EX-99.2 7 exhibit992.htm SUPPLEMENTAL INFORMATION PREPARED FOR USE WITH THE PRESS RELEASE

EXHIBIT 99.2

TSYS Announces Earnings for 2005

 

Page 5 of 10

 

TSYS

Financial Highlights

(Unaudited)

(In thousands, except per share data)

 

 

Three months ended

 

 

 

Twelve months ended

 

 

 

December 31,

 

 

 

December 31,

 

 

 

 

 

 

 

Percentage

 

 

 

 

 

 

 

Percentage

 

 

 

2005

 

2004

 

Change

 

 

 

2005

 

2004

 

Change

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronic payment processing services

$

223,586

 

198,273

 

12.8

%

 

$

869,785

 

759,544

 

14.5

%

Merchant services

 

67,410

 

6,411

 

nm

 

 

 

237,418

 

26,169

 

nm

 

Other services

 

45,250

 

45,225

 

0.1

 

 

 

182,587

 

170,906

 

6.8

 

Revenues before reimbursables

 

336,246

 

249,909

 

34.5

 

 

 

1,289,790

 

956,619

 

34.8

 

Reimbursable items

 

84,489

 

57,248

 

47.6

 

 

 

313,141

 

230,389

 

35.9

 

Total revenues

 

420,735

 

307,157

 

37.0

 

 

 

1,602,931

 

1,187,008

 

35.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employment expenses*

 

127,876

 

91,885

 

39.2

 

 

 

462,217

 

361,532

 

27.8

 

Net occupancy & equipment expenses*

 

71,185

 

56,210

 

26.6

 

 

 

283,955

 

240,425

 

18.1

 

Other operating expense*

 

65,040

 

43,009

 

51.2

 

 

 

256,489

 

152,448

 

68.2

 

Expenses before reimbursables

 

264,101

 

191,104

 

38.2

 

 

 

1,002,661

 

754,405

 

32.9

 

Reimbursable items

 

84,489

 

57,248

 

47.6

 

 

 

313,141

 

230,389

 

35.9

 

Total operating expenses

 

348,590

 

248,352

 

40.4

 

 

 

1,315,802

 

984,794

 

33.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

72,145

 

58,805

 

22.7

 

 

 

287,129

 

202,214

 

42.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

2,123

 

1,147

 

85.0

 

 

 

6,012

 

2,856

 

110.5

 

Interest expense

 

(115)

 

(64)

 

79.1

 

 

 

(374)

 

(941)

 

(60.2)

 

(Loss) gain on foreign currency translation, net

 

(79)

 

117

 

(166.5)

 

 

 

(840)

 

162

 

nm

 

Other Income

 

1,929

 

1,200

 

60.7

 

 

 

4,798

 

2,077

 

131.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before Income Taxes, Minority Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and Equity in Income of Joint Ventures

 

74,074

 

60,005

 

23.4

 

 

 

291,927

 

204,291

 

42.9

 

Income Taxes

 

25,100

 

21,574

 

16.3

 

 

 

103,286

 

77,210

 

33.8

 

Minority Interest

 

(80)

 

(19)

 

nm

 

 

 

(256)

 

(259)

 

(1.1)

 

Equity in Income of Joint Ventures

 

804

 

4,558

 

(82.4)

 

 

 

6,135

 

23,736

 

(74.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

49,698

 

42,970

 

15.7

%

 

$

194,520

 

150,558

 

29.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

$

0.25

 

0.22

 

15.4

%

 

$

0.99

 

0.76

 

29.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share

$

0.25

 

0.22

 

15.6

%

 

$

0.99

 

0.76

 

29.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Declared Per Share

$

0.06

 

0.04

 

 

 

 

$

0.22

 

0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Common Shares Outstanding

 

197,277

 

196,849

 

 

 

 

 

197,145

 

196,847

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Common and Common

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equivalent Shares Outstanding

 

197,371

 

197,278

 

 

 

 

 

197,345

 

197,236

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

nm = not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Certain items have been reclassified for prior periods to conform with the presentation adopted in 2005.

