-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EzcHEoh4fE0jC2vFS00BcJcVtDKiWnpE31llunFV+rZv+qBnxT6oYNarJOO7Oi+S zOe6VNReIMXAgCMDPy3b7g== 0000721683-01-500008.txt : 20010427 0000721683-01-500008.hdr.sgml : 20010427 ACCESSION NUMBER: 0000721683-01-500008 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010426 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOTAL SYSTEM SERVICES INC CENTRAL INDEX KEY: 0000721683 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 581493818 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-10254 FILM NUMBER: 1611243 BUSINESS ADDRESS: STREET 1: 1600 FIRST AVENUE STREET 2: P O BOX 1755 CITY: COLUMBUS STATE: GA ZIP: 31901 BUSINESS PHONE: 7066492267 MAIL ADDRESS: STREET 1: 1600 FIRST AVENUE CITY: COLUMBUS STATE: GA ZIP: 31901 10-K/A 1 body.txt 10-K/A FILING SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A Amendment No. 1 (Mark One) [X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended 2000 or ------------- [ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to . --------- ------ Commission file number 1-10254 TOTAL SYSTEM SERVICES, INC. (Exact Name of Registrant as specified in its charter) Georgia 58-1493818 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1600 First Avenue Columbus, Georgia 31901 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (706) 649-2204 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered ------------------- ----------------------------------------- Common Stock, $.10 Par Value New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. YES X NO___________ ----------- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] As of February 15, 2001, 194,761,020 shares of the $.10 par value common stock of Total System Services, Inc. were outstanding, and the aggregate market value of the shares of $.10 par value common stock of Total System Services, Inc. held by non-affiliates was approximately $807,241,000 (based upon the closing per share price of such stock on said date.) Portions of the 2000 Annual Report to Shareholders of Registrant are incorporated in Parts I, II, III and IV of this report. Portions of the Proxy Statement of Registrant dated March 9, 2001 are incorporated in Part III of this report. The undersigned registrant hereby amends Item 14 of its Annual Report on Form 10-K for the year ended December 31, 2000 by adding Exhibit 99.1, the Annual Report on Form 11-K for the Total System Services, Inc. Employee Stock Purchase Plan for the year ended December 31, 2000, and by adding Exhibit 99.2, the Annual Report on Form 11-K for the Total System Services, Inc. Director Stock Purchase Plan for the year ended December 31, 2000, as set forth below and in the attached exhibits. PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a) 1. Financial Statements The following Consolidated Financial Statements of TSYS are specifically incorporated by reference from pages 26 through 41 of TSYS' 2000 Annual Report to Shareholders to Item 8, Part II, Financial Statements and Supplementary Data. Consolidated Balance Sheets - December 31, 2000 and 1999. Consolidated Statements of Income - Years Ended December 31, 2000, 1999 and 1998. Consolidated Statements of Cash Flows - Years Ended December 31, 2000, 1999 and 1998. Consolidated Statements of Shareholders' Equity and Comprehensive Income - Years Ended December 31, 2000, 1999 and 1998. Notes to Consolidated Financial Statements. Report of Independent Auditors. 2. Index to Financial Statement Schedules The following report of independent auditors and consolidated financial statement schedule of Total System Services, Inc. are included: Report of Independent Auditors. Schedule II - Valuation and Qualifying Accounts - Years Ended December 31, 2000, 1999 and 1998. All other schedules are omitted because they are inapplicable or the required information is included in the Notes to Consolidated Financial Statements. 2 3. Exhibits Exhibit Number Description ------- ----------- 3.1 Articles of Incorporation of Total System Services, Inc. ("TSYS"), as amended, incorporated by reference to Exhibit 4.1 of TSYS' Registration Statement on Form S-8 filed with the Commission on April 18, 1997 (File No. 333-25401). 3.2 Bylaws of TSYS, as amended, incorporated by reference to Exhibit 3.2 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1999, as filed with the Commission on March 16, 2000. 10. EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS 10.1 Director Stock Purchase Plan of TSYS, incorporated by reference to Exhibit 10.1 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1999, as filed with the Commission on March 16, 2000. 10.2 Group "Y" Key Executive Restricted Stock Bonus Plan of TSYS, incorporated by reference to Exhibit 10.2 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1992, as filed with the Commission on March 18, 1993. 10.3 1985 Key Employee Restricted Stock Bonus Plan of TSYS, incorporated by reference to Exhibit 10.3 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1992, as filed with the Commission on March 18, 1993. 10.4 1990 Key Employee Restricted Stock Bonus Plan of TSYS, incorporated by reference to Exhibit 10.4 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1992, as filed with the Commission on March 18, 1993. 10.5 Total System Services, Inc. 1992 Long-Term Incentive Plan, which was renamed the Total System Services, Inc. 2000 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.5 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1992, as filed with the Commission on March 18, 1993. 10.6 Excess Benefit Agreement of TSYS, incorporated by reference to Exhibit 10.6 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1992, as filed with the Commission on March 18, 1993. 3 10.7 Wage Continuation Agreement of TSYS, incorporated by reference to Exhibit 10.7 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1992, as filed with the Commission on March 18, 1993. 10.8 Incentive Bonus Plan of Synovus Financial Corp. in which executive officers of TSYS participate, incorporated by reference to Exhibit 10.8 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1992, as filed with the Commission on March 18, 1993. 10.9 Agreement in connection with use of aircraft, incorporated by reference to Exhibit 10.9 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1992, as filed with the Commission on March 18, 1993. 10.10 Split Dollar Insurance Agreement of TSYS, incorporated by reference to Exhibit 10.10 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1993, as filed with the Commission on March 22, 1994. 10.11 Synovus Financial Corp. 1994 Long-Term Incentive Plan in which executive officers of TSYS participate, incorporated by reference to Exhibit 10.11 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1994, as filed with the Commission on March 9, 1995. 10.12 Synovus Financial Corp. Executive Bonus Plan in which executive officers of TSYS participate, incorporated by reference to Exhibit 10.12 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1995, as filed with the Commission on March 19, 1996. 10.13 Change of Control Agreements for executive officers of TSYS, incorporated by reference to Exhibit 10.13 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1995, as filed with the Commission on March 19, 1996. 10.14 Stock Option Agreement of Samuel A. Nunn, incorporated by reference to Exhibit 10.14 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1996, as filed with the Commission on March 20, 1997. 10.15 DotsConnect, Inc. 2000 Long-Term Incentive Plan in which executive officers of TSYS participate. 4 10.16 Vital Processing Services, L.L.C. Restricted Unit Agreement for executive officers of TSYS. 10.17 Lease Agreement between First Security Bank, National Association, and TSYS incorporated by reference to Exhibit 10.15 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1997, as filed with the Commission on March 23, 1998. 10.18 Synovus Financial Corp. 2000 Long-Term Incentive Plan in which executive officers of TSYS participate, incorporated by reference to Exhibit 10.16 of TSYS' Annual Report on Form 10-K for the fiscal year ended December 31, 1999, as filed with the Commission on March 16, 2000. 13.1 Certain specified pages of TSYS' 2000 Annual Report to Shareholders which are specifically incorporated herein by reference. 20.1 Proxy Statement for the Annual Meeting of Shareholders of TSYS to be held on April 19, 2001, certain pages of which are specifically incorporated herein by reference. 21.1 Subsidiaries of Total System Services, Inc. 23.1 Independent Auditors' Consent. 24.1 Powers of Attorney contained on the signature pages of the 2000 Annual Report on Form10-K. 99.1 Annual Report on Form 11-K for the Total System Services, Inc. Employee Stock Purchase Plan for the year ended December 31, 2000. 