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, 2016

Commission file number    1-10254

TOTALSYSTEM SERVICES, INC.

(Exact name of registrant as specified in its charter)

Georgia	58-1493818
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
One TSYS Way
Columbus, Georgia	31901
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:  (706) 644-6081

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 [ ]

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, 2016, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $9,575,381,000 based on the closing sale price as reported on the New York Stock Exchange.

As of February 17, 2017, there were 183,354,641 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, 2016 (“Annual Report”)	Parts I, II, III and IV
Portions of the 2017 Proxy Statement for the Annual Meeting of Shareholders to be held April 27, 2017 (“Proxy Statement”)	Part III

Table of Contents

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

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 payment processing services, merchant services and related payment services to financial and nonfinancial institutions. In addition, we provide general purpose reloadable (“GPR”) prepaid debit and payroll cards and alternative financial service solutions to the underbanked and other consumers. The services we provide are divided into four operating segments, Merchant Services, which accounted for 44% of our revenues in 2016, North America Services, which accounted for 32% of our revenues in 2016, Netspend, which accounted for 16% of our revenues in 2016, and International Services, which accounted for 8% of our revenues in 2016. 

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.

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 20 through 25, and Note 21 on pages 73 through 76 of the Annual Report which are incorporated in this document by reference.

Competition.  Each of our four business segments encounters vigorous competition in connection with the services it provides.

Issuing Services - North America and International.  Our North America Services and International Services segments encounter competition from credit card processing firms, third-party card processing software vendors and various other firms that provide products and services to credit card issuers in the United States and

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internationally.  The United States market for third party processing for credit card issuers is primarily serviced by three vendors, including TSYS, with our largest competitor being a subsidiary of First Data Corporation.  We believe that as of December 31, 2016, we are the largest third party processor for credit card issuers in the United States, based on net revenues derived from solutions for credit card issuers.  Further, we believe that during 2016, we provided issuer processing services for 40%-45% of the domestic Visa and Mastercard credit accounts issued in the United States, approximately 80% of Canadian credit card accounts and approximately 20% of credit card accounts in TSYS’ Home European Markets (UK, Ireland, Netherlands, Italy, Germany and Switzerland).  The principal methods of competition between us and our competitors are system performance and reliability, servicing capability, breadth of features and functionality, disaster recovery capabilities and business continuity preparedness, data security, scalability and flexibility of infrastructure and price.

Merchant Services.  Our Merchant Services segment competes with financial institutions and merchant acquirers who provide businesses with merchant services and related services.  Our primary competitors include First Data Corporation (and its alliances), Vantiv, Inc., Global Payments Inc. and Elavon, Inc.  Additionally, payment networks such as Visa and Mastercard are increasingly offering products and services that compete with our products and services.  We also provide third party processing and related services to merchant acquirers, Independent Sales Organizations (“ISO’s”) and financial institutions.  We believe that as of December 31, 2016, we are the sixth largest merchant acquirer in the United States based on net revenue and one of the top two providers of third party processing services.  The principal methods of competition between us and our competitors include quality of distribution partners, breadth of features and functionality, service levels, system performance and reliability, data security and price.

Netspend.  Our Netspend segment primarily competes with other prepaid program managers to provide underbanked and other consumers with alternative financial service solutions.  Our primary competitors in this space include Green Dot Corporation, American Express Company and First Data Corporation.  As of December 31, 2016, we believe that we are the largest prepaid program manager in the United States based on gross dollar volume (total spending on the accounts we manage).  The principal methods of competition between us and our competitors include diversity and strength of distribution, breadth and strength of innovative features and functionality, quality of service, reliability of system performance and security and price.

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 47 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

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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 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.  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. The cap on interchange fees has not had 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 promulgated a new rule regarding prepaid financial products, which, among other things, establishes new disclosure requirements specific to prepaid accounts, eliminates certain fees that may currently be imposed on prepaid accounts, and effectively eliminates the ability of a prepaid card provider such as our Netspend business to offer courtesy overdraft protection on prepaid accounts.  The new rule is scheduled to become effective October 1, 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

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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, which laws are subject to change. 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, 2016, we had approximately 11,500 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 and 12, the “Financial Review” Section on pages 13 through 36 and Note 1, Note 2, Note 8, Note 15, Note 21, Note 23 and Note 26 of Notes to Consolidated Financial Statements on pages 42 through 52, page 52, page 56, pages 64 through 67, pages 73 through 76, pages 77 through 80, and page 81 of the Annual Report which are incorporated in this document by reference.

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.  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

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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, and in the form of penalties and fines from regulators and the card networks;

· result in the loss of our financial institution sponsorships;

· increase our risk of regulatory scrutiny;

· adversely affect our continued card network registration;

· 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.

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 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.  Any change in

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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 or average purchase amount 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 through methods that we process, including through an increase in the number of cash transactions, could result in a decrease in our revenues and profits and would likely have a material adverse effect on our financial position and results of operations.

Our ability to anticipate and respond to changing industry and client needs and preferences may affect our competitiveness or demand for our products, which may adversely affect our financial results.

The payment processing markets in which we compete are subject to rapid and significant technological changes, new product introductions, including mobile payment applications, evolving competitive landscape, developing industry standards, and changing client and consumer needs and preferences. We expect that new services and technologies applicable to the payment processing markets will continue to emerge. These changes in technology may limit the competitiveness of and demand for our services.  Also, our clients continue to adopt new technology for business and personal uses.  We must anticipate and respond to these changes in order to remain competitive within our markets.  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 anticipate and respond to new competitors and to develop or adapt to technological changes and evolving industry standards on a timely basis.  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.

Conversions and deconversions of client portfolios may not occur as scheduled which may negatively impact our financial results.

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.  Due to a variety of factors, conversions and deconversions may not 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 April 1, 2016, we completed our acquisition of TransFirst Holdings Corp. (TransFirst”). The acquisition and integration of businesses such as TransFirst involve a number of risks. Core risks are in the area of valuation (negotiating a fair price for the business based on inherently limited diligence) and integration and conversion (managing the complex process of integrating the acquired company's people, services, technology and other assets to realize the projected value of the acquired company and the synergies projected to be realized in connection with the acquisition). In addition, 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; enforcement of intellectual property rights in some foreign countries; difficulty entering new foreign markets due to, among other things, customer acceptance and business knowledge of those new markets; and general economic and political conditions.

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If the integration and conversion process when acquiring a business does not proceed smoothly, the following factors, among others, could have an adverse effect on our financial position and results of operations, and result in a loss of projected synergies:

●if we are unable to successfully integrate the benefits plans, duties and responsibilities, and other factors of interest to the management and employees of the acquired business, we could lose employees to our competitors, which could significantly affect our ability to operate the business and complete the integration;

●if the integration process causes any delays with the delivery of our services, or the quality of those services, we could lose clients to our competitors, which would reduce our revenues and earnings;

●the acquisition may otherwise cause disruption to the acquired company’s business and operations and relationships with financial institution sponsors, customers, merchants, employees and other partners, as applicable;

●the acquisition and the related integration could divert the attention of our management from other strategic matters including possible acquisitions and alliances and planning for new product development; and

●the costs related to the integration of the acquired company’s business and operations into ours and the financing of the transaction may be greater than anticipated.

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 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.

In June 2016, the United Kingdom held a referendum in which voters approved an exit from the European Union, commonly referred to as "Brexit." The referendum has caused, and may continue to cause, volatility in global stock markets and currency exchange rate fluctuations, resulting in a decline in the value of the British pound relative to the U.S. dollar. In addition, it is expected that the British government will begin negotiating the terms of the United Kingdom’s separation from the European Union. Although it is not known what those terms will be, it is possible that there will be increased regulatory complexities, including without limitation regulation relating to data security, privacy, and taxation. These changes may adversely affect our financial position and results of operations.

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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 pending and future 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 or indemnities 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.

When we acquired 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 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

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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.  For example, the new Trump Administration has called for changes in existing regulatory requirements, including those applicable to financial services.  We cannot predict the impact, if any, of such changes on our business.  It is likely that some policies adopted by the new administration will benefit us, while others will negatively affect us.  Until we know what changes are adopted, we will not know whether in total we benefit from, or are negatively affected by, the changes.  More broadly, 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 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 promulgated a new rule regarding the prepaid industry which is expected to negatively impact our Netspend business and thus negatively impact our revenues and earnings.  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,

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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 47 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 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. 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.

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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 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. It is possible that incidents of fraud could increase in the future. 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.

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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, we have a third party risk management process in place through our global procurement program.  If we are unable to effectively manage the risk associated with our third party relationships, it could negatively impact our financial condition and results of operations.

We may experience software defects, computer viruses, and development delays, which could damage client relations, our potential profitability and expose us to liability.

Our products are based on sophisticated software and computing systems that often encounter development delays, and the underlying software may contain undetected errors, viruses, or defects. Defects in our software products and errors or delays in our processing of electronic transactions could result in additional development costs, diversion of technical and other resources from our other development efforts, loss of credibility with current or potential clients, harm to our reputation, fines imposed by card networks, or exposure to liability claims. In addition, we rely on technologies supplied to us by third parties that may also contain undetected errors, viruses or defects that could have a material adverse effect on our business, financial condition and results of operations.

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

In our 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. 

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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.

Item 2. Properties

As of December 31, 2016, we and our subsidiaries owned 12 facilities encompassing approximately 1,446,568 square feet and leased 46 facilities encompassing approximately 1,184,621 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	7	299,910
International Services	2	96,368	14	208,783
Merchant Services	-	-	19	487,504
NetSpend	-	-	6	188,424

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 9, Note 15 and Note 21 of Notes to Consolidated Financial Statements on pages on pages 42 through 52, page 57, pages 64 through 67, and pages 73 through 76 and “Property and Equipment” under the “Financial Review” Section on page 31 of the Annual Report which are incorporated in this document by reference.

Item 3. Legal Proceedings

See Note 15 of Notes to Consolidated Financial Statements on pages 64 through 67 of the Annual Report which is incorporated in this document by reference.

Item 4. Mine Safety Disclosures

Not Applicable.

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 84, Note19 of Notes to Consolidated Financial Statements on page 72 and “Stock Performance Graph” on page 85 of the Annual Report are incorporated in this document by reference.  The “Stock Performance Graph” is

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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 36 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, 2016, 2015 and 2014 was:

(in millions)	2016		2015		2014
Comprehensive income (loss), net of tax	$	(30.5)	$	(21.4)	$	(15.6)

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, 2016:

(in millions)	December 31, 2016
Europe	$	165.9
China		101.8
Cyprus		37.5
Other		14.6

We record foreign currency translation adjustments associated with other balance sheet accounts.  See “Nonoperating Income (Expense)” under the “Financial Review” Section on page 26 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 loss of approximately $1.7 million for the year ended December 31, 2016 relating to the translation of foreign denominated balance sheet accounts, most of which were accounts receivable. The balance of the foreign-denominated accounts receivable accounts subject to risk of translation gains or losses at December 31, 2016 was approximately $16.0 million, the majority of which is denominated in U.S. dollars.

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. 

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The net asset account balance subject to foreign currency exchange rates between the local currencies and the U.S. dollar at December 31, 2016 was $20.9 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 $20.9 million at December 31, 2016.

	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	$	209	1,046	2,092	(209)	(1,046)	(2,092)

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, 2016	Expected maturity date
Liabilities	2017			2018		2019		2020		2021		Thereafter		TOTAL
(US$ Equivalent in millions)
Long-term Debt:
Fixed Rate	$	13.9		550.0		-		-		750.0		1,300.0		$	2,613.9
Average interest rate		3.77	%	4.00	%	-		-		4.30	%	4.65	%		4.34	%
Variable Rate	$	35.0		131.3		70.0		70.0		363.7		-		$	770.0
Average interest rate		2.27	%	2.27	%	2.27	%	2.27	%	2.27	%	-			2.27	%

Item 8. Financial Statements and Supplementary Data

The “Quarterly Financial Data (Unaudited), Stock Price, Dividend Information” Section, which is set forth on page 84, 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 37 through 83 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, 2016, 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. 

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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 83 of the Annual Report, and “Report of Independent Registered Public Accounting Firm,” which is set forth on page 82 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.

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 17 of Notes to Consolidated Financial Statements on pages 67 and 68 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 37 through 83 of the Annual Report.

Consolidated Balance Sheets - December 31, 2016 and 2015

Consolidated Statements of Income - Years Ended December 31, 2016, 2015 and 2014

Consolidated Statements of Comprehensive Income – Years Ended December 31, 2016, 2015 and 2014

Consolidated Statements of Cash Flows - Years Ended December 31, 2016, 2015 and 2014

Consolidated Statements of Changes in Equity - Years Ended December 31, 2016, 2015 and 2014

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Management’s Report on Internal Control Over Financial Reporting

      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, 2016, 2015 and 2014

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

17

      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
4.4	Senior Indenture, dated March 17, 2016, between TSYS and Regions Bank as trustee, incorporated by reference to Exhibit 4.1 of TSYS’ Current Report on Form 8-K dated March 17, 2016
4.5	Form of 3.800% Senior Note due 2021, incorporated by reference to Exhibit 4.2 of TSYS’ Current Report on Form 8-K dated March 17, 2016
4.6	Form of 4.800% Senior Note due 2026, incorporated by reference to Exhibit 4.3 of TSYS’ Current Report on Form 8-K dated March 17, 2016
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 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

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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 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

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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
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

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10.27	Form of Senior Executive Performance Share Agreement for 2015 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, 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
10.32	Form of Stock Option Agreement for 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, 2016, as filed with the SEC on May 5, 2016
10.33	Form of Performance Share Agreement for 2016 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, 2016, as filed with the SEC on May 5, 2016
13.1	Certain specified pages of TSYS’ 2016 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 2016 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, 2016 (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.

Item 16. Form 10-K Summary

Not Applicable.

