9
| |
Add: Litigation, claims, judgments or settlements**
| | | | |
-
| | | |
26
| | | |
(100.0
|
)
| | | |
-
| | | |
1,904
| | | |
(100.0
|
)
|
Less: Tax impact of adjustments***
| | | | |
(16,381
|
)
|
|
|
(20,614
|
)
| | |
20.5
| | | | |
(51,563
|
)
|
|
|
(67,702
|
)
| | |
23.8
| |
Adjusted earnings (non-GAAP)
| | | |
$
|
212,412
|
|
|
|
162,667
|
| | |
30.6
|
%
| | |
$
|
623,795
|
|
|
|
473,148
|
| | |
31.8
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
Diluted EPS - Net income attributable to TSYS common
shareholders | | | | | | | | | | | | | | | | | | | | | | |
As reported (GAAP)
| | | | |
$
|
0.85
|
|
|
|
0.66
|
| | |
28.0
|
%
| | |
$
|
2.40
|
|
|
|
1.85
|
| | |
29.3
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
Adjusted diluted EPS (non-GAAP)
| | | |
$
|
1.16
|
|
|
|
0.88
|
| | |
32.0
|
%
| | |
$
|
3.40
|
|
|
|
2.55
|
| | |
33.2
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
Weighted average diluted shares outstanding
| | | | |
183,846
|
|
|
|
185,809
|
| | | | | | | |
183,601
|
|
|
|
185,472
|
| | | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
* Costs associated with the Cayan and TransFirst acquisitions and
integrations 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 discrete items as a result of the acquisitions.
|
|
nm = not meaningful
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP |
|
Adjusted EBITDA
|
(unaudited)
|
(in thousands) |
| | |
|
|
| | |
|
| |
|
| | |
|
| | |
|
| |
|
| | |
| | | | | | |
Three Months Ended September 30,
| | | |
Nine Months Ended September 30,
|
| | | | | | | | | | | | |
Percent
| | | | | | | | | |
Percent
|
| | | | | | |
2018
|
|
|
2017
|
|
|
Change
| | | |
2018
|
|
|
2017
|
|
|
Change
|
Net income (GAAP) (a) | | | | |
$
|
155,960
| | | |
124,726
| | | |
25.0
|
%
| | |
$
|
441,497
| | | |
348,345
| | | |
26.7
|
%
|
Adjust for:
| | | | | | | | | | | | | | | | | | | | | | | |
Less: Equity in income of equity investments
| | | | |
(12,383
|
)
| | |
(8,497
|
)
| | |
(45.7
|
)
| | | |
(35,313
|
)
| | |
(30,919
|
)
| | |
(14.2
|
)
|
Less: Income tax expense
| | | | | |
31,112
| | | |
54,628
| | | |
(43.0
|
)
| | | |
86,662
| | | |
153,917
| | | |
(43.7
|
)
|
Add: Interest expense, net
| | | | | |
41,093
| | | |
28,501
| | | |
44.2
| | | | |
118,865
| | | |
87,811
| | | |
35.4
| |
Add: Depreciation and amortization*
| | | | |
101,332
| | | |
100,284
| | | |
1.0
| | | | |
310,010
| | | |
303,821
| | | |
2.0
| |
Add: Client incentive/contract asset amortization*
| | | | |
7,303
| | | |
-
| | | |
na
| | | | |
20,888
| | | |
-
| | | |
na
| |
Add: Contract cost asset amortization*
| | | | |
8,592
| | | |
-
| | | |
na
| | | | |
27,830
| | | |
-
| | | |
na
| |
Less: (Gain)/loss on foreign currency translations
| | | | |
(187
|
)
| | |
427
| | | |
nm
| | | | |
(295
|
)
| | |
1,250
| | | |
nm
| |
Less: Other nonoperating (income)/expenses
| | | | |
388
| | | |
(93
|
)
| | |
nm
| | | | |
1,536
| | | |
(281
|
)
| | |
nm
| |
Add: Share-based compensation
| | | | |
12,391
| | | |
8,407
| | | |
47.4
| | | | |
32,915
| | | |
28,462
| | | |
15.6
| |
Add: Cayan and TransFirst M&A expenses**
| | | | |
2,887
| | | |
1,052
| | | |
nm
| | | | |
19,836
| | | |
10,086
| | | |
96.7
| |
Add: Litigation, claims, judgments or settlements
| | | | |
-
|
|
|
|
26
|
| | |
(100.0
|
)
| | | |
-
|
|
|
|
1,904
|
| | |
(100.0
|
)
|
Adjusted EBITDA (non-GAAP) (b) | | | |
$
|
348,488
|
|
|
|
309,461
|
| | |
12.6
|
%
| | |
$
|
1,024,431
|
|
|
|
904,396
|
| | |
13.3
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
Total revenues (c) | | | | |
$
|
1,015,371
|
|
|
|
1,247,576
|
| | | | | | |
$
|
3,010,121
|
|
|
|
3,654,676
|
| | | | |
Net income margin on total revenues (GAAP) (a)/(c)
| | | | |
15.4
|
%
|
|
|
10.0
|
%
| | | | | | | |
14.7
|
%
|
|
|
9.5
|
%
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
|
Net revenue (d) | | | | |
$
|
964,594
|
|
|
|
852,759
|
| | | | | | |
$
|
2,856,639
|
|
|
|
2,529,719
|
| | | | |
Adjusted EBITDA margin on net revenue (non-GAAP) (b)/(d)
| | | | |
36.1
|
%
|
|
|
36.3
|
%
| | | | | | | |
35.9
|
%
|
|
|
35.8
|
%
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
|
* Client incentive/contract asset amortization and contract cost
asset amortization are no longer included in depreciation and
amortization due to the adoption of ASC 606 on January 1, 2018.