99.2 Annual Report on Form 11-K for the Total System Services, Inc. Director Stock Purchase Plan for the year ended December 31, 2000. (b) Reports on Form 8-K On October 18, 2000, TSYS filed a Form 8-K with the Commission in connection with the announcement of its earnings for the third quarter of 2000. 5 SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, Total System Services, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TOTAL SYSTEM SERVICES, INC. (Registrant) April 26, 2001 By:/s/James H. Blanchard --------------------------------------------- James H. Blanchard, Chairman of the Executive Committee 6 INDEX TO EXHIBITS Exhibit Number Description - ------- ------------ 23.1 Accountants' Consents 99.1 Annual Report on Form 11-K for the Total System Services, Inc. Employee Stock Purchase Plan for the year ended December 31, 2000. 99.2 Annual Report on Form 11-K for the Total System Services, Inc. Director Stock Purchase Plan for the year ended December 31, 2000. EX-23.1 2 auditconsents.txt ACCOUNTANT'S CONSENTS Independent Auditors' Consent We consent to incorporation by reference in the Registration Statement (No. 2-92497) on Form S-8 of Total System Services, Inc. of our report dated April 13, 2001, relating to the statement of financial condition of the Total System Services, Inc. Employee Stock Purchase Plan as of December 31, 2000 and 1999, and the related statements of operations and changes in plan equity for each of the years in the three-year period ended December 31, 2000, which report appears in the 2000 annual report on Form 11-K of the Total System Services, Inc. Employee Stock Purchase Plan, included as Exhibit 99.1 to the 2000 annual report on Form 10-K/A of Total System Services, Inc. /s/KPMG LLP Atlanta, Georgia April 26, 2001 Independent Auditors' Consent We consent to incorporation by reference in the Registration Statement (No. 33-17376) on Form S-8 of Total System Services, Inc. of our report dated April 13, 2001, relating to the statement of financial condition of the Total System Services, Inc. Director Stock Purchase Plan as of December 31, 2000 and 1999, and the related statements of operations and changes in plan equity for each of the years in the three-year period ended December 31, 2000, which report appears in the 2000 annual report on Form 11-K of the Total System Services, Inc. Director Stock Purchase Plan, included as Exhibit 99.2 to the 2000 annual report on Form 10-K/A of Total System Services, Inc. /s/KPMG LLP Atlanta, Georgia April 26, 2001 EX-99.1 3 empplan.txt EMPLOYEE STOCK PURCHASE PLAN FORM 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended 2000 ------------------------------------------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------------------- ----------------------- Commission file number 1-10254 ---------------------------------------------------------- TOTAL SYSTEM SERVICES, INC. EMPLOYEE STOCK PURCHASE PLAN TOTAL SYSTEM SERVICES, INC. 1600 FIRST AVENUE COLUMBUS, GEORGIA 31901 (706) 649-2204 Exhibit 99.1 KPMG TOTAL SYSTEM SERVICES, INC. EMPLOYEE STOCK PURCHASE PLAN Financial Statements December 31, 2000, 1999, and 1998 (With Independent Auditors' Report Thereon) KPMG 303 Peachtree Street, N.E. Suite 2000 Atlanta, GA 30308 Independent Auditors' Report The Plan Administrator Total System Services, Inc. Employee Stock Purchase Plan: We have audited the accompanying statements of financial condition of the Total System Services, Inc. Employee Stock Purchase Plan as of December 31, 2000 and 1999, and the related statements of operations and changes in plan equity for each of the years in the three-year period ended December 31, 2000. These financial statements are the responsibility of the Plan's administrator. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial condition of the Total System Services, Inc. Employee Stock Purchase Plan as of December 31, 2000 and 1999, and the results of its operations and changes in its plan equity for each of the years in the three-year period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. /s/KPMG LLP April 13, 2001 TOTAL SYSTEM SERVICES, INC. EMPLOYEE STOCK PURCHASE PLAN Statements of Financial Condition December 31, 2000 and 1999
