EX-99.2 4 financials.txt SUPPLEMENTAL INFORMATION TSYS Announces 12.1% Increase in Earnings for 2003 Page 4 of 10
TSYS Financial Highlights (In thousands, except per share data) ------------------------------------- ------------------------------------- Three months ended Twelve months ended December 31, December 31, ------------------------------------- ------------------------------------- Percentage Percentage 2003 2002 Change 2003 2002 Change ---------- ------------ ---------- --------- ---------- ------------ Revenues Electronic payment processing services 183,237 163,419 12.1 % 707,816 617,877 14.6 % Other services 38,750 24,989 55.1 120,485 106,086 13.6 ---------- ------------ --------- ---------- Revenues before reimbursables 221,987 188,408 17.8 828,301 723,963 14.4 Reimbursable items 56,313 57,590 (2.2) 225,165 231,170 (2.6) ---------- ------------ --------- ---------- Total revenues 278,300 245,998 13.1 1,053,466 955,133 10.3 ---------- ------------ --------- ---------- Expenses Employment 85,384 78,951 8.1 326,568 300,240 8.8 Occupancy & equipment 52,775 44,343 19.0 205,845 174,958 17.7 Other 30,062 22,363 34.4 105,334 91,167 15.6 (Gain)/Loss on disposal of equipment 10 (13) nm (25) (75) nm ---------- ------------ --------- ---------- Expenses before reimbursables 168,231 145,644 15.5 637,722 566,290 12.6 Reimbursable items 56,313 57,590 (2.2) 225,165 231,170 (2.6) ---------- ------------ --------- ---------- Total operating expenses 224,544 203,234 10.5 862,887 797,460 8.2 ---------- ------------ --------- ---------- Operating Income 53,756 42,764 25.7 190,579 157,673 20.9 ---------- ------------ --------- ---------- Other Income: Interest income, net 449 521 (13.9) 2,748 2,601 5.6 Gain/(loss) on foreign currency translation, net 126 866 (85.4) 1,042 3,013 (65.4) ---------- ------------ --------- ---------- Other Income 575 1,387 (58.6) 3,790 5,614 (32.5) ---------- ------------ --------- ---------- Income before Income Taxes, Minority Interest and Equity in Income of Joint Ventures 54,331 44,151 23.1 194,369 163,287 19.0 Income Taxes 19,737 14,613 35.1 70,868 57,908 22.4 Minority Interest (77) (22) nm (338) (155) nm Equity in Income of Joint Ventures 4,901 5,940 (17.5) 17,810 20,581 (13.5) ---------- ------------ --------- ---------- Net Income $ 39,418 35,456 11.2 % 140,973 125,805 12.1 % =========== ============ =========== =========== Basic Earnings Per Share $ 0.20 0.18 11.3 % 0.72 0.64 12.2 % =========== ============ =========== =========== Diluted Earnings Per Share $ 0.20 0.18 10.9 % 0.71 0.64 12.1 % =========== ============ =========== =========== Dividend Declared Per Share $ 0.0200 0.0175 0.0775 0.0675 =========== ============ =========== =========== Average Common Shares Outstanding 196,821,929 197,049,470 196,829,802 197,016,699 =========== ============ =========== =========== Average Common and Common Equivalent Shares Outstanding 197,623,458 197,055,850 197,437,744 197,497,049 =========== ============ =========== =========== Effective Tax Rate 33.6% 29.3% 33.6% 31.7% =========== ============ =========== =========== EFFECTIVE INCOME TAX RATE CALCULATION Income taxes (A) $ 19,737 14,613 $ 70,868 57,908 =========== ============ =========== =========== Income before Income Taxes, Minority Interest and Equity in Income of Joint Ventures 54,331 44,151 194,369 163,287 Add Back: Equity in Income of Vital 4,554 5,791 16,666 19,753 Minority Interest (77) (22) (338) (155) ----------- ------------ ----------- ----------- Adjusted Income before income taxes (B) 58,808 49,920 210,697 182,885 =========== ============ =========== =========== Effective Tax Rate (A/B) 33.6% 29.3% 33.6% 31.7% =========== ============ =========== ===========
Note: nm = not meaningful - more - Exhibit 99.2 TSYS Announces 12.1% Increase in Earnings for 2003 Page 5 of 10 TSYS Segment Breakdown (In thousands) Three Months Ended December 31,2003 Three Months Ended December 31, 2002* ------------------------------------------------ ----------------------------------------------- Domestic-based International-based Domestic-based International-based Transaction Transaction Transaction Transaction Processing Processing Consolidated Processing Processing Consolidated ------------------------------------------------------------------------------------------------- Total revenue $ 256,092 22,277 278,369 228,575 17,581 246,156 Intersegment revenue (69) - (69) (158) - (158) ------------------------------------------------ ----------------------------------------------- Revenues from external customers $ 256,023 22,277 278,300 228,417 17,581 245,998 ================================================ =============================================== Depreciation and amortization $ 24,650 2,708 27,358 18,276 2,394 20,670 ================================================ =============================================== Segment operating income $ 50,453 3,303 53,756 44,637 (1,873) 42,764 ================================================ =============================================== Income tax expense $ 18,443 1,294 19,737 15,241 (628) 14,613 ================================================ =============================================== Equity in income of joint ventures $ 4,554 347 4,901 5,791 149 5,940 ================================================ =============================================== Net Income $ 37,204 2,214 39,418 36,461 (1,005) 35,456 ================================================ =============================================== Average accounts on file 258,063 13,643 271,706 231,410 11,984 243,394 ================================================ ===============================================
Twelve Months Ended December 31, 2003* Twelve Months Ended December 31, 2002* ------------------------------------------------------------------------------------------------- Domestic-based International-based Domestic-based International-based Transaction Transaction Transaction Transaction Processing Processing Consolidated Processing Processing Consolidated ------------------------------------------------------------------------------------------------- Total revenue $ 973,252 80,288 1,053,540 890,831 64,948 955,779 Intersegment revenue (74) - (74) (646) - (646) ------------------------------------------------ ----------------------------------------------- Revenues from external customers $ 973,178 80,288 1,053,466 890,185 64,948 955,133 ================================================ =============================================== Depreciation and amortization $ 87,555 10,860 98,415 65,284 8,729 74,013 ================================================ =============================================== Segment operating income $ 179,580 10,999 190,579 155,974 1,699 157,673 ================================================ =============================================== Income tax expense $ 66,790 4,078 70,868 56,841 1,067 57,908 ================================================ =============================================== Equity in income of joint ventures $ 16,666 1,144 17,810 19,753 828 20,581 ================================================ =============================================== Net Income $ 133,860 7,113 140,973 123,146 2,659 125,805 ================================================ =============================================== Average accounts on file 249,489 13,129 262,618 220,383 11,764 232,147 ================================================ ===============================================
Note:Revenues for domestic-based processing services include electronic payment processing services and other services provided from the United States to clients domiciled in the United States or other countries. Revenues from international-based processing services include electronic payment processing services and other services provided from outside the United States to clients based mainly outside the United States. *- To conform with the way management evaluates TSYS' business, TSYS has reclassed the operations of its Canadian subsidiary from International-based processing services to Domestic-based processing services in the fourth quarter of 2003. The Canadian subsidiary's function is to provide programming services solely to TSYS. All prior period segment disclosures have been restated to conform with that presentation. - more - TSYS Announces 12.1% Increase in Earnings for 2003 Page 6 of 10 TSYS Prior Period Restatements for New Segment Classification (In thousands) First Quarter 2002 Second Quarter 2002 ---------------------------------------------------------------------- Domestic- International- Domestic- International- based based based based Transaction Transaction Consoli- Transaction Transaction Consoli- Processing Processing dated Processing Processing dated ----------- ------------------- ----------------------------------- Total revenue $ 213,399 14,675 228,074 225,484 16,278 241,762 Intersegment revenue (151) - (151) (156) - (156) ----------- ------------------- -------- ------------------------ Revenues from external customers 213,248 14,675 227,923 225,328 16,278 241,606 =========== =================== ======== ======================== Depreciation and amortization $ 14,684 1,990 16,674 16,063 2,078 18,141 =========== =================== ======== ======================== Segment operating income $ 35,413 559 35,972 36,404 1,869 38,273 =========== =================== ======== ======================== Income tax expense $ 13,163 93 13,256 13,462 692 14,154 =========== =================== ======== ======================== Equity in income of joint ventures $ 4,226 247 4,473 4,691 214 4,905 =========== =================== ======== ======================== Net Income $ 27,036 345 27,381 28,717 1,436 30,153 =========== =================== ======== ========================
