10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2015

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 incorporation or organization)	(I.R.S. Employer Identification No.)
One TSYS Way Columbus, Georgia	31901
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (706) 649-2310

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 if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    YES  x    NO  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    YES  ¨    NO  x

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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    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  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated Filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

As of June 30, 2015, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $7,510,394,000 based on the closing sale price as reported on the New York Stock Exchange.

As of February 19, 2016, there were 183,168,798 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Incorporated Documents	Form 10-K Reference Locations
Portions of the Annual Report to Shareholders for the year ended December 31, 2015 (“Annual Report”)	Parts I, II, III and IV
Portions of the 2016 Proxy Statement for the Annual Meeting of Shareholders to be held April 28, 2016 (“Proxy Statement”)	Part III

Table of Contents

		Page
Part I
Safe Harbor Statement			1
Item 1.	Business		1
Item 1A.	Risk Factors		6
Item 1B.	Unresolved Staff Comments		16
Item 2.	Properties		17
Item 3.	Legal Proceedings		17
Item 4.	Mine Safety Disclosures		17
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		18
Item 6.	Selected Financial Data		18
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		18
Item 8.	Financial Statements and Supplementary Data		19
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure		20
Item 9A.	Controls and Procedures		20
Item 9B.	Other Information		20
Part III
Item 10.	Directors, Executive Officers and Corporate Governance		21
Item 11.	Executive Compensation		21
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		21
Item 13.	Certain Relationships and Related Transactions, and Director Independence		22
Item 14.	Principal Accountant Fees and Services		22
Part IV
Item 15.	Exhibits and Financial Statement Schedules		22

PART I

Safe Harbor Statement

We have included or incorporated by reference in this Annual Report on Form 10-K, and from time to time our management may make, statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts but instead represent only our belief regarding future events, many of which by their nature are inherently uncertain and outside our control. These statements include statements other than historical information or statements of current condition and may relate to our future plans, objectives and results, among other things, and also include (without limitation) statements made in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this annual report. It is possible that our actual results may differ, possibly materially, from the anticipated results indicated in these forward-looking statements. Important factors that could cause actual results to differ from those in the forward-looking statements include, among others, those discussed under “Risk Factors” in Part I, Item 1A of this annual report and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this annual report.

Accordingly, you are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statements to reflect the impact of circumstances or events that arise after the dates they are made, whether as a result of new information, future events or otherwise except as required by applicable law. You should, however, consult further disclosures we may make in future filings of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and any amendments thereto.

Item 1. Business

Business. Based in Columbus, Georgia, and traded on the New York Stock Exchange under the symbol “TSS,” we are a global payment solutions provider that provides services to financial and nonfinancial institutions. We also provide processing services, acquiring solutions, related systems and integrated support services to merchant acquirers and merchants. In addition, we provide general purpose reloadable (“GPR”) prepaid and payroll cards and alternative financial service solutions to the underbanked and other consumers. The services we provide are divided into four operating segments, North America Services, which accounted for 47% of our revenues in 2015, NetSpend, which accounted for 21% of our revenues in 2015, Merchant Services, which accounted for 20% of our revenues in 2015, and International Services, which accounted for 12% of our revenues in 2015.

Seasonality. Due to the somewhat seasonal nature of the credit card industry, our revenues and results of operations have generally increased in the fourth quarter of each year because of increased transaction and authorization volumes during the traditional holiday shopping season.

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Intellectual Property. Our intellectual property portfolio is a component of our ability to be a leading provider of transaction processing and other payment-related services. We diligently protect and work to build our intellectual property rights through patent, servicemark and trade secret laws. We also use various licensed intellectual property to conduct our business. In addition to using our intellectual property in our own operations, we grant licenses to certain of our clients to use our intellectual property.

Major Customers. A significant amount of our revenues is derived from long-term contracts with large clients. The loss of one of our large clients could have a material adverse effect on our financial position, results of operations and cash flows. See “Major Customer” and “Operating Segments” under the “Financial Review” Section on pages 21 through 27, and Note 22 on pages 80 through 82 of the Annual Report which are incorporated in this document by reference.

Competition. We encounter vigorous competition in providing electronic payment services from several different sources. TSYS’ business is primarily derived from third-party processing for issuers and merchant acquirers. Most of the national market in third party processors is presently being provided by approximately three vendors. We believe that as of December 31, 2015 we are the largest third party card processor in the United States. In addition, we compete with banks and acquirers who choose to process payments in house through proprietary systems and with software vendors which provide their products to institutions which process in house. We are presently encountering, and in the future anticipate continuing to encounter, substantial competition from data processing, bankcard computer service firms and third-party software vendors within the United States and from certain international processors, in-country providers and third-party software vendors with respect to our International Services segment. In addition, payments networks such as Visa, MasterCard and Discover are increasingly offering products and services that compete with our products and services.

Based upon available market share data that includes cards processed in house, we believe that during 2015 we provided issuer processing services for approximately 40% of the domestic consumer credit card accounts in market, 45% of the domestic commercial credit cards issued in market, 81% of the Canadian credit card accounts in market and 22% of credit card accounts in TSYS’ Home European Markets (UK, Ireland, Netherlands, Italy, Germany and Switzerland). With respect to the Merchant Services Segment, we provide third party processing services to merchant acquirers and Independent Sales Organizations (“ISOs”) and we are also a direct merchant acquirer. We believe that we are the second largest processor of merchant accounts and process transactions for approximately 21% of all bankcard accepting merchant locations in the United States. Our direct merchant acquirer business is ranked as the 11^th largest merchant acquirer in the U.S. based on active merchant outlets according to The Nilson Report dated March 2015. Through our NetSpend business, we believe that we are the largest prepaid program manager in the United States based on gross dollar volume.

Our major competitor in the card processing industry is First Data Resources, LLC, a wholly owned subsidiary of First Data Corporation, which provides card processing services. The principal methods of competition between us and First Data Resources are price, system performance and reliability, breadth of features and functionality, disaster recovery capabilities and business continuity preparedness, data security, scalability and flexibility of infrastructure and servicing capability. Other affiliates of First Data Corporation also compete with us with respect to the provision of merchant services and GPR prepaid card services.

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Regulation and Examination. Government regulation affects key aspects of our business, in the U.S. as well as internationally. In addition, we are registered with Visa, MasterCard, American Express and the Discover Network as a service provider and are subject to their respective rules which subject us to a variety of fines or penalties that may be levied by the card networks for certain acts or omissions. Set forth below is a brief summary of some of the significant laws and regulations that apply to us. These descriptions are not exhaustive and are qualified in their entirety by reference to the particular statutory or regulatory provision, which provisions are subject to change.

Banking Laws and Regulations. Because we provide electronic payment processing services to banks and other financial institutions, we are subject to examination by the Federal Financial Institutions Examination Council (“FFIEC”), an interagency body comprised primarily of federal banking regulators, and also subject to examination by the various state financial regulatory agencies which supervise and regulate the financial institutions for which we provide electronic payment processing and other payment related services. The FFIEC examines large data processors in order to identify and mitigate risks associated with systemically significant service providers, including specifically the risks they may pose to the banking industry.

Money Transmitter and Payment Instrument Laws and Regulations. Our NetSpend business is subject to money transfer and payment instrument licensing regulations. We have obtained licenses to operate as a money transmitter in 45 states and the District of Columbia. The remaining U.S. jurisdictions either do not currently regulate money transmitters or have rendered a regulatory determination or a legal interpretation that the money services laws of that jurisdiction do not require us to obtain a license in connection with the conduct of our business.

In those states where we are licensed as a money transmitter, our NetSpend business is subject to direct supervision and regulation by the relevant state banking departments or similar agencies charged with enforcement of the money transmitter statutes and we must comply with various requirements, such as those related to the maintenance of a certain level of net worth, surety bonding, selection and oversight of our authorized agents, maintaining permissible investments in an amount equal to our outstanding payment obligations, recordkeeping and reporting and disclosures to consumers. Our NetSpend business is also subject to periodic examinations by the relevant licensing authorities, which may include reviews of our compliance practices, policies and procedures, financial position and related records, various agreements that we have with our issuing banks, distributors and other third parties, privacy and data security policies and procedures and other matters related to our business.

Privacy, Information Security, and Other Business Practices Regulation. Aspects of our business are also subject, directly or indirectly, to business and trade practices regulation in the United States, the European Union and elsewhere. For example, in the United States, we and our financial institution clients are, respectively, subject to the Federal Trade Commission’s and the federal banking regulators’ privacy and information safeguarding requirements under the Gramm-Leach-Bliley Act. These requirements limit the manner in which personal information may be collected, stored, used and disclosed. The Federal Trade Commission’s information safeguarding rules require us to develop, implement and maintain a written, comprehensive information security program containing safeguards that are appropriate for our size and complexity, the nature and scope of our activities and the sensitivity of any customer information at issue. Our financial institution clients in the United States are subject to similar requirements under the guidelines

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issued by the federal banking regulators. As part of their compliance with these requirements, each of our U.S. financial institution clients is expected to have a program in place for responding to unauthorized access to, or use of, customer information that could result in substantial harm or inconvenience to customers.

Anti-money Laundering and Counter Terrorist Regulation. The Financial Crimes Enforcement Network of the U.S. Department of the Treasury (“FinCEN”) has issued a rule regarding the applicability of the Bank Secrecy Act’s anti-money laundering provisions to “prepaid access programs.” This rulemaking clarifies the anti-money laundering obligations for entities, such as our NetSpend business and its distributors, engaged in the provision and sale of prepaid access devices like our GPR prepaid debit cards. Our NetSpend business has registered with FinCEN as a money services business. This registration results in our having direct responsibility to maintain and implement an anti-money laundering compliance program.

As are all U.S. persons, we are also subject to regulations imposed by the U.S. Department of the Treasury Office of Foreign Assets Control (“OFAC”) which prohibit or restrict financial and other transactions with specified countries and designated individuals and entities such as terrorists and narcotics traffickers. We have procedures and controls in place which are designed to protect against having direct business dealings with such prohibited countries, individuals or entities. We also have procedures and controls in place which are designed to allow our processing clients to protect against having direct business dealings with such prohibited countries, individuals or entities.

The Dodd-Frank Act. We and the rest of the financial services industry continue to experience increased legislative and regulatory scrutiny, including the enactment of additional legislative and regulatory initiatives such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Reform Act”). This legislation, which provides for significant financial regulatory reform, may have a significant and negative impact on us and our clients, which could impact TSYS’ earnings through fee reductions, higher costs (both regulatory and implementation) and new restrictions on our operations. The Reform Act, among other things, provides for the regulation and oversight by the Board of Governors of the Federal Reserve System (“Board”) of debit interchange fees that are typically paid by acquirers and charged or received by a payment card network for the purpose of compensating an issuer for its involvement in an electronic debit transaction. As of October 1, 2011, in accordance with the Reform Act, the Board capped the maximum U.S. debit interchange fee assessed for debit cards issued by large financial institutions at twenty-one cents per transaction plus five basis points, before applying a fraud prevention adjustment of up to an additional one cent. It remains difficult to predict the impact that the debit interchange regulations will ultimately have on us, but we do not expect that they will have a significant negative impact on our business.

The Reform Act also created a new Consumer Financial Protection Bureau (“CFPB”) with responsibility for regulating consumer financial products and services and enforcing most federal consumer protection laws in the area of financial services, including consumer credit and the prepaid card industry. For example, the CFPB has proposed regulations regarding the prepaid industry, which, if adopted as proposed, could impose significant additional disclosure requirements, overdraft requirements, and other requirements on the prepaid card industry, including our NetSpend business, effective in 2016 or 2017. Similarly, other future actions of the CFPB may make payment card or product transactions generally less attractive to card issuers, acquirers, consumers and merchants by further regulatory disclosures, payment card practices, fees,

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routing and other matters with respect to credit, debit and prepaid cards, and thus negatively impact our business. In addition, the Reform Act created a Financial Stability Oversight Council that has the authority to determine whether nonbank financial companies such as TSYS should be supervised by the Board because they are systemically important to the U.S. financial system. To date, the Financial Stability Oversight Council does not appear to be focused on regulating entities such as TSYS. However, any such future designation would result in increased regulatory burdens on our business.

State Wage Payment Laws and Regulations. The use of payroll card programs as a means for an employer to remit wages or other compensation to its employees or independent contractors is governed by state labor laws related to wage payments. The paycard portion of our NetSpend business includes payroll cards and convenience checks and is designed to allow employers to comply with applicable state wage and hour laws. Most states permit the use of payroll cards as a method of paying wages to employees, either through statutory provisions allowing such use or, in the absence of specific statutory guidance, the adoption by state labor departments of formal or informal policies allowing for their use. Nearly every state allowing payroll cards places certain requirements and/or restrictions on their use as a wage payment method, the most common of which involve obtaining the prior written consent of the employee, limitations on fees and disclosure requirements.

Escheat Laws. We are subject to unclaimed or abandoned property laws in the United States and in foreign countries that require us to transfer to certain government authorities the unclaimed property of others that we hold when that property has been unclaimed for a certain period of time. Moreover, we are subject to audit by state regulatory authorities with regard to our escheatment practices.

Employees. As of December 31, 2015, we had approximately 10,500 employees.

Available Information. Our website address is www.tsys.com. You may obtain free electronic copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports in the Investor Relations section of our website under the heading “SEC Filings.” These reports are available on our website as soon as reasonably practicable after we electronically file them with the Securities and Exchange Commission.

We have adopted a Code of Business Conduct and Ethics for our directors, officers and employees and have also adopted Corporate Governance Guidelines. Our Code of Business Conduct and Ethics, Corporate Governance Guidelines and the charters of our board committees are available in the Corporate Governance section of our website at www.tsys.com under “Investor Relations” then “Corporate Governance.”

For more information about our business see the “Financial Overview” Section on pages 11 through 13, the “Financial Review” Section on pages 13 through 40 and Note 1, Note 2, Note 9, Note 16, Note 22, Note 24 and Note 27 of Notes to Consolidated Financial Statements on pages 46 through 55, pages 55 and 56, pages 60 and 61, pages 70 through 73, pages 80 through 82, pages 83 through 86, and pages 87 and 88 of the Annual Report which are incorporated in this document by reference.

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Item 1A. Risk Factors

This section highlights specific risks that could affect our business and us. Although this section attempts to highlight key factors, please be aware that other risks may prove to be important in the future. New risks may emerge at any time and we cannot predict such risks or estimate the extent to which they may affect our financial performance. In addition to the factors discussed elsewhere or incorporated by reference in this report, among the other factors that could cause actual results to differ materially are the following:

Security and privacy breaches of our systems may damage client relations, our reputation and expose us to financial liability.

The uninterrupted operation of our processing systems and the confidentiality of the client/consumer information that resides on our systems is critical to the successful operation of our business. We have security, backup and recovery systems in place, as well as business continuity plans designed to ensure our systems will not be inoperable. Recently, a number of companies have experienced security breaches in which credit card, debit card and other personal information has been stolen. Our visibility in the global payments industry may attract hackers to conduct attacks on our systems. Although we devote significant resources to information security and have what we believe to be sufficient security around our systems to prevent unauthorized access, third parties may have the technology or know-how to breach the security of the information transmitted in connection with payment processing transactions, and our security measures may not effectively prohibit others from obtaining improper access to this information. An information breach in the system and loss of confidential information could have a longer and more significant impact on our business than a hardware failure. We electronically store personal information, such as credit card numbers and related information, about consumers who are customers of our clients. If we are unable to protect, or our clients or consumers perceive that we are unable to protect, the security and privacy of our electronic transactions, our growth could be materially adversely affected. A security or privacy breach or a system failure may:

• cause our clients and consumers to lose confidence in our services;

• harm our reputation;

• expose us to financial liability, both as a result of litigation and contractually;

• cause us to modify our protective measures which would increase our expenses; and

• increase our expenses from potential remediation costs.

Our financial exposure from the items referenced above may either not be insured against or not fully covered through any insurance maintained by us. In addition, our ability to attract and retain clients and employees could be adversely affected to the extent our reputation is damaged. While we believe we use proven applications designed for data security and integrity to process electronic transactions, there can be no assurance that our use of these applications will be sufficient to counter all current and emerging technology threats designed to breach our systems in order to gain access to confidential information or our intellectual property or assurance that our use of these applications will be sufficient to address the security and privacy concerns of existing and potential clients and consumers.

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Consolidation among financial institutions and retail clients, including the merger of TSYS clients with entities that are not TSYS clients or the sale of portfolios by TSYS clients to entities that are not TSYS clients could materially impact our financial position and results of operation.

Consolidation among financial institutions, particularly in the area of credit card operations, and consolidation in the retail industry, continues to be a major risk. Specifically, we face the risk that our clients may merge with entities that are not our clients, our clients may sell portfolios to entities that are not our clients or our financial institution clients may otherwise cease to exist, thereby negatively impacting our existing agreements and projected revenues with these clients. In addition, consolidation among financial institutions has led to an increasingly concentrated client base at TSYS which results in a changing client mix toward larger clients. Continued consolidation among financial institutions could increase the bargaining power of our current and future clients and further increase our client concentration. Consolidation among financial institutions and retail clients, the nationalization of financial institutions or the seizure by banking regulators of financial institutions and the resulting loss of any significant client by us could have a material adverse effect on our financial position and results of operations.

If we do not successfully renew or renegotiate our agreements with our clients, our business will suffer.

A significant amount of our revenues is derived from long-term contracts with large clients. The financial position of these clients and their willingness to pay for our products and services are affected by general market positions, competitive pressures and operating margins within their industries. When our long-term contracts expire, the time of renewal or renegotiation presents our clients with the opportunity to consider other providers, transition all or a portion of the services we provide in-house or seek lower rates for our services. The loss of our contracts with existing clients or renegotiation of contracts at reduced rates or reduced service levels could have a material adverse effect on our financial position and results of operation.

Economic and geopolitical conditions could adversely affect our business.

A significant portion of our revenues is derived from the number of consumer payment transactions that we process which may be affected by, among other things, overall economic conditions. The payment processing industry depends heavily upon the overall level of consumer, business and government spending to support the necessary volume of payment transactions. Any change in economic factors, including a sustained deterioration in general economic conditions or consumer confidence, particularly in the United States or Europe, or increases in interest rates in key countries in which we operate may adversely affect our financial performance by reducing the number of transactions involving credit, debit, GPR prepaid and other payment-related cards. Future reductions in consumer spending through credit, debit, GPR prepaid debit and other payment-related card usage, including through an increase in the number of cash transactions, would likely have a material adverse effect on our financial position and results of operations.

The ability to adapt technology to changing industry and client needs or trends may affect our competitiveness or demand for our products, which may adversely affect our financial results.

The payment processing market in which we compete is subject to rapid and significant technological changes, new product introductions, evolving industry standards and changing client

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needs and preferences. Also, our clients continue to adopt new technology for business and personal uses. We must anticipate and respond to these industry and client changes in order to remain competitive. If we are unable to effectively respond to these changes, the competitiveness of and demand for our services and products will be materially impaired and may result in our services being removed from the payments value chain. Our future success will depend in part on our ability to respond to new competitors and to develop or adapt to technological changes and evolving industry standards. Our failure to do so could have a material adverse effect on our financial position and results of operation.

The market for our electronic payment services is evolving and may not continue to develop or grow rapidly enough for us to maintain and increase our profitability.

If the number of electronic payment transactions of the type we process does not continue to grow or if businesses or consumers do not continue to adopt our services, it could have a material adverse effect on the profitability of our business, financial position and results of operations. We believe future growth in the use of credit, debit and GPR prepaid cards and other electronic payments will be driven by the cost, ease-of-use, and quality of products and services offered to consumers and businesses. In order to consistently increase and maintain our profitability, businesses and consumers must continue to use electronic payment methods that we process, including credit, debit and GPR prepaid cards.

We may not convert and deconvert client’s portfolios as scheduled.

The timing of the conversion of card portfolios of new payment processing clients to our processing systems and the deconversion of existing clients to other systems impacts our revenues and expenses. There is no guarantee that conversions and deconversions will occur as scheduled and this may have a material adverse effect on our financial position and results of operations.

Acquisitions and integrating such acquisitions create certain risks and may affect our financial results.

We have acquired businesses both in the U.S. and internationally and will continue to explore opportunities for strategic acquisitions in the future. On January 26, 2016, we announced our proposed acquisition of TransFirst Holdings Corp. (TransFirst”). The acquisition and integration of businesses such as TransFirst involve a number of risks. The core risks are in the areas of valuation (negotiating a fair price for the business based on inherently limited diligence) and integration (managing the complex process of integrating the acquired company’s people, products, technology and other assets so as to realize the projected value of the acquired company and the synergies projected to be realized in connection with the acquisition). Other risks include the inaccurate assessment of disclosed liabilities, inconsistencies in standards, controls, procedures and policies, including internal control and regulatory requirements under the Sarbanes-Oxley Act of 2002, and personnel turnover. Furthermore, the TransFirst acquisition is subject customary terms and conditions and may not be completed at all.

The success of the TransFirst acquisition and other future acquisitions will depend, in part, on our ability to realize the anticipated benefits from integrating the acquired business with our existing businesses. The integration process may be complex, costly and time consuming. The process of integrating the operations of TransFirst or any future acquisition could cause an

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interruption of, or loss of momentum in, the activities of one or more of our combined businesses and the possible loss of key personnel. The diversion of management’s attention and any delays or difficulties encountered in connection with acquisitions and the integration of the acquired companies’ operations could have an adverse effect on our financial position and results of operations.

Following completion of the TransFirst acquisition, we may not be able to maintain the levels of revenue, earnings or operating efficiency that each of TSYS and TransFirst have achieved or might achieve separately. In addition, the success of the TransFirst acquisition will depend, in part, on the combined company’s ability to realize the anticipated benefits from the acquisition, including anticipated synergies and costs savings. Furthermore, in order to finance the acquisition of TransFirst, we expect to incur significant amounts of additional debt.

Finally, any international acquisitions often involve additional or increased risks including for example:

• managing geographically separated organizations, systems and facilities;

• integrating personnel with diverse business backgrounds and organizational cultures;

• complying with foreign regulatory requirements;

• fluctuations in currency exchange rates;

• difficulty entering new foreign markets due to, among other things, customer acceptance and business knowledge of these new markets; and

• general economic and political conditions.

A negative perception of our company in the marketplace may affect our brands and reputation, which are key assets of our business.

Our brands and their attributes are key assets of our business. The ability to attract and retain business clients and consumers to TSYS and NetSpend branded products depends highly upon the external perceptions of our company and our industry’s quality of service, use and protection of account holder data, regulatory compliance, financial condition, corporate responsibility and other factors. Negative perception or publicity, particularly in light of the rapid, widespread use of social media channels, could cause damage to our brands and reputation.

If business clients and consumers turn away from our brand and products, we may be required to incur additional liabilities and costs, result in greater regulatory or legislative scrutiny, and materially and adversely affect our financial position, results of operations and prospects for future growth and overall business.

Our business may be adversely affected by currency, geopolitical and other risks associated with foreign operations and, as we pursue international expansion, we may incur higher than anticipated costs and will become more susceptible to these risks.

We provide services to our clients worldwide. As a result, our revenues derived from international operations are subject to risk of loss from foreign currency exchange rates. Revenue and profit generated by international operations will increase or decrease compared to prior periods as a result of changes in foreign currency exchange rates. We have not entered into foreign

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exchange forward contracts to mitigate the risks associated with our foreign operations. In addition, we may become subject to exchange control regulations that might restrict or prohibit the conversion of our foreign currency into U.S. dollars. The occurrence of any of these factors could decrease the value of revenues we receive from international operations and adversely affect our financial position and results of operations. In addition, our revenues derived from international operations are subject to risk of loss as a result of social and geopolitical instability and unfavorable political or diplomatic developments which could negatively impact our financial results.

We may also incur higher than anticipated costs as we expand internationally and grow our international client base. If we are unable to successfully manage these expenses as our business expands, our financial position and results of operations could be negatively impacted.

The costs and effects of litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our financial position and results of operations.

We are from time to time involved in various litigation matters and governmental or regulatory investigations or similar matters arising out of our business. Our insurance may not cover all claims that may be asserted against it, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Should the ultimate judgments or settlements in any pending litigation or future litigation or investigation significantly exceed our insurance coverage, they could have a material adverse effect on our financial position and results of operations. In addition, we may not be able to obtain appropriate types or levels of insurance in the future, nor may we be able to obtain adequate replacement policies with acceptable terms, if at all. For more information about our legal proceedings, see Item 3 of this annual report.

We operate in a competitive business environment, and if we are unable to compete effectively our financial position may be adversely affected.

The market for payment processing services is intensely competitive. Our competitors vary in size and in the scope and breadth of the services they offer. We face direct competition from third parties, and since certain of our larger potential issuer clients develop their key applications in-house and therefore view their system requirements from a make-versus-buy perspective, we often compete against our potential issuer clients’ in-house capacities. In addition, we expect that the markets in which we compete will continue to attract new competitors and new technologies, including non-traditional competitors who offer certain innovations in payment methods. There can be no assurance that we will be able to compete successfully against current or future competitors or that the competitive pressures we face in the markets in which we operate will not materially adversely affect our financial position and results of operations.

The market for prepaid cards and alternative financial services is highly competitive and competition is increasing as more companies endeavor to address the needs of underbanked consumers.

With our 2013 acquisition of NetSpend, we added an aspect to our business to complement our previous presence in the prepaid processing space to include GPR prepaid and payroll cards and alternative financial services. The alternative financial services industry, including the prepaid card market, is subject to intense and increasing competition. Our NetSpend business directly competes

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with a number of companies that market open-loop prepaid cards and demand deposit accounts through retail and online distribution. In addition, we compete with banks that offer demand deposit accounts and other traditional issuers of debit cards. We also compete against large retailers who are seeking to integrate more financial services into their product offerings. We anticipate increased competition from alternative financial services providers who are often well-positioned to service the underbanked and who may wish to develop their own prepaid card or demand deposit account programs. The increased desire of banks, retailers and alternative financial services providers to develop and promote prepaid card and demand deposit account programs could have an adverse effect on the NetSpend portion of our business. We also face strong price competition. To stay competitive, we may have to increase the incentives that we offer to our distributors and decrease the prices of our products and services, which could adversely affect our operating results.

Our NetSpend business relies on certain relationships with issuing banks and distributors. The loss of such relationships or if we are unable to maintain such relationships on terms that are favorable to us, our business, financial position and operating results may be materially adversely affected.

Our NetSpend business relies on arrangements we have with issuing banks to provide us with critical products and services, including the FDIC-insured depository accounts tied to the cards we manage, access to the ATM networks, membership in the card associations and network organizations and other banking services. The majority of our active NetSpend cards are issued through Meta Payment Systems (“MetaBank”). If our relationship with MetaBank deteriorates, it could have an adverse impact on the NetSpend business. If any material adverse event were to affect MetaBank, or one or more of our other issuing banks or if we were to lose MetaBank or one or more of the other issuing banks, we would be forced to find an alternative provider of these critical banking services for our NetSpend business. It may not be possible to find a replacement bank on terms that are acceptable to us or at all. Any change in the issuing banks could disrupt the business or result in arrangements with new banks that are less favorable to us than those we have with our existing issuing banks, either of which could have a material adverse impact on our results of operations and our financial position.

Furthermore, our NetSpend business depends in large part on establishing agreements with distributors, primarily alternative financial services providers as well as grocery and convenience stores and other traditional retailers. Some of these distributors may endeavor to internally develop their own prepaid debit card programs or enter into exclusive relationships with our competitors to distribute their products. The loss of, or a substantial decrease in revenues from, one or more of our top distributors could have a material adverse effect on the NetSpend business and our operating results.

Changes in the laws, regulations, policies, credit card association rules or other industry standards affecting our business may impose costly compliance burdens and negatively impact our business.

There may be changes in the laws, regulations, credit card association rules or other industry standards that affect our operating environment in substantial and unpredictable ways in the U.S. as well as internationally. Changes to statutes, regulations or industry standards, including interpretation and implementation of statutes, regulations or standards, could increase the cost of doing business or affect the competitive balance. Regulation of the payments industry has increased

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significantly in recent years. Failure to comply with laws, rules and regulations or standards to which we are subject in the U.S. as well as internationally, including the card network rules and rules with respect to privacy and information security, may result in the suspension or revocation of a license or registration, the limitation, suspension or termination of service, and the imposition of fines, sanctions or other penalties, which could have a material adverse effect on our financial position and results of operations, as well as damage our reputation. Even if such a change to statutes, regulations or industry standards does not directly apply to us, the effects of such a change on our financial institution clients could result in material, indirect effects on the way we operate or the costs to operate our business and impair the demand for our services amongst our financial institution clients.

We and the rest of the financial services industry continue to experience increased legislative and regulatory scrutiny, including the enactment of additional legislative and regulatory initiatives such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Reform Act”). This legislation provides for significant financial regulatory reform. The Reform Act, among other things, provides for the regulation and oversight by the Board of Governors of the Federal Reserve System (“Board”) of debit interchange fees that are typically paid by acquirers and charged or received by a payment card network for the purpose of compensating an issuer for its involvement in an electronic debit transaction. The Reform Act also created a new Consumer Financial Protection Bureau (“CFPB”) with responsibility for regulating consumer financial products and services and enforcing most federal consumer protection laws in the area of financial services, including consumer credit and the prepaid card industry. The CFPB recently mandated that supervised financial institutions, including our clients, are required to ensure that their service providers are in compliance with applicable federal consumer laws, which may increase regulatory oversight and our cost of doing business. In addition, the CFPB has proposed regulations regarding the prepaid industry, which regulations, if adopted as proposed, may have a negative impact on the revenues and financial position of our NetSpend business. Furthermore, the Reform Act created a Financial Stability Oversight Council that has the authority to determine whether nonbank financial companies such as TSYS should be supervised by the Board because they are systemically important to the U.S. financial system. Any such designation would result in increased regulatory burdens on our business. The overall impact of the Reform Act on TSYS is difficult to estimate. Current and future regulations as a result of the Reform Act may adversely affect our business or operations, directly or indirectly (if, for example, our clients’ businesses and operations are adversely affected).

With respect to our NetSpend business, because each distributor offers prepaid cards and reload services as an agent of NetSpend, or another third party, we do not believe that the distributors themselves are required to become licensed as money transmitters in order to engage in such activity. However, there is a risk that a federal or state regulator will take a contrary position and initiate enforcement or other proceedings against a distributor, us, our issuing banks or our other service providers. In addition, we understand that state banking departments, which are charged with regulating the business of money transmission, have traditionally taken the position that the offering of payroll and other prepaid cards does not constitute money transmission and so we are not required to obtain a state money transmission license in order to engage in this activity. However, even though our NetSpend business is authorized to operate as a money transmitter in 45 states and the District of Columbia, there remains a risk that a federal or state regulator will initiate enforcement or other proceedings against us or our issuing banks. If the relevant party is unsuccessful in making a persuasive argument that it should not be subject to such licensing

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requirements or that it is already licensed to engage in such activity, and is therefore deemed to be in violation of one or more of the state money transmitter statutes, it could result in the imposition of fines, the suspension of the relevant party’s ability to offer some or all of our prepaid cards and related services in the relevant jurisdiction, civil liability and criminal liability, each of which could negatively impact our financial position and results of operations. Furthermore, if the federal government or one or more state governments impose additional legislative or regulatory requirements on our NetSpend business, the issuing banks or the distributors, or prohibit or limit the activities of our NetSpend business as currently conducted, we may be required to modify or terminate some or all of our NetSpend products and services offered in the relevant jurisdiction or certain of the issuing banks may terminate their relationship with us.

In addition, we are subject to tax laws in each jurisdiction where we do business. Changes in tax laws or their interpretations could decrease the value of revenues we receive, the value of tax losses and tax credits carry forwards recorded on our balance sheet and the amount of our cash flow and have a material adverse effect on our financial position and results of operations. Furthermore, changes in accounting policies can significantly affect how we calculate expenses and earnings.

We rely on financial institution sponsors in order to process Visa, MasterCard, American Express and Discover transactions. If these sponsorships are terminated and we are unable to secure new sponsors our business and results of operations will be materially and adversely affected.

In order to provide our Visa, MasterCard, American Express and Discover transaction processing services, we must be either a direct participant or be registered as a merchant processor or service provider of Visa, MasterCard, American Express and Discover. Registration as a merchant processor or service provider is dependent upon our being sponsored by member banks of these credit card companies. If our sponsor banks should stop providing sponsorship for us, we would need to find another financial institution to provide those services or we would need to attain direct participation, either of which could prove to be difficult and expensive. If we are unable to find a replacement financial institution to provide sponsorship or attain direct participation, we may no longer be able to provide processing services to the affected customers, which would have a material adverse effect on our business and results of operations.

If we fail to comply with the applicable requirements of the card networks, they could seek to fine us, suspend us or terminate our registrations. If our merchants or independent sales organizations incur fines or penalties that we cannot collect from them, we could end up bearing the cost of such fines or penalties.

We are subject to card association and network rules that could subject us to a variety of fines or penalties that may be levied by the card networks for certain acts or omissions. The rules of the card networks are set by their boards, which may be influenced by card issuers, and some of those issuers are our competitors with respect to these processing services. Many banks directly or indirectly sell processing services to merchants in direct competition with us. These banks could attempt, by virtue of their influence on the networks, to alter the networks’ rules or policies to the detriment of non-members like us. The termination of our registrations or our status as a service provider or a merchant processor, or any changes in card association or other network rules or standards, including interpretation and implementation of the rules or standards, that increase the cost of doing business or limit our ability to provide transaction processing services to our customers, could have a material adverse effect on our financial position and results of operations.

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If a merchant or an ISO fails to comply with the applicable requirements of the card associations and networks, it could be subject to a variety of fines or penalties that may be levied by the card associations or networks. If we cannot collect such amounts from the applicable merchant or ISO, we could end up bearing such fines or penalties, resulting in lower earnings for us.

The providers of alternative financial services that distribute our NetSpend products are subject to extensive and complex federal and state regulations and new regulations and/or changes to existing regulations could adversely affect their ability to offer GPR cards through their locations, which in turn could have an adverse impact on our business.

The distributors include a large number of companies in industries that are highly regulated, such as payday lending and it is possible that changes in the legal regime governing such businesses could limit their ability to distribute our NetSpend products or adversely impact their business and thereby have an indirect adverse impact on our NetSpend business. For example, a large number of states have either prohibited, or imposed substantial restrictions upon, the offering of “payday loans” and this activity continues to draw substantial scrutiny from federal and state legislatures, regulatory authorities and various consumer groups. Furthermore, the Reform Act grants supervisory authority over entities engaged in this activity to the CFPB, which is in the process of promulgating regulations which may significantly impact the operations and/or viability of various entities. As a number of our NetSpend distributors are engaged in offering payday loans, further legislative and regulatory restrictions that negatively impact their ability to continue their operations could have a corresponding negative impact on our ability to offer GPR cards through their locations, potentially resulting in a significant decline in revenue from the NetSpend business.

We are subject to the business cycles and credit risk of our merchant customers and our independent sales organizations.

A recessionary economic environment could affect our merchants through a higher rate of business closures, resulting in lower revenues and earnings for us. Our merchants are liable for any charges properly reversed by the card issuer on behalf of the cardholder. Our merchants and ISOs are also liable for any fines, or penalties, that may be assessed by any card networks. In the event, however, that we are not able to collect such amounts from the merchants or ISOs, due to merchant fraud, breach of contract, insolvency, bankruptcy or any other reason, we may be liable for any such charges which could have a material adverse effect on our financial position and results of operations.

We incur chargeback liability when our merchants refuse or cannot reimburse chargebacks resolved in favor of their customers. We cannot accurately anticipate these liabilities, which may adversely affect our financial results.

In the event a billing dispute between a cardholder and a merchant is not resolved in favor of the merchant, the transaction is normally “charged back” to the merchant and the purchase price is credited or otherwise refunded to the cardholder. If we are unable to collect such amounts from the merchant’s account or reserve account (if applicable), or if the merchant refuses or is unable, due to closure, bankruptcy or other reasons, to reimburse us for a chargeback, we bear the loss for the amount of the refund paid to the cardholder. We may experience significant losses from chargebacks in the future. Any increase in chargebacks not paid by our merchants could have a material adverse effect on our financial position and results of operation. We have policies to

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manage merchant-related credit risk and often mitigate such risk by requiring collateral and monitoring transaction activity. Notwithstanding our programs and policies for managing credit risk, it is possible that a default on such obligations by one or more of our merchants could have a material adverse effect on our business.

Fraudulent activities by merchants, prepaid card holders or others and losses from overdrawn cardholder accounts may adversely affect our financial results.

We have potential liability for fraudulent bankcard transactions or credits initiated by merchants or others, and our prepaid card programs expose us to threats involving the misuse of cards, collusion, fraud and identify theft. Examples of merchant fraud include when a merchant knowingly uses a stolen or counterfeit bankcard or card number to record a false sales transaction, processes an invalid bankcard, or intentionally fails to deliver the merchandise or services sold in an otherwise valid transaction. Criminals are using increasingly sophisticated methods to engage in illegal activities such as counterfeit and fraud. While we have systems and procedures designed to detect and reduce the impact of fraud, we cannot assure the effectiveness of these measures. It is possible that incidents of fraud could increase in the future. Although a large portion of the fraudulent activity associated with the cards we manage is addressed through the chargeback systems and procedures maintained by the card associations and networks, we are often responsible for other losses due to merchant, cardholder and other types of fraud. No system or procedures established to detect and reduce the impact of fraud are entirely effective. Although we actively devote efforts to effectively manage risk and prevent fraud, we could nevertheless experience an increase in fraud losses over our historical experience. Failure to effectively manage risk and prevent fraud would increase our chargeback liability or other liability. Increases in chargebacks or other liability could have a material adverse effect on our financial position and results of operations.

Our systems and our third-party providers’ systems may fail which could interrupt our service, cause us to lose business, increase our costs and expose us to liability.

We depend on the efficient and uninterrupted operation of our computer systems, software, data centers and telecommunications networks, as well as the systems and services of third parties. A system outage or data loss could have a material adverse effect on our business, financial position and results of operations. Not only would we suffer damage to our reputation in the event of a system outage or data loss, we may also be liable to third parties. Many of our contractual agreements with financial institutions require the payment of penalties if we do not meet certain operating standards. Our systems and operations or those of our third-party providers could be exposed to damage or interruption from events that may be outside our control. Events that could cause system interruptions include, among other things, fire, natural disaster, power loss, telecommunications failure, terrorist acts, war, unauthorized entry and computer viruses or other defects. Defects in our systems or those of third parties, errors or delays in the processing of payment transactions, telecommunications failures, or other difficulties could result in loss of revenue, loss of customers, loss of merchant and cardholder data, harm to our business or reputation, exposure to fraud losses or other liabilities, negative publicity, additional operating and development costs, fines and other sanctions imposed by card networks, and/or diversion of technical and other resources. In addition, our property and business interruption insurance may not be adequate to compensate us for all losses or failures that may occur.

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We may not be able to successfully manage our intellectual property and may be subject to infringement claims.

In the rapidly developing legal framework, we rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our proprietary technology. Despite our efforts to protect our intellectual property, third parties may infringe or misappropriate our intellectual property or may develop software or technology competitive to us. Our competitors may independently develop similar technology, duplicate our products or services or design around our intellectual property rights. We may have to litigate to enforce and protect our intellectual property rights, trade secrets and know-how or to determine their scope, validity or enforceability, which is expensive and could cause a diversion of resources and may not prove successful. The loss of intellectual property protection or the inability to secure or enforce intellectual property protection could harm our business and ability to compete.

We may also be subject to costly litigation in the event our products and technology infringe upon another party’s proprietary rights. Third parties may have, or may eventually be issued, patents that would be infringed by our products or technology. Any of these third parties could make a claim of infringement against us with respect to our products or technology. We may also be subject to claims by third parties for breach of copyright, trademark or license usage rights. Any such claims and any resulting litigation could subject us to significant liability for damages. An adverse determination in any litigation of this type could limit our ability to use the intellectual property subject to these claims and require us to design around a third party’s patent, which may not be possible, or to license alternative technology from another party, which may be costly. In addition, litigation is time consuming and expensive to defend and could result in the diversion of the time and attention of our management and employees.

If we lose key personnel or are unable to attract additional qualified personnel as we grow, our business could be adversely affected.

All of our businesses function at the intersection of rapidly changing technological, social, economic and regulatory developments that requires a wide ranging set of expertise and intellectual capital. To successfully compete and grow, we must recruit, develop and retain the necessary personnel who can provide the needed expertise across the entire spectrum of intellectual capital needs. In addition, we must develop our personnel to fulfill succession plans capable of maintaining continuity in the midst of the inevitable unpredictability of human capital. However, the market for qualified personnel is competitive and we may not succeed in recruiting additional personnel or may fail to effectively replace current personnel who depart with qualified or effective successors. Our efforts to retain and develop personnel may also result in significant additional expenses, which could negatively affect our profitability. We cannot assure that key personnel, including executive officers, will continue to be employed or that we will be able to attract and retain qualified personnel in the future. Failure to retain or attract key personnel could have a material adverse effect on our business, financial position and results of operations.

Item 1B. Unresolved Staff Comments

Not Applicable.

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Item 2. Properties

As of December 31, 2015, we and our subsidiaries owned 12 facilities encompassing approximately 1,446,568 square feet and leased 39 facilities encompassing approximately 892,386 square feet. These facilities are used for operational, sales and administrative purposes.

	Owned Facilities				Leased Facilities
	Number		Square Footage		Number		Square Footage
North America Services		10		1,350,200		8		306,926
International Services		2		96,368		13		193,102
Merchant Services		—		—		13		282,858
NetSpend		—		—		5		109,500

We believe that our facilities are suitable and adequate for our current business; however, we periodically review our space requirements and may acquire new space to meet the needs of our businesses or consolidate and dispose of or sublet facilities which are no longer required.

See Note 1, Note 10, Note 16 and Note 22 of Notes to Consolidated Financial Statements on pages 46 through 55, pages 61 and 62, pages 70 through 73, and pages 80 through 82 and “Property and Equipment” under the “Financial Review” Section on pages 33 and 34 of the Annual Report which are incorporated in this document by reference.

Item 3. Legal Proceedings

See Note 16 of Notes to Consolidated Financial Statements on pages 70 through 73 of the Annual Report which is incorporated in this document by reference.

Item 4. Mine Safety Disclosures

Not Applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Repurchases of Equity Securities

The “Quarterly Financial Data (Unaudited), Stock Price, Dividend Information” Section on page 91, Note 20 of Notes to Consolidated Financial Statements on page 78 and 79 and “Stock Performance Graph” on page 92 of the Annual Report are incorporated in this document by reference. The “Stock Performance Graph” is incorporated herein by reference; however, this information shall not be deemed to be “soliciting material” or to be “filed” with the Commission or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended.

Item 6. Selected Financial Data

The “Selected Financial Data” Section which is set forth on page 11 of the Annual Report is incorporated in this document by reference.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The “Financial Overview” and “Financial Review” Sections which are set forth on pages 11 through 40 of the Annual Report which includes the information encompassed within “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are incorporated in this document by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Foreign Exchange Risk. We are exposed to foreign exchange risk because we have assets, liabilities, revenues and expenses denominated in foreign currencies. These currencies are translated into U.S. dollars at current exchange rates, except for revenues, costs and expenses and net income, which are translated at the average exchange rate for each reporting period. Net exchange gains or losses resulting from the translation of assets and liabilities of our foreign operations, net of tax, are accumulated in a separate section of shareholders’ equity entitled “accumulated other comprehensive income (loss), net.” The amount of other comprehensive (loss) income, net of tax, related to foreign currency translation for the years ended December 31, 2015, 2014 and 2013 was:

(in millions)	2015			2014			2013
Comprehensive income (loss), net of tax	($	21.4	)	($	15.6	)	($	1.3	)

Currently, we do not use financial instruments to hedge our exposure to exchange rate changes.

The following table presents the carrying value of the net assets of our foreign operations in U.S. dollars at December 31, 2015:

(in millions)	December 31, 2015
Europe	$	209.1
China		98.7
Cyprus		36.4
Other		5.9

We record foreign currency translation adjustments associated with other balance sheet accounts. See “Nonoperating Income (Expense)” under the “Financial Review” Section on page 27 of the Annual Report which is incorporated in this document by reference. We maintain several cash accounts denominated in foreign currencies, primarily in US dollars and Euros. As we translate the foreign-denominated cash balances into U.S. dollars, the translated cash balance is adjusted upward or downward depending upon the foreign currency exchange movements. The upward or downward adjustment is recorded as a gain or loss on foreign currency translation in our statements of income. As those cash accounts have increased, the upward or downward adjustments have increased. We recorded a net translation gain of approximately $0.4 million for the year ended December 31, 2015 relating to the translation of foreign denominated balance sheet accounts, most of which were cash. The balance of the foreign-denominated cash accounts subject to risk of translation gains or losses at December 31, 2015 was approximately $11.3 million, the majority of which is denominated in Euros.

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We provide financing to our international operation in Europe through an intercompany loan that requires the operation to repay the financing in U.S. dollars. The functional currency of each operation is the respective local currency. As we translate the foreign currency denominated financial statements into U.S. dollars, the translated balance of the financing (liability) is adjusted upward or downward to match the U.S. dollar obligation (receivable) on our financial statements. The upward or downward adjustment is recorded as a gain or loss on foreign currency translation in other comprehensive income.

The net asset account balance subject to foreign currency exchange rates between the local currencies and the U.S. dollar at December 31, 2015 was $30.0 million.

The following table presents the potential effect on income before income taxes of hypothetical shifts in the foreign currency exchange rate between the local currencies and the U.S. dollar of plus or minus 100 basis points, 500 basis points and 1,000 basis points based on the net asset account balance of $30.0 million at December 31, 2015.

	Effect of Basis Point Change
	Increase in basis point of						Decrease in basis point of
(in thousands)	100		500		1,000		100			500			1,000
Effect on income before income taxes	$	300		1,500		3,000		(300	)		(1,500	)		(3,000	)

Interest Rate Risk. We are also exposed to interest rate risk associated with the investing of available cash. We invest available cash in conservative short-term instruments and are primarily subject to changes in the short-term interest rates.

The following table provides information about our debt obligations that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted average interest rates by expected maturity dates. The information is presented in U.S. dollar equivalents, which is our reporting currency. The debt obligation’s actual cash flows are denominated in U.S. dollars.

At December 31, 2015	Expected maturity date
Liabilities	2016			2017			2018			2019		2020		Thereafter			TOTAL
(US$ Equivalent in millions)
Long-term Debt:
Fixed Rate	$	20.4			15.1			550.0			—		—		550.0		$	1,135.5
Average interest rate		3.03	%		3.05	%		3.46	%		—		—		3.75	%		3.52	%
Variable Rate	$	30.0			128.2			140.0			—		—		—		$	298.2
Average interest rate		1.30	%		1.30	%		1.29	%		—		—		—			1.30	%

Item 8. Financial Statements and Supplementary Data

The “Quarterly Financial Data (Unaudited), Stock Price, Dividend Information” Section,

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which is set forth on page 91, and the “Consolidated Balance Sheets, Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows, Consolidated Statements of Changes in Equity, Notes to Consolidated Financial Statements, Report of Independent Registered Public Accounting Firm and Management’s Report on Internal Control Over Financial Reporting,” which are set forth on pages 41 through 90 of the Annual Report are incorporated in this document by reference.

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

Not Applicable.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. We have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this annual report as required by Rule 13a-15 of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This evaluation was carried out under the supervision and with the participation of our management, including our chief executive officer and chief financial officer. Based on this evaluation, the chief executive officer and chief financial officer concluded that as of December 31, 2015, TSYS’ disclosure controls and procedures were designed and effective to ensure that the information required to be disclosed by TSYS in reports that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and were also designed and effective to ensure that the information required to be disclosed in the reports that TSYS files or submits under the Exchange Act is accumulated and communicated to management, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting and Report of Independent Registered Public Accounting Firm. “Management’s Report on Internal Control Over Financial Reporting,” which is set forth on page 90 of the Annual Report, and “Report of Independent Registered Public Accounting Firm,” which is set forth on page 89 of the Annual Report, are incorporated in this document by reference.

Changes in Internal Control Over Financial Reporting. No change in our internal control over financial reporting occurred during the fourth fiscal quarter covered by this annual report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

Not Applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

Information included under the following captions in our Proxy Statement is incorporated in this document by reference:

• “PROPOSALS TO BE VOTED ON” – “PROPOSAL 1: ELECTION OF DIRECTORS,”

• “EXECUTIVE OFFICERS,” and

• “CORPORATE GOVERNANCE AND BOARD MATTERS” – “Committees of the Board.”

We have a Code of Business Conduct and Ethics that applies to all directors, officers and employees, including our principal executive officer, our principal financial officer and our chief accounting officer. You can find our Code of Business Conduct and Ethics in the Corporate Governance section of our website at www.tsys.com under “Investor Relations” then “Corporate Governance.” We will post any amendments to the Code of Business Conduct and Ethics and any waivers that are required to be disclosed by the rules of either the SEC or the NYSE in the Corporate Governance section of our website.

Item 11. Executive Compensation

Information included under the following captions in our Proxy Statement is incorporated in this document by reference:

• “DIRECTOR COMPENSATION,” and

• “EXECUTIVE COMPENSATION” – “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Summary Compensation Table” and the Compensation Tables and Narratives which follow the Summary Compensation Table, and “Compensation Committee Interlocks and Insider Participation.”

The information included under the heading “Compensation Committee Report” in our Proxy Statement is incorporated herein by reference; however, this information shall not be deemed to be “soliciting material” or to be “filed” with the Commission or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information pertaining to equity compensation plans is contained in Note 18 of Notes to Consolidated Financial Statements on page 73 of the Annual Report and is incorporated in this document by reference.

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Information included under the following captions in our Proxy Statement is incorporated in this document by reference:

• “STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS,” and

• “PRINCIPAL SHAREHOLDERS.”

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information included under the following captions in our Proxy Statement is incorporated in this document by reference:

• “CORPORATE GOVERNANCE AND BOARD MATTERS” – “Director Independence” and “Certain Relationships and Related Transactions.”

Item 14. Principal Accountant Fees and Services

Information included under the following captions in our Proxy Statement is incorporated in this document by reference:

• “RATIFICATION OF APPOINTMENT OF THE INDEPENDENT AUDITOR” – “Audit and Non-Audit Fees” and “Policy on Audit Committee Pre-Approval.”

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) 1. Financial Statements

The following consolidated financial statements of TSYS are incorporated in this document by reference from pages 41 through 90 of the Annual Report.

Consolidated Balance Sheets – December 31, 2015 and 2014

Consolidated Statements of Income – Years Ended December 31, 2015, 2014 and 2013

Consolidated Statements of Comprehensive Income – Years Ended December 31, 2015, 2014 and 2013

Consolidated Statements of Cash Flows – Years Ended December 31, 2015, 2014 and 2013

Consolidated Statements of Changes in Equity – Years Ended December 31, 2015, 2014 and 2013

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Management’s Report on Internal Control Over Financial Reporting

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2. Financial Statement Schedules

The following report of independent registered public accounting firm and consolidated financial statement schedule of TSYS are included:

Report of Independent Registered Public Accounting Firm

Schedule II - Valuation and Qualifying Accounts - Years Ended

December 31, 2015, 2014 and 2013

All other schedules are omitted because they are inapplicable or the required information is included in the consolidated financial statements and notes thereto.

3. Exhibits

The following exhibits are filed herewith or are incorporated to other documents previously filed with the SEC. Exhibits 10.8 through 10.31 pertain to executive compensation plans and arrangements. With the exception of those portions of the Annual Report and Proxy Statement that are expressly incorporated by reference in this Form 10-K, such documents are not to be deemed filed as part of this Form 10-K.

Exhibit Number	Description
2.1	Stock Purchase Agreement, dated January 26, 2016, by and among TSYS, Vista Equity Partners Fund V, L.P., Vista Equity Partners Fund V-A, L.P., Vista Equity Partners Fund V-B, L.P., Vista Equity Partners Fund V Executive, L.P., VEPF V FAF, L.P., Vista Equity Associates, LLC, and TransFirst Holdings Corp., incorporated by reference to Exhibit 2.1 of TSYS’ Current Report on Form 8-K dated January 27, 2016.
3.1	Articles of Incorporation of TSYS, as amended, incorporated by reference to Exhibit 3.1 of TSYS’ Current Report on Form 8-K dated April 30, 2009
3.2	Bylaws of TSYS, as amended, incorporated by reference to Exhibit 3.1 of TSYS’ Current Report on Form 8-K dated July 28, 2009
4.1	Indenture, dated as of May 22, 2013, between TSYS and Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 4.1 of TSYS’ Current Report on Form 8-K dated May 22, 2013
4.2	Form of 2.375% Senior Note due 2018, incorporated by reference to Exhibit 4.2 of TSYS’ Current Report on Form 8-K dated May 22, 2013
4.3	Form of 3.750% Senior Note due 2023, incorporated by reference to Exhibit 4.3 of TSYS’ Current Report on Form 8-K dated May 22, 2013
10.1	Credit Agreement of TSYS, dated as of September 10, 2012, with JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Securities LLC, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Regions Capital Markets and U.S. Bank National Association, as joint lead arrangers and joint bookrunners, and The Bank of Tokyo-Mitsubishi

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	UFJ, Ltd., Regions Bank and U.S. Bank National Association, as Syndication Agents, and the other lenders named therein, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated September 11, 2012
10.2	First Amendment, dated as of April 8, 2013, to the Credit Agreement of TSYS, dated as of September 10, 2012, with JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Securities LLC, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Regions Capital Markets and U.S. Bank National Association, as joint lead arrangers and joint bookrunners, and The Bank of Tokyo-Mitsubishi UFJ, Ltd., Regions Bank and U.S. Bank National Association, as Syndication Agents, and the other lenders named therein, incorporated by reference to Exhibit 10.2 of TSYS’ Current Report on Form 8-K dated April 8, 2013
10.3	Second Amendment, dated as of January 26, 2016, to the Credit Agreement of TSYS, dated as of September 10, 2012, with JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Securities LLC, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Regions Capital Markets and U.S. Bank National Association, as joint lead arrangers and joint bookrunners, and The Bank of Tokyo-Mitsubishi UFJ, Ltd., Regions Bank and U.S. Bank National Association, as Syndication Agents, and the other lenders named therein, incorporated by reference to Exhibit 10.2 of TSYS’ Current Report on Form 8-K dated January 27, 2016
10.4	Credit Agreement of TSYS, dated as of April 8, 2013, with JPMorgan Chase Bank, N.A., as Administrative Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Syndication Agent, Regions Bank and U.S. Bank National Association, as Documentation Agents, and other lenders party thereto, with J.P. Morgan Securities LLC, The Bank of Tokyo Mitsubishi UFJ, Ltd., Regional Capital Markets, and U.S. Bank National Association, as joint lead arrangers and joint bookrunners, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated April 8, 2013
10.5	First Amendment, dated as of January 26, 2016, to the Credit Agreement of TSYS, dated as of April 8, 2013, with JPMorgan Chase Bank, N.A., as Administrative Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Syndication Agent, Regions Bank and U.S. Bank National Association, as Documentation Agents, and other lenders party thereto, with J.P. Morgan Securities LLC, The Bank of Tokyo Mitsubishi UFJ, Ltd., Regional Capital Markets, and U.S. Bank National Association, as joint lead arrangers and joint bookrunners, incorporated by reference to Exhibit 10.3 of TSYS’ Current Report on Form 8-K dated January 27, 2016
10.6	Bridge Term Loan Facility Commitment Letter, dated January 26, 2016, by and among Total System Services, Inc., J.P. Morgan Securities LLC, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bank of America N.A., The Bank of Tokyo-Mitsubishi

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UFJ, Ltd., U.S. Bank National Association, Wells Fargo Securities, LLC and Wells Fargo Bank, National Association, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated January 27, 2016

10.7

Credit Agreement of Total System Services, Inc., dated as of February 23, 2016, with JPMorgan Chase Bank, N.A., as Administrative Agent and L/C Issuer, Bank of America, N.A., as Syndication Agent and L/C Issuer, The Bank of Tokyo-Mitsubishi UFJ, LTD., U.S. Bank National Association and Wells Fargo Bank, National Association, as Co-Documentation Agents, and the other lenders party thereto, with J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, The Bank of Tokyo-Mitsubishi UFJ, LTD., U.S. Bank National Association and Wells Fargo Securities, LLC as joint lead arrangers and joint bookrunners, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated February 23, 2016

EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS

10.8	Amended and Restated Total System Services, Inc. Deferred Compensation Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, as filed with the SEC on August 9, 2010
10.9	Amended and Restated Total System Services, Inc. Directors’ Deferred Compensation Plan, incorporated by reference to Exhibit 10.2 of TSYS’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, as filed with the SEC on August 7, 2008
10.10	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 SEC on March 18, 1993
10.11	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 SEC on March 22, 1994
10.12	Change of Control Agreement for executive officers of TSYS, incorporated by reference to Exhibit 10.17 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as filed with the SEC on February 29, 2008
10.13	Split Dollar Insurance Agreement and related Executive Benefit Substitution Agreement, incorporated by reference to Exhibit 10.19 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 2001, as filed with the SEC on March 19, 2002
10.14	Summary of Board of Directors Compensation, incorporated by reference to Exhibit 10.1 of TSYS’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, as filed with the SEC on August 6, 2015
10.15	Total System Services, Inc. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated April 24, 2007
10.16	Total System Services, Inc. 2012 Omnibus Plan (formerly named the 2008 Omnibus Plan), incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated May 4, 2012
10.17	Form of Non-Employee Director Fully Vested Stock Option Agreement for the Total System Services, Inc. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.37 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 2010, as filed with the SEC on February 28, 2011

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10.18	Form of Non-Employee Director Fully Vested Share Award Agreement for the Total System Services, Inc. 2007 Omnibus Plan, incorporated by reference to Exhibit 10.38 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 2010, as filed with the SEC on February 28, 2011
10.19	Form of Stock Option Agreement for 2011 stock option awards under the Total System Services, Inc. 2008 Omnibus Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, as filed with the SEC on May 6, 2011
10.20	Form of Indemnification Agreement for directors and executive officers of TSYS, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated July 25, 2007
10.21	Form of Senior Executive Stock Option Agreement for 2012 stock option awards under the Total System Services, Inc. 2008 Omnibus Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, as filed with the SEC on May 7, 2012
10.22	Form of Senior Executive Stock Option Agreement for 2013 stock option awards under the Total System Services, Inc. 2012 Omnibus Plan, incorporated by reference to Exhibit 10.3 of TSYS’ Quarterly Report on Form 10-Q for the Quarter ended March 31, 2013, as filed with the SEC on May 8, 2013
10.23	Form of Senior Executive Performance Share Agreement for 2013 performance share awards under the Total System Services, Inc. 2012 Omnibus Plan, incorporated by reference to Exhibit 10.4 of TSYS’ Quarterly Report on Form 10-Q for the Quarter ended March 31, 2013, as filed with the SEC on May 8, 2013
10.24	Form of Senior Executive Stock Option Agreement for 2014 stock option awards under the Total System Services, Inc. 2012 Omnibus Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Quarterly Report on Form 10-Q for the Quarter ended March 31, 2014, as filed with the SEC on May 8, 2014
10.25	Form of Senior Executive Performance Share Agreement for 2014 performance share awards under the Total System Services, Inc. 2012 Omnibus Plan, incorporated by reference to Exhibit 10.2 of TSYS’ Quarterly Report on Form 10-Q for the Quarter ended March 31, 2014, as filed with the SEC on May 8, 2014
10.26	Form of Senior Executive Stock Option Agreement for 2015 stock option awards under the Total System Services, Inc. 2012 Omnibus Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Quarterly Report on Form 10-Q for the Quarter ended March 31, 2015, as filed with the SEC on May 7, 2015
10.27	Form of Senior Executive Performance Share Agreement for 2015 performance share awards under the Total System Services, Inc. 2012

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	Omnibus Plan, incorporated by reference to Exhibit 10.2 of TSYS’ Quarterly Report on Form 10-Q for the Quarter ended March 31, 2015, as filed with the SEC on May 7, 2015
10.28	Form of Amendment to Senior Executive Stock Option Agreement and Senior Executive Performance Share Agreement, incorporated by reference to Exhibit 10.1 of TSYS’ Quarterly Report on Form 10-Q for the Quarter ended September 30, 2015, as filed with the SEC on November 5, 2015
10.29	Transition and Retirement Agreement, dated June 23, 2014, between Philip W. Tomlinson and Total System Services, Inc., incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated June 23, 2014
10.30	Restrictive Covenant Agreement, dated June 23, 2014, between Philip W. Tomlinson and Total System Services, Inc., incorporated by reference to Exhibit 10.2 of TSYS’ Current Report on Form 8-K dated June 23, 2014
10.31	Consulting Agreement, dated June 23, 2014, between Philip W. Tomlinson and Total System Services, Inc., incorporated by reference to Exhibit 10.3 of TSYS’ Current Report on Form 8-K dated June 23, 2014
13.1	Certain specified pages of TSYS’ 2015 Annual Report to Shareholders which are incorporated herein by reference
21.1	Subsidiaries of Total System Services, Inc.
23.1	Consent of Independent Registered Public Accounting Firm
24.1	Powers of Attorney contained on the signature pages of this 2015 Annual Report on Form 10-K and incorporated herein by reference
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1	Annual Report on Form 11-K for the Total System Services, Inc. 2012 Employee Stock Purchase Plan for the year ended December 31, 2015 (to be filed as an amendment hereto within 120 days of the end of the period covered by this report)
101	Interactive Data File

We agree to furnish the SEC, upon request, a copy of each instrument with respect to issues of long-term debt. The principal amount of any individual instrument, which has not been previously filed, does not exceed ten percent of the total assets of TSYS and our subsidiaries on a consolidated basis.

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Total System Services, Inc.:

Under date of February 24, 2016, we reported on the consolidated balance sheets of Total System Services, Inc. and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, cash flows, and changes in equity for each of the years in the three-year period ended December 31, 2015, which are included in the December 31, 2015 annual report on Form 10-K. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule as listed in Item 15. This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.

In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/KPMG LLP

Atlanta, Georgia

February 24, 2016

Schedule II

Schedule — Valuation and Qualifying Accounts

TOTAL SYSTEM SERVICES, INC.

Schedule II

Valuation and Qualifying Accounts

(in thousands)

	Balance at beginning of period		Additions			Deductions			Balance at end of period
			Changes in allowances, charges to expenses and changes to other accounts
Year ended December 31, 2013:
Provision for doubtful accounts	$	1,743		164	(1)		(149	)(3)	$	1,758
Provision for billing adjustments	$	1,174		(376	)(1)		(294	)(3)	$	504
Provision for merchant losses	$	994		2,211	(1)		(2,083	)(3)	$	1,122
Transaction processing provisions — processing errors	$	1,724		7,458	(2)		(6,773	)(3)	$	2,409
Provision for cardholder losses	$	—		19,737	(4),(5)		(13,953	)(3)	$	5,784
Deferred tax valuation allowance	$	12,976		2,298	(6)		(583	)(7)	$	14,691
Year ended December 31, 2014:
Provision for doubtful accounts	$	1,758		640	(1)		(824	)(3)	$	3,222
Provision for billing adjustments	$	504		497	(1)		(135	)(3)	$	866
Provision for merchant losses	$	1,122		1,686	(1)		(1,690	)(3)	$	1,118
Transaction processing provisions — processing errors	$	2,409		9,468	(2)		(7,247	)(3)	$	4,630
Provision for cardholder losses	$	5,784		38,381	(5)		(37,853	)(3)	$	6,312
Deferred tax valuation allowance	$	14,691		5,534	(6)		(1,262	)(7)	$	18,963
Year ended December 31, 2015:
Provision for doubtful accounts	$	3,222		(58	)(1)		(1,407	)(3)	$	1,757
Provision for billing adjustments	$	866		(114	)(1)		174	(3)	$	926
Provision for merchant losses	$	1,118		4,667	(1)		(4,419	)(3)	$	1,366
Transaction processing provisions — processing errors	$	4,630		6,976	(2)		(5,149	)(3)	$	6,457
Provision for cardholder losses	$	6,312		41,264	(5)		(38,185	)(3)	$	9,391
Deferred tax valuation allowance	$	18,963		541	(6)		(1,058	)(7)	$	18,446

(1) Amount reflected includes charges to (recoveries of) bad debt expense which are classified in selling, general and administrative expenses and the charges for billing adjustment which are recorded against revenues.

(2) Amount reflected is the change in transaction processing provisions reflected in cost of services expenses.

(3) Accounts deemed to be uncollectible and written off during the year as it relates to bad debts. Amounts that relate to billing adjustments and transaction processing provisions reflect actual billing adjustments and processing errors charged against the allowances. Amounts that related to cardholder losses reflect write-offs against the provision for cardholder losses.

(4) Includes $7.8 million of cardholder losses on July 1, 2013 related to the acquisition of NetSpend.

(5) Amount represents the charges in the provision for cardholder losses reflected in cost of services expenses.

(6) Amount represents an increase in the amount of deferred tax assets, which more likely than not, will not be realized.

(7) Amount represents a decrease in the amount of deferred tax assets, which more likely than not, will not be realized.

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)
Date: February 24, 2016	By:	/s/M. Troy Woods
		M. Troy Woods,
		Chairman, President and Chief Executive Officer
		(Principal Executive Officer)

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints M. Troy Woods and Paul M. Todd each of them, his true and lawful attorney(s)-in-fact and agent(s), with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments to this report and to file the same, with all exhibits and schedules thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney(s)-in-fact and agent(s) full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney(s)-in-fact and agent(s), or their substitute(s), may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons in the capacities and on the dates indicated.

/s/M. Troy Woods M. Troy Woods,	Date: February 24, 2016
Chairman, President, Chief Executive Officer and Director (Principal Executive Officer)
/s/Paul M. Todd Paul M. Todd,	Date: February 24, 2016
Senior Executive Vice President and Chief Financial Officer (Principal Financial Officer)

/s/Dorenda K. Weaver Dorenda K. Weaver,	Date: February 24, 2016
Chief Accounting Officer (Principal Accounting Officer)
/s/James H. Blanchard James H. Blanchard,	Date: February 24, 2016
Director
/s/Kriss Cloninger III Kriss Cloninger III,	Date: February 24, 2016
Director
/s/Walter W. Driver, Jr. Walter W. Driver, Jr.,	Date: February 24, 2016
Director
/s/Gardiner W. Garrard, Jr. Gardiner W. Garrard, Jr.,	Date: February 24, 2016
Director
/s/Sidney E. Harris Sidney E. Harris,	Date: February 24, 2016
Director
/s/William M. Isaac William M. Isaac,	Date: February 24, 2016
Director
/s/Mason H. Lampton Mason H. Lampton,	Date: February 24, 2016
Director

/s/Connie D. McDaniel Connie D. McDaniel,	Date: February 24, 2016
Director
/s/H. Lynn Page H. Lynn Page,	Date: February 24, 2016
Director
/s/Philip W. Tomlinson Philip W. Tomlinson,	Date: February 24, 2016
Director
/s/John T. Turner John T. Turner,	Date: February 24, 2016
Director
/s/Richard W. Ussery Richard W. Ussery,	Date: February 24, 2016
Director
/s/James D. Yancey James D. Yancey,	Date: February 24, 2016
Director

EX-13.1

Exhibit 13.1

Selected Financial Data

The following financial data should be read in conjunction with the Consolidated Financial Statements and Notes thereto and Financial Review sections of the Annual Report. The historical trends in Total System Services, Inc.’s (TSYS’ or the Company’s) results of operations and financial position over the last five years are presented below.

	Years Ended December 31,
(in thousands, except per share data)	2015			2014			2013			2012			2011
Income Statement Data:
Total revenues	$	2,779,541			2,446,877			2,064,305			1,793,557			1,733,237
Operating income	$	534,107			431,640			382,500			354,969			321,120
Income from continuing operations, net of tax	$	367,630			280,751			254,542			248,928			218,446
Income from discontinued operations, net of tax		1,411			48,655			2,055			995			4,216
Net income		369,041			329,406			256,597			249,923			222,662
Net income attributable to noncontrolling interests		(4,997	)		(6,534	)		(11,847	)		(5,643	)		(2,103	)
Net income attributable to TSYS common shareholders	$	364,044			322,872			244,750			244,280			220,559
Basic earnings per share (EPS)* attributable to TSYS common shareholders:
Income from continuing operations	$	1.97			1.48			1.31			1.31			1.14
Gain (loss) from discontinued operations		0.01			0.26			(0.01	)		(0.02	)		0.01
Net income	$	1.98			1.73			1.30			1.30			1.15
Diluted EPS* attributable to TSYS common shareholders:
Income from continuing operations	$	1.96			1.47			1.30			1.31			1.14
Gain (loss) from discontinued operations		0.01			0.25			(0.01	)		(0.02	)		0.01
Net income	$	1.97			1.72			1.29			1.29			1.15
Cash dividends declared per share	$	0.40			0.40			0.40			0.40			0.31

* Basic and diluted EPS amounts for continuing operations and net income may not total due to rounding.