Assets 2000 1999 ----------- ---------- Common stock of Total System Services, Inc. at market value - 1,612,733 shares (cost $21,969,881) in 2000 and 1,557,070 shares (cost $19,032,710) in 1999 $36,084,906 25,399,712 Dividends receivable 20,204 15,573 Contributions receivable 370,049 326,837 ----------- ---------- $36,475,159 25,742,122 =========== ========== Plan Equity Plan equity (5,241 and 5,072 participants at December 31, 2000 and 1999, respectively) $36,475,159 25,742,122 ========== ==========
See accompanying notes to financial statements. 2 TOTAL SYSTEM SERVICES, INC. EMPLOYEE STOCK PURCHASE PLAN Statements of Operations and Changes in Plan Equity Years ended December 31, 2000, 1999, and 1998
2000 1999 1998 --------- ----------- ----------- Dividend income $ 75,035 60,016 54,247 Realized gain on distributions to participants (note 4) 2,093,104 2,576,977 3,410,267 Unrealized appreciation (depreciation) in common stock of Total System Services, Inc. (note 3) 7,748,715 (13,058,157) 6,909,967 Contributions (notes 1 and 2): Participants 5,684,730 5,141,574 4,179,393 Participating employers: Total System Services, Inc. 2,220,960 2,071,247 1,695,051 Columbus Depot Equipment Company 365 411 358 TSYS Total Solutions, Inc. 239,780 183,889 79,930 Columbus Productions, Inc. 54,049 54,768 47,502 TSYS Canada, Inc. 16,278 17,887 10,438 DotsConnect, Inc. 28,769 -- -- Vital Processing Services, L.L.C 305,280 248,987 211,072 --------- ----------- ---------- Total employer contributions 2,865,481 2,577,189 2,044,351 --------- ----------- ---------- 18,467,065 (2,702,401) 16,598,225 Withdrawals by participants - common stock of Total System Services, Inc. at market value (435,792 shares in 2000, 321,694 shares in 1999, and 281,516 shares in 1998)-(notes 2 and 4) (7,734,028) (6,230,333) (6,405,895) --------- ----------- ---------- Increase (decrease) in Plan equity for the year 10,733,037 (8,932,734) 10,192,330 Plan equity at beginning of year 25,742,122 34,674,856 24,482,526 --------- ----------- ---------- Plan equity at end of year $36,475,159 25,742,122 34,674,856 ========== =========== ==========
See accompanying notes to financial statements. 3 TOTAL SYSTEM SERVICES, INC. EMPLOYEE STOCK PURCHASE PLAN Notes to Financial Statements December 31, 2000, 1999, and 1998 (1) Description of the Plan The Total System Services, Inc. Employee Stock Purchase Plan (the "Plan") was implemented as of October 1, 1984. The Plan is designed to enable participating Total System Services, Inc. ("TSYS") and subsidiaries' employees to purchase shares of common stock of TSYS at prevailing market prices from contributions made by them and TSYS and subsidiaries (the "Participating Employers"). Synovus Service Corp. serves as the Plan administrator. State Street Bank and Trust Company serves as the Plan agent, hereafter referred to as "Agent." All employees who work twenty hours per week or more are eligible to participate in the Plan after completing three months of continuous employment prior to the beginning of a calendar quarter. Participants who have previously withdrawn shares from their Plan account remain eligible to participate, but with certain exceptions, are precluded from receiving matching contributions from the Plan sponsor for a specified period of time. A participant may contribute to the Plan based on a formula through payroll deductions in multiples of $1 with a minimum deduction of $10 per month and a maximum deduction not to exceed a specified percentage of compensation (ranging from 3% to 7%). Effective January 1, 1999, participants initially joining the Plan, requesting reinstatement in the Plan or making a change under the Plan must select their payroll deduction amount as a percentage of compensation, with a minimum contribution level of 0.5%. Participants in the Plan prior to January 1, 1999 may continue contributing to the Plan through payroll deductions in whole dollar amounts. Contributions to the Plan are to be made by the Participating Employers in an amount equal to one-half of each participant's contribution. Participants are immediately vested in their contributions and Participating Employers' matching contributions. The Plan provides, among other things, that all expenses of the Plan and its administration shall be paid by TSYS with the exception of brokers' fees, commissions, postage, and transaction costs which are included in the cost of each participant's investment