Third Quarter 2002 Fourth Quarter 2002 2002 YTD -------------------------------- ---------------------------------- --------------------------------- Domestic- International- Domestic- International- Domestic- International- based based based based based based Transaction Transaction Consoli- Transaction Transaction Consoli- Transaction Transaction Consoli- Processing Processing dated Processing Processing dated Processing Processing dated ------------ -------------------- ---------------------------------- ----------- --------------------- Total revenue $ 223,373 16,414 239,787 228,575 17,581 246,156 890,831 64,948 955,779 Intersegment revenue (181) - (181) (158) - (158) (646) - (646) ------------ -------------------- ---------- ----------------------- ---------- --------------------- Revenues from external customers 223,192 16,414 239,606 228,417 17,581 245,998 890,185 64,948 955,133 ============ ==================== ========== ======================= ========== ===================== Depreciation and amortization $ 16,261 2,267 18,528 18,276 2,394 20,670 65,284 8,729 74,013 ============ ==================== ========== ======================= ========== ===================== Segment operating income $ 39,520 1,144 40,664 44,637 (1,873) 42,764 155,974 1,699 157,673 ============ ==================== ========== ====================== ========= ===================== Income tax expense $ 14,975 910 15,885 15,241 (628) 14,613 56,841 1,067 57,908 ============ ==================== ========== ====================== ========= ===================== Equity in income of joint ventures $ 5,045 218 5,263 5,791 149 5,940 19,753 828 20,581 ============ ==================== ========== ====================== ========= ===================== Net Income $ 30,932 1,883 32,815 36,461 (1,005) 35,456 123,146 2,659 125,805 ============ ==================== ========== ====================== ========= =====================
First Quarter 2003 Second Quarter 2003 --------------------------------- --------------------------------- Domestic- International- Domestic- International- based based based based Transaction Transaction Consoli- Transaction Transaction Consoli- Processing Processing dated Processing Processing dated --------------------------------- ----------------------------------- Total revenue $ 233,119 18,235 251,354 237,849 19,851 257,700 Intersegment revenue (1) - (1) (2) - (2) --------------------------------- ---------- ------------------------ Revenues from external customers $ 233,118 18,235 251,353 237,847 19,851 257,698 ================================= ========== ======================== Depreciation and amortization $ 19,619 2,483 22,102 20,958 2,537 23,495 ================================= ========== ======================== Segment operating income $ 41,036 2,132 43,168 41,015 3,740 44,755 ================================= ========== ======================== Income tax expense $ 14,917 597 15,514 16,799 1,308 18,107 ================================= ========== ======================== Equity in income of joint ventures $ 3,941 246 4,187 4,550 250 4,800 ================================= ========== ======================== Net Income $ 30,365 1,371 31,736 31,672 2,635 34,307 ================================= ========== ========================
Third Quarter 2003 Fourth Quarter 2003 2003 YTD -------------------------------- ---------------------------------- --------------------------------- Domestic- International- Domestic- International- Domestic- International- based based based based based based Transaction Transaction Consoli- Transaction Transaction Consoli- Transaction Transaction Consoli- Processing Processing dated Processing Processing dated Processing Processing dated ------------ -------------------- ---------------------------------- -------------------------------- Total revenue $ 246,192 19,925 266,117 256,092 22,277 278,369 973,252 80,288 1,053,540 Intersegment revenue (2) - (2) (69) - (69) (74) - (74) --------------------------------- --------- ------------------------ --------- --------------------- Revenues from external customers $ 246,190 19,925 266,115 256,023 22,277 278,300 973,178 80,288 1,053,466 ================================= ========== ======================== ========== ==================== Depreciation and amortization $ 22,328 3,132 25,460 24,650 2,708 27,358 87,555 10,860 98,415 ================================= ========== ======================== ========== ==================== Segment operating income $ 47,076 1,824 48,900 50,453 3,303 53,756 179,580 10,999 190,579 ================================= ========== ======================== ========== ==================== Income tax expense $ 16,631 879 17,510 18,443 1,294 19,737 66,790 4,078 70,868 ================================= ========== ======================== ========== ==================== Equity in income of joint ventures $ 3,621 301 3,922 4,554 347 4,901 16,666 1,144 17,810 ================================= ========== ======================== ========== ==================== Net Income $ 34,619 893 35,512 37,204 2,214 39,418 133,860 7,113 140,973 ================================= ========== ======================== ========== ====================