 

 

 

 

 

 

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TSYS Announces Earnings for 2005
Page 6 of 10 

TSYS

Segment Breakdown

(Unaudited)

(In thousands)

 

 

Three Months Ended December 31, 2005

 

Three Months Ended December 31, 2004

 

 

Domestic-
based
support services

International-
based
support services

Merchant
processing
services

Consolidated

 

Domestic
based
support services

International-
based
support services

Merchant
processing
services

Consolidated

 

 

 

 

 

 

Revenue before reimbursables

$

246,455

31,148

63,552

341,155

 

220,325

29,584

-

249,909

Intersegment revenue

 

(4,863)

-

(46)

(4,909)

 

-

-

-

-

Revenues before reimbursables

 

 

 

 

 

 

 

 

 

 

from external customers

$

241,592

31,148

63,506

336,246

 

220,325

29,584

-

249,909

Total revenue

$

315,501

37,378

75,204

428,083

 

275,736

31,424

-

307,160

Intersegment revenue

 

(7,302)

-

(46)

(7,348)

 

(3)

-

-

(3)

Revenues from external customers

$

308,199

37,378

75,158

420,735

 

275,733

31,424

-

307,157

Depreciation and amortization

$

30,214

4,154

7,299

41,667

 

25,477

3,590

-

29,067

Intersegment expenses

$

9,733

(9,414)

(7,668)

(7,349)

 

17,777

(17,777)

-

-

Segment operating income

$

58,921

1,230

11,994

72,145

 

70,668

(11,863)

-

58,805

Income tax expense

$

19,860

632

4,608

25,100

 

24,657

(4,452)

1,369

21,574

Equity in income of joint ventures

$

-

804

-

804

 

-

495

4,063

4,558

Net Income

$

42,172

(205)

7,731

49,698

 

48,771

(8,495)

2,694

42,970

Identifiable assets

 

1,320,552

178,135

230,712

1,729,399

 

 

 

 

 

Intersegment assets

 

(318,475)

(1)

(26)

(318,502)

 

 

 

 

 

Total assets

 

1,002,077

178,134

230,686

1,410,897

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended December 31, 2005

 

Twelve Months Ended December 31 ,2004

 

 

Domestic-
based
support services

International-
based
support services

Merchant
processing
services

Consolidated

 

Domestic-
based
support services

International-
based
support services

Merchant
processing
services

Consolidated

 

 

 

 

 

 

Revenue before reimbursables

$

959,845

123,865

220,038

1,303,748

 

848,367

108,252

-

956,619

Intersegment revenue

 

(13,809)

-

(149)

(13,958)

 

-

-

-

-

Revenues before reimbursables

 

 

 

 

 

 

 

 

 

 

from external customers

$

946,036

123,865

219,889

1,289,790

 

848,367

108,252

-

956,619

Total revenue

$

1,220,199

146,982

258,082

1,625,263

 

1,071,965

115,052

-

1,187,017

Intersegment revenue

 

(22,183)

-

(149)

(22,332)

 

(9)

-

-

(9)

Revenues from external customers

$

1,198,016

146,982

257,933

1,602,931

 

1,071,956

115,052

-

1,187,008

Depreciation and amortization

$

115,272

16,570

19,372

151,214

 

95,431

13,157

-

108,588

Intersegment expenses

$

34,594

(31,247)

(25,691)

(22,344)

 

22,045

(22,046)

-

(1)

Segment operating income

$

235,267

9,373

42,489

287,129

 

196,067

6,147

-

202,214

Income tax expense

$

80,876

4,925

17,485

103,286

 

66,535

3,147

7,528

77,210

Equity in income of joint ventures

$

-

2,894

3,241

6,135

 

-

1,737

21,999

23,736

Net Income

$

160,853

4,567

29,100

194,520

 

131,966

4,122

14,470

150,558

 

 

 

 

 

 

 

 

 

 

 

Note:

 

Revenues for domestic-based 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 services include electronic payment
processing services and other services provided from outside the United States to clients based mainly outside the United States.
Revenues from merchant processing services include Vital's merchant processing and related services.