in common stock of TSYS. The Plan provides that upon withdrawal from the Plan, each participant may elect to receive the proceeds from his account balance in the form of shares of common stock of TSYS and a check for any fractional shares and cash held, a lump-sum cash distribution, or a combination of both. TSYS expects to maintain the Plan indefinitely, but reserves the right to terminate or amend the Plan at any time, provided, however, that no termination or amendment shall affect or diminish any participant's right to the benefit of contributions made by him or TSYS prior to the date of such amendment or termination. On April 16, 1998, the TSYS Board of Directors approved a three-for-two stock split which was effected on May 8, 1998 in the form of a 50% stock dividend to shareholders of record as of April 27, 1998. 4 (Continued) TOTAL SYSTEM SERVICES, INC. EMPLOYEE STOCK PURCHASE PLAN Notes to Financial Statements December 31, 2000, 1999, and 1998 All share and per share data for all periods presented in the accompanying financial statements and related notes has been restated to reflect the additional shares resulting from this stock split. (2) Summary of Accounting Policies The investment in common stock of TSYS is stated at market value. The 2000 and 1999 market values are based on the closing price at year-end. The December 31, 2000 and 1999 market values were $22.375 and $16.31 per share, respectively. The realized gain on distributions to participants is determined by computing the difference between the average cost per common stock share and the market value per share at the date of the distribution to the participants. Contributions to and withdrawals from the Plan are accounted for on the accrual basis. Common stock contributions are recorded at fair value. During the years ended December 31, 2000, 1999, and 1998, TSYS contributed one share of stock to each new employee, upon reaching three months of employment with TSYS. Such contributions were made to the employees' accounts with the Plan, and resulted in an increase of employer contributions of approximately $22,650, $25,000, and $21,000 for the years ended December 31, 2000, 1999, and 1998, respectively. Dividend income is accrued on the record date. The Plan is not qualified under Sections 401(a) or 501(a) of the Internal Revenue Code of 1986, as amended. The Plan does not provide for income taxes because any income is taxable to the participants. Participants in the Plan must treat as compensation income their pro rata share of contributions made to the Plan by their employer. Cash dividends paid on common stock of TSYS purchased under the Plan will be taxed to the participants on a pro rata basis for Federal and state income tax purposes during the year any such dividend is received by the participant or the Plan. Upon disposition of the common stock of TSYS purchased under the Plan, participants must treat any gain or loss as long-term or short-term capital gain or loss depending upon when such disposition occurs. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. 5 (Continued) TOTAL SYSTEM SERVICES, INC. EMPLOYEE STOCK PURCHASE PLAN Notes to Financial Statements December 31, 2000, 1999, and 1998 (3) Unrealized Appreciation (Depreciation) in Common Stock of TSYS Changes in unrealized appreciation (depreciation) in common stock of TSYS are as follows:
2000 1999 1998 ---------------- ----------------- --------------- Unrealized appreciation at end of year $ 14,115,717 6,367,002 19,425,159 Unrealized appreciation at beginning of year 6,367,002 19,425,159 12,515,192 ---------------- ----------------- --------------- Unrealized appreciation (depreciation) for the year $ 7,748,715 (13,058,157) 6,909,967 ================ ================= ===============
(4) Realized Gain on Withdrawal Distributions to Participants The gain realized on withdrawal distributions to participants is summarized as follows: 2000 1999 1998 --------------- ----------------- --------------- Market value at dates of distribution or redemption of shares of common stock of TSYS $ 7,734,028 6,230,333 6,405,895 Less cost (computed on an average cost basis) of shares of common stock of TSYS distributed or redeemed 5,640,924 3,653,356 2,995,628 --------------- ----------------- --------------- Total realized gain $ 2,093,104 2,576,977 3,410,267 =============== ================= ===============