- more - TSYS Announces 12.1% Increase in Earnings for 2003 Page 7 of 10
Balance Sheet Information: (in thousands) Dec 2003 Dec 2002 ------------------------------------- Assets Current assets: Cash and cash equivalents $ 122,874 109,171 Restricted cash 7,679 4,035 Accounts receivable, net 120,646 121,439 Deferred income tax assets 9,620 8,786 Prepaid expenses and other current assets 24,081 22,548 ------------------------------------- Total current assets 284,900 265,979 Property and equipment, net 232,076 120,835 Computer software, net 212,729 200,297 Contract acquisition costs, net 125,472 123,729 Goodwill, net 29,626 3,619 Equity investments, net 66,708 54,181 Other assets 16,242 14,228 ------------------------------------- Total assets $ 967,753 782,868 ===================================== Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 17,549 10,366 Accrued salaries and employee benefits 32,562 43,315 Current portion of long-term debt and obligations under capital leases 889 68 Billings in excess of costs on uncompleted contracts 17,573 - Other current liabilities 71,705 60,233 ------------------------------------- Total current liabilities 140,278 113,982 Long-term debt and obligations under capital leases, excluding current portion 2,702 67 Other accounts payable - 563 Deferred income tax liabilities 88,800 63,306 ------------------------------------- Total liabilities 231,780 177,918 ------------------------------------- Minority interest in consolidated subsidiary 3,439 2,744 ------------------------------------- Shareholders' Equity: Common stock 19,750 19,725 Additional paid-in capital 41,574 35,143 Accumulated other comprehensive income (loss) 8,314 1,053 Treasury stock (12,426) (3,316) Retained earnings 675,322 549,601 ------------------------------------- Total shareholders' equity 732,534 602,206 ------------------------------------- Total liabilities and shareholders' equity $ 967,753 782,868 =====================================
- more - TSYS Announces 12.1% Increase in Earnings for 2003 Page 8 of 10
Cash Flow Information: Twelve Months Ending: (in thousands) Dec 2003 Dec 2002 ------------------------------------- Cash flows from operating activities: Net income $ 140,973 125,805 Adjustments to reconcile net income to net cash provided by operating activities: Minority interest in consolidated subsidiary's net income 338 155 Equity in income of joint ventures (17,810) (20,581) (Gain) loss on currency translation adjustments, net (1,042) (3,013) Depreciation and amortization 98,415 74,013 Charges for bad debts and billing adjustments 2,690 3,263 Charges for transaction processing 3,450 6,532 Deferred income tax expense 22,884 13,621 Gain on disposal of equipment,net (25) (75) (Increase)decrease in: Accounts receivable 3,624 (5,355) Prepaid expenses and other assets 3,828 1,663 Increase(decrease) in: Accounts payable 3,028 (11,340) Accrued salaries and employee benefits (10,819) 3,276 Billings in excess of costs on uncompleted contracts 17,573 - Other current liabilities (752) 9,650 ------------------------------------- Net cash provided by operating activities 266,355 197,614 ------------------------------------- Cash flows from investing activities: Purchase of property and equipment (128,438) (14,781) Additions to purchased computer software programs (47,312) (37,020) Additions to developed software (17,689) (29,451) Proceeds from disposal of equipment 66 162 Cash acquired in acquisition of subsidiary 4,442 2,858 Cash used in acquisition (36,000) (30,000) Dividends received from joint ventures 5,278 17,855 Increase in contract acquisition costs (18,129) (44,044) ------------------------------------- Net cash used in investing activities (237,782) (134,421) ------------------------------------- Cash flows from financing activities: Purchase of common stock (9,825) - Proceeds from issuance of long-term debt 23,370 - Principal payments on long-term debt (20,234) - Other (11,040) (12,672) ------------------------------------- Net cash used in financing activities (17,729) (12,672) ------------------------------------- Effect of foreign currency translation on cash and cash equivalents 2,859 (9) ------------------------------------- Net increase (decrease) in cash and cash equivalents 13,703 50,512 Cash and cash equivalents at beginning of year 109,171 58,659 ------------------------------------- Cash and cash equivalents at end of period $ 122,874 109,171 =====================================