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TSYS Announces Earnings for 2005

 

 

 

 

Page 7 of 10

 

 

 

 

 

 

 

 

 

TSYS

Balance Sheet

(Unaudited)

(In thousands)

 

 

At December 31,

 

 

 

2005

2004

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

$

237,569

231,806

 

Restricted cash

 

29,688

24,993

 

Accounts receivable, net

 

184,532

144,827

 

Deferred income tax assets

 

15,264

10,791

 

Prepaid expenses and other current assets

 

45,236

35,739

 

Total current assets

 

512,289

448,156

 

Computer software, net

 

267,988

268,647

 

Property and equipment, net

 

267,979

263,584

 

Contract acquisition costs, net

 

163,861

132,428

 

Goodwill, net

 

141,885

70,561

 

Equity investments, net

 

13,711

54,400

 

Other intangible assets, net

 

13,580

4,692

 

Other assets

 

29,604

39,475

 

Total assets

$

1,410,897

1,281,943

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

$

29,464

75,188

 

Accrued salaries and employee benefits

 

84,348

46,725

 

Current portion of obligations under capital leases

 

2,078

1,828

 

Other current liabilities

 

156,719

148,124

 

Total current liabilities

 

272,609

271,865

 

Deferred income tax liabilities

 

93,881

131,106

 

Obligations under capital leases excluding current portion

 

3,555

4,508

 

Other long-term liabilities

 

24,398

6,038

 

Total liabilities

 

394,443

413,517

 

Minority interest in consolidated subsidiary

 

3,682

3,814

 

Shareholders' Equity:

 

 

 

 

Common stock

 

19,809

19,759

 

Additional paid-in capital

 

54,747

44,732

 

Treasury stock

 

(16,934)

(13,573)

 

Accumulated other comprehensive income

 

5,685

15,373

 

Retained earnings

 

949,465

798,321

 

Total shareholders' equity

 

1,012,772

864,612

 

Total liabilities and shareholders' equity

$

1,410,897

1,281,943

 

 

 

 

 

 

* Certain items from prior periods have been reclassified to conform with the presentation adopted in 2005.

 

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TSYS Announces Earnings for 2005

 

 

 

 

 

Page 8 of 10

 

 

 

 

 

TSYS

 

Cash Flow

 

(Unaudited)

 

(In thousands)

 

 

 

Twelve Months Ended December 31,

 

 

 

 

2005

2004

 

 

Cash flows from operating activities:

 

 

 

 

 

Net income

$

194,520

150,558

 

 

Adjustments to reconcile net income to net cash provided by

 

 

 

 

 

operating activities:

 

 

 

 

 

Minority interests in consolidated subsidiaries' net income

 

256

259

 

 

Equity in income of joint ventures

 

(6,135)

(23,736)

 

 

Loss (gain) on currency translation adjustments, net

 

840

(162)

 

 

Depreciation and amortization

 

151,214

108,588

 

 

Impairment of developed software

 

3,619

10,059

 

 

Charges for (recoveries of) bad debt expense and billing

 

 

 

 

 

adjustments

 

4,589

(2,450)

 

 

Charges for transaction processing provisions

 

7,397

9,878

 

 

Deferred income tax (benefit) expense

 

(35,055)

31,691

 

 

Loss on disposal of equipment, net

 

2,535

387

 

 

(Increase) decrease in:

 

 

 

 

 

Accounts receivable

 

(13,164)

(18,027)

 

 

Prepaid expenses and other assets

 

11,496

(40,383)

