Segment Reporting and Major Customers

3 Months Ended

Mar. 31, 2012

Segment Reporting and Major Customers

Note 8 — Segment Reporting and Major Customers

The Company reports selected information about operating segments in accordance with ASC 280, “Segment Reporting.” The Company’s segment information reflects the information that the chief operating decision maker (CODM) uses to make resource allocations and strategic decisions. The CODM at TSYS consists of the chairman of the board and chief executive officer, the president and the four senior executive vice presidents.

TSYS provides electronic payment processing and other services to card-issuing and merchant acquiring institutions in the United States and internationally through online accounting and electronic payment processing systems.

On May 2, 2011, TSYS completed its acquisition of all of the outstanding common stock of TermNet Merchant Services, Inc. (TermNet), an Atlanta-based merchant acquirer. TermNet’s financial results are included in the Merchant Services segment.

North America Services includes electronic payment processing services and other services provided from within the North America region. International Services includes electronic payment processing and other services provided from outside the North America region. Merchant Services includes electronic processing and other services provided to merchant acquiring institutions. Corporate administration expenses, such as finance, legal, human resources, mergers and acquisitions and investor relations, that exist in all operating segments are accumulated and categorized as Corporate Administration.

The Company believes the terms and conditions of transactions between the segments are comparable to those which could have been obtained in transactions with unaffiliated parties. TSYS’ operating segments share certain resources, such as Information Technology support, that TSYS allocates asymmetrically.

Operating Segments	Three months ended March 31,
							Change
(in thousands)	2012			2011			$			%
Revenues before reimbursable items
North America Services	$	204,050			194,590			9,460			4.9
International Services		96,491			87,419			9,072			10.4
Merchant Services		98,356			86,519			11,837			13.7
Intersegment revenues		(3,718	)		(5,885	)		2,167			36.8
Revenues before reimbursable items from external customers	$	395,179			362,643			32,536			9.0
Total revenues
North America Services	$	240,599			230,558			10,041			4.4
International Services		100,360			90,710			9,650			10.6
Merchant Services		125,518			115,756			9,762			8.4
Intersegment revenues		(5,315	)		(7,594	)		2,279			30.0
Revenues from external customers	$	461,162			429,430			31,732			7.4
Depreciation and amortization
North America Services	$	18,454			19,466			(1,012	)		(5.2	)
International Services		12,911			11,708			1,203			10.3
Merchant Services		8,786			9,146			(360	)		(3.9	)
Corporate Administration		722			748			(26	)		(3.5	)
Total depreciation and amortization	$	40,873			41,068			(195	)		(0.5	)
Segment operating income
North America Services	$	68,173			55,200			12,973			23.5
International Services		4,113			11,025			(6,912	)		(62.7	)
Merchant Services		34,219			26,923			7,296			27.1
Corporate Administration		(21,674	)		(20,120	)		(1,554	)		(7.7	)
Operating income	$	84,831			73,028			11,803			16.2
							Change
Total Assets	At March 31, 2012			At December 31, 2011			$			%
North America Services	$	1,676,032			1,621,664			54,368			3.4
International Services		439,948			433,203			6,745			1.6
Merchant Services		498,586			487,858			10,728			2.2
Corporate Administration		(708,431	)		(684,333	)		(24,098	)		(3.5	)
Total Assets	$	1,906,135			1,858,392			47,743			2.6

Revenues by Geographic Area

Revenues for North America Services and Merchant Services include electronic payment processing and other services provided from the United States to clients domiciled in the United States or other countries. Revenues for International Services include electronic payment processing and other services provided from facilities outside the United States to clients based predominantly outside the United States.

The following geographic data presents revenues based on the domicile of the Company’s customers:

	Three months ended March 31,
(in millions)	2012		2011
United States	$	305.5	$	292.7
Europe*		73.0		65.8
Canada		50.8		44.1
Japan*		18.4		17.4
Mexico		2.4		1.9
Other		11.1		7.5
Total	$	461.2	$	429.4

* Revenues are impacted by movements in foreign currency exchange rates. Refer to the discussion under “Revenues” in the Results of Operations.

The following table reconciles geographic revenues to revenues by operating segment based on the domicile of the Company’s customers:

	Three months ended March 31,
	North America Services				International Services				Merchant Services
(in millions)	2012		2011		2012		2011		2012		2011
United States	$	179.5		178.9		—		—		125.9		113.8
Europe		0.2		0.2		72.8		65.6		—		—
Canada		50.7		44.0		—		—		0.1		0.1
Japan		—		—		18.4		17.4		—		—
Mexico		2.4		1.9		—		—		—		—
Other		2.6		2.5		8.4		4.8		0.2		0.2
Total	$	235.4		227.5		99.6		87.8		126.2		114.1

The Company maintains property and equipment, net of accumulated depreciation and amortization, in the following geographic areas:

(in millions)	At March 31, 2012		At December 31, 2011
United States	$	190.6		194.8
Europe		52.3		52.4
Japan		8.5		9.7
Other		9.5		9.7
Total	$	260.9		266.6

Major Customers

For the three months ended March 31, 2012, the Company had one major customer which accounted for approximately 10.5%, or $48.6 million, of total revenues. For the three months ended March 31, 2011, this major customer accounted for approximately 12.5%, or $53.6 million, of total revenues. Revenues from the major customer for the periods reported are primarily attributable to the North America Services and Merchant Services segments.