Note: Certain amounts in 2002 have been reclassified to conform with the presentation adopted in 2003. - more - TSYS Announces 12.1% Increase in Earnings for 2003 Page 9 of 10 Geographic Area Data: The following geographic area data represents revenues for the three months and twelve months ended December 31 based on where the client is domiciled:
Three Months Ended December 31, ------------------------------------------------------------ 2003 % 2002 % % Chg ------------------------------------------------------------ (dollars in millions): United States $ 230.6 83% 207.9 85% 10.9 % Canada* 20.8 7% 11.1 5% 87.3 Europe 19.3 7% 14.9 6% 30.0 Mexico 3.6 1% 8.8 4% (59.0) Japan 3.3 1% 2.7 1% 22.5 Other 0.7 0% 0.6 0% 4.6 --------------------------------------------------- $ 278.3 100% 246.0 100% 13.1 % ===================================================
Twelve Months Ended December 31, ------------------------------------------------------------ 2003 % 2002 % % Chg ------------------------------------------------------------ (dollars in millions): United States $ 863.0 82% 816.0 85% 5.8 % Canada* 75.9 7% 42.8 4% 77.5 Europe 68.6 7% 54.6 6% 25.6 Mexico 31.4 3% 29.2 3% 7.5 Japan 12.1 1% 10.3 1% 16.6 Other 2.5 0% 2.2 0% 14.2 --------------------------------------------------- $ 1,053.5 100% 955.1 100% 10.3 % ===================================================
Geographic Area Revenue by Operating Segment: The following tables reconcile segment revenues to revenues by reporting segment for the three and twelve months ended December 31:
Three Months Ended December 31, --------------------------------------------------- Domestic-based International-based processing services processing services --------------------------------------------------- (dollars in millions): 2003 2002 2003 2002 --------------------------------------------------- United States $ 230.6 207.9 - - Canada* 20.8 11.1 - - Europe 0.2 - 19.1 14.9 Mexico 3.6 8.8 - - Japan 0.1 - 3.2 2.7 Other 0.7 0.6 - - --------------------------------------------------- $ 256.0 228.4 22.3 17.6 =================================================== Twelve Months Ended December 31, --------------------------------------------------- Domestic-based International-based processing services processing services --------------------------------------------------- (dollars in millions): 2003 2002 2003 2002 --------------------------------------------------- United States $ 863.0 816.0 - - Canada* 75.9 42.8 - - Europe 0.3 - 68.3 54.6 Mexico 31.4 29.2 - - Japan 0.1 - 12.0 10.3 Other 2.5 2.2 - - --------------------------------------------------- $ 973.2 890.2 80.3 64.9 ===================================================
* These revenues include those generated from the Caribbean accounts owned by a Canadian institution. - more - TSYS Announces 12.1% Increase in Earnings for 2003 Page 10 of 10 Supplemental Information:
Accounts on File at: ------------------------------------------------------------- Dec 31, 2003 % Dec 31, 2002 % % Chg ------------------------------------------------------------- Accounts on File (in millions): Consumer 143.5 52% 137.0 56% 4.5 % Retail 85.5 31% 77.3 31% 10.7 Commercial 21.5 8% 19.8 8% 8.4 Government services/EBT 13.8 5% 5.5 2% 148.5 Debit/Stored Value 9.6 4% 6.3 3% 53.2 ---------------------------------------------------- 273.9 100% 245.9 100% 11.4 % ==================================================== Dec 31, 2003 Dec 31, 2002 ------------------ ---------------- QTD Average Accounts on File (in thousands) 271,706 243,394 11.6 % YTD Average Accounts on File (in thousands) 262,618 232,147 13.1 % Accounts on File at: ------------------------------------------------------------- Dec 31, 2003 % Dec 31, 2002 % % Chg ------------------------------------------------------------- Accounts on File (in millions): Domestic 229.8 84% 215.4 88% 6.7 % International 44.1 16% 30.5 12% 44.8 ---------------------------------------------------- 273.9 100% 245.9 100% 11.4 % ====================================================
Note: The accounts on file between domestic and international is based on the geographic domicile of processing clients.
Growth in Accounts (in millions): ------------------------------------------ 2002 to 2003 2001 to 2002 ------------------ ---------------- Beginning balance 245.9 218.5 Change in accounts on file due to: Internal growth of existing clients 25.1 22.9 New clients 19.9 14.2 Purges/Sales (13.2) (9.7) Deconversions (3.8) - ------------------ ---------------- Ending balance 273.9 245.9 ================== ================
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