	As of December 31,
(in thousands)	2015		2014		2013		2012		2011
Balance Sheet Data:
Total assets	$	3,908,300		3,733,581		3,686,568		2,023,838		1,858,392
Obligations under long-term borrowings and capital leases, excluding current portion		1,383,634		1,405,106		1,435,751		192,014		63,593

Financial Overview

TSYS’ revenues are derived from providing global payment processing services to financial and nonfinancial institutions, generally under long-term processing contracts. In addition, the Company derives revenues from providing processing services, acquiring solutions, related systems and integrated support services to merchant acquirers and merchants. The Company also derives revenues by providing general-purpose reloadable (GPR) prepaid debit cards and payroll cards and alternative financial services to underbanked and other consumers. The Company’s services are provided through the Company’s four operating segments: North America Services, International Services, Merchant Services and NetSpend.

Through the Company’s North America Services and International Services segments, TSYS processes information through its cardholder systems for financial institutions throughout the United States and

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internationally. The Company’s North America Services segment provides these services to clients in the United States, Canada, Mexico and the Caribbean. The Company’s International Services segment provides services to clients in Europe, India, Middle East, Africa, Asia Pacific and Brazil. The Company’s Merchant Services segment provides merchant services to merchant acquirers and merchants based primarily in the United States. The Company’s NetSpend segment provides GPR prepaid debit and payroll cards and alternative financial service solutions to underbanked and other consumers in the United States.

The following table sets forth each segment’s revenues as a percentage of the Company’s total revenues:

	Years Ended December 31,
	2015			2014			2013
North America Services		47	%		45	%		48	%
NetSpend		21			19			10
Merchant Services		20			21			26
International Services		12			15			16
Total revenues		100	%		100	%		100	%

Due to the somewhat seasonal nature of the credit card industry, TSYS’ revenues and results of operations have generally increased in the fourth quarter of each year because of increased transaction and authorization volumes during the traditional holiday shopping season. Furthermore, growth or declines in card and merchant portfolios of existing clients, the conversion of cardholder and merchant accounts of new clients to the Company’s processing platforms, the receipt of fees for early contract termination and the loss of cardholder and merchant accounts either through purges or deconversions impact the results of operations from period to period.

Another factor which may affect TSYS’ revenues and results of operations from time to time is consolidation in the financial services or retail industries either through the sale, by a client, of its business, its card portfolio or a segment of its accounts to a party which processes cardholder or merchant accounts internally or uses another third-party processor. A change in the economic environment in the retail sector, or a change in the mix of payments between cash and cards could favorably or unfavorably impact TSYS’ financial position, results of operations and cash flows in the future.

TSYS’ reported financial results will also be impacted by significant shifts in currency conversion rates. TSYS does not view foreign currency as an economic event for the Company but as a financial reporting issue. Because changes in foreign currency exchange rates distort the operating growth rates, TSYS discloses the impact of foreign currency translation on its financial performance.

A significant amount of the Company’s revenues are derived from long-term contracts with large clients. Processing contracts with large clients, representing a significant portion of the Company’s total revenues, generally provide for discounts on certain services based on the size and activity of clients’ portfolios. Therefore, revenues and the related margins are influenced by the client mix relative to the size of client portfolios, as well as the number and activity of individual cardholder or merchant accounts processed for each client.

Regulation

Government regulation affects key areas of TSYS’ business, in the U.S. as well as internationally. TSYS, along with the rest of the financial services industry, continues to experience increased legislative and regulatory scrutiny, including the enactment of additional legislative and regulatory initiatives such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (Financial Reform Act). This legislation, which provides for sweeping financial regulatory reform, may have a significant and negative impact on the Company and its clients, which could impact TSYS’ earnings through fee reductions, higher costs (both regulatory and implementation) and new restrictions on operations. The Financial Reform Act may also impact the competitive dynamics of the financial services industry in the U.S. by more adversely impacting large financial institutions, some of which are TSYS clients, and by adversely impacting the competitive position of U.S. financial institutions in comparison to foreign competitors in certain businesses.

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The Financial Reform Act, which includes the Durbin Amendment to the Electronic Funds Transfer Act, mandates that the Board of Governors of the Federal Reserve System (Board) limit debit card interchange fees. Final rules were issued in June 2011. The final rules cap interchange fees for debit transactions at $0.21 plus five basis points of the transaction and require that the amount of any debit interchange transaction fee charged be reasonable and proportional to the costs incurred in connection with the transaction.

Although this legislative action by the U.S. Congress had been anticipated for some time, it remains impossible to predict the impact, if any, that the law and the regulations to be promulgated thereunder may have on the Company’s operations or its financial condition in the future. However, as TSYS’ business is predominately credit card related, the Durbin Amendment is not expected to have a significant negative impact upon TSYS’ business.

The Financial Reform Act also created a new Consumer Financial Protection Bureau (“CFPB”) with responsibility for regulating consumer financial products and services and enforcing most federal consumer protection laws in the area of financial services, including consumer credit and the prepaid card industry. For example, the CFPB has proposed regulations regarding the prepaid industry, which, if adopted as proposed, could impose significant additional disclosure requirements, overdraft requirements, and other requirements on the prepaid card industry, including the Company’s NetSpend business, effective in 2016 or 2017. Similarly, other future actions of the CFPB may make payment card or product transactions generally less attractive to card issuers, acquirers, consumers and merchants by further regulatory disclosures, payment card practices, fees, routing and other matters with respect to credit, debit and prepaid cards, and thus negatively impact the Company’s business.

Financial Review

This Financial Review provides a discussion of critical accounting policies and estimates, related party transactions and off-balance sheet arrangements. This Financial Review also discusses the results of operations, financial position, liquidity and capital resources of TSYS and outlines the factors that have affected its recent earnings, as well as those factors that may affect its future earnings. The accompanying Consolidated Financial Statements and related Notes are an integral part of this Financial Review and should be read in conjunction with it.

Critical Accounting Policies and Estimates

Risk factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations are listed in the Company’s forward-looking statements. Negative developments in these or other risk factors could have a material adverse effect on the Company’s financial position, results of operations and cash flows.

TSYS’ financial position, results of operations and cash flows are impacted by the accounting policies the Company has adopted. Refer to Note 1 in the Consolidated Financial Statements for more information on the Company’s basis of presentation and a summary of significant accounting policies.

Management believes that the following accounting policies are the most critical to fully understand and evaluate the Company’s results. Within each critical policy, the Company makes estimates that require management’s subjective or complex judgments about the effects of matters that are inherently uncertain.

A summary of the Company’s critical accounting estimates applicable to the reportable operating segments follows:

Allowance for Doubtful Accounts and Billing Adjustments

The Company estimates the allowance for doubtful accounts. When estimating the allowance, the Company takes into consideration such factors as its knowledge of the financial position of specific clients, the industry and size of its clients, the overall composition of its accounts receivable aging, prior experience with specific customers of accounts receivable write-offs and prior history of allowances in proportion to the overall receivable balance. This analysis includes an ongoing and continuous communication with its largest clients and those clients with past due balances. A financial decline of any one of the Company’s large clients could have a material

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adverse effect on collectability of receivables and thus the adequacy of the allowance for doubtful accounts. If the actual collectability of clients’ accounts is not consistent with the Company’s estimates, bad debt expense, which is recorded in selling, general and administrative expenses, may be materially different than was initially recorded. The Company’s experience and extensive data accumulated historically indicates that these estimates have proven reliable over time.

The Company estimates allowances for billing adjustments for potential billing discrepancies. When estimating the allowance for billing adjustments, the Company considers its overall history of billing adjustments, as well as its history with specific clients and known disputes. If the actual adjustments to clients’ billing are not consistent with the Company’s estimates, billing adjustments, which are recorded as a reduction of revenues in the Company’s Consolidated Statements of Income, may be materially different than was initially recorded. The Company’s experience and extensive data accumulated historically indicates that these estimates have proven reliable over time. The allowance for doubtful accounts and billing adjustments on the Company’s Consolidated Balance Sheet as of December 31, 2015 was $2.7 million.

Contract Acquisition Costs

In evaluating contract acquisition costs for recoverability, expected cash flows are estimated by management. The Company evaluates the carrying value of contract acquisition costs associated with each customer for impairment on the basis of whether these costs are fully recoverable from either contractual minimum fees (conversion costs) or from expected undiscounted net operating cash flows of the related contract (cash incentives paid). The determination of expected undiscounted net operating cash flows requires management to make estimates. If the actual cash flows are not consistent with the Company’s estimates, a material impairment charge may result and net income may be materially different than was initially recorded.

These costs may become impaired with the loss of a contract, the financial decline of a client, termination of conversion efforts after a contract is signed, or diminished prospects for current clients. Note 11 in the Consolidated Financial Statements contains a discussion of contract acquisition costs. The net carrying value of contract acquisition costs on the Company’s Consolidated Balance Sheet as of December 31, 2015 was $247.8 million.

Software Development Costs

In evaluating software development costs for recoverability, expected cash flows are estimated by management. The Company evaluates the unamortized capitalized costs of software development as compared to the net realizable value of the software product, which is determined by expected undiscounted net operating cash flows. The amount by which the unamortized software development costs exceed the net realizable value is written off in the period that such determination is made. If the actual cash flows are not consistent with the Company’s estimates, a material write-off may result and net income may be materially different than was initially recorded. Assumptions and estimates about future cash flows and remaining useful lives of software are complex and subjective. They can be affected by a variety of factors, including industry and economic trends, changes in the Company’s business strategy and changes in the internal forecasts. Note 9 in the Consolidated Financial Statements contains a discussion of internally developed software costs. The net carrying value of internally developed software on the Company’s Consolidated Balance Sheet as of December 31, 2015 was $116.4 million.

Acquisitions – Purchase Price Allocation

TSYS’ purchase price allocation methodology requires the Company to make assumptions and to apply judgment to estimate the fair value of acquired assets and liabilities. TSYS estimates the fair value of assets and liabilities based upon appraised values, the carrying value of the acquired assets and widely accepted valuation techniques, including discounted cash flows and market multiple analyses. Management determines the fair value of fixed assets and identifiable intangible assets such as developed technology or customer relationships, and any other significant assets or liabilities. TSYS adjusts the purchase price allocation, as necessary, up to one year after the acquisition closing date as TSYS obtains more information regarding asset valuations and liabilities assumed. Unanticipated events or circumstances may occur which could affect the accuracy of the Company’s fair value estimates, including assumptions regarding industry economic factors and business strategies, and result in an impairment or a new allocation of purchase price.

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Given its history of acquisitions, TSYS may allocate part of the purchase price of future acquisitions to contingent consideration as required by generally accepted accounting principles (GAAP) for business combinations. The fair value calculation of contingent consideration will involve a number of assumptions that are subjective in nature and which may differ significantly from actual results. TSYS may experience volatility in its earnings to some degree in future reporting periods as a result of these fair value measurements.

Goodwill

In evaluating for impairment, discounted net cash flows for future periods are estimated by management. In accordance with the provisions of GAAP, goodwill is required to be tested for impairment at least annually. The combination of the income approach, utilizing the discounted cash flow (DCF) method, and the market approach, utilizing readily available market valuation multiples, is used to estimate the fair value. Under the DCF method, the fair value of the asset reflects the present value of the projected earnings that will be generated by each asset after taking into account the revenues and expenses associated with the asset, the relative risk that the cash flows will occur, the contribution of other assets, and an appropriate discount rate to reflect the value of invested capital. Cash flows are estimated for future periods based on historical data and projections provided by management. If the actual cash flows are not consistent with the Company’s estimates, a material impairment charge may result and net income may be materially different than was initially recorded. Note 7 in the Consolidated Financial Statements contains a discussion of goodwill. The net carrying value of goodwill on the Company’s Consolidated Balance Sheet as of December 31, 2015 was $1.5 billion.

Long-lived Assets and Intangibles

In evaluating long-lived assets and intangibles for recoverability, expected undiscounted net operating cash flows are estimated by management. The Company reviews long-lived assets, such as property and equipment and intangibles subject to amortization, including contract acquisition costs and certain computer software, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the actual cash flows are not consistent with the Company’s estimates, a material impairment charge may result and net income may be materially different than was initially recorded. The Company did not recognize any impairment charges during the years ended December 31, 2015, 2014 and 2013.

Revenue Recognition

The Company recognizes revenues in accordance with the provisions of GAAP, which sets forth guidance as to when revenue is realized or realizable and earned when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been performed; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured.

The Company evaluates its contractual arrangements that provide services to clients through a bundled sales arrangement in accordance with the provisions of GAAP to address the determination of whether an arrangement involving more than one deliverable contains more than one unit of accounting and how the arrangement consideration should be measured and allocated to the separate units of accounting.

A deliverable in multiple element arrangements indicates any performance obligation on the part of the seller and includes any combination of obligations to perform different services, grant licenses or other rights. Revenue is allocated to the separate units of accounting in a multiple element arrangement based on relative fair values, provided the delivered element has standalone value to the customer and delivery of any undelivered items is probable and substantially within the Company’s control. Evidence of fair value must be objective and reliable. An item has value to the customer on a standalone basis if it is sold separately by any vendor or the customer could resell the deliverable on a standalone basis.

As TSYS’ business and service offerings change in the future, the determination of the number of deliverables in an arrangement and related units of accounting and future pricing practices may result in changes in the estimates of vendor-specific objective evidence of selling price (VSOE) and estimates of the standalone selling price (ESP), which may change the ratio of fees allocated to each service or unit of accounting in a given

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customer arrangement. There were no material changes or impact to revenue in revenue recognition in the year ended December 31, 2015 due to any changes in the determination of the number of deliverables in an arrangement, units of accounting, or estimates of VSOE or ESP for existing contractual arrangements.

Cardholders’ Reserve

The Company is exposed to losses due to cardholder fraud, payment defaults and other forms of cardholder activity as well as losses due to non-performance of third parties who receive cardholder funds for transmittal to the Issuing Banks (banks that issue MasterCard International or Visa USA, Inc. branded cards to customers). The Company establishes a reserve for the losses it estimates will arise from processing customer transactions, debit card overdrafts, chargebacks for unauthorized card use and merchant-related chargebacks due to non-delivery of goods or services. These reserves are established based upon historical loss and recovery rates and cardholder activity for which specific losses can be identified. The cardholders’ reserve was $9.4 million as of December 31, 2015. The provision for cardholder losses is included in cost of services in the Consolidated Statements of Income. The Company regularly updates its estimate as new facts become known and events occur that may impact the settlement or recovery of losses.

Provision for Merchant Losses

The Company has potential liability for losses resulting from disputes between a cardholder and a merchant that arise as a result of, among other things, the cardholder’s dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer by the card-issuing bank and charged to the merchant. If the merchant is unable to fund the refund, TSYS must do so. TSYS also bears the risk of reject losses arising from the fact that TSYS collects fees from its merchants on the first day after the monthly billing period. If the merchant has gone out of business during such period, TSYS may be unable to collect such fees. TSYS maintains cash deposits or requires the pledge of a letter of credit from certain merchants, generally those with higher average transaction size where the card is not present when the charge is made or the product or service is delivered after the charge is made, in order to offset potential contingent liabilities such as chargebacks and reject losses that would arise if the merchant went out of business. Most chargeback and reject losses are charged to cost of services as they are incurred. However, the Company also maintains a provision against losses, including major fraud losses, which are both less predictable and involve larger amounts. The loss provision is established using historical loss rates, applied to recent bankcard processing volume. As of December 31, 2015, the Company had a merchant loss provision in the amount of $1.3 million.

Transaction Processing Provisions

The Company records estimates to provide for contract contingencies (performance penalties) and processing errors. A significant number of the Company’s contracts with large clients contain service level agreements which can result in TSYS incurring performance penalties if contractually required service levels are not met. When estimating these accruals, the Company takes into consideration such factors as the prior history of performance penalties and processing errors incurred, actual contractual penalties inherent in the Company’s contracts, progress towards milestones, and known processing errors not covered by insurance. If the actual performance penalties incurred are not consistent with the Company’s estimates, performance penalties and processing errors, which are recorded in cost of services, may be materially different than were initially recorded. The Company’s experience and extensive data accumulated historically indicate that these estimates have proven reliable over time. As of December 31, 2015, the Company had a transaction processing provision in the amount of $6.5 million.

Income Taxes

In calculating its effective tax rate, the Company makes decisions regarding certain tax positions, including the timing and amount of deductions and allocations of income among various tax jurisdictions. The Company has various tax filing positions, including the timing and amount of deductions and credits, the establishment of reserves for audit matters and the allocation of income among various tax jurisdictions.

The Company makes estimates as to the amount of deferred tax assets and liabilities and records valuation allowances to reduce its deferred tax assets to reflect the amount that is more likely than not to be realized. The

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Company considers projected future taxable income and ongoing tax planning strategies in assessing the need for the valuation allowance. Actual results may differ from the Company’s estimates. If the Company realizes a deferred tax asset or the Company was unable to realize a net deferred tax asset, an adjustment to the deferred tax asset would increase or decrease earnings, respectively, in the period the difference is recognized.

Related Party Transactions

In December 2014, TSYS’ majority-owned subsidiary, TSYS Managed Services EMEA Limited (EMEA), obtained a £900,000, or approximately $1.4 million, term loan bearing interest at a rate of LIBOR plus two percentage points. During September 2015, TSYS increased the loan by £1.3 million, or approximately $1.9 million. The loan matures in December 2017, and has monthly interest payments. The lender is Merchants Limited, who has a noncontrolling interest in EMEA.

The Company provides miscellaneous services to Merchants Limited and to the Company’s equity investments, Total System Services de México, S.A. de C.V. (TSYS de México) and China UnionPay Data Co., Ltd. (CUP Data).

The related party services and arrangements are performed under contracts that are similar to its contracts with unrelated third party customers. The Company believes the terms and conditions of transactions between the Company and these related parties are comparable to those which could have been obtained in transactions with unaffiliated parties. The Company’s margins with respect to related party transactions are comparable to margins recognized in transactions with unrelated third parties. The amounts related to these transactions are immaterial. No significant changes have been made to the method of establishing terms with the affiliated companies during the periods presented.

Refer to Note 4 in the Consolidated Financial Statements for more information on transactions with affiliated companies.

Off-Balance Sheet Arrangements

OPERATING LEASES: As a method of funding its operations, TSYS employs noncancelable operating leases for computer equipment, software and facilities. These leases allow the Company to use the latest technology while avoiding the risk of ownership. Neither the assets nor obligations related to these leases are included on the balance sheet. Refer to Notes 1 and 16 in the Consolidated Financial Statements for further information on operating lease commitments.

CONTRACTUAL OBLIGATIONS: The total liability for uncertain tax positions as of December 31, 2015 is $13.1 million. Refer to Note 15 in the Consolidated Financial Statements for more information on income taxes. The Company is not able to reasonably estimate the amount by which the liability will increase or decrease over time; however, at this time, the Company does not expect any significant changes related to these obligations within the next year.

Recent Accounting Pronouncements

In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-17 “Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes,” which requires the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. Also, companies will no longer allocate valuation allowances between current and noncurrent deferred tax assets because those allowances also will be classified as noncurrent. The guidance is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2016. Early adoption is permitted. Companies can adopt the guidance either prospectively or retrospectively. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows.

In September 2015, the FASB issued ASU 2015-16 “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments,” which eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement-period adjustments that occur in periods after a business combination is consummated. The guidance is effective for public business entities for annual and

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interim periods in fiscal years beginning after December 15, 2015. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows.

In June 2015, the FASB issued ASU 2015-15 “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements – Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting.” This ASU allows entities to defer and present debt issuance costs as an asset and subsequently amortize deferred debt issuance costs ratably over the term of a line-of-credit arrangement. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. The guidance will be applied retrospectively. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU 2015-05 “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” The amendments in this Update provide guidance to customers about whether a cloud computing arrangement includes a software license or a service agreement. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU 2015-03 “Interest – Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Cost.” The amendments in this update will require entities to present debt issuance costs in the balance sheet as a direct deduction from the carrying amount of the corresponding debt liability, consistent with debt discounts. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. The guidance will be applied retrospectively. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial position, results of operations or cash flows.

In January 2015, the FASB issued ASU 2015-01 “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” ASU 2015-01 eliminates from GAAP the concept of extraordinary items. For all entities, the ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted provided the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect the adoption of this ASU to have a material impact on the financial position, results of operations or cash flows of the Company.

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect on its ongoing financial reporting.

Results of Operations

Revenues

The Company generates revenues by providing transaction processing and other payment-related services. The Company’s pricing for transactions and services is complex. Each category of revenue has numerous fee components depending on the types of transactions processed or services provided. TSYS reviews its pricing and implements pricing changes on an ongoing basis. In addition, standard pricing varies among its regional businesses, and such pricing can be customized further for customers through tiered pricing of various thresholds for volume activity. TSYS’ revenues are based upon transactional information accumulated by its systems or reported by its customers. The Company’s revenues are impacted by currency translation of foreign operations, as well as doing business in the current economic environment.

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The Company has included reimbursements received for out-of-pocket expenses as revenues and expenses. The largest reimbursable expense items for which TSYS is reimbursed by clients are postage and network association fees. The Company’s reimbursable items are impacted with changes in postal rates and changes in the volumes of mailing activities by its clients. Reimbursable items for the year ended December 31, 2015, were $280.2 million, an increase of $26.3 million, or 10.4%, compared to $253.9 million for the same period last year. Reimbursable items for the year ended December 31, 2014 increased $13.3 million, or 5.5%, compared to $240.6 million for the same period in 2013.

TSYS’ revenues are generated from charges based on the number of accounts on file (AOF), transactions and authorizations processed, statements mailed, cards embossed and mailed, and other processing services for cardholder AOF. Cardholder AOF includes active and inactive consumer credit, retail, prepaid, stored value, government services and commercial card accounts.

TSYS’ revenues in its North America Services and International Services segments are influenced by several factors, including volumes related to AOF and transactions. TSYS estimates that approximately 48.4% of these segments’ revenues is AOF and transaction volume driven. The remaining 51.6% of payment processing revenues are not AOF and transaction volume driven, and are derived from production and optional services TSYS considers to be value added products and services, custom programming and licensing arrangements.

Whether or not an account on file is active can impact TSYS’ revenues differently. Active accounts are accounts that have had monetary activity either during the current month or in the past 90 days based on contractual definition. Inactive accounts are accounts that have not had a monetary transaction (such as a purchase or payment) in the past 90 days. The more active an account is, the more revenue is generated for TSYS (items such as transactions and authorizations processed and statements billed).

Occasionally, a client will purge inactive accounts from its portfolio. An inactive account typically will only generate an AOF charge. A processing client will periodically review its cardholder portfolio based upon activity and usage. Each client, based upon criteria individually set by the client, will flag an account to be “purged” from TSYS’ system and deactivated.

A deconversion involves a client migrating all of its accounts to an in-house solution or another processor. Account deconversions include active and inactive accounts and can impact the Company’s revenues significantly more than an account purge.

A sale of a portfolio typically involves a client selling a portion of its accounts to another party. A sale of a portfolio and a deconversion impact the Company’s financial statements in a similar fashion, although a sale usually has a smaller financial impact due to the number of accounts typically involved.

TSYS’ revenues in its Merchant Services segment are influenced by several factors, including volumes related to transactions and dollar sales volume, which are approximately 92.3% of this segment’s revenues. The remaining 7.7% of Merchant Services’ revenues are derived from value added services, monthly statement fees, compliance fees and miscellaneous services.

TSYS’ revenues in its NetSpend segment primarily consist of a portion of the service fees and interchange revenues received by NetSpend’s prepaid card Issuing Banks in connection with the programs managed by NetSpend. For the year ended December 31, 2015, 69.6% of revenues was derived from fees charged to cardholders and 30.4% of revenues was derived from interchange and other revenues. Service fee revenues are driven by the number of active cards, and in particular by the number of cards with direct deposit. Cardholders with direct deposit generally initiate more transactions and generate more revenues than those that do not take advantage of this feature. Interchange revenues are driven by gross dollar volume. Substantially all of the NetSpend segment’s revenues are volume driven as they are driven by the active card and gross dollar volume indicators.

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A summary of the consolidated financial highlights for the years ended December 31, 2015, 2014, and 2013 is provided below:

	Years Ended December 31,						Percent Change
(in thousands, except per share data)	2015		2014		2013		2015 vs. 2014			2014 vs. 2013
Total revenues	$	2,779,541		2,446,877		2,064,305		13.6	%		18.5	%
Operating income		534,107		431,640		382,500		23.7			12.8
Net income attributable to TSYS common shareholders		364,044		322,872		244,750		12.8			31.9
Basic EPS attributable to TSYS common shareholders1		1.98		1.73		1.30		14.1			33.5
Diluted EPS attributable to TSYS common shareholders1		1.97		1.72		1.29		14.2			33.6
Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA)2		833,920		712,267		624,093		17.1			14.1
Adjusted EPS3 from continuing operations		2.46		1.96		1.73		25.5			13.2
Cash flows provided by operating activities		600,194		560,201		452,398		7.1			23.8

1 Basic and diluted EPS is computed based on the two-class method in accordance with the guidance under GAAP. Refer to Note 26 in the Consolidated Financial Statements for more information on EPS^.

2 Adjusted EBITDA is net income excluding equity in income of equity investments, nonoperating income/(expense), income taxes, depreciation, amortization and stock-based compensation expenses and other non-recurring items.

3 Adjusted EPS is adjusted earnings divided by weighted average shares outstanding used for basic EPS calculations. Adjusted earnings is net income excluding theafter-tax impact of stock-based compensation expenses, amortization of acquisition intangibles and other nonrecurring items.

Total revenues increased $332.7 million for the year ended December 31, 2015, compared to the year ended December 31, 2014, which increased $382.6 million compared to the year ended December 31, 2013. The increases in revenues for 2015 and 2014 include a decrease of $31.5 million and an increase of $14.9 million, respectively, related to the effects of currency translation of the Company’s foreign-based subsidiaries and branches.

Excluding reimbursable items, revenues increased 14.0%, or $306.4 million, for the year ended December 31, 2015, compared to the year ended December 31, 2014, which increased 20.2%, or $369.3 million, compared to the year ended December 31, 2013. The increase in revenues excluding reimbursable items for the year ended December 31, 2015, as compared to the same period in 2014, is the result of increases in new business and organic growth, partially offset by decreases associated with currency translation. The increase in revenues excluding reimbursable items for the year ended December 31, 2014 as compared to the same period in 2013 is primarily the result of the acquisition of NetSpend in July 2013. NetSpend’s revenues excluding reimbursable items were $580.4 million, $482.7 million and $207.9 million, respectively, for the years ended December 31, 2015, 2014 and 2013.

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Below is a summary of AOF for the Company’s North America Services and International Services segments combined:

	As of December 31,						Percent Change
(in millions)	2015		2014		2013		2015 vs. 2014			2014 vs. 2013
Consumer Credit		382.1		270.0		228.9		41.5	%		18.0	%
Retail		26.1		28.4		27.8		(7.9	)		2.2
Total Consumer		408.2		298.4		256.7		36.8			16.3
Commercial		45.4		41.6		39.9		9.2			4.2
Other		26.6		22.4		18.9		18.8			18.7
Subtotal1		480.2		362.4		315.5		32.5			14.9
Prepaid/Stored Value2		97.2		127.3		118.0		(23.7	)		7.9
Government Services3		79.3		67.4		62.2		17.8			8.2
Commercial Card Single Use4		75.8		59.6		45.3		27.1			31.5
Total AOF		732.5		616.7		541.0		18.8			14.0

1 Traditional accounts include consumer, retail, commercial, debit and other accounts. These accounts are grouped together due to the tendency to have more transactional activity than prepaid, government services and single use accounts.

2 Prepaid does not include NetSpend accounts.These accounts tend to have less transactional activity than the traditional accounts. Prepaid and stored value cards are issued by firms through retail establishments to be purchased by consumers to be used at a later date. These accounts tend to be the least active of all accounts on file.

3 Government services accounts are disbursements of student loan accounts issued by the Department of Education, which have minimal activity.

4 Commercial card single use accounts are one-time use accounts issued by firms to book lodging and other travel related expenses.

Major Customer

The Company works to maintain a large and diverse customer base across various industries. Although the Company does not have a major customer on a consolidated basis, a significant amount of the Company’s revenues are derived from long-term contracts with large clients. TSYS derives revenues from providing various processing and other services to these clients, including processing of consumer and commercial accounts, as well as revenues for reimbursable items. The loss of one of the Company’s large clients could have a material adverse effect on the Company’s financial position, results of operations and cash flows.

Refer to Note 22 in the Consolidated Financial Statements for more information on major customers.

Operating Segments

TSYS’ services are provided through four operating segments: North America Services, International Services, Merchant Services and NetSpend.

Issuing Services – North America Services and International Services

The Company’s North America Services and International Services segments have many long-term customer contracts with card issuers providing account processing and output services for printing and embossing items. These contracts generally require advance notice prior to the end of the contract if a client chooses not to renew. Additionally, some contracts may allow for early termination upon the occurrence of certain events such as a change in control. The termination fees paid upon the occurrence of such events are designed primarily to cover balance sheet exposure related to items such as capitalized conversion costs or client incentives associated with the contract and, in some cases, may cover a portion of lost future revenue and profit. Although these contracts may be terminated upon certain occurrences, the contracts provide the segment with a steady revenue stream since a vast majority of the contracts are honored through the contracted expiration date.

These services are provided throughout the period of each account’s use, starting from a card-issuing client processing an application for a card. Services may include processing the card application, initiating service for the cardholder, processing each card transaction for the issuing retailer or financial institution and accumulating

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the account’s transactions. Fraud management services monitor the unauthorized use of accounts which have been reported to be lost, stolen, or which exceed credit limits. Fraud detection systems help identify fraudulent transactions by monitoring each account holder’s purchasing patterns and flagging unusual purchases. Other services provided include customized communications to cardholders, information verification associated with granting credit, debt collection and customer service.

TSYS’ revenues in its North America Services and International Services segments are derived from electronic payment processing. There are certain basic core services directly tied to accounts on file and transactions. These are provided to all of TSYS’ processing clients. The core services begin with an account on file.

The core services include housing an account on TSYS’ system (AOF), authorizing transactions (authorizations), accumulating monthly transactional activity (transactions) and providing a monthly statement (statements billed). From these core services, TSYS’ clients also have the option to use fraud and portfolio management services. Collectively, these services are considered volume-based revenues.

Non-volume related revenues include processing fees which are not directly associated with AOF and transactional activity, such as value added products and services, custom programming and certain other services, which are only offered to TSYS’ processing clients.

Value added products and services, which includes services such as data analytics and application processing, are primarily non-volume related and are only offered to TSYS’ processing clients (i.e., indirectly derived from accounts on file). These ancillary products and services, along with offerings such as card production, statement production, managed services, customized reporting and custom programming provided to clients at an hourly rate, are considered non-volume based products and services.

Additionally, certain clients license the Company’s processing systems and process in-house. Since the accounts are processed outside of TSYS for licensing arrangements, the AOF and other volumes are not available to TSYS. Thus, volumes reported by TSYS do not include volumes associated with licensing.

A summary of each segment’s results follows:

North America Services

The North America Services segment provides issuer account solutions for financial institutions and other organizations primarily based in North America. Growth in revenues and operating profit in this segment is derived from retaining and growing the core business and improving the overall cost structure. Growing the core business comes primarily from an increase in account usage, growth from existing clients and sales to new clients and the related account conversions.

In July 2012, TSYS executed a master services agreement, with a minimum six year term, with Bank of America to provide processing services for its consumer credit card portfolios in the U.S. In addition, TSYS continues to process Bank of America’s commercial credit card portfolios in the U.S. and internationally. In May 2015, the contract term for processing both the consumer and commercial credit card portfolios was extended for an additional 18 months.

The master services agreement with Bank of America provides for a tiered-pricing arrangement for both the consumer card portfolio and the existing commercial card portfolios.

This segment has two major customers.

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Below is a summary of the North America Services segment:

	Years Ended December 31,									Percent Change
(in thousands)	2015			2014			2013			2015 vs. 2014			2014 vs. 2013
Volume-based revenues	$	595,314			480,386			433,723			23.9	%		10.8	%
Non-volume related revenues:
Processing fees		235,313			216,685			195,394			8.6			10.9
Value-added, custom programming, licensing and other		151,671			115,741			110,448			31.0			4.8
Output and managed services		164,956			141,270			121,080			16.8			16.7
Total non-volume related revenues		551,940			473,696			426,922			16.5			11.0
Total revenues before reimbursable items		1,147,254			954,082			860,645			20.2			10.9
Reimbursable items		187,004			163,682			139,428			14.2			17.4
Total revenues	$	1,334,258			1,117,764			1,000,073			19.4			11.8
Adjusted segment operating income1	$	429,064			351,512			321,619			22.1			9.3
Adjusted segment operating margin2		37.4	%		36.8	%		37.4	%
Key indicators (in millions):
AOF		654.1			550.0			481.9			18.9			14.1
Transactions		15,774.5			10,838.0			9,132.8			45.5			18.7

1 Adjusted segment operating income excludes acquisition intangible amortization and expenses associated with Corporate Administration and Other.

2 Adjusted segment operating margin equals adjusted segment operating income divided by revenues before reimbursable items.

Total segment revenues increased $216.5 million for 2015, as compared to 2014. The increase is attributable to an increase in new business, internal growth and reimbursable items, partially offset by decreases related to client deconversions and price reductions. Total segment revenues increased $117.7 million for 2014, as compared to 2013. The increase is attributable to an increase in new business, internal growth and reimbursable items, partially offset by decreases related to client deconversions, price reductions and other adjustments.

The increases in adjusted segment operating income for 2015 and 2014 are driven primarily by increases in revenues partially offset by increases in total operating expenses.

For the year ended December 31, 2015, approximately 51.9% of revenues before reimbursable items of TSYS’ North America Services segment are driven by the volume of accounts on file and transactions processed and approximately 48.1% were derived from non-volume based revenues, such as processing fees, value-added products and services, custom programming and licensing arrangements.

International Services

The International Services segment provides issuer card solutions to financial institutions and other organizations primarily based outside the North American region. Growth in revenues and operating profit in this segment is derived from retaining and growing the core business and improving the overall cost structure. Growing the core business comes primarily from an increase in account usage, growth from existing clients and sales to new clients and the related account conversions. This segment’s financial results are impacted by foreign currency. Movements in foreign currency exchange rates as compared to the U.S. dollar can result in foreign denominated financial statements being translated into more or fewer U.S. dollars, which impacts the comparison to prior periods when the U.S. dollar was stronger or weaker.

This segment has two major customers.

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Below is a summary of the International Services segment:

	Years Ended December 31,									Percent Change
(in thousands)	2015			2014			2013			2015 vs. 2014			2014 vs. 2013
Volume-based revenues	$	119,974			131,322			126,714			(8.6	)%		3.6	%
Non-volume related revenues:
Processing fees		62,998			69,346			61,519			(9.2	)		12.7
Value-added, custom programming, licensing and other		86,318			95,040			92,807			(9.2	)		2.4
Output and managed services		61,869			46,077			40,444			34.3			13.9
Total non-volume related revenues		211,185			210,463			194,770			0.3			8.1
Total revenues before reimbursable items		331,159			341,785			321,484			(3.1	)		6.3
Reimbursable items		23,566			21,574			20,065			9.2			7.5
Total revenues	$	354,725			363,359			341,549			(2.4	)		6.4
Adjusted segment operating income1	$	60,087			55,123			42,068			9.0			31.0
Adjusted segment operating margin2		18.1	%		16.1	%		13.1	%
Key indicators (in millions):
AOF		78.5			66.6			59.1			17.8			12.7
Transactions		2,473.6			2,268.4			2,007.4			9.0			13.0

1 Adjusted segment operating income excludes acquisition intangible amortization and expenses associated with Corporate Administration and Other.

2 Adjusted segment operating margin equals adjusted segment operating income divided by revenues before reimbursable items.

The decrease in total segment revenues for 2015, as compared to 2014, is driven primarily by the negative impact of $31.0 million of currency translation. The increase in total segment revenues for 2014, as compared to 2013, was driven primarily by the positive impact of $14.8 million in currency translation, as well as organic growth. Excluding the impact of currency translation, segment revenues increased $22.3 million, or 6.1% in 2015, as compared to 2014 and $7.0 million, or 2.1% in 2014, as compared to 2013.

The increase in adjusted segment operating income for 2015, as compared to 2014, is driven primarily by an increase in non-volume related revenues, excluding the impact of currency translation, due to increased business. The increase in adjusted segment operating income for 2014, as compared to 2013, is driven primarily from an increase in revenues partially offset by an increase in employee related expenses.

For the year ended December 31, 2015, approximately 36.2% of revenues before reimbursable items of TSYS’ International Services segment are driven by the volume of accounts on file and transactions processed and approximately 63.8% are derived from non-volume based revenues, such as processing fees, value-added products and services, custom programming and licensing arrangements.

Merchant Services

The Merchant Services segment provides merchant services and related services to clients based primarily in the United States. The Merchant Services segment’s revenues are derived from providing processing services, acquiring solutions, related systems and integrated support services to merchant acquirers and merchants. Revenues from merchant services include processing all payment forms including credit, debit, prepaid, electronic benefit transfer and electronic check for merchants of all sizes across a wide array of market verticals. Merchant services include authorization and capture of transactions; clearing and settlement of transactions; information reporting services related to transactions; merchant billing services; and point-of-sale equipment sales and service.

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In June 2009, Bank of America announced that it formed a new joint venture to provide merchant services. In November 2010, TSYS and Bank of America agreed to a new agreement, during the term of which TSYS expects merchant services revenues from Bank of America to decline as Bank of America transitions its services to its new joint venture. The loss of Bank of America as a merchant services client is not expected to have a material adverse effect on the Merchant Services segment’s or TSYS’ financial position, results of operations or cash flows.

Effective June 2013, the Company renewed its processing agreement, which includes revenue minimums, with Bank of America for an additional two years.

This segment has no major customers.

Below is a summary of the Merchant Services segment:

	Years Ended December 31,									Percent Change
(in thousands)	2015			2014			2013			2015 vs. 2014			2014 vs. 2013
Revenues before reimbursable items	$	474,040			435,649			446,277			8.8	%		(2.4	)%
Reimbursable items		75,329			74,471			86,773			1.2			(14.2	)
Total revenues	$	549,369			510,120			533,050			7.7			(4.3	)
Adjusted segment operating income1	$	150,225			134,872			155,643			11.4			(13.3	)
Adjusted segment operating margin2		31.7	%		31.0	%		34.9	%
Key indicators (in millions):
Point-of-sale transactions		4,266.5			4,052.7			4,359.8			5.3			(7.0	)
Dollar sales volume	$	48,072.7			46,846.4			44,144.0			2.6			6.1

1 Adjusted segment operating income excludes acquisition intangible amortization and expenses associated with Corporate Administration and Other.

2 Adjusted segment operating margin equals adjusted segment operating income divided by revenues before reimbursable items.

Total segment revenues increased $39.2 million for 2015, as compared to 2014. This increase includes increases associated with new business, internal growth and reimbursable items offset by decreases associated with lost business, deconversions and price reductions. Total segment revenues decreased $22.9 million for 2014, as compared to 2013. This decrease was due primarily to lost business, deconversions and price reductions and reimbursable items offset by new business and internal growth.

The increase in adjusted segment operating income for 2015, as compared to 2014, is driven by an increase in revenues partially offset by increases in associated costs. The decrease in adjusted segment operating income for 2014, as compared to 2013, is driven by lower third party processing revenues and incremental costs related to integration projects.

The Merchant Services segment results are driven by dollar sales volume and the authorization and capture transactions processed at the point-of-sale and clearing and settlement transactions. This segment’s authorization and capture transactions are primarily through dial-up or Internet connectivity.

For the year ended December 31, 2015 approximately 92.3% of the revenues of the Merchant Services segment, were influenced by several factors, including volumes related to transactions and dollar sales volume. The remaining 7.7% of this segment’s revenues were derived from value added services, chargebacks, managed services, investigation, risk and collection services performed.

NetSpend

The NetSpend segment is a program manager for FDIC-insured depository institutions that issue GPR cards and payroll cards and provide alternative financial services to underbanked and other consumers in the United States.

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The products within this segment provide underbanked consumers with access to FDIC-insured depository accounts with a menu of pricing and features specifically tailored to their needs. This segment has an extensive distribution and reload network comprised of financial service centers, employers and retail locations throughout the United States. The NetSpend segment markets prepaid cards through multiple distribution channels, including alternative financial service providers, traditional retailers, direct-to-consumer and online marketing programs and contractual relationships with corporate employers.

The NetSpend segment’s revenues primarily consist of a portion of the service fees and interchange revenues received by NetSpend’s prepaid card Issuing Banks in connection with the programs managed by this segment. Cardholders are charged fees for transactions including fees for PIN and signature-based purchase transactions made using their prepaid cards, for ATM withdrawals or other transactions conducted at ATMs, for balance inquiries, and monthly maintenance fees among others. Cardholders are also charged fees associated with additional products and services offered in connection with certain cards including the use of overdraft features, bill payment options, custom card designs and card-to-card transfers of funds initiated through call centers. The NetSpend segment also earns revenues from a portion of the interchange fees remitted by merchants when cardholders make purchase transactions using their cards. Subject to applicable law, interchange fees are fixed by card associations and network organizations.

This segment has no major customers.

Below is a summary of the NetSpend segment:

	Years Ended December 31,									Percent Change
(in thousands)	2015			2014			2013			2015 vs. 2014			2014 vs. 2013
Total revenues (and revenues before reimbursable items)	$	580,377			482,686			207,851			20.2	%		nm	%
Adjusted segment operating income1	$	137,837			128,285			66,353			7.4			nm
Adjusted segment operating margin2		23.8	%		26.6	%		31.9	%
Key indicators (in millions):
Number of active cards		3.9			3.2			2.8			29.1			13.4
Number of active cards with direct deposit		1.9			1.6			1.3			17.7			21.9
Percentage of active cards with direct deposit		48.7	%		50.1	%		46.6	%
Gross dollar volume	$	24,274.9			20,296.0			7,748.5			19.6	%		nm	%

nm = not meaningful. Amounts are not comparable because the amounts for 2013 only include six months of results compared to twelve months of results for 2014.

1 Adjusted segment operating income excludes acquisition intangible amortization and expenses associated with Corporate Administration and Other.

2 Adjusted segment operating margin equals adjusted segment operating income divided by revenues before reimbursable items.

The results noted above for the year 2013 are for the period from July 1, 2013, the date that TSYS acquired NetSpend, through December 31, 2013. Number of active cards represents the total number of prepaid cards that have had a PIN or signature-based purchase transaction, a point-of-sale load transaction or an ATM withdrawal within three months of the date of determination. Number of active cards with direct deposit represents the number of active cards that have had a direct deposit load within three months of the date of determination. Gross dollar volume represents the total dollar volume of debit transactions and cash withdrawals made using the prepaid cards the NetSpend segment manages.

NetSpend segment revenues increased $97.7 million for 2015 from 2014. This increase was comprised of a $64.3 million increase in service fee revenues and a $33.4 million increase in interchange and other revenues. NetSpend segment revenues increased $274.8 million for 2014, as compared to 2013. This increase is attributable mainly to the inclusion of a full twelve months of results in 2014. The $580.4 million of revenues for 2015 was a combination of 69.6% of revenues derived from service fees charged to cardholders and 30.4% of revenues derived from interchange and other revenues. Service fee revenues are driven by the number of active

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cards and in particular by the number of cards with direct deposit. Cardholders with direct deposit generally initiate more transactions and generate more revenues than those that do not take advantage of this feature. Interchange revenues are driven by gross dollar volume. Substantially all of the NetSpend segment revenues are volume driven as they are driven by the active card and gross dollar volume indicators.

Cardholder funds and deposits related to NetSpend’s prepaid products are held at FDIC-insured Issuing Banks for the benefit of the cardholders. NetSpend currently has active agreements with six Issuing Banks.

NetSpend’s prepaid card business derived approximately one-fourth of its revenues from cardholders acquired through one of its third-party distributors.

Operating Expenses

The Company’s operating expenses consist of cost of services and selling, general and administrative expenses. Cost of services describes the direct expenses incurred in performing a particular service for customers, including the cost of direct labor expense in putting the service in saleable condition. Selling, general and administrative expenses are incurred in selling or marketing and for the direction of the enterprise as a whole, including accounting, legal fees, officers’ salaries, investor relations and mergers and acquisitions.

Operating expenses were $2.2 million, $2.0 million and $1.7 million in 2015, 2014 and 2013, respectively. The changes in operating expenses for the years ended December 31, 2015 and 2014 include a decrease of $30.4 million and an increase of $5.9 million, respectively, related to the effects of currency translation of the Company’s foreign-based subsidiaries. The changes in operating expenses for the years ended December 31, 2015, 2014 and 2013 were also impacted by the NetSpend acquisition in 2013. NetSpend’s operating expenses were $535.2 million, $443.5 million and $191.0 million in 2015, 2014 and 2013, respectively. Expenses in 2015 were also impacted by certain one-time state tax benefits of $15.6 million that resulted from prior years but were recognized in 2015. Expenses in 2014 were also impacted by a significant nonrecurring charitable contribution.

Federal legislation was enacted which makes extensive changes to the current system of health care insurance and benefits. The Company has reviewed the legislation and, based upon information available, estimates the impact of the legislation was approximately $2.0 million on 2015, $1.8 million on 2014 and $1.1 million on 2013.

The Company’s merger and acquisition expenses were $64,000, $3.2 million and $14.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. These expenses consist of legal, accounting and professional fees, as well as, personnel costs for severance and retention.

Nonoperating Income (Expense)

Nonoperating income (expense) consists of interest income, interest expense, gains and losses on currency transactions and gains and losses on investments in private equity. Nonoperating income (expense) decreased in 2015 as compared to 2014, and increased in 2014 as compared to 2013.

The following table provides a summary of nonoperating expense:

	Years Ended December 31,									Percent Change
(in thousands)	2015			2014			2013			2015 vs. 2014			2014 vs. 2013
Interest income	$	1,450		$	1,109		$	1,494			30.8	%		(25.8	)%
Interest expense*		(40,701	)		(40,975	)		(32,449	)		(0.7	)		26.3
Currency transaction gains(losses), net		(388	)		142			(1,013	)		nm			nm
Net gains on investments in private equity		3,324			308			338			nm			(8.8	)
Other		(904	)		705			1,606			nm			(56.1	)
Total	$	(37,219	)		(38,711	)		(30,024	)		(3.9	)		28.9

* Interest expense includes interest on bonds of $33.7 million, $33.7 million, and $20.5 million, respectively, for the years ended December 31, 2015, 2014 and 2013.

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Income Taxes

Below is a summary of income tax expense:

	Years Ended December 31,									Percent Change
(in thousands)	2015			2014			2013			2015 vs. 2014			2014 vs. 2013
Income tax expense	$	151,364			129,761			110,981			16.6	%		16.9	%
Effective income tax rate		30.5	%		32.0	%		31.5	%

The pretax income and the effective income tax rate includes noncontrolling interest in consolidated subsidiaries’ net income and excludes equity in income of equity investments.

During 2015, the Company generated income tax credits in excess of its utilization capacity based on both the Company’s current operations and with consideration of future tax planning strategies. Based upon these same considerations, the Company reassessed its need for valuation allowances in all jurisdictions. Accordingly, the Company experienced a net decrease in its valuation allowance for deferred income tax assets of $0.5 million.

TSYS has adopted the permanent reinvestment exception as allowed by GAAP, with respect to future earnings of certain foreign subsidiaries. As a result, TSYS considers foreign earnings related to these foreign operations to be permanently reinvested. No provision for U.S. federal and state incomes taxes has been made in the Consolidated Financial Statements for those non-U.S. subsidiaries whose earnings are considered to be reinvested. The amount of undistributed earnings considered to be “reinvested” which may be subject to tax upon distribution was approximately $83.9 million as of December 31, 2015. Although TSYS does not intend to repatriate these earnings, a distribution of these non-U.S. earnings in the form of dividends, or otherwise, would subject the Company to both U.S. federal and state income taxes, as adjusted for non-U.S. tax credits, and withholding taxes payable to the various non-U.S. countries. Determination of the amount of any unrecognized deferred income tax liability on these undistributed earnings is not practicable.

In 2015, TSYS reassessed its contingencies for foreign, federal and state exposures, which resulted in a net increase in tax contingency amounts of approximately $6.4 million.

Refer to Note 15 in the Consolidated Financial Statements for more information on income taxes.

Equity in Income of Equity Investments

Below is a summary of TSYS’ share of income from its interest in equity investments:

	Years Ended December 31,						Percent Change
(in thousands)	2015		2014		2013		2015 vs. 2014			2014 vs. 2013
Equity in income of equity investments	$	22,106		17,583		13,047		25.7	%		34.8	%

The increase in equity income in 2015 and 2014 is the result of organic growth in CUP Data. Refer to Note 12 in the Consolidated Financial Statements for more information on equity investments.

Discontinued Operations

TSYS sold its Japan-based operations during 2014 and recorded income from discontinued operations, net of tax, of $1.4 million, $48.7 million and $2.1 million for 2015, 2014 and 2013, respectively. Refer to Note 2 in the Consolidated Financial Statements for more information on discontinued operations.

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Net Income

The following table provides a summary of net income and EPS:

	Years Ended December 31,									Percent Change
(in thousands, except per share data)	2015			2014			2013			2015 vs. 2014			2014 vs. 2013
Net Income	$	369,041			329,406			256,597			12.0	%		28.4	%
Net income attributable to noncontrolling interests		(4,997	)		(6,534	)		(11,847	)		(23.5	)		(44.8	)
Net income attributable to TSYS common shareholders	$	364,044			322,872			244,750			12.8			31.9
Basic EPS attributable to TSYS common shareholders1	$	1.98			1.73			1.30			14.1			33.5
Diluted EPS attributable to TSYS common shareholders1	$	1.97			1.72			1.29			14.2			33.6

1 Basic and diluted EPS is computed based on the two-class method in accordance with the guidance under GAAP. Refer to Note 26 in the Consolidated Financial Statements for more information on EPS.

Net income attributable to noncontrolling interests in 2015 decreased by $1.5 million, from 2014 and decreased $5.3 million in 2014 from 2013. The decrease in 2015 compared to 2014 is driven by the sale of GP Net in 2014 and the operating results of the Company’s European cost center business. The decrease in 2014 was a result of the additional acquisition of 15% of Central Payment Co., LLC (CPAY) in 2014.

Non-GAAP Financial Measures

Management evaluates the Company’s operating performance based upon operating margin excluding reimbursables, adjusted EBITDA, adjusted segment operating income, adjusted segment operating margin and adjusted EPS, which are all non-generally accepted accounting principles (non-GAAP) measures. TSYS also uses these non-GAAP financial measures to evaluate and assess TSYS’ financial performance against budget.

Although not a substitute for GAAP, 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 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 captions of other companies due to potential inconsistencies in the method of calculation.

TSYS believes that its use of non-GAAP financial measures provides investors with the same 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 the presentation of GAAP financial measures alone would not provide its shareholders and potential investors with the ability to appropriately analyze its ongoing operational results, and therefore expected future results. TSYS therefore 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.

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The following tables provide a reconciliation of GAAP to non-GAAP financial measures:

Revenues Before Reimbursable Items and Operating Margin Excluding Reimbursable Items

	Years Ended December 31,
(in thousands)	2015			2014			2013
Operating income (a)	$	534,107			431,640			382,500
Total revenues (b)	$	2,779,541			2,446,877			2,064,305
Less reimbursable items		280,192			253,899			240,597
Revenues before reimbursable items (c)	$	2,499,349			2,192,978			1,823,708
Operating margin (as reported) (a)/(b)		19.22	%		17.64	%		18.53	%
Operating margin excluding reimbursables (a)/(c)		21.37	%		19.68	%		20.97	%

Adjusted EBITDA

	Years Ended December 31,
(in thousands)	2015			2014			2013
Net income	$	369,041			329,406			256,597
Adjusted for:
Income from discontinued operations		(1,411	)		(48,655	)		(2,055	)
Equity in income of equity investments, net of taxes		(22,106	)		(17,583	)		(13,047	)
Income taxes		151,364			129,761			110,981
Nonoperating expenses, net		37,219			38,711			30,024
Depreciation and amortization		258,264			246,620			199,026
EBITDA		792,371			678,260			581,526
Adjusted for:
Share-based compensation		41,549			30,790			28,933
NetSpend merger and acquisition expenses*		—			3,217			13,634
Adjusted EBITDA	$	833,920			712,267			624,093
Deduct: State tax credits and related expenses	$	(14,903	)		—			—
Adjusted EBITDA without impact of one-time tax items	$	819,017			712,267			624,093

* Excludes share-based compensation

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Segment Operating Margin and Consolidated Adjusted Operating Margin

	Year Ended December 31, 2015
(in thousands)	Adjusted Segment Operating Income			Revenues before Reimbursable Items			Adjusted Operating Margin
North America Services	$	429,064			1,147,254			37.40	%
International Services		60,087			331,159			18.14
Merchant Services		150,225			474,040			31.69
NetSpend		137,837			580,377			23.75
Intersegment		—			(33,481	)
Corporate admin and other		(109,035	)
Adjusted operating margin		668,178			2,499,349			26.73	%
Acquisition intangible amortization		(92,522	)
NetSpend M&A operating expenses		—
Share-based compensation		(41,549	)
Operating income and margin*		534,107			2,499,349			21.37	%
Reimbursable items		—			280,192
Operating income and margin*	$	534,107			2,779,541			19.22	%

	Year Ended December 31, 2014
	Adjusted Segment Operating Income			Revenues before Reimbursable Items			Adjusted Operating Margin
North America Services	$	351,512			954,082			36.84	%
International Services		55,123			341,785			16.13
Merchant Services		134,872			435,649			30.96
NetSpend		128,285			482,686			26.58
Intersegment		—			(21,224	)
Corporate admin and other		(107,174	)
Adjusted operating margin		562,618			2,192,978			25.66	%
Acquisition intangible amortization		(96,971	)
NetSpend M&A operating expenses		(3,217	)
Share-based compensation		(30,790	)
Operating income and margin*		431,640			2,192,978			19.68	%
Reimbursable items		—			253,899
Operating income and margin*	$	431,640			2,446,877			17.64	%

	Year Ended December 31, 2013
	Adjusted Segment Operating Income			Revenues before Reimbursable Items			Adjusted Operating Margin
North America Services	$	321,619			860,645			37.37	%
International Services		42,068			321,484			13.09
Merchant Services		155,643			446,277			34.88
NetSpend		66,353			207,851			31.92
Intersegment		—			(12,549	)
Corporate admin and other		(94,137	)		—
Adjusted operating margin		491,546			1,823,708			26.95	%
Acquisition intangible amortization		(65,893	)
NetSpend M&A operating expenses		(14,220	)
Share-based compensation		(28,933	)
Operating income and margin*		382,500			1,823,708			20.97	%
Reimbursable items		—			240,597
Operating income and margin*	$	382,500			2,064,305			18.53	%

* Operating margin on revenue before reimbursable items

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Adjusted Earnings Per Share

	Years Ended December 31,
(in thousands except per share data)	2015			2014		2013
Income from continuing operations attributable to TSYS common shareholders	$	362,633		$	275,216		246,893
Adjust for amounts attributable to TSYS common shareholders (net of taxes):
Acquisition intangible amortization		61,525			65,127		43,743
Share-based compensation		27,954			20,944		19,830
NetSpend merger and acquisition expenses		—			3,115		15,251
Adjusted earnings	$	452,112		$	364,402	$	325,717
Basic EPS—Income from continuing operations attributable to TSYS common shareholders
As reported (GAAP)	$	1.97			1.48		1.31
Adjust for amounts attributable to TSYS common shareholders (net of taxes):
Acquisition intangible amortization		0.33			0.35		0.23
Share-based compensation		0.15			0.11		0.11
NetSpend merger and acquisition expenses		—			0.02		0.08
Adjusted EPS*	$	2.46			1.96		1.73
Deduct: Federal and state tax credits and related expenses, net of tax	$	(0.13	)		—		—
Adjusted EPS without impact of one-time tax items	$	2.33			1.96		1.73
Average common shares and participating securities		184,082			186,222		188,391

* Adjusted EPS amounts do not total due to rounding.

Projected Outlook for 2016

As compared to 2015, TSYS expects its 2016 total revenues to increase by 4%-6%, its revenues before reimbursable items to increase by 5%-7%, and its adjusted EPS from continuing operations attributable to TSYS common shareholders to increase by 4%-7%, based on the following assumptions with respect to 2016: (1) there will be no significant movements in the London Interbank Offered Rate (LIBOR) and TSYS will not make any significant draws on the remaining balance of its revolving credit facility; (2) there will be no significant movement in foreign currency exchange rates related to TSYS’ business; (3) TSYS will not incur significant expenses associated with the conversion of new large clients, additional acquisitions, or any significant impairment of goodwill or other intangibles; (4) there will be no deconversions of large clients during the year other than as previously disclosed; and (5) the economy will not worsen. In addition, TSYS’ earnings guidance for 2016 does not include the impact of share repurchases or the pending acquisition of TransFirst Holdings Corp. (“TransFirst”).

Financial Position, Liquidity and Capital Resources

The Consolidated Statements of Cash Flows detail the Company’s cash flows from operating, investing and financing activities. TSYS’ primary methods for funding its operations and growth have been cash generated from current operations, the use of leases and the occasional use of borrowed funds to supplement financing of capital expenditures.

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Cash Flows from Operating Activities

	Years Ended December 31,
(in thousands)	2015			2014			2013
Net income	$	369,041			329,406			256,597
Depreciation and amortization		258,264			248,018			205,351
Other noncash items and charges, net		50,458			(27,928	)		76,744
Net change in current and other assets and current and other liabilities		(77,569	)		10,705			(86,294	)
Net cash provided by operating activities	$	600,194			560,201			452,398

TSYS’ main source of funds is derived from operating activities, specifically net income. The increases in 2015 and 2014, as compared to the previous years, in net cash provided by operating activities were primarily the result of increased earnings.

Net change in current and other assets and current and other liabilities include accounts receivable, prepaid expenses, other current assets and other assets, accounts payable, accrued salaries and employee benefits and other liabilities. The change in accounts receivable between the years is the result of timing of collections compared to billings. The change in accounts payable and other liabilities between years is the result of the timing of payments and the reduction of liabilities related to the disposal of the Company’s Japan operations.

Cash Flows from Investing Activities

	Years Ended December 31,
(in thousands)	2015			2014			2013
Additions to contract acquisition costs	$	(58,728	)		(88,871	)		(55,965	)
Purchases of property and equipment, net		(54,640	)		(75,913	)		(40,598	)
Additions to licensed computer software from vendors		(50,729	)		(29,638	)		(63,635	)
Additions to internally developed computer software		(39,219	)		(41,501	)		(33,600	)
Purchases of private equity investments		(3,525	)		(3,291	)		(1,378	)
Cash used in acquisitions, net of cash acquired		(750	)		(38,584	)		(1,314,660	)
Proceeds from insurance recovery for loss on disposal		—			6,212			—
Proceeds from sale of private equity investment		1,839			—			—
Proceeds from dispositions, net of expenses paid and cash disposed		3,568			44,979			—
Net cash used in investing activities	$	(202,184	)		(226,607	)		(1,509,836	)

The major uses of cash for investing activities in 2015, 2014 and 2013 were for additions to contract acquisition costs, equipment, acquisitions, internally developed computer software and licensed computer software from vendors.

Contract Acquisition Costs

TSYS makes cash payments for processing rights, third-party development costs and other direct salary-related costs in connection with converting new customers to the Company’s processing systems. The Company’s investments in contract acquisition costs were $58.7 million in 2015, $88.9 million in 2014 and $56.0 million in 2013. The Company made cash payments for processing rights of $29.6 million, $21.7 million and $9.7 million in 2015, 2014 and 2013, respectively. Conversion cost additions were $29.1 million, $67.2 million and $46.3 million in 2015, 2014 and 2013, respectively. The decreases in conversion costs in 2015 compared to 2014, and the increase in 2014 compared to 2013, are primarily related to the conversion of Bank of America’s consumer card portfolio.

Property and Equipment

Capital expenditures for property and equipment were $54.6 million in 2015, compared to $75.9 million in 2014 and $40.6 million in 2013. The majority of capital expenditures in 2015 and 2014 related to computer processing

33

hardware. The majority of capital expenditures in 2013 related to investments in new computer processing hardware and building improvements

Internally Developed Computer Software Costs

Additions to capitalized software development costs, including enhancements to, and development of, processing systems, were $39.2 million in 2015, $41.5 million in 2014 and $33.6 million in 2013. The changes in capitalized software development costs in 2015, as compared to 2014, were the result of varying levels of activity in two corporate-wide initiatives. One initiative is a multi-year, multi-phase initiative that consists of enhancing TSYS’ issuing processing platforms. The other is an innovation initiative focused on enhancing existing product and service offerings through several new product concepts and ideas on how to change existing processes.

Licensed Computer Software from Vendors

Expenditures for licensed computer software from vendors for increases in processing capacity were $50.7 million in 2015, compared to $29.6 million in 2014 and $63.6 million in 2013. The increase in expenses in 2015 compared to 2014 was due primarily to the extension of existing mainframe and distributed software agreements. The decrease in expenditures in 2014 was due to purchases of software in 2013 in anticipation of large conversions in future years.

Purchases of Private Equity Investments

The Company has entered into limited partnership agreements in connection with investing in two Atlanta-based venture capital funds focused exclusively on investing in technology-enabled financial services companies. Pursuant to each limited partnership agreement, the Company has committed to invest up to $20.0 million in each fund so long as its ownership interest in each fund does not exceed 50%. The Company made investments in the fund of $3.5 million, $3.3 million and $1.4 million in 2015, 2014 and 2013, respectively. The Company recorded gains on this investment of $4.0 million, $793,000 and $966,000 for the years ended December 31, 2015, 2014 and 2013, respectively.

Cash Used in Acquisitions

In 2014, the Company paid $38.6 million to NetSpend dissenting shareholders to settle the outstanding lawsuit associated with the NetSpend acquisition. In 2013, the Company used cash of $1.3 billion in the acquisition of NetSpend.

Proceeds from Insurance Recovery for Loss on Disposal

In 2014, the Company received $6.2 million of proceeds from insurance coverage related to the destruction of property resulting from a fire. The Company recorded the loss on disposal which was more than offset by the insurance proceeds received.

Proceeds from Dispositions

TSYS received $3.6 million in proceeds from dispositions related to the return of cash in 2015 that was placed in escrow during closing and tax adjustments associated with the sale of the Company’s Japan-based operations in 2014. In 2014, TSYS received $45.0 million of proceeds, net of expenses paid and cash disposed in connection with this transaction. Refer to Note 2 in the Consolidated Financial Statements for more information on discontinued operations.

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Cash Flows from Financing Activities

	Years Ended December 31,
(in thousands)	2015			2014			2013
Repurchases of common stock under plans and tax withholding	$	(242,235	)		(170,516	)		(103,857	)
Dividends paid on common stock		(73,677	)		(74,796	)		(56,510	)
Principal payments on long-term borrowings and capital lease obligations		(54,719	)		(69,939	)		(166,805	)
Subsidiary dividends paid to noncontrolling shareholders		(5,028	)		(7,172	)		(7,321	)
Purchase of noncontrolling interest		—			(37,500	)		—
Debt issuance costs		—			—			(13,573	)
Proceeds from long-term borrowings		1,912			1,396			1,395,661
Excess tax benefit from share-based payment arrangements		24,357			7,185			3,528
Proceeds from exercise of stock options		58,636			34,869			40,691
Net cash (used in) provided by financing activities	$	(290,754	)		(316,473	)		1,091,814

The main sources of cash from financing activities in 2015 and 2014 were proceeds from the exercise of stock options. The main source of cash from financing activities in 2013 was the proceeds of borrowed funds. Net cash used in financing activities for the years ended December 31, 2015 and 2014 was primarily the result of the repurchases of common stock, payment of dividends, and principal payments on long-term debt borrowings and capital lease obligations offset by proceeds from the exercise of stock options. Net cash provided by financing activities for the year ended December 31, 2013 was primarily the result of proceeds from long-term borrowings in connection with the NetSpend acquisition. Refer to Notes 13 and 24 in the Consolidated Financial Statements for more information on the long-term debt financing and acquisitions.

Financing

In connection with the NetSpend acquisition, the Company obtained commitments for a $1.2 billion 364-day bridge term loan facility. In May, 2013 the Company closed the bridge term loan and issued debt of $1.4 billion to finance the NetSpend acquisition. In April 2013, the Company entered into a new credit agreement that provided for a five-year term loan to the Company in the amount of $200.0 million. In May 2013, the Company closed its issuance of $550.0 million aggregate principal amount of 2.375% Senior Notes due 2018 and $550.0 million aggregate principal amount of 3.750% Senior Notes due 2023 (collectively, the “Notes”). The interest on the Notes is payable semiannually. Upon the issuance of the Notes, the Company eliminated its bridge term loan facility. In July 2013, the Company borrowed $100 million on its revolving credit facility which was repaid as of December 31, 2013. In connection with the bridge term loan facility and the aforementioned loans, the Company paid debt issuance costs of $13.6 million in 2013.

Refer to Note 13 in the Consolidated Financial Statements for further information on TSYS’ long-term debt and financing arrangements.

Purchase of Noncontrolling Interest

In connection with the acquisition of CPAY, the Company is party to call and put arrangements with respect to the membership units that represent the remaining noncontrolling interest of CPAY. The call arrangement is exercisable by TSYS and the put arrangement is exercisable by the Seller. The put arrangement is outside the control of the Company by requiring the Company to purchase the Seller’s entire equity interest in CPAY at a put price at fair value. At the time of the original acquisition, the redemption of the put option was considered probable based upon the passage of time of the second anniversary date. The put arrangement is recorded on the balance sheet and is classified as redeemable noncontrolling interest outside of permanent equity.

In February 2014, the Company purchased an additional 15% equity interest in CPAY for $37.5 million, reducing the redeemable noncontrolling interest to 25%. The call and put options for the Seller’s 25% equity interest were extended as a result of this transaction.

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The put option is not currently redeemable, but redemption is considered probable based upon the passage of time toward the third anniversary date of the 2014 purchase of additional equity. The Company’s accounting policy is to accrete changes in the redemption value over the period from the date of issuance to the earliest redemption date, which the Company believes to be in 2017. The Company did not accrete any changes to the redemption value as the balance as of December 31, 2015 exceeded the accretion fair value amount.

Refer to Note 24 in the Consolidated Financial Statements for more information on this purchase.

Stock Repurchase Plan

In January 2015, TSYS announced that its Board had approved a new stock repurchase plan to repurchase up to 20 million shares of TSYS stock. The shares may be purchased from time to time at prices considered appropriate. There is no expiration date for the plan. Through December 31, 2015, the Company purchased 5.2 million shares for approximately $242.1 million, at an average price of $47.01.

In April 2010, TSYS announced a stock repurchase plan to purchase up to 10 million shares of TSYS stock. The shares were to be purchased from time to time over the next two years at prices considered attractive to the Company. In May 2011, TSYS announced that its Board had approved an increase in the number of shares that may be repurchased under its current share repurchase plan from up to 10 million shares to up to 15 million shares of TSYS stock. The expiration date of the plan was also extended to April 30, 2013. In July 2012, TSYS announced that its Board had approved an increase in the number of shares that may be repurchased under its current share repurchase plan from up to 15 million shares to up to 20 million shares of TSYS stock. The expiration date of the plan was also extended to April 30, 2014. In January, 2014, TSYS announced that its Board had approved an increase in the number of shares that may be repurchased under its current share repurchase plan from up to 20 million shares to up to 28 million shares of TSYS stock. With the increase, TSYS had 6.8 million shares available to be repurchased. In addition, the expiration date of the plan was extended to April 30, 2015. Through December 31, 2014 and 2013, respectively, the Company purchased 21.2 million and 16.0 million shares for approximately $503.3 million and $338.0 million, at an average price of $23.75 and $21.13. In January 2015, this plan was terminated.

Dividends

Dividends on common stock of $73.7 million were paid in 2015, compared to $74.8 million and $56.5 million in 2014 and 2013, respectively. The Company paid dividends of $0.40 per share in 2015 and 2014, and $0.30 per share in 2013. The increase in dividends paid in 2014, compared to 2013, is due to the acceleration of the payment of the fourth quarter 2012 dividend. The fourth quarter 2012 dividend payment was paid in December 2012, rather than January 2013, to allow shareholders to benefit from the lower dividend tax rate that was set to expire on December 31, 2012.