21

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Total System Services, Inc.:

Under date of February 23, 2017, we reported on the consolidated balance sheets of Total System Services, Inc. and subsidiaries (the Company) as of December 31, 2016 and 2015, 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, 2016, which are included in the December 31, 2016 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 23, 2017

Schedule II

Schedule — Valuation and Qualifying Accounts

TOTAL SYSTEM SERVICES, INC.

Schedule II

Valuation and Qualifying Accounts

(in thousands)

			Additions
			Changes in
	Balance at		allowances, charges to				Balance at
	beginning		expenses and changes				end
	of period		to other accounts		Deductions		of period
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 fraud losses	$	5,784	38,381	(4)	(37,853)	(3)	$	6,312
Deferred tax valuation allowance	$	14,691	5,534	(5)	(1,262)	(6)	$	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 fraud losses	$	6,312	41,264	(4)	(38,185)	(3)	$	9,391
Deferred tax valuation allowance	$	18,963	541	(5)	(1,058)	(6)	$	18,446
Year ended December 31, 2016:
Provision for doubtful accounts	$	1,757	6,970	(1)	(5,245)	(3)	$	3,482
Provision for billing adjustments	$	926	614	(1)	(180)	(3)	$	1,360
Provision for merchant losses	$	1,366	1,682	(1)	(1,009)	(3)	$	2,039
Transaction processing provisions - processing errors	$	6,457	3,669	(2)	(7,275)	(3)	$	2,851
Provision for fraud losses	$	9,391	49,362	(4)	(48,226)	(3)	$	10,527
Deferred tax valuation allowance	$	18,446	4,124	(5)	(1,269)	(6)	$	21,301

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

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

(6) 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 23, 2017By: /s/M. Troy Woods

         M. Troy Woods,

        Chairman 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 WoodsDate: February 23, 2017

M. Troy Woods,

Chairman, Chief Executive Officer and Director

(Principal Executive Officer)

/s/Pamela A. JosephDate: February 23, 2017

Pamela A. Joseph,

President, Chief Operating Officer and

Director

/s/Paul M. ToddDate: February 23, 2017

Paul M. Todd,

Senior Executive Vice President and

Chief Financial Officer

(Principal Financial Officer)

/s/Dorenda K. Weaver            Date: February 23, 2017

Dorenda K. Weaver,

Chief Accounting Officer

(Principal Accounting Officer)

/s/James H. BlanchardDate: February 23, 2017

James H. Blanchard,

Director

/s/Kriss Cloninger IIIDate: February 23, 2017

Kriss Cloninger III,

Director

/s/Walter W. Driver, Jr.Date: February 23, 2017

Walter W. Driver, Jr.,

Director

/s/Sidney E. HarrisDate: February 23, 2017

Sidney E. Harris,

Director

/s/William M. IsaacDate: February 23, 2017

William M. Isaac,

Director

/s/Mason H. LamptonDate: February 23, 2017

Mason H. Lampton,

Director

/s/Connie D. McDanielDate: February 23, 2017

Connie D. McDaniel,

Director

/s/Philip W. TomlinsonDate: February 23, 2017

Philip W. Tomlinson,

Director

/s/John T. TurnerDate: February 23, 2017

John T. Turner,

Director

/s/Richard W. UsseryDate: February 23, 2017

Richard W. Ussery,

Director

/s/James D. YanceyDate: February 23, 2017

James D. Yancey,

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)	2016		2015	2014	2013	2012
Income Statement Data:
Total revenues	$	4,170,077	2,779,541	2,446,877	2,064,305	1,793,557
Operating income	$	573,382	534,107	431,640	382,500	354,969
Income from continuing operations, net of tax	$	325,972	367,630	280,751	254,542	248,928
Income from discontinued operations, net of tax		-	1,411	48,655	2,055	995
Net income	$	325,972	369,041	329,406	256,597	249,923
Net income attributable to noncontrolling interests		(6,334)	(4,997)	(6,534)	(11,847)	(5,643)
Net income attributable to TSYS common shareholders	$	319,638	364,044	322,872	244,750	244,280
Basic earnings per share (EPS)* attributable to TSYS common shareholders:
Income from continuing operations	$	1.74	1.97	1.48	1.31	1.31
Gain (loss) from discontinued operations		-	0.01	0.26	(0.01)	(0.02)
Net income	$	1.74	1.98	1.73	1.30	1.30
Diluted EPS* attributable to TSYS common shareholders:
Income from continuing operations	$	1.73	1.96	1.47	1.30	1.31
Gain (loss) from discontinued operations		-	0.01	0.25	(0.01)	(0.02)
Net income	$	1.73	1.97	1.72	1.29	1.29
Cash dividends declared per share	$	0.40	0.40	0.40	0.40	0.40

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

	As of December 31,
(in thousands)	2016		2015	2014	2013	2012
Balance Sheet Data:
Total assets	$	6,366,177	3,877,895	3,725,652	3,677,077	2,023,129
Obligations under long-term borrowings and capital leases, excluding current portion		3,313,276	1,377,541	1,397,483	1,426,260	190,854

Financial Overview

TSYS' 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 Latin America. 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.

TSYS acquires other companies as part of its strategy for growth. In April 2016, the Company completed the acquisition of all the outstanding stock of TransFirst Holdings Corp. (TransFirst). TransFirst is part of the Merchant Services segment. Refer to Note 23 in the Notes to Consolidated Financial Statements for more information about the acquisition of TransFirst.

11

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

	Years Ended December 31,
	2016		2015		2014
Merchant Services	44	%	20	%	21	%
North America Services	32		47		45
Netspend	16		21		19
International Services	8		12		15
Total revenues	100	%	100	%	100	%

Due to the somewhat seasonal nature of the payments 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.

Also impacting revenues is the impact of TransFirst. TransFirst’s results are part of the Merchant Services segment and are reported gross, which includes amounts paid for interchange and assessments, due to TransFirst’s relationship with its customers.

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.

The Financial Reform Act 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 promulgated a new rule regarding prepaid financial products, which, among other things, establishes new disclosure requirements specific to prepaid accounts, eliminates certain fees that may currently be imposed on prepaid accounts, and effectively eliminates the ability of a prepaid card provider such as the Company’s Netspend business to offer courtesy overdraft protection on prepaid accounts.  The new rule is scheduled to become effective on October 1, 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.

12

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 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, 2016 was $4.8 million.

Contract Acquisition Costs

In evaluating contract acquisition costs for recoverability, expected cash flows are estimated by management should events indicate a loss may have been triggered. 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 10 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, 2016 was $235.7 million.

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Software Development Costs

In evaluating software development costs for recoverability, expected cash flows are estimated by management should events indicate a loss may have been triggered. The Company evaluates the unamortized capitalized costs of software development, the impairment of which is determined by expected undiscounted future operating cash flows of the software as compared to the carrying amount of the software product. The amount by which the unamortized software development costs exceed the lower of the carrying amount or fair 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 8 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, 2016 was $121.4 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 the cost approach, 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 may result in an impairment or a new allocation of purchase price.

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 6 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, 2016 was $3.3 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, 2016, 2015 and 2014.

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

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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 customer arrangement. There were no material changes or impact to revenue in revenue recognition during the years ended December 31, 2016, 2015 and 2014 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 $10.5 million as of December 31, 2016. The provision for cardholder losses is included in cost of services in the Consolidated Statements of Income and in other current liabilities in the Consolidated Balance Sheets. 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 due to the indemnities it has with the sponsoring bank. TSYS also bears the risk of reject losses arising from the fact that TSYS collects fees from its merchants 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, 2016, the Company had a merchant loss provision in the amount of $2.0 million.

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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. Transaction processing provisions are included in other current liabilities in the Consolidated Balance Sheets. As of December 31, 2016, the Company had a transaction processing provision in the amount of $2.9 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 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.

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 15 in the Consolidated Financial Statements for further information on operating lease commitments.

Contractual Obligations

The Company has long-term obligations which consist of required minimum future payments under contracts with the Company’s distributors and other service providers.

Recent Accounting Pronouncements

In December 2016, the FASB issued ASU 2016-19 “Technical Corrections,” which represent changes to clarify, correct errors or make minor improvements to the Accounting Standards Codification. Most of the amendments in this Update do not require transition guidance and are effective upon issuance of this Update. Six amendments in this Update clarify guidance or correct references in the Accounting Standards Codification that could potentially result in changes in current practice because of either misapplication or misunderstanding of current guidance. Early adoption is permitted for the amendments that require transition guidance. The Company will be impacted by the amendment to Subtopic 350-40, “Intangibles—Goodwill and Other— Internal-Use Software,” which adds a reference to guidance to use when accounting for internal-use software licensed from third parties that is within the scope of Subtopic 350-40. The transition guidance for that amendment is the same as the transition guidance in ASU 2015-05, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” to which the amendment relates. 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 November 2016, the FASB issued ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash,” which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The ASU is effective for the Company on January 1,

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2018. 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 October 2016, the FASB issued ASU 2016-16 “Income Taxes (Topic 740): Intra-Equity Transfers of Assets Other Than Inventory,” which requires that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs and eliminates the exception for an intra-entity transfer of an asset other than inventory. The ASU is effective for the Company on January 1, 2018. 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 August 2016, the FASB issued ASU 2016-15 “Statement of Cash Flow (Topic 230): Classification of Certain Receipts and Cash Payments,” which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flow. The ASU is effective for the Company on January 1, 2018. Early adoption is permitted by all entities. 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 March 2016, the FASB issued ASU 2016-09 “Improvements to Employee Share‑Based Payment Accounting,” which simplifies several aspects of the accounting for employee share‑based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The adoption of this ASU will result in excess tax benefits and deficiencies associated with share-based payments being recorded on the income statement at the time they are deducted on the income tax return instead of being recorded in additional paid-in capital. The excess tax benefits are recorded along with other income tax cash flows as an operating activity in the statement of cash flows. The Company will adopt this ASU on January 1, 2017. The Company has reviewed this standard, noting adoption of the standard will result in a benefit to the income tax provision and an immaterial dilutive effect on diluted EPS.

In March 2016, the FASB issued ASU 2016-07 “Simplifying the Transition to the Equity Method of Accounting,” which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. The ASU further requires that unrealized holding gains or losses in accumulated other comprehensive income related to an available-for-sale security that becomes eligible for the equity method be recognized in earnings as of the date on which the investment qualifies for the equity method. The guidance in the ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. Early adoption is permitted for all entities. Entities are required to apply the guidance prospectively to increases in the level of ownership interest or degree of influence occurring after the ASU’s effective date. 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 February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” ASU 2016-02 introduces a lessee model that brings most leases on the balance sheet and aligns many of the underlying principles of the new lessor model with those in the FASB’s new revenue recognition standard. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than twelve months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The new guidance will be effective for the Company on January 1, 2019 with early adoption permitted. The Company expects to adopt the new standard on its effective date. The Company expects the standard will have a material effect on its financial statements.  At December 31, 2016, the Company had approximately $472.8 million of operating leases that would be recorded on the balance sheet if the standard was already effective. The Company has not determined the remaining effect on its ongoing financial reporting for adoption of this ASU. The Company expects to elect all of the available practical expedients on adoption.

In January 2016, the FASB issued ASU 2016-01 “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. The ASU significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments.  The new standard is effective for fiscal years and interim periods within those years beginning after December 15, 2017. 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.

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Recent Revenue Recognition Accounting Pronouncements

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 FASB has issued several additional ASUs since this time that add additional clarification to certain issues existing after the original ASU was released. All of the new standards are effective for the Company on January 1, 2018, with early adoption permitted no sooner than January 1, 2017. The standards permit the use of either the retrospective or cumulative effect transition method. The Company has not determined the effect on its ongoing financial reporting for adoption of these ASUs.

The Company is reviewing the requirements of the new revenue standard, and amendments described below, while following activities of the FASB and the American Institute of Certified Public Accountants (AICPA) for certain interpretive guidance applicable to IT outsourcers and payment processors. The Company is evaluating customer contracts under the new standard for each type of significant revenue stream (and related costs) identified to evaluate differences from current accounting. TSYS plans to adopt ASU 2014-09, as well as all other clarifications and technical guidance issued by the FASB and AICPA related to this new revenue standard, on January 1, 2018 using the modified retrospective transition method. Such adoption method may result in an adjustment to the opening balance of retained earnings (or other appropriate components of net assets in the statement of financial position) for the cumulative effect, if any, of applying the standard to contracts that are not completed on January 1, 2018. Under the modified retrospective transition method, the Company is required to disclose the impact of changes to financial statement line items due to the application of the new revenue standard, including an explanation of the reasons for any significant changes.

The new standard could change the amount and timing of revenue and costs for certain significant revenue streams, increase areas of judgment and related internal controls requirements, change the presentation of revenue for certain contract arrangements and possibly require changes to the Company’s software systems to assist in both internally capturing accounting differences and externally reporting such differences through enhanced disclosure requirements.

In March 2016, the FASB issued ASU 2016-08 “Revenue from Contracts with Customers (Topic  606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),"  which improves the operability and understandability of the implementation guidance on principal versus agent considerations by providing indicators as to which party controls the good or service provided to a customer (the principal).

In April 2016, the FASB issued ASU 2016-10 “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” which clarifies two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas.

In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients,” which affects only the following narrow aspects of Topic 606: Assessing the Collectability Criterion; Presentation of Sales and Other Taxes Collected from Customers; Noncash Consideration; Contract Modification at Transition; Completed Contracts at Transition; and Technical Correction.

In December 2016, the FASB issued ASU 2016-20 “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” which affects only the following narrow aspects of Topic 606: Disclosure of Remaining Performance Obligations as it relates to entities such as processors which may not be required to estimate revenue under ASU 2014-09 due to direct allocation of variable consideration; Disclosure of Prior-Period Performance Obligations; Loan Guarantee Fees; Contract Costs—Impairment Testing; Contract Costs— Interaction of Impairment Testing with Guidance in Other Topics; Provisions for Losses on Construction-Type and Production Type Contracts; Contracts within the scope of Topic 944 (insurance)are excluded from the scope of Topic 606; Contract Modifications; Contract Asset versus Receivable; Refund Liability; Advertising Costs; Fixed-Odds Wagering Contracts in the Casino Industry.