 

 

Increase (decrease) in:

 

 

 

 

 

Accounts payable

 

(51,138)

57,979

 

 

Accrued salaries and employee benefits

 

21,420

14,135

 

 

Billings in excess of costs and profits on uncompleted contracts

 

-

(17,573)

 

 

Other liabilities

 

(53,565)

50,832

 

 

Net cash provided by operating activities

 

238,829

332,035

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchase of property and equipment, net

 

(40,904)

(53,890)

 

 

Additions to licensed computer software from vendors

 

(12,875)

(57,302)

 

 

Additions to internally developed computer software

 

(22,602)

(5,224)

 

 

Cash acquired in acquisition

 

38,799

2,422

 

 

Cash used in acquisitions

 

(134,769)

(53,515)

 

 

Dividends received from joint ventures

 

1,659

35,876

 

 

Contract acquisition costs

 

(19,468)

(29,150)

 

 

Net cash used in investing activities

 

(190,160)

(160,783)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Purchases of common stock

 

-

(1,188)

 

 

Proceeds from borrowings of long-term debt

 

48,143

-

 

 

Principal payments on long-term debt borrowings

 

(48,261)

-

 

 

Principal payments on capital lease obligations and software obligations

 

(2,176)

(42,656)

 

 

Dividends paid on common stock

 

(39,418)

(23,621)

 

 

Proceeds from exercise of stock options

 

3,058

1,193

 

 

Net cash used in financing activities

 

(38,654)

(66,272)

 

 

Effect of foreign currency translation on cash and cash equivalents

 

(4,252)

3,953

 

 

Net increase in cash and cash equivalents

 

5,763

108,933

 

 

Cash and cash equivalents at beginning of year

 

231,806

122,873

 

 

Cash and cash equivalents at end of period

$

237,569

231,806

 

 

 

 

 

 

 

 

 

 

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TSYS Announces Earnings for 2005

 

 

 

 

 

 

 

 

Page 9 of 10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Geographic Area Data:

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

(dollars in millions):

 

2005

%

 

 

2004

%

 

UnitedStates

$

356.1

84.6

%

$

251.4

81.8

%

Europe

 

33.5

8.0

 

 

27.9

9.1

 

Canada*

 

23.3

5.5

 

 

20.9

6.8

 

Japan

 

4.0

0.9

 

 

3.7

1.2

 

Mexico

 

2.3

0.6

 

 

2.1

0.7

 

Other

 

1.5

0.4

 

 

1.2

0.4

 

 

$

420.7

100.0

%

$

307.2

100.0

%

 

 

 

Twelve Months Ended December 31,

 

(dollarsinmillions):

 

2005

%

 

 

2004

%

 

UnitedStates

$

1,354.1

84.5

%

$

973.3

82.0

%

Europe

 

131.9

8.2

 

 

101.6

8.6

 

Canada*

 

89.9

5.6

 

 

83.2

7.0

 

Japan

 

15.6

1.0

 

 

14.0

1.2

 

Mexico

 

7.6

0.5

 

 

11.2

0.9

 

Other

 

3.8

0.2

 

 

3.7

0.3

 

 

$

1,602.9

100.0

%

$

1,187.0

100.0

%

 

Geographic Area Revenue by Operating Segment:

 

 

 

 

 

 

 

 

The following table reconciles segment revenues to revenues by reporting segment for the three months ended December 31:

 

 

 

Three Months Ended December 31,

 

 

 

Domestic-based

 

 

International-based

 

Merchant processing

 

 

 

support services

 

 

support services

 

services

 

(dollars in millions):

 

2005

2004

 

 

2005

2004

 

2005

2004

 

United States

$

281.2

251.4

 

 

-

-

 

74.9

-

 

Europe

 

0.1

0.1

 

 

33.4

27.8

 

-

-

 

Canada*

 

23.2

20.9

 

 

-

-

 

0.1

-

 