Significant Noncash Transactions

During 2015, 2014 and 2013, the Company issued 388,211, 673,724 and 1.7 million shares of common stock, respectively, to certain key employees and non-management members of its Board of Directors. The grants to certain key employees were issued in the form of nonvested stock bonus awards for services to be provided in the future by such officers and employees. The market value of the common stock at the date of issuance is amortized as compensation expense over the vesting period of the awards. The grants to the Board of Directors were fully vested on the date of grant.

The Company acquired computer equipment and software under capital leases in the amount of $4.1 million, $17.9 million and $14.8 million in 2015, 2014 and 2013, respectively.

Refer to Notes 19 and 23 in the Consolidated Financial Statements for more information on share-based compensation and significant noncash transactions.

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Additional Cash Flow Information

Off-Balance Sheet Financing

TSYS uses various operating leases in its normal course of business. These “off-balance sheet” arrangements obligate TSYS to make payments for computer equipment, software and facilities. These computer and software lease commitments may be replaced with new lease commitments due to new technology. Management expects that, as these leases expire, they will be evaluated and renewed or replaced by similar leases based on need.

The following table summarizes future contractual cash obligations, including lease payments and software arrangements, as of December 31, 2015, for the next five years and thereafter:

	Contractual Cash Obligations Payments Due By Period
(in thousands)	Total		1 Year or Less		2-3 Years		4-5 Years		After 5 Years
Debt obligations (principal)	$	1,433,669		50,364		833,305		—		550,000
Debt obligations (interest)		195,403		37,932		64,658		41,250		51,563
Operating leases		495,238		123,812		218,550		130,159		22,716
Purchase commitments		67,425		18,144		27,165		22,091		25
Redeemable noncontrolling interest		23,410		—		23,410		—		—
Capital lease obligations		7,362		3,637		3,662		63		—
Total contractual cash obligations	$	2,222,507		233,889		1,170,750		193,563		624,304

Amounts utilize prevailing interest rates as of December 31, 2015.

Income Taxes

The total liability for uncertain tax positions as of December 31, 2015 is $13.1 million. Refer to Note 15 in the Consolidated Financial Statements for more information on income taxes. The Company is not able to reasonably estimate the amount by which the liability will increase or decrease over time; however, at this time, the Company does not expect any significant changes related to these obligations within the next twelve months.

Foreign Operations

TSYS operates internationally and is subject to the impact of adverse movements in foreign currency exchange rates. TSYS does not enter into foreign exchange forward contracts to reduce its exposure to foreign currency rate changes; however, the Company continues to analyze the potential use of hedging instruments to safeguard it from significant foreign currency translation risks.

TSYS maintains operating cash accounts outside the United States. Refer to Note 5 in the Consolidated Financial Statements for more information on cash and cash equivalents. TSYS has adopted the permanent reinvestment exception under GAAP with respect to future earnings of certain foreign subsidiaries. While some of the foreign cash is available to repay intercompany financing arrangements, remaining amounts are not presently available to fund domestic operations and obligations without paying a significant amount of taxes upon its repatriation. Demand on the Company’s cash has increased as a result of its strategic initiatives. TSYS funds these initiatives through a balance of internally generated cash, external sources of capital and, when advantageous, access to foreign cash in a tax efficient manner. Where local regulations limit an efficient intercompany transfer of amounts held outside of the U.S., TSYS will continue to utilize these funds for local liquidity needs. Under current law, balances available to be repatriated to the U.S. would be subject to U.S. federal income taxes, less applicable foreign tax credits. TSYS has provided for the U.S. federal tax liability on these amounts for financial statement purposes, except for foreign earnings that are considered permanently reinvested outside of the U.S. TSYS utilizes a variety of tax planning and financing strategies with the objective of having its worldwide cash available in the locations where it is needed.

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Impact of Inflation

Although the impact of inflation on its operations cannot be precisely determined, the Company believes that by controlling its operating expenses and by taking advantage of more efficient computer hardware and software, it can minimize the impact of inflation.

Working Capital

TSYS may seek additional external sources of capital in the future. The form of any such financing will vary depending upon prevailing market and other conditions and may include short-term or long-term borrowings from financial institutions or the issuance of additional equity and/or debt securities such as industrial revenue bonds. However, there can be no assurance that funds will be available on terms acceptable to TSYS. Management expects that TSYS will continue to be able to fund a significant portion of its capital expenditure needs through internally generated cash in the future, as evidenced by TSYS’ current ratio of 2.6:1. As of December 31, 2015, TSYS had working capital of $543.7 million, compared to $394.0 million in 2014 and $356.7 million in 2013.

Legal Proceedings

Refer to Note 16 in the Consolidated Financial Statements for information regarding the Company’s commitments and contingencies including legal proceedings.

Forward-Looking Statements

Certain statements contained in this filing which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the Act). These forward-looking statements include, among others: (i) TSYS’ expectation that the loss of Bank of America as a merchant services client will not have a material adverse effect on TSYS’ business; (ii) TSYS’ expectation that the Durbin Amendment will not have a significant negative impact on TSYS’ business; (iii) TSYS’ expectation with respect to the effect of recent accounting pronouncements; (iv) TSYS’ expectation that it will be able to fund a significant portion of its capital expenditure needs through internally generated cash in the future; (v) TSYS’ earnings guidance for 2016 total revenues, revenues before reimbursable items, and adjusted EPS attributable to TSYS’ common shareholders from continuing operations; (vi) TSYS’ belief with respect to lawsuits, claims and other complaints; (vii) TSYS’ expectation with respect to certain tax matters; (viii) the Board’s intention to continue to pay cash dividends; (ix) statements regarding the pending Transfirst acquisition, and the assumptions underlying such statements. In addition, certain statements in future filings by TSYS with the Securities and Exchange Commission, in press releases, and in oral and written statements made by or with the approval of TSYS which are not statements of historical fact constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenue, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans and objectives of TSYS or its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “estimates,” “projects,” “plans,” “may,” “could,” “should,” “would,” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying these statements.

These statements are based upon the current beliefs and expectations of TSYS’ management 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 to differ materially from those contemplated by the Company’s forward-looking statements. 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 incurs expenses associated with the signing of a significant client;

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• organic growth rates for TSYS’ existing clients are lower than anticipated whether as a result of unemployment rates, card delinquencies and charge off rates or otherwise or attrition rates of existing clients are higher than anticipated;

• TSYS does not convert and deconvert clients’ portfolios as scheduled;

• risks associated with foreign operations, including adverse developments with respect to foreign currency exchange rates;

• adverse developments with respect to entering into contracts with new clients and retaining current clients;

• consolidation in the financial services and other industries, including the merger of TSYS clients with entities that are not TSYS processing clients, the sale of portfolios by TSYS clients to entities that are not TSYS processing clients and financial institutions which are TSYS clients otherwise ceasing to exist;

• the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on TSYS and its clients;

• adverse developments with respect to the payment card industry in general, including a decline in the use of cards as a payment mechanism;

• the impact of potential and completed acquisitions, particularly the pending TransFirst acquisition, including the costs associated therewith, their being more difficult to integrate than anticipated, and the inability to achieve the anticipated growth opportunities and other benefits of the acquisitions;

• the costs and effects of litigation, investigations or similar matters or adverse facts and developments relating thereto;

• the impact of the application of and/or changes in accounting principles;

• TSYS’ inability to timely, successfully and cost-effectively improve and implement processing systems to provide new products, increased functionality and increased efficiencies;

• TSYS’ reliance on financial institution sponsors;

• changes occur in laws, rules, regulations, credit card association rules, prepaid industry rules, or other industry standards affecting TSYS and its clients that may result in costly new compliance burdens on TSYS and its 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;

• successfully managing the potential both for patent protection and patent liability in the context of rapidly developing legal framework for expansive patent protection;

• one or more of the assumptions upon which TSYS’ earnings guidance for 2016 is based is inaccurate;

• the effect of current domestic and worldwide economic and geopolitical conditions;

• the impact on TSYS’ business, as well as on the risks set forth above, of various domestic or international military or terrorist activities or conflicts;

• other risk factors described in the “Risk Factors” and other sections of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and other filings with the Securities and Exchange Commission; and

• TSYS’ ability to manage the foregoing and other risks.

These forward-looking statements speak only as of the date on which they are made and TSYS does not intend to update any forward-looking statement as a result of new information, future developments or otherwise.

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Subsequent Events

Agreement to Acquire Capital Stock of TransFirst Holdings Corp.

On January 26, 2016, TSYS announced it entered into a definitive agreement with Vista Equity Partners Fund V, L.P. and certain related funds (collectively, “Vista”) to acquire TransFirst Holdings Corp. (“TransFirst”), a Vista portfolio company and leading U S. merchant solutions provider, in an all-cash transaction valued at approximately $2.35 billion. The Company intends to finance the TransFirst acquisition with cash on hand and approximately $2.4 billion of additional indebtedness. In connection with the transaction, the Company entered into a commitment letter with certain of its lenders to provide a $2.0 billion bridge term loan facility (the “Bridge Term Loan Facility”) to finance the TransFirst acquisition to the extent the Company has not obtained alternative financing before the closing of the transaction. The transaction is currently expected to close in the second quarter of 2016 and is subject to regulatory approvals and other customary closing conditions. For additional information regarding the transaction, see TSYS’ Current Reports on Form 8-K filed on January 26, 2016 and January 27, 2016, which include the press release announcing the transaction, the stock purchase agreement for the transaction and the commitment letter for the Bridge Term Loan Facility. There can be no assurance that the proposed acquisition will be completed, or if it is completed, that the expected benefits of the transaction will be realized.

Entry into Credit Agreement

On February 23, 2016, TSYS entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent and L/C Issuer, Bank of America, N.A., as Syndication Agent and L/C Issuer, The Bank of Tokyo-Mitsubishi UFJ, LTD., U.S. Bank National Association and Wells Fargo Bank, National Association, as Co-Documentation Agents, and the other lenders party thereto, with J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, The Bank of Tokyo-Mitsubishi UFJ, LTD., U.S. Bank National Association and Wells Fargo Securities, LLC as joint lead arrangers and joint bookrunners. The Credit Agreement provides TSYS with a $700 million five-year term loan facility broken consisting of (i) a $300 million term loan (the “Refinancing Term Loan”) funded upon entry into the Credit Agreement and (ii) a $400 million term loan (the “Delayed Draw Term Loan”). The Credit Agreement also provides TSYS with a $800 million unsecured revolving credit facility (the “Revolving Credit Facility”), which includes a $50 million sub-facility for the issuance of standby letters of credit.

The Refinancing Term Loan was used to repay in full TSYS’ outstanding loans and other obligations under that certain Credit Agreement, dated as of September 10, 2012, by and among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent thereunder, as amended, and that certain Credit Agreement, dated as of April 8, 2013, by and among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent thereunder, as amended. The Delayed Draw Term Loan will be available to be drawn to finance, in part, the TransFirst acquisition and related transactions, upon satisfaction of a limited set of conditions precedent. The Revolving Loan Facility will be available for draws for purposes of working capital and other general corporate purposes, including to finance, in part, the TransFirst acquisition and related transactions upon satisfaction of a limited set of conditions precedent.

Upon entering into the Credit Agreement, the total commitments under the Bridge Term Loan Facility were reduced from $2.0 billion to $1.15 billion by the amount of the Delayed Draw Term Loan commitment and the portion of the Revolving Loan Facility commitments in excess of $350 million.

For additional information regarding the Credit Agreement, see TSYS’ Current Report on Form 8-K filed on February 23, 2016.

Management performed an evaluation of the Company’s activity as of the date these audited financial statements were issued, and has concluded that, other than as set forth above, there are no significant subsequent events requiring disclosure.

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Consolidated Balance Sheets

	December 31,
(in thousands, except per share data)	2015			2014
Assets
Current assets:
Cash and cash equivalents (Note 5)	$	389,328			289,183
Accounts receivable, net of allowances for doubtful accounts, billing adjustments and merchant losses of $4.0 million and $5.2 million as of 2015 and 2014, respectively (Note 4)		314,705			283,203
Deferred income tax assets (Note 15)		24,670			15,190
Prepaid expenses and other current assets (Note 6)		154,199			98,974
Current assets of discontinued operations (Note 2)		—			4,003
Total current assets		882,902			690,553
Goodwill (Note 7)		1,545,424			1,547,397
Computer software, net of accumulated amortization of $680.6 million and $613.3 million as of 2015 and 2014, respectively (Note 9)		405,070			366,148
Other intangible assets, net of accumulated amortization of $257.1 million and $181.9 million as of 2015 and 2014, respectively (Note 8)		328,320			404,107
Property and equipment, net of accumulated depreciation and amortization of $457.3 million and $423.2 million as of 2015 and 2014, respectively (Note 10)		289,898			290,585
Contract acquisition costs, net of accumulated amortization of $287.9 million and $276.1 million as of 2015 and 2014, respectively (Note 11)		247,811			236,305
Equity investments, net (Note 12)		106,118			100,468
Deferred income tax assets (Note 15)		5,598			7,002
Other assets		97,159			91,016
Total assets	$	3,908,300			3,733,581
Liabilities
Current liabilities:
Accrued salaries and employee benefits	$	66,594			38,001
Accounts payable (Note 4)		52,213			48,793
Current portion of long-term borrowings (Note 13)		50,364			43,784
Current portion of obligations under capital leases (Note 13)		3,468			7,127
Other current liabilities (Note 14)		166,579			154,805
Current liabilities of discontinued operations (Note 2)		—			4,003
Total current liabilities		339,218			296,513
Long-term borrowings, excluding current portion (Notes 4 and 13)		1,379,971			1,398,132
Deferred income tax liabilities (Note 15)		216,470			211,820
Obligations under capital leases, excluding current portion (Note 13)		3,663			6,974
Other long-term liabilities		96,886			98,006
Total liabilities		2,036,208			2,011,445
Redeemable noncontrolling interest in consolidated subsidiary		23,410			22,492
Commitments and contingencies (Note 16)
Equity
Shareholders’ equity: (Notes 18 ,19 ,20 and 21)
Common stock — $0.10 par value. Authorized 600,000 shares; 202,769 and 202,775 issued as of 2015 and 2014, respectively; 182,781 and 184,939 outstanding as of 2015 and 2014, respectively		20,277			20,278
Additional paid-in capital		241,891			171,270
Accumulated other comprehensive income, net		(33,544	)		(11,926	)
Treasury stock, at cost (19,988 and 17,836 shares as of 2015 and 2014, respectively)		(641,664	)		(453,230	)
Retained earnings		2,256,058			1,966,370
Total shareholders’ equity		1,843,018			1,692,762
Noncontrolling interests in consolidated subsidiary		5,664			6,882
Total equity		1,848,682			1,699,644
Total liabilities and equity	$	3,908,300			3,733,581

See accompanying Notes to Consolidated Financial Statements

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Consolidated Statements of Income

	Years Ended December 31,
(in thousands, except per share data)	2015			2014			2013
Total revenues (Notes 4 and 22)	$	2,779,541			2,446,877			2,064,305
Cost of services		1,855,181			1,668,892			1,369,438
Selling, general and administrative expenses		390,253			346,345			312,367
Total operating expenses		2,245,434			2,015,237			1,681,805
Operating income		534,107			431,640			382,500
Nonoperating expenses, net		(37,219	)		(38,711	)		(30,024	)
Income before income taxes and equity in income of equity investments		496,888			392,929			352,476
Income taxes (Note 15)		151,364			129,761			110,981
Income before equity in income of equity investments		345,524			263,168			241,495
Equity in income of equity investments, net of tax (Note 12)		22,106			17,583			13,047
Income from continuing operations, net of tax		367,630			280,751			254,542
Income from discontinued operations, net of tax		1,411			48,655			2,055
Net income		369,041			329,406			256,597
Net income attributable to noncontrolling interests		(4,997	)		(6,534	)		(11,847	)
Net income attributable to Total System Services, Inc. (TSYS) common shareholders	$	364,044			322,872			244,750
Basic earnings per share (EPS) attributable to TSYS common shareholders (Note 26)
Income from continuing operations to TSYS common shareholders	$	1.97			1.48			1.31
Gain (loss) from discontinued operations to TSYS common shareholders		0.01			0.26			(0.01	)
Net income attributable to TSYS common shareholders*	$	1.98			1.73			1.30
Diluted EPS attributable to TSYS common shareholders (Note 26)
Income from continuing operations to TSYS common shareholders	$	1.96			1.47			1.30
Gain (loss) from discontinued operations to TSYS common shareholders		0.01			0.25			(0.01	)
Net income attributable to TSYS common shareholders*	$	1.97			1.72			1.29
Amounts attributable to TSYS common shareholders:
Income from continuing operations	$	362,633			275,216			246,893
Gain (loss) from discontinued operations		1,411			47,656			(2,143	)
Net income	$	364,044			322,872			244,750

* EPS amounts may not total due to rounding

See accompanying Notes to Consolidated Financial Statements

42

Consolidated Statements of Comprehensive Income

	Years Ended December 31,
(in thousands)	2015			2014			2013
Net income	$	369,041			329,406			256,597
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(21,719	)		(19,531	)		(4,081	)
Less reclassifications of foreign currency translation adjustments to net income		—			3,514			—
Total foreign currency translation adjustments		(21,719	)		(16,017	)		(4,081	)
Postretirement healthcare plan adjustments		(1,567	)		589			1,895
Unrealized gain (loss) on available-for-sale securities		1,398			(668	)		1,773
Other comprehensive loss		(21,888	)		(16,096	)		(413	)
Comprehensive income		347,153			313,310			256,184
Comprehensive income attributable to noncontrolling interests		(4,727	)		(6,113	)		(9,092	)
Comprehensive income attributable to TSYS common shareholders	$	342,426			307,197			247,092

See accompanying Notes to Consolidated Financial Statements

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Consolidated Statements of Cash Flows

	Years Ended December 31,
(in thousands)	2015			2014			2013
Cash flows from operating activities:
Net income	$	369,041			329,406			256,597
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		258,264			248,018			205,351
Share-based compensation		41,549			30,790			28,933
Provisions for cardholder losses		41,264			38,381			11,912
Dividends received from equity investments		12,097			9,189			8,595
Charges for transaction processing provisions		6,976			9,468			7,458
Provisions for bad debt expenses, billing adjustments and merchant losses		4,495			2,823			2,000
Amortization of debt issuance costs		1,841			1,817			7,269
Amortization of bond discount		397			383			225
Loss on foreign currency		388			999			1,027
Gain on disposals of equipment, net		(397	)		(293	)		(79	)
Gain on disposal of subsidiaries		(3,568	)		(86,961	)		—
Changes in value of private equity investments		(4,038	)		(793	)		(966	)
Deferred income tax (benefit) expense		(4,083	)		(8,963	)		26,945
Equity in income of equity investments		(22,106	)		(17,583	)		(13,047	)
Excess tax benefit from share-based payment arrangements		(24,357	)		(7,185	)		(3,528	)
Changes in operating assets and liabilities, net of effects of acquisition:
Accounts receivable		(39,218	)		(33,406	)		(8,667	)
Prepaid expenses, other current assets and other long-term assets		(8,498	)		(10,525	)		(571	)
Accounts payable		(3,987	)		8,765			(52,042	)
Accrued salaries and employee benefits		29,168			414			(403	)
Other current liabilities and other long-term liabilities		(55,034	)		45,457			(24,611	)
Net cash provided by operating activities		600,194			560,201			452,398
Cash flows from investing activities:
Additions to contract acquisition costs		(58,728	)		(88,871	)		(55,965	)
Purchases of property and equipment		(54,640	)		(75,913	)		(40,598	)
Additions to licensed computer software from vendors		(50,729	)		(29,638	)		(63,635	)
Additions to internally developed computer software		(39,219	)		(41,501	)		(33,600	)
Purchases of private equity investments		(3,525	)		(3,291	)		(1,378	)
Cash used in acquisitions, net of cash acquired		(750	)		(38,584	)		(1,314,660	)
Proceeds from insurance recovery for loss on disposal		—			6,212			—
Proceeds from sale of private equity investment		1,839			—			—
Proceeds from dispositions, net of expenses paid and cash disposed		3,568			44,979			—
Net cash used in investing activities		(202,184	)		(226,607	)		(1,509,836	)
Cash flows from financing activities:
Repurchases of common stock under plans and tax withholding		(242,235	)		(170,516	)		(103,857	)
Dividends paid on common stock		(73,677	)		(74,796	)		(56,510	)
Principal payments on long-term borrowings and capital lease obligations		(54,719	)		(69,939	)		(166,805	)
Subsidiary dividends paid to noncontrolling shareholders		(5,028	)		(7,172	)		(7,321	)
Purchase of noncontrolling interests		—			(37,500	)		—
Debt issuance costs		—			—			(13,573	)
Proceeds from long-term borrowings		1,912			1,396			1,395,661
Excess tax benefit from share-based payment arrangements		24,357			7,185			3,528
Proceeds from exercise of stock options		58,636			34,869			40,691
Net cash (used in) provided by financing activities		(290,754	)		(316,473	)		1,091,814
Cash and cash equivalents:
Effect of exchange rate changes on cash and cash equivalents		(7,111	)		(6,168	)		(3,758	)
Net increase (decrease) in cash and cash equivalents		100,145			10,953			30,618
Cash and cash equivalents at beginning of period		289,183			278,230			247,612
Cash and cash equivalents at end of period		389,328			289,183			278,230
Less cash and cash equivalents of discontinued operations at end of period		—			—			(30,530	)
Cash and cash equivalents of continued operations at end of period	$	389,328			289,183			247,700
Supplemental cash flow information:
Interest paid	$	40,425			40,969			23,157
Income taxes paid, net	$	171,455			135,770			80,033

See accompanying Notes to Consolidated Financial Statements

44

Consolidated Statements of Changes in Equity

				TSYS Shareholders
	Redeemable Noncontrolling Interests			Common Stock						Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Retained Earnings			Noncontrolling Interests			Total Equity
(in thousands, except per share data)				Shares			Dollars
Balance as of December 31, 2012	$	39,505			202,471		$	20,247			141,793			1,408			(287,301	)		1,549,063			19,725		$	1,444,935
Net income		6,515			—			—			—			—			—			244,750			5,331			250,081
Other comprehensive income (Note 21)		—			—			—			—			2,341			—			—			(2,754	)		(413	)
Replacement share-based awards issued in connection with acquisition (Note 19)		—			—			—			(1,167	)		—			16,723			—			—			15,556
Common stock issued from treasury shares for exercise of stock options (Note 19)		—			—			—			(700	)		—			41,391			—			—			40,691
Common stock issued for nonvested awards (Note 19)		—			319			32			(32	)		—			—			—			—			—
Common stock issued from treasury shares for nonvested awards (Note 19)		—			—			—			(5,747	)		—			5,747			—			—			—
Share-based compensation (Note 19)		—			—			—			28,972			—			—			—			—			28,972
Common stock issued from treasury shares for dividend equivalents (Note 19)		—			—			—			36			—			301			161			—			498
Cash dividends declared ($0.40 per share)		—			—			—			—			—			—			(75,770	)		—			(75,770	)
Purchase of treasury shares (Note 20)		—			—			—			—			—			(103,857	)		—			—			(103,857	)
Subsidiary dividends paid to noncontrolling interests		(6,368	)		—			—			—			—			—			—			(953	)		(953	)
Tax benefits associated with share-based compensation		—			—			—			2,686			—			—			—			—			2,686
Balance as of December 31, 2013		39,652			202,790			20,279			165,841			3,749			(326,996	)		1,718,204			21,349			1,602,426
Net income		4,650			—			—			—			—			—			322,872			1,884			324,756
Other comprehensive income (Note 21)		—			—			—			—			(15,675	)		—			—			(421	)		(16,096	)
Common stock issued from treasury shares for exercise of stock options (Note 19)		—			—			—			1,955			—			32,914			—			—			34,869
Common stock unissued due to forfeiture of nonvested awards		—			(15	)		(1	)		1			—			—			—			—			—
Common stock issued from treasury shares for nonvested awards (Note 19)		—			—			—			(11,142	)		—			11,142			—			—			—
Share-based compensation (Note 19)		—			—			—			30,312			—			—			—			—			30,312
Common stock issued from treasury shares for dividend equivalents (Note 19)		—			—			—			185			—			226			—			—			411
Cash dividends declared ($0.40 per share)		—			—			—			—			—			—			(74,706	)		—			(74,706	)
Purchase of treasury shares (Note 20)		—			—			—			—			—			(170,516	)		—			—			(170,516	)
Subsidiary dividends paid to noncontrolling interests		(6,732	)		—			—			—			—			—			—			(440	)		(440	)
Fair value of noncontrolling interest		(15,078	)		—			—			(22,422	)		—			—			—			—			(22,422	)
Disposition of noncontrolling interest (Note 2)		—			—			—			—			—			—			—			(15,490	)		(15,490	)
Tax benefits associated with share-based compensation		—			—			—			6,540			—			—			—			—			6,540
Balance as of December 31, 2014		22,492			202,775			20,278			171,270			(11,926	)		(453,230	)		1,966,370			6,882			1,699,644
Net income		5,945			—			—			—			—			—			364,044			(948	)		363,096
Other comprehensive income (Note 21)		—			—			—			—			(21,618	)		—						(270	)		(21,888	)
Common stock issued from treasury shares for exercise of stock options (Note 19)		—			—			—			12,273			—			46,363			—			—			58,636
Common stock unissued due to forfeiture of nonvested awards		—			(6	)		(1	)		702			—			(701	)		—			—			—
Common stock issued from treasury shares for nonvested awards (Note 19)		—			—			—			(7,982	)		—			7,982			—			—			—
Share-based compensation (Note 19)		—			—			—			41,179			—			—			—			—			41,179
Common stock issued from treasury shares for dividend equivalents (Note 19)		—			—			—			186			—			163			—			—			349
Cash dividends declared ($0.40 per share)		—			—			—			—			—			—			(74,356	)		—			(74,356	)
Purchase of treasury shares (Note 20)		—			—			—			6			—			(242,241	)		—			—			(242,235	)
Subsidiary dividends paid to noncontrolling interests		(5,027	)		—			—			—			—			—			—			—			—
Tax benefits associated with share-based compensation		—			—			—			24,257			—			—			—			—			24,257
Balance as of December 31, 2015	$	23,410			202,769		$	20,277			241,891			(33,544	)		(641,664	)		2,256,058			5,664		$	1,848,682

See accompanying Notes to Consolidated Financial Statements

45

Notes to Consolidated Financial Statements

Note 1: Basis of Presentation and Summary of Significant Accounting Policies

BUSINESS:    Total System Services, Inc.’s (TSYS’ or the Company’s) revenues are derived from providing payment processing, merchant services and related payment services to financial and nonfinancial institutions, generally under long-term processing contracts. The Company also derives revenues by providing general-purpose reloadable (GPR) prepaid debit cards and payroll cards and alternative financial services to underbanked and other consumers. The Company’s services are provided through four operating segments: North America Services, International Services, Merchant Services and NetSpend.

Through the Company’s North America Services and International Services segments, TSYS processes information through its cardholder systems to financial and nonfinancial institutions throughout the United States and internationally. The Company’s North America Services segment provides these services to clients in the United States, Canada, Mexico and the Caribbean. The Company’s International Services segment provides services to clients in Europe, India, Middle East, Africa, Asia Pacific and Brazil. The Company’s Merchant Services segment provides merchant services to merchant acquirers and merchants mainly in the United States. The Company’s NetSpend segment provides services to consumers in the United States.

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION:    The accompanying consolidated financial statements, which are prepared in accordance with generally accepted accounting principles (GAAP) include the accounts of TSYS and its wholly- and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In addition, the Company evaluates its relationships with other entities to identify whether they are variable interest entities and to assess whether it is the primary beneficiary of such entities. If the determination is made that the Company is the primary beneficiary, then that entity is included in the consolidated financial statements.

RISKS AND UNCERTAINTIES AND USE OF ESTIMATES:    Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, lower than anticipated growth from existing clients, an inability to attract new clients and grow internationally, loss of a major customer or other significant client, loss of a major supplier, an inability to grow through acquisitions or successfully integrate acquisitions, an inability to control expenses, technology changes, the impact of the application of and/or changes in accounting principles, financial services consolidation, changes in regulatory requirements, a decline in the use of cards as a payment mechanism, disruption of the Company’s international operations, breach of the Company’s security systems, a decline in the financial stability of the Company’s clients and uncertain economic conditions. Negative developments in these or other risk factors could have a material adverse effect on the Company’s financial position, results of operations and cash flows.

The Company has prepared the accompanying consolidated financial statements in conformity with U.S. GAAP. The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. These estimates and assumptions are developed based upon all information available. Actual results could differ from estimated amounts.

ACQUISITIONS — PURCHASE PRICE ALLOCATION:    TSYS’ purchase price allocation methodology requires the Company to make assumptions and to apply judgment to estimate the fair value of acquired assets and liabilities. TSYS estimates the fair value of assets and liabilities based upon appraised market values, the carrying value of the acquired assets and widely accepted valuation techniques, including discounted cash flows and market multiple analyses. Management determines the fair value of fixed assets and identifiable intangible assets such as developed technology or customer relationships, and any other significant assets or liabilities. TSYS adjusts the purchase price allocation, as necessary, up to one year after the acquisition closing date as TSYS obtains more information regarding asset valuations and liabilities assumed. Unanticipated events or circumstances may occur which could affect the accuracy of the Company’s fair value estimates, including assumptions regarding industry economic factors and business strategies, and result in an impairment or a new allocation of purchase price.

46

Given its history of acquisitions, TSYS may allocate part of the purchase price of future acquisitions to contingent consideration as required by GAAP for business combinations. The fair value calculation of contingent consideration will involve a number of assumptions that are subjective in nature and which may differ significantly from actual results. TSYS may experience volatility in its earnings to some degree in future reporting periods as a result of these fair value measurements.

CASH AND CASH EQUIVALENTS:    Cash on hand and investments with a maturity of three months or less when purchased are considered to be cash equivalents.

ACCOUNTS RECEIVABLE:    Accounts receivable balances are stated net of allowances for doubtful accounts, billing adjustments and merchant losses.

TSYS records an allowance for doubtful accounts when it is probable that the accounts receivable balance will not be collected. When estimating the allowance for doubtful accounts, the Company takes into consideration such factors as its day-to-day knowledge of the financial position of specific clients, the industry and size of its clients, the overall composition of its accounts receivable aging, prior history with specific customers of accounts receivable write-offs and prior experience of allowances in proportion to the overall receivable balance. This analysis includes an ongoing and continuous communication with its largest clients and those clients with past due balances. A financial decline of any one of the Company’s large clients could have a material adverse effect on collectability of receivables and thus the adequacy of the allowance for doubtful accounts.

Increases in the allowance for doubtful accounts are recorded as charges to bad debt expense and are reflected in selling, general and administrative expenses in the Company’s Consolidated Statements of Income. Write-offs of uncollectible accounts are charged against the allowance for doubtful accounts.

TSYS records an allowance for billing adjustments for actual and potential billing discrepancies. When estimating the allowance for billing adjustments, the Company considers its overall history of billing adjustments, as well as its history with specific clients and known disputes. Increases in the allowance for billing adjustments are recorded as a reduction of revenues in the Company’s Consolidated Statements of Income and actual adjustments to invoices are charged against the allowance for billing adjustments.

TSYS records a provision for merchant losses. When estimating the provision for merchant losses, the Company considers historical loss rates. Increases in the provision for merchant losses are charged to expense and are reflected in cost of services expenses in the Company’s Consolidated Statements of Income. Write-offs of uncollectible amounts are charged against the provision for merchant losses.

UP-FRONT DISTRIBUTOR PAYMENTS:    The Company makes up-front contractual payments to third-party distribution partners. The Company assesses each up-front payment to determine whether it meets the criteria of an asset as defined by U.S. GAAP. If these criteria are met, the Company capitalizes the up-front payment and recognizes the capitalized amount as expense ratably over the benefit period, which is generally the contract period. If the contract requires the distributor to perform specific acts (i.e. achieve a sales goal) and no other conditions exist for the distributor to earn or retain the up-front payment, then the Company capitalizes the payment and recognizes it as an expense when the performance conditions have been met. Up-front distributor payments are classified on the Consolidated Balance Sheet as other non-current assets and recorded as a cost of services in the Consolidated Statements of Income.

PROPERTY AND EQUIPMENT:    Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Buildings and improvements are depreciated over estimated useful lives of 5-40 years, computer and other equipment over estimated useful lives of 2-5 years, and furniture and other equipment over estimated useful lives of 3-15 years. The Company evaluates impairment losses on long-lived assets used in operations in accordance with the provisions of GAAP. All ordinary repairs and maintenance costs are expensed as incurred. Maintenance costs that extend the asset life are capitalized and amortized over the remaining estimated life of the asset.

LICENSED COMPUTER SOFTWARE:    The Company licenses software that is used in providing services to clients. Licensed software is obtained through perpetual licenses, term licenses, site licenses and through

47

agreements based on processing capacity. Perpetual and site licenses are amortized using the straight-line method over their estimated useful lives which range from three to ten years. Term licenses are amortized over the term of the agreement. Mainframe software that is licensed based on processing capacity is amortized using a units-of-production basis over the estimated useful life of the software, generally not to exceed ten years. At each balance sheet date, the Company evaluates impairment losses on long-lived assets used in operations in accordance with GAAP.

ACQUISITION TECHNOLOGY INTANGIBLES:    These identifiable intangible assets are software technology assets resulting from acquisitions. These assets are amortized using the straight-line method over periods not exceeding their estimated useful lives, which range from five to nine years. GAAP requires that intangible assets with estimated useful lives be amortized over their respective estimated useful lives to their residual values, and reviewed for impairment. Acquisition technology intangibles’ net book values are included in computer software, net in the accompanying balance sheets. Amortization expenses are charged to cost of services in the Company’s Consolidated Statements of Income.

SOFTWARE DEVELOPMENT COSTS:    Software development costs are capitalized once technological feasibility of the software product has been established. Costs incurred prior to establishing technological feasibility are expensed as incurred. Technological feasibility is established when the Company has completed a detailed program design and has determined that a product can be produced to meet its design specifications, including functions, features and technical performance requirements. Capitalization of costs ceases when the product is generally available to clients. At each balance sheet date, the Company evaluates the unamortized capitalized costs of software development as compared to the net realizable value of the software product which is determined by future undiscounted net cash flows. The amount by which the unamortized software development costs exceed the net realizable value is written off in the period that such determination is made. Software development costs are amortized using the straight-line method over its estimated useful life, which ranges from three to ten years.

The Company also develops software that is used internally. These software development costs are capitalized in accordance with GAAP. Internal-use software development costs are capitalized once: (1) the preliminary project stage is completed, (2) management authorizes and commits to funding a computer software project, and (3) it is probable that the project will be completed and the software will be used to perform the function intended. Costs incurred prior to meeting the qualifications are expensed as incurred. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. Internal-use software development costs are amortized using the straight-line method over its estimated useful life which ranges from three to ten years.

Software development costs may become impaired in situations where development efforts are abandoned due to the viability of the planned project becoming doubtful or due to technological obsolescence of the planned software product.

CONTRACT ACQUISITION COSTS:    The Company capitalizes contract acquisition costs related to signing or renewing long-term contracts and costs related to cash payments for rights to provide processing services. The Company capitalizes internal conversion costs in accordance with GAAP. All costs incurred prior to a signed agreement are expensed as incurred.

Contract acquisition costs are amortized using the straight-line method over the expected customer relationship (contract term) beginning when the client’s cardholder accounts are converted and producing revenues. The amortization of contract acquisition costs associated with cash payments for client incentives is included as a reduction of revenues in the Company’s Consolidated Statements of Income. The amortization of contract acquisition costs associated with conversion activity is recorded as cost of services in the Company’s Consolidated Statements of Income.

The Company evaluates the carrying value of contract acquisition costs associated with each customer for impairment on the basis of whether these costs are fully recoverable from either contractual minimum fees (contractual costs) or from expected undiscounted net operating cash flows of the related contract (cash incentives paid). The determination of expected undiscounted net operating cash flows requires management to make estimates. These costs may become impaired with the loss of a contract, the financial decline of a client, termination of conversion efforts after a contract is signed, diminished prospects for current clients or if the

48

Company’s actual results differ from its estimates of future cash flows. The amount of the impairment is written off in the period that such a determination is made.

EQUITY INVESTMENTS:    TSYS’ 49% investment in Total System Services de México, S.A. de C.V. (TSYS de México), an electronic payment processing support operation located in Toluca, Mexico, is accounted for using the equity method of accounting, as is TSYS’ 44.56% investment in China UnionPay Data Co., Ltd. (CUP Data) headquartered in Shanghai, China. TSYS’ equity investments are recorded initially at cost and subsequently adjusted for equity in earnings, cash contributions and distributions, and foreign currency translation adjustments.

GOODWILL:    Goodwill results from the excess of cost over the fair value of net assets of businesses acquired. Goodwill and intangible assets with indefinite useful lives are tested for impairment at least annually. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values. Equity investment goodwill, which is not reported as goodwill in the Company’s Consolidated Balance Sheet, but is reported as a component of the equity investment, was $49.4 million as of December 31, 2015.

OTHER INTANGIBLE ASSETS:    Identifiable intangible assets relate primarily to customer relationships, databases, channel relationships, covenants-not-to-compete, trade names and trade associations resulting from acquisitions. These identifiable intangible assets are amortized using the straight-line method over periods not exceeding the estimated useful lives, which range from three to ten years. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with GAAP. Amortization expenses are charged to selling, general and administrative expenses in the Company’s Consolidated Statements of Income.

FAIR VALUES OF FINANCIAL INSTRUMENTS:    The Company uses financial instruments in the normal course of its business. The carrying values of cash equivalents, accounts receivable, accounts payable, accrued salaries and employee benefits, and other current liabilities approximate their fair value due to the short-term maturities of these assets and liabilities. The fair value of the Company’s long-term debt and obligations under capital leases is not significantly different from its carrying value.

Investments in equity investments are accounted for using the equity method of accounting and pertain to privately held companies for which fair value is not readily available. The Company believes the fair values of its investments in equity investments exceed their respective carrying values.

IMPAIRMENT OF LONG-LIVED ASSETS:    The Company reviews long-lived assets, such as property and equipment and intangibles subject to amortization, including contract acquisition costs and certain computer software, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If upon a triggering event the Company determines that the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.

TRANSACTION PROCESSING PROVISIONS:    The Company has recorded an accrual for contract contingencies (performance penalties) and processing errors. A significant number of the Company’s contracts with large clients contain service level agreements which can result in TSYS incurring performance penalties if contractually required service levels are not met. When providing for these accruals, the Company takes into consideration such factors as the prior history of performance penalties and processing errors incurred, actual contractual penalties inherent in the Company’s contracts, progress towards milestones and known processing errors not covered by insurance. As of December 31, 2015, the Company had transaction processing provision of $6.5 million. These accruals are included in other current liabilities in the accompanying Consolidated Balance Sheets. Increases and decreases in transaction processing provisions are charged to cost of services in the Company’s Consolidated Statements of Income, and payments or credits for performance penalties and processing errors are charged against the accrual.

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PROVISION FOR CARDHOLDER LOSSES:    The Company is exposed to losses due to cardholder fraud, payment defaults and other forms of cardholder activity as well as losses due to non-performance of third parties who receive cardholder funds for transmittal to the Issuing Banks (banks that issue MasterCard International or Visa USA, Inc. branded cards to customers). The Company establishes a reserve for the losses it estimates will arise from processing customer transactions, debit card overdrafts, chargebacks for unauthorized card use and merchant-related chargebacks due to non-delivery of goods and services. These reserves are established based upon historical loss and recovery rates and cardholder activity for which specific losses can be identified. The provision for cardholder losses was approximately $9.4 million as of December 31, 2015. The charges to provisions for cardholder losses are included in cost of services in the Consolidated Statements of Income. The Company regularly updates its reserve estimate as new facts become known and events occur that may impact the settlement or recovery of losses.

PROVISION FOR MERCHANT LOSSES:    The Company has potential liability for losses resulting from disputes between a cardholder and a merchant that arise as a result of, among other things, the cardholder’s dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer by the card-issuing bank and charged to the merchant. If the merchant is unable to fund the refund, TSYS must do so. TSYS also bears the risk of reject losses arising from the fact that TSYS collects fees from its merchants on the first day after the monthly billing period. If the merchant has gone out of business during such period, TSYS may be unable to collect such fees. TSYS maintains cash deposits or requires the pledge of a letter of credit from certain merchants, generally those with higher average transaction size where the card is not present when the charge is made or the product or service is delivered after the charge is made, in order to offset potential contingent liabilities such as chargebacks and reject losses that would arise if the merchant went out of business. Most chargeback and reject losses are charged to cost of services as they are incurred. However, the Company also maintains a provision against losses, including major fraud losses, which are both less predictable and involve larger amounts. The loss provision was established using historical loss rates, applied to recent bankcard processing volume. As of December 31, 2015, the Company had a merchant loss provision in the amount of $1.3 million.

REDEEMABLE NONCONTROLLING INTEREST:    In connection with the acquisition of Central Payment Co., LLC (CPAY), the Company is party to call and put arrangements with respect to the membership units that represent the remaining noncontrolling interest of CPAY. The call arrangement is exercisable by TSYS and the put arrangement is exercisable by the seller. The put arrangement is outside the control of the Company by requiring the Company to purchase the seller’s entire equity interest in CPAY at a put price at fair value. The put arrangement is recorded on the balance sheet and is classified as redeemable noncontrolling interest outside of permanent equity.

FOREIGN CURRENCY TRANSLATION:    The Company maintains several different foreign operations whose functional currency is their local currency. Foreign currency financial statements of the Company’s Mexican and Chinese equity investments, the Company’s wholly-owned subsidiaries and the Company’s majority-owned subsidiaries, as well as the Company’s division and branches in the United Kingdom and China, are translated into U.S. dollars at current exchange rates, except for revenues, costs and expenses, and net income which are translated at the average exchange rates for each reporting period. Net gains or losses resulting from the currency translation of assets and liabilities of the Company’s foreign operations, net of tax when applicable, are accumulated in a separate section of shareholders’ equity titled accumulated other comprehensive income (loss). Gains and losses on transactions denominated in currencies other than the functional currencies are included in determining net income for the period in which exchange rates change.

TREASURY STOCK:    The Company uses the cost method when it purchases its own common stock as treasury shares or issues treasury stock upon option exercises and displays treasury stock as a reduction of shareholders’ equity.

REVENUE RECOGNITION:    Revenue is recognized when it is realized or realizable and earned, which is deemed to occur when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been performed; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. The Company accrues for rights of refund, processing errors or penalties, or other related allowances based on historical experience.

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The Company’s North America and International Services revenues are derived from long-term processing contracts with financial and nonfinancial institutions and are generally recognized as the services are performed. Payment processing services revenues are generated primarily from charges based on the number of accounts on file, transactions and authorizations processed, statements mailed, cards embossed and mailed and other processing services for cardholder accounts on file. Most of these contracts have prescribed annual revenue minimums, penalties for early termination, and service level agreements which may impact contractual fees if certain service levels are not achieved.

Revenue is recognized as the services are performed, primarily on a per unit basis. Processing contracts generally range from three to ten years in length. When providing payment processing services, the Company frequently enters into customer arrangements to provide multiple services that may also include conversion or implementation services, business process outsourcing services such as call center services, web-based services, and other payment processing-related services. Revenue for these services is generally recognized as they are performed on a per unit basis each month or ratably over the term of the contract.

The Company’s Merchant Services revenues are partially derived from relationships with thousands of individual merchants. Additionally, part of the revenues are derived from long-term processing contracts with large financial institutions, other merchant acquirers and merchant organizations which generally range from three to eight years and provide for penalties for early termination. Merchant services revenue is generated primarily from processing all payment forms including credit, debit, electronic benefits transfer and check truncation for merchants of all sizes across a wide array of retail market segments. The products and services offered include authorization and capture of electronic transactions, clearing and settlement of electronic transactions, information reporting services related to electronic transactions, merchant billing services, and point-of-sale terminal services. Revenue is recognized for merchant services as those services are performed, primarily measured on a per unit basis. When providing merchant processing services, the Company frequently enters into customer arrangements to provide multiple services that may also include conversion or implementation services, business process outsourcing services such as call center services, terminal services, and other merchant processing-related services. Revenue for these services is generally recognized as they are performed on a per unit basis each month or ratably over the term of the contract. Revenues on point-of-sale terminal equipment are recognized upon the transfer of ownership and shipment of product.

When a sale involves multiple deliverables, revenue recognition is affected by the determination of the number of deliverables in an arrangement, whether those deliverables may be separated into multiple units of accounting, and the standalone selling price of each unit of accounting which affects the amount of revenue allocated to each unit. Pursuant to Accounting Standards Codification (ASC) 605 ”Revenue Recognition,” the Company uses vendor-specific objective evidence of the standalone selling price (VSOE) of its services when it exists to determine the amount of revenue to allocate to each unit of accounting. The Company establishes VSOE using the price charged when the same service is sold separately (on a standalone basis). In certain situations, the Company does not have sufficient VSOE. In these situations, TSYS considers whether sufficient third party evidence (TPE) of standalone selling price exists for the Company’s services. However, the Company typically is not able to determine TPE and has not used this measure of selling price due to the unique and proprietary nature of some of its services and the inability to reliably verify relevant standalone third party prices. When there is insufficient evidence of VSOE and TPE, the Company has made its best estimate of the standalone selling price (ESP) of that service for purposes of allocating revenue to each unit of accounting. When determining ESP, TSYS uses limited standalone sales data that do not meet the Company’s criteria to establish VSOE, management pricing strategies, residual selling price data when VSOE exists for a group of elements, the cost of providing the services and the related margin objectives. Consideration is also given to geographies in which the services are sold or delivered, customer classifications, and market conditions including competitor pricing strategies and benchmarking studies. Revenue is recognized when the revenue recognition criteria for each unit of accounting have been met.

As business and service offerings change in the future, the determination of the number of deliverables in an arrangement and related units of accounting and the future pricing practices may result in changes in the estimates of VSOE and ESP, which may change the ratio of fees allocated to each service or unit of accounting in a given customer arrangement. There were no material changes or impact to revenue for current contractual arrangements in the year ended December 31, 2015 due to any changes in the determination of the number of deliverables in an arrangement, units of accounting, or estimates of VSOE or ESP.

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In many situations, the Company enters into arrangements with customers to provide conversion or implementation services in addition to processing services where the conversion or implementation services do not have standalone value. For these arrangements, conversion or implementation services that do not have standalone value, are recognized over the expected customer relationship (contract term) as the related processing services are performed.

The Company’s other services generally have standalone value and constitute separate units of accounting for revenue recognition purposes. Customer arrangements entered into prior to 2011 (prior to the adoption of Accounting Standards Update (ASU) 2009-13 “Multiple-Deliverable Revenue Arrangements,” an update to ASC Topic 605 “Revenue Recognition,” and formerly known as EITF 08-1, “Revenue Arrangements with Multiple Deliverables”) often included services for which sufficient objective and reliable evidence of fair value did not exist. In these situations, the deliverables were combined and recognized as a single unit of accounting based on the proportional performance for the combined unit. For pre-2011 arrangements that have not expired, have not been materially modified or amended, or terminated, the Company continues to recognize revenue in accordance with these policies in the accompanying financial statements. Beginning in 2011, services in new or materially modified arrangements of this nature were divided into separate units of accounting and revenue is now allocated to each unit of accounting based on the relative selling price method as disclosed above. As the services in the pre-2011 arrangements are generally delivered over the same term with consistent patterns of performance, there is no material difference in the timing or pattern of revenue recognition for each group of arrangements (pre-2011 arrangements and those new or materially modified thereafter).

The Company’s multiple element arrangements may include one or more elements that are subject to other topics including software revenue recognition and leasing guidance. The consideration for these multiple element arrangements is allocated to each group of deliverables — those subject to ASC 605-25 and those subject to other topics based on the revised guidance in ASU 2009-13. Arrangement revenue for each group of deliverables is then further separated, allocated, and recognized based on applicable guidance.

The Company’s NetSpend revenues principally consist of a portion of the service fees and interchange revenues received by the Issuing Banks in connection with the programs NetSpend manages. Revenue is recognized when there is persuasive evidence of an arrangement, the relevant services have been rendered, the price is fixed or determinable and collectability is reasonably assured.

Cardholders are charged fees in connection with NetSpend’s products and services as follows:

• Transactions — Cardholders are typically charged a fee for each PIN and signature-based purchase transaction made using their GPR cards, unless the cardholder is on a monthly or annual service plan, in which case the cardholder is instead charged a monthly or annual subscription fee, as applicable. Cardholders are also charged fees for ATM withdrawals and other transactions conducted at ATMs.

• Customer Service and Maintenance — Cardholders are typically charged fees for balance inquiries made through NetSpend’s call centers. Cardholders are also charged a monthly maintenance fee after a specified period of inactivity.

• Additional Products and Services — Cardholders are charged fees associated with additional products and services offered in connection with certain GPR cards, including the use of overdraft features, a variety of bill payment options, custom card designs and card-to-card transfers of funds initiated through the call centers.

• Other — Cardholders are charged fees in connection with the acquisition and reloading of the GPR cards at retailers and the Company receives a portion of these amounts in some cases.

Revenue resulting from the service fees charged to the cardholders described above is recognized when the fees are charged because the earnings process is substantially complete, except for revenue resulting from the initial activation of cards and annual subscription fees. Revenue resulting from the initial activation of cards is recognized ratably, net of commissions paid to distributors, over the average account life, which is approximately six months for GPR cards. Revenue resulting from annual subscription fees is recognized ratably over the annual period to which the fees relate.

Revenues also include fees charged in connection with program management and processing services the Company provides for private-label programs. Revenue resulting from these fees is recognized when the company has fulfilled its obligations under the underlying service agreements.

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NetSpend derives revenue from a portion of the interchange fees remitted by merchants when cardholders make purchases using their GPR cards. Subject to applicable law, interchange fees are fixed by the card associations and network organizations (Networks). Interchange revenue is recognized net of sponsorship, licensing and processing fees charged by the Networks for services they provide in processing purchase transactions routed through them. Interchange revenue is recognized during the period that the purchase transactions occur. Also included in interchange revenue are fees earned from branding agreements with the Networks.

In regards to taxes assessed by a governmental authority imposed directly on a revenue producing transaction, the Company reports its revenues on a net basis.

REIMBURSABLE ITEMS:    Reimbursable items consist of out-of-pocket expenses which are reimbursed by the Company’s clients. These expenses consist primarily of postage, access fees and third party software services.

SHARE-BASED COMPENSATION:    GAAP establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. A public entity must measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award.

The Company estimates forfeitures when recognizing compensation cost. The estimate of forfeitures will be adjusted by the Company as actual forfeitures differ from its estimates, resulting in compensation cost only for those awards that actually vest. The effect of the change in estimated forfeitures is recognized as compensation costs in the period the change in estimate occurred. In estimating its forfeiture rate, the Company stratified its data based upon historical experience to determine separate forfeiture rates for the different award grants. The Company currently estimates a forfeiture rate for existing stock option grants to TSYS non-executive employees, and other TSYS share-based awards. Currently, TSYS estimates a forfeiture rate in the range of 0% to 8%.

The Company has issued its vested awards to directors and nonvested awards to certain employees. The market value of the common stock at the date of issuance is recognized as compensation expense immediately for vested awards and over the vesting period of the nonvested awards. For nonvested award grants that have pro rata vesting, the Company recognizes compensation expense using the straight-line method over the vesting period of the award.

LEASES:    The Company is obligated under noncancelable leases for computer equipment, software and facilities. As these leases expire, they will be evaluated and renewed or replaced by similar leases based on need. A lease is an agreement conveying the right to use property, software or equipment (land and/or depreciable assets) usually for a stated period of time. For purposes of applying the accounting and reporting standards, leases are classified from the standpoint of the lessee as capital or operating leases.

Rental payments on operating leases are charged to expense over the lease term. If rental payments are not made on a straight-line basis, rental expense nevertheless shall be recognized on a straight-line basis unless another systematic and rational basis is more representative of the time pattern in which use benefit is derived from the leased property, in which case that basis shall be used.

Certain of the Company’s operating leases are for office space. The Company will make various alterations (leasehold improvements) to the office space and capitalize these costs as part of property and equipment. Leasehold improvements are amortized on a straight-line basis over the useful life of the improvement or the term of the lease, whichever is shorter.

ADVERTISING:    Advertising costs are expensed as incurred or the first time the advertising takes place except for direct-response advertising and television advertising production costs. Direct-response advertising consists of commission paid to affiliate marketers for the new funded customer accounts generated by them. Direct-response advertising costs are capitalized and amortized over the average life of the new accounts, which is approximately one year. Television advertising production costs consist of the costs of developing and filming

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television ads. Television advertising production costs are capitalized when the production services are received and expensed in the period when the advertising first takes place. Advertising expense for 2015, 2014 and 2013 was $9.6 million, $5.7 million and $1.3 million, respectively.

INCOME TAXES:    Income taxes reflected in TSYS’ consolidated financial statements are computed based on the taxable income of TSYS and its affiliated subsidiaries. A consolidated U.S. federal income tax return is filed for TSYS and its majority-owned U.S. subsidiaries. Additionally, income tax returns are also filed in states where TSYS and its subsidiaries have filing obligations and in foreign jurisdictions where TSYS has a foreign affiliate.

The Company accounts for income taxes in accordance with the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Reserves against the carrying value of a deferred tax asset are established when necessary to reflect the decreased likelihood of realization of a deferred asset in the future. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Income tax provisions require the use of management judgments, which are subject to challenge by various taxing authorities. Contingency reserves are periodically established where the amount of the contingency can be reasonably determined and is likely to occur. Reductions in contingency reserves are recognized when tax disputes are settled or examination periods lapse.

Significant estimates used in accounting for income taxes relate to the determination of taxable income, the determination of temporary differences between book and tax basis, as well as estimates on the realizability of tax credits and net operating losses.

TSYS recognizes potential interest and penalties related to the underpayment of income taxes as income tax expense in the Consolidated Statements of Income.

NONCONTROLLING INTEREST:    Noncontrolling interests in earnings of subsidiaries represents the minority shareholders’ share of the net income or loss of TSYS Managed Services EMEA Limited (EMEA) and CPAY. The noncontrolling interests in the Consolidated Balance Sheet reflects the original investment by these shareholders in EMEA and CPAY, their proportional share of the earnings or losses and their proportional share of net gains or losses resulting from the currency translation of assets and liabilities of EMEA and CPAY.

EARNINGS PER SHARE:    Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are “participating securities” as defined by GAAP, and therefore should be included in EPS using the two-class method.

The two-class method is an earnings allocation method for computing EPS when an entity’s capital structure includes two or more classes of common stock or common stock and participating securities. It determines EPS based on dividends declared on common stock and participating securities and participation rights of participating securities in any undistributed earnings.

Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated to reflect the potential dilution that would occur if stock options or other contracts to issue common stock were exercised. Diluted EPS is calculated by dividing net income by weighted average common and common equivalent shares outstanding. Common equivalent shares are calculated using the treasury stock method.

RECLASSIFICATIONS:    Certain reclassifications have been made to the 2014 and 2013 financial statements to conform to the presentation adopted in 2015.

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Recent Accounting Pronouncements

In November 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-17 “Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes,” which requires the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. Also, companies will no longer allocate valuation allowances between current and noncurrent deferred tax assets because those allowances also will be classified as noncurrent. The guidance is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2016. Early adoption is permitted. Companies can adopt the guidance either prospectively or retrospectively. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU 2015-03 “Interest — Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Cost.” The amendments in this update will require entities to present debt issuance costs in the balance sheet as a direct deduction from the carrying amount of the corresponding debt liability, consistent with debt discounts. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. The guidance will be applied retrospectively. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial position, results of operations or cash flows.

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect on its ongoing financial reporting.

Note 2 Discontinued Operations

In accordance with GAAP, the Company determined its Japan-based businesses became discontinued operations in the first quarter of 2014.

The Company sold all of its stock of GP Network Corporation (GP Net) (representing 54% ownership of the company) and all of its stock of TSYS Japan Godo Kaisha (TSYS Japan) (representing 100% ownership of the company) in April 2014. Both entities were part of the International Services segment. The sale of the Company’s stock in both of its operations in Japan was the result of management’s decision during the first quarter of 2014 to divest non-strategic businesses and focus resources on core products and services. In 2014, the Company had a gain of $48.6 million, net of tax, related to the sales of its operations in Japan. In 2015, the Company recorded an additional gain of $1.4 million, net of tax, related to the return of cash that was placed in escrow during closing and tax adjustments associated with the transaction.

GP Net and TSYS Japan were not significant components of TSYS’ consolidated results.

The following table presents the main classes of assets and liabilities held for sale as of December 31, 2014:

(in thousands)	2014
Total assets	$	4,003
Total liabilities		4,003

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The following table presents the summarized results of discontinued operations for the years ended December 31, 2015, 2014 and 2013:

(in thousands)	2015		2014			2013
Total revenues	$	—	$	16,376			68,048
Income before taxes	$	—	$	1			3,443
Income tax (benefit) expense	$	—	$	(39	)		1,388
Income from operating activities of discontinued operations, net of tax	$	—	$	40			2,055
Gain on dispositions, net of tax	$	1,411	$	48,615			—
Income from discontinued operations, net of tax	$	1,411	$	48,655			2,055
Income from discontinued operations, net of tax, attributable to noncontrolling interest	$	—	$	999			4,198
Income (loss) from discontinued operations, net of tax, attributable to TSYS common shareholders	$	1,411	$	47,656			(2,143	)
Interest allocated to discontinued operations1	$	—	$	—			281

1 Interest expense relates to borrowings directly for use by Japan-based operations.

Note 3 Fair Value Measurement

GAAP requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant level of inputs. The three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows:

Level 1 — Quoted prices for identical assets and liabilities in active markets.

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Unobservable inputs for the asset or liability.

The Company had no transfers between Level 1, Level 2, or Level 3 during the years ended December 31, 2015, 2014 or 2013. Goodwill is assessed annually for impairment in the second quarter of each year using fair value measurement techniques. Specifically, goodwill impairment is determined using a two-step test. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit (RU) with its book value, including goodwill. If the fair value of the RU exceeds its book value, goodwill is considered not impaired and the second step of the impairment test is unnecessary. If the book value of the RU exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the RU’s goodwill with the book value of that goodwill. If the book value of the RU’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The fair value of the RU is allocated to all of the assets and liabilities of that unit as if the RU had been acquired in a business combination and the fair value of the RU was the purchase price paid to acquire the RU.

The estimate of fair value of the Company’s RUs is determined using various valuation techniques, including using an equally weighted combination of the market approach and the income approach. The market approach, which contains Level 2 inputs, utilizes readily available market valuation multiples to estimate fair value. The income approach is a valuation technique that utilizes the discounted cash flow (DCF) method, which includes Level 3 inputs. Under the DCF method, the fair value of the RU reflects the present value of the projected earnings that will be generated by each RU after taking into account the revenues and expenses associated with the asset, the relative risk that the cash flows will occur, the contribution of other assets, and an appropriate discount rate to reflect the value of the invested capital. Cash flows are estimated for future periods based upon historical data and projections by management.

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As of December 31, 2015, the Company had recorded goodwill in the amount of $1.5 billion. The Company performed its annual impairment test of its goodwill balances as of May 31, 2015, and this test did not indicate any impairment. The fair value of the RUs substantially exceeds the carrying value. Refer to Note 7 for more information regarding goodwill.

The fair value of the Company’s long-term debt and obligations under capital leases is not significantly different from its carrying value.

Note 4 Relationships with Affiliated Companies

TSYS has a note payable to Merchants Limited, which has a noncontrolling interest in EMEA. Refer to Note 13 for more information regarding this loan.

The Company provides miscellaneous services to Merchants Limited and to the Company’s equity investments, TSYS de México and CUP Data.

The foregoing related party arrangements and services are performed under contracts that are similar to its contracts with unrelated third party customers. The Company believes the terms and conditions of transactions between the Company and these related parties are comparable to those which could have been obtained in transactions with unaffiliated parties.

Through its related party transactions, TSYS generates accounts receivable and liability accounts with TSYS de México and CUP Data.

The Company had the following balances with related parties as of December 31, 2015 and 2014:

(in thousands)	2015		2014
Accounts receivable	$	19	$	19
Account payable		3,278		4,329

The table below details revenues and expenses derived from affiliated companies for the years ended December 31, 2015, 2014 and 2013:

(in thousands)	2015		2014		2013
Total revenues:
CUP Data	$	116		232		229
TSYS de México		85		78		68
Total revenues	$	201		310		297
Total operating expenses:
Merchants Limited	$	4,202		9,842		5,739
TSYS de México		148		148		148
Total operating expenses	$	4,350		9,990		5,887
Nonoperating expenses paid to Merchants Limited	$	42		—		—

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Note 5 Cash and Cash Equivalents

Cash and cash equivalent balances as of December 31, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Cash and cash equivalents in domestic accounts	$	307,578		225,396
Cash and cash equivalents in foreign accounts		81,750		63,787
Total	$	389,328		289,183

The Company maintains operating accounts outside the United States denominated in currencies other than the U.S. dollar. All amounts in domestic accounts are denominated in U.S. dollars.

NOTE 6 Prepaid Expenses and Other Current Assets

Significant components of prepaid expenses and other current assets as of December 31, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Prepaid expenses	$	37,961		35,334
Supplies inventory		15,114		14,340
Income taxes receivable		51,322		259
Other		49,802		49,041
Total	$	154,199		98,974

NOTE 7 Goodwill

In 2013, the Company allocated $1.0 billion to goodwill due to the acquisition of NetSpend. In 2014, the Company adjusted the NetSpend purchase price allocation to add an additional $8.5 million for settlement of the dissenting shareholder lawsuit and adjustments to deferred taxes. In 2015, the Company adjusted the NetSpend goodwill allocation to include an additional $627,000 for an adjustment to a sales and use tax reserve associated with the acquisition.

The gross amount and accumulated impairment losses of goodwill as of December 31, 2015 and 2014 are as follows:

	2015
(in thousands)	North America Services			International Services			Merchant Services			NetSpend		Consolidated
Gross amount	$	70,796			29,081			415,973			1,033,586	$	1,549,436
Accumulated impairment losses		(182	)		(1,605	)		(2,225	)		—		(4,012	)
Goodwill, net	$	70,614			27,476			413,748			1,033,586	$	1,545,424

	2014
	North America Services			International Services			Merchant Services			NetSpend		Consolidated
Gross amount	$	70,796			31,681			415,973			1,032,959	$	1,551,409
Accumulated impairment losses		(182	)		(1,605	)		(2,225	)		—		(4,012	)
Goodwill, net	$	70,614			30,076			413,748			1,032,959	$	1,547,397

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The changes in the carrying amount of goodwill as of December 31, 2015 and 2014 are as follows:

(in thousands)	North America Services			International Services			Merchant Services		NetSpend		Consolidated
Balance as of December 31, 2013	$	70,796			34,201			413,748		1,024,434	$	1,543,179
Disposal of GP Net		(182	)		(1,605	)		—		—		(1,787	)
NetSpend purchase price allocation		—			—			—		8,525		8,525
Currency translation adjustments		—			(2,520	)		—		—		(2,520	)
Balance as of December 31, 2014	$	70,614			30,076			413,748		1,032,959	$	1,547,397
NetSpend tax adjustment		—			—			—		627		627
Currency translation adjustments		—			(2,600	)		—		—		(2,600	)
Balance as of December 31, 2015	$	70,614		$	27,476		$	413,748	$	1,033,586	$	1,545,424

Refer to Note 24 for more information on acquisitions.

Note 8 Other Intangible Assets, net

In 2015, the changes related to other gross intangible assets were related to foreign currency translation and an acquisition of an acquisition technology intangible asset. Refer to Note 24 for more information on acquisitions.

Significant components of other intangible assets as of December 31, 2015 and 2014 are summarized as follows:

	2015
(in thousands)	Gross		Accumulated Amortization			Net
Channel relationships	$	318,600		(99,909	)	$	218,691
Customer relationships		166,579		(104,736	)		61,843
Trade name		46,422		(24,422	)		22,000
Database		28,000		(14,000	)		14,000
Covenants-not-to-compete		14,940		(7,834	)		7,106
Trade association		10,000		(5,750	)		4,250
Favorable lease		875		(445	)		430
Total	$	585,416		(257,096	)	$	328,320

	2014
(in thousands)	Gross		Accumulated Amortization			Net
Channel relationships	$	318,600		(60,079	)	$	258,521
Customer relationships		167,140		(87,201	)		79,939
Trade name		46,480		(15,680	)		30,800
Database		28,000		(8,400	)		19,600
Covenants-not-to-compete		14,940		(5,551	)		9,389
Trade association		10,000		(4,750	)		5,250
Favorable lease		875		(267	)		608
Total	$	586,035		(181,928	)	$	404,107

Amortization related to other intangible assets, which is recorded in selling, general and administrative expenses, was $75.8 million, $77.3 million and $50.0 million for 2015, 2014 and 2013, respectively.

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The weighted average useful life for each component of other intangible assets, and in total, as of December 31, 2015 is as follows:

	Weighted Average Amortization Period (Yrs)
Channel relationships		8.0
Customer relationships		8.2
Trade name		4.9
Database		5.0
Covenants-not-to-compete		5.3
Trade association		10.0
Favorable Lease		4.9
Total		7.6

Estimated future amortization expense of other intangible assets as of December 31, 2015 for the next five years is:

(in thousands)
2016	$	75,213
2017		74,823
2018		60,166
2019		47,870
2020		43,711

Note 9 Computer Software, net

Computer software as of December 31, 2015 and 2014 is summarized as follows:

(in thousands)	2015		2014
Licensed computer software	$	513,443		435,701
Software development costs		404,238		376,026
Acquisition technology intangibles		167,971		167,687
Total computer software		1,085,652		979,414
Less accumulated amortization:
Licensed computer software		282,563		243,866
Software development costs		287,863		275,512
Acquisition technology intangibles		110,156		93,888
Total accumulated amortization		680,582		613,266
Computer software, net	$	405,070		366,148

The Company held the following computer software under capital lease as of December 31, 2015 and 2014:

(in thousands)	2015			2014
Licensed computer software	$	18,206			17,625
Less accumulated amortization		(8,175	)		(4,816	)
Licensed computer software, net	$	10,031			12,809

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Amortization expense includes amounts for computer software acquired under capital lease. The Company had the following amortization expense related to computer software for the years ended December 31, 2015, 2014 and 2013:

(in thousands)	2015		2014		2013
Amortization expense related to:
Licensed computer software	$	41,823		36,775		33,511
Software development costs		22,740		25,248		21,430
Acquisition technology intangibles		16,734		19,683		15,855

The weighted average useful life for each component of computer software, and in total, as of December 31, 2015, is as follows:

	Weighted Average Amortization Period (Yrs)
Licensed computer software		5.4
Software development costs		6.1
Acquisition technology intangibles		6.8
Total		5.9

Estimated future amortization expense of licensed computer software, software development costs and acquisition technology intangibles as of December 31, 2015 for the next five years is:

(in thousands)	Licensed Computer Software		Software Development Costs		Acquisition Technology Intangibles
2016	$	36,207		27,312		15,352
2017		31,034		21,608		13,868
2018		25,345		16,041		11,393
2019		13,617		9,916		11,393
2020		8,899		7,343		5,734

Note 10 Property and Equipment, net

Property and equipment balances as of December 31, 2015 and 2014 are as follows:

(in thousands)	2015		2014
Computer equipment	$	346,387		317,862
Buildings and improvements		244,938		243,211
Furniture and other equipment		138,727		135,741
Land		16,577		16,763
Other		597		204
Total property and equipment		747,226		713,781
Less accumulated depreciation and amortization		457,328		423,196
Property and equipment, net	$	289,898		290,585

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The Company has various types of equipment under capital lease arrangements. The Company has the following amounts of equipment under capital lease obligations as of December 31, 2015 and 2014:

(in thousands)	2015			2014
Computer equipment	$	55,450			49,118
Furniture and other equipment		5,374			5,374
Total equipment		60,824			54,492
Less accumulated depreciation:
Computer and other equipment		(36,134	)		(29,816	)
Furniture and other equipment		(2,731	)		(1,666	)
Total accumulated depreciation		(38,865	)		(31,482	)
Total equipment, net	$	21,959			23,010

Depreciation and amortization expense includes amounts for computer equipment, furniture and other equipment acquired under capital lease. Depreciation and amortization expense related to property and equipment was $56.6 million, $53.5 million and $45.5 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Note 11 Contract Acquisition Costs, net

Significant components of contract acquisition costs as of December 31, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Conversion costs, net	$	159,000		159,339
Payments for processing rights, net		88,811		76,966
Total	$	247,811		236,305

Amortization expense related to contract acquisition cost for the years ended December 31, 2015, 2014 and 2013 are as follows:

(in thousands)	2015		2014		2013
Amortization expense related to:
Conversion costs	$	27,392		17,816		19,515
Payments for processing rights		17,039		16,209		13,099

The weighted average useful life for each component of contract acquisition costs, and in total, as of December 31, 2015 is as follows:

	Weighted Average Amortization Period (Yrs)
Payments for processing rights		14.7
Conversion costs		12.3
Total		13.3

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Estimated future amortization expense of conversion costs and payments for processing rights as of December 31, 2015 for the next five years is:

(in thousands)	Conversion Costs		Payments for Processing Rights
2016	$	32,122		17,394
2017		29,148		15,978
2018		25,656		14,561
2019		21,149		12,277
2020		17,800		10,167

Note 12 Equity Investments

The Company has an equity investment in TSYS de México and records its 49% ownership using the equity method of accounting. The operation prints statements and provides card-issuing support services to the equity investment clients and others.