|
** Costs associated with the Cayan and TransFirst acquisitions and
integrations 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) |
| |
|
| |
Nine Months Ended
|
| | | |
Free cash flow: | | | |
September 30,
| | | | |
| | | | |
2018
|
|
|
2017
| | | | |
| | | | | | | | | | | |
|
|
Net cash provided by operating activities (GAAP)
| | |
$
|
752,508
| | | |
659,428
| | | | | |
|
Capital expenditures
| | | |
(140,029
|
)
| | |
(109,359
|
)
| | | | |
|
Free cash flow (non-GAAP)
| | |
$
|
612,479
|
| | |
550,069
|
| | | | |
| | | | | | | | | | | |
|
|
Revised Guidance Summary
|
(unaudited)
|
(in millions, except per share data) |
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
Revenue: | | | |
2018(1) | |
% Change
|
| | | | | | | | | | | |
|
|
Total revenues (GAAP)
| | |
$
|
3,990
| |
to
|
$
|
4,040
| | |
(19
|
%)
|
to
|
(18
|
%)
|
|
Less: reimbursable items, interchange and payment network fees
| | | |
200
|
|
to
| |
200
|
| | | | |
|
Net revenue (non-GAAP)
| | |
$
|
3,790
| |
to
|
$
|
3,840
| | |
11
|
%
|
to
|
13
|
%
|
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
Earnings per share (EPS): | | | | | | | | | | | |
| | | | | | | | | | | |
|
|
Diluted EPS (GAAP)
| | |
$
|
3.09
| |
to
|
$
|
3.15
| | |
(2
|
%)
|
to
|
0
|
%
|
|
Acquisition intangible amortization, share-based compensation,
litigation, claims, judgments or settlements and for Cayan and
TransFirst M&A expenses, less the tax impact of adjustments
| | | |
1.32
|
|
to
|
|
1.32
|
| | | | |
|
Adjusted diluted EPS attributable to TSYS common shareholders*
(non-GAAP)
| | |
$
|
4.41
| |
to
|
$
|
4.47
| | |
31
|
%
|
to
|
33
|
%
|
| | | | | | | | | | | |
|
|
* Weighted average diluted shares outstanding
| | | | |
184
| | | | | | |
| | | | | | | | | | | |
|
(1)
|
The estimated impact of the adoption of ASC 606 on TSYS' revised
2018 outlook is as follows: Total revenues ($1,700) to ($1,675), Net
revenue ($69) to ($62), 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.
|
|
|
|
|
|
|
|
|
|
|
TSYS
|
Impact of New Revenue Guidance on Financial Statement Line items
|
(unaudited)
|
(in thousands, except per share data) |
|
|
|
|
| |
Three Months Ended
|
|
|
Nine Months Ended
|
| | | | |
September 30, 2018
| | |
September 30, 2018
|
| | | | | |
|
|
Balances
|
|
|
Effect of
| | | |
|
|
Balances
|
|
|
Effect of
|
| | | | |
As
| | |
Without Adoption
| | |
Change
| | |
As
| | |
Without Adoption
| | |
Change
|
| | | | |
Reported
| | |
of Topic 606
| | |
Higher/(Lower)
| | |
Reported
| | |
of Topic 606
| | |
Higher/(Lower)
|
| | | | | | | | | | | | | | | | | | | |
|
Total revenues
| | | |
$
|
1,015,371
| | |
1,459,182
| | |
(443,811
|
)
| | |
3,010,121
| | |
4,252,569
| | |
(1,242,448
|
)
|
Total expenses
| | | | |
799,388
| | |
1,239,228
| | |
(439,840
|
)
| | |
2,397,169
| | |
3,631,739
| | |
(1,234,570
|
)
|
Operating income
| | | |
$
|
215,983
| | |
219,954
| | |
(3,971
|
)
| | |
612,952
| | |
620,830
| | |
(7,878
|
)
|
Income taxes
| | | |
$
|
31,112
| | |
32,033
| | |
(921
|
)
| | |
86,662
| | |
88,461
| | |
(1,799
|
)
|
Net income
| | | |
$
|
155,960
| | |
159,010
| | |
(3,050
|
)
| | |
441,497
| | |
447,575
| | |
(6,078
|
)
|
Net income attributable to TSYS common shareholders
| | | |
$
|
155,960
| | |
159,010
| | |
(3,050
|
)
| | |
440,236
| | |
446,314
| | |
(6,078
|
)
|
Earnings per share (EPS):
| | | | | | | | | | | | | | | | | | | | |
Basic EPS*
| | | |
$
|
0.85
| | |
0.87
| | |
(0.02
|
)
| | |
2.42
| | |
2.45
| | |
(0.03
|
)
|
Diluted EPS*
| | | |
$
|
0.85
| | |
0.86
| | |
(0.02
|
)
| | |
2.40
| | |
2.43
| | |
(0.03
|
)
|
| | | | | | | | | | | | | | | | | | | |
|
* EPS amounts may not total due to rounding.
|
|
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View source version on businesswire.com: https://www.businesswire.com/news/home/20181023006117/en/
Contacts:
TSYS
Media Relations:
Cyle Mims, 706-644-3110
cylemims@tsys.com
or
Investor
Relations:
Shawn Roberts, 706-644-6081
shawnroberts@tsys.com
Source: TSYS
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