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

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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.

The Company reviews revenue performance on a net revenue basis which is a non-GAAP measure. Net revenue is defined as total revenues less reimbursable items, as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment networks that are recorded by TSYS as expense. 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, 2016 were $259.5 million, a decrease of $20.6 million or 7.4%, compared to $280.2 million for the same period last year. Reimbursable items for the year ended December 31, 2015 increased $26.3 million, or 10.4%, compared to $253.9 million for the same period in 2014. Interchange and assessment expenses related to the TransFirst business were $868.7 million for the year ended December 31, 2016.

TSYS' revenues in its North America Services and International Services segments are influenced by several factors, including volumes related to accounts on file (AOF) and transactions. TSYS estimates that approximately 49.4% of these segments’ net revenue is AOF and transaction volume driven. The remaining 50.6% of net revenue is not AOF and transaction volume driven, and is derived from production and optional services TSYS considers to be value added products and services, custom programming and licensing arrangements.

TSYS’ revenues in its Merchant Services segment are influenced by several factors, including volumes related to transactions, dollar sales volume, 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.

A summary of the consolidated financial highlights is provided below:

	Years Ended December 31,				Percent Change
(in thousands, except per share data)	2016		2015	2014	2016 vs. 2015		2015 vs. 2014
Total revenues	$	4,170,077	2,779,541	2,446,877	50.0	%	13.6	%
Net revenue1	$	3,041,876	2,499,349	2,192,978	21.7		14.0
Operating income	$	573,382	534,107	431,640	7.4		23.7
Net income attributable to TSYS common shareholders	$	319,638	364,044	322,872	(12.2)		12.8
Basic earnings per share (EPS) attributable to TSYS common shareholders2	$	1.74	1.98	1.73	(12.0)		14.1
Diluted EPS attributable to TSYS common shareholders2	$	1.73	1.97	1.72	(11.8)		14.2
Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA)3	$	1,040,551	833,920	712,267	24.8		17.1
Adjusted EPS4 from continuing operations	$	2.81	2.46	1.96	14.5		25.5
Cash flows from operating activities	$	717,909	600,194	560,201	19.6		7.1
Free cash flow5	$	575,336	396,879	324,278	45.0		22.4

Refer to the reconciliation of GAAP to non-GAAP measures later in this section.

¹ Net revenue is total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment networks that are recorded by TSYS as expense.

² Basic and diluted EPS is computed based on the two-class method in accordance with the guidance under GAAP. Refer to Note 25 in the Consolidated Financial Statements for more information on EPS.

³ Adjusted EBITDA is net income excluding equity in income of equity investments, nonoperating income/(expense), income taxes, depreciation, amortization and share-based compensation expenses and other items.

⁴ Adjusted EPS is adjusted earnings divided by weighted average shares outstanding used for basic EPS calculations. Adjusted earnings is net income excluding the after-tax impact of share-based compensation expenses, amortization of acquisition intangibles and other items.

⁵ Free cash flow is net cash provided by operating activities less capital expenditures.

Total revenues increased $1.4 billion for the year ended December 31, 2016, compared to the year ended December 31, 2015, which increased $332.7 million compared to the year ended December 31, 2014. The increase in total revenues for the year ended December 31, 2016, as compared to 2015 is primarily the result of the acquisition of TransFirst in April 2016.  The impact of the acquisition on total revenues was $1.2 billion. The increases in revenues for 2016 and 2015 include decreases of $42.5 million and $31.5 million, respectively, related to the effects of currency translation of the Company's foreign-based subsidiaries and branches.

Net revenue increased 21.7%, or $542.5 million, for the year ended December 31, 2016, compared to the year ended December 31, 2015, which increased 14.0%, or $306.4 million, compared to the year ended December 31, 2014. The

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increase in net revenue for the year ended December 31, 2016, as compared to the same period in 2015, is primarily the result of the acquisition of TransFirst in April 2016, partially offset by decreases associated with currency translation. The impact of the TransFirst acquisition on net revenue was $380.7 million for the year ended December 31, 2016. The increase in net revenue for the year ended December 31, 2015, as compared to the same period in 2014 is primarily the result of increases in new business and organic growth, partially offset by decreases associated with currency translation.

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.

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 pursuant to which both segments provide 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 permit 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 each 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 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

Issuing Services 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’ clients also have the option to use fraud and portfolio management services. Collectively, these services are considered volume-based revenues.

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.

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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.

Below is a summary of AOF for the Company’s Issuing Services segments combined:

(in millions)	As of December 31,			Percent Change
AOF	2016	2015	2014	2016 vs. 2015		2015 vs. 2014
Consumer	442.9	408.2	298.4	8.5	%	36.8	%
Commercial	47.9	45.4	41.6	5.4		9.2
Other	31.0	26.6	22.4	16.8		18.8
Traditional AOF1	521.8	480.2	362.4	8.7		32.5
Prepaid/Stored Value2	57.8	97.2	127.3	(40.5)		(23.7)
Government Services3	88.7	79.3	67.4	11.7		17.8
Commercial Card Single-Use4	83.2	75.8	59.6	9.8		27.1
Total AOF	751.5	732.5	616.7	2.6		18.8

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.

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.

Additionally, certain clients license the Company’s processing systems and process in-house. Since these 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.

Output and managed services include offerings such as card production, statement production, correspondence and call center support services.

A summary of each segment's results follows:

North America Services

The North America Services segment provides payment processing and related services to clients based primarily 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. This segment had three major customers for the year ended December 31, 2016.

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Below is a summary of the North America Services segment:

	Years Ended December 31,							Percent Change
(in thousands)	2016			2015		2014		2016 vs. 2015		2015 vs. 2014
Volume-based revenues	$	630,900		595,314		480,386		6.0	%	23.9	%
Non-volume related revenues:
Processing fees	$	236,641		235,313		216,685		0.6		8.6
Value-added, custom programming, licensing and other		159,084		151,671		115,741		4.9		31.0
Output and managed services		179,388		164,956		141,270		8.7		16.8
Total non-volume related revenues	$	575,113		551,940		473,696		4.2		16.5
Net revenue	$	1,206,013		1,147,254		954,082		5.1		20.2
Total revenues	$	1,387,416		1,334,258		1,117,764		4.0		19.4
Adjusted segment operating income1	$	468,251		429,064		351,512		9.1		22.1
Adjusted segment operating margin2		38.8	%	37.4	%	36.8	%
Key indicators (in millions):
AOF		662.8		654.1		550.0		1.3		18.9
Transactions		17,140.3		15,774.5		10,838.0		8.7		45.5

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 net revenue.

For the year ended December 31, 2016, approximately 52.3% of TSYS’ North America Services segment net revenue was driven by the volume of accounts on file and transactions processed and approximately 47.7% was derived from non-volume based revenues.

Total segment revenues increased $53.2 million for 2016, as compared to 2015. The increase was attributable to an increase in new business and internal growth, partially offset by decreases related to client deconversions and price reductions. Total segment revenues increased $216.5 million for 2015, as compared to 2014. The increase was 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.

During the first quarter of 2015, two of the Company’s largest prepaid processing clients in the North America Services segment informed TSYS that they did not intend to renew their prepaid processing agreements. One of the deconversions was completed in early October 2015. The other is expected to be completed during the first half of 2017. The revenues associated with these clients, in the aggregate, are immaterial to the Company’s total consolidated revenues in 2016, 2015, and 2014.

The increases in adjusted segment operating income for 2016 and 2015 were driven primarily by increases in revenues partially offset by increases in total operating expenses including severance costs, technology and other expenses.

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 had two major customers for the year ended December 31, 2016.

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Below is a summary of the International Services segment:

	Years Ended December 31,							Percent Change
(in thousands)	2016			2015		2014		2016 vs. 2015		2015 vs. 2014
Volume-based revenues	$	118,311		119,974		131,322		(1.4)	%	(8.6)	%
Non-volume related revenues:
Processing fees	$	59,379		62,998		69,346		(5.7)		(9.2)
Value-added, custom programming, licensing and other		78,408		86,318		95,040		(9.2)		(9.2)
Output and managed services		57,533		61,869		46,077		(7.0)		34.3
Total non-volume related revenues	$	195,320		211,185		210,463		(7.5)		0.3
Net revenue	$	313,631		331,159		341,785		(5.3)		(3.1)
Total revenues	$	335,977		354,725		363,359		(5.3)		(2.4)
Adjusted segment operating income1	$	56,774		60,087		55,123		(5.5)		9.0
Adjusted segment operating margin2		18.1	%	18.1	%	16.1	%
Key indicators (in millions):
AOF		88.7		78.5		66.6		13.0		17.8
Transactions		2,717.8		2,473.6		2,268.4		9.9		9.0

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 net revenue.

For the year ended December 31, 2016, approximately 37.7% of TSYS’ International Services segment net revenue was driven by the volume of accounts on file and transactions processed and approximately 62.3% was derived from non-volume based revenues.

The decreases in total segment revenues for 2016 and 2015 were driven primarily by the negative impacts of $42.5 million and $31.0 million in currency translation. Excluding the impact of currency translation, segment revenues increased $23.8 million, or 6.7% in 2016, as compared to 2015 and $22.3 million, or 6.1% in 2015, as compared to 2014.

The decrease in adjusted segment operating income for 2016, as compared to 2015, was driven primarily by currency translation, severance costs and decreases in both volume and non-volume related revenues. The increase in adjusted segment operating income for 2015, as compared to 2014, was driven primarily by an increase in non-volume related revenues due to increased business.

Merchant Services

The Merchant Services segment provides merchant services and related services to clients based primarily in the United States. Merchant Services 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 (POS) equipment sales and service. This segment had no major customers for the year ended December 31, 2016.

Below is a summary of the Merchant Services segment: 

	Years Ended December 31,							Percent Change
(in thousands)	2016			2015		2014		2016 vs. 2015		2015 vs. 2014
Net revenue	$	898,533		474,040		435,649		89.5	%	8.8	%
Total revenues	$	1,828,828		549,369		510,120		nm		7.7
Adjusted segment operating income1	$	307,595		150,225		134,872		nm		11.4
Adjusted segment operating margin2		34.2	%	31.7	%	31.0	%
Key indicators (in millions):
POS transactions		4,548.1		4,266.5		4,052.7		6.6		5.3
Dollar sales volume	$	97,735.1		48,072.7		46,846.4		nm		2.6
Includes TransFirst's results for nine months in 2016. TransFirst's results are not included in 2015 and 2014. nm = not meaningful

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 net revenue.

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With the acquisition of TransFirst in April 2016, TSYS included nine months of TransFirst’s results as part of the Merchant Services segment.  TransFirst’s revenues are reported gross, which includes amounts paid for interchange and assessments, as TransFirst is the principal in the contractual relationship with its customers. Expenses covering interchange and assessment fees are included in TransFirst’s cost of services and are directly attributable to processing fee revenues.  Merchant Segment net revenue is defined as total revenues less merchant acquiring interchange and assessment fees charged by the card associations or payment networks that are recorded by TSYS as an expense.

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, 2016, approximately 94.0% of TSYS’ Merchant Services segment net revenue was influenced by several factors, including volumes related to transactions and dollar sales volume. The remaining 6.0% of this segment’s net revenue was derived from value added services, chargebacks, managed services, investigation, risk and collection services performed.

Total segment revenues increased $1.3 billion for 2016, as compared to 2015. This increase was primarily due to the inclusion of TransFirst revenues, which were $1.2 billion, as well as increases associated with new business, internal growth and reimbursable items offset by decreases associated with lost business, deconversions and price reductions. 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.

The increase in adjusted segment operating income for 2016, as compared to 2015, was driven primarily by the acquisition of TransFirst in April 2016, partially offset by severance costs. The increase in adjusted segment operating income for 2015, as compared to 2014, was driven by an increase in revenues partially offset by increases in associated costs.

Netspend

Netspend provides GPR prepaid debit cards, payroll cards, and alternative financial service solutions to underbanked and other consumers and businesses in the United States.  Netspend’s products provide customers with access to depository accounts insured by the FDIC with a menu of pricing and features specifically tailored to their needs.  This segment has an extensive distribution and reload network comprising financial service centers and other retail locations throughout the United States, and is a program manager for FDIC-insured depository institutions that issue the card products that Netspend develops, promotes and distributes. Netspend currently has active agreements with six Issuing Banks.

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. This segment had no major customers and one major third-party distributor for the year ended December 31, 2016.

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.   

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Below is a summary of the Netspend segment:

	Years Ended December 31,							Percent Change
(in thousands)	2016			2015		2014		2016 vs. 2015		2015 vs. 2014
Total revenues (and net revenue)	$	663,579		580,377		482,686		14.3	%	20.2	%
Adjusted segment operating income1	$	160,371		137,837		128,285		16.3		7.4
Adjusted segment operating margin2		24.2	%	23.8	%	26.6	%
Key indicators (in millions):
Number of active cards3		4.3		3.9		3.2		10.3		29.1
Number of active cards with direct deposit4		2.1		1.9		1.6		12.7		17.7
Percentage of active cards with direct deposit		49.7	%	48.7	%	50.1	%
Gross dollar volume5	$	28,722.3		24,274.9		20,296.0		18.3	%	19.6	%

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 net revenue

³ 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.

⁴ 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.

⁵ Gross dollar volume represents the total dollar volume of debit transactions and cash withdrawals made using prepaid cards.

Netspend segment revenues increased $83.2 million for 2016 from 2015. This increase was comprised of a $66.6 million increase in service fee revenues and a $16.6 million increase in interchange and other revenues. Netspend segment revenues increased $97.7 million for 2015, as compared to 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.

For the year ended December 31, 2016, 70.9% of revenues were derived from service fees charged to cardholders and 29.1% of revenues were 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 revenues were volume driven as they were driven by the active card and gross dollar volume indicators.