The Company has an equity investment in CUP Data and records its 44.56% ownership using the equity method of accounting. CUP Data is sanctioned by the People’s Bank of China, China’s central bank, and has become one of the world’s largest and fastest-growing payments networks. CUP Data currently provides transaction processing, disaster recovery and other services for banks and bankcard issuers in China.

TSYS’ equity investments are recorded initially at cost and subsequently adjusted for equity in earnings, cash contributions and distributions, and foreign currency translation adjustments. TSYS believes the carrying value approximates the underlying assets of the equity investments.

TSYS’ equity in income of equity investments (net of tax) for the years ended December 31, 2015, 2014 and 2013 was $22.1 million, $17.6 million and $13.0 million, respectively.

A summary of TSYS’ equity investments as of December 31, 2015 and 2014 is as follows:

(in thousands)	2015		2014
CUP Data	$	98,518		92,738
TSYS de México		7,600		7,730
Total	$	106,118		100,468

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Note 13 Long-term Borrowings and Capital Lease Obligations

Long-term debt as of December 31, 2015 and 2014 consists of:

(in thousands)	2015		2014
2.375% Senior Notes due June 1, 2018 (5 year tranche), net of discount	$	549,919		549,889
3.75% Senior Notes due June 1, 2023 (10 year tranche), net of discount		546,746		546,379
LIBOR + 1.125%, unsecured term loan, due April 8, 2018, with quarterly principal and interest payments		175,000		185,000
LIBOR + 1.125%, unsecured term loan, due September 10, 2017, with quarterly principal and interest payments		120,000		131,250
1.38% note payable due January 31, 2017, with monthly interest and principal payments		30,000		—
1.50% note payable, due September 30, 2016, with monthly interest and principal payments		5,132		11,886
LIBOR + 2.0%, unsecured term loan, due December 7, 2017, with monthly interest payments and principal paid at maturity		3,202		1,396
1.50% note payable, due January 31, 2016, with monthly interest and principal payments		336		4,332
1.50% note payable, due December 31, 2015, with monthly interest and principal payments		—		10,075
1.50% note payable, due July 31, 2015, with monthly interest and principal payments		—		1,709
Total debt		1,430,335		1,441,916
Less current portion		50,364		43,784
Noncurrent portion of long-term debt	$	1,379,971		1,398,132

During December 2014, EMEA obtained a £900,000, or approximately $1.4 million term loan. In September 2015, TSYS increased the loan by £1.3 million, or approximately $1.9 million. The loan bears interest at a rate of LIBOR plus two percent. The loan matures in December 2017, and has monthly interest payments. The lender in this transaction is Merchants Limited, who has a noncontrolling interest in EMEA. The balance as of December 31, 2015 was $3.2 million.

In December 2015, the Company entered into a $30.0 million financing agreement for perpetual software licenses. The balance as of December 31, 2015 was $30.0 million.

In September 2014, the Company entered into a $13.6 million financing agreement for perpetual software licenses. The balance as of December 31, 2015 was $5.1 million.

In December 2013, the Company entered into a $20.0 million financing arrangement to purchase additional software licenses. The financing arrangement was repaid in 2015.

TSYS acquired additional mainframe software licenses to increase capacity in 2012. The Company entered into an $8.6 million and an $11.9 million financing agreement in June and December of 2012, respectively, to purchase these additional software licenses. The balance as of December 31, 2015 for the $11.9 million financing agreement was $0.3 million. The $8.6 million financing agreement was repaid in 2015.

In addition, TSYS maintains an unsecured credit agreement with Columbus Bank and Trust. The credit agreement has a maximum available principal balance of $5.0 million, with interest at prime. TSYS did not use the credit facility during 2015, 2014 or 2013.

Acquisition-Related Borrowings

In April 2013, the Company entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Syndication Agent, Regions Bank

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and U.S. Bank National Association, as Documentation Agents, and other lenders party thereto, with J.P. Morgan Securities LLC, The Bank of Tokyo Mitsubishi UFJ, Ltd., Regions Capital Markets, and U.S. Bank National Association as joint lead arrangers and joint bookrunners. The Credit Agreement provides for a five-year term loan to the Company in the amount of $200.0 million (the “Term Loan”) and bears interest at LIBOR plus 1.125%, which are subject to adjustment based on changes in the Company’s credit ratings, with margins ranging from 1.00% to 1.75%. As of December 31, 2015, the outstanding balance on the Credit Agreement was $175.0 million.

Concurrently with entering into the Merger Agreement, TSYS obtained commitments for a $1.2 billion 364-day bridge term loan facility from JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC and The Bank of Tokyo-Mitsubishi UFJ, Ltd. Thereafter, JPMorgan Chase Bank, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. assigned portions of their commitments to other bridge facility lenders. The Company paid fees in 2013 associated with the bridge term loan of approximately $5.9 million. The total commitments under the bridge term loan facility were eliminated in May 2013 after the issuance of the Notes described below.

In May 2013, the Company closed its issuance (the “Transaction”) of $550.0 million aggregate principal amount of 2.375% Senior Notes due 2018 and $550.0 million aggregate principal amount of 3.750% Senior Notes due 2023 (collectively, the “Notes”) pursuant to an Underwriting Agreement with J.P. Morgan Securities LLC, as representative of certain underwriters (the “Underwriters”), whereby the Company agreed to sell and the Underwriters agreed to purchase the Notes from the Company, subject to and upon the terms and conditions set forth in the Underwriting Agreement. The interest on the Notes are payable semiannually. The Company paid fees in 2013 associated with the issuance of these Notes of approximately $8.9 million and recorded discounts of approximately $4.3 million that are being amortized over the life of the Notes. The Company used the net proceeds of the Transaction to pay a portion of the $1.4 billion purchase price of the Company’s acquisition of NetSpend and related fees and expenses. The Notes were issued pursuant to an Indenture dated as of May 22, 2013 between the Company and Wells Fargo Bank, National Association, as trustee. The balance as of December 31, 2015 was $549.9 million net of discount for the Senior Notes due June 2018 and $546.7 million net of discount for the Senior Notes due June 2023.

The Notes also contain various affirmative and negative covenants, including those that create limitations on the Company’s:

• creation of liens;

• merging or selling assets unless certain conditions are met; and

• entering into sale/leaseback transactions.

The Notes also contain a provision that requires the Company to repurchase all or any portion of a holder’s Notes, at the holder’s option, if a Change in Control Repurchase Event occurs.

Amendment to Existing Credit Agreement

In September 2012, the Company entered into a credit agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Regions Bank and U.S. Bank National Association, as Syndication Agents, and the other lenders named therein, with J.P. Morgan Securities LLC, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Regions Capital Markets and U.S. Bank National Association, as joint lead arrangers and joint bookrunners (the “Existing Credit Agreement”). The Existing Credit Agreement provides for a $350.0 million five-year unsecured revolving credit facility (which may be increased by up to an additional $350.0 million under certain circumstances) and includes a $50.0 million subfacility for the issuance of standby letters of credit and a $50.0 million subfacility for swingline loans. The Existing Credit Agreement also provides for a $150 million five-year unsecured term loan, which was fully funded on the closing of the Existing Credit Agreement. As of December 31, 2015, the outstanding balance on the Existing Credit Agreement was $120.0 million.

In April 2013, the Company entered into the First Amendment to the Existing Credit Agreement (the “Revolver”) in order to conform certain provisions of the Existing Credit Agreement to the Credit Agreement for the Term Loan. On July 1, 2013, an additional $100.0 million was used as funding in the NetSpend Merger. As of December 31, 2015, there was no outstanding balance on the Revolver.

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The Credit Agreement for the aforementioned loan provided for a $168.0 million unsecured five-year term loan to the Company, which was repaid in 2012 and a $252.0 million five year unsecured revolving credit facility. The principal balance of loans outstanding under the credit facility bears interest at a rate of LIBOR plus an applicable margin of 0.60%. The applicable margin could vary within a range from 0.27% to 0.725% depending on changes in the Company’s corporate credit rating. Interest was paid on the last date of each interest period; however, if the period exceeded three months, interest was paid every three months after the beginning of such interest period. In addition, the Company paid each lender a fee in respect of the amount of such lender’s commitment under the revolving credit facility (regardless of usage), ranging from 0.08% to 0.15% depending on the Company’s corporate credit rating.

The Company was able to prepay the revolving credit facility and the term loan in whole or in part at any time without premium or penalty, subject to reimbursement of the lenders’ customary breakage and redeployment costs in the case of prepayment of LIBOR borrowings. The Credit Agreement included covenants requiring the Company to maintain certain minimum financial ratios. The Company did not use the revolving credit facility in 2015.

Required annual principal payments on long-term debt for the five years subsequent to December 31, 2015 are summarized as follows:

(in thousands)
2016	$	50,364
2017		143,305
2018		690,000
2019		—
2020		—

Capital lease obligations as of December 31, 2015 and 2014 consist of:

(in thousands)	2015		2014
Capital lease obligations	$	7,131		14,101
Less current portion		3,468		7,127
Noncurrent portion of capital leases	$	3,663		6,974

The Company acquires various computer equipment, software, machinery and equipment and furniture and fixtures under capital lease obligations. Refer to Notes 9, 10 and 23 for more information. The capital lease obligations have various payment terms for each capital lease obligation, including single payment leases, monthly, quarterly and annually. The lease terms for the equipment and software range from one to six years.

The future minimum lease payments under capital leases as of December 31, 2015 are summarized as follows:

(in thousands)
2016	$	3,611
2017		2,687
2018		1,001
2019		63
2020		—
Total minimum lease payments		7,362
Less amount representing interest		(231	)
Principal minimum lease payments	$	7,131

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Note 14 Other Current Liabilities

Significant components of other current liabilities as of December 31, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Deferred revenues	$	39,863		41,773
Accrued expenses		26,017		23,617
Dividends payable		19,367		19,006
Other		81,332		70,409
Total	$	166,579		154,805

Note 15 Income Taxes

The provision for income taxes includes income taxes currently payable and those deferred because of temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities.

The components of income tax expense included in the Consolidated Statements of Income were as follows:

	Years Ended December 31,
(in thousands)	2015			2014			2013
Current income tax expense:
Federal	$	139,228			126,203			74,327
State		9,255			5,161			2,949
Foreign		4,762			7,694			6,822
Total current income tax expense		153,245			139,058			84,098
Deferred income tax expense (benefit):
Federal		(2,198	)		(3,623	)		27,447
State		442			(2,039	)		(55	)
Foreign		(125	)		(3,635	)		(509	)
Total deferred income tax expense (benefit)		(1,881	)		(9,297	)		26,883
Total income tax expense	$	151,364			129,761			110,981

	Years Ended December 31,
(in thousands)	2015		2014		2013
Components of income before income tax expense:
Domestic	$	488,515		369,888		328,052
Foreign		8,373		23,041		24,424
Total income before income tax expense	$	496,888		392,929		352,476

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Income tax expense differed from the amounts computed by applying the statutory U.S. federal income tax rate of 35% to income before income taxes, noncontrolling interest and equity in income of equity investments as a result of the following:

	Years Ended December 31,
(in thousands)	2015			2014			2013
Computed “expected” income tax expense	$	173,911			137,525			123,367
Increase (decrease) in income tax expense resulting from:
International tax rate differential and equity income		8,367			6,541			1,870
State income tax expense, net of federal income tax effect		7,101			4,823			3,408
Increase (decrease) in valuation allowance		(517	)		(4,550	)		1,715
Tax credits		(28,831	)		(3,459	)		(6,141	)
Deduction for domestic production activities		(11,550	)		(8,750	)		(8,225	)
Permanent differences and other, net		2,883			(2,369	)		(5,013	)
Total income tax expense	$	151,364			129,761			110,981

Temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities that give rise to significant portions of the net deferred tax liability as of December 31, 2015 and 2014 relate to the following:

	As of December 31,
(in thousands)	2015			2014
Deferred income tax assets:
Net operating loss and income tax credit carryforwards	$	29,522			31,978
Allowances for doubtful accounts and billing adjustments		1,399			1,328
Deferred revenue		31,713			31,240
Share-based compensation		22,088			24,449
Other, net		34,673			24,743
Total deferred income tax assets		119,395			113,738
Less valuation allowance for deferred income tax assets		(18,446	)		(18,963	)
Net deferred income tax assets		100,949			94,775
Deferred income tax liabilities:
Excess tax over financial statement depreciation		(61,161	)		(53,527	)
Computer software development costs		(82,835	)		(67,703	)
Purchase accounting adjustments		(114,171	)		(136,701	)
Foreign currency translation		(4,522	)		(7,642	)
Other, net		(24,462	)		(18,830	)
Total deferred income tax liabilities		(287,151	)		(284,403	)
Net deferred income tax liabilities	$	(186,202	)		(189,628	)
Total net deferred tax assets (liabilities):
Current	$	24,670			15,190
Noncurrent		(210,872	)		(204,818	)
Net deferred income tax liability	$	(186,202	)		(189,628	)

As of December 31, 2015, TSYS had recognized deferred tax assets from net operating losses and federal and state income tax credit carryforwards of $4.5 million and $25.0 million, respectively. As of December 31, 2014, TSYS had recognized deferred tax assets from net operating losses and federal and state income tax credit carryforwards of $5.9 million and $26.1 million, respectively

In assessing the realizability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of

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deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

Management believes it is more likely than not that TSYS will realize the benefits of these deductible differences, net of existing valuation allowances. The valuation allowance for deferred tax assets was $18.4 million and $19.0 million at December 31, 2015 and 2014, respectively. The decrease in the valuation allowance for deferred income tax assets was $0.5 million for 2015. The decrease relates to foreign and state losses which, more likely than not, will not be realized in later years.

TSYS has adopted the permanent reinvestment exception under GAAP, with respect to future earnings of certain foreign subsidiaries. As a result, TSYS considers foreign earnings related to these foreign operations to be permanently reinvested. No provision for U.S. federal and state incomes taxes has been made in the consolidated financial statements for those non-U.S. subsidiaries whose earnings are considered to be reinvested. The amount of undistributed earnings considered to be “reinvested” which may be subject to tax upon distribution was approximately $83.9 million as of December 31, 2015. Although TSYS does not intend to repatriate these earnings, a distribution of these non-U.S. earnings in the form of dividends, or otherwise, would subject the Company to both U.S. federal and state income taxes, as adjusted for non-U.S. tax credits, and withholding taxes payable to the various non-U.S. countries. Determination of the amount of any unrecognized deferred income tax liability on these undistributed earnings is not practicable.

TSYS is the parent of an affiliated group that files a consolidated U.S. federal income tax return and most state and foreign income tax returns on a separate entity basis. In the normal course of business, the Company is subject to examinations by these taxing authorities unless statutory examination periods lapse. TSYS is no longer subject to U.S. federal income tax examinations for years before 2011 and with few exceptions, the Company is no longer subject to income tax examinations from state and local or foreign tax authorities for years before 2005. There are currently federal income tax examinations in progress for the years 2009 through 2012 for a subsidiary which was acquired in 2013. Additionally, a number of tax examinations are in progress by the relevant state tax authorities. Although TSYS is unable to determine the ultimate outcome of these examinations, TSYS believes that its liability for uncertain tax positions relating to these jurisdictions for such years is adequate.

GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken in a tax return. During the year ended December 31, 2015, TSYS increased its liability for prior year uncertain income tax positions as a discrete item by a net amount of approximately $6.4 million (net of the federal tax effect). The Company is not able to reasonably estimate the amount by which the liability will increase or decrease over time; however, at this time, the Company does not expect any significant changes related to these obligations within the next twelve months.

A reconciliation of the beginning and ending amount of unrecognized tax liabilities is as follows ¹:

(in millions)	Year Ended December 31, 2015
Beginning balance	$	6.7
Current activity:
Additions based on tax positions related to current year		2.3
Additions for tax positions of prior years		4.7
Reductions for tax positions of prior years		(0.6	)
Net, current activity		6.4
Ending balance	$	13.1

1 Unrecognized state tax liabilities are not adjusted for the federal tax impact

TSYS recognizes potential interest and penalties related to the underpayment of income taxes as income tax expense in the Consolidated Statements of Income. Gross accrued interest and penalties on unrecognized tax

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benefits totaled $0.7 million and $0.3 million as of December 31, 2015 and December 31, 2014, respectively. The total amounts of unrecognized income tax benefits as of December 31, 2015 and December 31, 2014 that, if recognized, would affect the effective tax rates are $13.2 million and $6.5 million (net of the federal benefit on state tax issues), respectively, which includes interest and penalties of $0.5 million and $0.2 million, respectively.

Note 16 Commitments and Contingencies

LEASE COMMITMENTS:    TSYS is obligated under noncancelable operating leases for computer equipment, software and facilities.

The future minimum lease payments under noncancelable operating leases with remaining terms greater than one year for the next five years and thereafter and in the aggregate as of December 31, 2015, are as follows:

(in thousands)
2016	$	121,892
2017		117,137
2018		101,413
2019		99,426
2020		30,733
Thereafter		22,716
Total future minimum lease payments	$	493,317

The majority of computer equipment lease commitments come with a renewal option or an option to terminate the lease. These lease commitments may be replaced with new leases which allow the Company to continually update its computer equipment. Total rental expense under all operating leases in 2015, 2014 and 2013 was $124.8 million, $105.2 million and $93.4 million, respectively.

CONTRACTUAL COMMITMENTS:    In the normal course of its business, the Company maintains long-term processing contracts with its clients. These processing contracts contain commitments, including, but not limited to, minimum standards and time frames against which the Company’s performance is measured. In the event the Company does not meet its contractual commitments with its clients, the Company may incur penalties and certain clients may have the right to terminate their contracts with the Company. The Company does not believe that it will fail to meet its contractual commitments to an extent that will result in a material adverse effect on its financial position, results of operations or cash flows.

CONTINGENCIES:

Legal Proceedings — General

The Company is subject to various legal proceedings and claims and is also subject to information requests, inquiries and investigations arising out of the ordinary conduct of its business. The Company establishes reserves for litigation and similar matters when those matters present loss contingencies that TSYS determines to be both probable and reasonably estimable in accordance with GAAP. In the opinion of management, based on current knowledge and in part upon the advice of legal counsel, all matters not specifically discussed below are believed to be adequately covered by insurance, or, if not covered, the possibility of losses from such matters are believed to be remote or such matters are of such kind or involve such amounts that would not have a material adverse effect on the financial position, results of operations or cash flows of the Company if disposed of unfavorably.

Telexfree Matter

ProPay, Inc. (“ProPay”), a subsidiary of the Company, has been named as one of a number of defendants (including other merchant processors) in several purported class action lawsuits relating to the activities of Telexfree, Inc. and its affiliates and principals. Telexfree is a former merchant customer of ProPay. With regard to Telexfree, each purported class action lawsuit generally alleges that Telexfree engaged in an improper multi-tier marketing scheme involving voice-over Internet protocol telephone services. The plaintiffs in each of the

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purported class action complaints generally allege that the various merchant processor defendants, including ProPay, aided and abetted the improper activities of Telexfree. Telexfree filed for bankruptcy protection in Nevada. The bankruptcy proceeding was subsequently transferred to the Massachusetts Bankruptcy Court.

Specifically, ProPay has been named as one of a number of defendants (including other merchant processors) in each of the following purported class action complaints relating to Telexfree: (i) Waldermara Martin, et al. v. TelexFree, Inc., et al. (Case No. BK-S-14-12524-ABL) filed on May 3, 2014 in the United States Bankruptcy Court District of Nevada, (ii) Anthony Cellucci, et al. v. TelexFree, Inc., et. al. (Case No. 4: 14-BK-40987) filed on May 15, 2014 in the United States Bankruptcy Court District of Massachusetts, (iii) Maduako C. Ferguson Sr., et al. v. Telexelectric, LLLP, et. al (Case No. 5: 14-CV-00316-D) filed on June 5, 2014 in the United States District Court of North Carolina, (iv) Todd Cook v. TelexElectric LLLP et al. (Case No. 2: 14-CV-00134), filed on June 24, 2014 in the United States District Court for the Northern District of Georgia, (v) Felicia Guevara v. James M. Merrill et al., CA No. 1: 14-cv-22405-DPG), filed on June 27, 2014 in the United State District Court for the Southern District of Florida, and (vi) Reverend Jeremiah Githere, et al. v. TelexElectric LLLP et al. (Case No. 1: 14-CV-12825-GAO), filed on June 30, 2014 in the United States District Court for the District of Massachusetts (together, the “Actions”). On October 21, 2014, the Judicial Panel on Multidistrict Litigation transferred and consolidated the Actions before the United States District Court for the District of Massachusetts (the “Consolidated Action”).

Following the Judicial Panel on Multidistrict Litigation’s October 21, 2014 order, four additional cases arising from the alleged TelexFree scheme were transferred to the United States District Court for the District of Massachusetts for coordinated or consolidated proceedings, including (i) Paulo Eduardo Ferrari et al. v. Telexfree, Inc. et al. (Case No. 14-04080); (ii) Magalhaes v. TelexFree, Inc., et al., No. 14-cv-12437 (D. Mass.); (iii) Griffith v. Merrill et al., No. 14-CV-12058 (D. Mass.); Abelgadir v. Telexelectric, LLP, No. 14-09857 (S.D.N.Y.) In addition, on September 23, 2015, a putative class action relating to TelexFree was filed in the United States District Court for the District of Arizona, styled Rita Dos Santos, Putative Class Representatives and those Similarly Situated v. TelexElectric, LLLP et al., 2: 15-cv-01906-NVW (the “Arizona Action”). The Arizona Action makes claims similar to those alleged in the consolidated action pending before the United States District Court for the District of Massachusetts. On September 29, 2015, a group of certain defendants to the Consolidated Action, including ProPay, filed a “tag along” notice with the Judicial Panel on Multidistrict Litigation, asking that the Arizona Action be transferred to the District of Massachusetts where it can be consolidated or coordinated with the Consolidated Action. On October 20, 2015, the Judicial Panel on Multidistrict Litigation transferred the Arizona Action to the District of Massachusetts.

The United States District Court for the District of Massachusetts appointed lead plaintiffs’ counsel on behalf of the putative class of plaintiffs in the Consolidated Action. On March 31, 2015, the plaintiffs filed a First Consolidated Amended Complaint (the “Consolidated Complaint”). The Consolidated Complaint purports to bring claims on behalf of all persons who purchased certain TelexFree “memberships” and suffered a “net loss” between January 1, 2012 and April 16, 2014. The Consolidated Complaint supersedes the complaints filed prior to consolidation of the Actions, and alleges that ProPay aided and abetted tortious acts committed by TelexFree, and that ProPay was unjustly enriched in the course of providing payment processing services to TelexFree. On April 30, 2015, the plaintiffs filed a Second Consolidated Amended Complaint (the “Second Amended Complaint”), which amends and supersedes the Consolidated Complaint. Like the Consolidated Complaint, the Second Amended Complaint generally alleges that ProPay aided and abetted tortious acts committed by TelexFree, and that ProPay was unjustly enriched in the course of providing payment processing services to TelexFree.

Several defendants, including ProPay, moved to dismiss the Second Amended Complaint on June 2, 2015. Briefing on those motions closed on October 16, 2015. The court held a hearing on the motions to dismiss on November 2, 2015. At present, pursuant to a court order, all discovery in the action is stayed pending the resolution of parallel criminal proceedings against certain former principals of TelexFree, Inc.

ProPay has also received various subpoenas, a seizure warrant and other inquiries requesting information regarding Telexfree from (i) the Commonwealth of Massachusetts, Securities Division, (ii) United States Securities and Exchange Commission, (iii) US Immigration and Customs Enforcement, and (iv) the bankruptcy Trustee of the Chapter 11 entities of Telexfree, Inc., Telexfree, LLC and Telexfree Financial, Inc. Pursuant to the seizure warrant served by the United States Attorney’s Office for the District of Massachusetts, ProPay delivered all funds

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associated with Telexfree held for chargeback and other purposes by ProPay to US Immigration and Customs Enforcement. In addition, ProPay received a notice of potential claim from the bankruptcy Trustee as a result of the relationship of ProPay with Telexfree and its affiliates.

The above proceedings and actions are preliminary in nature. While the Company and ProPay intend to vigorously defend matters arising out of the relationship of ProPay with Telexfree and believe ProPay has substantial defenses related to these purported claims, the Company currently cannot reasonably estimate losses attributable to these matters.

GUARANTEES AND INDEMNIFICATIONS:    The Company has entered into processing and licensing agreements with its clients that include intellectual property indemnification clauses. Under these clauses, the Company generally agrees to indemnify its clients, subject to certain exceptions, against legal claims that TSYS’ services or systems infringe on certain third party patents, copyrights or other proprietary rights. In the event of such a claim, the Company is generally obligated to hold the client harmless and pay for related losses, liabilities, costs and expenses, including, without limitation, court costs and reasonable attorney’s fees. The Company has not made any indemnification payments pursuant to these indemnification clauses.

A portion of the Company’s business is conducted through distributors that provide load and reload services to cardholders at their locations. Members of the Company’s distribution and reload network collect cardholder funds and remit them by electronic transfer to the Issuing Banks for deposit in the cardholder accounts. The Company’s Issuing Banks typically receive cardholders’ funds no earlier than three business days after they are collected by the distributor. If any distributor fails to remit cardholders’ funds to the Company’s Issuing Banks, the Company typically reimburses the Issuing Banks for the shortfall created thereby. The Company manages the risk associated with this process through a formalized set of credit standards, volume limits and deposit requirements for certain distributors and by typically maintaining the right to offset any settlement shortfall against the commissions payable to the relevant distributor. To date, the Company has not experienced any significant losses associated with settlement failures and the Company had not recorded a settlement guarantee liability as of December 31, 2015. As of December 31, 2015, the Company’s estimated gross settlement exposure was $9.9 million.

GPR cardholders can incur charges in excess of the funds available in their accounts and are liable for the resulting overdrawn account balance. Although the Company generally declines authorization attempts for amounts that exceed the available balance in a cardholder’s account, the application of the Networks’ rules and regulations, the timing of the settlement of transactions and the assessment of subscription, maintenance or other fees can, among other things, result in overdrawn card accounts. The Company also provides, as a courtesy and in its discretion, certain cardholders with a “cushion” that allows them to overdraw their card accounts by up to $10. In addition, eligible cardholders may enroll in the Issuing Banks’ overdraft protection programs and fund transactions that exceed the available balance in their accounts. The Company generally provides the funds used as part of these overdraft programs (one of the Company’s Issuing Banks will advance the first $1.0 million on behalf of its cardholders) and is responsible to the Issuing Banks for any losses associated with any overdrawn account balances. As of December 31, 2015 and 2014, cardholders’ overdrawn account balances totaled $17.9 million and $14.0 million, respectively. As of December 31, 2015 and 2014, the Company’s reserves for the losses it estimates will arise from processing customer transactions, debit card overdrafts, chargebacks for unauthorized card use and merchant-related chargebacks due to non-delivery of goods or services was $9.4 million and $6.3 million, respectively.

The Company has not recorded a liability for guarantees or indemnities in the accompanying consolidated balance sheet since the maximum amount of potential future payments under such guarantees and indemnities is not determinable.

PRIVATE EQUITY INVESTMENTS:    The Company has entered into limited partnership agreements in connection with investing in two Atlanta-based venture capital funds focused exclusively on investing in technology-enabled financial services companies. Pursuant to each limited partnership agreement, the Company has committed to invest up to $20.0 million in each fund so long as its ownership interest in each fund does not exceed 50%. As of December 31, 2015 and 2014, the Company had made contributions to the funds of $15.0 million and $10.8 million, respectively. The Company had investments, including gains, totaling $17.6 million and

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$11.9 million, respectively, as of December 31, 2015 and 2014. The Company recognized gains of $4.0 million, $0.8 million, and $1.0 million due to increases in fair value in the years ended December 31, 2015, 2014 and 2013, respectively.

Note 17 Employee Benefit Plans

The Company provides benefits to its employees by offering employees participation in certain defined contribution plans. The employee benefit plans through which TSYS provided benefits to its employees during 2015 are described as follows:

RETIREMENT SAVINGS AND STOCK PURCHASE PLANS:    TSYS maintains a single plan, the Retirement Savings Plan, which is designed to reward all team members of TSYS U.S.-based companies with a uniform employer contribution. The terms of the plan provide for the Company to match 100% of the employee contribution up to 4% of eligible compensation. The Company can make discretionary contributions up to another 4% based upon business conditions.

The Company also maintains a stock purchase plan for employees. The Company contributes 15% of employee contributions. The funds are used to purchase presently issued and outstanding shares of TSYS common stock on the open market at fair market value for the benefit of participants. The Company’s contributions to the plans charged to expense for the years ended December 31, 2015, 2014 and 2013 are as follows:

(in thousands)	2015		2014		2013
TSYS Retirement Savings Plan	$	24,169		17,531		14,506
TSYS Stock Purchase Plan		1,378		1,288		1,236

POSTRETIREMENT MEDICAL BENEFITS PLAN:    TSYS provides certain medical benefits to qualified retirees through a postretirement medical benefits plan, which is immaterial to the Company’s consolidated financial statements. The measurement of the benefit expense and accrual of benefit costs associated with the plan do not reflect the effects of the 2003 Medicare Act. Additionally, the benefit expense and accrued benefit cost associated with the plan, as well as any potential impact of the effects of the 2003 Medicare Act, are not significant to the Company’s consolidated financial statements.

Note 18 Equity

DIVIDENDS:    Dividends on common stock of $73.7 million were paid in 2015, compared to $74.8 million and $56.5 million in 2014 and 2013, respectively. The increase in dividends paid in 2014 compared to 2013 is due to the acceleration of payment of the fourth quarter 2012 dividend. The fourth quarter 2012 dividend payment was paid in December 2012, rather than January 2013, to allow shareholders to benefit from the lower dividend tax rate that was set to expire on December 31, 2012.

EQUITY COMPENSATION PLANS:    The following table summarizes TSYS’ equity compensation plans by category as of December 31, 2015:

(in thousands, except per share data) Plan Category	(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights		(b) Weighted-average exercise price of outstanding options, warrants and rights			(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders		4,475	$	28.07	1		8,550	2

The Company does not have any equity compensation plans that were not approved by security holders.

1 Weighted-average exercise price represents 2,887 thousand options only and does not include performance shares and other awards that have no exercise price.

2 Shares available for future grants under the Total System Services Inc. 2007 Omnibus Plan and 2012 Omnibus Plan, which could be in the form of options, nonvested awards and performance shares.

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Note 19 Share-Based Compensation

General Description of Share-Based Compensation Plans

TSYS has various long-term incentive plans under which the Compensation Committee of the Board of Directors has the authority to grant share-based compensation to TSYS employees.

Stock options generally become exercisable in three equal annual installments on the anniversaries of the date of grant and expire ten years from the date of grant. The required service period for retirement eligible employees is typically 12 or 18 months. For retirement eligible employees who retire prior to completing this required service period, the options vest on a pro-rata basis based upon the number of months employed during the full service period. For retirement eligible employees who retire after the required 18-month service period, the options become fully vested upon retirement. For retirement eligible employees who retire after the required 12-month service period, the option holder is deemed to have continued employment through the end of the vesting period and the options continue to vest in accordance with their terms.

Long-Term Incentive Plans

TSYS maintains the Total System Services, Inc. 2012 Omnibus Plan, Total System Services, Inc. 2007 Omnibus Plan, Total System Services, Inc. 2002 Long-Term Incentive Plan, Total System Services, Inc. 2000 Long-Term Incentive Plan and the Amended and Restated NetSpend Holdings Inc. 2004 Equity Incentive Plan for Options and Restricted Shares Assumed by Total System Services, Inc. to advance the interests of TSYS and its shareholders through awards that give employees and directors a personal stake in TSYS’ growth, development and financial success. Awards under these plans are designed to motivate employees and directors to devote their best efforts to the business of TSYS. Awards will also help TSYS attract and retain the services of employees and directors who are in a position to make significant contributions to TSYS’ success.

The plans are administered by the Compensation Committee of the Company’s Board of Directors and enable the Company to grant nonqualified and incentive stock options, stock appreciation rights, restricted stock and restricted stock units, performance units or performance shares, cash-based awards and other stock-based awards.

All stock options must have a maximum life of no more than ten years from the date of grant. The exercise price will not be less than 100% of the fair market value of TSYS’ common stock at the time of grant. Any shares related to awards which terminate by expiration, forfeiture, cancellation or otherwise without the issuance of such shares, are settled in cash in lieu of shares, or are exchanged with the Committee’s permission, prior to the issuance of shares, for awards not involving shares, shall be available again for grant under the various plans. The aggregate number of shares of TSYS stock which may be granted to participants pursuant to awards granted under the various plans may not exceed the following: Total System Services, Inc. 2012 Omnibus Plan -17 million shares; Total System Services, Inc. 2007 Omnibus Plan -5 million shares; Total System Services, Inc. 2002 Long-Term Incentive Plan -9.4 million shares; and Total System Services, Inc. 2000 Long-Term Incentive Plan -2.4 million shares. Effective February 1, 2010 and March 5, 2012, no additional awards may be made from the Total System Services, Inc. 2000 and 2002 Long-Term Incentive Plans, respectively.

Share-Based Compensation

Share-based compensation costs are classified as selling, general and administrative expenses on the Company’s statements of income and corporate administration and other expenses for segment reporting purposes. TSYS does not include amounts associated with share-based compensation as costs capitalized as software development and contract acquisition costs as these awards are typically granted to individuals not involved in capitalizable activities. For the year ended December 31, 2015, share-based compensation was $41.5 million compared to $30.8 million and $28.9 million for the same periods in 2014 and 2013, respectively.

Nonvested Awards

The Company granted shares of TSYS common stock to certain key employees and non-management members of its Board of Directors. The grants to certain key employees were issued under nonvested stock bonus awards

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and are typically for services to be provided in the future by such officers and employees. The grants to the Board of Directors were fully vested on the date of grant.

On July 1, 2013, the Company issued 870,361 shares of TSYS common stock as nonvested stock replacement awards with a market value of $21.5 million as part of the NetSpend acquisition. The nonvested stock bonus awards to employees of NetSpend are for services to be provided in the future and vest over varying periods. The NetSpend awards were converted into equivalent shares of Company’s common stock on the acquisition date. The value of the stock at the date of issuance is charged as compensation expense over the vesting periods of the awards.

On July 18, 2013, the Company issued 212,694 retention shares of TSYS common stock with a market value of $5.5 million to certain key employees of NetSpend. The nonvested stock bonus awards to certain key employees are for services to be provided in the future and vest over periods ranging from two to four years. The market value of the TSYS common stock at the date of issuance is charged as compensation expense over the vesting periods of the awards.

The following table summarizes the number of shares granted each year:

	2015		2014		2013
Number of shares		388,211		672,724		1,667,246
Market value (in millions)	$	14.9		20.6		41.3

A summary of the status of TSYS’ nonvested shares as of December 31, 2015, 2014 and 2013 and the changes during the periods are presented below:

	2015					2014					2013
(in thousands, except per share data) Nonvested shares	Shares			Weighted Average Grant-Date Fair Value		Shares			Weighted Average Grant-Date Fair Value		Shares			Weighted Average Grant-Date Fair Value
Outstanding at beginning of year		1,769		$	26.75		1,783		$	24.19		554		$	19.96
Granted1		388			38.38		673			30.67		1,667			24.75
Vested		(930	)		26.05		(602	)		23.74		(328	)		19.95
Forfeited/canceled		(81	)		28.78		(85	)		25.47		(110	)		23.82
Outstanding at end of year		1,146		$	31.11		1,769		$	26.75		1,783		$	24.19

1 Includes the issuance of approximately 870,361 stock replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $21.5 million. A portion of the expense associated with these options has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

As of December 31, 2015, there was approximately $22.8 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements. That cost is expected to be recognized over a remaining weighted average period of 1.9 years.

Performance- and Market-Based Awards

The Company granted performance- and market-based shares to certain key executives. The Company has also granted performance-based shares to certain key employees. The performance- and market-based goals are established by the Compensation Committee of the Board of Directors and will vest, up to a maximum of 200%. During 2015 and 2014, the Compensation Committee established performance goals based on adjusted EPS, revenue growth and revenues before reimbursable items and market goals based on Total Shareholder Return (TSR) as compared to the TSR of the companies in the S&P 500 over the performance period.

Compensation expense for performance shares is measured on the grant date based on the quoted market price of TSYS common stock. The Company estimates the probability of achieving the goals through the performance period and expenses the awards on a straight-line basis. The fair value of market-based awards is estimated on the grant date using a Monte Carlo simulation model. The Company expenses market-based awards on a

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straight-line basis. Compensation costs related to performance- and market-based shares are recognized through the longer of the performance period or the vesting period. As of December 31, 2015, there was approximately $11.0 million of unrecognized compensation cost related to TSYS performance-based awards that is expected to be recognized through December 2018. As of December 31, 2015, there was approximately $1.5 million of unrecognized compensation cost related to TSYS market-based awards that is expected to be recognized through July 2018.

The following table summarizes the performance- and market-based awards granted during the years 2015, 2014 and 2013:

Year Awarded	Type of Award	Performance Period Ending	Performance Measure	Number of Shares Granted		Period Expensed Through
2015	Market	July 2016, 2017 and 2018	Total Shareholder Return		25,000	July 2018
2015	Performance	December 2017	Adjusted EPS		135,289	December 2017
2015	Market	December 2017	Total Shareholder Return		57,982	December 2017
2015	Performance	December 2015	Revenues before Reimbursable Items and Adjusted EPS		165,543	December 2018
2014	Performance	December 2016	Revenues before Reimbursable Items and Adjusted EPS		211,593	December 2016
2013	Performance	December 2015	NetSpend Revenues and NetSpend Operating Income		87,356	December 2015
2013	Performance	December 2015	Revenues before Reimbursable Items and Income from Continuing Operations		237,679	December 2015

In July 2013, TSYS issued 225,000 shares of TSYS common stock as a performance-based retention stock award to a certain key executive with a performance-based vesting schedule through 2015. This award was forfeited in July 2014. The Company reversed all previously recorded expense associated with this award.

A summary of the awards authorized in each year is below:

	Total Number of Shares Awarded		Potential Number of Performance-and Market-Based Shares to be Vested
2015		383,814		526,879	(2018	)
2014		211,593		211,593	(2017	)
2013		563,803		400,539	(2016	)

A summary of the status of TSYS’ performance- and market-based nonvested shares as of December 31, 2015, 2014 and 2013 and changes during those periods are presented below:

	2015					2014					2013
(in thousands, except per share data) Performance- and market-based Nonvested shares	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Outstanding at beginning of year		766		$	25.86		1,049		$	22.75		809		$	18.76
Granted1		384			36.84		211			30.89		564			24.88
Vested		(241	)		22.92		(258	)		17.57		(324	)		15.93
Forfeited/canceled/adjusted		9			22.20		(236	)		25.62		—			—
Outstanding at end of year		918		$	31.19		766		$	25.86		1,049		$	22.75

1 Includes the issuance of approximately 87,356 stock replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $2.2 million. A portion of the expense associated with these awards has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

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Stock Option Awards

During 2015, 2014 and 2013, the Company granted stock options to key TSYS executive officers and non-management members of its Board of Directors. The grants to key TSYS executive officers were issued for services to be provided in the future and vest over a period of three years. The grants to the Board of Directors were fully vested on the date of grant. The average fair value of the options granted was estimated on the date of grant using the Black-Scholes-Merton option-pricing model.

On July 1, 2013, the Company issued 1,060,148 stock option replacement awards with a market value of $13.7 million as part of the NetSpend acquisition. The weighted average fair value of the options was $12.93 and was calculated on the date of grant using a conversion factor into equivalent shares of the Company’s common stock on the acquisition date. The grants vest over a period ranging from seven months to 45 months. The weighted average fair value of the option grants was estimated on the date of grant using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions: exercise price of $11.68; risk-free interest rate of 1.31%; expected volatility of 29.22%; expected term of 4.7 years; and dividend yield of 1.63%.

The following table summarizes the weighted average assumptions, and the weighted average fair value of the options:

	2015			2014			2013
Number of options granted		613,473			1,046,372			1,939,796
Weighted average exercise price	$	39.01		$	30.96		$	17.42
Risk-free interest rate		1.73	%		2.01	%		1.31	%
Expected volatility		20.80	%		25.06	%		26.81	%
Expected term (years)		6.3			6.5			6.0
Dividend yield		1.04	%		1.29	%		1.64	%
Weighted average fair value	$	8.27		$	7.66		$	9.48

A summary of TSYS’ stock option activity as of December 31, 2015, 2014 and 2013, and changes during the years ended on those dates is presented below:

	2015					2014					2013
(in thousands, except per share data)	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Options:
Outstanding at beginning of year		4,892		$	23.83		5,752		$	20.96		6,065		$	21.27
Granted 1		613			39.01		1,046			30.96		1,940			17.42
Exercised		(2,586	)		22.68		(1,850	)		18.79		(2,177	)		18.75
Forfeited/canceled		(32	)		20.79		(56	)		28.88		(76	)		16.78
Outstanding at end of year		2,887		$	28.07		4,892		$	23.83		5,752		$	20.96
Options exercisable at year-end		1,439		$	25.17		2,781		$	22.86		3,232		$	23.02
Weighted average fair value of options granted during the year				$	8.27				$	7.66				$	9.48

1 Includes the issuance of approximately 1.1 million stock option replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $13.7 million. A portion of the expense associated with these awards has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

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As of December 31, 2015 the average remaining contractual life and intrinsic value of TSYS’ outstanding and exercisable stock options were as follows:

	Outstanding		Exercisable
Average remaining contractual life (in years)		7.8		7.2
Aggregate intrinsic value (in thousands)	$	62,738		35,434

Shares Issued for Options Exercised

During 2015, 2014 and 2013, employees of the Company exercised options for shares of TSYS common stock that were issued from treasury. The table below summarizes these stock option exercises by year:

(in thousands)	Options Exercised and Issued from Treasury		Intrinsic Value
2015		2,586	$	67,702
2014		1,850		22,883
2013		2,177		16,580

For awards granted before January 1, 2006 that were not fully vested on January 1, 2006, the Company will record the tax benefits from the exercise of stock options as increases to the “Additional paid-in capital” line item of the Consolidated Balance Sheets. If the Company does recognize tax benefits, the Company will record these tax benefits from share-based compensation costs as cash inflows in the financing section and cash outflows in the operating section in the Statement of Cash Flows. The Company has elected to use the short-cut method to calculate its historical pool of windfall tax benefits.

As of December 31, 2015, there was approximately $2.9 million of total unrecognized compensation cost related to TSYS stock options that is expected to be recognized over a remaining weighted average period of 1.5 years.

Note 20 Treasury Stock

The following table summarizes shares held as treasury stock and their related carrying value as of December 31:

(in thousands)	Number of Treasury Shares		Treasury Shares Cost
2015		19,988	$	641,664
2014		17,836		453,230
2013		15,073		326,996

Stock Repurchase Plan

In April 2010, TSYS announced a stock repurchase plan to purchase up to 10 million shares of TSYS stock. The shares may be purchased from time to time over the next two years at prices considered attractive to the Company. By January 2014, the TSYS Board had approved several increases in the number of shares that could be repurchased under its share repurchase plan to up to 28 million shares of TSYS stock. The expiration date of the plan was extended to April 30, 2015. On January 27, 2015, TSYS announced that its Board had approved a new stock repurchase plan to purchase up to 20 million shares of TSYS stock. The shares may be purchased from time to time at prices considered appropriate. There is no expiration date for the plan. The previous plan was terminated.

During 2015, the Company purchased 5.2 million shares for approximately $242.1 million, at an average price of $47.01. During 2014, the Company purchased 5.2 million shares for approximately $165.3 million, at an average price of $31.79. During 2013, the Company purchased 3.1 million shares for approximately $97.6 million, at an average price of $31.48.

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The following table sets forth information regarding the Company’s purchases of its common stock on a monthly basis during the three months ended December 31, 2015:

(in thousands, except per share data)	Total Number of Shares Purchased			Average Price Paid per Share		Total Number of Cumulative shares Purchased as Part of Publicly announced Plans or Programs		Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
October 2015		—		$	—		2,150		17,850
November 2015		3,000			52.85		5,150		14,850
December 2015		1	1		49.80		5,150		14,850
Total		3,001		$	52.85

1 Consists of delivery of shares to TSYS on vesting of shares to pay taxes.

Treasury Shares

In 2008, the Compensation Committee approved “share withholding for taxes” for all employee nonvested awards, and also for employee stock options under specified circumstances. The dollar amount of the income tax liability from each exercise is converted into TSYS shares and withheld at the statutory minimum. The shares are added to the treasury account and TSYS remits funds to the Internal Revenue Service to settle the tax liability. During 2015 and 2014, the Company acquired 3,344 shares for approximately $0.2 million and acquired 162,489 shares for approximately $5.2 million, respectively, as a result of share withholding for taxes.

Note 21 Other Comprehensive Income (Loss)

Comprehensive income (loss) for TSYS consists of net income, cumulative foreign currency translation adjustments, unrealized gains on available for sale securities and the recognition of an overfunded or underfunded status of a defined benefit postretirement plan recorded as a component of shareholders’ equity. The income tax effects allocated to and the cumulative balance of each component of accumulated other comprehensive income (loss) are as follows:

(in thousands)	Beginning Balance			Pretax amount			Tax effect			Net-of-tax Amount			Ending Balance
As of December 31, 2012	$	(445	)		2,272			419			1,853		$	1,408
Foreign currency translation adjustments	$	3,332			(295	)		1,033			(1,328	)	$	2,004
Transfer from NCI		28			—			—			—			28
Gain on available for sale securities		—			2,810			1,037			1,773			1,773
Change in AOCI related to postretirement healthcare plans		(1,952	)		1,926			30			1,896			(56	)
As of December 31, 2013	$	1,408			4,441			2,100			2,341		$	3,749
Foreign currency translation adjustments	$	2,004			(17,143	)		(1,547	)		(15,596	)	$	(13,592	)
Transfer from NCI		28			—			—			—			28
Gain on available for sale securities		1,773			(1,058	)		(390	)		(668	)		1,105
Change in AOCI related to postretirement healthcare plans		(56	)		921			332			589			533
As of December 31, 2014	$	3,749			(17,280	)		(1,605	)		(15,675	)	$	(11,926	)
Foreign currency translation adjustments	$	(13,592	)		(22,997	)		(1,548	)		(21,449	)	$	(35,041	)
Transfer from NCI		28			—			—			—			28
Gain on available for sale securities		1,105			2,177			779			1,398			2,503
Change in AOCI related to postretirement healthcare plans		533			(2,449	)		(882	)		(1,567	)		(1,034	)
As of December 31, 2015	$	(11,926	)		(23,269	)		(1,651	)		(21,618	)	$	(33,544	)

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Consistent with its overall strategy of pursuing international investment opportunities, TSYS adopted the permanent reinvestment exception under GAAP, with respect to future earnings of certain foreign subsidiaries. Its decision to permanently reinvest foreign earnings offshore means TSYS will no longer allocate taxes to foreign currency translation adjustments associated with these foreign subsidiaries accumulated in other comprehensive income.

Note 22 Segment Reporting, including Geographic Area Data and Major Customers

TSYS provides global 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. Corporate expenses, such as finance, legal, human resources, mergers and acquisitions and investor relations are categorized as Corporate Administration and Other.

In the first quarter of 2014, the Company’s Japan-based entities qualified for discontinued operations treatment.

In July 2013, TSYS completed its acquisition of all the outstanding stock of NetSpend, which previously operated as a publicly traded company. NetSpend’s financial results are included in the NetSpend segment.

Refer to Note 24 for more information on acquisitions.

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 merchants and merchant acquirers. The NetSpend segment provides GPR prepaid debit and payroll cards and alternative financial service solutions to the underbanked and other consumers in the United States.

At TSYS, the chief operating decision maker (CODM) is a group consisting of Senior Executive Management and above. In the first quarter of 2014, the CODM decided that all share-based compensation costs should be included in the category “Corporate Administration and Other” for purposes of segment disclosures. All prior periods were restated to reflect this change. This change is used to evaluate performance and assess resources starting in the first quarter of 2014. The information utilized by the CODM consists of the financial statements and the main metrics monitored are revenue growth and growth in profitability.

Upon completion of the NetSpend acquisition in 2013, the CODM implemented a new metric called adjusted segment operating income in order to analyze each segment’s results of operations. This new metric consists of operating income adjusted for amortization of acquisition related intangibles and corporate administrative and other costs. All periods presented have been adjusted to reflect this new measure. Depreciation and amortization for the segments changed as a result of this new metric removing amortization associated with intangible assets from the total for the segments.

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.

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Years Ended December 31,
(in thousands)
Operating Segments	2015			2014			2013
Revenues before reimbursable items
North America Services	$	1,147,254			954,082			860,645
International Services		331,159			341,785			321,484
Merchant Services		474,040			435,649			446,277
NetSpend		580,377			482,686			207,851
Intersegment revenues		(33,481	)		(21,224	)		(12,549	)
Revenues before reimbursable items from external customers	$	2,499,349			2,192,978			1,823,708
Total revenues
North America Services	$	1,334,258			1,117,764			1,000,073
International Services		354,725			363,359			341,549
Merchant Services		549,369			510,120			533,050
NetSpend		580,377			482,686			207,851
Intersegment revenues		(39,188	)		(27,052	)		(18,218	)
Revenues from external customers	$	2,779,541			2,446,877			2,064,305
Depreciation and amortization
North America Services	$	99,544			86,513			74,480
International Services		34,892			38,909			41,708
Merchant Services		18,268			14,571			12,034
NetSpend		10,686			7,509			3,121
Segment depreciation and amortization		163,390			147,502			131,343
Acquisition intangible amortization		92,522			96,971			65,893
Corporate Administration and Other		2,352			2,147			1,790
Total depreciation and amortization	$	258,264			246,620			199,026
Adjusted segment operating income
North America Services	$	429,064			351,512			321,619
International Services		60,087			55,123			42,068
Merchant Services		150,225			134,872			155,643
NetSpend		137,837			128,285			66,353
Total adjusted segment operating income		777,213			669,792			585,683
Acquisition intangible amortization		(92,522	)		(96,971	)		(65,893	)
NetSpend merger and acquisition operating expenses		—			(3,217	)		(14,220	)
Share-based compensation		(41,549	)		(30,790	)		(28,933	)
Corporate Administration and Other		(109,035	)		(107,174	)		(94,137	)
Operating income	$	534,107			431,640			382,500
As of December 31,	2015			2014
Total assets
North America Services	$	3,516,328			3,327,160
International Services		348,714			356,590
Merchant Services		689,781			695,744
NetSpend		1,504,740			1,556,369
Intersegment assets		(2,151,263	)		(2,202,282	)
Total assets	$	3,908,300			3,733,581

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

	As of December 31,
(in thousands)	2015		2014
United States	$	241,814		237,865
Europe		41,953		45,503
Other		6,131		7,217
Totals	$	289,898		290,585

GEOGRAPHIC AREA REVENUE BY OPERATING SEGMENT:    The following tables reconcile segment external revenue to revenues by geography for the years ended December 31:

	2015
(in thousands)	North America Services		International Services		Merchant Services		NetSpend		Total		%
United States	$	981,588		—		548,079		580,377	$	2,110,044		75.9
Europe1		796		303,832		22		—		304,650		11.0
Canada1		288,728		—		355		—		289,083		10.4
Mexico		16,558		—		—		—		16,558		0.6
Other1		18,329		40,198		679		—		59,206		2.1
Total	$	1,305,999		344,030		549,135		580,377	$	2,779,541		100.0

	2014
(in thousands)	North America Services		International Services		Merchant Services		NetSpend		Total		%
United States	$	778,766		—		508,747		482,686	$	1,770,199		72.3
Europe1		781		304,308		—		—		305,089		12.5
Canada		290,248		—		248		—		290,496		11.9
Mexico		16,216		—		—		—		16,216		0.7
Other1		16,305		47,888		684		—		64,877		2.7
Total	$	1,102,316		352,196		509,679		482,686	$	2,446,877		100.0

	2013
(in thousands)	North America Services		International Services		Merchant Services		NetSpend		Total		%
United States	$	712,252		—		533,939		207,851	$	1,454,042		70.4
Europe1		774		293,803		—		—		294,577		14.3
Canada		242,975		—		178		—		243,153		11.8
Mexico		16,513		—		—		—		16,513		0.8
Other1		14,492		40,962		566		—		56,020		2.7
Total	$	987,006		334,764		534,683		207,851	$	2,064,305		100.0

1 Revenues are impacted by movements in foreign currency exchange rates

MAJOR CUSTOMER:    For the years ended December 31, 2015, 2014 and 2013, the Company had no major customers.

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Note 23 Supplemental Cash Flow Information

Nonvested Share Awards

The Company has issued shares of TSYS common stock to certain key employees and non-management members of its Board of Directors. The grants to certain key employees were issued in the form of nonvested stock bonus awards for services to be provided in the future by such officers and employees. The grants to the Board of Directors were fully vested on the date of grant. Refer to Note 18 for more information on nonvested share awards.

Equipment and Software Acquired Under Capital Lease Obligations

The Company acquired computer equipment and software under capital leases in the amount of $4.1 million, $17.9 million and $14.8 million in 2015, 2014 and 2013, respectively.

Software Acquired Under Direct Financing

The Company acquired software under direct financing in the amount of $30.0 million in 2015. The Company acquired software under direct financing in the amount of $13.6 million in 2014. The Company did not acquire any software under direct financing in 2013. Refer to Note 13 for more information.

Note 24 Acquisitions

2015

In September 2015, TSYS purchased certain assets for its NetSpend segment for $750,000. The purchase qualifies as a business combination in accordance with GAAP. The Company recorded an acquisition technology intangible asset for the amount of the purchase price. This acquisition intangible asset represents software and is being amortized over a five year life. There were no other material assets included in the purchase. The acquisition included the employment of certain key employees which resulted in the transaction qualifying as a business combination.

2014

In February 2014, the Company acquired an additional 15% equity interest in CPAY from its privately held owner for $37.5 million, which increased its equity interest in CPAY from 60% to 75%. This purchase reduced the remaining redeemable noncontrolling interest in CPAY to 25% of its total outstanding equity.

2013

On July 1, 2013, TSYS acquired all the outstanding stock of NetSpend, which previously operated as a publicly traded company and is a leading provider of GPR prepaid debit and payroll cards and related financial services to underbanked and other consumers in the U.S. The acquisition complements the Company’s existing presence in the prepaid processing space. The results of the newly acquired business are being reported by TSYS as a new operating segment titled NetSpend.

Under the terms of the Merger Agreement, TSYS acquired 100 percent ownership of NetSpend for approximately $1.4 billion, including $1.2 billion of cash to shareholders, $70.7 million of cash for payment to holders of vested stock options and awards, $58.3 million of cash for repayment of NetSpend’s revolving credit facility and $15.6 million in replacement stock options and awards. NetSpend shareholders received $16.00 in cash for each share of NetSpend common stock. There were 1.6 million NetSpend shares held by five shareholders who asserted appraisal (or dissenters’) rights with respect to their NetSpend shares, for a preliminary value of $25.7 million at $16.00 per share that were not funded at the closing of the acquisition. During 2014, TSYS paid $38.6 million to dissenting shareholders to settle the lawsuit.

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Under the terms of the Merger Agreement, the Company replaced unvested share-based awards for certain current employees of NetSpend. The following table provides a list of all replacement awards and the estimated fair value of those awards issued in conjunction with the acquisition of NetSpend:

	Number of Shares and Options Issued		Fair Value (in millions)
Time-based restricted stock		870,361	$	21.5
Non-qualified stock options		530,696		8.4
Incentive stock options		529,452		5.3
Performance-based restricted stock		87,356		2.2
Total		2,017,865	$	37.4

The portion of the fair value of the replacement awards related to services provided prior to the business combination was included in the total purchase price. The portion of the fair value associated with future service is recognized as expense over the future service period, which varies by award. The Company determined that $15.6 million ($11.1 million net of tax) of the replacement awards was related to services rendered prior to the business combination.

The goodwill amount of $1.0 billion arising from the acquisition consists largely of expansion of customer base, differentiation in market opportunity and economies of scale expected from combining the operations of TSYS and NetSpend. All of the goodwill was assigned to TSYS’ new NetSpend segment. The goodwill recognized is not expected to be deductible for income tax purposes.

The following table summarizes the consideration paid for NetSpend and the initially recognized amounts of the identifiable assets acquired and liabilities assumed on July 1, 2013 (the acquisition date).

(in thousands)
Consideration
Cash	$	1,355,270
Equity instruments		15,557
Dissenting shareholder liability*		25,723
Fair value of total consideration transferred	$	1,396,550
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	40,610
Accounts receivable		11,335
Property equipment and software		11,657
Identifiable intangible assets		480,086
Deferred tax asset		10,165
Other assets		36,660
Deferred tax liability		(155,945	)
Financial liabilities		(62,452	)
Total identifiable net assets		372,116
Goodwill		1,024,434
	$	1,396,550

* Represents 1.6 million NetSpend shares held by dissenting shareholders

In 2015, the Company adjusted goodwill for NetSpend to include an additional $627,000 for a change in a sales and use tax reserve associated with the acquisition. As of December 31, 2014, goodwill related to NetSpend increased $8.5 million due to changes during the measurement period. For more information, refer to Note 7.

Identifiable intangible assets acquired in the NetSpend acquisition include channel relationships, current technology, a prospect database, the NetSpend trade name and non-compete agreements.

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The identifiable intangible assets had no significant estimated residual value. These intangible assets are being amortized over their estimated useful lives of five to eight years based on the pattern of expected future economic benefit, which approximates a straight-line basis over the useful lives of the assets. The fair value of the acquired identifiable intangible assets of $480.1 million was estimated using the income approach (discounted cash flow and relief from royalty methods) and cost approach. The fair values and useful lives of the identified intangible assets were primarily determined using forecasted cash flows, which included estimates for certain assumptions such as revenues, expenses, attrition rates and royalty rates.

The estimated fair value of identifiable intangible assets acquired in the acquisitions and the related estimated weighted average useful lives are as follows:

(in thousands)	Fair Value		Weighted Average Useful Life (in years)
Channel relationships	$	317,000		8.0
Current technology		78,711		7.0
Trade name		44,000		5.0
Database		28,000		5.0
Covenants-not-to-compete		11,500		6.0
Favorable lease		875		4.9
Total acquired identifiable intangible assets	$	480,086		7.3

The fair value measurement of the identifiable intangible assets represents Level 2 and Level 3 measurements. Key assumptions include (a) cash flow projections based on market participant and internal data, (b) a discount rate of 11%, (c) a pre-tax royalty rate range of 2.5-7.0%, (d) attrition rates of 5%-40%, (e) an effective tax rate of 40%, and (f) a terminal value based on a long-term sustainable growth rate of 3%.

In connection with the acquisition, TSYS incurred $3.2 million and $14.2 million in acquisition-related costs primarily related to professional legal, finance, and accounting costs for the years ended December 31, 2014 and 2013, respectively. These costs were expensed as incurred and are included in selling, general and administrative expenses on the income statement.

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Pro Forma Results of Operations

The amounts of NetSpend revenue and earnings included in TSYS’ consolidated income statement for the year ended December 31, 2013, and the pro forma revenue and earnings of the combined entity had the acquisition date been January 1, 2013 are:

	Actual		Supplemental pro forma
	Year Ended December 31 ,2013		Year Ended December 31, 2013
(in thousands, except per share data)
Revenue	$	2,064,305		2,286,348
Net income attributable to TSYS common shareholders	$	244,750		239,775
Basic EPS attributable to TSYS common shareholders	$	1.30		1.28
Diluted EPS attributable to TSYS common shareholders	$	1.29		1.27

The unaudited pro forma financial information presented above does not purport to represent what the actual results of operations would have been if the acquisition of NetSpend’s operations had occurred prior to January 1, 2013, nor is it indicative of the future operating results of TSYS. The unaudited pro forma financial information does not reflect the impact of future events that may occur after the acquisition, including, but not limited to, anticipated cost savings from operating synergies.

The unaudited pro forma financial information presented in the table above has been adjusted to give effect to adjustments that are (1) directly related to the business combination; (2) factually supportable; and (3) expected to have a continuing impact. These adjustments include, but are not limited to, the application of accounting policies; and depreciation and amortization related to fair value adjustments to property, plant and equipment and intangible assets.

The pro forma adjustments do not reflect the following material items that result directly from the acquisition and which impacted the statement of operations following the acquisition:

• Acquisition and related financing transactions costs relating to fees to investment bankers, attorneys, accountants, and other professional advisors, and other transaction-related costs that were not capitalized as deferred financing costs; and

• The effect of anticipated cost savings or operating efficiencies expected to be realized and related restructuring charges such as technology and infrastructure integration expenses, and other costs related to the integration of NetSpend into TSYS.

Redeemable Noncontrolling Interest

The fair value of the noncontrolling interest in CPAY, owned by a private company, was based on the actual purchase price paid for the controlling interest in CPAY. Next, adjustments were made for lack of control and lack of marketability that market participants would consider when estimating the fair value of the noncontrolling, non-marketable interest in CPAY.

In connection with the acquisition of CPAY, the Company is party to call and put arrangements with respect to the membership units that represent the remaining noncontrolling interest of CPAY. The call arrangement is exercisable by TSYS and the put arrangement is exercisable by the Seller. The put arrangement is outside the control of the Company by requiring the Company to purchase the Seller’s entire equity interest in CPAY at a put price at fair market value. At the time of the original acquisition, the redemption of the put option was considered probable based upon the passage of time of the second anniversary date. The put arrangement is recorded on the balance sheet and is classified as redeemable noncontrolling interest outside of permanent equity.

86

In February 2014, the Company purchased an additional 15% equity interest in CPAY for $37.5 million, reducing its redeemable noncontrolling interest in CPAY to 25%. As a result of this transaction, the call and put arrangements for CPAY, representing 25% of its total outstanding equity interests, were extended and may now be exercised at the discretion of TSYS or the Seller on the third anniversary of the closing of the additional purchase and upon the recurrence of certain other specified events.

The put option is not currently redeemable, but redemption is considered probable based upon the passage of time of the third anniversary date of the 2014 purchase of additional equity. As such, the Company has adopted the accounting policy to accrete changes in the redemption value over the period from the date of issuance to the earliest redemption date, which the Company believes to be in 2017. If the put option was redeemable as of December 31, 2015, the redemption value was estimated to be approximately $23.4 million. The Company did not accrete any changes to the redemption value as the balance as of December 31, 2015 exceeded the accretion fair value amount.

Pro forma Results of Operations

The pro forma revenue and earnings of TSYS’ acquisitions other than NetSpend are not material to the consolidated financial statements.

Note 25 Collaborative Arrangement

TSYS has a 45% ownership interest in an enterprise jointly owned with two other entities which operates aircraft for the owners’ internal use. The arrangement allows each entity access to the aircraft and each entity pays for its usage of the aircraft. Each quarter, the net operating costs of the enterprise are shared among the owners based on their respective ownership percentage.

TSYS records its usage of the aircraft and its share of net operating costs of the enterprise in selling, general and administrative expenses.

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Note 26 Earnings Per Share

The following table illustrates basic and diluted EPS under the guidance of GAAP for the years ended December 31, 2015, 2014 and 2013:

	2015					2014					2013
(in thousands, except per share data)	Common Stock			Participating Securities		Common Stock			Participating Securities		Common Stock			Participating Securities
Basic EPS:
Net income	$	364,044				$	322,872				$	244,750
Less income allocated to nonvested awards		(3,164	)		3,164		(3,308	)		3,308		(1,595	)		1,595
Net income allocated to common stock for EPS calculation(a)	$	360,880			3,164	$	319,564			3,308	$	243,155			1,595
Average common shares outstanding(b)		182,465			1,617		184,297			1,925		187,145			1,246
Basic EPS(a)/(b)	$	1.98			1.96	$	1.73			1.72	$	1.30			1.28
Diluted EPS:
Net income	$	364,044				$	322,872				$	244,750
Less income allocated to nonvested awards		(3,148	)		3,148		(3,288	)		3,288		(1,585	)		1,585
Net income allocated to common stock for EPS calculation(c)	$	360,896			3,148	$	319,584			3,288	$	243,165			1,585
Average common shares outstanding		182,465			1,617		184,297			1,925		187,145			1,246
Increase due to assumed issuance of shares related to common equivalent shares outstanding		1,157					1,459					1,648
Average common and common equivalent shares outstanding(d)		183,622			1,617		185,756			1,925		188,793			1,246
Diluted EPS(c)/(d)	$	1.97			1.95	$	1.72			1.71	$	1.29			1.27

The diluted EPS calculation excludes stock options and nonvested awards that are convertible into 0.6 million, 1.1 million and 2.9 million common shares for the years ended December 31, 2015, 2014 and 2013, respectively, because their inclusion would have been anti-dilutive.

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Note 27 Subsequent Events

Agreement to Acquire Capital Stock of TransFirst Holdings Corp.

On January 26, 2016, TSYS announced it entered into a definitive agreement with Vista Equity Partners Fund V, L.P. and certain related funds (collectively, “Vista”) to acquire TransFirst Holdings Corp. (“TransFirst”), a Vista portfolio company and leading U S. merchant solutions provider, in an all-cash transaction valued at approximately $2.35 billion. The Company intends to finance the TransFirst acquisition with cash on hand and approximately $2.4 billion of additional indebtedness. In connection with the transaction, the Company entered into a commitment letter with certain of its lenders to provide a $2.0 billion bridge term loan facility (the “Bridge Term Loan Facility”) to finance the TransFirst acquisition to the extent the Company has not obtained alternative financing before the closing of the transaction. The transaction is currently expected to close in the second quarter of 2016 and is subject to regulatory approvals and other customary closing conditions. For additional information regarding the transaction, see TSYS’ Current Reports on Form 8-K filed on January 26, 2016 and January 27, 2016, which include the press release announcing the transaction, the stock purchase agreement for the transaction and the commitment letter for the Bridge Term Loan Facility. There can be no assurance that the proposed acquisition will be completed, or if it is completed, that the expected benefits of the transaction will be realized.

Entry into Credit Agreement

On February 23, 2016, TSYS entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent and L/C Issuer, Bank of America, N.A., as Syndication Agent and L/C Issuer, The Bank of Tokyo-Mitsubishi UFJ, LTD., U.S. Bank National Association and Wells Fargo Bank, National Association, as Co-Documentation Agents, and the other lenders party thereto, with J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, The Bank of Tokyo-Mitsubishi UFJ, LTD., U.S. Bank National Association and Wells Fargo Securities, LLC as joint lead arrangers and joint bookrunners. The Credit Agreement provides TSYS with a $700 million five-year term loan facility broken consisting of (i) a $300 million term loan (the “Refinancing Term Loan”) funded upon entry into the Credit Agreement and (ii) a $400 million term loan (the “Delayed Draw Term Loan”). The Credit Agreement also provides TSYS with a $800 million unsecured revolving credit facility (the “Revolving Credit Facility”), which includes a $50 million sub-facility for the issuance of standby letters of credit.

The Refinancing Term Loan was used to repay in full TSYS’ outstanding loans and other obligations under that certain Credit Agreement, dated as of September 10, 2012, by and among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent thereunder, as amended, and that certain Credit Agreement, dated as of April 8, 2013, by and among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent thereunder, as amended. The Delayed Draw Term Loan will be available to be drawn to finance, in part, the TransFirst acquisition and related transactions, upon satisfaction of a limited set of conditions precedent. The Revolving Loan Facility will be available for draws for purposes of working capital and other general corporate purposes, including to finance, in part, the TransFirst acquisition and related transactions upon satisfaction of a limited set of conditions precedent.

Upon entering into the Credit Agreement, the total commitments under the Bridge Term Loan Facility were reduced from $2.0 billion to $1.15 billion by the amount of the Delayed Draw Term Loan commitment and the portion of the Revolving Loan Facility commitments in excess of $350 million.

For additional information regarding the Credit Agreement, see TSYS’ Current Report on Form 8-K filed on February 23, 2016.

Management performed an evaluation of the Company’s activity as of the date these audited financial statements were issued, and has concluded that, other than as set forth above, there are no significant subsequent events requiring disclosure.