6 EX-99.2 4 direplan.txt DIRECTOR STOCK PURCHASE PLAN FORM 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended 2000 ----------------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------------------- ----------------------- Commission file number 1-10254 ---------------------------------------------------------- TOTAL SYSTEM SERVICES, INC. DIRECTOR STOCK PURCHASE PLAN TOTAL SYSTEM SERVICES, INC. 1200 FIRST AVENUE COLUMBUS, GEORGIA 31901 (706) 649-2204 Exhibit 99.2 KPMG TOTAL SYSTEM SERVICES, INC. DIRECTOR STOCK PURCHASE PLAN Financial Statements December 31, 2000, 1999, and 1998 (With Independent Auditors' Report Thereon) KPMG 303 Peachtree Street, N.E. Suite 2000 Atlanta, GA 30308 Independent Auditors' Report The Plan Administrator Total System Services, Inc. Director Stock Purchase Plan: We have audited the accompanying statements of financial condition of the Total System Services, Inc. Director Stock Purchase Plan as of December 31, 2000 and 1999, and the related statements of operations and changes in plan equity for each of the years in the three-year period ended December 31, 2000. These financial statements are the responsibility of the Plan's administrator. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial condition of the Total System Services, Inc. Director Stock Purchase Plan as of December 31, 2000 and 1999, and the results of its operations and changes in its plan equity for each of the years in the three-year period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. /s/KPMG LLP April 13, 2001 TOTAL SYSTEM SERVICES, INC. DIRECTOR STOCK PURCHASE PLAN Statements of Financial Condition December 31, 2000 and 1999 Assets 2000 1999 ----------- --------- Common stock of Total System Services, Inc. at market value-144,507 shares (cost $861,490) in 2000 and 122,465 shares (cost $474,192) in 1999 $3,233,344 1,997,710 Dividends receivable 1,806 1,225 ---------- ---------- $3,235,150 1,998,935 ========== ========= Plan Equity Plan equity (19 and 13 participants at December 31, 2000 and 1999, respectively) $3,235,150 1,998,935 ========== ========= See accompanying notes to financial statements. 2 TOTAL SYSTEM SERVICES, INC. DIRECTOR STOCK PURCHASE PLAN Statements of Operations and Changes in Plan Equity Years ended December 31, 2000, 1999, and 1998
2000 1999 1998 --------- ----------- --------- Dividend income $ 6,379 5,428 5,019 Realized gain on distributions to participants (notes 2 and 4) -- 277,688 356,245 Unrealized appreciation (depreciation) in common stock of Total System Services, Inc. (note 3) 848,336 (1,258,547) 710,468 Contributions (notes 1 and 2): Participants 254,333 38,333 35,333 Total System Services, Inc. 127,167 19,167 17,667 --------- ---------- ---------- 1,236,215 (917,931) 1,124,732 Withdrawals by participants common stock of Total System Services, Inc. at market value (-0- shares in 2000, 20,000 shares in 1999, and 19,366 shares in 1998)- (notes 2 and 4) -- (353,750) (420,001) --------- ---------- ---------- Increase (decrease) in Plan equity for the year 1,236,215 (1,271,681) 704,731 Plan equity at beginning of year 1,998,935 3,270,616 2,565,885 --------- ---------- ---------- Plan equity at end of year $3,235,150 1,998,935 3,270,616 ========= ========== ==========
See accompanying notes to financial statements. 3 TOTAL SYSTEM SERVICES, INC. DIRECTOR STOCK PURCHASE PLAN Notes to Financial Statements December 31, 2000, 1999, and 1998 (1) Description of the Plan The Total System Services, Inc. Director Stock Purchase Plan (Plan) was implemented as of October 15, 1987. The Plan is designed to enable participating Total System Services, Inc. (TSYS) directors to purchase shares of common stock of TSYS at prevailing market prices from contributions made by them and TSYS. Synovus Service Corp. serves as the Plan administrator. State Street Bank and Trust Company serves as the Plan agent, hereafter referred to as "Agent." Any person who currently serves or in the future is elected to serve as a member, advisory member, or emeritus member of the Board of Directors of TSYS is eligible to participate in the Plan. Prior to February 24, 2000, cash contributions by a participant could not exceed $1,000 per calendar quarter. Effective February 24, 2000, cash contributions by participants cannot exceed $5,000 per calendar quarter. Contributions