If the CFPB’s new rule pertaining to prepaid financial products, which is scheduled to become effective October 1, 2017, had been effective for 2016, the Company currently estimates that 2016 total revenues would have been negatively impacted by approximately $80.0 million to $85.0 million, with an estimated negative impact to EPS of $0.19 to $0.21, including compliance costs. The impacted revenue consists of overdraft revenue which was approximately 10% to 12% of Netspend’s revenue and certain other fees that are prohibited by the rule. The Company currently expects 2017 total revenues to be negatively impacted by approximately $20.0 million to $25.0 million, with an estimated negative impact to EPS of $0.06 to $0.08, which has been factored in to the Company’s guidance for 2017, and currently expects 2018 total revenues to be negatively impacted by an additional $20.0 million to $25.0 million, with an estimated negative impact to EPS of $0.05 to $0.07.

The estimated earnings and revenue impact of the new rule set forth above for 2017 and 2018 is based in part on the Company’s current, but not yet complete, analysis of the rule and analysis of the CFPB’s underlying intent. By 2018, the Company expects to offset approximately one-half of the total negative revenue impact of the rule and approximately one-third of the total negative EPS impact of the rule through its business expansion strategies.

The Company will continue to review and interpret the new rule and analyze its expected impact on Netspend’s business. The estimated revenue and earnings impact set forth above only includes the projected impact of the rule on the Company’s financial performance and does not include the impact of other matters that may impact the performance of Netspend’s business in 2017 and 2018 and is subject to risks and uncertainties such as the costs of compliance associated with the rule and the success of Netspend’s business expansion strategies which success will depend on, among other things, the rate of adoption of Netspend’s new products both by consumers and its distribution partners, the rate of utilization of the various product features by cardholders and market and regulatory dynamics. The estimated impact of the rule on both the Company’s 2017 and 2018 financial performance could vary either positively or negatively based on these and other factors. Furthermore, the estimated impact of the rule on both the Company’s 2017 and 2018 financial performance may be adjusted either upward or downward after the Company completes its analysis of the rule and as Netspend’s business expansion planning progresses.

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Operating Expenses

The Company’s operating expenses were $3.6 billion, $2.2 billion and $2.0 billion in 2016, 2015 and 2014, respectively. 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, sales, investor relations and mergers and acquisitions.

The changes in operating expenses for the years ended December 31, 2016 and 2015 include decreases of $26.0 million and $30.4 million, respectively, related to the effects of currency translation of the Company's foreign-based subsidiaries. Operating expenses for the year ended December 31, 2016 were also impacted by the TransFirst acquisition. Operating expenses increased $1.3 billion due to the acquisition of TransFirst in 2016. Operating expenses in 2016 were also impacted by $21.7 million of litigation settlement, settlement discussions and related legal expenses.

The Company’s cost of services were $3.0 billion, $1.9 billion and $1.7 billion in 2016, 2015 and 2014, respectively. The increases in cost of services are due to increases in employment, severance, technology and facilities and other costs to support revenue growth and the acquisition of TransFirst. The Company’s selling, general and administrative expenses were $603.6 million, $390.3 million and $346.3 million in 2016, 2015 and 2014, respectively. The increases in selling, general and administrative costs were due primarily to the acquisition of TransFirst in April 2016 and litigation settlement and settlement discussions. 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.

The Company’s transaction and integration expenses related to the acquisition of TransFirst in 2016 were $32.3 million for the year ended December 31, 2016. These expenses consist of costs related to the completion of the acquisition such as legal, accounting and professional fees, as well as, personnel costs for severance and retention.

Operating Income

Operating income increased 7.4% for the year ended December 31, 2016, compared to 2015. The Company’s operating profit margin for year ended December 31, 2016 was 13.6%, compared to 19.2% last year. TSYS’ operating margins decreased for the year ended December 31, 2016, as compared 2015, due primarily to the increase in acquisition and integration expenses, severance and the operating results and lower operating margin of TransFirst.

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 expense increased in 2016 as compared to 2015, and decreased in 2015 as compared to 2014.

The following table provides a summary of nonoperating expense:

	Years Ended December 31,						Percent Change
(in thousands)	2016		2015		2014		2016 vs. 2015		2015 vs. 2014
Interest expense1	$	(115,363)		(40,701)		(40,975)	nm	%	(0.7)	%
Interest income		1,840		1,450		1,109	26.9		30.8
Currency transaction gains (losses),net		1,748		(388)		142	nm		nm
Net gains (losses) on investments in private equity		182		3,324		308	nm		nm
Other		(575)		(904)		705	(36.4)		nm
Total	$	(112,168)		(37,219)		(38,711)	nm		(3.9)
nm = not meaningful

¹ Interest expense includes interest on bonds of $84.6 million, $33.7 million, and $33.7 million, respectively, for the years ended December 31, 2016, 2015 and 2014.

Interest expense for the year ended December 31, 2016 increased $74.6 million compared to 2015. The increase in interest expense in 2016 compared to 2015 is due to the debt financing of the acquisition of TransFirst in April 2016. Refer to Notes 12 and 23 in the Consolidated Financial Statements for more information on long-term borrowings and acquisitions.

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Income Taxes

Below is a summary of income tax expense:

	Years Ended December 31,							Percent Change
(in thousands)	2016			2015		2014		2016 vs. 2015		2015 vs. 2014
Income tax expense	$	161,175		151,364		129,761		6.5	%	16.6	%
Effective income tax rate		34.9	%	30.5	%	33.0	%

During 2016, 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 increase in its valuation allowance for deferred income tax assets of $2.9 million.

In 2016, TSYS reassessed its uncertain tax positions for all jurisdictions.  As a result, the Company increased unrecognized tax benefits by $3.4 million.

Refer to Note 14 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)	2016		2015	2014	2016 vs. 2015		2015 vs. 2014
Equity in income of equity investments	$	25,933	22,106	17,583	17.3	%	25.7	%

The increases in equity income in 2016 and 2015 is the result of organic growth in China Union Pay Data Co., Ltd (CUP Data). Refer to Note 11 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 and $48.7 million for 2015 and 2014, respectively. Refer to Note 2 in the Consolidated Financial Statements for more information on discontinued operations.

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)	2016		2015	2014	2016 vs. 2015		2015 vs. 2014
Net income	$	325,972	369,041	329,406	(11.7)	%	12.0	%
Net income attributable to noncontrolling interests		(6,334)	(4,997)	(6,534)	26.8		(23.5)
Net income attributable to TSYS common shareholders	$	319,638	364,044	322,872	(12.2)		12.8
Basic EPSattributable to TSYS common shareholders1	$	1.74	1.98	1.73	(12.0)		14.1
Diluted EPS attributable to TSYS common shareholders1	$	1.73	1.97	1.72	(11.8)		14.2

¹ Basic and diluted EPS is computed based on the two-class method in accordance with the guidance under GAAP. Refer to Note 25 in the Consolidated Financial Statements for more information on EPS.

Net income attributable to noncontrolling interests in 2016 increased by $1.3 million from 2015 and decreased $1.5 million in 2015 from 2014. The increase in 2016 compared to 2015 is driven by the increased operating results of Central Payment Co., LLC (CPAY). The decrease in 2015 compared to 2014 is driven by the sale of GP Network Corporation (GP Net) in 2014 and the decline in operating results of the Company’s European cost center business in 2015.

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Non-GAAP Financial Measures

Management evaluates the Company's operating performance based upon operating margin on a net revenue basis, adjusted EBITDA, segment operating margin and consolidated adjusted operating margin, adjusted EPS and free cash flow 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 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 measures of other companies due to potential inconsistencies in the method of calculation.

TSYS believes that its provision of non-GAAP financial measures provides investors with important 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 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 understand the business, manage budgets and allocate resources.

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

Revenue before Reimbursable Items, Net Revenue and Operating Margin on a Net Revenue Basis
	Years Ended December 31,
(in thousands)	2016			2015		2014
Operating income (a) (GAAP)	$	573,382		534,107		431,640
Total revenues (b)	$	4,170,077		2,779,541		2,446,877
Less: Reimbursable items		259,543		280,192		253,899
Revenue before reimbursable items		3,910,534		2,499,349		2,192,978
Less: Interchange and assessment expenses		868,658		-		-
Net revenue (c) (non-GAAP)	$	3,041,876		2,499,349		2,192,978
Operating margin (as reported) (a)/(b)		13.75	%	19.22	%	17.64	%
Operating margin on a net revenue basis (a)/(c) (non-GAAP)		18.85	%	21.37	%	19.68	%

Adjusted EBITDA
	Years Ended December 31,
(in thousands)	2016		2015		2014
Net income (GAAP)	$	325,972		369,041		329,406
Adjust for:
Income from discontinued operations		-		(1,411)		(48,655)
Deduct: Equity in income of equity investments		(25,933)		(22,106)		(17,583)
Add: Income taxes		161,175		151,364		129,761
Add: Nonoperating expense		112,168		37,219		38,711
Add: Depreciation and amortization		373,546		258,264		246,620
EBITDA		946,928		792,371		678,260
Adjust for:
Add: Share-based compensation		43,728		41,549		30,790
Add: TransFirst and Netspend M&A and integration expenses1		28,176		-		3,217
Add: Litigation, claims, judgments or settlements2		21,719		-		-
Adjusted EBITDA (non-GAAP)	$	1,040,551		833,920		712,267

¹ Costs associated with the TransFirst and Netspend acquisitions which are included in selling, general and administrative expenses.

² Litigation settlement or settlement discussions and related legal expenses

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Segment Operating Margin and Adjusted Segment Operating Income
	Years Ended December 31,
(in thousands)		2016	2015	2014
Operating income (GAAP) (a)	$	573,382	534,107	431,640
Share-based compensation		43,728	41,549	30,790
TransFirst and Netspend M&A and integration expenses1		28,176	-	3,217
Litigation, claims, judgments or settlements		21,719	-	-
Acquisition intangible amortization		189,990	92,521	96,970
Adjusted operating income (non-GAAP)(b)	$	856,995	668,177	562,617
Adjusted operating income by segment (non-GAAP):
North America Services (c)	$	468,251	429,064	351,512
International Services (d)		56,774	60,087	55,123
Merchant Services (e)		307,595	150,225	134,872
Netspend (f)		160,371	137,837	128,285
Corporate Administration and Other		(135,996)	(109,036)	(107,175)
Adjusted segment operating income2 (non-GAAP)	$	856,995	668,177	562,617
Total revenues (GAAP) (g)	$	4,170,077	2,779,541	2,446,877
Less: reimbursable items		259,543	280,192	253,899
Revenue before reimbursable items		3,910,534	2,499,349	2,192,978
Intersegment revenues		39,880	33,481	21,224
Segment revenue before reimbursable items (non-GAAP)	$	3,950,414	2,532,830	2,214,202
Segment revenue before reimbursable items (non-GAAP):
North America Services	$	1,206,013	1,147,254	954,082
International Services		313,631	331,159	341,785
Merchant Services		1,767,191	474,040	435,649
Netspend		663,579	580,377	482,686
Segment revenue before reimbursable items (non-GAAP)	$	3,950,414	2,532,830	2,214,202
Total revenues (GAAP) (g)	$	4,170,077	2,779,541	2,446,877
Less: reimbursable items		259,543	280,192	253,899
Revenue before reimbursable items		3,910,534	2,499,349	2,192,978
Less: interchange and assessments expenses		868,658	-	-
Net revenue2 (non-GAAP) (h)		3,041,876	2,499,349	2,192,978
Intersegment revenues		39,880	33,481	21,224
Segment net revenue (non-GAAP)	$	3,081,756	2,532,830	2,214,202
Segment net revenue (non-GAAP):
North America Services (i)	$	1,206,013	1,147,254	954,082
International Services (j)		313,631	331,159	341,785
Merchant Services (k)		898,533	474,040	435,649
Netspend (l)		663,579	580,377	482,686
Segment net revenue (non-GAAP)	$	3,081,756	2,532,830	2,214,202
Segment external net revenue (non-GAAP):
North America Services	$	1,174,304	1,118,332	936,957
International Services		308,552	326,834	338,126
Merchant Services		898,175	473,806	435,209
Netspend		660,845	580,377	482,686
Segment external net revenue (non-GAAP)	$	3,041,876	2,499,349	2,192,978
Operating margin (GAAP) (a)/(g)		13.8%	19.2%	17.6%
Adjusted operating margin on net revenue (non-GAAP) (b)/(h)		28.2%	26.7%	25.7%
Adjusted segment operating margin on net revenue (non-GAAP):
North America Services (c)/(i)		38.8%	37.4%	36.8%
International Services (d)/(j)		18.1%	18.1%	16.1%
Merchant Services (e)/(k)		34.2%	31.7%	31.0%
Netspend (f)/(l)		24.2%	23.7%	26.6%

¹ Excludes share-based compensation

² Net revenue and adjusted segment operating income are non-GAAP measures. Net revenue is total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment networks that are recorded by TSYS as expense.  Adjusted segment operating income excludes acquisition intangible amortization, TransFirst M&A expenses, share-based compensation and expenses associated with Corporate Administration and Other.

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Adjusted Earnings Per Share
	Years Ended December 31,
(in thousands, except per share data)	2016		2015		2014
Income attributable to TSYS common shareholders (GAAP)	$	319,638	$	362,633		275,216
Adjust for amounts attributable to TSYS common shareholders:
Add: Acquisition intangible amortization		188,887		91,418		95,743
Add: Share-based compensation		43,691		41,535		30,790
Add: TransFirst and Netspend M&A and integration expenses1		37,957		-		3,217
Add: Litigation, claims, judgments or settlements2		19,913		-		-
Less: Tax impact of adjustments3		(93,667)		(43,474)		(40,564)
Adjusted earnings	$	516,419	$	452,112	$	364,402
Basic EPS - Income attributable to TSYS common shareholders:
As reported (GAAP)	$	1.74		1.97		1.48
Adjusted EPS (non-GAAP)	$	2.81		2.46		1.96
Average common shares and participating securities		183,655		184,082		186,222

¹ Costs associated with the TransFirst and Netspend acquisitions which are included in selling, general and administrative expenses and nonoperating expenses.