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Report of Independent Registered Public Accounting Firm

The Board of Directors

Total System Services, Inc.:

We have audited the accompanying consolidated balance sheets of Total System Services, Inc. and subsidiaries (the Company) as of December 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, cash flows and changes in equity for each of the years in the three-year period ended December 31, 2015. We also have audited the Company’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Total System Services, Inc. and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also in our opinion, Total System Services, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Atlanta, Georgia

February 24, 2016

90

Management’s Report on Internal Control Over Financial Reporting

The management of Total System Services, Inc. (the Company) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. The Company maintains accounting and internal control systems which are intended to provide reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition, transactions are executed in accordance with management’s authorization and accounting records are reliable for preparing financial statements in accordance with accounting principles generally accepted in the United States.

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, risk.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in Internal Control — Integrated Framework 2013.

Based on our assessment, management believes that, as of December 31, 2015, the Company’s internal control over financial reporting is effective based on those criteria.

KPMG LLP, the independent registered public accounting firm who audited the Company’s consolidated financial statements, has issued an attestation report on the effectiveness of internal control over financial reporting as of December 31, 2015 that appears on the preceding page.

M. Troy Woods Chairman, President & Chief Executive Officer	Paul M. Todd Senior Executive Vice President & Chief Financial Officer

91

Quarterly Financial Data (Unaudited), Stock Price, Dividend Information

TSYS’ common stock trades on the New York Stock Exchange (NYSE) under the symbol “TSS.” Price and volume information appears under the abbreviation “TotlSysSvc” in NYSE daily stock quotation listings. As of February 19, 2016, there were 20,477 holders of record of TSYS common stock, some of whom are holders in nominee name for the benefit of different shareholders.

The 2015 fourth quarter dividend of $0.10 per share was declared on December 2, 2015, and was paid January 4, 2016, to shareholders of record on December 17, 2015. The 2014 fourth quarter dividend of $0.10 per share was declared on December 2, 2014, and was paid January 2, 2015, to shareholders of record on December 19, 2014. Total dividends declared in 2015 and in 2014 amounted to $73.7 million and $74.8 million, respectively. It is the present intention of the Board of Directors of TSYS to continue to pay cash dividends on its common stock.

Presented here is a summary of the unaudited quarterly financial data for the years ended December 31, 2015 and 2014.

(in thousands, except per share data)		First Quarter		Second Quarter		Third Quarter		Fourth Quarter
2015	Revenues	$	662,156		692,652		707,890		716,843
	Operating income		122,496		130,602		163,104		117,905
	Net income attributable to TSYS common shareholders		77,755		82,839		120,622		82,828
	Basic earnings per share attributable to TSYS common shareholders		0.42		0.45		0.66		0.45
	Diluted earnings per share attributable to TSYS common shareholders		0.42		0.45		0.65		0.45
	Cash dividends declared		0.10		0.10		0.10		0.10
	Stock prices:
	High		39.02		42.72		48.64		56.37
	Low		33.27		37.89		41.52		45.82
	Close		38.15		41.77		45.43		49.80
2014	Revenues	$	592,848		602,036		616,891		635,104
	Operating income		80,697		98,763		129,407		122,773
	Net income attributable to TSYS common shareholders		49,303		109,904		83,805		79,860
	Basic earnings per share attributable to TSYS common shareholders		0.26		0.59		0.45		0.43
	Diluted earnings per share attributable to TSYS common shareholders		0.26		0.58		0.45		0.43
	Cash dividends declared		0.10		0.10		0.10		0.10
	Stock prices:
	High		33.28		32.70		32.41		34.41
	Low		28.71		28.70		30.63		28.83
	Close		30.41		31.41		30.96		33.96

92

STOCK PERFORMANCE GRAPH

The following graph compares the yearly percentage change in cumulative shareholder return on TSYS stock with the cumulative total return of the Standard & Poor’s 500 Index and the Standard & Poor’s Systems Software Index for the last five fiscal years (assuming a $100 investment on December 31, 2010 and reinvestment of all dividends).

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN

Among TSYS, the S&P 500 Index, and the S&P Systems Software Index

	2010		2011		2012		2013		2014		2015
TSYS	$	100.00	$	129.35	$	144.12	$	227.30	$	234.93	$	347.59
S&P 500	$	100.00	$	102.11	$	118.45	$	156.82	$	178.29	$	180.75
S&P SS	$	100.00	$	90.05	$	103.76	$	137.89	$	169.62	$	187.38

93

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF TOTAL SYSTEM SERVICES, INC.

Ownership Percentage			Name					Place of Incorporation
	100	%		Columbus Depot Equipment Company				Georgia
				99	%	TSYS Merchant Solutions, LLC (1)		Delaware
	100	%		TSYS Canada, Inc.				Georgia
	100	%		TSYS Managed Services Canada, Inc.				Ontario
	100	%		TSYS U.S. Holdings, Inc.				Georgia
				100	%	ProPay, Inc.		Utah
						100%	ProPay Financial Solutions Canada, Inc.	Utah
						100%	ProPay Global, Ltd.	England and Wales
				75	%	Central Payment Co., LLC		Delaware
						100%	Central Payment Deployment, Inc.	Delaware
	100	%		Columbus Productions, Inc.				Georgia
	100	%		TSYS Advisors, Inc.				Georgia
	100	%		TSYS Servicos de Transacoes Eletronicas Ltda (2)				Brazil
	100	%		TSYS International Management Limited (3)				England
				100	%	Total System Services Processing Europe Limited		England
				100	%	TSYS Europe (Netherlands) B.V.		Netherlands
				100	%	TSYS Europe (Spain) S.L.		Spain
				100	%	TSYS Europe (Deutschland) GmBH		Germany
				100	%	TSYS Europe (Italia) S.r.l		Italy
				100	%	TSYS Card Tech Limited		England
				100	%	TSYS Card Tech Services Limited		Cyprus
						100%	TSYS Card Tech Services (Malaysia) Limited	Malaysia
						100%	TSYS Card Tech Services India Private Limited (4)	India
						100%	TSYS – Rus L.L.C.	Russia
				55	%	TSYS Managed Services EMEA Limited		England
						100%	TSYS Managed Services EMEA B.V.	Netherlands
						100%	TSYS Managed Services EMEA (Netherlands) B.V.	Netherlands
	100	%		TSYS Acquiring Solutions, L.L.C.				Delaware
				100	%	Infonox Software Private Limited (2)		India
	100	%		NetSpend Holdings, Inc.				Delaware
				100	%	NetSpend Corporation		Delaware
				100	%	Skylight Acquisition I, Inc.		Delaware
						100%	Skylight Financial, Inc.	Delaware
	49	%		Total System Services de Mexico, S.A. de C.V.				Mexico
	49	%		TSYS Servicios Corporativos, S.A. de C.V.				Mexico
	44.56	%		China Unionpay Data Services Company Limited				China

(1) 1% is owned by TSYS U.S. Holdings, Inc.

(2) Less than .1% is owned by Columbus Depot Equipment Company.

(3) 10% is owned by Columbus Depot Equipment Company.

(4) Less than .1% is owned by TSYS Card Tech Services (Malaysia) Limited.

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Total System Services, Inc.:

We consent to the incorporation by reference in the registration statements (No. 333-25401, No. 333-41775, No. 333-104142, No. 333-142791, No. 333-148449, No. 333-181790, and No. 333-189733) on Form S-8 and the registration statements (No. 333-199964 and No. 333-188453) on Form S-3 of Total System Services, Inc. of our reports dated February 24, 2016, with respect to the consolidated balance sheets of Total System Services, Inc. as of December 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, cash flows, and changes in equity for each of the years in the three-year period ended December 31, 2015, and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of December 31, 2015, which reports appear in the December 31, 2015 annual report on Form 10-K of Total System Services, Inc.

/s/ KPMG LLP

Atlanta, Georgia

February 24, 2016

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, M. Troy Woods, certify that:

1. I have reviewed this annual report on Form 10-K of Total System Services, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2016	/s/M. Troy Woods
	M. Troy Woods
	Chairman, President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Paul M. Todd, certify that:

1. I have reviewed this annual report on Form 10-K of Total System Services, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2016	/s/Paul M. Todd
	Paul M. Todd
	Senior Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION OF PERIODIC REPORT

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, M. Troy Woods, the Chairman, President and Chief Executive Officer of Total System Services, Inc. (the “Company”), and Paul M. Todd, the Senior Executive Vice President and Chief Financial Officer of the Company, hereby certify that, to the best of his knowledge:

(1) The Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “Report”) fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 24, 2016	/s/M. Troy Woods
	M. Troy Woods
	Chairman, President and Chief Executive Officer
February 24, 2016	/s/Paul M. Todd
	Paul M. Todd
	Senior Executive Vice President and Chief Financial Officer

This certification “accompanies” the Form 10-K to which it relates, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K, irrespective of any general incorporation language contained in such filing.)

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2015	Feb. 19, 2016	Jun. 30, 2015
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Trading Symbol	TSS
Entity Registrant Name	TOTAL SYSTEM SERVICES INC
Entity Central Index Key	0000721683
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		183,168,798
Entity Public Float			$ 7,510,394,000

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents (Note 5)	$ 389,328	$ 289,183
Accounts receivable, net of allowances for doubtful accounts, billing adjustments and merchant losses of $4.0 million and $5.2 million as of 2015 and 2014, respectively (Note 4)	314,705	283,203
Deferred income tax assets (Note 15)	24,670	15,190
Prepaid expenses and other current assets (Note 6)	154,199	98,974
Current assets of discontinued operations (Note 2)		4,003
Total current assets	882,902	690,553
Goodwill (Note 7)	1,545,424	1,547,397
Computer software, net of accumulated amortization of $680.6 million and $613.3 million as of 2015 and 2014, respectively (Note 9)	405,070	366,148
Other intangible assets, net of accumulated amortization of $257.1 million and $181.9 million as of 2015 and 2014, respectively (Note 8)	328,320	404,107
Property and equipment, net of accumulated depreciation and amortization of $457.3 million and $423.2 million as of 2015 and 2014, respectively (Note 10)	289,898	290,585
Contract acquisition costs, net of accumulated amortization of $287.9 million and $276.1 million as of 2015 and 2014, respectively (Note 11)	247,811	236,305
Equity investments, net (Note 12)	106,118	100,468
Deferred income tax assets (Note 15)	5,598	7,002
Other assets	97,159	91,016
Total assets	3,908,300	3,733,581
Current liabilities:
Accrued salaries and employee benefits	66,594	38,001
Accounts payable (Note 4)	52,213	48,793
Current portion of long-term borrowings (Note 13)	50,364	43,784
Current portion of obligations under capital leases (Note 13)	3,468	7,127
Other current liabilities (Note 14)	166,579	154,805
Current liabilities of discontinued operations (Note 2)		4,003
Total current liabilities	339,218	296,513
Long-term borrowings, excluding current portion (Notes 4 and 13)	1,379,971	1,398,132
Deferred income tax liabilities (Note 15)	216,470	211,820
Obligations under capital leases, excluding current portion (Note 13)	3,663	6,974
Other long-term liabilities	96,886	98,006
Total liabilities	2,036,208	2,011,445
Redeemable noncontrolling interest in consolidated subsidiary	$ 23,410	$ 22,492
Commitments and contingencies (Note 16)
Shareholders' equity: (Notes 18 ,19 ,20 and 21)
Common stock - $0.10 par value. Authorized 600,000 shares; 202,769 and 202,775 issued as of 2015 and 2014, respectively; 182,781 and 184,939 outstanding as of 2015 and 2014, respectively	$ 20,277	$ 20,278
Additional paid-in capital	241,891	171,270
Accumulated other comprehensive income, net	(33,544)	(11,926)
Treasury stock, at cost (19,988 and 17,836 shares as of 2015 and 2014, respectively)	(641,664)	(453,230)
Retained earnings	2,256,058	1,966,370
Total shareholders' equity	1,843,018	1,692,762
Noncontrolling interests in consolidated subsidiary	5,664	6,882
Total equity	1,848,682	1,699,644
Total liabilities and equity	$ 3,908,300	$ 3,733,581

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Accounts receivable, allowances for doubtful accounts, billing adjustments and merchant losses	$ 4,000	$ 5,200
Computer software, accumulated amortization	680,582	613,266
Intangible assets, accumulated amortization	257,096	181,928
Property and equipment, accumulated depreciation and amortization	$ 457,328	$ 423,196
Common stock, par value	$ 0.10	$ 0.10
Common stock, authorized	600,000,000	600,000,000
Common stock, issued	202,769,000	202,775,000
Common stock, outstanding	182,781,000	184,939,000
Treasury stock, shares	19,988,000	17,836,000
Contract Acquisition Costs
Intangible assets, accumulated amortization	$ 287,900	$ 276,100

XML

Consolidated Statements of Income - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Total revenues (Notes 4 and 22)		$ 2,779,541	$ 2,446,877	$ 2,064,305
Cost of services		1,855,181	1,668,892	1,369,438
Selling, general and administrative expenses		390,253	346,345	312,367
Total operating expenses		2,245,434	2,015,237	1,681,805
Operating income		534,107	431,640	382,500
Nonoperating expenses, net		(37,219)	(38,711)	(30,024)
Income before income taxes and equity in income of equity investments		496,888	392,929	352,476
Income taxes (Note 15)		151,364	129,761	110,981
Income before equity in income of equity investments		345,524	263,168	241,495
Equity in income of equity investments, net of tax (Note 12)		22,106	17,583	13,047
Income from continuing operations, net of tax		367,630	280,751	254,542
Income from discontinued operations, net of tax		1,411	48,655	2,055
Net income		369,041	329,406	256,597
Net income attributable to noncontrolling interests		(4,997)	(6,534)	(11,847)
Net income		$ 364,044	$ 322,872	$ 244,750
Basic earnings per share (EPS) attributable to TSYS common shareholders (Note 26)
Income from continuing operations to TSYS common shareholders		$ 1.97	$ 1.48	$ 1.31
Gain (loss) from discontinued operations to TSYS common shareholders		0.01	0.26	(0.01)
Net income attributable to TSYS common shareholders	[1]	1.98	1.73	1.30
Diluted EPS attributable to TSYS common shareholders (Note 26)
Income from continuing operations to TSYS common shareholders		1.96	1.47	1.30
Gain (loss) from discontinued operations to TSYS common shareholders		0.01	0.25	(0.01)
Net income attributable to TSYS common shareholders	[1]	$ 1.97	$ 1.72	$ 1.29
Amounts attributable to TSYS common shareholders:
Income from continuing operations		$ 362,633	$ 275,216	$ 246,893
Gain (loss) from discontinued operations		1,411	47,656	(2,143)
Net income		$ 364,044	$ 322,872	$ 244,750

[1] EPS amounts may not total due to rounding

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Net income	$ 369,041	$ 329,406	$ 256,597
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(21,719)	(19,531)	(4,081)
Less reclassifications of foreign currency translation adjustments to net income		3,514
Total foreign currency translation adjustments	(21,719)	(16,017)	(4,081)
Postretirement healthcare plan adjustments	(1,567)	589	1,895
Unrealized gain (loss) on available-for-sale securities	1,398	(668)	1,773
Other comprehensive loss	(21,888)	(16,096)	(413)
Comprehensive income	347,153	313,310	256,184
Comprehensive income attributable to noncontrolling interests	(4,727)	(6,113)	(9,092)
Comprehensive income attributable to TSYS common shareholders	$ 342,426	$ 307,197	$ 247,092

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Net income	$ 369,041	$ 329,406	$ 256,597
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	258,264	248,018	205,351
Share-based compensation	41,549	30,790	28,933
Provisions for cardholder losses	41,264	38,381	11,912
Dividends received from equity investments	12,097	9,189	8,595
Charges for transaction processing provisions	6,976	9,468	7,458
Provisions for bad debt expenses, billing adjustments and merchant losses	4,495	2,823	2,000
Amortization of debt issuance costs	1,841	1,817	7,269
Amortization of bond discount	397	383	225
Loss on foreign currency	388	999	1,027
Gain on disposals of equipment, net	(397)	(293)	(79)
Gain on disposal of subsidiaries	(3,568)	(86,961)
Changes in value of private equity investments	(4,038)	(793)	(966)
Deferred income tax (benefit) expense	(4,083)	(8,963)	26,945
Equity in income of equity investments	(22,106)	(17,583)	(13,047)
Excess tax benefit from share-based payment arrangements	(24,357)	(7,185)	(3,528)
Changes in operating assets and liabilities, net of effects of acquisition:
Accounts receivable	(39,218)	(33,406)	(8,667)
Prepaid expenses, other current assets and other long-term assets	(8,498)	(10,525)	(571)
Accounts payable	(3,987)	8,765	(52,042)
Accrued salaries and employee benefits	29,168	414	(403)
Other current liabilities and other long-term liabilities	(55,034)	45,457	(24,611)
Net cash provided by operating activities	600,194	560,201	452,398
Cash flows from investing activities:
Additions to contract acquisition costs	(58,728)	(88,871)	(55,965)
Purchases of property and equipment	(54,640)	(75,913)	(40,598)
Additions to licensed computer software from vendors	(50,729)	(29,638)	(63,635)
Additions to internally developed computer software	(39,219)	(41,501)	(33,600)
Purchases of private equity investments	(3,525)	(3,291)	(1,378)
Cash used in acquisitions, net of cash acquired	(750)	(38,584)	(1,314,660)
Proceeds from insurance recovery for loss on disposal		6,212
Proceeds from sale of private equity investment	1,839
Proceeds from dispositions, net of expenses paid and cash disposed	3,568	44,979
Net cash used in investing activities	(202,184)	(226,607)	(1,509,836)
Cash flows from financing activities:
Repurchases of common stock under plans and tax withholding	(242,235)	(170,516)	(103,857)
Dividends paid on common stock	(73,677)	(74,796)	(56,510)
Principal payments on long-term borrowings and capital lease obligations	(54,719)	(69,939)	(166,805)
Subsidiary dividends paid to noncontrolling shareholders	(5,028)	(7,172)	(7,321)
Purchase of noncontrolling interests		(37,500)
Debt issuance costs			(13,573)
Proceeds from long-term borrowings	1,912	1,396	1,395,661
Excess tax benefit from share-based payment arrangements	24,357	7,185	3,528
Proceeds from exercise of stock options	58,636	34,869	40,691
Net cash (used in) provided by financing activities	(290,754)	(316,473)	1,091,814
Cash and cash equivalents:
Effect of exchange rate changes on cash and cash equivalents	(7,111)	(6,168)	(3,758)
Net increase (decrease) in cash and cash equivalents	100,145	10,953	30,618
Cash and cash equivalents at beginning of period	289,183	278,230	247,612
Cash and cash equivalents at end of period	389,328	289,183	278,230
Less cash and cash equivalents of discontinued operations at end of period			(30,530)
Cash and cash equivalents	389,328	289,183	247,700
Supplemental cash flow information:
Interest paid	40,425	40,969	23,157
Income taxes paid, net	$ 171,455	$ 135,770	$ 80,033

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Consolidated Statements of Changes in Equity - USD ($) shares in Thousands, $ in Thousands	Total	Redeemable Noncontrolling Interests	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Retained Earnings	Noncontrolling Interests
Beginning Balance at Dec. 31, 2012	$ 1,444,935	$ 39,505	$ 20,247	$ 141,793	$ 1,408	$ (287,301)	$ 1,549,063	$ 19,725
Beginning Balance (in shares) at Dec. 31, 2012			202,471
Net income	250,081	6,515					244,750	5,331
Other comprehensive income (Note 21)	(413)				2,341			(2,754)
Replacement share-based awards issued in connection with acquisition (Note 19)	15,556			(1,167)		16,723
Common stock issued from treasury shares for exercise of stock options (Note 19)	40,691			(700)		41,391
Common stock issued for nonvested awards (Note 19) (in shares)			319
Common stock issued for nonvested awards (Note 19)			$ 32	(32)
Common stock issued from treasury shares for nonvested awards (Note 19)				(5,747)		5,747
Share-based compensation (Note 19)	28,972			28,972
Common stock issued from treasury shares for dividend equivalents (Note 19)	498			36		301	161
Cash dividends declared ($0.40 per share)	(75,770)						(75,770)
Purchase of treasury shares (Note 20)	(103,857)					(103,857)
Subsidiary dividends paid to noncontrolling interests	(953)	(6,368)						(953)
Tax benefits associated with share-based compensation	2,686			2,686
Ending Balance at Dec. 31, 2013	1,602,426	39,652	$ 20,279	165,841	3,749	(326,996)	1,718,204	21,349
Ending Balance (in shares) at Dec. 31, 2013			202,790
Net income	324,756	4,650					322,872	1,884
Other comprehensive income (Note 21)	(16,096)				(15,675)			(421)
Common stock issued from treasury shares for exercise of stock options (Note 19)	34,869			1,955		32,914
Common stock unissued due to forfeiture of nonvested awards			$ (1)	1
Common stock unissued due to forfeiture of nonvested awards (in shares)			(15)
Common stock issued from treasury shares for nonvested awards (Note 19)				(11,142)		11,142
Share-based compensation (Note 19)	30,312			30,312
Common stock issued from treasury shares for dividend equivalents (Note 19)	411			185		226
Cash dividends declared ($0.40 per share)	(74,706)						(74,706)
Purchase of treasury shares (Note 20)	(170,516)					(170,516)
Subsidiary dividends paid to noncontrolling interests	(440)	(6,732)						(440)
Disposition of noncontrolling interest (Note 2)	(15,490)							(15,490)
Tax benefits associated with share-based compensation	6,540			6,540
Ending Balance at Dec. 31, 2014	1,699,644	22,492	$ 20,278	171,270	(11,926)	(453,230)	1,966,370	6,882
Ending Balance (in shares) at Dec. 31, 2014			202,775
Fair value of noncontrolling interest	(22,422)	(15,078)		(22,422)
Net income	363,096	5,945					364,044	(948)
Other comprehensive income (Note 21)	(21,888)				(21,618)			(270)
Common stock issued from treasury shares for exercise of stock options (Note 19)	58,636			12,273		46,363
Common stock unissued due to forfeiture of nonvested awards			$ (1)	702		(701)
Common stock unissued due to forfeiture of nonvested awards (in shares)			(6)
Common stock issued from treasury shares for nonvested awards (Note 19)				(7,982)		7,982
Share-based compensation (Note 19)	41,179			41,179
Common stock issued from treasury shares for dividend equivalents (Note 19)	349			186		163
Cash dividends declared ($0.40 per share)	(74,356)						(74,356)
Purchase of treasury shares (Note 20)	(242,235)			6		(242,241)
Subsidiary dividends paid to noncontrolling interests		(5,027)
Tax benefits associated with share-based compensation	24,257			24,257
Ending Balance at Dec. 31, 2015	$ 1,848,682	$ 23,410	$ 20,277	$ 241,891	$ (33,544)	$ (641,664)	$ 2,256,058	$ 5,664
Ending Balance (in shares) at Dec. 31, 2015			202,769

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Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Cash dividends declared, per share	$ 0.40	$ 0.40	$ 0.40

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Schedule II Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2015

Schedule II Valuation and Qualifying Accounts

Schedule II

Valuation and Qualifying Accounts

(in thousands)

	Balance at beginning of period		Additions			Deductions			Balance at end of period
			Changes in allowances, charges to expenses and changes to other accounts
Year ended December 31, 2013:
Provision for doubtful accounts	$	1,743		164	(1)		(149	)(3)	$	1,758
Provision for billing adjustments	$	1,174		(376	)(1)		(294	)(3)	$	504
Provision for merchant losses	$	994		2,211	(1)		(2,083	)(3)	$	1,122
Transaction processing provisions — processing errors	$	1,724		7,458	(2)		(6,773	)(3)	$	2,409
Provision for cardholder losses	$	—		19,737	(4),(5)		(13,953	)(3)	$	5,784
Deferred tax valuation allowance	$	12,976		2,298	(6)		(583	)(7)	$	14,691
Year ended December 31, 2014:
Provision for doubtful accounts	$	1,758		640	(1)		(824	)(3)	$	3,222
Provision for billing adjustments	$	504		497	(1)		(135	)(3)	$	866
Provision for merchant losses	$	1,122		1,686	(1)		(1,690	)(3)	$	1,118
Transaction processing provisions — processing errors	$	2,409		9,468	(2)		(7,247	)(3)	$	4,630
Provision for cardholder losses	$	5,784		38,381	(5)		(37,853	)(3)	$	6,312
Deferred tax valuation allowance	$	14,691		5,534	(6)		(1,262	)(7)	$	18,963
Year ended December 31, 2015:
Provision for doubtful accounts	$	3,222		(58	)(1)		(1,407	)(3)	$	1,757
Provision for billing adjustments	$	866		(114	)(1)		174	(3)	$	926
Provision for merchant losses	$	1,118		4,667	(1)		(4,419	)(3)	$	1,366
Transaction processing provisions — processing errors	$	4,630		6,976	(2)		(5,149	)(3)	$	6,457
Provision for cardholder losses	$	6,312		41,264	(5)		(38,185	)(3)	$	9,391
Deferred tax valuation allowance	$	18,963		541	(6)		(1,058	)(7)	$	18,446

(1) Amount reflected includes charges to (recoveries of) bad debt expense which are classified in selling, general and administrative expenses and the charges for billing adjustment which are recorded against revenues.

(2) Amount reflected is the change in transaction processing provisions reflected in cost of services expenses.

(3) Accounts deemed to be uncollectible and written off during the year as it relates to bad debts. Amounts that relate to billing adjustments and transaction processing provisions reflect actual billing adjustments and processing errors charged against the allowances. Amounts that related to cardholder losses reflect write-offs against the provision for cardholder losses.

(4) Includes $7.8 million of cardholder losses on July 1, 2013 related to the acquisition of NetSpend.

(5) Amount represents the charges in the provision for cardholder losses reflected in cost of services expenses.

(6) Amount represents an increase in the amount of deferred tax assets, which more likely than not, will not be realized.

(7) Amount represents a decrease in the amount of deferred tax assets, which more likely than not, will not be realized.

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Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

Basis of Presentation and Summary of Significant Accounting Policies

Note 1: Basis of Presentation and Summary of Significant Accounting Policies

BUSINESS:    Total System Services, Inc.’s (TSYS’ or the Company’s) revenues are derived from providing payment processing, merchant services and related payment services to financial and nonfinancial institutions, generally under long-term processing contracts. The Company also derives revenues by providing general-purpose reloadable (GPR) prepaid debit cards and payroll cards and alternative financial services to underbanked and other consumers. The Company’s services are provided through four operating segments: North America Services, International Services, Merchant Services and NetSpend.

Through the Company’s North America Services and International Services segments, TSYS processes information through its cardholder systems to financial and nonfinancial institutions throughout the United States and internationally. The Company’s North America Services segment provides these services to clients in the United States, Canada, Mexico and the Caribbean. The Company’s International Services segment provides services to clients in Europe, India, Middle East, Africa, Asia Pacific and Brazil. The Company’s Merchant Services segment provides merchant services to merchant acquirers and merchants mainly in the United States. The Company’s NetSpend segment provides services to consumers in the United States.

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION:    The accompanying consolidated financial statements, which are prepared in accordance with generally accepted accounting principles (GAAP) include the accounts of TSYS and its wholly- and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In addition, the Company evaluates its relationships with other entities to identify whether they are variable interest entities and to assess whether it is the primary beneficiary of such entities. If the determination is made that the Company is the primary beneficiary, then that entity is included in the consolidated financial statements.

RISKS AND UNCERTAINTIES AND USE OF ESTIMATES:    Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, lower than anticipated growth from existing clients, an inability to attract new clients and grow internationally, loss of a major customer or other significant client, loss of a major supplier, an inability to grow through acquisitions or successfully integrate acquisitions, an inability to control expenses, technology changes, the impact of the application of and/or changes in accounting principles, financial services consolidation, changes in regulatory requirements, a decline in the use of cards as a payment mechanism, disruption of the Company’s international operations, breach of the Company’s security systems, a decline in the financial stability of the Company’s clients and uncertain economic conditions. Negative developments in these or other risk factors could have a material adverse effect on the Company’s financial position, results of operations and cash flows.

The Company has prepared the accompanying consolidated financial statements in conformity with U.S. GAAP. The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. These estimates and assumptions are developed based upon all information available. Actual results could differ from estimated amounts.

ACQUISITIONS — PURCHASE PRICE ALLOCATION:    TSYS’ purchase price allocation methodology requires the Company to make assumptions and to apply judgment to estimate the fair value of acquired assets and liabilities. TSYS estimates the fair value of assets and liabilities based upon appraised market values, the carrying value of the acquired assets and widely accepted valuation techniques, including discounted cash flows and market multiple analyses. Management determines the fair value of fixed assets and identifiable intangible assets such as developed technology or customer relationships, and any other significant assets or liabilities. TSYS adjusts the purchase price allocation, as necessary, up to one year after the acquisition closing date as TSYS obtains more information regarding asset valuations and liabilities assumed. Unanticipated events or circumstances may occur which could affect the accuracy of the Company’s fair value estimates, including assumptions regarding industry economic factors and business strategies, and result in an impairment or a new allocation of purchase price.

Given its history of acquisitions, TSYS may allocate part of the purchase price of future acquisitions to contingent consideration as required by GAAP for business combinations. The fair value calculation of contingent consideration will involve a number of assumptions that are subjective in nature and which may differ significantly from actual results. TSYS may experience volatility in its earnings to some degree in future reporting periods as a result of these fair value measurements.

CASH AND CASH EQUIVALENTS:    Cash on hand and investments with a maturity of three months or less when purchased are considered to be cash equivalents.

ACCOUNTS RECEIVABLE:    Accounts receivable balances are stated net of allowances for doubtful accounts, billing adjustments and merchant losses.

TSYS records an allowance for doubtful accounts when it is probable that the accounts receivable balance will not be collected. When estimating the allowance for doubtful accounts, the Company takes into consideration such factors as its day-to-day knowledge of the financial position of specific clients, the industry and size of its clients, the overall composition of its accounts receivable aging, prior history with specific customers of accounts receivable write-offs and prior experience of allowances in proportion to the overall receivable balance. This analysis includes an ongoing and continuous communication with its largest clients and those clients with past due balances. A financial decline of any one of the Company’s large clients could have a material adverse effect on collectability of receivables and thus the adequacy of the allowance for doubtful accounts.

Increases in the allowance for doubtful accounts are recorded as charges to bad debt expense and are reflected in selling, general and administrative expenses in the Company’s Consolidated Statements of Income. Write-offs of uncollectible accounts are charged against the allowance for doubtful accounts.

TSYS records an allowance for billing adjustments for actual and potential billing discrepancies. When estimating the allowance for billing adjustments, the Company considers its overall history of billing adjustments, as well as its history with specific clients and known disputes. Increases in the allowance for billing adjustments are recorded as a reduction of revenues in the Company’s Consolidated Statements of Income and actual adjustments to invoices are charged against the allowance for billing adjustments.

TSYS records a provision for merchant losses. When estimating the provision for merchant losses, the Company considers historical loss rates. Increases in the provision for merchant losses are charged to expense and are reflected in cost of services expenses in the Company’s Consolidated Statements of Income. Write-offs of uncollectible amounts are charged against the provision for merchant losses.

UP-FRONT DISTRIBUTOR PAYMENTS:    The Company makes up-front contractual payments to third-party distribution partners. The Company assesses each up-front payment to determine whether it meets the criteria of an asset as defined by U.S. GAAP. If these criteria are met, the Company capitalizes the up-front payment and recognizes the capitalized amount as expense ratably over the benefit period, which is generally the contract period. If the contract requires the distributor to perform specific acts (i.e. achieve a sales goal) and no other conditions exist for the distributor to earn or retain the up-front payment, then the Company capitalizes the payment and recognizes it as an expense when the performance conditions have been met. Up-front distributor payments are classified on the Consolidated Balance Sheet as other non-current assets and recorded as a cost of services in the Consolidated Statements of Income.

PROPERTY AND EQUIPMENT:    Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Buildings and improvements are depreciated over estimated useful lives of 5-40 years, computer and other equipment over estimated useful lives of 2-5 years, and furniture and other equipment over estimated useful lives of 3-15 years. The Company evaluates impairment losses on long-lived assets used in operations in accordance with the provisions of GAAP. All ordinary repairs and maintenance costs are expensed as incurred. Maintenance costs that extend the asset life are capitalized and amortized over the remaining estimated life of the asset.

LICENSED COMPUTER SOFTWARE:    The Company licenses software that is used in providing services to clients. Licensed software is obtained through perpetual licenses, term licenses, site licenses and through agreements based on processing capacity. Perpetual and site licenses are amortized using the straight-line method over their estimated useful lives which range from three to ten years. Term licenses are amortized over the term of the agreement. Mainframe software that is licensed based on processing capacity is amortized using a units-of-production basis over the estimated useful life of the software, generally not to exceed ten years. At each balance sheet date, the Company evaluates impairment losses on long-lived assets used in operations in accordance with GAAP.

ACQUISITION TECHNOLOGY INTANGIBLES:    These identifiable intangible assets are software technology assets resulting from acquisitions. These assets are amortized using the straight-line method over periods not exceeding their estimated useful lives, which range from five to nine years. GAAP requires that intangible assets with estimated useful lives be amortized over their respective estimated useful lives to their residual values, and reviewed for impairment. Acquisition technology intangibles’ net book values are included in computer software, net in the accompanying balance sheets. Amortization expenses are charged to cost of services in the Company’s Consolidated Statements of Income.

SOFTWARE DEVELOPMENT COSTS:    Software development costs are capitalized once technological feasibility of the software product has been established. Costs incurred prior to establishing technological feasibility are expensed as incurred. Technological feasibility is established when the Company has completed a detailed program design and has determined that a product can be produced to meet its design specifications, including functions, features and technical performance requirements. Capitalization of costs ceases when the product is generally available to clients. At each balance sheet date, the Company evaluates the unamortized capitalized costs of software development as compared to the net realizable value of the software product which is determined by future undiscounted net cash flows. The amount by which the unamortized software development costs exceed the net realizable value is written off in the period that such determination is made. Software development costs are amortized using the straight-line method over its estimated useful life, which ranges from three to ten years.

The Company also develops software that is used internally. These software development costs are capitalized in accordance with GAAP. Internal-use software development costs are capitalized once: (1) the preliminary project stage is completed, (2) management authorizes and commits to funding a computer software project, and (3) it is probable that the project will be completed and the software will be used to perform the function intended. Costs incurred prior to meeting the qualifications are expensed as incurred. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. Internal-use software development costs are amortized using the straight-line method over its estimated useful life which ranges from three to ten years.

Software development costs may become impaired in situations where development efforts are abandoned due to the viability of the planned project becoming doubtful or due to technological obsolescence of the planned software product.

CONTRACT ACQUISITION COSTS:    The Company capitalizes contract acquisition costs related to signing or renewing long-term contracts and costs related to cash payments for rights to provide processing services. The Company capitalizes internal conversion costs in accordance with GAAP. All costs incurred prior to a signed agreement are expensed as incurred.

Contract acquisition costs are amortized using the straight-line method over the expected customer relationship (contract term) beginning when the client’s cardholder accounts are converted and producing revenues. The amortization of contract acquisition costs associated with cash payments for client incentives is included as a reduction of revenues in the Company’s Consolidated Statements of Income. The amortization of contract acquisition costs associated with conversion activity is recorded as cost of services in the Company’s Consolidated Statements of Income.

The Company evaluates the carrying value of contract acquisition costs associated with each customer for impairment on the basis of whether these costs are fully recoverable from either contractual minimum fees (contractual costs) or from expected undiscounted net operating cash flows of the related contract (cash incentives paid). The determination of expected undiscounted net operating cash flows requires management to make estimates. These costs may become impaired with the loss of a contract, the financial decline of a client, termination of conversion efforts after a contract is signed, diminished prospects for current clients or if the Company’s actual results differ from its estimates of future cash flows. The amount of the impairment is written off in the period that such a determination is made.

EQUITY INVESTMENTS:    TSYS’ 49% investment in Total System Services de México, S.A. de C.V. (TSYS de México), an electronic payment processing support operation located in Toluca, Mexico, is accounted for using the equity method of accounting, as is TSYS’ 44.56% investment in China UnionPay Data Co., Ltd. (CUP Data) headquartered in Shanghai, China. TSYS’ equity investments are recorded initially at cost and subsequently adjusted for equity in earnings, cash contributions and distributions, and foreign currency translation adjustments.

GOODWILL:    Goodwill results from the excess of cost over the fair value of net assets of businesses acquired. Goodwill and intangible assets with indefinite useful lives are tested for impairment at least annually. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values. Equity investment goodwill, which is not reported as goodwill in the Company’s Consolidated Balance Sheet, but is reported as a component of the equity investment, was $49.4 million as of December 31, 2015.

OTHER INTANGIBLE ASSETS:    Identifiable intangible assets relate primarily to customer relationships, databases, channel relationships, covenants-not-to-compete, trade names and trade associations resulting from acquisitions. These identifiable intangible assets are amortized using the straight-line method over periods not exceeding the estimated useful lives, which range from three to ten years. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with GAAP. Amortization expenses are charged to selling, general and administrative expenses in the Company’s Consolidated Statements of Income.

FAIR VALUES OF FINANCIAL INSTRUMENTS:    The Company uses financial instruments in the normal course of its business. The carrying values of cash equivalents, accounts receivable, accounts payable, accrued salaries and employee benefits, and other current liabilities approximate their fair value due to the short-term maturities of these assets and liabilities. The fair value of the Company’s long-term debt and obligations under capital leases is not significantly different from its carrying value.

Investments in equity investments are accounted for using the equity method of accounting and pertain to privately held companies for which fair value is not readily available. The Company believes the fair values of its investments in equity investments exceed their respective carrying values.

IMPAIRMENT OF LONG-LIVED ASSETS:    The Company reviews long-lived assets, such as property and equipment and intangibles subject to amortization, including contract acquisition costs and certain computer software, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If upon a triggering event the Company determines that the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.

TRANSACTION PROCESSING PROVISIONS:    The Company has recorded an accrual for contract contingencies (performance penalties) and processing errors. A significant number of the Company’s contracts with large clients contain service level agreements which can result in TSYS incurring performance penalties if contractually required service levels are not met. When providing for these accruals, the Company takes into consideration such factors as the prior history of performance penalties and processing errors incurred, actual contractual penalties inherent in the Company’s contracts, progress towards milestones and known processing errors not covered by insurance. As of December 31, 2015, the Company had transaction processing provision of $6.5 million. These accruals are included in other current liabilities in the accompanying Consolidated Balance Sheets. Increases and decreases in transaction processing provisions are charged to cost of services in the Company’s Consolidated Statements of Income, and payments or credits for performance penalties and processing errors are charged against the accrual.

PROVISION FOR CARDHOLDER LOSSES:    The Company is exposed to losses due to cardholder fraud, payment defaults and other forms of cardholder activity as well as losses due to non-performance of third parties who receive cardholder funds for transmittal to the Issuing Banks (banks that issue MasterCard International or Visa USA, Inc. branded cards to customers). The Company establishes a reserve for the losses it estimates will arise from processing customer transactions, debit card overdrafts, chargebacks for unauthorized card use and merchant-related chargebacks due to non-delivery of goods and services. These reserves are established based upon historical loss and recovery rates and cardholder activity for which specific losses can be identified. The provision for cardholder losses was approximately $9.4 million as of December 31, 2015. The charges to provisions for cardholder losses are included in cost of services in the Consolidated Statements of Income. The Company regularly updates its reserve estimate as new facts become known and events occur that may impact the settlement or recovery of losses.

PROVISION FOR MERCHANT LOSSES:    The Company has potential liability for losses resulting from disputes between a cardholder and a merchant that arise as a result of, among other things, the cardholder’s dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer by the card-issuing bank and charged to the merchant. If the merchant is unable to fund the refund, TSYS must do so. TSYS also bears the risk of reject losses arising from the fact that TSYS collects fees from its merchants on the first day after the monthly billing period. If the merchant has gone out of business during such period, TSYS may be unable to collect such fees. TSYS maintains cash deposits or requires the pledge of a letter of credit from certain merchants, generally those with higher average transaction size where the card is not present when the charge is made or the product or service is delivered after the charge is made, in order to offset potential contingent liabilities such as chargebacks and reject losses that would arise if the merchant went out of business. Most chargeback and reject losses are charged to cost of services as they are incurred. However, the Company also maintains a provision against losses, including major fraud losses, which are both less predictable and involve larger amounts. The loss provision was established using historical loss rates, applied to recent bankcard processing volume. As of December 31, 2015, the Company had a merchant loss provision in the amount of $1.3 million.

REDEEMABLE NONCONTROLLING INTEREST:    In connection with the acquisition of Central Payment Co., LLC (CPAY), the Company is party to call and put arrangements with respect to the membership units that represent the remaining noncontrolling interest of CPAY. The call arrangement is exercisable by TSYS and the put arrangement is exercisable by the seller. The put arrangement is outside the control of the Company by requiring the Company to purchase the seller’s entire equity interest in CPAY at a put price at fair value. The put arrangement is recorded on the balance sheet and is classified as redeemable noncontrolling interest outside of permanent equity.

FOREIGN CURRENCY TRANSLATION:    The Company maintains several different foreign operations whose functional currency is their local currency. Foreign currency financial statements of the Company’s Mexican and Chinese equity investments, the Company’s wholly-owned subsidiaries and the Company’s majority-owned subsidiaries, as well as the Company’s division and branches in the United Kingdom and China, are translated into U.S. dollars at current exchange rates, except for revenues, costs and expenses, and net income which are translated at the average exchange rates for each reporting period. Net gains or losses resulting from the currency translation of assets and liabilities of the Company’s foreign operations, net of tax when applicable, are accumulated in a separate section of shareholders’ equity titled accumulated other comprehensive income (loss). Gains and losses on transactions denominated in currencies other than the functional currencies are included in determining net income for the period in which exchange rates change.

TREASURY STOCK:    The Company uses the cost method when it purchases its own common stock as treasury shares or issues treasury stock upon option exercises and displays treasury stock as a reduction of shareholders’ equity.

REVENUE RECOGNITION:    Revenue is recognized when it is realized or realizable and earned, which is deemed to occur when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been performed; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. The Company accrues for rights of refund, processing errors or penalties, or other related allowances based on historical experience.

The Company’s North America and International Services revenues are derived from long-term processing contracts with financial and nonfinancial institutions and are generally recognized as the services are performed. Payment processing services revenues are generated primarily from charges based on the number of accounts on file, transactions and authorizations processed, statements mailed, cards embossed and mailed and other processing services for cardholder accounts on file. Most of these contracts have prescribed annual revenue minimums, penalties for early termination, and service level agreements which may impact contractual fees if certain service levels are not achieved.

Revenue is recognized as the services are performed, primarily on a per unit basis. Processing contracts generally range from three to ten years in length. When providing payment processing services, the Company frequently enters into customer arrangements to provide multiple services that may also include conversion or implementation services, business process outsourcing services such as call center services, web-based services, and other payment processing-related services. Revenue for these services is generally recognized as they are performed on a per unit basis each month or ratably over the term of the contract.

The Company’s Merchant Services revenues are partially derived from relationships with thousands of individual merchants. Additionally, part of the revenues are derived from long-term processing contracts with large financial institutions, other merchant acquirers and merchant organizations which generally range from three to eight years and provide for penalties for early termination. Merchant services revenue is generated primarily from processing all payment forms including credit, debit, electronic benefits transfer and check truncation for merchants of all sizes across a wide array of retail market segments. The products and services offered include authorization and capture of electronic transactions, clearing and settlement of electronic transactions, information reporting services related to electronic transactions, merchant billing services, and point-of-sale terminal services. Revenue is recognized for merchant services as those services are performed, primarily measured on a per unit basis. When providing merchant processing services, the Company frequently enters into customer arrangements to provide multiple services that may also include conversion or implementation services, business process outsourcing services such as call center services, terminal services, and other merchant processing-related services. Revenue for these services is generally recognized as they are performed on a per unit basis each month or ratably over the term of the contract. Revenues on point-of-sale terminal equipment are recognized upon the transfer of ownership and shipment of product.

When a sale involves multiple deliverables, revenue recognition is affected by the determination of the number of deliverables in an arrangement, whether those deliverables may be separated into multiple units of accounting, and the standalone selling price of each unit of accounting which affects the amount of revenue allocated to each unit. Pursuant to Accounting Standards Codification (ASC) 605 ”Revenue Recognition,” the Company uses vendor-specific objective evidence of the standalone selling price (VSOE) of its services when it exists to determine the amount of revenue to allocate to each unit of accounting. The Company establishes VSOE using the price charged when the same service is sold separately (on a standalone basis). In certain situations, the Company does not have sufficient VSOE. In these situations, TSYS considers whether sufficient third party evidence (TPE) of standalone selling price exists for the Company’s services. However, the Company typically is not able to determine TPE and has not used this measure of selling price due to the unique and proprietary nature of some of its services and the inability to reliably verify relevant standalone third party prices. When there is insufficient evidence of VSOE and TPE, the Company has made its best estimate of the standalone selling price (ESP) of that service for purposes of allocating revenue to each unit of accounting. When determining ESP, TSYS uses limited standalone sales data that do not meet the Company’s criteria to establish VSOE, management pricing strategies, residual selling price data when VSOE exists for a group of elements, the cost of providing the services and the related margin objectives. Consideration is also given to geographies in which the services are sold or delivered, customer classifications, and market conditions including competitor pricing strategies and benchmarking studies. Revenue is recognized when the revenue recognition criteria for each unit of accounting have been met.

As business and service offerings change in the future, the determination of the number of deliverables in an arrangement and related units of accounting and the future pricing practices may result in changes in the estimates of VSOE and ESP, which may change the ratio of fees allocated to each service or unit of accounting in a given customer arrangement. There were no material changes or impact to revenue for current contractual arrangements in the year ended December 31, 2015 due to any changes in the determination of the number of deliverables in an arrangement, units of accounting, or estimates of VSOE or ESP.

In many situations, the Company enters into arrangements with customers to provide conversion or implementation services in addition to processing services where the conversion or implementation services do not have standalone value. For these arrangements, conversion or implementation services that do not have standalone value, are recognized over the expected customer relationship (contract term) as the related processing services are performed.

The Company’s other services generally have standalone value and constitute separate units of accounting for revenue recognition purposes. Customer arrangements entered into prior to 2011 (prior to the adoption of Accounting Standards Update (ASU) 2009-13 “Multiple-Deliverable Revenue Arrangements,” an update to ASC Topic 605 “Revenue Recognition,” and formerly known as EITF 08-1, “Revenue Arrangements with Multiple Deliverables”) often included services for which sufficient objective and reliable evidence of fair value did not exist. In these situations, the deliverables were combined and recognized as a single unit of accounting based on the proportional performance for the combined unit. For pre-2011 arrangements that have not expired, have not been materially modified or amended, or terminated, the Company continues to recognize revenue in accordance with these policies in the accompanying financial statements. Beginning in 2011, services in new or materially modified arrangements of this nature were divided into separate units of accounting and revenue is now allocated to each unit of accounting based on the relative selling price method as disclosed above. As the services in the pre-2011 arrangements are generally delivered over the same term with consistent patterns of performance, there is no material difference in the timing or pattern of revenue recognition for each group of arrangements (pre-2011 arrangements and those new or materially modified thereafter).

The Company’s multiple element arrangements may include one or more elements that are subject to other topics including software revenue recognition and leasing guidance. The consideration for these multiple element arrangements is allocated to each group of deliverables — those subject to ASC 605-25 and those subject to other topics based on the revised guidance in ASU 2009-13. Arrangement revenue for each group of deliverables is then further separated, allocated, and recognized based on applicable guidance.

The Company’s NetSpend revenues principally consist of a portion of the service fees and interchange revenues received by the Issuing Banks in connection with the programs NetSpend manages. Revenue is recognized when there is persuasive evidence of an arrangement, the relevant services have been rendered, the price is fixed or determinable and collectability is reasonably assured.

Cardholders are charged fees in connection with NetSpend’s products and services as follows:

• Transactions — Cardholders are typically charged a fee for each PIN and signature-based purchase transaction made using their GPR cards, unless the cardholder is on a monthly or annual service plan, in which case the cardholder is instead charged a monthly or annual subscription fee, as applicable. Cardholders are also charged fees for ATM withdrawals and other transactions conducted at ATMs.

• Customer Service and Maintenance — Cardholders are typically charged fees for balance inquiries made through NetSpend’s call centers. Cardholders are also charged a monthly maintenance fee after a specified period of inactivity.

• Additional Products and Services — Cardholders are charged fees associated with additional products and services offered in connection with certain GPR cards, including the use of overdraft features, a variety of bill payment options, custom card designs and card-to-card transfers of funds initiated through the call centers.

• Other — Cardholders are charged fees in connection with the acquisition and reloading of the GPR cards at retailers and the Company receives a portion of these amounts in some cases.

Revenue resulting from the service fees charged to the cardholders described above is recognized when the fees are charged because the earnings process is substantially complete, except for revenue resulting from the initial activation of cards and annual subscription fees. Revenue resulting from the initial activation of cards is recognized ratably, net of commissions paid to distributors, over the average account life, which is approximately six months for GPR cards. Revenue resulting from annual subscription fees is recognized ratably over the annual period to which the fees relate.

Revenues also include fees charged in connection with program management and processing services the Company provides for private-label programs. Revenue resulting from these fees is recognized when the company has fulfilled its obligations under the underlying service agreements.

NetSpend derives revenue from a portion of the interchange fees remitted by merchants when cardholders make purchases using their GPR cards. Subject to applicable law, interchange fees are fixed by the card associations and network organizations (Networks). Interchange revenue is recognized net of sponsorship, licensing and processing fees charged by the Networks for services they provide in processing purchase transactions routed through them. Interchange revenue is recognized during the period that the purchase transactions occur. Also included in interchange revenue are fees earned from branding agreements with the Networks.

In regards to taxes assessed by a governmental authority imposed directly on a revenue producing transaction, the Company reports its revenues on a net basis.

REIMBURSABLE ITEMS:    Reimbursable items consist of out-of-pocket expenses which are reimbursed by the Company’s clients. These expenses consist primarily of postage, access fees and third party software services.

SHARE-BASED COMPENSATION:    GAAP establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. A public entity must measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award.

The Company estimates forfeitures when recognizing compensation cost. The estimate of forfeitures will be adjusted by the Company as actual forfeitures differ from its estimates, resulting in compensation cost only for those awards that actually vest. The effect of the change in estimated forfeitures is recognized as compensation costs in the period the change in estimate occurred. In estimating its forfeiture rate, the Company stratified its data based upon historical experience to determine separate forfeiture rates for the different award grants. The Company currently estimates a forfeiture rate for existing stock option grants to TSYS non-executive employees, and other TSYS share-based awards. Currently, TSYS estimates a forfeiture rate in the range of 0% to 8%.

The Company has issued its vested awards to directors and nonvested awards to certain employees. The market value of the common stock at the date of issuance is recognized as compensation expense immediately for vested awards and over the vesting period of the nonvested awards. For nonvested award grants that have pro rata vesting, the Company recognizes compensation expense using the straight-line method over the vesting period of the award.

LEASES:    The Company is obligated under noncancelable leases for computer equipment, software and facilities. As these leases expire, they will be evaluated and renewed or replaced by similar leases based on need. A lease is an agreement conveying the right to use property, software or equipment (land and/or depreciable assets) usually for a stated period of time. For purposes of applying the accounting and reporting standards, leases are classified from the standpoint of the lessee as capital or operating leases.

Rental payments on operating leases are charged to expense over the lease term. If rental payments are not made on a straight-line basis, rental expense nevertheless shall be recognized on a straight-line basis unless another systematic and rational basis is more representative of the time pattern in which use benefit is derived from the leased property, in which case that basis shall be used.

Certain of the Company’s operating leases are for office space. The Company will make various alterations (leasehold improvements) to the office space and capitalize these costs as part of property and equipment. Leasehold improvements are amortized on a straight-line basis over the useful life of the improvement or the term of the lease, whichever is shorter.

ADVERTISING:    Advertising costs are expensed as incurred or the first time the advertising takes place except for direct-response advertising and television advertising production costs. Direct-response advertising consists of commission paid to affiliate marketers for the new funded customer accounts generated by them. Direct-response advertising costs are capitalized and amortized over the average life of the new accounts, which is approximately one year. Television advertising production costs consist of the costs of developing and filming television ads. Television advertising production costs are capitalized when the production services are received and expensed in the period when the advertising first takes place. Advertising expense for 2015, 2014 and 2013 was $9.6 million, $5.7 million and $1.3 million, respectively.

INCOME TAXES:    Income taxes reflected in TSYS’ consolidated financial statements are computed based on the taxable income of TSYS and its affiliated subsidiaries. A consolidated U.S. federal income tax return is filed for TSYS and its majority-owned U.S. subsidiaries. Additionally, income tax returns are also filed in states where TSYS and its subsidiaries have filing obligations and in foreign jurisdictions where TSYS has a foreign affiliate.

The Company accounts for income taxes in accordance with the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Reserves against the carrying value of a deferred tax asset are established when necessary to reflect the decreased likelihood of realization of a deferred asset in the future. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Income tax provisions require the use of management judgments, which are subject to challenge by various taxing authorities. Contingency reserves are periodically established where the amount of the contingency can be reasonably determined and is likely to occur. Reductions in contingency reserves are recognized when tax disputes are settled or examination periods lapse.

Significant estimates used in accounting for income taxes relate to the determination of taxable income, the determination of temporary differences between book and tax basis, as well as estimates on the realizability of tax credits and net operating losses.

TSYS recognizes potential interest and penalties related to the underpayment of income taxes as income tax expense in the Consolidated Statements of Income.

NONCONTROLLING INTEREST:    Noncontrolling interests in earnings of subsidiaries represents the minority shareholders’ share of the net income or loss of TSYS Managed Services EMEA Limited (EMEA) and CPAY. The noncontrolling interests in the Consolidated Balance Sheet reflects the original investment by these shareholders in EMEA and CPAY, their proportional share of the earnings or losses and their proportional share of net gains or losses resulting from the currency translation of assets and liabilities of EMEA and CPAY.

EARNINGS PER SHARE:    Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are “participating securities” as defined by GAAP, and therefore should be included in EPS using the two-class method.

The two-class method is an earnings allocation method for computing EPS when an entity’s capital structure includes two or more classes of common stock or common stock and participating securities. It determines EPS based on dividends declared on common stock and participating securities and participation rights of participating securities in any undistributed earnings.

Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated to reflect the potential dilution that would occur if stock options or other contracts to issue common stock were exercised. Diluted EPS is calculated by dividing net income by weighted average common and common equivalent shares outstanding. Common equivalent shares are calculated using the treasury stock method.

RECLASSIFICATIONS:    Certain reclassifications have been made to the 2014 and 2013 financial statements to conform to the presentation adopted in 2015.

Recent Accounting Pronouncements

In November 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-17 “Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes,” which requires the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. Also, companies will no longer allocate valuation allowances between current and noncurrent deferred tax assets because those allowances also will be classified as noncurrent. The guidance is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2016. Early adoption is permitted. Companies can adopt the guidance either prospectively or retrospectively. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU 2015-03 “Interest — Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Cost.” The amendments in this update will require entities to present debt issuance costs in the balance sheet as a direct deduction from the carrying amount of the corresponding debt liability, consistent with debt discounts. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. The guidance will be applied retrospectively. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial position, results of operations or cash flows.

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect on its ongoing financial reporting.

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Discontinued Operations

12 Months Ended

Dec. 31, 2015

Discontinued Operations

Note 2 Discontinued Operations

In accordance with GAAP, the Company determined its Japan-based businesses became discontinued operations in the first quarter of 2014.

The Company sold all of its stock of GP Network Corporation (GP Net) (representing 54% ownership of the company) and all of its stock of TSYS Japan Godo Kaisha (TSYS Japan) (representing 100% ownership of the company) in April 2014. Both entities were part of the International Services segment. The sale of the Company’s stock in both of its operations in Japan was the result of management’s decision during the first quarter of 2014 to divest non-strategic businesses and focus resources on core products and services. In 2014, the Company had a gain of $48.6 million, net of tax, related to the sales of its operations in Japan. In 2015, the Company recorded an additional gain of $1.4 million, net of tax, related to the return of cash that was placed in escrow during closing and tax adjustments associated with the transaction.

GP Net and TSYS Japan were not significant components of TSYS’ consolidated results.

The following table presents the main classes of assets and liabilities held for sale as of December 31, 2014:

(in thousands)	2014
Total assets	$	4,003
Total liabilities		4,003

The following table presents the summarized results of discontinued operations for the years ended December 31, 2015, 2014 and 2013:

(in thousands)	2015		2014			2013
Total revenues	$	—	$	16,376			68,048
Income before taxes	$	—	$	1			3,443
Income tax (benefit) expense	$	—	$	(39	)		1,388
Income from operating activities of discontinued operations, net of tax	$	—	$	40			2,055
Gain on dispositions, net of tax	$	1,411	$	48,615			—
Income from discontinued operations, net of tax	$	1,411	$	48,655			2,055
Income from discontinued operations, net of tax, attributable to noncontrolling interest	$	—	$	999			4,198
Income (loss) from discontinued operations, net of tax, attributable to TSYS common shareholders	$	1,411	$	47,656			(2,143	)
Interest allocated to discontinued operations1	$	—	$	—			281

1 Interest expense relates to borrowings directly for use by Japan-based operations.

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Fair Value Measurement

12 Months Ended

Dec. 31, 2015

Fair Value Measurement

Note 3 Fair Value Measurement

GAAP requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant level of inputs. The three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows:

Level 1 — Quoted prices for identical assets and liabilities in active markets.

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Unobservable inputs for the asset or liability.

The Company had no transfers between Level 1, Level 2, or Level 3 during the years ended December 31, 2015, 2014 or 2013. Goodwill is assessed annually for impairment in the second quarter of each year using fair value measurement techniques. Specifically, goodwill impairment is determined using a two-step test. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit (RU) with its book value, including goodwill. If the fair value of the RU exceeds its book value, goodwill is considered not impaired and the second step of the impairment test is unnecessary. If the book value of the RU exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the RU’s goodwill with the book value of that goodwill. If the book value of the RU’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The fair value of the RU is allocated to all of the assets and liabilities of that unit as if the RU had been acquired in a business combination and the fair value of the RU was the purchase price paid to acquire the RU.

The estimate of fair value of the Company’s RUs is determined using various valuation techniques, including using an equally weighted combination of the market approach and the income approach. The market approach, which contains Level 2 inputs, utilizes readily available market valuation multiples to estimate fair value. The income approach is a valuation technique that utilizes the discounted cash flow (DCF) method, which includes Level 3 inputs. Under the DCF method, the fair value of the RU reflects the present value of the projected earnings that will be generated by each RU after taking into account the revenues and expenses associated with the asset, the relative risk that the cash flows will occur, the contribution of other assets, and an appropriate discount rate to reflect the value of the invested capital. Cash flows are estimated for future periods based upon historical data and projections by management.

As of December 31, 2015, the Company had recorded goodwill in the amount of $1.5 billion. The Company performed its annual impairment test of its goodwill balances as of May 31, 2015, and this test did not indicate any impairment. The fair value of the RUs substantially exceeds the carrying value. Refer to Note 7 for more information regarding goodwill.

The fair value of the Company’s long-term debt and obligations under capital leases is not significantly different from its carrying value.

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Relationships with Affiliated Companies

12 Months Ended

Dec. 31, 2015

Relationships with Affiliated Companies

Note 4 Relationships with Affiliated Companies

TSYS has a note payable to Merchants Limited, which has a noncontrolling interest in EMEA. Refer to Note 13 for more information regarding this loan.

The Company provides miscellaneous services to Merchants Limited and to the Company’s equity investments, TSYS de México and CUP Data.

The foregoing related party arrangements and services are performed under contracts that are similar to its contracts with unrelated third party customers. The Company believes the terms and conditions of transactions between the Company and these related parties are comparable to those which could have been obtained in transactions with unaffiliated parties.

Through its related party transactions, TSYS generates accounts receivable and liability accounts with TSYS de México and CUP Data.

The Company had the following balances with related parties as of December 31, 2015 and 2014:

(in thousands)	2015		2014
Accounts receivable	$	19	$	19
Account payable		3,278		4,329

The table below details revenues and expenses derived from affiliated companies for the years ended December 31, 2015, 2014 and 2013:

(in thousands)	2015		2014		2013
Total revenues:
CUP Data	$	116		232		229
TSYS de México		85		78		68
Total revenues	$	201		310		297
Total operating expenses:
Merchants Limited	$	4,202		9,842		5,739
TSYS de México		148		148		148
Total operating expenses	$	4,350		9,990		5,887
Nonoperating expenses paid to Merchants Limited	$	42		—		—

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Cash and Cash Equivalents

12 Months Ended

Dec. 31, 2015

Cash and Cash Equivalents

Note 5 Cash and Cash Equivalents

Cash and cash equivalent balances as of December 31, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Cash and cash equivalents in domestic accounts	$	307,578		225,396
Cash and cash equivalents in foreign accounts		81,750		63,787
Total	$	389,328		289,183

The Company maintains operating accounts outside the United States denominated in currencies other than the U.S. dollar. All amounts in domestic accounts are denominated in U.S. dollars.

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Prepaid Expenses and Other Current Assets

12 Months Ended

Dec. 31, 2015

Prepaid Expenses and Other Current Assets

NOTE 6 Prepaid Expenses and Other Current Assets

Significant components of prepaid expenses and other current assets as of December 31, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Prepaid expenses	$	37,961		35,334
Supplies inventory		15,114		14,340
Income taxes receivable		51,322		259
Other		49,802		49,041
Total	$	154,199		98,974

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Goodwill

12 Months Ended

Dec. 31, 2015

Goodwill

NOTE 7 Goodwill

In 2013, the Company allocated $1.0 billion to goodwill due to the acquisition of NetSpend. In 2014, the Company adjusted the NetSpend purchase price allocation to add an additional $8.5 million for settlement of the dissenting shareholder lawsuit and adjustments to deferred taxes. In 2015, the Company adjusted the NetSpend goodwill allocation to include an additional $627,000 for an adjustment to a sales and use tax reserve associated with the acquisition.

The gross amount and accumulated impairment losses of goodwill as of December 31, 2015 and 2014 are as follows:

	2015
(in thousands)	North America Services			International Services			Merchant Services			NetSpend		Consolidated
Gross amount	$	70,796			29,081			415,973			1,033,586	$	1,549,436
Accumulated impairment losses		(182	)		(1,605	)		(2,225	)		—		(4,012	)
Goodwill, net	$	70,614			27,476			413,748			1,033,586	$	1,545,424

	2014
	North America Services			International Services			Merchant Services			NetSpend		Consolidated
Gross amount	$	70,796			31,681			415,973			1,032,959	$	1,551,409
Accumulated impairment losses		(182	)		(1,605	)		(2,225	)		—		(4,012	)
Goodwill, net	$	70,614			30,076			413,748			1,032,959	$	1,547,397

The changes in the carrying amount of goodwill as of December 31, 2015 and 2014 are as follows:

(in thousands)	North America Services			International Services			Merchant Services		NetSpend		Consolidated
Balance as of December 31, 2013	$	70,796			34,201			413,748		1,024,434	$	1,543,179
Disposal of GP Net		(182	)		(1,605	)		—		—		(1,787	)
NetSpend purchase price allocation		—			—			—		8,525		8,525
Currency translation adjustments		—			(2,520	)		—		—		(2,520	)
Balance as of December 31, 2014	$	70,614			30,076			413,748		1,032,959	$	1,547,397
NetSpend tax adjustment		—			—			—		627		627
Currency translation adjustments		—			(2,600	)		—		—		(2,600	)
Balance as of December 31, 2015	$	70,614		$	27,476		$	413,748	$	1,033,586	$	1,545,424

Refer to Note 24 for more information on acquisitions.

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Other Intangible Assets, net

12 Months Ended

Dec. 31, 2015

Other Intangible Assets, net

Note 8 Other Intangible Assets, net

In 2015, the changes related to other gross intangible assets were related to foreign currency translation and an acquisition of an acquisition technology intangible asset. Refer to Note 24 for more information on acquisitions.

Significant components of other intangible assets as of December 31, 2015 and 2014 are summarized as follows:

	2015
(in thousands)	Gross		Accumulated Amortization			Net
Channel relationships	$	318,600		(99,909	)	$	218,691
Customer relationships		166,579		(104,736	)		61,843
Trade name		46,422		(24,422	)		22,000
Database		28,000		(14,000	)		14,000
Covenants-not-to-compete		14,940		(7,834	)		7,106
Trade association		10,000		(5,750	)		4,250
Favorable lease		875		(445	)		430
Total	$	585,416		(257,096	)	$	328,320

	2014
(in thousands)	Gross		Accumulated Amortization			Net
Channel relationships	$	318,600		(60,079	)	$	258,521
Customer relationships		167,140		(87,201	)		79,939
Trade name		46,480		(15,680	)		30,800
Database		28,000		(8,400	)		19,600
Covenants-not-to-compete		14,940		(5,551	)		9,389
Trade association		10,000		(4,750	)		5,250
Favorable lease		875		(267	)		608
Total	$	586,035		(181,928	)	$	404,107

Amortization related to other intangible assets, which is recorded in selling, general and administrative expenses, was $75.8 million, $77.3 million and $50.0 million for 2015, 2014 and 2013, respectively.

The weighted average useful life for each component of other intangible assets, and in total, as of December 31, 2015 is as follows:

	Weighted Average Amortization Period (Yrs)
Channel relationships		8.0
Customer relationships		8.2
Trade name		4.9
Database		5.0
Covenants-not-to-compete		5.3
Trade association		10.0
Favorable Lease		4.9
Total		7.6

Estimated future amortization expense of other intangible assets as of December 31, 2015 for the next five years is:

(in thousands)
2016	$	75,213
2017		74,823
2018		60,166
2019		47,870
2020		43,711

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Computer Software, net

12 Months Ended

Dec. 31, 2015

Computer Software, net

Note 9 Computer Software, net

Computer software as of December 31, 2015 and 2014 is summarized as follows:

(in thousands)	2015		2014
Licensed computer software	$	513,443		435,701
Software development costs		404,238		376,026
Acquisition technology intangibles		167,971		167,687
Total computer software		1,085,652		979,414
Less accumulated amortization:
Licensed computer software		282,563		243,866
Software development costs		287,863		275,512
Acquisition technology intangibles		110,156		93,888
Total accumulated amortization		680,582		613,266
Computer software, net	$	405,070		366,148

The Company held the following computer software under capital lease as of December 31, 2015 and 2014:

(in thousands)	2015			2014
Licensed computer software	$	18,206			17,625
Less accumulated amortization		(8,175	)		(4,816	)
Licensed computer software, net	$	10,031			12,809

Amortization expense includes amounts for computer software acquired under capital lease. The Company had the following amortization expense related to computer software for the years ended December 31, 2015, 2014 and 2013:

(in thousands)	2015		2014		2013
Amortization expense related to:
Licensed computer software	$	41,823		36,775		33,511
Software development costs		22,740		25,248		21,430
Acquisition technology intangibles		16,734		19,683		15,855

The weighted average useful life for each component of computer software, and in total, as of December 31, 2015, is as follows:

	Weighted Average Amortization Period (Yrs)
Licensed computer software		5.4
Software development costs		6.1
Acquisition technology intangibles		6.8
Total		5.9

Estimated future amortization expense of licensed computer software, software development costs and acquisition technology intangibles as of December 31, 2015 for the next five years is:

(in thousands)	Licensed Computer Software		Software Development Costs		Acquisition Technology Intangibles
2016	$	36,207		27,312		15,352
2017		31,034		21,608		13,868
2018		25,345		16,041		11,393
2019		13,617		9,916		11,393
2020		8,899		7,343		5,734

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Property and Equipment, net

12 Months Ended

Dec. 31, 2015

Property and Equipment, net

Note 10 Property and Equipment, net

Property and equipment balances as of December 31, 2015 and 2014 are as follows:

(in thousands)	2015		2014
Computer equipment	$	346,387		317,862
Buildings and improvements		244,938		243,211
Furniture and other equipment		138,727		135,741
Land		16,577		16,763
Other		597		204
Total property and equipment		747,226		713,781
Less accumulated depreciation and amortization		457,328		423,196
Property and equipment, net	$	289,898		290,585

The Company has various types of equipment under capital lease arrangements. The Company has the following amounts of equipment under capital lease obligations as of December 31, 2015 and 2014:

(in thousands)	2015			2014
Computer equipment	$	55,450			49,118
Furniture and other equipment		5,374			5,374
Total equipment		60,824			54,492
Less accumulated depreciation:
Computer and other equipment		(36,134	)		(29,816	)
Furniture and other equipment		(2,731	)		(1,666	)
Total accumulated depreciation		(38,865	)		(31,482	)
Total equipment, net	$	21,959			23,010

Depreciation and amortization expense includes amounts for computer equipment, furniture and other equipment acquired under capital lease. Depreciation and amortization expense related to property and equipment was $56.6 million, $53.5 million and $45.5 million for the years ended December 31, 2015, 2014 and 2013, respectively.