Japan

 

-

-

 

 

4.0

3.7

 

-

-

 

Mexico

 

2.3

2.1

 

 

-

-

 

-

-

 

Other

 

1.3

1.2

 

 

-

-

 

0.2

-

 

 

$

308.1

275.7

 

 

37.4

31.5

 

75.2

-

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table reconciles segment revenues to revenues by reporting segment for the twelve months ended December 31:

 

 

 

Twelve Months Ended December 31,

 

 

 

Domestic-based

 

 

International-based

 

Merchant processing

 

 

 

Support services

 

 

Support services

 

services

 

(dollars in millions):

 

2005

2004

 

 

2005

2004

 

2005

2004

 

United States

$

1,097.1

973.3

 

 

-

-

 

257.0

-

 

Europe

 

0.5

0.5

 

 

131.4

101.1

 

-

-

 

Canada*

 

89.5

83.2

 

 

-

-

 

0.4

-

 

Japan

 

-

-

 

 

15.6

14.0

 

-

-

 

Mexico

 

7.6

11.2

 

 

-

-

 

-

-

 

Other

 

3.3

3.7

 

 

-

-

 

0.5

-

 

 

$

1,198.0

1,071.9

 

 

147.0

115.1

 

257.9

-

 

 

 

 

 

 

 

 

 

 

 

 

 

* These revenues include those generated from the Caribbean accounts owned by a Canadian institution.

 

 

 

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TSYS Announces Earnings for 2005

 

 

 

 

 

 

 

 

 

Page 10 of 10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Information:

 

 

 

 

 

 

 

 

 

 

 

Accounts on File at December 31,

 

(in millions)

 

2005

%

 

2004

%

 

% Change

 

Consumer

 

267.4

61.0

%

203.3

56.9

%

31.5

%

Retail

 

99.7

22.8

 

93.6

26.2

 

6.4

 

Commercial

 

30.1

6.9

 

25.6

7.2

 

17.7

 

Government services/EBT

 

18.8

4.3

 

16.3

4.6

 

15.4

 

Stored Value

 

14.3

3.3

 

11.9

3.3

 

19.7

 

Debit

 

7.6

1.7

 

6.9

1.8

 

10.5

 

 

 

437.9

100.0

%

357.6

100.0

%

22.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

Dec.31, 2005

 

 

Dec. 31, 2004

 

 

 

 

QTD Average Accounts on File

 

436,019

 

 

344,223

 

 

 

 

YTD Average Accounts on File

 

401,059

 

 

303,102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts on File at December 31,

 

(in millions)

 

2005

%

 

2004

%

 

% Change

 

Domestic

 

381.8

87.2

%

308.2

86.2

%

23.9

%

International

 

56.1

12.8

 

49.4

13.8

 

13.4

 

 

 

437.9

100.0

%

357.6

100.0

%

22.4

%

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

Growth in Accounts on File (in millions):

 

 

 

 

 

 

 

 

 

 

 

Dec. 2004 to Dec. 2005

 

 

Dec. 2003 to Dec. 2004

 

 

 

 

Beginning balance

 

357.6

 

 

273.9

 

 

 

 

Change in accounts on file due to:

 

 

 

 

 

 

 

 

 

Internal growth of existing clients

 

40.8

 

 

36.9

 

 

 

 

New clients

 

51.8

 

 

49.1

 

 

 

 

Purges/Sales

 

(9.6)

 

 

(1.1)

 

 

 

 

Deconversions

 

(2.7)

 

 

(1.2)

 

 

 

 

Ending balance

 

437.9

 

 

357.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of Employees (FTEs):

 

2005

 

 

2004

 

 

 

 

At December 31,

 

6,698

 

 

5,700

 

 

 

 

Quarterly average for period ended December 31,

6,601

 

 

5,667

 

 

 

 

YTD average for period ended December 31,

 

6,317

 

 

5,598

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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