² Litigation settlement or settlement discussions and related legal expenses

³ Certain of these merger and acquisition costs are nondeductible for income tax purposes. Income tax impact includes a discrete item as a result of the acquisition.

.

Free Cash Flow
	Years Ended December 31,
(in thousands)	2016		2015	2014
Net cash provided by operating activities (GAAP)	$	717,909	600,194	560,201
Capital expenditures		(142,573)	(203,315)	(235,923)
Free cash flow (non-GAAP)	$	575,336	396,879	324,278

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.

Cash Flows from Operating Activities

	Years Ended December 31,
(in thousands)	2016		2015	2014
Net income	$	325,972	369,041	329,406
Depreciation and amortization		373,546	258,264	248,018
Other noncash items and charges, net		105,403	50,458	(27,928)
Net change in current and other assets and current and other liabilities		(87,012)	(77,569)	10,705
Net cash provided by operating activities	$	717,909	600,194	560,201

TSYS' main source of funds is derived from operating activities, specifically net income. The increase in 2016, as compared to 2015, in net cash provided by operating activities was primarily the result of the combined increase of noncash charges, such as depreciation and amortization, the net earnings of the Company, and the impact of TransFirst. The increase in 2015, as compared to 2014, in net cash provided by operating activities was 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 2015 and 2014 is the result of the timing of payments and the reduction of liabilities related to the disposal of the Company’s Japan operations.

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Cash Flows from Investing Activities

	Years Ended December 31,
(in thousands)	2016		2015	2014
Cash used in acquisitions, net of cash acquired	$	(2,345,493)	(750)	(38,584)
Purchases of property and equipment		(51,132)	(54,640)	(75,913)
Additions to contract acquisition costs		(45,847)	(58,728)	(88,871)
Additions to internally developed computer software		(34,043)	(39,219)	(41,501)
Additions to licensed computer software from vendors		(11,551)	(50,729)	(29,638)
Purchase of private equity investments		(4,930)	(3,525)	(3,291)
Proceeds from insurance recovery for loss on disposal		-	-	6,212
Proceeds from dispositions, net of expenses paid and cash disposed		-	3,568	44,979
Proceeds from sale of private equity investment		120	1,839	-
Net cash used in investing activities	$	(2,492,876)	(202,184)	(226,607)

The major uses of cash for investing activities in 2016, 2015 and 2014 were for acquisitions, purchases of property and equipment, additions to contract acquisition costs, internally developed computer software and licensed computer software from vendors.

Cash Used in Acquisitions

In 2016, the Company used cash of $2.3 billion in the acquisition of TransFirst. In 2014, the Company paid $38.6 million to Netspend dissenting shareholders to settle the outstanding lawsuit associated with the Netspend acquisition.

Property and Equipment

Capital expenditures for property and equipment were $51.1 million in 2016, compared to $54.6 million in 2015 and $75.9 million in 2014. The majority of capital expenditures in 2016 and 2015 related to computer processing hardware. The majority of capital expenditures in 2014 related to investments in new computer processing hardware and building improvements.

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 $45.8 million in 2016, $58.7 million in 2015 and $88.9 million in 2014. The Company made cash payments for processing rights of $25.8 million, $29.6 million and $21.7 million in 2016, 2015 and 2014, respectively. Conversion cost additions were $20.0 million, $29.1 million and $67.2 million in 2016, 2015 and 2014, respectively. The decreases in conversion costs in 2016 and 2015, as compared to 2014, are primarily related to the conversion of Bank of America’s consumer card portfolio.

Internally Developed Computer Software Costs

Additions to capitalized software development costs, including enhancements to, and development of, processing systems, were $34.0 million in 2016, $39.2 million in 2015 and $41.5 million in 2014. The changes in capitalized software development costs in 2016, as compared to 2015, were the result of a decrease in the level of activity in a multi-year, multi-phase initiative that consists of enhancing TSYS’ issuing processing platforms.

Licensed Computer Software from Vendors

Capital expenditures for licensed computer software from vendors for increases in processing capacity were $11.6 million in 2016, compared to $50.7 million in 2015 and $29.6 million in 2014. The higher capital expenditures in 2015 were due primarily to the extension of existing mainframe and distributed software agreements.

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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.

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 funds of $4.9 million, $3.5 million and $3.3 million in 2016, 2015 and 2014, respectively.

Cash Flows from Financing Activities

	Years Ended December 31,
(in thousands)	2016		2015	2014
Proceeds from long-term borrowings	$	2,666,295	1,912	1,396
Proceeds from exercise of stock options		11,708	58,636	34,869
Excess tax benefit from share-based payment arrangements		9,905	24,357	7,185
Subsidiary dividends paid to noncontrolling shareholders		(5,548)	(5,028)	(7,172)
Purchase of noncontrolling interests		(5,878)	-	(37,500)
Debt issuance costs		(26,555)	-	-
Repurchases of common stock under plans and tax withholding		(30,275)	(242,235)	(170,516)
Dividends paid on common stock		(73,378)	(73,677)	(74,796)
Principal payments on long-term borrowings and capital lease obligations		(724,084)	(54,719)	(69,939)
Net cash provided by (used in) financing activities	$	1,822,190	(290,754)	(316,473)

The main sources of cash from financing activities in 2016 were proceeds from long-term borrowings. The main sources of cash from financing activities in 2015 and 2014 were proceeds from the exercise of stock options. Net cash provided by financing activities for the year ended December 31, 2016 was primarily the result of proceeds from long-term borrowings in connection with the TransFirst acquisition. 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. Refer to Notes 12 and 23 in the Consolidated Financial Statements for more information on the long-term debt financing and acquisitions.

Borrowings

Refer to Note 12 in the Consolidated Financial Statements for further information on borrowings.

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.

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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.

The put option was not redeemable on December 31, 2016, but redemption was 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, 2016 exceeded the accretion fair value amount.

Refer to Note 23 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, 2016, the Company purchased 5.7 million shares for approximately $266.4 million at an average price of $47.15.

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 the Company purchased 21.2 million shares for approximately $503.3 million, at an average price of $23.75. In January 2015, this plan was terminated.

Dividends

Dividends on common stock of $73.4 million were paid in 2016, compared to $73.7 million and $74.8 million in 2015 and 2014, respectively. The Company paid dividends of $0.40 per share in 2016, 2015 and 2014. 

Significant Noncash Transactions

During 2016, 2015 and 2014, the Company issued 362,804, 388,211 and 673,724 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 under capital leases and software under license agreements in the amount of $1.8 million, $4.1 million and $17.9 million in 2016, 2015 and 2014, respectively.

Refer to Notes 18 and 22 in the Consolidated Financial Statements for more information on share-based compensation and significant noncash transactions.

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.

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The following table summarizes future contractual cash obligations, including lease payments and software arrangements, as of December 31, 2016, for the next five years and thereafter:

	Contractual Cash Obligations
	Payments Due By Period
			1 Year or
(in thousands)	Total		Less	2-3 Years	4-5 Years	After 5 Years
Debt obligations (principal)	$	3,383,853	48,853	681,250	1,353,750	1,300,000
Debt obligations (interest)1		672,555	115,707	205,199	164,712	186,938
Operating leases		472,808	128,254	242,836	67,074	34,644
Purchase commitments		59,121	26,656	21,422	11,043	-
Redeemable noncontrolling interest		24,093	24,093	-	-	-
Capital lease obligations		3,836	2,754	1,082	-	-
Total contractual cash obligations	$	4,616,266	346,316	1,151,789	1,596,579	1,521,582

¹ Amounts utilize prevailing interest rates as of December 31, 2016.

Income Taxes

The total liability for uncertain tax positions as of December 31, 2016 is $16.5 million. Refer to Note 14 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 adverse movements in foreign currency exchange rates. On June 23, 2016, the United Kingdom (U.K.) held a referendum in which voters approved an exit from the European Union (E.U.), commonly referred to as “Brexit.” As a result, global markets were adversely impacted, including currencies, and resulted in a decline in the value of the British pound, as compared to the U.S. dollar and other currencies. The announcement of Brexit and the withdrawal of the U.K. from the E.U. may also create global economic uncertainty, and have unknown social and geopolitical impact, which may adversely affect the Company’s business, results of operations and financial condition. TSYS has not entered into foreign exchange forward contracts to reduce its exposure to foreign currency rate changes. TSYS continues to analyze potential hedging instruments to safeguard it from significant foreign currency translation risks.

TSYS maintains operating cash accounts outside the United States. Refer to Note 4 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.

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 2.4:1. As of December 31, 2016, TSYS had working capital of $602.3 million, compared to $519.3 million in 2015 and $394.3 million in 2014.

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Legal Proceedings

Refer to Note 15 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 with respect to the effect of recent accounting pronouncements; (ii) TSYS’ expectation with respect to the timing of deconversions; (iii) TSYS’ expectation with respect to the potential impact of the CFPB’s new rule pertaining to prepaid  financial products on its Netspend business and the Company’s future revenue and earnings, and Netspend’s business expansion strategies; (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’ belief with respect to lawsuits, claims and other complaints; (vi) TSYS’ expectation with respect to certain tax matters; (vii) the Board’s intention to continue to pay cash dividends; 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;

· 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;

· conversions and deconverions of client portfolios may not occur as scheduled;

· risks associated with foreign operations, including adverse developments with respect to foreign currency exchange rates, and in particular with respect to the current environment, adverse developments with respect to foreign currency  exchange rates as a result of the United Kingdom’s decision to leave the European Union (Brexit);

· 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 completed 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;

35

· 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, and in particular the CFPB’s new rule regarding prepaid financial products;

· the success of Netspend’s business expansion strategies to offset the loss of revenue from the CFPB’s new rule regarding prepaid financial products which will depend on, among other things, the rate of adoption of Netspend’s new products both by consumers and its distribution partners, the rate of utilization of the various product features by cardholders and market and regulatory dynamics, and, in addition, the costs of compliance associated with the new rule;

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

· 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, 2016 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 disclaims any obligation to update any forward-looking statement as a result of new information, future developments or otherwise except as required by law.

Subsequent Events

On February 3, 2017, the Company acquired an additional 10% equity interest in CPAY from a privately-owned company for $70.0 million. This purchase reduced the remaining redeemable noncontrolling interest in CPAY to 15% of its total outstanding equity and extended the put call arrangement until April 2018.

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)	2016		2015
Assets
Current assets:
Cash and cash equivalents (Note 4)	$	425,354	389,328
Accounts receivable, net of allowances for doubtful accounts and billing adjustments of $4.8 million and $4.0 million as of 2016 and 2015, respectively		432,847	314,705
Prepaid expenses and other current assets (Note 5)		164,488	154,199
Total current assets		1,022,689	858,232
Goodwill (Note 6)		3,270,952	1,545,424
Other intangible assets, net of accumulated amortization of $420.6 million and $257.1 million as of 2016 and 2015, respectively (Note 7)		906,676	328,320
Computer software, net of accumulated amortization of $757.4 million and $680.6 million as of 2016 and 2015, respectively (Note 8)		423,188	405,070
Property and equipment, net of accumulated depreciation and amortization of $480.7 million and $457.3 million as of 2016 and 2015, respectively (Note 9)		282,345	289,898
Contract acquisition costs, net of accumulated amortization of $309.7 million and $287.9 million as of 2016 and 2015, respectively (Note 10)		235,700	247,811
Equity investments, net (Note 11)		110,793	106,118
Deferred income tax assets (Note 14)		7,055	6,242
Other assets		106,779	90,780
Total assets	$	6,366,177	3,877,895
Liabilities
Current liabilities:
Accrued salaries and employee benefits	$	67,655	66,594
Current portion of long-term borrowings (Note 12)		48,040	50,078
Accounts payable		38,712	52,213
Current portion of obligations under capital leases (Note 12)		2,687	3,468
Other current liabilities (Note 13)		263,259	166,579
Total current liabilities		420,353	338,932
Long-term borrowings, excluding current portion (Note 12)		3,312,215	1,373,878
Deferred income tax liabilities (Note 14)		419,552	192,444
Obligations under capital leases, excluding current portion (Note 12)		1,061	3,663
Other long-term liabilities		88,983	96,886
Total liabilities		4,242,164	2,005,803
Redeemable noncontrolling interest in consolidated subsidiary		24,093	23,410
Commitments and contingencies (Note 15)
Equity
Shareholders’ equity: (Notes 17, 18, 19 and 20)
Common stock — $0.10 par value. Authorized 600,000 shares; 202,765 and 202,769 issued as of 2016 and 2015 respectively; 183,451 and 182,781 outstanding as of 2016 and 2015, respectively		20,276	20,277
Additional paid-in capital		279,627	241,891
Accumulated other comprehensive loss, net (Note 20)		(56,158)	(33,544)
Treasury stock, at cost (19,314 and 19,988 shares as of 2016 and 2015, respectively)		(646,047)	(641,664)
Retained earnings		2,502,222	2,256,058
Total shareholders’ equity		2,099,920	1,843,018
Noncontrolling interest in consolidated subsidiary		-	5,664
Total equity		2,099,920	1,848,682
Total liabilities and equity	$	6,366,177	3,877,895

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)	2016		2015	2014
Total revenues (Note 21)	$	4,170,077	2,779,541	2,446,877
Cost of services		2,993,062	1,855,181	1,668,892
Selling, general and administrative expenses		603,633	390,253	346,345
Total operating expenses		3,596,695	2,245,434	2,015,237
Operating income		573,382	534,107	431,640
Nonoperating expenses, net		(112,168)	(37,219)	(38,711)
Income before income taxes and equity in income of equity investments		461,214	496,888	392,929
Income taxes (Note 14)		161,175	151,364	129,761
Income before equity in income of equity investments		300,039	345,524	263,168
Equity in income of equity investments, net of tax (Note 11)		25,933	22,106	17,583
Income from continuing operations, net of tax		325,972	367,630	280,751
Income from discontinued operations, net of tax		-	1,411	48,655
Net income	$	325,972	369,041	329,406
Net income attributable to noncontrolling interests		(6,334)	(4,997)	(6,534)
Net income attributable to Total System Services, Inc. (TSYS) common shareholders	$	319,638	364,044	322,872
Basic earnings per share (EPS) attributable to TSYS common shareholders (Note 25)
Income from continuing operations to TSYS common shareholders	$	1.74	1.97	1.48
Gain from discontinued operations to TSYS common shareholders		-	0.01	0.26
Net income attributable to TSYS common shareholders1	$	1.74	1.98	1.73
Diluted EPS attributable to TSYS common shareholders (Note 25)
Income from continuing operations to TSYS common shareholders	$	1.73	1.96	1.47
Gain from discontinued operations to TSYS common shareholders		-	0.01	0.25
Net income attributable to TSYS common shareholders1	$	1.73	1.97	1.72
Amounts attributable to TSYS common shareholders:
Income from continuing operations	$	319,638	362,633	275,216
Gain from discontinued operations		-	1,411	47,656
Net income	$	319,638	364,044	322,872