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Contract Acquisition Costs, net

12 Months Ended

Dec. 31, 2015

Contract Acquisition Costs, net

Note 11 Contract Acquisition Costs, net

Significant components of contract acquisition costs as of December 31, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Conversion costs, net	$	159,000		159,339
Payments for processing rights, net		88,811		76,966
Total	$	247,811		236,305

Amortization expense related to contract acquisition cost for the years ended December 31, 2015, 2014 and 2013 are as follows:

(in thousands)	2015		2014		2013
Amortization expense related to:
Conversion costs	$	27,392		17,816		19,515
Payments for processing rights		17,039		16,209		13,099

The weighted average useful life for each component of contract acquisition costs, and in total, as of December 31, 2015 is as follows:

	Weighted Average Amortization Period (Yrs)
Payments for processing rights		14.7
Conversion costs		12.3
Total		13.3

Estimated future amortization expense of conversion costs and payments for processing rights as of December 31, 2015 for the next five years is:

(in thousands)	Conversion Costs		Payments for Processing Rights
2016	$	32,122		17,394
2017		29,148		15,978
2018		25,656		14,561
2019		21,149		12,277
2020		17,800		10,167

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Equity Investments

12 Months Ended

Dec. 31, 2015

Equity Investments

Note 12 Equity Investments

The Company has an equity investment in TSYS de México and records its 49% ownership using the equity method of accounting. The operation prints statements and provides card-issuing support services to the equity investment clients and others.

The Company has an equity investment in CUP Data and records its 44.56% ownership using the equity method of accounting. CUP Data is sanctioned by the People’s Bank of China, China’s central bank, and has become one of the world’s largest and fastest-growing payments networks. CUP Data currently provides transaction processing, disaster recovery and other services for banks and bankcard issuers in China.

TSYS’ equity investments are recorded initially at cost and subsequently adjusted for equity in earnings, cash contributions and distributions, and foreign currency translation adjustments. TSYS believes the carrying value approximates the underlying assets of the equity investments.

TSYS’ equity in income of equity investments (net of tax) for the years ended December 31, 2015, 2014 and 2013 was $22.1 million, $17.6 million and $13.0 million, respectively.

A summary of TSYS’ equity investments as of December 31, 2015 and 2014 is as follows:

(in thousands)	2015		2014
CUP Data	$	98,518		92,738
TSYS de México		7,600		7,730
Total	$	106,118		100,468

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Long-term Borrowings and Capital Lease Obligations

12 Months Ended

Dec. 31, 2015

Long-term Borrowings and Capital Lease Obligations

Note 13 Long-term Borrowings and Capital Lease Obligations

Long-term debt as of December 31, 2015 and 2014 consists of:

(in thousands)	2015		2014
2.375% Senior Notes due June 1, 2018 (5 year tranche), net of discount	$	549,919		549,889
3.75% Senior Notes due June 1, 2023 (10 year tranche), net of discount		546,746		546,379
LIBOR + 1.125%, unsecured term loan, due April 8, 2018, with quarterly principal and interest payments		175,000		185,000
LIBOR + 1.125%, unsecured term loan, due September 10, 2017, with quarterly principal and interest payments		120,000		131,250
1.38% note payable due January 31, 2017, with monthly interest and principal payments		30,000		—
1.50% note payable, due September 30, 2016, with monthly interest and principal payments		5,132		11,886
LIBOR + 2.0%, unsecured term loan, due December 7, 2017, with monthly interest payments and principal paid at maturity		3,202		1,396
1.50% note payable, due January 31, 2016, with monthly interest and principal payments		336		4,332
1.50% note payable, due December 31, 2015, with monthly interest and principal payments		—		10,075
1.50% note payable, due July 31, 2015, with monthly interest and principal payments		—		1,709
Total debt		1,430,335		1,441,916
Less current portion		50,364		43,784
Noncurrent portion of long-term debt	$	1,379,971		1,398,132

During December 2014, EMEA obtained a £900,000, or approximately $1.4 million term loan. In September 2015, TSYS increased the loan by £1.3 million, or approximately $1.9 million. The loan bears interest at a rate of LIBOR plus two percent. The loan matures in December 2017, and has monthly interest payments. The lender in this transaction is Merchants Limited, who has a noncontrolling interest in EMEA. The balance as of December 31, 2015 was $3.2 million.

In December 2015, the Company entered into a $30.0 million financing agreement for perpetual software licenses. The balance as of December 31, 2015 was $30.0 million.

In September 2014, the Company entered into a $13.6 million financing agreement for perpetual software licenses. The balance as of December 31, 2015 was $5.1 million.

In December 2013, the Company entered into a $20.0 million financing arrangement to purchase additional software licenses. The financing arrangement was repaid in 2015.

TSYS acquired additional mainframe software licenses to increase capacity in 2012. The Company entered into an $8.6 million and an $11.9 million financing agreement in June and December of 2012, respectively, to purchase these additional software licenses. The balance as of December 31, 2015 for the $11.9 million financing agreement was $0.3 million. The $8.6 million financing agreement was repaid in 2015.

In addition, TSYS maintains an unsecured credit agreement with Columbus Bank and Trust. The credit agreement has a maximum available principal balance of $5.0 million, with interest at prime. TSYS did not use the credit facility during 2015, 2014 or 2013.

Acquisition-Related Borrowings

In April 2013, the Company entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Syndication Agent, Regions Bank and U.S. Bank National Association, as Documentation Agents, and other lenders party thereto, with J.P. Morgan Securities LLC, The Bank of Tokyo Mitsubishi UFJ, Ltd., Regions Capital Markets, and U.S. Bank National Association as joint lead arrangers and joint bookrunners. The Credit Agreement provides for a five-year term loan to the Company in the amount of $200.0 million (the “Term Loan”) and bears interest at LIBOR plus 1.125%, which are subject to adjustment based on changes in the Company’s credit ratings, with margins ranging from 1.00% to 1.75%. As of December 31, 2015, the outstanding balance on the Credit Agreement was $175.0 million.

Concurrently with entering into the Merger Agreement, TSYS obtained commitments for a $1.2 billion 364-day bridge term loan facility from JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC and The Bank of Tokyo-Mitsubishi UFJ, Ltd. Thereafter, JPMorgan Chase Bank, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. assigned portions of their commitments to other bridge facility lenders. The Company paid fees in 2013 associated with the bridge term loan of approximately $5.9 million. The total commitments under the bridge term loan facility were eliminated in May 2013 after the issuance of the Notes described below.

In May 2013, the Company closed its issuance (the “Transaction”) of $550.0 million aggregate principal amount of 2.375% Senior Notes due 2018 and $550.0 million aggregate principal amount of 3.750% Senior Notes due 2023 (collectively, the “Notes”) pursuant to an Underwriting Agreement with J.P. Morgan Securities LLC, as representative of certain underwriters (the “Underwriters”), whereby the Company agreed to sell and the Underwriters agreed to purchase the Notes from the Company, subject to and upon the terms and conditions set forth in the Underwriting Agreement. The interest on the Notes are payable semiannually. The Company paid fees in 2013 associated with the issuance of these Notes of approximately $8.9 million and recorded discounts of approximately $4.3 million that are being amortized over the life of the Notes. The Company used the net proceeds of the Transaction to pay a portion of the $1.4 billion purchase price of the Company’s acquisition of NetSpend and related fees and expenses. The Notes were issued pursuant to an Indenture dated as of May 22, 2013 between the Company and Wells Fargo Bank, National Association, as trustee. The balance as of December 31, 2015 was $549.9 million net of discount for the Senior Notes due June 2018 and $546.7 million net of discount for the Senior Notes due June 2023.

The Notes also contain various affirmative and negative covenants, including those that create limitations on the Company’s:

• creation of liens;

• merging or selling assets unless certain conditions are met; and

• entering into sale/leaseback transactions.

The Notes also contain a provision that requires the Company to repurchase all or any portion of a holder’s Notes, at the holder’s option, if a Change in Control Repurchase Event occurs.

Amendment to Existing Credit Agreement

In September 2012, the Company entered into a credit agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Regions Bank and U.S. Bank National Association, as Syndication Agents, and the other lenders named therein, with J.P. Morgan Securities LLC, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Regions Capital Markets and U.S. Bank National Association, as joint lead arrangers and joint bookrunners (the “Existing Credit Agreement”). The Existing Credit Agreement provides for a $350.0 million five-year unsecured revolving credit facility (which may be increased by up to an additional $350.0 million under certain circumstances) and includes a $50.0 million subfacility for the issuance of standby letters of credit and a $50.0 million subfacility for swingline loans. The Existing Credit Agreement also provides for a $150 million five-year unsecured term loan, which was fully funded on the closing of the Existing Credit Agreement. As of December 31, 2015, the outstanding balance on the Existing Credit Agreement was $120.0 million.

In April 2013, the Company entered into the First Amendment to the Existing Credit Agreement (the “Revolver”) in order to conform certain provisions of the Existing Credit Agreement to the Credit Agreement for the Term Loan. On July 1, 2013, an additional $100.0 million was used as funding in the NetSpend Merger. As of December 31, 2015, there was no outstanding balance on the Revolver.

The Credit Agreement for the aforementioned loan provided for a $168.0 million unsecured five-year term loan to the Company, which was repaid in 2012 and a $252.0 million five year unsecured revolving credit facility. The principal balance of loans outstanding under the credit facility bears interest at a rate of LIBOR plus an applicable margin of 0.60%. The applicable margin could vary within a range from 0.27% to 0.725% depending on changes in the Company’s corporate credit rating. Interest was paid on the last date of each interest period; however, if the period exceeded three months, interest was paid every three months after the beginning of such interest period. In addition, the Company paid each lender a fee in respect of the amount of such lender’s commitment under the revolving credit facility (regardless of usage), ranging from 0.08% to 0.15% depending on the Company’s corporate credit rating.

The Company was able to prepay the revolving credit facility and the term loan in whole or in part at any time without premium or penalty, subject to reimbursement of the lenders’ customary breakage and redeployment costs in the case of prepayment of LIBOR borrowings. The Credit Agreement included covenants requiring the Company to maintain certain minimum financial ratios. The Company did not use the revolving credit facility in 2015.

Required annual principal payments on long-term debt for the five years subsequent to December 31, 2015 are summarized as follows:

(in thousands)
2016	$	50,364
2017		143,305
2018		690,000
2019		—
2020		—

Capital lease obligations as of December 31, 2015 and 2014 consist of:

(in thousands)	2015		2014
Capital lease obligations	$	7,131		14,101
Less current portion		3,468		7,127
Noncurrent portion of capital leases	$	3,663		6,974

The Company acquires various computer equipment, software, machinery and equipment and furniture and fixtures under capital lease obligations. Refer to Notes 9, 10 and 23 for more information. The capital lease obligations have various payment terms for each capital lease obligation, including single payment leases, monthly, quarterly and annually. The lease terms for the equipment and software range from one to six years.

The future minimum lease payments under capital leases as of December 31, 2015 are summarized as follows:

(in thousands)
2016	$	3,611
2017		2,687
2018		1,001
2019		63
2020		—
Total minimum lease payments		7,362
Less amount representing interest		(231	)
Principal minimum lease payments	$	7,131

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Other Current Liabilities

12 Months Ended

Dec. 31, 2015

Other Current Liabilities

Note 14 Other Current Liabilities

Significant components of other current liabilities as of December 31, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Deferred revenues	$	39,863		41,773
Accrued expenses		26,017		23,617
Dividends payable		19,367		19,006
Other		81,332		70,409
Total	$	166,579		154,805

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Income Taxes

12 Months Ended

Dec. 31, 2015

Income Taxes

Note 15 Income Taxes

The provision for income taxes includes income taxes currently payable and those deferred because of temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities.

The components of income tax expense included in the Consolidated Statements of Income were as follows:

	Years Ended December 31,
(in thousands)	2015			2014			2013
Current income tax expense:
Federal	$	139,228			126,203			74,327
State		9,255			5,161			2,949
Foreign		4,762			7,694			6,822
Total current income tax expense		153,245			139,058			84,098
Deferred income tax expense (benefit):
Federal		(2,198	)		(3,623	)		27,447
State		442			(2,039	)		(55	)
Foreign		(125	)		(3,635	)		(509	)
Total deferred income tax expense (benefit)		(1,881	)		(9,297	)		26,883
Total income tax expense	$	151,364			129,761			110,981

	Years Ended December 31,
(in thousands)	2015		2014		2013
Components of income before income tax expense:
Domestic	$	488,515		369,888		328,052
Foreign		8,373		23,041		24,424
Total income before income tax expense	$	496,888		392,929		352,476

Income tax expense differed from the amounts computed by applying the statutory U.S. federal income tax rate of 35% to income before income taxes, noncontrolling interest and equity in income of equity investments as a result of the following:

	Years Ended December 31,
(in thousands)	2015			2014			2013
Computed “expected” income tax expense	$	173,911			137,525			123,367
Increase (decrease) in income tax expense resulting from:
International tax rate differential and equity income		8,367			6,541			1,870
State income tax expense, net of federal income tax effect		7,101			4,823			3,408
Increase (decrease) in valuation allowance		(517	)		(4,550	)		1,715
Tax credits		(28,831	)		(3,459	)		(6,141	)
Deduction for domestic production activities		(11,550	)		(8,750	)		(8,225	)
Permanent differences and other, net		2,883			(2,369	)		(5,013	)
Total income tax expense	$	151,364			129,761			110,981

Temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities that give rise to significant portions of the net deferred tax liability as of December 31, 2015 and 2014 relate to the following:

	As of December 31,
(in thousands)	2015			2014
Deferred income tax assets:
Net operating loss and income tax credit carryforwards	$	29,522			31,978
Allowances for doubtful accounts and billing adjustments		1,399			1,328
Deferred revenue		31,713			31,240
Share-based compensation		22,088			24,449
Other, net		34,673			24,743
Total deferred income tax assets		119,395			113,738
Less valuation allowance for deferred income tax assets		(18,446	)		(18,963	)
Net deferred income tax assets		100,949			94,775
Deferred income tax liabilities:
Excess tax over financial statement depreciation		(61,161	)		(53,527	)
Computer software development costs		(82,835	)		(67,703	)
Purchase accounting adjustments		(114,171	)		(136,701	)
Foreign currency translation		(4,522	)		(7,642	)
Other, net		(24,462	)		(18,830	)
Total deferred income tax liabilities		(287,151	)		(284,403	)
Net deferred income tax liabilities	$	(186,202	)		(189,628	)
Total net deferred tax assets (liabilities):
Current	$	24,670			15,190
Noncurrent		(210,872	)		(204,818	)
Net deferred income tax liability	$	(186,202	)		(189,628	)

As of December 31, 2015, TSYS had recognized deferred tax assets from net operating losses and federal and state income tax credit carryforwards of $4.5 million and $25.0 million, respectively. As of December 31, 2014, TSYS had recognized deferred tax assets from net operating losses and federal and state income tax credit carryforwards of $5.9 million and $26.1 million, respectively

In assessing the realizability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

Management believes it is more likely than not that TSYS will realize the benefits of these deductible differences, net of existing valuation allowances. The valuation allowance for deferred tax assets was $18.4 million and $19.0 million at December 31, 2015 and 2014, respectively. The decrease in the valuation allowance for deferred income tax assets was $0.5 million for 2015. The decrease relates to foreign and state losses which, more likely than not, will not be realized in later years.

TSYS has adopted the permanent reinvestment exception under GAAP, with respect to future earnings of certain foreign subsidiaries. As a result, TSYS considers foreign earnings related to these foreign operations to be permanently reinvested. No provision for U.S. federal and state incomes taxes has been made in the consolidated financial statements for those non-U.S. subsidiaries whose earnings are considered to be reinvested. The amount of undistributed earnings considered to be “reinvested” which may be subject to tax upon distribution was approximately $83.9 million as of December 31, 2015. Although TSYS does not intend to repatriate these earnings, a distribution of these non-U.S. earnings in the form of dividends, or otherwise, would subject the Company to both U.S. federal and state income taxes, as adjusted for non-U.S. tax credits, and withholding taxes payable to the various non-U.S. countries. Determination of the amount of any unrecognized deferred income tax liability on these undistributed earnings is not practicable.

TSYS is the parent of an affiliated group that files a consolidated U.S. federal income tax return and most state and foreign income tax returns on a separate entity basis. In the normal course of business, the Company is subject to examinations by these taxing authorities unless statutory examination periods lapse. TSYS is no longer subject to U.S. federal income tax examinations for years before 2011 and with few exceptions, the Company is no longer subject to income tax examinations from state and local or foreign tax authorities for years before 2005. There are currently federal income tax examinations in progress for the years 2009 through 2012 for a subsidiary which was acquired in 2013. Additionally, a number of tax examinations are in progress by the relevant state tax authorities. Although TSYS is unable to determine the ultimate outcome of these examinations, TSYS believes that its liability for uncertain tax positions relating to these jurisdictions for such years is adequate.

GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken in a tax return. During the year ended December 31, 2015, TSYS increased its liability for prior year uncertain income tax positions as a discrete item by a net amount of approximately $6.4 million (net of the federal tax effect). The Company is not able to reasonably estimate the amount by which the liability will increase or decrease over time; however, at this time, the Company does not expect any significant changes related to these obligations within the next twelve months.

A reconciliation of the beginning and ending amount of unrecognized tax liabilities is as follows ¹:

(in millions)	Year Ended December 31, 2015
Beginning balance	$	6.7
Current activity:
Additions based on tax positions related to current year		2.3
Additions for tax positions of prior years		4.7
Reductions for tax positions of prior years		(0.6	)
Net, current activity		6.4
Ending balance	$	13.1

1 Unrecognized state tax liabilities are not adjusted for the federal tax impact

TSYS recognizes potential interest and penalties related to the underpayment of income taxes as income tax expense in the Consolidated Statements of Income. Gross accrued interest and penalties on unrecognized tax benefits totaled $0.7 million and $0.3 million as of December 31, 2015 and December 31, 2014, respectively. The total amounts of unrecognized income tax benefits as of December 31, 2015 and December 31, 2014 that, if recognized, would affect the effective tax rates are $13.2 million and $6.5 million (net of the federal benefit on state tax issues), respectively, which includes interest and penalties of $0.5 million and $0.2 million, respectively.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies

Note 16 Commitments and Contingencies

LEASE COMMITMENTS:    TSYS is obligated under noncancelable operating leases for computer equipment, software and facilities.

The future minimum lease payments under noncancelable operating leases with remaining terms greater than one year for the next five years and thereafter and in the aggregate as of December 31, 2015, are as follows:

(in thousands)
2016	$	121,892
2017		117,137
2018		101,413
2019		99,426
2020		30,733
Thereafter		22,716
Total future minimum lease payments	$	493,317

The majority of computer equipment lease commitments come with a renewal option or an option to terminate the lease. These lease commitments may be replaced with new leases which allow the Company to continually update its computer equipment. Total rental expense under all operating leases in 2015, 2014 and 2013 was $124.8 million, $105.2 million and $93.4 million, respectively.

CONTRACTUAL COMMITMENTS:    In the normal course of its business, the Company maintains long-term processing contracts with its clients. These processing contracts contain commitments, including, but not limited to, minimum standards and time frames against which the Company’s performance is measured. In the event the Company does not meet its contractual commitments with its clients, the Company may incur penalties and certain clients may have the right to terminate their contracts with the Company. The Company does not believe that it will fail to meet its contractual commitments to an extent that will result in a material adverse effect on its financial position, results of operations or cash flows.

CONTINGENCIES:

Legal Proceedings — General

The Company is subject to various legal proceedings and claims and is also subject to information requests, inquiries and investigations arising out of the ordinary conduct of its business. The Company establishes reserves for litigation and similar matters when those matters present loss contingencies that TSYS determines to be both probable and reasonably estimable in accordance with GAAP. In the opinion of management, based on current knowledge and in part upon the advice of legal counsel, all matters not specifically discussed below are believed to be adequately covered by insurance, or, if not covered, the possibility of losses from such matters are believed to be remote or such matters are of such kind or involve such amounts that would not have a material adverse effect on the financial position, results of operations or cash flows of the Company if disposed of unfavorably.

Telexfree Matter

ProPay, Inc. (“ProPay”), a subsidiary of the Company, has been named as one of a number of defendants (including other merchant processors) in several purported class action lawsuits relating to the activities of Telexfree, Inc. and its affiliates and principals. Telexfree is a former merchant customer of ProPay. With regard to Telexfree, each purported class action lawsuit generally alleges that Telexfree engaged in an improper multi-tier marketing scheme involving voice-over Internet protocol telephone services. The plaintiffs in each of the purported class action complaints generally allege that the various merchant processor defendants, including ProPay, aided and abetted the improper activities of Telexfree. Telexfree filed for bankruptcy protection in Nevada. The bankruptcy proceeding was subsequently transferred to the Massachusetts Bankruptcy Court.

Specifically, ProPay has been named as one of a number of defendants (including other merchant processors) in each of the following purported class action complaints relating to Telexfree: (i) Waldermara Martin, et al. v. TelexFree, Inc., et al. (Case No. BK-S-14-12524-ABL) filed on May 3, 2014 in the United States Bankruptcy Court District of Nevada, (ii) Anthony Cellucci, et al. v. TelexFree, Inc., et. al. (Case No. 4: 14-BK-40987) filed on May 15, 2014 in the United States Bankruptcy Court District of Massachusetts, (iii) Maduako C. Ferguson Sr., et al. v. Telexelectric, LLLP, et. al (Case No. 5: 14-CV-00316-D) filed on June 5, 2014 in the United States District Court of North Carolina, (iv) Todd Cook v. TelexElectric LLLP et al. (Case No. 2: 14-CV-00134), filed on June 24, 2014 in the United States District Court for the Northern District of Georgia, (v) Felicia Guevara v. James M. Merrill et al., CA No. 1: 14-cv-22405-DPG), filed on June 27, 2014 in the United State District Court for the Southern District of Florida, and (vi) Reverend Jeremiah Githere, et al. v. TelexElectric LLLP et al. (Case No. 1: 14-CV-12825-GAO), filed on June 30, 2014 in the United States District Court for the District of Massachusetts (together, the “Actions”). On October 21, 2014, the Judicial Panel on Multidistrict Litigation transferred and consolidated the Actions before the United States District Court for the District of Massachusetts (the “Consolidated Action”).

Following the Judicial Panel on Multidistrict Litigation’s October 21, 2014 order, four additional cases arising from the alleged TelexFree scheme were transferred to the United States District Court for the District of Massachusetts for coordinated or consolidated proceedings, including (i) Paulo Eduardo Ferrari et al. v. Telexfree, Inc. et al. (Case No. 14-04080); (ii) Magalhaes v. TelexFree, Inc., et al., No. 14-cv-12437 (D. Mass.); (iii) Griffith v. Merrill et al., No. 14-CV-12058 (D. Mass.); Abelgadir v. Telexelectric, LLP, No. 14-09857 (S.D.N.Y.) In addition, on September 23, 2015, a putative class action relating to TelexFree was filed in the United States District Court for the District of Arizona, styled Rita Dos Santos, Putative Class Representatives and those Similarly Situated v. TelexElectric, LLLP et al., 2: 15-cv-01906-NVW (the “Arizona Action”). The Arizona Action makes claims similar to those alleged in the consolidated action pending before the United States District Court for the District of Massachusetts. On September 29, 2015, a group of certain defendants to the Consolidated Action, including ProPay, filed a “tag along” notice with the Judicial Panel on Multidistrict Litigation, asking that the Arizona Action be transferred to the District of Massachusetts where it can be consolidated or coordinated with the Consolidated Action. On October 20, 2015, the Judicial Panel on Multidistrict Litigation transferred the Arizona Action to the District of Massachusetts.

The United States District Court for the District of Massachusetts appointed lead plaintiffs’ counsel on behalf of the putative class of plaintiffs in the Consolidated Action. On March 31, 2015, the plaintiffs filed a First Consolidated Amended Complaint (the “Consolidated Complaint”). The Consolidated Complaint purports to bring claims on behalf of all persons who purchased certain TelexFree “memberships” and suffered a “net loss” between January 1, 2012 and April 16, 2014. The Consolidated Complaint supersedes the complaints filed prior to consolidation of the Actions, and alleges that ProPay aided and abetted tortious acts committed by TelexFree, and that ProPay was unjustly enriched in the course of providing payment processing services to TelexFree. On April 30, 2015, the plaintiffs filed a Second Consolidated Amended Complaint (the “Second Amended Complaint”), which amends and supersedes the Consolidated Complaint. Like the Consolidated Complaint, the Second Amended Complaint generally alleges that ProPay aided and abetted tortious acts committed by TelexFree, and that ProPay was unjustly enriched in the course of providing payment processing services to TelexFree.

Several defendants, including ProPay, moved to dismiss the Second Amended Complaint on June 2, 2015. Briefing on those motions closed on October 16, 2015. The court held a hearing on the motions to dismiss on November 2, 2015. At present, pursuant to a court order, all discovery in the action is stayed pending the resolution of parallel criminal proceedings against certain former principals of TelexFree, Inc.

ProPay has also received various subpoenas, a seizure warrant and other inquiries requesting information regarding Telexfree from (i) the Commonwealth of Massachusetts, Securities Division, (ii) United States Securities and Exchange Commission, (iii) US Immigration and Customs Enforcement, and (iv) the bankruptcy Trustee of the Chapter 11 entities of Telexfree, Inc., Telexfree, LLC and Telexfree Financial, Inc. Pursuant to the seizure warrant served by the United States Attorney’s Office for the District of Massachusetts, ProPay delivered all funds associated with Telexfree held for chargeback and other purposes by ProPay to US Immigration and Customs Enforcement. In addition, ProPay received a notice of potential claim from the bankruptcy Trustee as a result of the relationship of ProPay with Telexfree and its affiliates.

The above proceedings and actions are preliminary in nature. While the Company and ProPay intend to vigorously defend matters arising out of the relationship of ProPay with Telexfree and believe ProPay has substantial defenses related to these purported claims, the Company currently cannot reasonably estimate losses attributable to these matters.

GUARANTEES AND INDEMNIFICATIONS:    The Company has entered into processing and licensing agreements with its clients that include intellectual property indemnification clauses. Under these clauses, the Company generally agrees to indemnify its clients, subject to certain exceptions, against legal claims that TSYS’ services or systems infringe on certain third party patents, copyrights or other proprietary rights. In the event of such a claim, the Company is generally obligated to hold the client harmless and pay for related losses, liabilities, costs and expenses, including, without limitation, court costs and reasonable attorney’s fees. The Company has not made any indemnification payments pursuant to these indemnification clauses.

A portion of the Company’s business is conducted through distributors that provide load and reload services to cardholders at their locations. Members of the Company’s distribution and reload network collect cardholder funds and remit them by electronic transfer to the Issuing Banks for deposit in the cardholder accounts. The Company’s Issuing Banks typically receive cardholders’ funds no earlier than three business days after they are collected by the distributor. If any distributor fails to remit cardholders’ funds to the Company’s Issuing Banks, the Company typically reimburses the Issuing Banks for the shortfall created thereby. The Company manages the risk associated with this process through a formalized set of credit standards, volume limits and deposit requirements for certain distributors and by typically maintaining the right to offset any settlement shortfall against the commissions payable to the relevant distributor. To date, the Company has not experienced any significant losses associated with settlement failures and the Company had not recorded a settlement guarantee liability as of December 31, 2015. As of December 31, 2015, the Company’s estimated gross settlement exposure was $9.9 million.

GPR cardholders can incur charges in excess of the funds available in their accounts and are liable for the resulting overdrawn account balance. Although the Company generally declines authorization attempts for amounts that exceed the available balance in a cardholder’s account, the application of the Networks’ rules and regulations, the timing of the settlement of transactions and the assessment of subscription, maintenance or other fees can, among other things, result in overdrawn card accounts. The Company also provides, as a courtesy and in its discretion, certain cardholders with a “cushion” that allows them to overdraw their card accounts by up to $10. In addition, eligible cardholders may enroll in the Issuing Banks’ overdraft protection programs and fund transactions that exceed the available balance in their accounts. The Company generally provides the funds used as part of these overdraft programs (one of the Company’s Issuing Banks will advance the first $1.0 million on behalf of its cardholders) and is responsible to the Issuing Banks for any losses associated with any overdrawn account balances. As of December 31, 2015 and 2014, cardholders’ overdrawn account balances totaled $17.9 million and $14.0 million, respectively. As of December 31, 2015 and 2014, the Company’s reserves for the losses it estimates will arise from processing customer transactions, debit card overdrafts, chargebacks for unauthorized card use and merchant-related chargebacks due to non-delivery of goods or services was $9.4 million and $6.3 million, respectively.

The Company has not recorded a liability for guarantees or indemnities in the accompanying consolidated balance sheet since the maximum amount of potential future payments under such guarantees and indemnities is not determinable.

PRIVATE EQUITY INVESTMENTS:    The Company has entered into limited partnership agreements in connection with investing in two Atlanta-based venture capital funds focused exclusively on investing in technology-enabled financial services companies. Pursuant to each limited partnership agreement, the Company has committed to invest up to $20.0 million in each fund so long as its ownership interest in each fund does not exceed 50%. As of December 31, 2015 and 2014, the Company had made contributions to the funds of $15.0 million and $10.8 million, respectively. The Company had investments, including gains, totaling $17.6 million and $11.9 million, respectively, as of December 31, 2015 and 2014. The Company recognized gains of $4.0 million, $0.8 million, and $1.0 million due to increases in fair value in the years ended December 31, 2015, 2014 and 2013, respectively.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2015

Employee Benefit Plans

Note 17 Employee Benefit Plans

The Company provides benefits to its employees by offering employees participation in certain defined contribution plans. The employee benefit plans through which TSYS provided benefits to its employees during 2015 are described as follows:

RETIREMENT SAVINGS AND STOCK PURCHASE PLANS:    TSYS maintains a single plan, the Retirement Savings Plan, which is designed to reward all team members of TSYS U.S.-based companies with a uniform employer contribution. The terms of the plan provide for the Company to match 100% of the employee contribution up to 4% of eligible compensation. The Company can make discretionary contributions up to another 4% based upon business conditions.

The Company also maintains a stock purchase plan for employees. The Company contributes 15% of employee contributions. The funds are used to purchase presently issued and outstanding shares of TSYS common stock on the open market at fair market value for the benefit of participants. The Company’s contributions to the plans charged to expense for the years ended December 31, 2015, 2014 and 2013 are as follows:

(in thousands)	2015		2014		2013
TSYS Retirement Savings Plan	$	24,169		17,531		14,506
TSYS Stock Purchase Plan		1,378		1,288		1,236

POSTRETIREMENT MEDICAL BENEFITS PLAN:    TSYS provides certain medical benefits to qualified retirees through a postretirement medical benefits plan, which is immaterial to the Company’s consolidated financial statements. The measurement of the benefit expense and accrual of benefit costs associated with the plan do not reflect the effects of the 2003 Medicare Act. Additionally, the benefit expense and accrued benefit cost associated with the plan, as well as any potential impact of the effects of the 2003 Medicare Act, are not significant to the Company’s consolidated financial statements.

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Equity

12 Months Ended

Dec. 31, 2015

Equity

Note 18 Equity

DIVIDENDS:    Dividends on common stock of $73.7 million were paid in 2015, compared to $74.8 million and $56.5 million in 2014 and 2013, respectively. The increase in dividends paid in 2014 compared to 2013 is due to the acceleration of payment of the fourth quarter 2012 dividend. The fourth quarter 2012 dividend payment was paid in December 2012, rather than January 2013, to allow shareholders to benefit from the lower dividend tax rate that was set to expire on December 31, 2012.

EQUITY COMPENSATION PLANS:    The following table summarizes TSYS’ equity compensation plans by category as of December 31, 2015:

(in thousands, except per share data) Plan Category	(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights		(b) Weighted-average exercise price of outstanding options, warrants and rights			(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders		4,475	$	28.07	1		8,550	2

The Company does not have any equity compensation plans that were not approved by security holders.

1 Weighted-average exercise price represents 2,887 thousand options only and does not include performance shares and other awards that have no exercise price.

2 Shares available for future grants under the Total System Services Inc. 2007 Omnibus Plan and 2012 Omnibus Plan, which could be in the form of options, nonvested awards and performance shares.

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Share-Based Compensation

12 Months Ended

Dec. 31, 2015

Share-Based Compensation

Note 19 Share-Based Compensation

General Description of Share-Based Compensation Plans

TSYS has various long-term incentive plans under which the Compensation Committee of the Board of Directors has the authority to grant share-based compensation to TSYS employees.

Stock options generally become exercisable in three equal annual installments on the anniversaries of the date of grant and expire ten years from the date of grant. The required service period for retirement eligible employees is typically 12 or 18 months. For retirement eligible employees who retire prior to completing this required service period, the options vest on a pro-rata basis based upon the number of months employed during the full service period. For retirement eligible employees who retire after the required 18-month service period, the options become fully vested upon retirement. For retirement eligible employees who retire after the required 12-month service period, the option holder is deemed to have continued employment through the end of the vesting period and the options continue to vest in accordance with their terms.

Long-Term Incentive Plans

TSYS maintains the Total System Services, Inc. 2012 Omnibus Plan, Total System Services, Inc. 2007 Omnibus Plan, Total System Services, Inc. 2002 Long-Term Incentive Plan, Total System Services, Inc. 2000 Long-Term Incentive Plan and the Amended and Restated NetSpend Holdings Inc. 2004 Equity Incentive Plan for Options and Restricted Shares Assumed by Total System Services, Inc. to advance the interests of TSYS and its shareholders through awards that give employees and directors a personal stake in TSYS’ growth, development and financial success. Awards under these plans are designed to motivate employees and directors to devote their best efforts to the business of TSYS. Awards will also help TSYS attract and retain the services of employees and directors who are in a position to make significant contributions to TSYS’ success.

The plans are administered by the Compensation Committee of the Company’s Board of Directors and enable the Company to grant nonqualified and incentive stock options, stock appreciation rights, restricted stock and restricted stock units, performance units or performance shares, cash-based awards and other stock-based awards.

All stock options must have a maximum life of no more than ten years from the date of grant. The exercise price will not be less than 100% of the fair market value of TSYS’ common stock at the time of grant. Any shares related to awards which terminate by expiration, forfeiture, cancellation or otherwise without the issuance of such shares, are settled in cash in lieu of shares, or are exchanged with the Committee’s permission, prior to the issuance of shares, for awards not involving shares, shall be available again for grant under the various plans. The aggregate number of shares of TSYS stock which may be granted to participants pursuant to awards granted under the various plans may not exceed the following: Total System Services, Inc. 2012 Omnibus Plan -17 million shares; Total System Services, Inc. 2007 Omnibus Plan -5 million shares; Total System Services, Inc. 2002 Long-Term Incentive Plan -9.4 million shares; and Total System Services, Inc. 2000 Long-Term Incentive Plan -2.4 million shares. Effective February 1, 2010 and March 5, 2012, no additional awards may be made from the Total System Services, Inc. 2000 and 2002 Long-Term Incentive Plans, respectively.

Share-Based Compensation

Share-based compensation costs are classified as selling, general and administrative expenses on the Company’s statements of income and corporate administration and other expenses for segment reporting purposes. TSYS does not include amounts associated with share-based compensation as costs capitalized as software development and contract acquisition costs as these awards are typically granted to individuals not involved in capitalizable activities. For the year ended December 31, 2015, share-based compensation was $41.5 million compared to $30.8 million and $28.9 million for the same periods in 2014 and 2013, respectively.

Nonvested Awards

The Company granted shares of TSYS common stock to certain key employees and non-management members of its Board of Directors. The grants to certain key employees were issued under nonvested stock bonus awards and are typically for services to be provided in the future by such officers and employees. The grants to the Board of Directors were fully vested on the date of grant.

On July 1, 2013, the Company issued 870,361 shares of TSYS common stock as nonvested stock replacement awards with a market value of $21.5 million as part of the NetSpend acquisition. The nonvested stock bonus awards to employees of NetSpend are for services to be provided in the future and vest over varying periods. The NetSpend awards were converted into equivalent shares of Company’s common stock on the acquisition date. The value of the stock at the date of issuance is charged as compensation expense over the vesting periods of the awards.

On July 18, 2013, the Company issued 212,694 retention shares of TSYS common stock with a market value of $5.5 million to certain key employees of NetSpend. The nonvested stock bonus awards to certain key employees are for services to be provided in the future and vest over periods ranging from two to four years. The market value of the TSYS common stock at the date of issuance is charged as compensation expense over the vesting periods of the awards.

The following table summarizes the number of shares granted each year:

	2015		2014		2013
Number of shares		388,211		672,724		1,667,246
Market value (in millions)	$	14.9		20.6		41.3

A summary of the status of TSYS’ nonvested shares as of December 31, 2015, 2014 and 2013 and the changes during the periods are presented below:

	2015					2014					2013
(in thousands, except per share data) Nonvested shares	Shares			Weighted Average Grant-Date Fair Value		Shares			Weighted Average Grant-Date Fair Value		Shares			Weighted Average Grant-Date Fair Value
Outstanding at beginning of year		1,769		$	26.75		1,783		$	24.19		554		$	19.96
Granted1		388			38.38		673			30.67		1,667			24.75
Vested		(930	)		26.05		(602	)		23.74		(328	)		19.95
Forfeited/canceled		(81	)		28.78		(85	)		25.47		(110	)		23.82
Outstanding at end of year		1,146		$	31.11		1,769		$	26.75		1,783		$	24.19

1 Includes the issuance of approximately 870,361 stock replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $21.5 million. A portion of the expense associated with these options has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

As of December 31, 2015, there was approximately $22.8 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements. That cost is expected to be recognized over a remaining weighted average period of 1.9 years.

Performance- and Market-Based Awards

The Company granted performance- and market-based shares to certain key executives. The Company has also granted performance-based shares to certain key employees. The performance- and market-based goals are established by the Compensation Committee of the Board of Directors and will vest, up to a maximum of 200%. During 2015 and 2014, the Compensation Committee established performance goals based on adjusted EPS, revenue growth and revenues before reimbursable items and market goals based on Total Shareholder Return (TSR) as compared to the TSR of the companies in the S&P 500 over the performance period.

Compensation expense for performance shares is measured on the grant date based on the quoted market price of TSYS common stock. The Company estimates the probability of achieving the goals through the performance period and expenses the awards on a straight-line basis. The fair value of market-based awards is estimated on the grant date using a Monte Carlo simulation model. The Company expenses market-based awards on a straight-line basis. Compensation costs related to performance- and market-based shares are recognized through the longer of the performance period or the vesting period. As of December 31, 2015, there was approximately $11.0 million of unrecognized compensation cost related to TSYS performance-based awards that is expected to be recognized through December 2018. As of December 31, 2015, there was approximately $1.5 million of unrecognized compensation cost related to TSYS market-based awards that is expected to be recognized through July 2018.

The following table summarizes the performance- and market-based awards granted during the years 2015, 2014 and 2013:

Year Awarded	Type of Award	Performance Period Ending	Performance Measure	Number of Shares Granted		Period Expensed Through
2015	Market	July 2016, 2017 and 2018	Total Shareholder Return		25,000	July 2018
2015	Performance	December 2017	Adjusted EPS		135,289	December 2017
2015	Market	December 2017	Total Shareholder Return		57,982	December 2017
2015	Performance	December 2015	Revenues before Reimbursable Items and Adjusted EPS		165,543	December 2018
2014	Performance	December 2016	Revenues before Reimbursable Items and Adjusted EPS		211,593	December 2016
2013	Performance	December 2015	NetSpend Revenues and NetSpend Operating Income		87,356	December 2015
2013	Performance	December 2015	Revenues before Reimbursable Items and Income from Continuing Operations		237,679	December 2015

In July 2013, TSYS issued 225,000 shares of TSYS common stock as a performance-based retention stock award to a certain key executive with a performance-based vesting schedule through 2015. This award was forfeited in July 2014. The Company reversed all previously recorded expense associated with this award.

A summary of the awards authorized in each year is below:

	Total Number of Shares Awarded		Potential Number of Performance-and Market-Based Shares to be Vested
2015		383,814		526,879	(2018	)
2014		211,593		211,593	(2017	)
2013		563,803		400,539	(2016	)

A summary of the status of TSYS’ performance- and market-based nonvested shares as of December 31, 2015, 2014 and 2013 and changes during those periods are presented below:

	2015					2014					2013
(in thousands, except per share data) Performance- and market-based Nonvested shares	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Outstanding at beginning of year		766		$	25.86		1,049		$	22.75		809		$	18.76
Granted1		384			36.84		211			30.89		564			24.88
Vested		(241	)		22.92		(258	)		17.57		(324	)		15.93
Forfeited/canceled/adjusted		9			22.20		(236	)		25.62		—			—
Outstanding at end of year		918		$	31.19		766		$	25.86		1,049		$	22.75

1 Includes the issuance of approximately 87,356 stock replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $2.2 million. A portion of the expense associated with these awards has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

Stock Option Awards

During 2015, 2014 and 2013, the Company granted stock options to key TSYS executive officers and non-management members of its Board of Directors. The grants to key TSYS executive officers were issued for services to be provided in the future and vest over a period of three years. The grants to the Board of Directors were fully vested on the date of grant. The average fair value of the options granted was estimated on the date of grant using the Black-Scholes-Merton option-pricing model.

On July 1, 2013, the Company issued 1,060,148 stock option replacement awards with a market value of $13.7 million as part of the NetSpend acquisition. The weighted average fair value of the options was $12.93 and was calculated on the date of grant using a conversion factor into equivalent shares of the Company’s common stock on the acquisition date. The grants vest over a period ranging from seven months to 45 months. The weighted average fair value of the option grants was estimated on the date of grant using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions: exercise price of $11.68; risk-free interest rate of 1.31%; expected volatility of 29.22%; expected term of 4.7 years; and dividend yield of 1.63%.

The following table summarizes the weighted average assumptions, and the weighted average fair value of the options:

	2015			2014			2013
Number of options granted		613,473			1,046,372			1,939,796
Weighted average exercise price	$	39.01		$	30.96		$	17.42
Risk-free interest rate		1.73	%		2.01	%		1.31	%
Expected volatility		20.80	%		25.06	%		26.81	%
Expected term (years)		6.3			6.5			6.0
Dividend yield		1.04	%		1.29	%		1.64	%
Weighted average fair value	$	8.27		$	7.66		$	9.48

A summary of TSYS’ stock option activity as of December 31, 2015, 2014 and 2013, and changes during the years ended on those dates is presented below:

	2015					2014					2013
(in thousands, except per share data)	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Options:
Outstanding at beginning of year		4,892		$	23.83		5,752		$	20.96		6,065		$	21.27
Granted 1		613			39.01		1,046			30.96		1,940			17.42
Exercised		(2,586	)		22.68		(1,850	)		18.79		(2,177	)		18.75
Forfeited/canceled		(32	)		20.79		(56	)		28.88		(76	)		16.78
Outstanding at end of year		2,887		$	28.07		4,892		$	23.83		5,752		$	20.96
Options exercisable at year-end		1,439		$	25.17		2,781		$	22.86		3,232		$	23.02
Weighted average fair value of options granted during the year				$	8.27				$	7.66				$	9.48

1 Includes the issuance of approximately 1.1 million stock option replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $13.7 million. A portion of the expense associated with these awards has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

As of December 31, 2015 the average remaining contractual life and intrinsic value of TSYS’ outstanding and exercisable stock options were as follows:

	Outstanding		Exercisable
Average remaining contractual life (in years)		7.8		7.2
Aggregate intrinsic value (in thousands)	$	62,738		35,434

Shares Issued for Options Exercised

During 2015, 2014 and 2013, employees of the Company exercised options for shares of TSYS common stock that were issued from treasury. The table below summarizes these stock option exercises by year:

(in thousands)	Options Exercised and Issued from Treasury		Intrinsic Value
2015		2,586	$	67,702
2014		1,850		22,883
2013		2,177		16,580

For awards granted before January 1, 2006 that were not fully vested on January 1, 2006, the Company will record the tax benefits from the exercise of stock options as increases to the “Additional paid-in capital” line item of the Consolidated Balance Sheets. If the Company does recognize tax benefits, the Company will record these tax benefits from share-based compensation costs as cash inflows in the financing section and cash outflows in the operating section in the Statement of Cash Flows. The Company has elected to use the short-cut method to calculate its historical pool of windfall tax benefits.

As of December 31, 2015, there was approximately $2.9 million of total unrecognized compensation cost related to TSYS stock options that is expected to be recognized over a remaining weighted average period of 1.5 years.

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Treasury Stock

12 Months Ended

Dec. 31, 2015

Treasury Stock

Note 20 Treasury Stock

The following table summarizes shares held as treasury stock and their related carrying value as of December 31:

(in thousands)	Number of Treasury Shares		Treasury Shares Cost
2015		19,988	$	641,664
2014		17,836		453,230
2013		15,073		326,996

Stock Repurchase Plan

In April 2010, TSYS announced a stock repurchase plan to purchase up to 10 million shares of TSYS stock. The shares may be purchased from time to time over the next two years at prices considered attractive to the Company. By January 2014, the TSYS Board had approved several increases in the number of shares that could be repurchased under its share repurchase plan to up to 28 million shares of TSYS stock. The expiration date of the plan was extended to April 30, 2015. On January 27, 2015, TSYS announced that its Board had approved a new stock repurchase plan to purchase up to 20 million shares of TSYS stock. The shares may be purchased from time to time at prices considered appropriate. There is no expiration date for the plan. The previous plan was terminated.

During 2015, the Company purchased 5.2 million shares for approximately $242.1 million, at an average price of $47.01. During 2014, the Company purchased 5.2 million shares for approximately $165.3 million, at an average price of $31.79. During 2013, the Company purchased 3.1 million shares for approximately $97.6 million, at an average price of $31.48.

The following table sets forth information regarding the Company’s purchases of its common stock on a monthly basis during the three months ended December 31, 2015:

(in thousands, except per share data)	Total Number of Shares Purchased			Average Price Paid per Share		Total Number of Cumulative shares Purchased as Part of Publicly announced Plans or Programs		Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
October 2015		—		$	—		2,150		17,850
November 2015		3,000			52.85		5,150		14,850
December 2015		1	1		49.80		5,150		14,850
Total		3,001		$	52.85

1 Consists of delivery of shares to TSYS on vesting of shares to pay taxes.

Treasury Shares

In 2008, the Compensation Committee approved “share withholding for taxes” for all employee nonvested awards, and also for employee stock options under specified circumstances. The dollar amount of the income tax liability from each exercise is converted into TSYS shares and withheld at the statutory minimum. The shares are added to the treasury account and TSYS remits funds to the Internal Revenue Service to settle the tax liability. During 2015 and 2014, the Company acquired 3,344 shares for approximately $0.2 million and acquired 162,489 shares for approximately $5.2 million, respectively, as a result of share withholding for taxes.

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Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2015

Other Comprehensive Income (Loss)

Note 21 Other Comprehensive Income (Loss)

Comprehensive income (loss) for TSYS consists of net income, cumulative foreign currency translation adjustments, unrealized gains on available for sale securities and the recognition of an overfunded or underfunded status of a defined benefit postretirement plan recorded as a component of shareholders’ equity. The income tax effects allocated to and the cumulative balance of each component of accumulated other comprehensive income (loss) are as follows:

(in thousands)	Beginning Balance			Pretax amount			Tax effect			Net-of-tax Amount			Ending Balance
As of December 31, 2012	$	(445	)		2,272			419			1,853		$	1,408
Foreign currency translation adjustments	$	3,332			(295	)		1,033			(1,328	)	$	2,004
Transfer from NCI		28			—			—			—			28
Gain on available for sale securities		—			2,810			1,037			1,773			1,773
Change in AOCI related to postretirement healthcare plans		(1,952	)		1,926			30			1,896			(56	)
As of December 31, 2013	$	1,408			4,441			2,100			2,341		$	3,749
Foreign currency translation adjustments	$	2,004			(17,143	)		(1,547	)		(15,596	)	$	(13,592	)
Transfer from NCI		28			—			—			—			28
Gain on available for sale securities		1,773			(1,058	)		(390	)		(668	)		1,105
Change in AOCI related to postretirement healthcare plans		(56	)		921			332			589			533
As of December 31, 2014	$	3,749			(17,280	)		(1,605	)		(15,675	)	$	(11,926	)
Foreign currency translation adjustments	$	(13,592	)		(22,997	)		(1,548	)		(21,449	)	$	(35,041	)
Transfer from NCI		28			—			—			—			28
Gain on available for sale securities		1,105			2,177			779			1,398			2,503
Change in AOCI related to postretirement healthcare plans		533			(2,449	)		(882	)		(1,567	)		(1,034	)
As of December 31, 2015	$	(11,926	)		(23,269	)		(1,651	)		(21,618	)	$	(33,544	)

Consistent with its overall strategy of pursuing international investment opportunities, TSYS adopted the permanent reinvestment exception under GAAP, with respect to future earnings of certain foreign subsidiaries. Its decision to permanently reinvest foreign earnings offshore means TSYS will no longer allocate taxes to foreign currency translation adjustments associated with these foreign subsidiaries accumulated in other comprehensive income.

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Segment Reporting, including Geographic Area Data and Major Customers

12 Months Ended

Dec. 31, 2015

Segment Reporting, including Geographic Area Data and Major Customers

Note 22 Segment Reporting, including Geographic Area Data and Major Customers

TSYS provides global 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. Corporate expenses, such as finance, legal, human resources, mergers and acquisitions and investor relations are categorized as Corporate Administration and Other.

In the first quarter of 2014, the Company’s Japan-based entities qualified for discontinued operations treatment.

In July 2013, TSYS completed its acquisition of all the outstanding stock of NetSpend, which previously operated as a publicly traded company. NetSpend’s financial results are included in the NetSpend segment.

Refer to Note 24 for more information on acquisitions.

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 merchants and merchant acquirers. The NetSpend segment provides GPR prepaid debit and payroll cards and alternative financial service solutions to the underbanked and other consumers in the United States.

At TSYS, the chief operating decision maker (CODM) is a group consisting of Senior Executive Management and above. In the first quarter of 2014, the CODM decided that all share-based compensation costs should be included in the category “Corporate Administration and Other” for purposes of segment disclosures. All prior periods were restated to reflect this change. This change is used to evaluate performance and assess resources starting in the first quarter of 2014. The information utilized by the CODM consists of the financial statements and the main metrics monitored are revenue growth and growth in profitability.

Upon completion of the NetSpend acquisition in 2013, the CODM implemented a new metric called adjusted segment operating income in order to analyze each segment’s results of operations. This new metric consists of operating income adjusted for amortization of acquisition related intangibles and corporate administrative and other costs. All periods presented have been adjusted to reflect this new measure. Depreciation and amortization for the segments changed as a result of this new metric removing amortization associated with intangible assets from the total for the segments.

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.

Years Ended December 31,
(in thousands)
Operating Segments	2015			2014			2013
Revenues before reimbursable items
North America Services	$	1,147,254			954,082			860,645
International Services		331,159			341,785			321,484
Merchant Services		474,040			435,649			446,277
NetSpend		580,377			482,686			207,851
Intersegment revenues		(33,481	)		(21,224	)		(12,549	)
Revenues before reimbursable items from external customers	$	2,499,349			2,192,978			1,823,708
Total revenues
North America Services	$	1,334,258			1,117,764			1,000,073
International Services		354,725			363,359			341,549
Merchant Services		549,369			510,120			533,050
NetSpend		580,377			482,686			207,851
Intersegment revenues		(39,188	)		(27,052	)		(18,218	)
Revenues from external customers	$	2,779,541			2,446,877			2,064,305
Depreciation and amortization
North America Services	$	99,544			86,513			74,480
International Services		34,892			38,909			41,708
Merchant Services		18,268			14,571			12,034
NetSpend		10,686			7,509			3,121
Segment depreciation and amortization		163,390			147,502			131,343
Acquisition intangible amortization		92,522			96,971			65,893
Corporate Administration and Other		2,352			2,147			1,790
Total depreciation and amortization	$	258,264			246,620			199,026
Adjusted segment operating income
North America Services	$	429,064			351,512			321,619
International Services		60,087			55,123			42,068
Merchant Services		150,225			134,872			155,643
NetSpend		137,837			128,285			66,353
Total adjusted segment operating income		777,213			669,792			585,683
Acquisition intangible amortization		(92,522	)		(96,971	)		(65,893	)
NetSpend merger and acquisition operating expenses		—			(3,217	)		(14,220	)
Share-based compensation		(41,549	)		(30,790	)		(28,933	)
Corporate Administration and Other		(109,035	)		(107,174	)		(94,137	)
Operating income	$	534,107			431,640			382,500
As of December 31,	2015			2014
Total assets
North America Services	$	3,516,328			3,327,160
International Services		348,714			356,590
Merchant Services		689,781			695,744
NetSpend		1,504,740			1,556,369
Intersegment assets		(2,151,263	)		(2,202,282	)
Total assets	$	3,908,300			3,733,581

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

	As of December 31,
(in thousands)	2015		2014
United States	$	241,814		237,865
Europe		41,953		45,503
Other		6,131		7,217
Totals	$	289,898		290,585

GEOGRAPHIC AREA REVENUE BY OPERATING SEGMENT:    The following tables reconcile segment external revenue to revenues by geography for the years ended December 31:

	2015
(in thousands)	North America Services		International Services		Merchant Services		NetSpend		Total		%
United States	$	981,588		—		548,079		580,377	$	2,110,044		75.9
Europe1		796		303,832		22		—		304,650		11.0
Canada1		288,728		—		355		—		289,083		10.4
Mexico		16,558		—		—		—		16,558		0.6
Other1		18,329		40,198		679		—		59,206		2.1
Total	$	1,305,999		344,030		549,135		580,377	$	2,779,541		100.0

	2014
(in thousands)	North America Services		International Services		Merchant Services		NetSpend		Total		%
United States	$	778,766		—		508,747		482,686	$	1,770,199		72.3
Europe1		781		304,308		—		—		305,089		12.5
Canada		290,248		—		248		—		290,496		11.9
Mexico		16,216		—		—		—		16,216		0.7
Other1		16,305		47,888		684		—		64,877		2.7
Total	$	1,102,316		352,196		509,679		482,686	$	2,446,877		100.0

	2013
(in thousands)	North America Services		International Services		Merchant Services		NetSpend		Total		%
United States	$	712,252		—		533,939		207,851	$	1,454,042		70.4
Europe1		774		293,803		—		—		294,577		14.3
Canada		242,975		—		178		—		243,153		11.8
Mexico		16,513		—		—		—		16,513		0.8
Other1		14,492		40,962		566		—		56,020		2.7
Total	$	987,006		334,764		534,683		207,851	$	2,064,305		100.0

1 Revenues are impacted by movements in foreign currency exchange rates

MAJOR CUSTOMER:    For the years ended December 31, 2015, 2014 and 2013, the Company had no major customers.

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Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2015

Supplemental Cash Flow Information

Note 23 Supplemental Cash Flow Information

Nonvested Share Awards

The Company has issued shares of TSYS common stock to certain key employees and non-management members of its Board of Directors. The grants to certain key employees were issued in the form of nonvested stock bonus awards for services to be provided in the future by such officers and employees. The grants to the Board of Directors were fully vested on the date of grant. Refer to Note 18 for more information on nonvested share awards.

Equipment and Software Acquired Under Capital Lease Obligations

The Company acquired computer equipment and software under capital leases in the amount of $4.1 million, $17.9 million and $14.8 million in 2015, 2014 and 2013, respectively.

Software Acquired Under Direct Financing

The Company acquired software under direct financing in the amount of $30.0 million in 2015. The Company acquired software under direct financing in the amount of $13.6 million in 2014. The Company did not acquire any software under direct financing in 2013. Refer to Note 13 for more information.

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Acquisitions

12 Months Ended

Dec. 31, 2015

Acquisitions

Note 24 Acquisitions

2015

In September 2015, TSYS purchased certain assets for its NetSpend segment for $750,000. The purchase qualifies as a business combination in accordance with GAAP. The Company recorded an acquisition technology intangible asset for the amount of the purchase price. This acquisition intangible asset represents software and is being amortized over a five year life. There were no other material assets included in the purchase. The acquisition included the employment of certain key employees which resulted in the transaction qualifying as a business combination.

2014

In February 2014, the Company acquired an additional 15% equity interest in CPAY from its privately held owner for $37.5 million, which increased its equity interest in CPAY from 60% to 75%. This purchase reduced the remaining redeemable noncontrolling interest in CPAY to 25% of its total outstanding equity.

2013

On July 1, 2013, TSYS acquired all the outstanding stock of NetSpend, which previously operated as a publicly traded company and is a leading provider of GPR prepaid debit and payroll cards and related financial services to underbanked and other consumers in the U.S. The acquisition complements the Company’s existing presence in the prepaid processing space. The results of the newly acquired business are being reported by TSYS as a new operating segment titled NetSpend.

Under the terms of the Merger Agreement, TSYS acquired 100 percent ownership of NetSpend for approximately $1.4 billion, including $1.2 billion of cash to shareholders, $70.7 million of cash for payment to holders of vested stock options and awards, $58.3 million of cash for repayment of NetSpend’s revolving credit facility and $15.6 million in replacement stock options and awards. NetSpend shareholders received $16.00 in cash for each share of NetSpend common stock. There were 1.6 million NetSpend shares held by five shareholders who asserted appraisal (or dissenters’) rights with respect to their NetSpend shares, for a preliminary value of $25.7 million at $16.00 per share that were not funded at the closing of the acquisition. During 2014, TSYS paid $38.6 million to dissenting shareholders to settle the lawsuit.

Under the terms of the Merger Agreement, the Company replaced unvested share-based awards for certain current employees of NetSpend. The following table provides a list of all replacement awards and the estimated fair value of those awards issued in conjunction with the acquisition of NetSpend:

	Number of Shares and Options Issued		Fair Value (in millions)
Time-based restricted stock		870,361	$	21.5
Non-qualified stock options		530,696		8.4
Incentive stock options		529,452		5.3
Performance-based restricted stock		87,356		2.2
Total		2,017,865	$	37.4

The portion of the fair value of the replacement awards related to services provided prior to the business combination was included in the total purchase price. The portion of the fair value associated with future service is recognized as expense over the future service period, which varies by award. The Company determined that $15.6 million ($11.1 million net of tax) of the replacement awards was related to services rendered prior to the business combination.

The goodwill amount of $1.0 billion arising from the acquisition consists largely of expansion of customer base, differentiation in market opportunity and economies of scale expected from combining the operations of TSYS and NetSpend. All of the goodwill was assigned to TSYS’ new NetSpend segment. The goodwill recognized is not expected to be deductible for income tax purposes.

The following table summarizes the consideration paid for NetSpend and the initially recognized amounts of the identifiable assets acquired and liabilities assumed on July 1, 2013 (the acquisition date).

(in thousands)
Consideration
Cash	$	1,355,270
Equity instruments		15,557
Dissenting shareholder liability*		25,723
Fair value of total consideration transferred	$	1,396,550
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	40,610
Accounts receivable		11,335
Property equipment and software		11,657
Identifiable intangible assets		480,086
Deferred tax asset		10,165
Other assets		36,660
Deferred tax liability		(155,945	)
Financial liabilities		(62,452	)
Total identifiable net assets		372,116
Goodwill		1,024,434
	$	1,396,550

* Represents 1.6 million NetSpend shares held by dissenting shareholders

In 2015, the Company adjusted goodwill for NetSpend to include an additional $627,000 for a change in a sales and use tax reserve associated with the acquisition. As of December 31, 2014, goodwill related to NetSpend increased $8.5 million due to changes during the measurement period. For more information, refer to Note 7.

Identifiable intangible assets acquired in the NetSpend acquisition include channel relationships, current technology, a prospect database, the NetSpend trade name and non-compete agreements.

The identifiable intangible assets had no significant estimated residual value. These intangible assets are being amortized over their estimated useful lives of five to eight years based on the pattern of expected future economic benefit, which approximates a straight-line basis over the useful lives of the assets. The fair value of the acquired identifiable intangible assets of $480.1 million was estimated using the income approach (discounted cash flow and relief from royalty methods) and cost approach. The fair values and useful lives of the identified intangible assets were primarily determined using forecasted cash flows, which included estimates for certain assumptions such as revenues, expenses, attrition rates and royalty rates.

The estimated fair value of identifiable intangible assets acquired in the acquisitions and the related estimated weighted average useful lives are as follows:

(in thousands)	Fair Value		Weighted Average Useful Life (in years)
Channel relationships	$	317,000		8.0
Current technology		78,711		7.0
Trade name		44,000		5.0
Database		28,000		5.0
Covenants-not-to-compete		11,500		6.0
Favorable lease		875		4.9
Total acquired identifiable intangible assets	$	480,086		7.3

The fair value measurement of the identifiable intangible assets represents Level 2 and Level 3 measurements. Key assumptions include (a) cash flow projections based on market participant and internal data, (b) a discount rate of 11%, (c) a pre-tax royalty rate range of 2.5-7.0%, (d) attrition rates of 5%-40%, (e) an effective tax rate of 40%, and (f) a terminal value based on a long-term sustainable growth rate of 3%.

In connection with the acquisition, TSYS incurred $3.2 million and $14.2 million in acquisition-related costs primarily related to professional legal, finance, and accounting costs for the years ended December 31, 2014 and 2013, respectively. These costs were expensed as incurred and are included in selling, general and administrative expenses on the income statement.

Pro Forma Results of Operations

The amounts of NetSpend revenue and earnings included in TSYS’ consolidated income statement for the year ended December 31, 2013, and the pro forma revenue and earnings of the combined entity had the acquisition date been January 1, 2013 are:

	Actual		Supplemental pro forma
	Year Ended December 31 ,2013		Year Ended December 31, 2013
(in thousands, except per share data)
Revenue	$	2,064,305		2,286,348
Net income attributable to TSYS common shareholders	$	244,750		239,775
Basic EPS attributable to TSYS common shareholders	$	1.30		1.28
Diluted EPS attributable to TSYS common shareholders	$	1.29		1.27

The unaudited pro forma financial information presented above does not purport to represent what the actual results of operations would have been if the acquisition of NetSpend’s operations had occurred prior to January 1, 2013, nor is it indicative of the future operating results of TSYS. The unaudited pro forma financial information does not reflect the impact of future events that may occur after the acquisition, including, but not limited to, anticipated cost savings from operating synergies.

The unaudited pro forma financial information presented in the table above has been adjusted to give effect to adjustments that are (1) directly related to the business combination; (2) factually supportable; and (3) expected to have a continuing impact. These adjustments include, but are not limited to, the application of accounting policies; and depreciation and amortization related to fair value adjustments to property, plant and equipment and intangible assets.

The pro forma adjustments do not reflect the following material items that result directly from the acquisition and which impacted the statement of operations following the acquisition:

• Acquisition and related financing transactions costs relating to fees to investment bankers, attorneys, accountants, and other professional advisors, and other transaction-related costs that were not capitalized as deferred financing costs; and

• The effect of anticipated cost savings or operating efficiencies expected to be realized and related restructuring charges such as technology and infrastructure integration expenses, and other costs related to the integration of NetSpend into TSYS.

Redeemable Noncontrolling Interest

The fair value of the noncontrolling interest in CPAY, owned by a private company, was based on the actual purchase price paid for the controlling interest in CPAY. Next, adjustments were made for lack of control and lack of marketability that market participants would consider when estimating the fair value of the noncontrolling, non-marketable interest in CPAY.

In connection with the acquisition of CPAY, the Company is party to call and put arrangements with respect to the membership units that represent the remaining noncontrolling interest of CPAY. The call arrangement is exercisable by TSYS and the put arrangement is exercisable by the Seller. The put arrangement is outside the control of the Company by requiring the Company to purchase the Seller’s entire equity interest in CPAY at a put price at fair market value. At the time of the original acquisition, the redemption of the put option was considered probable based upon the passage of time of the second anniversary date. The put arrangement is recorded on the balance sheet and is classified as redeemable noncontrolling interest outside of permanent equity.

In February 2014, the Company purchased an additional 15% equity interest in CPAY for $37.5 million, reducing its redeemable noncontrolling interest in CPAY to 25%. As a result of this transaction, the call and put arrangements for CPAY, representing 25% of its total outstanding equity interests, were extended and may now be exercised at the discretion of TSYS or the Seller on the third anniversary of the closing of the additional purchase and upon the recurrence of certain other specified events.

The put option is not currently redeemable, but redemption is considered probable based upon the passage of time of the third anniversary date of the 2014 purchase of additional equity. As such, the Company has adopted the accounting policy to accrete changes in the redemption value over the period from the date of issuance to the earliest redemption date, which the Company believes to be in 2017. If the put option was redeemable as of December 31, 2015, the redemption value was estimated to be approximately $23.4 million. The Company did not accrete any changes to the redemption value as the balance as of December 31, 2015 exceeded the accretion fair value amount.

Pro forma Results of Operations

The pro forma revenue and earnings of TSYS’ acquisitions other than NetSpend are not material to the consolidated financial statements.

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Collaborative Arrangement

12 Months Ended

Dec. 31, 2015

Collaborative Arrangement

Note 25 Collaborative Arrangement

TSYS has a 45% ownership interest in an enterprise jointly owned with two other entities which operates aircraft for the owners’ internal use. The arrangement allows each entity access to the aircraft and each entity pays for its usage of the aircraft. Each quarter, the net operating costs of the enterprise are shared among the owners based on their respective ownership percentage.

TSYS records its usage of the aircraft and its share of net operating costs of the enterprise in selling, general and administrative expenses.

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Earnings Per Share

12 Months Ended

Dec. 31, 2015

Earnings Per Share

Note 26 Earnings Per Share

The following table illustrates basic and diluted EPS under the guidance of GAAP for the years ended December 31, 2015, 2014 and 2013:

	2015					2014					2013
(in thousands, except per share data)	Common Stock			Participating Securities		Common Stock			Participating Securities		Common Stock			Participating Securities
Basic EPS:
Net income	$	364,044				$	322,872				$	244,750
Less income allocated to nonvested awards		(3,164	)		3,164		(3,308	)		3,308		(1,595	)		1,595
Net income allocated to common stock for EPS calculation(a)	$	360,880			3,164	$	319,564			3,308	$	243,155			1,595
Average common shares outstanding(b)		182,465			1,617		184,297			1,925		187,145			1,246
Basic EPS(a)/(b)	$	1.98			1.96	$	1.73			1.72	$	1.30			1.28
Diluted EPS:
Net income	$	364,044				$	322,872				$	244,750
Less income allocated to nonvested awards		(3,148	)		3,148		(3,288	)		3,288		(1,585	)		1,585
Net income allocated to common stock for EPS calculation(c)	$	360,896			3,148	$	319,584			3,288	$	243,165			1,585
Average common shares outstanding		182,465			1,617		184,297			1,925		187,145			1,246
Increase due to assumed issuance of shares related to common equivalent shares outstanding		1,157					1,459					1,648
Average common and common equivalent shares outstanding(d)		183,622			1,617		185,756			1,925		188,793			1,246
Diluted EPS(c)/(d)	$	1.97			1.95	$	1.72			1.71	$	1.29			1.27

The diluted EPS calculation excludes stock options and nonvested awards that are convertible into 0.6 million, 1.1 million and 2.9 million common shares for the years ended December 31, 2015, 2014 and 2013, respectively, because their inclusion would have been anti-dilutive.

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Subsequent Events

12 Months Ended

Dec. 31, 2015

Subsequent Events

Note 27 Subsequent Events

Agreement to Acquire Capital Stock of TransFirst Holdings, Corp.

On January 26, 2016, TSYS announced it entered into a definitive agreement with Vista Equity Partners Fund V, L.P. and certain related funds (collectively, “Vista”) to acquire TransFirst Holding, Corp. (“TransFirst”), a Vista portfolio company and leading U S. merchant solutions provider, in an all-cash transaction valued at approximately $2.35 billion. The Company intends to finance the TransFirst acquisition with cash on hand and approximately $2.4 billion of additional indebtedness. In connection with the transaction, the Company entered into a commitment letter with certain of its lenders to provide a $2.0 billion bridge term loan facility (the “Bridge Term Loan Facility”) to finance the TransFirst acquisition to the extent the Company has not obtained alternative financing before the closing of the transaction. The transaction is currently expected to close in the second quarter of 2016 and is subject to regulatory approvals and other customary closing conditions. For additional information regarding the transaction, see TSYS’ Current Reports on Form 8-K filed on January 26, 2016 and January 27, 2016, which include the press release announcing the transaction, the stock purchase agreement for the transaction and the commitment letter for the Bridge Term Loan Facility. There can be no assurance that the proposed acquisition will be completed, or if it is completed, that the expected benefits of the transaction will be realized.