to the Plan are to be made by TSYS in an amount equal to one-half of each participant's contribution. Participants are immediately vested in their contributions and TSYS' matching contributions. The Plan provides, among other things, that all expenses of the Plan and its administration shall be paid by TSYS with the exception of brokers' fees, commissions, postage and transaction costs which are included in the cost of each participant's investment in common stock of TSYS. The Plan provides that upon withdrawal from the Plan, each participant may elect to receive the shares of TSYS common stock held on his behalf by the Agent, together with a check for any fractional share interest and any remaining cash balance. TSYS expects to maintain the Plan indefinitely, but reserves the right to terminate or amend the Plan at any time, provided, however, that no termination or amendment shall affect or diminish any participant's right to the benefit of contributions made by him or TSYS prior to the date of such amendment or termination. On April 16, 1998, the TSYS Board of Directors approved a three-for-two stock split which was effected on May 8, 1998 in the form of a 50% stock dividend to shareholders of record as of April 27, 1998. All share and per share data for all periods presented in the accompanying financial statements and related notes has been restated to reflect the additional shares resulting from this stock split. (2) Summary of Accounting Policies The investment in common stock of TSYS is stated at market value. The 2000 and 1999 market values are based on the closing price at year-end. The December 31, 2000 and 1999 market values were $22.375 and $16.31 per share, respectively. 4 (Continued) TOTAL SYSTEM SERVICES, INC. DIRECTOR STOCK PURCHASE PLAN Notes to Financial Statements December 31, 2000, 1999, and 1998 The realized gain on distributions to participants is determined by computing the difference between the average cost per common stock share and the market value per share at the date of distribution to the participants. Contributions by TSYS and participating directors, as well as withdrawals, are accounted for on the accrual basis. Dividend income is accrued on the record date. The Plan is not qualified under Sections 401(a) or 501(a) of the Internal Revenue Code of 1986, as amended. The Plan does not provide for income taxes because any income is taxable to the participants. Participants in the Plan must treat as compensation income their pro rata share of contributions made to the Plan by TSYS. Cash dividends paid on common stock of TSYS purchased under the Plan will be taxable to the participants on a pro rata basis for Federal and state income tax purposes during the year any such dividend is received by the participant or the Plan. Upon disposition of the common stock of TSYS purchased under the Plan, participants must treat any gain or loss as long-term or short-term capital gain or loss depending upon when such disposition occurs. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. (3) Unrealized Appreciation (Depreciation) in Common Stock of TSYS Changes in unrealized appreciation (depreciation) in common stock of TSYS are as follows:
2000 1999 1998 ---------------- ----------------- ---------------- Unrealized appreciation at end of year $ 2,371,854 1,523,518 2,782,065 Unrealized appreciation at beginning of year 1,523,518 2,782,065 2,071,597 ---------------- ----------------- ---------------- Unrealized appreciation (depreciation) for the year $ 848,336 (1,258,547) 710,468 ================ ================= ================
5 (Continued) TOTAL SYSTEM SERVICES, INC. DIRECTOR STOCK PURCHASE PLAN Notes to Financial Statements December 31, 2000, 1999, and 1998 (4) Realized Gain on Withdrawal Distributions to Participants The gain realized on withdrawal distributions to participants is summarized as follows:
2000 1999 1998 ---------------- --------------- --------------- Market value at dates of distribution or redemption of common stock of TSYS $ -- 353,750 420,001 Less cost (computed on an average cost basis) of shares of common stock of TSYS distributed or redeemed -- 76,062 63,756 ---------------- --------------- --------------- Total realized gain $ -- 277,688 356,245 ================ =============== =============== 6
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