¹ EPS amounts may not total due to rounding

See accompanying Notes to Consolidated Financial Statements

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Consolidated Statements of Comprehensive Income

	Years Ended December 31,
(in thousands)	2016		2015	2014
Net income	$	325,972	369,041	329,406
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(30,801)	(21,719)	(19,531)
Less reclassifications of foreign currency translation adjustments to net income		-	-	3,514
Total foreign currency translation adjustments		(30,801)	(21,719)	(16,017)
Postretirement healthcare plan adjustments		496	(1,567)	589
Unrealized gain (loss) on available-for-sale securities		7,359	1,398	(668)
Other comprehensive loss		(22,946)	(21,888)	(16,096)
Comprehensive income	$	303,026	347,153	313,310
Comprehensive income attributable to noncontrolling interests		(6,002)	(4,727)	(6,113)
Comprehensive income attributable to TSYS common shareholders	$	297,024	342,426	307,197

See accompanying Notes to Consolidated Financial Statements

39

Consolidated Statements of Cash Flows

	Years Ended December 31,
(in thousands)	2016		2015	2014
Cash flows from operating activities:
Net income	$	325,972	369,041	329,406
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		373,546	258,264	248,018
Provisions for cardholder losses		49,362	41,264	38,381
Share-based compensation		43,728	41,549	30,790
Dividends received from equity investments		15,246	12,097	9,189
Amortization of debt issuance costs		13,570	1,841	1,817
Provisions for bad debt expenses, billing adjustments and merchant losses		7,584	4,495	2,823
Deferred income tax (benefit) expense		7,435	(4,083)	(8,963)
Charges for transaction processing provisions		5,351	6,976	9,468
Loss (gain) on disposal of equipment, net		774	(397)	(293)
Amortization of bond discount		750	397	383
Gain on disposal of subsidiaries		-	(3,568)	(86,961)
Changes in value of private equity investments		(811)	(4,038)	(793)
(Gain) loss on foreign currency		(1,748)	388	999
Excess tax benefit from share-based payment arrangements		(9,905)	(24,357)	(7,185)
Equity in income of equity investments, net of tax		(25,933)	(22,106)	(17,583)
Changes in operating assets and liabilities, net of effect of acquisition:
Accounts receivable		(73,235)	(39,218)	(33,406)
Prepaid expenses, other current assets and other long-term assets		(57,835)	(8,498)	(10,525)
Accounts payable		(12,562)	(3,987)	8,765
Accrued salaries and employee benefits		(2,597)	29,168	414
Other current liabilities and other long-term liabilities		59,217	(55,034)	45,457
Net cash provided by operating activities		717,909	600,194	560,201
Cash flows from investing activities:
Cash used in acquisitions, net of cash acquired		(2,345,493)	(750)	(38,584)
Purchases of property and equipment		(51,132)	(54,640)	(75,913)
Additions to contract acquisition costs		(45,847)	(58,728)	(88,871)
Additions to internally developed computer software		(34,043)	(39,219)	(41,501)
Additions to licensed computer software from vendors		(11,551)	(50,729)	(29,638)
Purchase of private equity investments		(4,930)	(3,525)	(3,291)
Proceeds from insurance recovery for loss on disposal		-	-	6,212
Proceeds from dispositions, net of expenses paid and cash disposed		-	3,568	44,979
Proceeds from sale of private equity investment		120	1,839	-
Net cash used in investing activities		(2,492,876)	(202,184)	(226,607)
Cash flows from financing activities:
Proceeds from long-term borrowings		2,666,295	1,912	1,396
Proceeds from exercise of stock options		11,708	58,636	34,869
Excess tax benefit from share-based payment arrangements		9,905	24,357	7,185
Subsidiary dividends paid to noncontrolling shareholders		(5,548)	(5,028)	(7,172)
Purchase of noncontrolling interests		(5,878)	-	(37,500)
Debt issuance costs		(26,555)	-	-
Repurchases of common stock under plans and tax withholding		(30,275)	(242,235)	(170,516)
Dividends paid on common stock		(73,378)	(73,677)	(74,796)
Principal payments on long-term borrowings and capital lease obligations		(724,084)	(54,719)	(69,939)
Net cash provided by (used in) financing activities		1,822,190	(290,754)	(316,473)
Cash and cash equivalents:
Effect of exchange rate changes on cash and cash equivalents		(11,197)	(7,111)	(6,168)
Net increase in cash and cash equivalents		36,026	100,145	10,953
Cash and cash equivalents at beginning of period		389,328	289,183	278,230
Cash and cash equivalents at end of period	$	425,354	389,328	289,183
Supplemental cash flow information:
Interest paid	$	84,420	40,425	40,969
Income taxes paid, net	$	87,428	171,455	135,770

See accompanying Notes to Consolidated Financial Statements

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Consolidated Statements of Changes in Equity

			TSYS Shareholders
							Accumulated
	Redeemable					Additional	Other
	Noncontrolling		Common Stock			Paid-In	Comprehensive	Treasury	Retained	Noncontrolling
(in thousands, except per share data)	Interests		Shares	Dollars		Capital	Income (Loss)	Stock	Earnings	Interests	Total Equity
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 20)		-	-		-	-	(15,675)	-	-	(421)		(16,096)
Common stock issued from treasury shares for exercise of stock options (Note 18)		-	-		-	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 18)		-	-		-	(11,142)	-	11,142	-	-		-
Share-based compensation (Note 18)		-	-		-	30,312	-	-	-	-		30,312
Common stock issued from treasury shares for dividend equivalents (Note 18)		-	-		-	185	-	226	-	-		411
Cash dividends declared ($0.40 per share)		-	-		-	-	-	-	(74,706)	-		(74,706)
Purchase of treasury shares (Note 19)		-	-		-	-	-	(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 20)		-	-		-	-	(21,618)	-		(270)		(21,888)
Common stock issued from treasury shares for exercise of stock options (Note 18)		-	-		-	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 18)		-	-		-	(7,982)	-	7,982	-	-		-
Share-based compensation (Note 18)		-	-		-	41,179	-	-	-	-		41,179
Common stock issued from treasury shares for dividend equivalents (Note 18)		-	-		-	186	-	163	-	-		349
Cash dividends declared ($0.40 per share)		-	-		-	-	-	-	(74,356)	-		(74,356)
Purchase of treasury shares (Note 19)		-	-		-	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
Net income		6,231	-		-	-	-	-	319,638	103		319,741
Other comprehensive income  (Note 20)		-	-		-	-	(22,614)	-	-	(332)		(22,946)
Common stock issued from treasury shares for exercise of stock options (Note 18)		-	-		-	1,824	-	9,884	-	-		11,708
Common stock unissued due to forfeiture of nonvested awards		-	(4)		(1)	1,197	-	(1,196)	-	-		-
Common stock issued from treasury shares for nonvested awards (Note 18)		-	-		-	(17,204)	-	17,204	-	-		-
Share-based compensation (Note 18)		-	-		-	42,457	-	-	-	-		42,457
Cash dividends declared ($0.40 per share)		-	-		-	-	-	-	(73,474)	-		(73,474)
Purchase of treasury shares (Note 19)		-	-		-	-	-	(30,275)	-	-		(30,275)
Subsidiary repurchase of noncontrolling interests		-	-		-	(443)	-	-	-	(5,435)		(5,878)
Subsidiary dividends paid to noncontrolling interests		(5,548)	-		-	-	-	-	-	-		-
Tax benefits associated with share-based compensation		-	-		-	9,905	-	-	-	-		9,905
Balance as of December 31, 2016	$	24,093	202,765	$	20,276	279,627	(56,158)	(646,047)	2,502,222	-	$	2,099,920

See accompanying Notes to Consolidated Financial Statements

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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 Latin America. 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 the cost approach, 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 may result in an impairment or a new allocation of purchase price.

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 and billing adjustments.

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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.

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. In evaluating software development costs for recoverability, expected cash flows are estimated by management should events indicate a loss may have been triggered. The Company evaluates the unamortized capitalized costs of software development, the impairment of which is determined by expected undiscounted future operating cash flows of the software as compared to the carrying amount of the software product. The amount by which the unamortized software development costs exceed the lower of the

43

carrying amount or fair 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. 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.

In evaluating contract acquisition costs for recoverability, expected cash flows are estimated by management should events indicate a loss may have been triggered. 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, 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 METHOD 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, México, 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 $46.1 million as of December 31, 2016.

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.

44

Investments in equity method investments are accounted for using the equity method of accounting and pertain to privately held companies. The Company believes the fair values of its investments in equity method 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, 2016, the Company had transaction processing provisions of $2.9 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 $10.5 million as of December 31, 2016. The charges to provisions for cardholder losses are included in cost of services in the Consolidated Statements of Income and other current liabilities in the Consolidated Balance Sheets. 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 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, 2016, the Company had a merchant loss provision in the amount of $2.0 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.

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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 and electronic benefits transfer 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.

With the acquisition of TransFirst Holdings Corp. (TransFirst) on April 1, 2016, TSYS included TransFirst’s results as part of the Merchant Services segment. TransFirst’s revenues are reported gross, which includes amounts paid for interchange and assessments, as TransFirst is the principal in the contractual relationship with its customers. Expenses covering interchange and assessment fees are included in TransFirst’s cost of services and are directly attributable to processing fee revenues and are recognized in the same period as the related revenue.

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, 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

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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 during the years ended December 31, 2016, 2015 and 2014 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.

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· 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.

INTERCHANGE AND ASSESSMENTS:  Interchange and assessment fees are charged by the card associations or payment networks.Depending upon the transaction type, the fees are a percentage of the transaction’s dollar value, a fixed amount, or a combination of the two methods.

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% for executive level employees and up to 8% for other employees.

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 specified 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.

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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 2016, 2015 and 2014 was $11.5 million, $9.6 million and $5.7 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 carryforwards. 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. In March 2016, the Company acquired the remaining interest in EMEA. Refer to Note 23 for more information on acquisitions.

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 2015 and 2014 financial statements to conform to the presentation adopted in 2016. The most significant changes include the reclass of debt issuance costs from assets to

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contra-liability accounts offsetting the associated debt and the reclassification of deferred income tax assets and liabilities from current to noncurrent in connection with the adoption of new accounting standards.                                                                    

Recently Adopted Accounting Pronouncements

The Company adopted the following Accounting Standards Updates (ASUs) on January 1, 2016:

ASU 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” 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 Company early adopted this ASU resulting in $24.7 million of current net deferred tax assets as of December 31, 2015 being moved to noncurrent. The guidance was applied retrospectively. The adoption of this ASU did not have a material impact on the Company’s results of operations or cash flows.

ASU 2015-16 “Business Combinations (Topic 805): Simplifying the Accounting for Measurement Period Adjustments” 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 adoption of this ASU did not have a material impact on the Company’s financial position, results of operations or cash flows. 

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” and  ASU 2015-03 “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” 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, and allow entities to defer and present debt issuance costs associated with a line-of-credit as an asset and subsequently amortize deferred debt issuance costs ratably over the term of a line-of-credit arrangement. The guidance was applied retrospectively. The adoption of this guidance resulted in $6.4 million of debt issuance costs as of December 31, 2015 being moved from noncurrent assets on the Company’s balance sheet to liabilities that offset both the current and noncurrent portions of the debt which these costs are associated as of December 31, 2016. The Company continues to include debt issuance costs associated with a line-of-credit in its noncurrent assets. The adoption of this guidance did not have a material impact on the Company’s results of operations or cash flows.

ASU 2015-05 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” provides guidance about whether a cloud computing arrangement includes a software license or a service agreement. The Company adopted this ASU on a prospective basis. The adoption of this ASU did not have a material impact on the Company’s financial position, results of operations or cash flows.

ASU 2015-01 “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items” eliminates from GAAP the concept of extraordinary items. The adoption of this ASU did not have a material impact on the financial position, results of operations or cash flows of the Company.

Recent Accounting Pronouncements

In December 2016, the FASB issued ASU 2016-19 “Technical Corrections,” which represent changes to clarify, correct errors or make minor improvements to the ASC. Most of the amendments in this Update do not require transition guidance and are effective upon issuance of this Update. Six amendments in this Update clarify guidance or correct references in the ASC that could potentially result in changes in current practice because of either misapplication or misunderstanding of current guidance. Early adoption is permitted for the amendments that require transition guidance. The Company will be impacted by the amendment to Subtopic 350-40, Intangibles - Goodwill and Other - Internal-Use Software, which adds a reference to guidance to use when accounting for internal-use software licensed from third parties that is within the scope of Subtopic 350-40. The transition guidance for that amendment is the same as the transition guidance in ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” to which the amendment relates. 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 November 2016, the FASB issued ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash,” which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The ASU is effective for the Company on January 1, 2018. 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.

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In March 2016, the FASB issued ASU 2016-09 “Improvements to Employee Share‑Based Payment Accounting,” which simplifies several aspects of the accounting for employee share‑based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The adoption of this ASU will result in excess tax benefits and deficiencies associated with share-based payments being recorded on the income statement at the time they are deducted on the income tax return instead of being recorded in additional paid-in capital. The excess tax benefits are recorded along with other income tax cash flows as an operating activity in the statement of cash flows. The Company will adopt this ASU on January 1, 2017. The Company has reviewed this standard, noting adoption of the standard will result in a benefit to the income tax provision and an immaterial dilutive effect on diluted EPS.