Entry into Credit Agreement

On February 23, 2016, TSYS entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent and L/C Issuer, Bank of America, N.A., as Syndication Agent and L/C Issuer, The Bank of Tokyo-Mitsubishi UFJ, LTD., U.S. Bank National Association and Wells Fargo Bank, National Association, as Co-Documentation Agents, and the other lenders party thereto, with J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, The Bank of Tokyo-Mitsubishi UFJ, LTD., U.S. Bank National Association and Wells Fargo Securities, LLC as joint lead arrangers and joint bookrunners. The Credit Agreement provides TSYS with a $700 million five-year term loan facility broken consisting of (i) a $300 million term loan (the “Refinancing Term Loan”) funded upon entry into the Credit Agreement and (ii) a $400 million term loan (the “Delayed Draw Term Loan”). The Credit Agreement also provides TSYS with a $800 million unsecured revolving credit facility (the “Revolving Credit Facility”), which includes a $50 million sub-facility for the issuance of standby letters of credit.

The Refinancing Term Loan was used to repay in full TSYS’ outstanding loans and other obligations under that certain Credit Agreement, dated as of September 10, 2012, by and among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent thereunder, as amended, and that certain Credit Agreement, dated as of April 8, 2013, by and among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent thereunder, as amended. The Delayed Draw Term Loan will be available to be drawn to finance, in part, the TransFirst acquisition and related transactions, upon satisfaction of a limited set of conditions precedent. The Revolving Loan Facility will be available for draws for purposes of working capital and other general corporate purposes, including to finance, in part, the TransFirst acquisition and related transactions upon satisfaction of a limited set of conditions precedent.

Upon entering into the Credit Agreement, the total commitments under the Bridge Term Loan Facility were reduced from $2.0 billion to $1.15 billion by the amount of the Delayed Draw Term Loan commitment and the portion of the Revolving Loan Facility commitments in excess of $350 million.

For additional information regarding the Credit Agreement, see TSYS’ Current Report on Form 8-K filed on February 23, 2016.

Management performed an evaluation of the Company’s activity as of the date these audited financial statements were issued, and has concluded that, other than as set forth above, there are no significant subsequent events requiring disclosure.

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2015

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION:    The accompanying consolidated financial statements, which are prepared in accordance with generally accepted accounting principles (GAAP) include the accounts of TSYS and its wholly- and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In addition, the Company evaluates its relationships with other entities to identify whether they are variable interest entities and to assess whether it is the primary beneficiary of such entities. If the determination is made that the Company is the primary beneficiary, then that entity is included in the consolidated financial statements.

RISKS AND UNCERTAINTIES AND USE OF ESTIMATES

RISKS AND UNCERTAINTIES AND USE OF ESTIMATES:    Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, lower than anticipated growth from existing clients, an inability to attract new clients and grow internationally, loss of a major customer or other significant client, loss of a major supplier, an inability to grow through acquisitions or successfully integrate acquisitions, an inability to control expenses, technology changes, the impact of the application of and/or changes in accounting principles, financial services consolidation, changes in regulatory requirements, a decline in the use of cards as a payment mechanism, disruption of the Company’s international operations, breach of the Company’s security systems, a decline in the financial stability of the Company’s clients and uncertain economic conditions. Negative developments in these or other risk factors could have a material adverse effect on the Company’s financial position, results of operations and cash flows.

The Company has prepared the accompanying consolidated financial statements in conformity with U.S. GAAP. The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. These estimates and assumptions are developed based upon all information available. Actual results could differ from estimated amounts.

ACQUISITIONS - PURCHASE PRICE ALLOCATION

ACQUISITIONS — PURCHASE PRICE ALLOCATION:    TSYS’ purchase price allocation methodology requires the Company to make assumptions and to apply judgment to estimate the fair value of acquired assets and liabilities. TSYS estimates the fair value of assets and liabilities based upon appraised market values, the carrying value of the acquired assets and widely accepted valuation techniques, including discounted cash flows and market multiple analyses. Management determines the fair value of fixed assets and identifiable intangible assets such as developed technology or customer relationships, and any other significant assets or liabilities. TSYS adjusts the purchase price allocation, as necessary, up to one year after the acquisition closing date as TSYS obtains more information regarding asset valuations and liabilities assumed. Unanticipated events or circumstances may occur which could affect the accuracy of the Company’s fair value estimates, including assumptions regarding industry economic factors and business strategies, and result in an impairment or a new allocation of purchase price.

Given its history of acquisitions, TSYS may allocate part of the purchase price of future acquisitions to contingent consideration as required by GAAP for business combinations. The fair value calculation of contingent consideration will involve a number of assumptions that are subjective in nature and which may differ significantly from actual results. TSYS may experience volatility in its earnings to some degree in future reporting periods as a result of these fair value measurements.

CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS:    Cash on hand and investments with a maturity of three months or less when purchased are considered to be cash equivalents.

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE:    Accounts receivable balances are stated net of allowances for doubtful accounts, billing adjustments and merchant losses.

TSYS records an allowance for doubtful accounts when it is probable that the accounts receivable balance will not be collected. When estimating the allowance for doubtful accounts, the Company takes into consideration such factors as its day-to-day knowledge of the financial position of specific clients, the industry and size of its clients, the overall composition of its accounts receivable aging, prior history with specific customers of accounts receivable write-offs and prior experience of allowances in proportion to the overall receivable balance. This analysis includes an ongoing and continuous communication with its largest clients and those clients with past due balances. A financial decline of any one of the Company’s large clients could have a material adverse effect on collectability of receivables and thus the adequacy of the allowance for doubtful accounts.

Increases in the allowance for doubtful accounts are recorded as charges to bad debt expense and are reflected in selling, general and administrative expenses in the Company’s Consolidated Statements of Income. Write-offs of uncollectible accounts are charged against the allowance for doubtful accounts.

TSYS records an allowance for billing adjustments for actual and potential billing discrepancies. When estimating the allowance for billing adjustments, the Company considers its overall history of billing adjustments, as well as its history with specific clients and known disputes. Increases in the allowance for billing adjustments are recorded as a reduction of revenues in the Company’s Consolidated Statements of Income and actual adjustments to invoices are charged against the allowance for billing adjustments.

TSYS records a provision for merchant losses. When estimating the provision for merchant losses, the Company considers historical loss rates. Increases in the provision for merchant losses are charged to expense and are reflected in cost of services expenses in the Company’s Consolidated Statements of Income. Write-offs of uncollectible amounts are charged against the provision for merchant losses.

UP-FRONT DISTRIBUTOR PAYMENTS

UP-FRONT DISTRIBUTOR PAYMENTS:    The Company makes up-front contractual payments to third-party distribution partners. The Company assesses each up-front payment to determine whether it meets the criteria of an asset as defined by U.S. GAAP. If these criteria are met, the Company capitalizes the up-front payment and recognizes the capitalized amount as expense ratably over the benefit period, which is generally the contract period. If the contract requires the distributor to perform specific acts (i.e. achieve a sales goal) and no other conditions exist for the distributor to earn or retain the up-front payment, then the Company capitalizes the payment and recognizes it as an expense when the performance conditions have been met. Up-front distributor payments are classified on the Consolidated Balance Sheet as other non-current assets and recorded as a cost of services in the Consolidated Statements of Income.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT:    Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Buildings and improvements are depreciated over estimated useful lives of 5-40 years, computer and other equipment over estimated useful lives of 2-5 years, and furniture and other equipment over estimated useful lives of 3-15 years. The Company evaluates impairment losses on long-lived assets used in operations in accordance with the provisions of GAAP. All ordinary repairs and maintenance costs are expensed as incurred. Maintenance costs that extend the asset life are capitalized and amortized over the remaining estimated life of the asset.

LICENSED COMPUTER SOFTWARE

LICENSED COMPUTER SOFTWARE:    The Company licenses software that is used in providing services to clients. Licensed software is obtained through perpetual licenses, term licenses, site licenses and through agreements based on processing capacity. Perpetual and site licenses are amortized using the straight-line method over their estimated useful lives which range from three to ten years. Term licenses are amortized over the term of the agreement. Mainframe software that is licensed based on processing capacity is amortized using a units-of-production basis over the estimated useful life of the software, generally not to exceed ten years. At each balance sheet date, the Company evaluates impairment losses on long-lived assets used in operations in accordance with GAAP.

ACQUISITION TECHNOLOGY INTANGIBLES

ACQUISITION TECHNOLOGY INTANGIBLES:    These identifiable intangible assets are software technology assets resulting from acquisitions. These assets are amortized using the straight-line method over periods not exceeding their estimated useful lives, which range from five to nine years. GAAP requires that intangible assets with estimated useful lives be amortized over their respective estimated useful lives to their residual values, and reviewed for impairment. Acquisition technology intangibles’ net book values are included in computer software, net in the accompanying balance sheets. Amortization expenses are charged to cost of services in the Company’s Consolidated Statements of Income.

SOFTWARE DEVELOPMENT COSTS

SOFTWARE DEVELOPMENT COSTS:    Software development costs are capitalized once technological feasibility of the software product has been established. Costs incurred prior to establishing technological feasibility are expensed as incurred. Technological feasibility is established when the Company has completed a detailed program design and has determined that a product can be produced to meet its design specifications, including functions, features and technical performance requirements. Capitalization of costs ceases when the product is generally available to clients. At each balance sheet date, the Company evaluates the unamortized capitalized costs of software development as compared to the net realizable value of the software product which is determined by future undiscounted net cash flows. The amount by which the unamortized software development costs exceed the net realizable value is written off in the period that such determination is made. Software development costs are amortized using the straight-line method over its estimated useful life, which ranges from three to ten years.

The Company also develops software that is used internally. These software development costs are capitalized in accordance with GAAP. Internal-use software development costs are capitalized once: (1) the preliminary project stage is completed, (2) management authorizes and commits to funding a computer software project, and (3) it is probable that the project will be completed and the software will be used to perform the function intended. Costs incurred prior to meeting the qualifications are expensed as incurred. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. Internal-use software development costs are amortized using the straight-line method over its estimated useful life which ranges from three to ten years.

Software development costs may become impaired in situations where development efforts are abandoned due to the viability of the planned project becoming doubtful or due to technological obsolescence of the planned software product.

CONTRACT ACQUISITION COSTS

CONTRACT ACQUISITION COSTS:    The Company capitalizes contract acquisition costs related to signing or renewing long-term contracts and costs related to cash payments for rights to provide processing services. The Company capitalizes internal conversion costs in accordance with GAAP. All costs incurred prior to a signed agreement are expensed as incurred.

Contract acquisition costs are amortized using the straight-line method over the expected customer relationship (contract term) beginning when the client’s cardholder accounts are converted and producing revenues. The amortization of contract acquisition costs associated with cash payments for client incentives is included as a reduction of revenues in the Company’s Consolidated Statements of Income. The amortization of contract acquisition costs associated with conversion activity is recorded as cost of services in the Company’s Consolidated Statements of Income.

The Company evaluates the carrying value of contract acquisition costs associated with each customer for impairment on the basis of whether these costs are fully recoverable from either contractual minimum fees (contractual costs) or from expected undiscounted net operating cash flows of the related contract (cash incentives paid). The determination of expected undiscounted net operating cash flows requires management to make estimates. These costs may become impaired with the loss of a contract, the financial decline of a client, termination of conversion efforts after a contract is signed, diminished prospects for current clients or if the Company’s actual results differ from its estimates of future cash flows. The amount of the impairment is written off in the period that such a determination is made.

EQUITY INVESTMENTS

EQUITY INVESTMENTS:    TSYS’ 49% investment in Total System Services de México, S.A. de C.V. (TSYS de México), an electronic payment processing support operation located in Toluca, Mexico, is accounted for using the equity method of accounting, as is TSYS’ 44.56% investment in China UnionPay Data Co., Ltd. (CUP Data) headquartered in Shanghai, China. TSYS’ equity investments are recorded initially at cost and subsequently adjusted for equity in earnings, cash contributions and distributions, and foreign currency translation adjustments.

GOODWILL

GOODWILL:    Goodwill results from the excess of cost over the fair value of net assets of businesses acquired. Goodwill and intangible assets with indefinite useful lives are tested for impairment at least annually. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values. Equity investment goodwill, which is not reported as goodwill in the Company’s Consolidated Balance Sheet, but is reported as a component of the equity investment, was $49.4 million as of December 31, 2015.

OTHER INTANGIBLE ASSETS

OTHER INTANGIBLE ASSETS:    Identifiable intangible assets relate primarily to customer relationships, databases, channel relationships, covenants-not-to-compete, trade names and trade associations resulting from acquisitions. These identifiable intangible assets are amortized using the straight-line method over periods not exceeding the estimated useful lives, which range from three to ten years. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with GAAP. Amortization expenses are charged to selling, general and administrative expenses in the Company’s Consolidated Statements of Income.

FAIR VALUES OF FINANCIAL INSTRUMENTS

FAIR VALUES OF FINANCIAL INSTRUMENTS:    The Company uses financial instruments in the normal course of its business. The carrying values of cash equivalents, accounts receivable, accounts payable, accrued salaries and employee benefits, and other current liabilities approximate their fair value due to the short-term maturities of these assets and liabilities. The fair value of the Company’s long-term debt and obligations under capital leases is not significantly different from its carrying value.

Investments in equity investments are accounted for using the equity method of accounting and pertain to privately held companies for which fair value is not readily available. The Company believes the fair values of its investments in equity investments exceed their respective carrying values.

IMPAIRMENT OF LONG-LIVED ASSETS

IMPAIRMENT OF LONG-LIVED ASSETS:    The Company reviews long-lived assets, such as property and equipment and intangibles subject to amortization, including contract acquisition costs and certain computer software, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If upon a triggering event the Company determines that the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.

TRANSACTION PROCESSING PROVISIONS

TRANSACTION PROCESSING PROVISIONS:    The Company has recorded an accrual for contract contingencies (performance penalties) and processing errors. A significant number of the Company’s contracts with large clients contain service level agreements which can result in TSYS incurring performance penalties if contractually required service levels are not met. When providing for these accruals, the Company takes into consideration such factors as the prior history of performance penalties and processing errors incurred, actual contractual penalties inherent in the Company’s contracts, progress towards milestones and known processing errors not covered by insurance. As of December 31, 2015, the Company had transaction processing provision of $6.5 million. These accruals are included in other current liabilities in the accompanying Consolidated Balance Sheets. Increases and decreases in transaction processing provisions are charged to cost of services in the Company’s Consolidated Statements of Income, and payments or credits for performance penalties and processing errors are charged against the accrual.

PROVISION FOR CARDHOLDER LOSSES

PROVISION FOR CARDHOLDER LOSSES:    The Company is exposed to losses due to cardholder fraud, payment defaults and other forms of cardholder activity as well as losses due to non-performance of third parties who receive cardholder funds for transmittal to the Issuing Banks (banks that issue MasterCard International or Visa USA, Inc. branded cards to customers). The Company establishes a reserve for the losses it estimates will arise from processing customer transactions, debit card overdrafts, chargebacks for unauthorized card use and merchant-related chargebacks due to non-delivery of goods and services. These reserves are established based upon historical loss and recovery rates and cardholder activity for which specific losses can be identified. The provision for cardholder losses was approximately $9.4 million as of December 31, 2015. The charges to provisions for cardholder losses are included in cost of services in the Consolidated Statements of Income. The Company regularly updates its reserve estimate as new facts become known and events occur that may impact the settlement or recovery of losses.

PROVISION FOR MERCHANT LOSSES

PROVISION FOR MERCHANT LOSSES:    The Company has potential liability for losses resulting from disputes between a cardholder and a merchant that arise as a result of, among other things, the cardholder’s dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer by the card-issuing bank and charged to the merchant. If the merchant is unable to fund the refund, TSYS must do so. TSYS also bears the risk of reject losses arising from the fact that TSYS collects fees from its merchants on the first day after the monthly billing period. If the merchant has gone out of business during such period, TSYS may be unable to collect such fees. TSYS maintains cash deposits or requires the pledge of a letter of credit from certain merchants, generally those with higher average transaction size where the card is not present when the charge is made or the product or service is delivered after the charge is made, in order to offset potential contingent liabilities such as chargebacks and reject losses that would arise if the merchant went out of business. Most chargeback and reject losses are charged to cost of services as they are incurred. However, the Company also maintains a provision against losses, including major fraud losses, which are both less predictable and involve larger amounts. The loss provision was established using historical loss rates, applied to recent bankcard processing volume. As of December 31, 2015, the Company had a merchant loss provision in the amount of $1.3 million.

REDEEMABLE NONCONTROLLING INTEREST

REDEEMABLE NONCONTROLLING INTEREST:    In connection with the acquisition of Central Payment Co., LLC (CPAY), the Company is party to call and put arrangements with respect to the membership units that represent the remaining noncontrolling interest of CPAY. The call arrangement is exercisable by TSYS and the put arrangement is exercisable by the seller. The put arrangement is outside the control of the Company by requiring the Company to purchase the seller’s entire equity interest in CPAY at a put price at fair value. The put arrangement is recorded on the balance sheet and is classified as redeemable noncontrolling interest outside of permanent equity.

FOREIGN CURRENCY TRANSLATION

FOREIGN CURRENCY TRANSLATION:    The Company maintains several different foreign operations whose functional currency is their local currency. Foreign currency financial statements of the Company’s Mexican and Chinese equity investments, the Company’s wholly-owned subsidiaries and the Company’s majority-owned subsidiaries, as well as the Company’s division and branches in the United Kingdom and China, are translated into U.S. dollars at current exchange rates, except for revenues, costs and expenses, and net income which are translated at the average exchange rates for each reporting period. Net gains or losses resulting from the currency translation of assets and liabilities of the Company’s foreign operations, net of tax when applicable, are accumulated in a separate section of shareholders’ equity titled accumulated other comprehensive income (loss). Gains and losses on transactions denominated in currencies other than the functional currencies are included in determining net income for the period in which exchange rates change.

TREASURY STOCK

TREASURY STOCK:    The Company uses the cost method when it purchases its own common stock as treasury shares or issues treasury stock upon option exercises and displays treasury stock as a reduction of shareholders’ equity.

REVENUE RECOGNITION

REVENUE RECOGNITION:    Revenue is recognized when it is realized or realizable and earned, which is deemed to occur when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been performed; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. The Company accrues for rights of refund, processing errors or penalties, or other related allowances based on historical experience.

The Company’s North America and International Services revenues are derived from long-term processing contracts with financial and nonfinancial institutions and are generally recognized as the services are performed. Payment processing services revenues are generated primarily from charges based on the number of accounts on file, transactions and authorizations processed, statements mailed, cards embossed and mailed and other processing services for cardholder accounts on file. Most of these contracts have prescribed annual revenue minimums, penalties for early termination, and service level agreements which may impact contractual fees if certain service levels are not achieved.

Revenue is recognized as the services are performed, primarily on a per unit basis. Processing contracts generally range from three to ten years in length. When providing payment processing services, the Company frequently enters into customer arrangements to provide multiple services that may also include conversion or implementation services, business process outsourcing services such as call center services, web-based services, and other payment processing-related services. Revenue for these services is generally recognized as they are performed on a per unit basis each month or ratably over the term of the contract.

The Company’s Merchant Services revenues are partially derived from relationships with thousands of individual merchants. Additionally, part of the revenues are derived from long-term processing contracts with large financial institutions, other merchant acquirers and merchant organizations which generally range from three to eight years and provide for penalties for early termination. Merchant services revenue is generated primarily from processing all payment forms including credit, debit, electronic benefits transfer and check truncation for merchants of all sizes across a wide array of retail market segments. The products and services offered include authorization and capture of electronic transactions, clearing and settlement of electronic transactions, information reporting services related to electronic transactions, merchant billing services, and point-of-sale terminal services. Revenue is recognized for merchant services as those services are performed, primarily measured on a per unit basis. When providing merchant processing services, the Company frequently enters into customer arrangements to provide multiple services that may also include conversion or implementation services, business process outsourcing services such as call center services, terminal services, and other merchant processing-related services. Revenue for these services is generally recognized as they are performed on a per unit basis each month or ratably over the term of the contract. Revenues on point-of-sale terminal equipment are recognized upon the transfer of ownership and shipment of product.

When a sale involves multiple deliverables, revenue recognition is affected by the determination of the number of deliverables in an arrangement, whether those deliverables may be separated into multiple units of accounting, and the standalone selling price of each unit of accounting which affects the amount of revenue allocated to each unit. Pursuant to Accounting Standards Codification (ASC) 605 ”Revenue Recognition,” the Company uses vendor-specific objective evidence of the standalone selling price (VSOE) of its services when it exists to determine the amount of revenue to allocate to each unit of accounting. The Company establishes VSOE using the price charged when the same service is sold separately (on a standalone basis). In certain situations, the Company does not have sufficient VSOE. In these situations, TSYS considers whether sufficient third party evidence (TPE) of standalone selling price exists for the Company’s services. However, the Company typically is not able to determine TPE and has not used this measure of selling price due to the unique and proprietary nature of some of its services and the inability to reliably verify relevant standalone third party prices. When there is insufficient evidence of VSOE and TPE, the Company has made its best estimate of the standalone selling price (ESP) of that service for purposes of allocating revenue to each unit of accounting. When determining ESP, TSYS uses limited standalone sales data that do not meet the Company’s criteria to establish VSOE, management pricing strategies, residual selling price data when VSOE exists for a group of elements, the cost of providing the services and the related margin objectives. Consideration is also given to geographies in which the services are sold or delivered, customer classifications, and market conditions including competitor pricing strategies and benchmarking studies. Revenue is recognized when the revenue recognition criteria for each unit of accounting have been met.

As business and service offerings change in the future, the determination of the number of deliverables in an arrangement and related units of accounting and the future pricing practices may result in changes in the estimates of VSOE and ESP, which may change the ratio of fees allocated to each service or unit of accounting in a given customer arrangement. There were no material changes or impact to revenue for current contractual arrangements in the year ended December 31, 2015 due to any changes in the determination of the number of deliverables in an arrangement, units of accounting, or estimates of VSOE or ESP.

In many situations, the Company enters into arrangements with customers to provide conversion or implementation services in addition to processing services where the conversion or implementation services do not have standalone value. For these arrangements, conversion or implementation services that do not have standalone value, are recognized over the expected customer relationship (contract term) as the related processing services are performed.

The Company’s other services generally have standalone value and constitute separate units of accounting for revenue recognition purposes. Customer arrangements entered into prior to 2011 (prior to the adoption of Accounting Standards Update (ASU) 2009-13 “Multiple-Deliverable Revenue Arrangements,” an update to ASC Topic 605 “Revenue Recognition,” and formerly known as EITF 08-1, “Revenue Arrangements with Multiple Deliverables”) often included services for which sufficient objective and reliable evidence of fair value did not exist. In these situations, the deliverables were combined and recognized as a single unit of accounting based on the proportional performance for the combined unit. For pre-2011 arrangements that have not expired, have not been materially modified or amended, or terminated, the Company continues to recognize revenue in accordance with these policies in the accompanying financial statements. Beginning in 2011, services in new or materially modified arrangements of this nature were divided into separate units of accounting and revenue is now allocated to each unit of accounting based on the relative selling price method as disclosed above. As the services in the pre-2011 arrangements are generally delivered over the same term with consistent patterns of performance, there is no material difference in the timing or pattern of revenue recognition for each group of arrangements (pre-2011 arrangements and those new or materially modified thereafter).

The Company’s multiple element arrangements may include one or more elements that are subject to other topics including software revenue recognition and leasing guidance. The consideration for these multiple element arrangements is allocated to each group of deliverables — those subject to ASC 605-25 and those subject to other topics based on the revised guidance in ASU 2009-13. Arrangement revenue for each group of deliverables is then further separated, allocated, and recognized based on applicable guidance.

The Company’s NetSpend revenues principally consist of a portion of the service fees and interchange revenues received by the Issuing Banks in connection with the programs NetSpend manages. Revenue is recognized when there is persuasive evidence of an arrangement, the relevant services have been rendered, the price is fixed or determinable and collectability is reasonably assured.

Cardholders are charged fees in connection with NetSpend’s products and services as follows:

• Transactions — Cardholders are typically charged a fee for each PIN and signature-based purchase transaction made using their GPR cards, unless the cardholder is on a monthly or annual service plan, in which case the cardholder is instead charged a monthly or annual subscription fee, as applicable. Cardholders are also charged fees for ATM withdrawals and other transactions conducted at ATMs.

• Customer Service and Maintenance — Cardholders are typically charged fees for balance inquiries made through NetSpend’s call centers. Cardholders are also charged a monthly maintenance fee after a specified period of inactivity.

• Additional Products and Services — Cardholders are charged fees associated with additional products and services offered in connection with certain GPR cards, including the use of overdraft features, a variety of bill payment options, custom card designs and card-to-card transfers of funds initiated through the call centers.

• Other — Cardholders are charged fees in connection with the acquisition and reloading of the GPR cards at retailers and the Company receives a portion of these amounts in some cases.

Revenue resulting from the service fees charged to the cardholders described above is recognized when the fees are charged because the earnings process is substantially complete, except for revenue resulting from the initial activation of cards and annual subscription fees. Revenue resulting from the initial activation of cards is recognized ratably, net of commissions paid to distributors, over the average account life, which is approximately six months for GPR cards. Revenue resulting from annual subscription fees is recognized ratably over the annual period to which the fees relate.

Revenues also include fees charged in connection with program management and processing services the Company provides for private-label programs. Revenue resulting from these fees is recognized when the company has fulfilled its obligations under the underlying service agreements.

NetSpend derives revenue from a portion of the interchange fees remitted by merchants when cardholders make purchases using their GPR cards. Subject to applicable law, interchange fees are fixed by the card associations and network organizations (Networks). Interchange revenue is recognized net of sponsorship, licensing and processing fees charged by the Networks for services they provide in processing purchase transactions routed through them. Interchange revenue is recognized during the period that the purchase transactions occur. Also included in interchange revenue are fees earned from branding agreements with the Networks.

In regards to taxes assessed by a governmental authority imposed directly on a revenue producing transaction, the Company reports its revenues on a net basis.

REIMBURSABLE ITEMS

REIMBURSABLE ITEMS:    Reimbursable items consist of out-of-pocket expenses which are reimbursed by the Company’s clients. These expenses consist primarily of postage, access fees and third party software services.

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION:    GAAP establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. A public entity must measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award.

The Company estimates forfeitures when recognizing compensation cost. The estimate of forfeitures will be adjusted by the Company as actual forfeitures differ from its estimates, resulting in compensation cost only for those awards that actually vest. The effect of the change in estimated forfeitures is recognized as compensation costs in the period the change in estimate occurred. In estimating its forfeiture rate, the Company stratified its data based upon historical experience to determine separate forfeiture rates for the different award grants. The Company currently estimates a forfeiture rate for existing stock option grants to TSYS non-executive employees, and other TSYS share-based awards. Currently, TSYS estimates a forfeiture rate in the range of 0% to 8%.

The Company has issued its vested awards to directors and nonvested awards to certain employees. The market value of the common stock at the date of issuance is recognized as compensation expense immediately for vested awards and over the vesting period of the nonvested awards. For nonvested award grants that have pro rata vesting, the Company recognizes compensation expense using the straight-line method over the vesting period of the award.

LEASES

LEASES:    The Company is obligated under noncancelable leases for computer equipment, software and facilities. As these leases expire, they will be evaluated and renewed or replaced by similar leases based on need. A lease is an agreement conveying the right to use property, software or equipment (land and/or depreciable assets) usually for a stated period of time. For purposes of applying the accounting and reporting standards, leases are classified from the standpoint of the lessee as capital or operating leases.

Rental payments on operating leases are charged to expense over the lease term. If rental payments are not made on a straight-line basis, rental expense nevertheless shall be recognized on a straight-line basis unless another systematic and rational basis is more representative of the time pattern in which use benefit is derived from the leased property, in which case that basis shall be used.

Certain of the Company’s operating leases are for office space. The Company will make various alterations (leasehold improvements) to the office space and capitalize these costs as part of property and equipment. Leasehold improvements are amortized on a straight-line basis over the useful life of the improvement or the term of the lease, whichever is shorter.

ADVERTISING

ADVERTISING:    Advertising costs are expensed as incurred or the first time the advertising takes place except for direct-response advertising and television advertising production costs. Direct-response advertising consists of commission paid to affiliate marketers for the new funded customer accounts generated by them. Direct-response advertising costs are capitalized and amortized over the average life of the new accounts, which is approximately one year. Television advertising production costs consist of the costs of developing and filming television ads. Television advertising production costs are capitalized when the production services are received and expensed in the period when the advertising first takes place. Advertising expense for 2015, 2014 and 2013 was $9.6 million, $5.7 million and $1.3 million, respectively.

INCOME TAXES

INCOME TAXES:    Income taxes reflected in TSYS’ consolidated financial statements are computed based on the taxable income of TSYS and its affiliated subsidiaries. A consolidated U.S. federal income tax return is filed for TSYS and its majority-owned U.S. subsidiaries. Additionally, income tax returns are also filed in states where TSYS and its subsidiaries have filing obligations and in foreign jurisdictions where TSYS has a foreign affiliate.

The Company accounts for income taxes in accordance with the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Reserves against the carrying value of a deferred tax asset are established when necessary to reflect the decreased likelihood of realization of a deferred asset in the future. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Income tax provisions require the use of management judgments, which are subject to challenge by various taxing authorities. Contingency reserves are periodically established where the amount of the contingency can be reasonably determined and is likely to occur. Reductions in contingency reserves are recognized when tax disputes are settled or examination periods lapse.

Significant estimates used in accounting for income taxes relate to the determination of taxable income, the determination of temporary differences between book and tax basis, as well as estimates on the realizability of tax credits and net operating losses.

TSYS recognizes potential interest and penalties related to the underpayment of income taxes as income tax expense in the Consolidated Statements of Income.

NONCONTROLLING INTEREST

NONCONTROLLING INTEREST:    Noncontrolling interests in earnings of subsidiaries represents the minority shareholders’ share of the net income or loss of TSYS Managed Services EMEA Limited (EMEA) and CPAY. The noncontrolling interests in the Consolidated Balance Sheet reflects the original investment by these shareholders in EMEA and CPAY, their proportional share of the earnings or losses and their proportional share of net gains or losses resulting from the currency translation of assets and liabilities of EMEA and CPAY.

EARNINGS PER SHARE

EARNINGS PER SHARE:    Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are “participating securities” as defined by GAAP, and therefore should be included in EPS using the two-class method.

The two-class method is an earnings allocation method for computing EPS when an entity’s capital structure includes two or more classes of common stock or common stock and participating securities. It determines EPS based on dividends declared on common stock and participating securities and participation rights of participating securities in any undistributed earnings.

Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated to reflect the potential dilution that would occur if stock options or other contracts to issue common stock were exercised. Diluted EPS is calculated by dividing net income by weighted average common and common equivalent shares outstanding. Common equivalent shares are calculated using the treasury stock method.

RECLASSIFICATIONS

RECLASSIFICATIONS:    Certain reclassifications have been made to the 2014 and 2013 financial statements to conform to the presentation adopted in 2015.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In November 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-17 “Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes,” which requires the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. Also, companies will no longer allocate valuation allowances between current and noncurrent deferred tax assets because those allowances also will be classified as noncurrent. The guidance is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2016. Early adoption is permitted. Companies can adopt the guidance either prospectively or retrospectively. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU 2015-03 “Interest — Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Cost.” The amendments in this update will require entities to present debt issuance costs in the balance sheet as a direct deduction from the carrying amount of the corresponding debt liability, consistent with debt discounts. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. The guidance will be applied retrospectively. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial position, results of operations or cash flows.

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect on its ongoing financial reporting.

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Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2015

Financial Results for Discontinued Operations

The following table presents the main classes of assets and liabilities held for sale as of December 31, 2014:

(in thousands)	2014
Total assets	$	4,003
Total liabilities		4,003

The following table presents the summarized results of discontinued operations for the years ended December 31, 2015, 2014 and 2013:

(in thousands)	2015		2014			2013
Total revenues	$	—	$	16,376			68,048
Income before taxes	$	—	$	1			3,443
Income tax (benefit) expense	$	—	$	(39	)		1,388
Income from operating activities of discontinued operations, net of tax	$	—	$	40			2,055
Gain on dispositions, net of tax	$	1,411	$	48,615			—
Income from discontinued operations, net of tax	$	1,411	$	48,655			2,055
Income from discontinued operations, net of tax, attributable to noncontrolling interest	$	—	$	999			4,198
Income (loss) from discontinued operations, net of tax, attributable to TSYS common shareholders	$	1,411	$	47,656			(2,143	)
Interest allocated to discontinued operations1	$	—	$	—			281

1 Interest expense relates to borrowings directly for use by Japan-based operations.

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Relationships with Affiliated Companies (Tables)

12 Months Ended

Dec. 31, 2015

Balances with Related Parties

The Company had the following balances with related parties as of December 31, 2015 and 2014:

(in thousands)	2015		2014
Accounts receivable	$	19	$	19
Account payable		3,278		4,329

Revenues and Expenses Derived from Affiliated Companies

The table below details revenues and expenses derived from affiliated companies for the years ended December 31, 2015, 2014 and 2013:

(in thousands)	2015		2014		2013
Total revenues:
CUP Data	$	116		232		229
TSYS de México		85		78		68
Total revenues	$	201		310		297
Total operating expenses:
Merchants Limited	$	4,202		9,842		5,739
TSYS de México		148		148		148
Total operating expenses	$	4,350		9,990		5,887
Nonoperating expenses paid to Merchants Limited	$	42		—		—

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Cash and Cash Equivalents (Tables)

12 Months Ended

Dec. 31, 2015

Cash and Cash Equivalent Balances

Cash and cash equivalent balances as of December 31, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Cash and cash equivalents in domestic accounts	$	307,578		225,396
Cash and cash equivalents in foreign accounts		81,750		63,787
Total	$	389,328		289,183

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Prepaid Expenses and Other Current Assets (Tables)

12 Months Ended

Dec. 31, 2015

Prepaid Expenses and Other Current Assets

Significant components of prepaid expenses and other current assets as of December 31, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Prepaid expenses	$	37,961		35,334
Supplies inventory		15,114		14,340
Income taxes receivable		51,322		259
Other		49,802		49,041
Total	$	154,199		98,974

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Goodwill (Tables)

12 Months Ended

Dec. 31, 2015

Gross Amount and Accumulated Impairment Loss of Goodwill

The gross amount and accumulated impairment losses of goodwill as of December 31, 2015 and 2014 are as follows:

	2015
(in thousands)	North America Services			International Services			Merchant Services			NetSpend		Consolidated
Gross amount	$	70,796			29,081			415,973			1,033,586	$	1,549,436
Accumulated impairment losses		(182	)		(1,605	)		(2,225	)		—		(4,012	)
Goodwill, net	$	70,614			27,476			413,748			1,033,586	$	1,545,424

	2014
	North America Services			International Services			Merchant Services			NetSpend		Consolidated
Gross amount	$	70,796			31,681			415,973			1,032,959	$	1,551,409
Accumulated impairment losses		(182	)		(1,605	)		(2,225	)		—		(4,012	)
Goodwill, net	$	70,614			30,076			413,748			1,032,959	$	1,547,397

Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill as of December 31, 2015 and 2014 are as follows:

(in thousands)	North America Services			International Services			Merchant Services		NetSpend		Consolidated
Balance as of December 31, 2013	$	70,796			34,201			413,748		1,024,434	$	1,543,179
Disposal of GP Net		(182	)		(1,605	)		—		—		(1,787	)
NetSpend purchase price allocation		—			—			—		8,525		8,525
Currency translation adjustments		—			(2,520	)		—		—		(2,520	)
Balance as of December 31, 2014	$	70,614			30,076			413,748		1,032,959	$	1,547,397
NetSpend tax adjustment		—			—			—		627		627
Currency translation adjustments		—			(2,600	)		—		—		(2,600	)
Balance as of December 31, 2015	$	70,614		$	27,476		$	413,748	$	1,033,586	$	1,545,424

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Other Intangible Assets, net (Tables)

12 Months Ended

Dec. 31, 2015

Computer Software, Intangible Asset

Components of Intangible Assets

Computer software as of December 31, 2015 and 2014 is summarized as follows:

(in thousands)	2015		2014
Licensed computer software	$	513,443		435,701
Software development costs		404,238		376,026
Acquisition technology intangibles		167,971		167,687
Total computer software		1,085,652		979,414
Less accumulated amortization:
Licensed computer software		282,563		243,866
Software development costs		287,863		275,512
Acquisition technology intangibles		110,156		93,888
Total accumulated amortization		680,582		613,266
Computer software, net	$	405,070		366,148

Weighted Average Useful Life

The weighted average useful life for each component of computer software, and in total, as of December 31, 2015, is as follows:

	Weighted Average Amortization Period (Yrs)
Licensed computer software		5.4
Software development costs		6.1
Acquisition technology intangibles		6.8
Total		5.9

Estimated Future Amortization Expense

Estimated future amortization expense of licensed computer software, software development costs and acquisition technology intangibles as of December 31, 2015 for the next five years is:

(in thousands)	Licensed Computer Software		Software Development Costs		Acquisition Technology Intangibles
2016	$	36,207		27,312		15,352
2017		31,034		21,608		13,868
2018		25,345		16,041		11,393
2019		13,617		9,916		11,393
2020		8,899		7,343		5,734

Contract Acquisition Costs

Components of Intangible Assets

Significant components of contract acquisition costs as of December 31, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Conversion costs, net	$	159,000		159,339
Payments for processing rights, net		88,811		76,966
Total	$	247,811		236,305

Weighted Average Useful Life

The weighted average useful life for each component of contract acquisition costs, and in total, as of December 31, 2015 is as follows:

	Weighted Average Amortization Period (Yrs)
Payments for processing rights		14.7
Conversion costs		12.3
Total		13.3

Estimated Future Amortization Expense

Estimated future amortization expense of conversion costs and payments for processing rights as of December 31, 2015 for the next five years is:

(in thousands)	Conversion Costs		Payments for Processing Rights
2016	$	32,122		17,394
2017		29,148		15,978
2018		25,656		14,561
2019		21,149		12,277
2020		17,800		10,167

Other intangible assets

Components of Intangible Assets

Significant components of other intangible assets as of December 31, 2015 and 2014 are summarized as follows:

	2015
(in thousands)	Gross		Accumulated Amortization			Net
Channel relationships	$	318,600		(99,909	)	$	218,691
Customer relationships		166,579		(104,736	)		61,843
Trade name		46,422		(24,422	)		22,000
Database		28,000		(14,000	)		14,000
Covenants-not-to-compete		14,940		(7,834	)		7,106
Trade association		10,000		(5,750	)		4,250
Favorable lease		875		(445	)		430
Total	$	585,416		(257,096	)	$	328,320

	2014
(in thousands)	Gross		Accumulated Amortization			Net
Channel relationships	$	318,600		(60,079	)	$	258,521
Customer relationships		167,140		(87,201	)		79,939
Trade name		46,480		(15,680	)		30,800
Database		28,000		(8,400	)		19,600
Covenants-not-to-compete		14,940		(5,551	)		9,389
Trade association		10,000		(4,750	)		5,250
Favorable lease		875		(267	)		608
Total	$	586,035		(181,928	)	$	404,107

Weighted Average Useful Life

The weighted average useful life for each component of other intangible assets, and in total, as of December 31, 2015 is as follows:

	Weighted Average Amortization Period (Yrs)
Channel relationships		8.0
Customer relationships		8.2
Trade name		4.9
Database		5.0
Covenants-not-to-compete		5.3
Trade association		10.0
Favorable Lease		4.9
Total		7.6

Estimated Future Amortization Expense

Estimated future amortization expense of other intangible assets as of December 31, 2015 for the next five years is:

(in thousands)
2016	$	75,213
2017		74,823
2018		60,166
2019		47,870
2020		43,711

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Property and Equipment, net (Tables)

12 Months Ended

Dec. 31, 2015

Property and Equipment Balances

Property and equipment balances as of December 31, 2015 and 2014 are as follows:

(in thousands)	2015		2014
Computer equipment	$	346,387		317,862
Buildings and improvements		244,938		243,211
Furniture and other equipment		138,727		135,741
Land		16,577		16,763
Other		597		204
Total property and equipment		747,226		713,781
Less accumulated depreciation and amortization		457,328		423,196
Property and equipment, net	$	289,898		290,585

Computer Software, Intangible Asset

Asset Under Capital Lease

The Company held the following computer software under capital lease as of December 31, 2015 and 2014:

(in thousands)	2015			2014
Licensed computer software	$	18,206			17,625
Less accumulated amortization		(8,175	)		(4,816	)
Licensed computer software, net	$	10,031			12,809

Property, Plant and Equipment

Asset Under Capital Lease

The Company has various types of equipment under capital lease arrangements. The Company has the following amounts of equipment under capital lease obligations as of December 31, 2015 and 2014:

(in thousands)	2015			2014
Computer equipment	$	55,450			49,118
Furniture and other equipment		5,374			5,374
Total equipment		60,824			54,492
Less accumulated depreciation:
Computer and other equipment		(36,134	)		(29,816	)
Furniture and other equipment		(2,731	)		(1,666	)
Total accumulated depreciation		(38,865	)		(31,482	)
Total equipment, net	$	21,959			23,010

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Computer Software, net (Tables)

12 Months Ended

Dec. 31, 2015

Amortization Expense Related to Computer Software

Amortization expense includes amounts for computer software acquired under capital lease. The Company had the following amortization expense related to computer software for the years ended December 31, 2015, 2014 and 2013:

(in thousands)	2015		2014		2013
Amortization expense related to:
Licensed computer software	$	41,823		36,775		33,511
Software development costs		22,740		25,248		21,430
Acquisition technology intangibles		16,734		19,683		15,855

Contract Acquisition Costs

Amortization Expense Related to Computer Software

Amortization expense related to contract acquisition cost for the years ended December 31, 2015, 2014 and 2013 are as follows:

(in thousands)	2015		2014		2013
Amortization expense related to:
Conversion costs	$	27,392		17,816		19,515
Payments for processing rights		17,039		16,209		13,099

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Equity Investments (Tables)

12 Months Ended

Dec. 31, 2015

Summary of TSYS Equity Investments

A summary of TSYS’ equity investments as of December 31, 2015 and 2014 is as follows:

(in thousands)	2015		2014
CUP Data	$	98,518		92,738
TSYS de México		7,600		7,730
Total	$	106,118		100,468

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Long-term Borrowings and Capital Lease Obligations (Tables)

12 Months Ended

Dec. 31, 2015

Summary of Long-term Debt

Long-term debt as of December 31, 2015 and 2014 consists of:

(in thousands)	2015		2014
2.375% Senior Notes due June 1, 2018 (5 year tranche), net of discount	$	549,919		549,889
3.75% Senior Notes due June 1, 2023 (10 year tranche), net of discount		546,746		546,379
LIBOR + 1.125%, unsecured term loan, due April 8, 2018, with quarterly principal and interest payments		175,000		185,000
LIBOR + 1.125%, unsecured term loan, due September 10, 2017, with quarterly principal and interest payments		120,000		131,250
1.38% note payable due January 31, 2017, with monthly interest and principal payments		30,000		—
1.50% note payable, due September 30, 2016, with monthly interest and principal payments		5,132		11,886
LIBOR + 2.0%, unsecured term loan, due December 7, 2017, with monthly interest payments and principal paid at maturity		3,202		1,396
1.50% note payable, due January 31, 2016, with monthly interest and principal payments		336		4,332
1.50% note payable, due December 31, 2015, with monthly interest and principal payments		—		10,075
1.50% note payable, due July 31, 2015, with monthly interest and principal payments		—		1,709
Total debt		1,430,335		1,441,916
Less current portion		50,364		43,784
Noncurrent portion of long-term debt	$	1,379,971		1,398,132

Required Annual Principal Payments on Long-term Debt

Required annual principal payments on long-term debt for the five years subsequent to December 31, 2015 are summarized as follows:

(in thousands)
2016	$	50,364
2017		143,305
2018		690,000
2019		—
2020		—

Capital Lease Obligations

Capital lease obligations as of December 31, 2015 and 2014 consist of:

(in thousands)	2015		2014
Capital lease obligations	$	7,131		14,101
Less current portion		3,468		7,127
Noncurrent portion of capital leases	$	3,663		6,974

Future Minimum Lease Payments under Capital Leases

The future minimum lease payments under capital leases as of December 31, 2015 are summarized as follows:

(in thousands)
2016	$	3,611
2017		2,687
2018		1,001
2019		63
2020		—
Total minimum lease payments		7,362
Less amount representing interest		(231	)
Principal minimum lease payments	$	7,131

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Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2015

Significant Components of Other Current Liabilities

Significant components of other current liabilities as of December 31, 2015 and 2014 are summarized as follows:

(in thousands)	2015		2014
Deferred revenues	$	39,863		41,773
Accrued expenses		26,017		23,617
Dividends payable		19,367		19,006
Other		81,332		70,409
Total	$	166,579		154,805

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Components of Income Tax Expense Included in Consolidated Statements of Income

The components of income tax expense included in the Consolidated Statements of Income were as follows:

	Years Ended December 31,
(in thousands)	2015			2014			2013
Current income tax expense:
Federal	$	139,228			126,203			74,327
State		9,255			5,161			2,949
Foreign		4,762			7,694			6,822
Total current income tax expense		153,245			139,058			84,098
Deferred income tax expense (benefit):
Federal		(2,198	)		(3,623	)		27,447
State		442			(2,039	)		(55	)
Foreign		(125	)		(3,635	)		(509	)
Total deferred income tax expense (benefit)		(1,881	)		(9,297	)		26,883
Total income tax expense	$	151,364			129,761			110,981

Components of Income Tax Before Income Tax

	Years Ended December 31,
(in thousands)	2015		2014		2013
Components of income before income tax expense:
Domestic	$	488,515		369,888		328,052
Foreign		8,373		23,041		24,424
Total income before income tax expense	$	496,888		392,929		352,476

Income Tax Expense Differed from Amounts Computed by Applying Statutory U.S. Federal Income Tax Rate to Income before Income Taxes, Noncontrolling Interest and Equity in Income of Equity Investments

Income tax expense differed from the amounts computed by applying the statutory U.S. federal income tax rate of 35% to income before income taxes, noncontrolling interest and equity in income of equity investments as a result of the following:

	Years Ended December 31,
(in thousands)	2015			2014			2013
Computed “expected” income tax expense	$	173,911			137,525			123,367
Increase (decrease) in income tax expense resulting from:
International tax rate differential and equity income		8,367			6,541			1,870
State income tax expense, net of federal income tax effect		7,101			4,823			3,408
Increase (decrease) in valuation allowance		(517	)		(4,550	)		1,715
Tax credits		(28,831	)		(3,459	)		(6,141	)
Deduction for domestic production activities		(11,550	)		(8,750	)		(8,225	)
Permanent differences and other, net		2,883			(2,369	)		(5,013	)
Total income tax expense	$	151,364			129,761			110,981

Temporary Differences between Financial Statement Carrying Amounts and Tax Bases of Assets and Liabilities that Give Rise to Significant Portions of Net Deferred Tax Liability

Temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities that give rise to significant portions of the net deferred tax liability as of December 31, 2015 and 2014 relate to the following:

	As of December 31,
(in thousands)	2015			2014
Deferred income tax assets:
Net operating loss and income tax credit carryforwards	$	29,522			31,978
Allowances for doubtful accounts and billing adjustments		1,399			1,328
Deferred revenue		31,713			31,240
Share-based compensation		22,088			24,449
Other, net		34,673			24,743
Total deferred income tax assets		119,395			113,738
Less valuation allowance for deferred income tax assets		(18,446	)		(18,963	)
Net deferred income tax assets		100,949			94,775
Deferred income tax liabilities:
Excess tax over financial statement depreciation		(61,161	)		(53,527	)
Computer software development costs		(82,835	)		(67,703	)
Purchase accounting adjustments		(114,171	)		(136,701	)
Foreign currency translation		(4,522	)		(7,642	)
Other, net		(24,462	)		(18,830	)
Total deferred income tax liabilities		(287,151	)		(284,403	)
Net deferred income tax liabilities	$	(186,202	)		(189,628	)
Total net deferred tax assets (liabilities):
Current	$	24,670			15,190
Noncurrent		(210,872	)		(204,818	)
Net deferred income tax liability	$	(186,202	)		(189,628	)

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax liabilities is as follows ¹:

(in millions)	Year Ended December 31, 2015
Beginning balance	$	6.7
Current activity:
Additions based on tax positions related to current year		2.3
Additions for tax positions of prior years		4.7
Reductions for tax positions of prior years		(0.6	)
Net, current activity		6.4
Ending balance	$	13.1

1 Unrecognized state tax liabilities are not adjusted for the federal tax impact

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2015

Future Minimum Lease Payments Under Noncancelable Operating Leases

The future minimum lease payments under noncancelable operating leases with remaining terms greater than one year for the next five years and thereafter and in the aggregate as of December 31, 2015, are as follows:

(in thousands)
2016	$	121,892
2017		117,137
2018		101,413
2019		99,426
2020		30,733
Thereafter		22,716
Total future minimum lease payments	$	493,317

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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2015

Contributions Charged to Expense

The Company’s contributions to the plans charged to expense for the years ended December 31, 2015, 2014 and 2013 are as follows:

(in thousands)	2015		2014		2013
TSYS Retirement Savings Plan	$	24,169		17,531		14,506
TSYS Stock Purchase Plan		1,378		1,288		1,236

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Equity (Tables)

12 Months Ended

Dec. 31, 2015

Summary of Equity Compensation Plans

EQUITY COMPENSATION PLANS:    The following table summarizes TSYS’ equity compensation plans by category as of December 31, 2015:

(in thousands, except per share data) Plan Category	(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights		(b) Weighted-average exercise price of outstanding options, warrants and rights			(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders		4,475	$	28.07	1		8,550	2

The Company does not have any equity compensation plans that were not approved by security holders.

1 Weighted-average exercise price represents 2,887 thousand options only and does not include performance shares and other awards that have no exercise price.

2 Shares available for future grants under the Total System Services Inc. 2007 Omnibus Plan and 2012 Omnibus Plan, which could be in the form of options, nonvested awards and performance shares.

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Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2015

Summary of Performance- and Market- Based Awards Granted

The following table summarizes the performance- and market-based awards granted during the years 2015, 2014 and 2013:

Year Awarded	Type of Award	Performance Period Ending	Performance Measure	Number of Shares Granted		Period Expensed Through
2015	Market	July 2016, 2017 and 2018	Total Shareholder Return		25,000	July 2018
2015	Performance	December 2017	Adjusted EPS		135,289	December 2017
2015	Market	December 2017	Total Shareholder Return		57,982	December 2017
2015	Performance	December 2015	Revenues before Reimbursable Items and Adjusted EPS		165,543	December 2018
2014	Performance	December 2016	Revenues before Reimbursable Items and Adjusted EPS		211,593	December 2016
2013	Performance	December 2015	NetSpend Revenues and NetSpend Operating Income		87,356	December 2015
2013	Performance	December 2015	Revenues before Reimbursable Items and Income from Continuing Operations		237,679	December 2015

Summary of Weighted Average Assumptions and Fair Value of Options

The following table summarizes the weighted average assumptions, and the weighted average fair value of the options:

	2015			2014			2013
Number of options granted		613,473			1,046,372			1,939,796
Weighted average exercise price	$	39.01		$	30.96		$	17.42
Risk-free interest rate		1.73	%		2.01	%		1.31	%
Expected volatility		20.80	%		25.06	%		26.81	%
Expected term (years)		6.3			6.5			6.0
Dividend yield		1.04	%		1.29	%		1.64	%
Weighted average fair value	$	8.27		$	7.66		$	9.48

Summary of Stock Option Activity and Changes during Year

A summary of TSYS’ stock option activity as of December 31, 2015, 2014 and 2013, and changes during the years ended on those dates is presented below:

	2015					2014					2013
(in thousands, except per share data)	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Options:
Outstanding at beginning of year		4,892		$	23.83		5,752		$	20.96		6,065		$	21.27
Granted 1		613			39.01		1,046			30.96		1,940			17.42
Exercised		(2,586	)		22.68		(1,850	)		18.79		(2,177	)		18.75
Forfeited/canceled		(32	)		20.79		(56	)		28.88		(76	)		16.78
Outstanding at end of year		2,887		$	28.07		4,892		$	23.83		5,752		$	20.96
Options exercisable at year-end		1,439		$	25.17		2,781		$	22.86		3,232		$	23.02
Weighted average fair value of options granted during the year				$	8.27				$	7.66				$	9.48

1 Includes the issuance of approximately 1.1 million stock option replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $13.7 million. A portion of the expense associated with these awards has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

As of December 31, 2015 the average remaining contractual life and intrinsic value of TSYS’ outstanding and exercisable stock options were as follows:

	Outstanding		Exercisable
Average remaining contractual life (in years)		7.8		7.2
Aggregate intrinsic value (in thousands)	$	62,738		35,434

Summary of Stock Option Exercises

The table below summarizes these stock option exercises by year:

(in thousands)	Options Exercised and Issued from Treasury		Intrinsic Value
2015		2,586	$	67,702
2014		1,850		22,883
2013		2,177		16,580

Performance Shares

Summary of Number of Shares Granted Each Year

The following table summarizes the number of shares granted each year:

	2015		2014		2013
Number of shares		388,211		672,724		1,667,246
Market value (in millions)	$	14.9		20.6		41.3

Summary of Awards Authorized

A summary of the awards authorized in each year is below:

	Total Number of Shares Awarded		Potential Number of Performance-and Market-Based Shares to be Vested
2015		383,814		526,879	(2018	)
2014		211,593		211,593	(2017	)
2013		563,803		400,539	(2016	)

Summarized Status of Performance-based Nonvested Shares and Changes during Period

A summary of the status of TSYS’ performance- and market-based nonvested shares as of December 31, 2015, 2014 and 2013 and changes during those periods are presented below:

	2015					2014					2013
(in thousands, except per share data) Performance- and market-based Nonvested shares	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Outstanding at beginning of year		766		$	25.86		1,049		$	22.75		809		$	18.76
Granted1		384			36.84		211			30.89		564			24.88
Vested		(241	)		22.92		(258	)		17.57		(324	)		15.93
Forfeited/canceled/adjusted		9			22.20		(236	)		25.62		—			—
Outstanding at end of year		918		$	31.19		766		$	25.86		1,049		$	22.75

1 Includes the issuance of approximately 87,356 stock replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $2.2 million. A portion of the expense associated with these awards has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

Unvested Restricted Awards

Summarized Status of Nonvested Shares and Changes during Periods

A summary of the status of TSYS’ nonvested shares as of December 31, 2015, 2014 and 2013 and the changes during the periods are presented below:

	2015					2014					2013
(in thousands, except per share data) Nonvested shares	Shares			Weighted Average Grant-Date Fair Value		Shares			Weighted Average Grant-Date Fair Value		Shares			Weighted Average Grant-Date Fair Value
Outstanding at beginning of year		1,769		$	26.75		1,783		$	24.19		554		$	19.96
Granted1		388			38.38		673			30.67		1,667			24.75
Vested		(930	)		26.05		(602	)		23.74		(328	)		19.95
Forfeited/canceled		(81	)		28.78		(85	)		25.47		(110	)		23.82
Outstanding at end of year		1,146		$	31.11		1,769		$	26.75		1,783		$	24.19

1 Includes the issuance of approximately 870,361 stock replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $21.5 million. A portion of the expense associated with these options has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

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Treasury Stock (Tables)

12 Months Ended

Dec. 31, 2015

Summary of Shares Held as Treasury Stock and Related Carrying Value

The following table summarizes shares held as treasury stock and their related carrying value as of December 31:

(in thousands)	Number of Treasury Shares		Treasury Shares Cost
2015		19,988	$	641,664
2014		17,836		453,230
2013		15,073		326,996

Purchases of Common Stock on Monthly Basis

The following table sets forth information regarding the Company’s purchases of its common stock on a monthly basis during the three months ended December 31, 2015:

(in thousands, except per share data)	Total Number of Shares Purchased			Average Price Paid per Share		Total Number of Cumulative shares Purchased as Part of Publicly announced Plans or Programs		Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
October 2015		—		$	—		2,150		17,850
November 2015		3,000			52.85		5,150		14,850
December 2015		1	1		49.80		5,150		14,850
Total		3,001		$	52.85

1 Consists of delivery of shares to TSYS on vesting of shares to pay taxes.

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Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Effects Allocated to and Cumulative Balance of Each Component of Accumulated Other Comprehensive Income (Loss)

The income tax effects allocated to and the cumulative balance of each component of accumulated other comprehensive income (loss) are as follows:

(in thousands)	Beginning Balance			Pretax amount			Tax effect			Net-of-tax Amount			Ending Balance
As of December 31, 2012	$	(445	)		2,272			419			1,853		$	1,408
Foreign currency translation adjustments	$	3,332			(295	)		1,033			(1,328	)	$	2,004
Transfer from NCI		28			—			—			—			28
Gain on available for sale securities		—			2,810			1,037			1,773			1,773
Change in AOCI related to postretirement healthcare plans		(1,952	)		1,926			30			1,896			(56	)
As of December 31, 2013	$	1,408			4,441			2,100			2,341		$	3,749
Foreign currency translation adjustments	$	2,004			(17,143	)		(1,547	)		(15,596	)	$	(13,592	)
Transfer from NCI		28			—			—			—			28
Gain on available for sale securities		1,773			(1,058	)		(390	)		(668	)		1,105
Change in AOCI related to postretirement healthcare plans		(56	)		921			332			589			533
As of December 31, 2014	$	3,749			(17,280	)		(1,605	)		(15,675	)	$	(11,926	)
Foreign currency translation adjustments	$	(13,592	)		(22,997	)		(1,548	)		(21,449	)	$	(35,041	)
Transfer from NCI		28			—			—			—			28
Gain on available for sale securities		1,105			2,177			779			1,398			2,503
Change in AOCI related to postretirement healthcare plans		533			(2,449	)		(882	)		(1,567	)		(1,034	)
As of December 31, 2015	$	(11,926	)		(23,269	)		(1,651	)		(21,618	)	$	(33,544	)

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Segment Reporting, including Geographic Area Data and Major Customers (Tables)

12 Months Ended

Dec. 31, 2015

Operating Segments

Years Ended December 31,
(in thousands)
Operating Segments	2015			2014			2013
Revenues before reimbursable items
North America Services	$	1,147,254			954,082			860,645
International Services		331,159			341,785			321,484
Merchant Services		474,040			435,649			446,277
NetSpend		580,377			482,686			207,851
Intersegment revenues		(33,481	)		(21,224	)		(12,549	)
Revenues before reimbursable items from external customers	$	2,499,349			2,192,978			1,823,708
Total revenues
North America Services	$	1,334,258			1,117,764			1,000,073
International Services		354,725			363,359			341,549
Merchant Services		549,369			510,120			533,050
NetSpend		580,377			482,686			207,851
Intersegment revenues		(39,188	)		(27,052	)		(18,218	)
Revenues from external customers	$	2,779,541			2,446,877			2,064,305
Depreciation and amortization
North America Services	$	99,544			86,513			74,480
International Services		34,892			38,909			41,708
Merchant Services		18,268			14,571			12,034
NetSpend		10,686			7,509			3,121
Segment depreciation and amortization		163,390			147,502			131,343
Acquisition intangible amortization		92,522			96,971			65,893
Corporate Administration and Other		2,352			2,147			1,790
Total depreciation and amortization	$	258,264			246,620			199,026
Adjusted segment operating income
North America Services	$	429,064			351,512			321,619
International Services		60,087			55,123			42,068
Merchant Services		150,225			134,872			155,643
NetSpend		137,837			128,285			66,353
Total adjusted segment operating income		777,213			669,792			585,683
Acquisition intangible amortization		(92,522	)		(96,971	)		(65,893	)
NetSpend merger and acquisition operating expenses		—			(3,217	)		(14,220	)
Share-based compensation		(41,549	)		(30,790	)		(28,933	)
Corporate Administration and Other		(109,035	)		(107,174	)		(94,137	)
Operating income	$	534,107			431,640			382,500
As of December 31,	2015			2014
Total assets
North America Services	$	3,516,328			3,327,160
International Services		348,714			356,590
Merchant Services		689,781			695,744
NetSpend		1,504,740			1,556,369
Intersegment assets		(2,151,263	)		(2,202,282	)
Total assets	$	3,908,300			3,733,581

Property and Equipment, Net of Accumulated Depreciation and Amortization

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

	As of December 31,
(in thousands)	2015		2014
United States	$	241,814		237,865
Europe		41,953		45,503
Other		6,131		7,217
Totals	$	289,898		290,585

Revenues Based on Domicile of Company's Customers

The following tables reconcile segment external revenue to revenues by geography for the years ended December 31:

	2015
(in thousands)	North America Services		International Services		Merchant Services		NetSpend		Total		%
United States	$	981,588		—		548,079		580,377	$	2,110,044		75.9
Europe1		796		303,832		22		—		304,650		11.0
Canada1		288,728		—		355		—		289,083		10.4
Mexico		16,558		—		—		—		16,558		0.6
Other1		18,329		40,198		679		—		59,206		2.1
Total	$	1,305,999		344,030		549,135		580,377	$	2,779,541		100.0

	2014
(in thousands)	North America Services		International Services		Merchant Services		NetSpend		Total		%
United States	$	778,766		—		508,747		482,686	$	1,770,199		72.3
Europe1		781		304,308		—		—		305,089		12.5
Canada		290,248		—		248		—		290,496		11.9
Mexico		16,216		—		—		—		16,216		0.7
Other1		16,305		47,888		684		—		64,877		2.7
Total	$	1,102,316		352,196		509,679		482,686	$	2,446,877		100.0

	2013
(in thousands)	North America Services		International Services		Merchant Services		NetSpend		Total		%
United States	$	712,252		—		533,939		207,851	$	1,454,042		70.4
Europe1		774		293,803		—		—		294,577		14.3
Canada		242,975		—		178		—		243,153		11.8
Mexico		16,513		—		—		—		16,513		0.8
Other1		14,492		40,962		566		—		56,020		2.7
Total	$	987,006		334,764		534,683		207,851	$	2,064,305		100.0

1 Revenues are impacted by movements in foreign currency exchange rates

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2015

Awards and Estimated Fair Value of Awards Issued in Acquisition

The following table provides a list of all replacement awards and the estimated fair value of those awards issued in conjunction with the acquisition of NetSpend:

	Number of Shares and Options Issued		Fair Value (in millions)
Time-based restricted stock		870,361	$	21.5
Non-qualified stock options		530,696		8.4
Incentive stock options		529,452		5.3
Performance-based restricted stock		87,356		2.2
Total		2,017,865	$	37.4

Pro Forma Revenue and Earnings

The amounts of NetSpend revenue and earnings included in TSYS’ consolidated income statement for the year ended December 31, 2013, and the pro forma revenue and earnings of the combined entity had the acquisition date been January 1, 2013 are:

	Actual		Supplemental pro forma
	Year Ended December 31 ,2013		Year Ended December 31, 2013
(in thousands, except per share data)
Revenue	$	2,064,305		2,286,348
Net income attributable to TSYS common shareholders	$	244,750		239,775

NetSpend Holdings Inc

Amounts of Assets Acquired and Liabilities Assumed Recognized

The following table summarizes the consideration paid for NetSpend and the initially recognized amounts of the identifiable assets acquired and liabilities assumed on July 1, 2013 (the acquisition date).

(in thousands)
Consideration
Cash	$	1,355,270
Equity instruments		15,557
Dissenting shareholder liability*		25,723
Fair value of total consideration transferred	$	1,396,550
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	40,610
Accounts receivable		11,335
Property equipment and software		11,657
Identifiable intangible assets		480,086
Deferred tax asset		10,165
Other assets		36,660
Deferred tax liability		(155,945	)
Financial liabilities		(62,452	)
Total identifiable net assets		372,116
Goodwill		1,024,434
	$	1,396,550

* Represents 1.6 million NetSpend shares held by dissenting shareholders

Estimated Fair Value of Identifiable Intangible Assets Acquired

The estimated fair value of identifiable intangible assets acquired in the acquisitions and the related estimated weighted average useful lives are as follows:

(in thousands)	Fair Value		Weighted Average Useful Life (in years)
Channel relationships	$	317,000		8.0
Current technology		78,711		7.0
Trade name		44,000		5.0
Database		28,000		5.0
Covenants-not-to-compete		11,500		6.0
Favorable lease		875		4.9
Total acquired identifiable intangible assets	$	480,086		7.3

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2015

Basic and Diluted Earnings Per Share

The following table illustrates basic and diluted EPS under the guidance of GAAP for the years ended December 31, 2015, 2014 and 2013:

	2015					2014					2013
(in thousands, except per share data)	Common Stock			Participating Securities		Common Stock			Participating Securities		Common Stock			Participating Securities
Basic EPS:
Net income	$	364,044				$	322,872				$	244,750
Less income allocated to nonvested awards		(3,164	)		3,164		(3,308	)		3,308		(1,595	)		1,595
Net income allocated to common stock for EPS calculation(a)	$	360,880			3,164	$	319,564			3,308	$	243,155			1,595
Average common shares outstanding(b)		182,465			1,617		184,297			1,925		187,145			1,246
Basic EPS(a)/(b)	$	1.98			1.96	$	1.73			1.72	$	1.30			1.28
Diluted EPS:
Net income	$	364,044				$	322,872				$	244,750
Less income allocated to nonvested awards		(3,148	)		3,148		(3,288	)		3,288		(1,585	)		1,585
Net income allocated to common stock for EPS calculation(c)	$	360,896			3,148	$	319,584			3,288	$	243,165			1,585
Average common shares outstanding		182,465			1,617		184,297			1,925		187,145			1,246
Increase due to assumed issuance of shares related to common equivalent shares outstanding		1,157					1,459					1,648
Average common and common equivalent shares outstanding(d)		183,622			1,617		185,756			1,925		188,793			1,246
Diluted EPS(c)/(d)	$	1.97			1.95	$	1.72			1.71	$	1.29			1.27

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Schedule II - Valuation and Qualifying Accounts (Detail) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Provision for doubtful accounts
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period		$ 3,222	$ 1,758	$ 1,743
Additions Changes in allowances, charges to expenses and changes to other accounts	[1]	(58)	640	164
Deductions	[2]	(1,407)	(824)	(149)
Balance at end of period		1,757	3,222	1,758
Provision for billing adjustments
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period		866	504	1,174
Additions Changes in allowances, charges to expenses and changes to other accounts	[1]	(114)	497	(376)
Deductions	[2]	174	(135)	(294)
Balance at end of period		926	866	504
Provision for merchant losses
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period		1,118	1,122	994
Additions Changes in allowances, charges to expenses and changes to other accounts	[1]	4,667	1,686	2,211
Deductions	[2]	(4,419)	(1,690)	(2,083)
Balance at end of period		1,366	1,118	1,122
Transaction processing accruals - processing errors
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period		4,630	2,409	1,724
Additions Changes in allowances, charges to expenses and changes to other accounts	[3]	6,976	9,468	7,458
Deductions	[2]	(5,149)	(7,247)	(6,773)
Balance at end of period		6,457	4,630	2,409
Provision for cardholder losses
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period		6,312	5,784
Additions Changes in allowances, charges to expenses and changes to other accounts	[4]	41,264	38,381	19,737	[5]
Deductions	[2]	(38,185)	(37,853)	(13,953)
Balance at end of period		9,391	6,312	5,784
Deferred tax valuation allowance
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period		18,963	14,691	12,976
Additions Changes in allowances, charges to expenses and changes to other accounts	[6]	541	5,534	2,298
Deductions	[4]	(1,058)	(1,262)	(583)
Balance at end of period		$ 18,446	$ 18,963	$ 14,691

[1] Amount reflected includes charges to (recoveries of) bad debt expense which are classified in selling, general and administrative expenses and the charges for billing adjustment which are recorded against revenues.

[2] Accounts deemed to be uncollectible and written off during the year as it relates to bad debts. Amounts that relate to billing adjustments and transaction processing provisions reflect actual billing adjustments and processing errors charged against the allowances.

[3] Amount reflected is the change in transaction processing provisions reflected in cost of services expenses.

[4] Amount represents a decrease in the amount of deferred tax assets, which more likely than not, will not be realized.

[5] Amount represents an increase in the amount of deferred tax assets, which more likely than not, will not be realized.

[6] (6) Amount represents an increase in the amount of deferred tax assets, which more likely than not, will not be realized.

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Schedule II - Valuation and Qualifying Accounts (Parenthetical) (Detail) $ in Millions	Jul. 01, 2013 USD ($)
Provision for Fraud Losses | NetSpend Holdings Inc
Valuation and Qualifying Accounts Disclosure [Line Items]
Fraud losses related to the acquisition	$ 7.8

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Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands		12 Months Ended
	Jul. 01, 2013	Dec. 31, 2015 USD ($) Segment	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Significant Accounting Policies [Line Items]
Software technology assets resulting from acquisitions, estimated useful live	7 years 3 months 18 days
Equity investments		$ 106,118	$ 100,468
Cardholders' loss reserve		9,400	6,300
Advertising expenses		$ 9,600	5,700	$ 1,300
Minimum
Significant Accounting Policies [Line Items]
Estimated forfeiture rate		0.00%
Maximum
Significant Accounting Policies [Line Items]
Estimated forfeiture rate		8.00%
TSYS de Mexico
Significant Accounting Policies [Line Items]
Equity investments		$ 7,600	7,730
CUP Data
Significant Accounting Policies [Line Items]
Equity method investment, percentage of ownership		44.56%
Equity investments		$ 98,518	$ 92,738
Perpetual and site licenses | Minimum
Significant Accounting Policies [Line Items]
Intangible assets estimated useful life		3 years
Perpetual and site licenses | Maximum
Significant Accounting Policies [Line Items]
Intangible assets estimated useful life		10 years
Licensed computer software | Maximum
Significant Accounting Policies [Line Items]
Intangible assets estimated useful life		10 years
Acquisition technology intangibles | Minimum
Significant Accounting Policies [Line Items]
Software technology assets resulting from acquisitions, estimated useful live		5 years
Acquisition technology intangibles | Maximum
Significant Accounting Policies [Line Items]
Software technology assets resulting from acquisitions, estimated useful live		9 years
Software development costs | Minimum
Significant Accounting Policies [Line Items]
Intangible assets estimated useful life		3 years
Software development costs | Maximum
Significant Accounting Policies [Line Items]
Intangible assets estimated useful life		10 years
Other intangible assets | Minimum
Significant Accounting Policies [Line Items]
Intangible assets estimated useful life		3 years
Other intangible assets | Maximum
Significant Accounting Policies [Line Items]
Intangible assets estimated useful life		10 years
North American And International Services | Minimum
Significant Accounting Policies [Line Items]
Processing contracts		3 years
North American And International Services | Maximum
Significant Accounting Policies [Line Items]
Processing contracts		10 years
Merchant Services
Significant Accounting Policies [Line Items]
Reserve for merchant loss		$ 1,300
Merchant Services | Minimum
Significant Accounting Policies [Line Items]
Processing contracts		3 years
Merchant Services | Maximum
Significant Accounting Policies [Line Items]
Processing contracts		8 years
Goodwill
Significant Accounting Policies [Line Items]
Equity investments		$ 49,400
Buildings and improvements | Minimum
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful live		5 years
Buildings and improvements | Maximum
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful live		40 years
Computer equipment | Minimum
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful live		2 years
Computer equipment | Maximum
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful live		5 years
Furniture and other equipment | Minimum
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful live		3 years
Furniture and other equipment | Maximum
Significant Accounting Policies [Line Items]
Property and equipment, estimated useful live		15 years
NetSpend Holdings Inc
Significant Accounting Policies [Line Items]
Operating segments | Segment		4
Cardholders' loss reserve		$ 9,400
NetSpend Holdings Inc | Minimum
Significant Accounting Policies [Line Items]
Intangible assets estimated useful life	5 years
NetSpend Holdings Inc | Maximum
Significant Accounting Policies [Line Items]
Intangible assets estimated useful life	8 years
NetSpend Holdings Inc | TSYS de Mexico
Significant Accounting Policies [Line Items]
Equity method investment, percentage of ownership		49.00%
NetSpend Holdings Inc | CUP Data
Significant Accounting Policies [Line Items]
Equity method investment, percentage of ownership		44.56%
NetSpend Holdings Inc | Internal-use software | Minimum
Significant Accounting Policies [Line Items]
Intangible assets estimated useful life		3 years
NetSpend Holdings Inc | Internal-use software | Maximum
Significant Accounting Policies [Line Items]
Intangible assets estimated useful life		10 years
NetSpend Holdings Inc | Other Current Liabilities
Significant Accounting Policies [Line Items]
Transaction processing provision		$ 6,500

XML

Discontinued Operations - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Apr. 30, 2014	Dec. 31, 2015	Dec. 31, 2014
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on dispositions, net of tax		$ 1,411	$ 48,615
GP Net
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sale of stock, ownership percentage	54.00%
TSYS Japan
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sale of stock, ownership percentage	100.00%

XML

Main Classes of Assets and Liabilities Held for Sale (Detail) $ in Thousands	Dec. 31, 2014 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total assets	$ 4,003
Total liabilities	$ 4,003

XML

Summarized Results of Discontinued Operations (Detail) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total revenues			$ 16,376	$ 68,048
Income before taxes			1	3,443
Income tax (benefit) expense			(39)	1,388
Income from operating activities of discontinued operations, net of tax			40	2,055
Gain on dispositions, net of tax		$ 1,411	48,615
Income from discontinued operations, net of tax		1,411	48,655	2,055
Income from discontinued operations, net of tax, attributable to noncontrolling interest			999	4,198
Income (loss) from discontinued operations, net of tax, attributable to TSYS common shareholders		$ 1,411	$ 47,656	(2,143)
Interest allocated to discontinued operations	[1]			$ 281

[1] Interest expense relates to borrowings directly for use by Japan-based operations.

XML

Fair Value Measurement - Additional Information (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Goodwill	$ 1,545,424	$ 1,547,397

XML

Balances with Related Parties (Detail) - Affiliated Companies - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Accounts receivable	$ 19	$ 19
Account payable	$ 3,278	$ 4,329

XML

Revenues and Expenses Derived from Affiliated Companies (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
CUP Data
Related Party Transaction [Line Items]
Revenue	$ 116	$ 232	$ 229
TSYS de Mexico
Related Party Transaction [Line Items]
Revenue	85	78	68
Total operating expenses	148	148	148
Affiliated Companies
Related Party Transaction [Line Items]
Revenue	201	310	297
Total operating expenses	4,350	9,990	5,887
Merchants Limited
Related Party Transaction [Line Items]
Nonoperating expenses paid	42
Total operating expenses	$ 4,202	$ 9,842	$ 5,739

XML

Cash and Cash Equivalent Balances (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents in domestic accounts	$ 307,578	$ 225,396
Cash and cash equivalents in foreign accounts	81,750	63,787
Cash and cash equivalents	$ 389,328	$ 289,183	$ 247,700

XML

Significant Components of Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items]
Prepaid expenses	$ 37,961	$ 35,334
Supplies inventory	15,114	14,340
Income taxes receivable	51,322	259
Other	49,802	49,041
Total	$ 154,199	$ 98,974

XML

Goodwill - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Jul. 01, 2013
Goodwill [Line Items]
Business acquisition, goodwill	$ 1,545,424	$ 1,547,397
NetSpend Holdings Inc
Goodwill [Line Items]
Business acquisition, goodwill			$ 1,000,000	$ 1,024,434
Addition to purchase price allocation	$ 627	$ 8,500

XML

Gross Amount and Accumulated Impairment Loss of Goodwill (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Goodwill [Line Items]
Gross amount	$ 1,549,436	$ 1,551,409
Accumulated impairment losses	(4,012)	(4,012)
Goodwill, net	1,545,424	1,547,397	$ 1,543,179
North America Services
Goodwill [Line Items]
Gross amount	70,796	70,796
Accumulated impairment losses	(182)	(182)
Goodwill, net	70,614	70,614	70,796
International Services
Goodwill [Line Items]
Gross amount	29,081	31,681
Accumulated impairment losses	(1,605)	(1,605)
Goodwill, net	27,476	30,076	34,201
Merchant Services
Goodwill [Line Items]
Gross amount	415,973	415,973
Accumulated impairment losses	(2,225)	(2,225)
Goodwill, net	413,748	413,748	413,748
NetSpend
Goodwill [Line Items]
Gross amount	1,033,586	1,032,959
Goodwill, net	$ 1,033,586	$ 1,032,959	$ 1,024,434

XML

Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Goodwill [Line Items]
Beginning Balance	$ 1,547,397	$ 1,543,179
Disposal of GP Net		(1,787)
Currency translation adjustments	(2,600)	(2,520)
Ending Balance	1,545,424	1,547,397
NetSpend Holdings Inc
Goodwill [Line Items]
Tax adjustment	627	8,500
Purchase price allocation		8,525
North America Services
Goodwill [Line Items]
Beginning Balance	70,614	70,796
Disposal of GP Net		(182)
Ending Balance	70,614	70,614
International Services
Goodwill [Line Items]
Beginning Balance	30,076	34,201
Disposal of GP Net		(1,605)
Currency translation adjustments	(2,600)	(2,520)
Ending Balance	27,476	30,076
Merchant Services
Goodwill [Line Items]
Beginning Balance	413,748	413,748
Ending Balance	413,748	413,748
NetSpend
Goodwill [Line Items]
Beginning Balance	1,032,959	1,024,434
Ending Balance	1,033,586	1,032,959
NetSpend | NetSpend Holdings Inc
Goodwill [Line Items]
Tax adjustment	$ 627
Purchase price allocation		$ 8,525

XML

Significant Components of Other Intangible Assets (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Gross	$ 585,416	$ 586,035
Accumulated Amortization	(257,096)	(181,928)
Net	328,320	404,107
Channel relationships
Finite-Lived Intangible Assets [Line Items]
Gross	318,600	318,600
Accumulated Amortization	(99,909)	(60,079)
Net	218,691	258,521
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross	166,579	167,140
Accumulated Amortization	(104,736)	(87,201)
Net	61,843	79,939
Trade name
Finite-Lived Intangible Assets [Line Items]
Gross	46,422	46,480
Accumulated Amortization	(24,422)	(15,680)
Net	22,000	30,800
Database
Finite-Lived Intangible Assets [Line Items]
Gross	28,000	28,000
Accumulated Amortization	(14,000)	(8,400)
Net	14,000	19,600
Covenants-Not-to-Compete
Finite-Lived Intangible Assets [Line Items]
Gross	14,940	14,940
Accumulated Amortization	(7,834)	(5,551)
Net	7,106	9,389
Trade association
Finite-Lived Intangible Assets [Line Items]
Gross	10,000	10,000
Accumulated Amortization	(5,750)	(4,750)
Net	4,250	5,250
Favorable lease
Finite-Lived Intangible Assets [Line Items]
Gross	875	875
Accumulated Amortization	(445)	(267)
Net	$ 430	$ 608

XML

Other Intangible Assets, net - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Other intangible assets
Finite-Lived Intangible Assets [Line Items]
Amortization expenses recorded in selling, general and administrative expenses	$ 75.8	$ 77.3	$ 50.0

XML

Weighted Average Useful Life for Each Component of Other Intangible Assets (Detail) - Other intangible assets	12 Months Ended
	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	7 years 7 months 6 days
Channel relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	8 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	8 years 2 months 12 days
Trade name
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	4 years 10 months 24 days
Database
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	5 years
Covenants-Not-to-Compete
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	5 years 3 months 18 days
Trade association
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	10 years
Favorable lease
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	4 years 10 months 24 days

XML

Estimated Future Amortization Expense on Other Intangible Assets (Detail) - Other intangible assets $ in Thousands	Dec. 31, 2015 USD ($)
Finite-Lived Intangible Assets [Line Items]
2016	$ 75,213
2017	74,823
2018	60,166
2019	47,870
2020	$ 43,711

XML

Summary of Computer Software (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Computer software	$ 1,085,652	$ 979,414
Accumulated amortization	680,582	613,266
Computer software, net	405,070	366,148
Licensed computer software
Finite-Lived Intangible Assets [Line Items]
Computer software	513,443	435,701
Accumulated amortization	282,563	243,866
Software development costs
Finite-Lived Intangible Assets [Line Items]
Computer software	404,238	376,026
Accumulated amortization	287,863	275,512
Acquisition technology intangibles
Finite-Lived Intangible Assets [Line Items]
Computer software	167,971	167,687
Accumulated amortization	$ 110,156	$ 93,888

XML

Computer Software Under Capital Lease (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Capital Leased Assets [Line Items]
Gross	$ 60,824	$ 54,492
Accumulated Amortization	(38,865)	(31,482)
Net	21,959	23,010
Licensed computer software
Capital Leased Assets [Line Items]
Gross	18,206	17,625
Accumulated Amortization	(8,175)	(4,816)
Net	$ 10,031	$ 12,809

XML

Amortization Expense Related to Computer Software (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Licensed computer software
Amortization expense related to:
Amortization expenses	$ 41,823	$ 36,775	$ 33,511
Software development costs
Amortization expense related to:
Amortization expenses	22,740	25,248	21,430
Acquisition technology intangibles
Amortization expense related to:
Amortization expenses	$ 16,734	$ 19,683	$ 15,855

XML

Weighted Average Useful Life of Each Component of Computer Software (Detail) - Computer Software, Intangible Asset	12 Months Ended
	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	5 years 10 months 24 days
Licensed computer software
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	5 years 4 months 24 days
Software development costs
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	6 years 1 month 6 days
Acquisition technology intangibles
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	6 years 9 months 18 days

XML

Estimated Future Amortization Expense of Licensed Computer Software, Software Development Costs and Acquisition Technology Intangibles (Detail) $ in Thousands	Dec. 31, 2015 USD ($)
Licensed computer software
Finite-Lived Intangible Assets [Line Items]
2016	$ 36,207
2017	31,034
2018	25,345
2019	13,617
2020	8,899
Software development costs
Finite-Lived Intangible Assets [Line Items]
2016	27,312
2017	21,608
2018	16,041
2019	9,916
2020	7,343
Acquisition technology intangibles
Finite-Lived Intangible Assets [Line Items]
2016	15,352
2017	13,868
2018	11,393
2019	11,393
2020	$ 5,734

XML

Property and Equipment Balances (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 747,226	$ 713,781
Less accumulated depreciation and amortization	457,328	423,196
Property and equipment, net	289,898	290,585
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	346,387	317,862
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	244,938	243,211
Furniture and other equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	138,727	135,741
Land
Property, Plant and Equipment [Line Items]
Property and equipment, gross	16,577	16,763
Other
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 597	$ 204

XML

Property, Plant and Equipment under Capital Lease (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Capital Leased Assets [Line Items]
Gross	$ 60,824	$ 54,492
Accumulated Amortization	(38,865)	(31,482)
Net	21,959	23,010
Computer equipment
Capital Leased Assets [Line Items]
Gross	55,450	49,118
Accumulated Amortization	(36,134)	(29,816)
Furniture and other equipment
Capital Leased Assets [Line Items]
Gross	5,374	5,374
Accumulated Amortization	$ (2,731)	$ (1,666)

XML

Property and Equipment, net - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense related to property and equipment	$ 56.6	$ 53.5	$ 45.5

XML

Significant Components of Contract Acquisition Costs (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Acquired Finite-Lived Intangible Assets [Line Items]
Conversion costs, net	$ 159,000	$ 159,339
Payments for processing rights, net	88,811	76,966
Total	$ 247,811	$ 236,305

XML

Amortization Expense Related to Contract Acquisition Cost (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Conversion costs
Finite Lived Intangible Assets Amortization Expense [Line Items]
Amortization expense	$ 27,392	$ 17,816	$ 19,515
Payments for processing rights
Finite Lived Intangible Assets Amortization Expense [Line Items]
Amortization expense	$ 17,039	$ 16,209	$ 13,099

XML

Weighted Average Useful Life for Each Component of Contract Acquisition Costs (Detail) - Contract Acquisition Costs	12 Months Ended
	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	13 years 3 months 18 days
Payments for processing rights
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	14 years 8 months 12 days
Conversion costs
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	12 years 3 months 18 days

XML

Estimated Future Amortization Expense on Payments for Processing Rights and Conversion Costs (Detail) $ in Thousands	Dec. 31, 2015 USD ($)
Conversion costs
Finite-Lived Intangible Assets [Line Items]
2016	$ 32,122
2017	29,148
2018	25,656
2019	21,149
2020	17,800
Payments for processing rights
Finite-Lived Intangible Assets [Line Items]
2016	17,394
2017	15,978
2018	14,561
2019	12,277
2020	$ 10,167

XML

Equity Investments - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Schedule of Equity Method Investments [Line Items]
Equity in income of equity investments, net of tax	$ 22,106	$ 17,583	$ 13,047
Promocn Y Operacin, SA De CV
Schedule of Equity Method Investments [Line Items]
Equity method investment, percentage of ownership	49.00%
CUP Data
Schedule of Equity Method Investments [Line Items]
Equity method investment, percentage of ownership	44.56%

XML

Summary of TSYS Equity Investments (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Schedule of Equity Method Investments [Line Items]
Equity investments	$ 106,118	$ 100,468
CUP Data
Schedule of Equity Method Investments [Line Items]
Equity investments	98,518	92,738
TSYS de Mexico
Schedule of Equity Method Investments [Line Items]
Equity investments	$ 7,600	$ 7,730

XML

Summary of Long-term Debt (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Long-term debt	$ 1,430,335	$ 1,441,916
Less current portion	50,364	43,784
Noncurrent portion of long-term debt	1,379,971	1,398,132
2.375% Senior Notes due 2018
Debt Instrument [Line Items]
Long-term debt	549,919	549,889
3.750% Senior Notes due 2023
Debt Instrument [Line Items]
Long-term debt	546,746	546,379
LIBOR + 1.125%, unsecured term loan | Unsecured term loan due on April 08, 2018
Debt Instrument [Line Items]
Long-term debt	175,000	185,000
LIBOR + 1.125%, unsecured term loan | Unsecured term loan due on September 10, 2017
Debt Instrument [Line Items]
Long-term debt	120,000	131,250
1.38% note payable | Due January 31, 2017
Debt Instrument [Line Items]
Long-term debt	30,000
1.50% note payable | Due September 30, 2016
Debt Instrument [Line Items]
Long-term debt	5,132	11,886
1.50% note payable | Due January 31, 2016
Debt Instrument [Line Items]
Long-term debt	336	4,332
1.50% note payable | Due December 31, 2015
Debt Instrument [Line Items]
Long-term debt		10,075
1.50% note payable | Due July 31, 2015
Debt Instrument [Line Items]
Long-term debt		1,709
LIBOR + 2.0%, unsecured term loan
Debt Instrument [Line Items]
Long-term debt	$ 3,202	$ 1,396

XML

Summary of Long-term Debt (Parenthetical) (Detail)	1 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014	May. 31, 2013
2.375% Senior Notes due 2018
Debt Instrument [Line Items]
Debt instrument, interest rate		2.375%	2.375%	2.375%
Debt instrument, maturity date		Jun. 01, 2018	Jun. 01, 2018
Senior notes maturity , period		5 years	5 years
3.750% Senior Notes due 2023
Debt Instrument [Line Items]
Debt instrument, interest rate		3.75%	3.75%	3.75%
Debt instrument, maturity date		Jun. 01, 2023	Jun. 01, 2023
Senior notes maturity , period		10 years	10 years
1.38% note payable | Due January 31, 2017
Debt Instrument [Line Items]
Debt instrument, interest rate		1.38%	1.38%
Debt instrument, maturity date		Jan. 31, 2017	Jan. 31, 2017
1.50% note payable | Due September 30, 2016
Debt Instrument [Line Items]
Debt instrument, interest rate		1.50%	1.50%
Debt instrument, maturity date		Sep. 30, 2016	Sep. 30, 2016
1.50% note payable | Due January 31, 2016
Debt Instrument [Line Items]
Debt instrument, interest rate		1.50%	1.50%
Debt instrument, maturity date		Jan. 31, 2016	Jan. 31, 2016
1.50% note payable | Due December 31, 2015
Debt Instrument [Line Items]
Debt instrument, interest rate		1.50%	1.50%
Debt instrument, maturity date		Dec. 31, 2015	Dec. 31, 2015
1.50% note payable | Due July 31, 2015
Debt Instrument [Line Items]
Debt instrument, interest rate		1.50%	1.50%
Debt instrument, maturity date		Jul. 31, 2015	Jul. 31, 2015
LIBOR + 2.0%, unsecured term loan
Debt Instrument [Line Items]
Debt instrument, maturity date	Dec. 07, 2017	Dec. 07, 2017	Dec. 07, 2017
LIBOR + 2.0%, unsecured term loan | London Interbank Offered Rate
Debt Instrument [Line Items]
Debt instrument, margin rate		2.00%	2.00%
Unsecured term loan due on April 08, 2018 | LIBOR + 1.125%, unsecured term loan
Debt Instrument [Line Items]
Debt instrument, maturity date		Apr. 08, 2018	Apr. 08, 2018
Unsecured term loan due on April 08, 2018 | LIBOR + 1.125%, unsecured term loan | London Interbank Offered Rate
Debt Instrument [Line Items]
Debt instrument, margin rate		1.125%	1.125%
Unsecured term loan due on September 10, 2017 | LIBOR + 1.125%, unsecured term loan
Debt Instrument [Line Items]
Debt instrument, maturity date		Sep. 10, 2017	Sep. 10, 2017
Unsecured term loan due on September 10, 2017 | LIBOR + 1.125%, unsecured term loan | London Interbank Offered Rate
Debt Instrument [Line Items]
Debt instrument, margin rate		1.125%	1.125%

XML

Long-Term Borrowings and Capital Lease Obligations - Additional Information (Detail)								1 Months Ended	12 Months Ended
	Jul. 01, 2013 USD ($)	Jun. 01, 2013 USD ($)	May. 31, 2013 USD ($)	Apr. 08, 2013 USD ($)	Feb. 19, 2013 USD ($)	Sep. 30, 2012 USD ($)	Dec. 21, 2007 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2015 GBP (£)	Dec. 31, 2014 GBP (£)	Sep. 30, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Jun. 30, 2012 USD ($)
Debt Instrument [Line Items]
Long-term debt									$ 1,430,335,000	$ 1,441,916,000
Credit agreement, maximum borrowing capacity														$ 5,000,000
Credit facility outstanding amount									$ 0	$ 0				0
2.375% Senior Notes due 2018
Debt Instrument [Line Items]
Aggregate principal amount			$ 550,000,000
Debt instrument, maturity date									Jun. 01, 2018	Jun. 01, 2018
Long-term debt									$ 549,919,000	$ 549,889,000
Senior notes maturity year			2018
Senior notes interest rate			2.375%						2.375%	2.375%		2.375%
Debt instrument maturity period									5 years	5 years
3.750% Senior Notes due 2023
Debt Instrument [Line Items]
Aggregate principal amount			$ 550,000,000
Debt instrument, maturity date									Jun. 01, 2023	Jun. 01, 2023
Long-term debt									$ 546,746,000	$ 546,379,000
Senior notes maturity year			2023
Senior notes interest rate			3.75%						3.75%	3.75%		3.75%
Debt instrument maturity period									10 years	10 years
NetSpend Holdings Inc
Debt Instrument [Line Items]
Business acquisition, cost of acquired entity, purchase price	$ 1,396,550,000	$ 1,396,550,000
Equipment And Software [Member] | Minimum
Debt Instrument [Line Items]
Lease term range									1 year
Equipment And Software [Member] | Maximum
Debt Instrument [Line Items]
Lease term range									6 years
Term Loan
Debt Instrument [Line Items]
Credit agreement, maximum borrowing capacity				$ 200,000,000
Credit agreement term				5 years
Outstanding balance on the Credit Agreement									$ 175,000,000
Term Loan | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument, margin rate				1.125%
Term Loan | London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Debt instrument, margin rate				1.00%
Term Loan | London Interbank Offered Rate (LIBOR) | Maximum
Debt Instrument [Line Items]
Debt instrument, margin rate				1.75%
Bridge Loan Facility
Debt Instrument [Line Items]
Bridge loan facility, term					364 days
Debt instrument, fee amount					$ 5,900,000
Bridge Loan Facility | Before Amendment
Debt Instrument [Line Items]
Credit agreement commitment					$ 1,200,000,000
Unsecured revolving credit facility
Debt Instrument [Line Items]
Long-term debt						$ 150,000,000	$ 252,000,000
Credit agreement, maximum borrowing capacity						$ 350,000,000
Credit agreement term						5 years	5 years
Outstanding balance on the Credit Agreement									120,000,000
Debt instrument maturity period						5 years
Unsecured revolving credit facility | Standby letters of credit
Debt Instrument [Line Items]
Credit agreement, maximum borrowing capacity						$ 50,000,000
Unsecured revolving credit facility | Swingline loans
Debt Instrument [Line Items]
Credit agreement, maximum borrowing capacity						50,000,000
Unsecured revolving credit facility | Minimum
Debt Instrument [Line Items]
Commitment fee							0.08%
Unsecured revolving credit facility | Maximum
Debt Instrument [Line Items]
Unsecured revolving credit facility, increased additional borrowings						$ 350,000,000
Commitment fee							0.15%
Unsecured revolving credit facility | NetSpend Holdings Inc
Debt Instrument [Line Items]
Outstanding balance on the Credit Agreement									0
Proceeds from credit agreement, additional funding amount	$ 100,000,000
Financing agreement for perpetual software licenses
Debt Instrument [Line Items]
Aggregate principal amount									30,000,000	$ 13,600,000			$ 13,600,000
Financing agreement for perpetual software licenses | Licensing Agreement One
Debt Instrument [Line Items]
Financing agreement amount														$ 20,000,000
Financing agreement for perpetual software licenses | Licensing Agreement Two
Debt Instrument [Line Items]
Balance of financing agreement									11,900,000
Financing agreement amount																$ 8,600,000
Financing agreement amount repaid									8,600,000
Financing agreement for perpetual software licenses | Licensing Agreement Three
Debt Instrument [Line Items]
Balance of financing agreement									300,000
Financing agreement amount															$ 11,900,000
Financing agreement for perpetual software licenses | Financing Agreement In September 2014
Debt Instrument [Line Items]
Balance of financing agreement									5,100,000
Financing agreement for perpetual software licenses | Financing Agreement In December 2015
Debt Instrument [Line Items]
Balance of financing agreement									$ 30,000,000
LIBOR + 2.0%, unsecured term loan
Debt Instrument [Line Items]
Aggregate principal amount								$ 1,900,000		$ 1,400,000	£ 1,300,000	£ 900,000
Debt instrument, maturity date								Dec. 07, 2017	Dec. 07, 2017	Dec. 07, 2017
Long-term debt									$ 3,202,000	$ 1,396,000
LIBOR + 2.0%, unsecured term loan | London Interbank Offered Rate
Debt Instrument [Line Items]
Debt instrument, margin rate									2.00%	2.00%
LIBOR + 2.0%, unsecured term loan | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument, margin rate								2.00%
Senior Notes
Debt Instrument [Line Items]
Debt instrument, fee amount			$ 8,900,000
Debt instrument, discount			$ 4,300,000
LIBOR + 0.60%, unsecured term loan
Debt Instrument [Line Items]
Long-term debt							$ 168,000,000
Credit agreement term							5 years
Debt instrument, frequency of interest payments							3 months
LIBOR + 0.60%, unsecured term loan | London Interbank Offered Rate
Debt Instrument [Line Items]
Debt instrument, margin rate							0.60%
LIBOR + 0.60%, unsecured term loan | Minimum | London Interbank Offered Rate
Debt Instrument [Line Items]
Debt instrument, margin rate							0.27%
LIBOR + 0.60%, unsecured term loan | Maximum | London Interbank Offered Rate
Debt Instrument [Line Items]
Debt instrument, margin rate							0.725%

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Required Annual Principal Payments on Long-term Debt (Detail) $ in Thousands	Dec. 31, 2015 USD ($)
Long Term Debt Maturities Repayments Of Principal [Line Items]
2016	$ 50,364
2017	143,305
2018	690,000
2019	0
2020	$ 0

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Capital Lease Obligations (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Schedule of Capital Lease Obligations [Line Items]
Capital lease obligations	$ 7,131	$ 14,101
Less current portion	3,468	7,127
Noncurrent portion of capital leases	$ 3,663	$ 6,974

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Future Minimum Lease Payments under Capital Leases (Detail) $ in Thousands	Dec. 31, 2015 USD ($)
Schedule of Capital Lease Obligations [Line Items]
2016	$ 3,611
2017	2,687
2018	1,001
2019	63
2020	0
Total minimum lease payments	7,362
Less amount representing interest	(231)
Principal minimum lease payments	$ 7,131

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Significant Components of Other Current Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Other Liabilities [Line Items]
Deferred revenues	$ 39,863	$ 41,773
Accrued expenses	26,017	23,617
Dividends payable	19,367	19,006
Other	81,332	70,409
Total	$ 166,579	$ 154,805

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Components of Income Tax Expense Included in Consolidated Statements of Income Taxes (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Current income tax expense:
Federal	$ 139,228	$ 126,203	$ 74,327
State	9,255	5,161	2,949
Foreign	4,762	7,694	6,822
Total current income tax expense	153,245	139,058	84,098
Deferred income tax expense (benefit):
Federal	(2,198)	(3,623)	27,447
State	442	(2,039)	(55)
Foreign	(125)	(3,635)	(509)
Total deferred income tax expense (benefit)	(1,881)	(9,297)	26,883
Total income tax expense	$ 151,364	$ 129,761	$ 110,981

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Components of Income Tax Before Income Tax (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Components of income before income tax expense:
Domestic	$ 488,515	$ 369,888	$ 328,052
Foreign	8,373	23,041	24,424
Income before income taxes and equity in income of equity investments	$ 496,888	$ 392,929	$ 352,476

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Income Tax Contingency [Line Items]
Statutory federal income tax rate	35.00%
Deferred tax assets from net operating losses carryforwards	$ 4,500	$ 5,900
Deferred tax assets from federal and state income tax credit carryforwards	25,000	26,100
Valuation allowance for deferred income tax assets	18,446	18,963
Decrease in valuation allowance for deferred income tax assets	(500)
Undistributed earnings	83,900
Decrease in liability for prior year uncertain tax position	6,400
Gross accrued interest and penalties on unrecognized tax benefits	700	300
Unrecognized income tax benefits that, if recognized, would affect the effective tax rates	13,200	6,500
Unrecognized income tax benefits that, if recognized, would affect the effective tax rates , interest and penalties	$ 500	$ 200

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Income Tax Expense Differed from Amounts Computed by Applying Statutory U.S. Federal Income Tax Rate to Income before Income Taxes, Noncontrolling Interest and Equity in Income of Equity Investments (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Reconciliation of Provision of Income Taxes [Line Items]
Computed "expected" income tax expense	$ 173,911	$ 137,525	$ 123,367
International tax rate differential and equity income	8,367	6,541	1,870
State income tax expense, net of federal income tax effect	7,101	4,823	3,408
Increase (decrease) in valuation allowance	(517)	(4,550)	1,715
Tax credits	(28,831)	(3,459)	(6,141)
Deduction for domestic production activities	(11,550)	(8,750)	(8,225)
Permanent differences and other, net	2,883	(2,369)	(5,013)
Total income tax expense	$ 151,364	$ 129,761	$ 110,981

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Temporary Differences between Financial Statement Carrying Amounts and Tax Bases of Assets and Liabilities that Give Rise to Significant Portions of Net Deferred Tax Liability (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Deferred income tax assets:
Net operating loss and income tax credit carryforwards	$ 29,522	$ 31,978
Allowances for doubtful accounts and billing adjustments	1,399	1,328
Deferred revenue	31,713	31,240
Share-based compensation	22,088	24,449
Other, net	34,673	24,743
Total deferred income tax assets	119,395	113,738
Less valuation allowance for deferred income tax assets	(18,446)	(18,963)
Net deferred income tax assets	100,949	94,775
Deferred income tax liabilities:
Excess tax over financial statement depreciation	(61,161)	(53,527)
Computer software development costs	(82,835)	(67,703)
Purchase accounting adjustments	(114,171)	(136,701)
Foreign currency translation	(4,522)	(7,642)
Other, net	(24,462)	(18,830)
Total deferred income tax liabilities	(287,151)	(284,403)
Net deferred income tax liabilities	(186,202)	(189,628)
Total net deferred tax assets (liabilities):
Current	24,670	15,190
Noncurrent	(210,872)	(204,818)
Net deferred income tax liabilities	$ (186,202)	$ (189,628)

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Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2015 USD ($)	[1]
Reconciliation of Unrecognized Tax Benefits [Line Items]
Beginning balance	$ 6.7
Additions based on tax positions related to current year	2.3
Additions for tax positions of prior years	4.7
Reductions for tax positions of prior years	(0.6)
Net, current activity	6.4
Ending balance	$ 13.1

[1] Unrecognized state tax liabilities are not adjusted for the federal tax impact

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Future Minimum Lease Payments Under Noncancelable Operating Leases (Detail) $ in Thousands	Dec. 31, 2015 USD ($)
Operating Leased Assets [Line Items]
2016	$ 121,892
2017	117,137
2018	101,413
2019	99,426
2020	30,733
Thereafter	22,716
Total future minimum lease payments	$ 493,317

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Commitments And Contingencies - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Loss Contingencies [Line Items]
Rental expense under all operating leases	$ 124,800,000	$ 105,200,000	$ 93,400,000
Estimated gross settlement exposure	9,900,000
Cardholders' overdrawn account balances	17,900,000	14,000,000
Cardholders' loss reserve	9,400,000	6,300,000
Recognized gain on investment	4,038,000	793,000	966,000
MetaBank
Loss Contingencies [Line Items]
Advance on behalf of cardholders	1,000,000
Maximum
Loss Contingencies [Line Items]
Cardholder overdraft limit	10
Private Equity Funds
Loss Contingencies [Line Items]
Contributions made	15,000,000	10,800,000
Investments, including gains	17,600,000	11,900,000
Recognized gain on investment	4,000,000	$ 800,000	$ 1,000,000
Private Equity Funds | Maximum
Loss Contingencies [Line Items]
Commitment to invest	$ 20,000,000
Percentage of ownership interests	50.00%

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Employee Benefit Plans - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2015
TSYS Retirement Savings Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Employer contribution, percentage of eligible compensation	100.00%
TSYS Stock Repurchase Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Percentage of employer contribution	15.00%
Maximum | TSYS Retirement Savings Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Employee contribution, percentage of eligible compensation	4.00%
Percentage of employer discretionary contributions	4.00%

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Contributions Charged to Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
TSYS Retirement Savings Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Contributions charged to expense	$ 24,169	$ 17,531	$ 14,506
TSYS Stock Repurchase Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Contributions charged to expense	$ 1,378	$ 1,288	$ 1,236

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Equity - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividends on common stock	$ 73.7	$ 74.8	$ 56.5

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Summary of Equity Compensation Plans (Detail) - Equity compensation plans not approved by security holders shares in Thousands	Dec. 31, 2015 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of securities to be issued upon exercise of outstanding options, warrants and rights	4,475
Weighted-average exercise price of outstanding options, warrants and rights | $ / shares	$ 28.07	[1]
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))	8,550	[2]

[1] Weighted-average exercise price represents 2,887 thousand options only and does not include performance shares and other awards that have no exercise price.

[2] Shares available for future grants under the Total System Services Inc. 2007 Omnibus Plan and 2012 Omnibus Plan, which could be in the form of options, nonvested awards and performance shares.

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Summary of Equity Compensation Plans (Parenthetical) (Detail) - shares shares in Thousands	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at end of year	2,887	4,892	5,752

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Share-Based Compensation - Additional Information (Detail) $ / shares in Units, $ in Thousands				1 Months Ended	12 Months Ended
		Jul. 18, 2013 USD ($) shares	Jul. 01, 2013 USD ($) $ / shares shares	Jul. 31, 2013 shares	Dec. 31, 2015 USD ($) Installment $ / shares shares	Dec. 31, 2014 USD ($) $ / shares	Dec. 31, 2013 USD ($) $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equal annual installments of stock options exercisable | Installment					3
Expiration period of employee stock option					10 years
Share-based compensation | $					$ 41,549	$ 30,790	$ 28,933
Shares of common stock issued			2,017,865
Average fair value of option grant | $ / shares					$ 8.27	$ 7.66	$ 9.48
Exercise price | $ / shares					$ 39.01	$ 30.96	$ 17.42
Risk-free interest rate					1.73%	2.01%	1.31%
Expected volatility					20.80%	25.06%	26.81%
Expected term					6 years 3 months 18 days	6 years 6 months	6 years
Dividend yield					1.04%	1.29%	1.64%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Required service period for retirement eligible employees					12 months
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Required service period for retirement eligible employees					18 months
2015 Performance Share Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to non vested share-based compensation arrangements | $					$ 11,000
2015 Market-Based Share Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to non vested share-based compensation arrangements | $					$ 1,500
Nonvested Restricted Stock Bonus Awards | NetSpend Holdings Inc
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock issued		212,694
Value of awards issued | $		$ 5,500
Nonvested Restricted Stock Bonus Awards | NetSpend Holdings Inc | Minimum | Certain key Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period		2 years
Nonvested Restricted Stock Bonus Awards | NetSpend Holdings Inc | Maximum | Certain key Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period		4 years
Performance Shares | 2014 Performance Shares | attained in 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of performance shares grant expected to vest					200.00%
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of fair market value of common stock in exercise price					100.00%
Award vesting period					3 years
Unrecognized compensation cost related to non vested share-based compensation arrangements | $					$ 2,900
Unrecognized compensation cost related to non vested share-based compensation arrangements, remaining weighted average recognition period					1 year 6 months
Average fair value of option grant | $ / shares					$ 8.27	$ 7.66	$ 9.48
Exercise price | $ / shares	[1]				$ 39.01	$ 30.96	$ 17.42
Stock Options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period of employee stock option					10 years
Stock Option Replacement Awards | NetSpend Holdings Inc
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock issued			1,060,148
Value of awards issued | $			$ 13,700
Average fair value of option grant | $ / shares			$ 12.93
Exercise price | $ / shares			$ 11.68
Risk-free interest rate			1.31%
Expected volatility			29.22%
Expected term			4 years 8 months 12 days
Dividend yield			1.63%
Stock Option Replacement Awards | NetSpend Holdings Inc | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			7 months
Stock Option Replacement Awards | NetSpend Holdings Inc | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			45 months
Unvested Restricted Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to non vested share-based compensation arrangements | $					$ 22,800
Unrecognized compensation cost related to non vested share-based compensation arrangements, remaining weighted average recognition period					1 year 10 months 24 days
Omnibus Stock Incentive Plan, Twenty Twelve
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate number of shares granted to participants pursuant to awards					17,000,000
Omnibus Stock Incentive Plan 2007
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate number of shares granted to participants pursuant to awards					5,000,000
2002 Long Term Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate number of shares granted to participants pursuant to awards					9,400,000
Long Term Incentive Plan 2000
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate number of shares granted to participants pursuant to awards					2,400,000
Nonvested Stock Replacement Award | NetSpend Holdings Inc
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock issued			870,361
Value of awards issued | $			$ 21,500
Performance-based Replacement Stock Award | NetSpend Holdings Inc
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock issued				225,000

[1] Includes the issuance of approximately 1.1 million stock option replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $13.7 million. A portion of the expense associated with these awards has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

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Summary of Number of Shares Granted Each Year (Detail) - Unvested Restricted Awards - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares	[1]	388,211	672,724	1,667,246
Market value		$ 14.9	$ 20.6	$ 41.3

[1] Includes the issuance of approximately 870,361 stock replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $21.5 million. A portion of the expense associated with these options has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

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Summarized Status of Nonvested Shares and Changes during Periods (Detail) - Unvested Restricted Awards - $ / shares		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Shares
Outstanding at beginning of year		1,769,000	1,783,000	554,000
Granted	[1]	388,211	672,724	1,667,246
Vested		(930,000)	(602,000)	(328,000)
Forfeited/canceled		(81,000)	(85,000)	(110,000)
Outstanding at end of year		1,146,000	1,769,000	1,783,000
Weighted Average Grant-Date Fair Value
Outstanding at beginning of year		$ 26.75	$ 24.19	$ 19.96
Granted	[1]	38.38	30.67	24.75
Vested		26.05	23.74	19.95
Forfeited/canceled		28.78	25.47	23.82
Outstanding at end of year		$ 31.11	$ 26.75	$ 24.19

[1] Includes the issuance of approximately 870,361 stock replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $21.5 million. A portion of the expense associated with these options has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

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Summarized Status of Nonvested Shares and Changes during Periods (Parenthetical) (Detail) - Unvested Restricted Awards - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance of stock awards granted in connection with acquisition	[1]	388,211	672,724	1,667,246
Market value of stock awarded granted in connection with acquisition		$ 14.9	$ 20.6	$ 41.3
NetSpend Holdings Inc
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance of stock awards granted in connection with acquisition				870,361
Market value of stock awarded granted in connection with acquisition				$ 21.5

[1] Includes the issuance of approximately 870,361 stock replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $21.5 million. A portion of the expense associated with these options has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

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Summary of Performance- and Market- Based Awards Granted (Detail) - shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted	613,473	1,046,372	1,939,796
Market Based Share Awards | 2015 Market-Based Share Plan | Performance Period Ending July 2016, 2017 and 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Measure	Total Shareholder Return
Number of Shares Granted	25,000
Period Expensed Through	2018-07
Market Based Share Awards | 2015 Market-Based Share Plan | Performance Period Ending December 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Measure	Total Shareholder Return
Number of Shares Granted	57,982
Period Expensed Through	2017-12
Performance Shares | 2015 Performance Share Plan | Performance Period Ending December 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Measure	Adjusted EPS
Number of Shares Granted	135,289
Period Expensed Through	2017-12
Performance Shares | 2015 Performance Share Plan | Performance Period Ending December 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Measure	Revenues before Reimbursable Items and Adjusted EPS
Number of Shares Granted	165,543
Period Expensed Through	2018-12
Performance Shares | 2014 Performance Shares | Performance Period Ending December 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Measure		Revenues before Reimbursable Items and Adjusted EPS
Number of Shares Granted		211,593
Period Expensed Through		2016-12
Performance Shares | 2013 Performance-Based Share Plan | Performance Period Ending December 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Measure			NetSpend Revenues and NetSpend Operating Income
Number of Shares Granted			87,356
Period Expensed Through			2015-12
Performance Shares | 2013 Performance-Based Share Plan | Performance Period Ending December 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance Measure			Revenues before Reimbursable Items and Income from Continuing Operations
Number of Shares Granted			237,679
Period Expensed Through			2015-12

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Summary of Awards Authorized (Detail) - Performance Shares - shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Number of Shares Awarded	383,814	211,593	563,803
Potential Number of Performance-Based Shares to be Vested	526,879	211,593	400,539
Potential Number of Performance-Based Shares to be Vested period	2018	2017	2016

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Summarized Status of Performance-based Nonvested Shares and Changes during Period (Detail) - Performance Shares - $ / shares shares in Thousands		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Shares
Outstanding at beginning of year		766	1,049	809
Granted	[1]	384	211	564
Vested		(241)	(258)	(324)
Forfeited/canceled		9	(236)
Outstanding at end of year		918	766	1,049
Weighted Average Grant Date Fair Value
Outstanding at beginning of year		$ 25.86	$ 22.75	$ 18.76
Granted	[1]	36.84	30.89	24.88
Vested		22.92	17.57	15.93
Forfeited/canceled		22.20	25.62
Outstanding at end of year		$ 31.19	$ 25.86	$ 22.75

[1] Includes the issuance of approximately 87,356 stock replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $2.2 million. A portion of the expense associated with these awards has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

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Summarized Status of Performance-based Nonvested Shares and Changes during Period (Parenthetical) (Detail) - Performance Shares - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance of stock awards granted in connection with acquisition	[1]	384,000	211,000	564,000
NetSpend Holdings Inc
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance of stock awards granted in connection with acquisition				87,356
Market value of stock awarded granted in connection with acquisition				$ 2.2

[1] Includes the issuance of approximately 87,356 stock replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $2.2 million. A portion of the expense associated with these awards has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

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Summary of Weighted Average Assumptions and Fair Value of Options (Detail) - $ / shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted	613,473	1,046,372	1,939,796
Weighted average exercise price	$ 39.01	$ 30.96	$ 17.42
Risk-free interest rate	1.73%	2.01%	1.31%
Expected volatility	20.80%	25.06%	26.81%
Expected term (years)	6 years 3 months 18 days	6 years 6 months	6 years
Dividend yield	1.04%	1.29%	1.64%
Weighted average fair value	$ 8.27	$ 7.66	$ 9.48

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Summary of Stock Option Activity and Changes during Year (Detail) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Options:
Granted		613,473	1,046,372	1,939,796
Weighted Average Exercise Price
Granted		$ 39.01	$ 30.96	$ 17.42
Weighted average fair value of options granted during the year		$ 8.27	$ 7.66	$ 9.48
Stock Options
Options:
Outstanding at beginning of year		4,892,000	5,752,000	6,065,000
Granted	[1]	613,000	1,046,000	1,940,000
Exercised		(2,586,000)	(1,850,000)	(2,177,000)
Forfeited/canceled		(32,000)	(56,000)	(76,000)
Outstanding at end of year		2,887,000	4,892,000	5,752,000
Options exercisable at year-end		1,439,000	2,781,000	3,232,000
Weighted Average Exercise Price
Outstanding at beginning of year		$ 23.83	$ 20.96	$ 21.27
Granted	[1]	39.01	30.96	17.42
Exercised		22.68	18.79	18.75
Forfeited/canceled		20.79	28.88	16.78
Outstanding at end of year		28.07	23.83	20.96
Options exercisable at year-end		25.17	22.86	23.02
Weighted average fair value of options granted during the year		$ 8.27	$ 7.66	$ 9.48
Average remaining contractual life (in years)		7 years 9 months 18 days
Aggregate intrinsic value (in thousands)		$ 62,738
Average remaining contractual life (in years)		7 years 2 months 12 days
Aggregate intrinsic value (in thousands)		$ 35,434

[1] Includes the issuance of approximately 1.1 million stock option replacement awards in connection with the acquisition of NetSpend in 2013. These awards had a market value of $13.7 million. A portion of the expense associated with these awards has been included as a component of the total purchase price of the NetSpend acquisition. Refer to Note 24.

XML

Summary of Stock Option Activity and Changes during Year (Parenthetical) (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance of stock awards granted in connection with acquisition	613,473	1,046,372	1,939,796
NetSpend Holdings Inc
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance of stock awards granted in connection with acquisition	1,100,000
Market value of stock awarded granted in connection with acquisition	$ 13.7

XML

Summary of Stock Option Exercises (Detail) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Exercised and Issued from Treasury	2,586	1,850	2,177
Intrinsic Value	$ 67,702	$ 22,883	$ 16,580

XML

Summary of Shares Held as Treasury Stock and Related Carrying Value (Detail) - USD ($) shares in Thousands, $ in Thousands	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Equity, Class of Treasury Stock [Line Items]
Number of Treasury Shares	19,988	17,836	15,073
Treasury Shares Cost	$ 641,664	$ 453,230	$ 326,996

XML

Treasury Stock - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended					3 Months Ended	12 Months Ended
	Dec. 31, 2015		Nov. 30, 2015	Jan. 31, 2014	Apr. 30, 2010	Dec. 31, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Jan. 27, 2015
Equity, Class of Treasury Stock [Line Items]
Expiration date of shares authorized to be repurchased under stock repurchase plan				Apr. 30, 2015
Purchase of treasury shares (in shares)	1,000	[1]	3,000,000			3,001,000	5,200,000	5,200,000	3,100,000
Stock repurchase value							$ 242.1	$ 165.3	$ 97.6
Repurchase of common stock, average cost per share	$ 49.80		$ 52.85			$ 52.85	$ 47.01	$ 31.79	$ 31.48
Treasury stock acquired as a result of share withholding for taxes							3,344	162,489
Value of treasury stock acquired as a result of share withholding for taxes							$ 0.2	$ 5.2
Maximum
Equity, Class of Treasury Stock [Line Items]
Shares authorized to be repurchased under stock repurchase plan				28,000,000	10,000,000					20,000,000
Time shares may be purchased					2 years

[1] Consists of delivery of shares to TSYS on vesting of shares to pay taxes.

XML

Purchases of Common Stock on Monthly Basis (Detail) - $ / shares	1 Months Ended			3 Months Ended	12 Months Ended
	Dec. 31, 2015		Nov. 30, 2015	Dec. 31, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Oct. 31, 2015
Equity, Class of Treasury Stock [Line Items]
Total Number of Shares Purchased	1,000	[1]	3,000,000	3,001,000	5,200,000	5,200,000	3,100,000
Average Price Paid per Share	$ 49.80		$ 52.85	$ 52.85	$ 47.01	$ 31.79	$ 31.48
Total Number of Cumulative Shares Purchased as Part of Publicly Announced Plans or Programs	5,150,000		5,150,000	5,150,000	5,150,000			2,150,000
Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs	14,850,000		14,850,000	14,850,000	14,850,000			17,850,000

[1] Consists of delivery of shares to TSYS on vesting of shares to pay taxes.

XML

Income Tax Effects Allocated to and Cumulative Balance of Accumulated Other Comprehensive Income (loss) (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ (11,926)	$ 3,749	$ 1,408	$ (445)
Pretax amount	(23,269)	(17,280)	4,441	2,272
Tax effect	(1,651)	(1,605)	2,100	419
Net-of- tax	(21,618)	(15,675)	2,341	1,853
Ending Balance	(33,544)	(11,926)	3,749	1,408
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(13,592)	2,004	3,332
Pretax amount	(22,997)	(17,143)	(295)
Tax effect	(1,548)	(1,547)	1,033
Net-of- tax	(21,449)	(15,596)	(1,328)
Ending Balance	(35,041)	(13,592)	2,004	3,332
Noncontrolling Interest
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	28	28	28
Ending Balance	28	28	28	28
Gain on available for sale securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	1,105	1,773
Pretax amount	2,177	(1,058)	2,810
Tax effect	779	(390)	1,037
Net-of- tax	1,398	(668)	1,773
Ending Balance	2,503	1,105	1,773
Change in AOCI related to postretirement healthcare plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	533	(56)	(1,952)
Pretax amount	(2,449)	921	1,926
Tax effect	(882)	332	30
Net-of- tax	(1,567)	589	1,896
Ending Balance	$ (1,034)	$ 533	$ (56)	$ (1,952)

XML

Operating Segments (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Revenues before reimbursable items	$ 2,499,349	$ 2,192,978	$ 1,823,708
Revenue for reportable segment	2,779,541	2,446,877	2,064,305
Depreciation and amortization	258,264	246,620	199,026
Operating income	534,107	431,640	382,500
Total assets	3,908,300	3,733,581
North America Services
Segment Reporting Information [Line Items]
Revenue for reportable segment	1,305,999	1,102,316	987,006
International Services
Segment Reporting Information [Line Items]
Revenue for reportable segment	344,030	352,196	334,764
Merchant Services
Segment Reporting Information [Line Items]
Revenue for reportable segment	549,135	509,679	534,683
NetSpend
Segment Reporting Information [Line Items]
Revenue for reportable segment	580,377	482,686	207,851
Operating Segments
Segment Reporting Information [Line Items]
Depreciation and amortization	163,390	147,502	131,343
Operating income	777,213	669,792	585,683
Operating Segments | North America Services
Segment Reporting Information [Line Items]
Revenues before reimbursable items	1,147,254	954,082	860,645
Revenue for reportable segment	1,334,258	1,117,764	1,000,073
Depreciation and amortization	99,544	86,513	74,480
Operating income	429,064	351,512	321,619
Total assets	3,516,328	3,327,160
Operating Segments | International Services
Segment Reporting Information [Line Items]
Revenues before reimbursable items	331,159	341,785	321,484
Revenue for reportable segment	354,725	363,359	341,549
Depreciation and amortization	34,892	38,909	41,708
Operating income	60,087	55,123	42,068
Total assets	348,714	356,590
Operating Segments | Merchant Services
Segment Reporting Information [Line Items]
Revenues before reimbursable items	474,040	435,649	446,277
Revenue for reportable segment	549,369	510,120	533,050
Depreciation and amortization	18,268	14,571	12,034
Operating income	150,225	134,872	155,643
Total assets	689,781	695,744
Operating Segments | NetSpend
Segment Reporting Information [Line Items]
Revenues before reimbursable items	580,377	482,686	207,851
Revenue for reportable segment	580,377	482,686	207,851
Depreciation and amortization	10,686	7,509	3,121
Operating income	137,837	128,285	66,353
Total assets	1,504,740	1,556,369
Intersegment Elimination
Segment Reporting Information [Line Items]
Revenues before reimbursable items	(33,481)	(21,224)	(12,549)
Revenue for reportable segment	(39,188)	(27,052)	(18,218)
Total assets	(2,151,263)	(2,202,282)
Segment Reconciling Items | Acquisition Related Intangible Assets
Segment Reporting Information [Line Items]
Depreciation and amortization	92,522	96,971	65,893
Operating income	(92,522)	(96,971)	(65,893)
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Depreciation and amortization	2,352	2,147	1,790
Corporate, Non-Segment | NetSpend
Segment Reporting Information [Line Items]
Operating income		(3,217)	(14,220)
Corporate, Non-Segment | Share Based Compensation
Segment Reporting Information [Line Items]
Operating income	(41,549)	(30,790)	(28,933)
Corporate, Non-Segment | Corporate Administration
Segment Reporting Information [Line Items]
Operating income	$ (109,035)	$ (107,174)	$ (94,137)

XML

Property and Equipment, Net of Accumulated Depreciation and Amortization (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Property and equipment, net of accumulated depreciation and amortization	$ 289,898	$ 290,585
United States
Segment Reporting Information [Line Items]
Property and equipment, net of accumulated depreciation and amortization	241,814	237,865
Europe
Segment Reporting Information [Line Items]
Property and equipment, net of accumulated depreciation and amortization	41,953	45,503
Other
Segment Reporting Information [Line Items]
Property and equipment, net of accumulated depreciation and amortization	$ 6,131	$ 7,217

XML

Reconciliation of Geographic Revenues to External Revenues by Operating Segments (Detail) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Total revenues		$ 2,779,541	$ 2,446,877	$ 2,064,305
Total revenues, percentage		100.00%	100.00%	100.00%
United States
Segment Reporting Information [Line Items]
Total revenues		$ 2,110,044	$ 1,770,199	$ 1,454,042
Total revenues, percentage		75.90%	72.30%	70.40%
Europe
Segment Reporting Information [Line Items]
Total revenues	[1]	$ 304,650	$ 305,089	$ 294,577
Total revenues, percentage	[1]	11.00%	12.50%	14.30%
Canada
Segment Reporting Information [Line Items]
Total revenues		$ 289,083	$ 290,496	$ 243,153
Total revenues, percentage		10.40%	11.90%	11.80%
Mexico
Segment Reporting Information [Line Items]
Total revenues		$ 16,558	$ 16,216	$ 16,513
Total revenues, percentage		0.60%	0.70%	0.80%
Other
Segment Reporting Information [Line Items]
Total revenues	[1]	$ 59,206	$ 64,877	$ 56,020
Total revenues, percentage	[1]	2.10%	2.70%	2.70%
North America Services
Segment Reporting Information [Line Items]
Total revenues		$ 1,305,999	$ 1,102,316	$ 987,006
North America Services | United States
Segment Reporting Information [Line Items]
Total revenues		981,588	778,766	712,252
North America Services | Europe
Segment Reporting Information [Line Items]
Total revenues	[1]	796	781	774
North America Services | Canada
Segment Reporting Information [Line Items]
Total revenues		288,728	290,248	242,975
North America Services | Mexico
Segment Reporting Information [Line Items]
Total revenues		16,558	16,216	16,513
North America Services | Other
Segment Reporting Information [Line Items]
Total revenues	[1]	18,329	16,305	14,492
International Services
Segment Reporting Information [Line Items]
Total revenues		344,030	352,196	334,764
International Services | Europe
Segment Reporting Information [Line Items]
Total revenues	[1]	303,832	304,308	293,803
International Services | Other
Segment Reporting Information [Line Items]
Total revenues	[1]	40,198	47,888	40,962
Merchant Services
Segment Reporting Information [Line Items]
Total revenues		549,135	509,679	534,683
Merchant Services | United States
Segment Reporting Information [Line Items]
Total revenues		548,079	508,747	533,939
Merchant Services | Europe
Segment Reporting Information [Line Items]
Total revenues	[1]	22
Merchant Services | Canada
Segment Reporting Information [Line Items]
Total revenues		355	248	178
Merchant Services | Other
Segment Reporting Information [Line Items]
Total revenues	[1]	679	684	566
NetSpend
Segment Reporting Information [Line Items]
Total revenues		580,377	482,686	207,851
NetSpend | United States
Segment Reporting Information [Line Items]
Total revenues		$ 580,377	$ 482,686	$ 207,851

[1] Revenues are impacted by movements in foreign currency exchange rates

XML

Segment Reporting and Major Customers - Additional Information (Detail) - Customer	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Entity-wide revenue, major customer, number	0	0	0

XML

Supplementary Cash Flow Information - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Sep. 30, 2014
Supplemental cash flow information:
Equipment and software acquired under capital lease obligations	$ 4.1	$ 17.9	$ 14.8
Financing agreement for perpetual software licenses
Supplemental cash flow information:
Financing agreement amount	$ 30.0	$ 13.6		$ 13.6

XML

Acquisitions - Additional Information (Detail) $ / shares in Units, $ in Thousands, shares in Millions			1 Months Ended	12 Months Ended
	Jul. 01, 2013 USD ($) Shareholder $ / shares shares	Jun. 01, 2013 USD ($)	Feb. 28, 2014 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Business Acquisition [Line Items]
Replacement stock options and awards fair value	$ 37,400
Goodwill				$ 1,545,424	$ 1,547,397
Business acquisition, noncontrolling interest, redemption period				2017
Business acquisition, noncontrolling interest, redemption value				$ 23,400
CPAY
Business Acquisition [Line Items]
Percentage of Additional Equity Interest Acquired			15.00%
Amount paid to acquire additional Equity Interest			$ 37,500
Percentage of equity interest			25.00%
Noncontrolling interest			25.00%
CPAY | Minimum
Business Acquisition [Line Items]
Percentage of equity interest			60.00%
CPAY | Maximum
Business Acquisition [Line Items]
Percentage of equity interest			75.00%
NetSpend Holdings Inc
Business Acquisition [Line Items]
Business acquisition percent of acquisition	100.00%
Business acquisition, cost of acquired entity, purchase price	$ 1,396,550	$ 1,396,550
Business acquisition, cash paid	$ 1,355,270
Share price per share | $ / shares	$ 16.00
Shares held by dissenting shareholders | shares	1.6
Value of shares held by dissenting shareholders	$ 25,700
Number of shareholders | Shareholder	5
Goodwill	$ 1,024,434					$ 1,000,000
Addition to purchase price allocation				$ 627	8,500
Increase in goodwill					8,500
Identifiable intangible assets	480,086
Assumption used in fair value, measurement, discount rate				11.00%
Assumption used in fair value measurement, royalty rate low range				2.50%
Assumption used in fair value measurement, royalty rate high range				7.00%
Assumption used in fair value measurement,, attrition rate low range				5.00%
Assumption used in fair value measurement, attrition rate high range				40.00%
Assumption used in fair value, measurement, effective tax rate				40.00%
Assumption used in fair value, measurement, long-term sustainable growth rate				3.00%
Business acquisition, transaction costs				$ 3,200	14,200
NetSpend Holdings Inc | Dissenting Shareholders
Business Acquisition [Line Items]
Settlement for lawsuit					$ 38,600
NetSpend Holdings Inc | Repayment of Revolving Credit Facility
Business Acquisition [Line Items]
Business acquisition, cash paid	58,300
NetSpend Holdings Inc | Prior To Acquisition Date
Business Acquisition [Line Items]
Replacement stock options and awards	11,100
Replacement stock options and awards fair value	15,600
NetSpend Holdings Inc | Shareholders
Business Acquisition [Line Items]
Business acquisition, cash paid	1,200,000
NetSpend Holdings Inc | Holders of Stock Options and Awards
Business Acquisition [Line Items]
Business acquisition, cash paid	70,700
NetSpend Holdings Inc | Replacement Stock Options and Awards
Business Acquisition [Line Items]
Replacement stock options and awards	$ 15,600
NetSpend Holdings Inc | Minimum
Business Acquisition [Line Items]
Intangible assets estimated useful life	5 years
NetSpend Holdings Inc | Maximum
Business Acquisition [Line Items]
Intangible assets estimated useful life	8 years

XML

Awards and Estimated Fair Value of Awards Issued in Acquisition of Net Spend (Detail) $ in Millions	Jul. 01, 2013 USD ($) shares
Business Acquisition, Equity Interests Issued or Issuable [Line Items]
Number of Shares, Options and Units Issued | shares	2,017,865
Fair Value | $	$ 37.4
Time Based Restricted Stock
Business Acquisition, Equity Interests Issued or Issuable [Line Items]
Number of Shares, Options and Units Issued | shares	870,361
Fair Value | $	$ 21.5
Non-Qualified Stock Options
Business Acquisition, Equity Interests Issued or Issuable [Line Items]
Number of Shares, Options and Units Issued | shares	530,696
Fair Value | $	$ 8.4
Incentive Stock Options
Business Acquisition, Equity Interests Issued or Issuable [Line Items]
Number of Shares, Options and Units Issued | shares	529,452
Fair Value | $	$ 5.3
Performance Based Restricted Stock
Business Acquisition, Equity Interests Issued or Issuable [Line Items]
Number of Shares, Options and Units Issued | shares	87,356
Fair Value | $	$ 2.2

XML

Amounts of Assets Acquired and Liabilities Assumed Recognized (Detail) - USD ($) $ in Thousands		Jul. 01, 2013	Jun. 01, 2013	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Recognized amounts of identifiable assets acquired and liabilities assumed:
Goodwill				$ 1,545,424	$ 1,547,397
NetSpend Holdings Inc
Consideration
Cash		$ 1,355,270
Equity instruments		15,557
Dissenting shareholder liability	[1]	25,723
Fair value of total consideration transferred		1,396,550	$ 1,396,550
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash		40,610
Accounts receivable		11,335
Property equipment and software		11,657
Identifiable intangible assets		480,086
Deferred tax asset		10,165
Other assets		36,660
Deferred tax liability		(155,945)
Financial liabilities		(62,452)
Total identifiable net assets		372,116
Goodwill		1,024,434				$ 1,000,000
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total		$ 1,396,550

[1] Represents 1.6 million NetSpend shares held by dissenting shareholders

XML

Amounts of Assets Acquired and Liabilities Assumed Recognized (Parenthetical) (Detail) shares in Millions	Jul. 01, 2013 shares
NetSpend Holdings Inc
Business Acquisition [Line Items]
Dissenting shareholder, shares	1.6

XML

Estimated Fair Value of Identifiable Intangible Assets Acquired (Detail) $ in Thousands	Jul. 01, 2013 USD ($)
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired intangible assets,weighted average useful lives	7 years 3 months 18 days
Other intangible assets
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 480,086
Customer relationships
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired intangible assets,weighted average useful lives	8 years
Customer relationships | Other intangible assets
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 317,000
Current Technology
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired intangible assets,weighted average useful lives	7 years
Current Technology | Other intangible assets
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 78,711
Trade name
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired intangible assets,weighted average useful lives	5 years
Trade name | Other intangible assets
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 44,000
Database
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired intangible assets,weighted average useful lives	5 years
Database | Other intangible assets
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 28,000
Covenants-Not-to-Compete
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired intangible assets,weighted average useful lives	6 years
Covenants-Not-to-Compete | Other intangible assets
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 11,500
Favorable lease
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired intangible assets,weighted average useful lives	4 years 10 months 24 days
Favorable lease | Other intangible assets
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 875

XML

Pro Forma Revenue and Earnings (Detail) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Business Acquisition, Pro Forma Information [Abstract]
Revenue		$ 2,779,541	$ 2,446,877	$ 2,064,305
Net income attributable to TSYS common shareholders		$ 364,044	$ 322,872	$ 244,750
Basic EPS attributable to TSYS common shareholders	[1]	$ 1.98	$ 1.73	$ 1.30
Diluted EPS attributable to TSYS common shareholders	[1]	$ 1.97	$ 1.72	$ 1.29
NetSpend Holdings Inc
Business Acquisition, Pro Forma Information [Abstract]
Revenue				$ 2,064,305
Net income attributable to TSYS common shareholders				$ 244,750
Basic EPS attributable to TSYS common shareholders				$ 1.30
Diluted EPS attributable to TSYS common shareholders				$ 1.29
Revenue				$ 2,286,348
Net income attributable to TSYS common shareholders				$ 239,775
Basic EPS attributable to TSYS common shareholders				$ 1.28
Diluted EPS attributable to TSYS common shareholders				$ 1.27

[1] EPS amounts may not total due to rounding

XML

Collaborative Arrangement - Additional Information (Detail)	Dec. 31, 2015
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of ownership interest in an enterprise jointly owned with two other entities	45.00%

XML

Basic and Diluted Earnings Per Share Under Guidance of ASC 260 (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Basic EPS:
Net income		$ 364,044	$ 322,872	$ 244,750
Basic EPS(a)/(b)	[1]	$ 1.98	$ 1.73	$ 1.30
Diluted EPS:
Net income		$ 364,044	$ 322,872	$ 244,750
Diluted EPS(c)/(d)	[1]	$ 1.97	$ 1.72	$ 1.29
Common Stock
Basic EPS:
Net income		$ 364,044	$ 322,872	$ 244,750
Less income allocated to nonvested awards		(3,164)	(3,308)	(1,595)
Net income allocated to common stock for EPS calculation(a)		$ 360,880	$ 319,564	$ 243,155
Average common shares outstanding(b)		182,465	184,297	187,145
Basic EPS(a)/(b)		$ 1.98	$ 1.73	$ 1.30
Diluted EPS:
Net income		$ 364,044	$ 322,872	$ 244,750
Less income allocated to nonvested awards		(3,148)	(3,288)	(1,585)
Net income allocated to common stock for EPS calculation(c)		$ 360,896	$ 319,584	$ 243,165
Average common shares outstanding		182,465	184,297	187,145
Increase due to assumed issuance of shares related to common equivalent shares outstanding		1,157	1,459	1,648
Average common and common equivalent shares outstanding(d)		183,622	185,756	188,793
Diluted EPS(c)/(d)		$ 1.97	$ 1.72	$ 1.29
Participating Securities
Basic EPS:
Less income allocated to nonvested awards		$ 3,164	$ 3,308	$ 1,595
Net income allocated to common stock for EPS calculation(a)		$ 3,164	$ 3,308	$ 1,595
Average common shares outstanding(b)		1,617	1,925	1,246
Basic EPS(a)/(b)		$ 1.96	$ 1.72	$ 1.28
Diluted EPS:
Less income allocated to nonvested awards		$ 3,148	$ 3,288	$ 1,585
Net income allocated to common stock for EPS calculation(c)		$ 3,148	$ 3,288	$ 1,585
Average common shares outstanding		1,617	1,925	1,246
Average common and common equivalent shares outstanding(d)		1,617	1,925	1,246
Diluted EPS(c)/(d)		$ 1.95	$ 1.71	$ 1.27

[1] EPS amounts may not total due to rounding

XML

Earnings Per Share - Additional Information (Detail) - shares shares in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Computation of Earnings Per Share [Line Items]
Convertible stock options and nonvested awards excluded from diluted EPS calculation	0.6	1.1	2.9

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Subsequent Events - Additional Information (Detail) - USD ($)	Feb. 23, 2016	Jan. 26, 2016	Sep. 30, 2012	Dec. 31, 2013	Feb. 19, 2013
Subsequent Event [Line Items]
Credit facility, Maximum Borrowing Capacity				$ 5,000,000
Unsecured revolving credit facility
Subsequent Event [Line Items]
Credit facility, Maximum Borrowing Capacity			$ 350,000,000
Debt instrument maturity period			5 years
Unsecured revolving credit facility | Standby letters of credit
Subsequent Event [Line Items]
Credit facility, Maximum Borrowing Capacity			$ 50,000,000
Bridge Loan Facility | Before Amendment
Subsequent Event [Line Items]
Bridge loan facility, term					$ 1,200,000,000
Subsequent Event | Term Loan
Subsequent Event [Line Items]
Credit facility, Maximum Borrowing Capacity	$ 700,000,000
Debt instrument maturity period	5 years
Subsequent Event | Term Loan | Refinancing Term Loan
Subsequent Event [Line Items]
Credit facility, Maximum Borrowing Capacity	$ 300,000,000
Subsequent Event | Term Loan | Delayed Draw Term Loan
Subsequent Event [Line Items]
Credit facility, Maximum Borrowing Capacity	400,000,000
Subsequent Event | Unsecured revolving credit facility
Subsequent Event [Line Items]
Credit facility, Maximum Borrowing Capacity	800,000,000
Subsequent Event | Unsecured revolving credit facility | Standby letters of credit
Subsequent Event [Line Items]
Credit facility, Maximum Borrowing Capacity	50,000,000
Subsequent Event | Bridge Loan Facility
Subsequent Event [Line Items]
Bridge loan facility, term	1,150,000,000
Line of Credit, Current	350,000,000
Subsequent Event | Bridge Loan Facility | Before Amendment
Subsequent Event [Line Items]
Bridge loan facility, term	$ 2,000,000,000
Subsequent Event | TransFirst
Subsequent Event [Line Items]
Cash transaction		$ 2,400,000,000
Indebtedness		2,400,000,000
Subsequent Event | TransFirst | Bridge Loan
Subsequent Event [Line Items]
Indebtedness		$ 2,000,000,000