In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” ASU 2016-02 introduces a lessee model that brings most leases on the balance sheet and aligns many of the underlying principles of the new lessor model with those in the FASB’s new revenue recognition standard. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than twelve months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The new guidance will be effective for the Company on January 1, 2019 with early adoption permitted. The Company expects to adopt the new standard on its effective date.The Company expects the standard will have a material effect on the its financial statements.  At December 31, 2016, the Company had approximately $472.8 million of operating leases that would be recorded on the balance sheet if the standard was already effective. The Company has not determined the remaining effect on its ongoing financial reporting for adoption of this ASU. The Company expects to elect all of the available practical expedients on adoption.

Recent Revenue Recognition Accounting Pronouncements

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 FASB has issued several additional ASUs since this time that add additional clarification to certain issues existing after the original ASU was released. All of the new standards are effective for the Company on January 1, 2018, with early adoption permitted no sooner than January 1, 2017. The standards permit the use of either the retrospective or cumulative effect transition method. The Company has not determined the effect on its ongoing financial reporting for adoption of these ASUs.

The Company is reviewing the requirements of the new revenue standard, and amendments described below, while following activities of the FASB and the American Institute of Certified Public Accountants (AICPA) for certain interpretive guidance applicable to IT outsourcers and payment processors. The Company is evaluating customer contracts under the new standard for each type of significant revenue stream (and related costs) identified to evaluate differences from current accounting. TSYS plans to adopt ASU 2014-09, as well as all other clarifications and technical guidance issued by the FASB and AICPA related to this new revenue standard, on January 1, 2018 using the modified retrospective transition method. Such adoption method may result in an adjustment to the opening balance of retained earnings (or other appropriate components of net assets in the statement of financial position) for the cumulative effect, if any, of applying the standard to contracts that are not completed on January 1, 2018. Under the modified retrospective transition method, the Company is required to disclose the impact of changes to financial statement line items due to the application of the new revenue standard, including an explanation of the reasons for any significant changes.

The new standard could change the amount and timing of revenue and costs for certain significant revenue streams, increase areas of judgment and related internal controls requirements, change the presentation of revenue for certain contract arrangements and possibly require changes to the Company’s software systems to assist in both internally capturing accounting differences and externally reporting such differences through enhanced disclosure requirements.

In March 2016, the FASB issued ASU 2016-08 “Revenue from Contracts with Customers (Topic  606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),"  which improves the operability and understandability of the implementation guidance on principal versus agent considerations by providing indicators as to which party controls the good or service provided to a customer (the principal).

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In April 2016, the FASB issued ASU 2016-10 “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” which clarifies two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas.

In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients,” which affects only the following narrow aspects of Topic 606: Assessing the Collectability Criterion; Presentation of Sales and Other Taxes Collected from Customers; Noncash Consideration; Contract Modification at Transition; Completed Contracts at Transition; and Technical Correction.

In December 2016, the FASB issued ASU 2016-20 “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” which affects only the following narrow aspects of Topic 606: Disclosure of Remaining Performance Obligations as it relates to entities such as processors which may not be required to estimate revenue under ASU 2014-09 due to direct allocation of variable consideration; Disclosure of Prior - Period Performance Obligations; Loan Guarantee Fees; Contract Costs - Impairment Testing; Contract Costs - Interaction of Impairment Testing with Guidance in Other Topics; Provisions for Losses on Construction - Type and Production Type Contracts; Contracts within the scope of Topic 944 (insurance)are excluded from the scope of Topic 606; Contract Modifications; Contract Asset versus Receivable; Refund Liability; Advertising Costs; Fixed - Odds Wagering Contracts in the Casino Industry.

Note 2 Discontinued Operations

In accordance with GAAP, the Company determined its Japan-based businesses became discontinued operations in 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 in 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 in 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 summarized results of discontinued operations for the years ended December 31, 2015 and 2014:

(in thousands)	2015		2014
Total revenues	$	-	16,376
Income before taxes	$	-	1
Income tax benefit	$	-	(39)
Income from operating activities of discontinued operations, net of tax	$	-	40
Gain on dispositions, net of tax	$	1,411	48,615
Income from discontinued operations, net of tax	$	1,411	48,655
Income from discontinued operations, net of tax, attributable to noncontrolling interest	$	-	999
Income from discontinued operations, net of tax, attributable to TSYS common shareholders	$	1,411	47,656

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.

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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, 2016, 2015 or 2014. 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 three-step test. Step 0 is a qualitative analysis of relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. 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, 2016, the Company had recorded goodwill in the amount of $3.3 billion. The Company performed its annual impairment test of its goodwill balances as of May 31, 2016, and this test did not indicate any impairment. The fair value of the RUs substantially exceeds the carrying value. Refer to Note 6 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 Cash and Cash Equivalents

Cash and cash equivalent balances as of December 31, 2016 and 2015 are summarized as follows:

(in thousands)	2016		2015
Cash and cash equivalents in domestic accounts	$	375,122	307,578
Cash and cash equivalents in foreign accounts		50,232	81,750
Total	$	425,354	389,328

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 5 Prepaid Expenses and Other Current Assets

Significant components of prepaid expenses and other current assets as of December 31, 2016 and 2015 are summarized as follows:

(in thousands)	2016		2015
Prepaid expenses	$	84,173	37,961
Supplies inventory		17,105	15,114
Income taxes receivable		-	51,322
Other		63,210	49,802
Total	$	164,488	154,199

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Note 6 Goodwill

In 2016, the Company completed the TransFirst acquisition resulting in an additional $1.7 billion of goodwill being recorded. In addition, there was a downward adjustment to goodwill of $584,000 related to income tax reserves associated with the Netspend acquisition. In 2015, the Company adjusted the Netspend goodwill allocation to include an additional $627,000 for an adjustment to the sales tax reserves associated with the acquisition.

The gross amount and accumulated impairment losses of goodwill as of December 31, 2016 and 2015 are as follows:

	2016
(in thousands)	North America Services		International Services	Merchant Services	Netspend	Consolidated
Gross amount	$	70,796	25,937	2,144,061	1,034,170	$	3,274,964
Accumulated impairment losses		(182)	(1,605)	(2,225)	-		(4,012)
Goodwill, net	$	70,614	24,332	2,141,836	1,034,170	$	3,270,952

	2015
	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

Below are the balances of goodwill as of December 31, 2016 and 2015 along with the related changes in carrying value.

(in thousands)	North America Services		International Services		Merchant Services		Netspend		Consolidated
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
Netspend tax adjustment		-		-		-		584		584
TransFirst acquisition		-		-		1,728,088		-		1,728,088
Currency translation adjustments		-		(3,144)		-		-		(3,144)
Balance as of December 31, 2016	$	70,614		24,332		2,141,836		1,034,170	$	3,270,952

Refer to Note 23 for more information on acquisitions.

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Note 7 Other Intangible Assets, Net

In 2016, the changes in other intangible assets related to foreign currency translation and the acquisition of TransFirst. Refer to Note 23 for more information on acquisitions.

Significant components of other intangible assets as of December 31, 2016 and 2015 are summarized as follows:

	2016
(in thousands)	Gross		Accumulated Amortization	Net
Merchant relationships	$	588,000	(63,000)	$	525,000
Channel relationships		439,600	(148,815)		290,785
Customer relationships		166,340	(122,465)		43,875
Trade name		62,397	(45,197)		17,200
Covenants-not-to-compete		29,940	(13,869)		16,071
Database		28,000	(19,600)		8,400
Trade association		10,000	(6,750)		3,250
Favorable lease		3,006	(911)		2,095
Total	$	1,327,283	(420,607)	$	906,676

	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
Covenants-not-to-compete		14,940	(7,834)		7,106
Database		28,000	(14,000)		14,000
Trade association		10,000	(5,750)		4,250
Favorable lease		875	(445)		430
Total	$	585,416	(257,096)	$	328,320

Amortization related to other intangible assets, which is recorded in selling, general and administrative expenses, was $163.8 million, $75.8 million and $77.3 million for 2016, 2015 and 2014, respectively.

The weighted average useful life for each component of other intangible assets, and in total, as of December 31, 2016 is as follows:

	WeightedAverage Amortization Period (Yrs)
Merchant relationships	7.0
Channel relationships	8.6
Customer relationships	8.2
Trade name	3.9
Covenants-not-to-compete	4.1
Database	5.0
Trade association	10.0
Favorable lease	5.4
Total	7.4

Estimated future amortization expense of other intangible assets as of December 31, 2016 for the next five years is:

(in thousands)
2017	$	180,304
2018		161,647
2019		145,601
2020		140,193
2021		119,617

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Note 8 Computer Software, Net

Computer software as of December 31, 2016 and 2015 is summarized as follows:

(in thousands)	2016		2015
Licensed computer software	$	513,790	513,443
Software development costs		428,581	404,238
Acquisition technology intangibles		238,211	167,971
Total computer software		1,180,582	1,085,652
Less accumulated amortization:
Licensed computer software		315,591	282,563
Software development costs		307,190	287,863
Acquisition technology intangibles		134,613	110,156
Total accumulated amortization		757,394	680,582
Computer software, net	$	423,188	405,070

The Company held the following computer software under license agreements as of December 31, 2016 and 2015:

(in thousands)	2016		2015
Licensed computer software	$	23,665	18,206
Accumulated amortization		(14,634)	(8,175)
Licensed computer software, net	$	9,031	10,031

Amortization expense includes amounts for computer software acquired under license agreements. The Company had the following amortization expense related to computer software for the years ended December 31, 2016, 2015 and 2014:

(in thousands)	2016		2015	2014
Amortization expense related to:
Licensed computer software	$	45,655	41,823	36,775
Software development costs		26,478	22,740	25,248
Acquisition technology intangibles		26,217	16,734	19,683

The weighted average useful life for each component of computer software, and in total, as of December 31, 2016, is as follows:

	Weighted Average Amortization Period (Yrs)
Licensed computer software		5.8
Software development costs		6.1
Acquisition technology intangibles		6.2
Total		6.0

Estimated future amortization expense of licensed computer software, software development costs and acquisition technology intangibles as of December 31, 2016 for the next five years is:

(in thousands)	Licensed Computer Software		Software Development Costs	Acquisition Technology Intangibles
2017	$	42,937	23,777	28,268
2018		34,142	18,225	25,793
2019		21,071	13,414	25,793
2020		17,010	9,646	20,134
2021		9,293	6,787	3,600

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Note 9 Property and Equipment, Net

Property and equipment balances as of December 31, 2016 and 2015 are as follows:

(in thousands)	2016		2015
Computer and other equipment	$	356,358	346,387
Buildings and improvements		246,577	244,938
Furniture and other equipment		141,836	138,727
Land		15,877	16,577
Other		2,387	597
Total property and equipment		763,035	747,226
Less accumulated depreciation and amortization		480,690	457,328
Property and equipment, net	$	282,345	289,898

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, 2016 and 2015:

(in thousands)	2016		2015
Computer and other equipment	$	51,702	55,450
Furniture and other equipment		5,412	5,374
Total equipment		57,114	60,824
Less accumulated depreciation:
Computer and other equipment		(39,060)	(36,134)
Furniture and other equipment		(3,788)	(2,731)
Total accumulated depreciation		(42,848)	(38,865)
Total equipment, net	$	14,266	21,959

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 $62.5 million, $56.6 million and $53.5 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Note 10 Contract Acquisition Costs, Net

Significant components of contract acquisition costs as of December 31, 2016 and 2015 are summarized as follows:

(in thousands)	2016		2015
Conversion costs, net of accumulated amortization of $164.4 million and $150.0 million as of 2016 and 2015, respectively	$	144,173	159,000
Payments for processing rights, net of accumulated amortization of $145.3 million and $137.9 million as of 2016 and 2015, respectively		91,527	88,811
Total	$	235,700	247,811

Amortization expense related to contract acquisition costs for the years ended December 31, 2016, 2015 and 2014 is as follows:

(in thousands)	2016		2015	2014
Amortization expense related to:
Conversion costs	$	28,811	27,392	17,816
Payments for processing rights		19,804	17,039	16,209

The weighted average useful life for each component of contract acquisition costs, and in total, as of December 31, 2016 is as follows:

	Weighted Average Amortization Period (Yrs)
Conversion costs	12.9
Payments for processing rights	15.6
Total	14.1

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Estimated future amortization expense of conversion costs and payments for processing rights as of December 31, 2016 for the next five years is:

(in thousands)	Conversion Costs		Payments for Processing Rights
2017	$	32,830	19,487
2018		29,727	18,084
2019		24,480	15,220
2020		20,037	12,955
2021		18,197	10,704

Note 11 Equity Investments

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.

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.

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 net assets of the equity investments.

TSYS' equity in income of equity investments (net of tax) for the years ended December 31, 2016, 2015 and 2014 was $25.9 million, $22.1 million and $17.6 million, respectively.

A summary of TSYS' equity investments as of December 31, 2016 and 2015 is as follows:

(in thousands)	2016		2015
CUP Data	$	101,638	98,518
Other		9,155	7,600
Total	$	110,793	106,118

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Note 12 Long-term Borrowings and Capital Lease Obligations

Long-term debt as of December 31, 2016 and 2015 consists of:

(in thousands)	2016		2015
3.800% Senior Notes due April 1, 2021 (5 year tranche), net of discount and debt issuance costs	$	743,625	-
4.800% Senior Notes due April 1, 2026 (10 year tranche), net of discount and debt issuance costs		742,383	-
LIBOR + 1.500%, unsecured term facility, due February 23, 2021, with quarterly principal and interest payments, net of debt issuance costs		697,832	-
2.375% Senior Notes due June 1, 2018 (5 year tranche), net of discount and debt issuance costs		548,615	547,720
3.750% Senior Notes due June 1, 2023 (10 year tranche), net of discount and debt issuance costs		543,947	543,153
LIBOR + 1.300%, unsecured revolving loan, due February 23, 2021, with monthly interest payments on outstanding balances		70,000	-
1.380% note payable due December 31, 2017, with monthly interest and principal payments		13,853	30,000
LIBOR + 1.125%, unsecured term loan, due April 8, 2018, with quarterly principal and interest payments, net of debt issuance costs		-	174,652
LIBOR + 1.125%, unsecured term loan, due September 10, 2017, with quarterly principal and interest payments, net of debt issuance costs		-	119,761
1.500% note payable, due September 30, 2016, with monthly interest and principal payments		-	5,132
LIBOR + 2.000%, unsecured term loan, due December 7, 2017, with monthly interest payments and principal paid at maturity		-	3,202
1.500% note payable, due January 31, 2016, with monthly interest and principal payments		-	336
Total debt		3,360,255	1,423,956
Less current portion		48,040	50,078
Noncurrent portion of long-term debt	$	3,312,215	1,373,878

On January 26, 2016, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Vista Equity Partners Fund V, L.P., a Delaware limited partnership (“Fund V”), Vista Equity Partners Fund V-A, L.P., a Cayman Islands limited partnership (“Fund V-A”), Vista Equity Partners Fund V-B, L.P., a Cayman Islands limited partnership (“Fund V-B”), Vista Equity Partners Fund V Executive, L.P., a Delaware limited partnership (“Fund V Executive”), VEPF V FAF, L.P., a Delaware limited partnership (“VEPF V”), Vista Equity Associates, LLC, a Delaware limited liability company (“Associates LLC” and, together with Fund V, Fund V-A, Fund V-B, Fund V Executive and VEPF V, the “Sellers”), and TransFirst, a Delaware corporation, pursuant to which, and upon the terms and subject to the conditions set forth in the Purchase Agreement, the Company acquired all of the outstanding capital stock of TransFirst from the Sellers on April 1, 2016.

On February 23, 2016, the Company entered into a Credit Agreement (the “2016 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 2016 Credit Agreement provides the Company with a $700 million five-year term loan facility (the “Term Loan Facility”) consisting of (i) a $300 million term loan (the “Refinancing Term Loan”) funded upon entry into the 2016 Credit Agreement and (ii) a $400 million term loan (the “Delayed Draw Term Loan”). The 2016 Credit Agreement also provides the Company with a $800 million unsecured revolving credit facility (the “Revolving Loan Facility”), which includes a $50 million sub-facility for the issuance of standby letters of credit. The balance as of December 31, 2016 was $697.8 million net of discount and debt issuance costs on the Term Loan Facility. There is no outstanding balance as of December 31, 2016 on the Revolving Loan Facility.

The Refinancing Term Loan was used to repay in full the Company’s 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 was used to finance, in part, the acquisition and related transactions, upon satisfaction of a limited set of conditions precedent. The Revolving Loan Facility is available for draws for purposes of working capital and other general corporate purposes, including to finance, in part, the acquisition and related

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transactions upon satisfaction of a limited set of conditions precedent. The creditor group of the modified debt remained consistent before and after the debt was amended. Any exceptions were minor.

Concurrently with entering into the Purchase Agreement, the Company obtained commitments for a $2.0 billion 364-day bridge term loan facility from JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bank of America N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd, U.S. Bank National Association, Wells Fargo Securities, LLC and Wells Fargo Bank, National Association (collectively, the “Commitment Parties”). Thereafter, the Commitment Parties assigned portions of their commitments to certain other bridge facility lenders. Based on the terms of the bridge term loan facility commitment letter, upon entering into the 2016 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. The bridge term loan facility was terminated in March 2016 after the issuance of the Notes described below.

Borrowings under the 2016 Credit Agreement will accrue interest at the base rate (as defined in the 2016 Credit Agreement) or, for certain euro-denominated borrowings, the London Interbank Offered Rate (“LIBOR”), in each case plus a margin that is set based on the Company’s corporate credit ratings. The applicable margin for loans bearing interest based on LIBOR ranges from 0.900% to 1.500% for revolving loans and 1.000% to 1.750% for term loans. The applicable margin for loans bearing interest based on the base rate ranges from 0.000% to 0.500% for revolving loans and 0.000% to 0.750% for term loans. In addition, the Company will pay the lenders a facility fee ranging from 0.100% to 0.250% per annum, depending on the Company’s corporate credit ratings, on the commitments under the Revolving Loan Facility (regardless of usages) and the undrawn commitment amount in respect of the Delayed Draw Term Loan. Based on the Company’s current corporate credit ratings, (i) the applicable margin for loans accruing interest at the base rate is 0.500% for term loans and 0.300% for revolving loans and (ii) the applicable margin for loans accruing interest at LIBOR is 1.500% for term loans and 1.300% for revolving loans. The 2016 Credit Agreement contains customary covenants regarding, among other matters, the maintenance of insurance, the preservation and maintenance of the Company’s corporate existence, material compliance with laws and the payment of taxes and other material obligations. During the year ended December 31, 2016, the Company repaid $400.0 million on the Revolving Loan Facility. As of December 31, 2016, the outstanding balance on the Revolving Loan Facility was $70.0 million.

On March 17, 2016, the Company closed its sale (the “Transaction”) of $750 million aggregate principal amount of 3.800% Senior Notes due 2021 and $750 million aggregate principal amount of 4.800% Senior Notes due 2026 (collectively, the “2016 Notes”) pursuant to an agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the underwriters, whereby the Company agreed to sell and the Underwriters agreed to purchase the 2016 Notes from the Company, subject to and upon the terms and conditions set forth in the Underwriting Agreement. The Company used the net proceeds of the Transaction to pay a portion of the approximately $2.35 billion purchase price of the Company’s acquisition of TransFirst and related fees and expenses. The 2016 Notes were issued pursuant to a Senior Indenture, dated as of March 17, 2016, between the Company and Regions Bank, as trustee. The balance as of December 31, 2016 was $743.5 million net of discount and debt issuance costs for the Senior Notes due June 2021 and $743.0 million net of discount and debt issuance costs for the Senior Notes due June 2026.

During December 2014, EMEA obtained a £900,000, or approximately $1.4 million term loan. In September 2015, TSYS increased the loanby £1.3 million, or approximately $1.9 million. The loan bears interest at a rate of LIBOR plus two percent. The loan maturity date was December 2017, and had monthly interest payments. The lender in this transaction was Merchants Limited, who had a noncontrolling interest in EMEA. In 2016, the Company purchased the remaining ownership interest in EMEA from Merchants Limited. In addition, the debt was paid off in conjunction with the acquisition.

In December 2015, the Company entered into a $30.0 million financing agreement for perpetual software licenses. The balance as of December 31, 2016 was $13.9 million.

In September 2014, the Company entered into a $13.6 million financing agreement for perpetual software licenses. The agreement was paid during 2016 and no outstanding balance remained.

In April 2013, the Company entered into a Credit Agreement (the “2013 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 2013 Credit Agreement provided for a five-year term loan to the Company in the amount of $200.0 million (the “Term Loan”) and bore interest at LIBOR plus 1.125%, which was subject to adjustment based on changes in the Company’s credit ratings, with margins ranging from 1.00% to 1.75%. The 2013 Credit Agreement was paid during 2016 and no outstanding balance remains.

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

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“2013 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 2013 Notes from the Company, subject to and upon the terms and conditions set forth in the Underwriting Agreement. The interest on the 2013 Notes are payable semiannually. The Company paid fees in 2013 associated with the issuance of these 2013 Notes of approximately $8.9 million and recorded discounts of approximately $4.3 million that are being amortized over the life of the 2013 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 2013 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, 2016 was $548.1 million net of discount and debt issuance costs for the Senior Notes due June 2018 and $544.0 million net of discount and debt issuance costs for the Senior Notes due June 2023.

The 2013 and 2016 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 2013 and 2016 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, as defined in the Prospectus Supplements for the 2013 and 2016 Notes offerings.

Required annual principal payments on long-term debt for the five years subsequent to December 31, 2016 are summarized as follows:

(in thousands)
2017	$	48,853
2018		611,250
2019		70,000
2020		70,000
2021		1,283,750

Capital lease obligations as of December 31, 2016 and 2015 consist of:

(in thousands)	2016		2015
Capital lease obligations	$	3,748	7,131
Less current portion		2,687	3,468
Noncurrent portion of capital leases	$	1,061	3,663

The Company acquires various computer equipment, software, machinery and equipment and furniture and fixtures under capital lease obligations. Refer to Notes 8, 9 and 22 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, 2016 are summarized as follows:

(in thousands)
2017	$	2,754
2018		1,019
2019		63
2020		-
2021		-
Total minimum lease payments		3,836
Less amount representing interest		88
Principal minimum lease payments	$	3,748

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Note 13 Other Current Liabilities

Significant components of other current liabilities as of December 31, 2016 and 2015 are summarized as follows:

(in thousands)	2016		2015
Deferred revenues	$	40,473	39,863
Accrued expenses		32,861	26,017
Accrued third-party commissions		28,310	9,810
Litigation settlements		20,795	1,290
Dividends payable		19,513	19,367
Accrued interest		19,029	2,820
Other		102,278	67,412
Total	$	263,259	166,579

Note 14 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 are as follows:

	Years Ended December 31,
(in thousands)	2016		2015	2014
Current income tax expense:
Federal	$	140,079	139,228	126,203
State		9,218	9,255	5,161
Foreign		4,443	4,762	7,694
Total current income tax expense		153,740	153,245	139,058
Deferred income tax expense (benefit):
Federal		8,393	(2,198)	(3,623)
State		(65)	442	(2,039)
Foreign		(893)	(125)	(3,635)
Total deferred income tax expense (benefit)		7,435	(1,881)	(9,297)
Total income tax expense	$	161,175	151,364	129,761

	Years Ended December 31,
(in thousands)	2016		2015	2014
Components of income before income tax expense:
Domestic	$	454,763	488,515	369,888
Foreign		6,451	8,373	23,041
Total income before income tax expense	$	461,214	496,888	392,929

Income tax expense differs 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)	2016		2015	2014
Computed "expected" income tax expense	$	161,425	173,911	137,525
Increase (decrease) in income tax expense resulting from:
International tax rate differential and equity income		8,715	8,367	6,541
State income tax expense, net of federal income tax effect		9,127	7,101	4,823
Increase (decrease) in valuation allowance		2,855	(517)	(4,550)
Tax credits		(15,695)	(28,831)	(3,459)
Deduction for domestic production activities		(12,950)	(11,550)	(8,750)
Permanent differences and other, net		7,698	2,883	(2,369)
Total income tax expense	$	161,175	151,364	129,761

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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, 2016 and 2015 relate to the following:

	As of December 31,
(in thousands)	2016		2015
Deferred income tax assets:
Net operating loss and income tax credit carryforwards	$	34,490	29,522
Allowances for doubtful accounts and billing adjustments		1,512	1,399
Deferred revenue		27,461	31,713
Share-based compensation		25,497	22,088
Foreign currency translation		4,019	-
Other, net		38,341	34,673
Total deferred income tax assets		131,320	119,395
Less valuation allowance for deferred income tax assets		(21,301)	(18,446)
Net deferred income tax assets		110,019	100,949
Deferred income tax liabilities:
Excess tax over financial statement depreciation		(63,432)	(61,161)
Computer software development costs		(80,837)	(82,835)
Purchase accounting adjustments		(344,547)	(114,171)
Foreign currency translation		-	(4,522)
Other, net		(33,700)	(24,462)
Total deferred income tax liabilities		(522,516)	(287,151)
Net deferred income tax liabilities	$	(412,497)	(186,202)
Total net deferred tax assets (liabilities):
Noncurrent deferred tax asset	$	7,055	6,242
Noncurrent deferred tax liability		(419,552)	(192,444)
Net deferred tax liability	$	(412,497)	(186,202)

As of December 31, 2016, TSYS had recognized deferred tax assets from net operating losses, capital losses and federal and state income tax credit carryforwards of $8.5 million, $0.4 million and $25.6 million, respectively. 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. Net deferred income tax liabilities were also adjusted for acquisition activities. Refer to Note 23 for more information on acquisitions.

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 $21.3 million and $18.4 million at December 31, 2016 and 2015, respectively. The increase in the valuation allowance for deferred income tax assets was $2.9 million for 2016. The increase relates to foreign tax credits 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 $81.1 million as of December 31, 2016.  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

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from state and local or foreign tax authorities for years before 2005. There are currently federal income tax examinations in progress for the years 2011 through 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, 2016, TSYS increased its liability for uncertain income tax positions by a net amount of approximately $3.4 million. 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, 2016
Beginning balance	$	13.1
Current activity:
Additions based on tax positions related to current year		3.4
Additions for tax positions of prior years		3.0
Decreases resulting from settlements with tax authorities		(3.0)
Net, current activity		3.4
Ending balance	$	16.5

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 $1.8 million and $0.7 million as of December 31, 2016 and December 31, 2015, respectively. The total amounts of unrecognized income tax benefits as of December 31, 2016 and December 31, 2015 that, if recognized, would affect the effective tax rates are $17.0 million and $13.2 million (net of the federal benefit on state tax issues), respectively, which includes interest and penalties of $1.2 million and $0.5 million, respectively.

Note 15 Commitments and Contingencies

LEASE AND PURCHASE COMMITMENTS:  TSYS is obligated under noncancelable operating leases for computer equipment, software and facilities. Additionally, the Company has long-term obligations which consist of required minimum future payments under contracts withthe Company’s distributors and other service providers.

The future minimum lease payments under noncancelable operating leases and purchase commitments with remaining terms greater than one year for the next five years and thereafter and in the aggregate as of December 31, 2016, are as follows:

(in thousands)
2017	$	129,120
2018		132,015
2019		132,242
2020		57,083
2021		21,035
Thereafter		34,644
Total future minimum commitment payments	$	506,139

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 2016, 2015 and 2014 was $122.9 million, $124.8 million and $105.2 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 amaterial adverse effect on its financial position, results of operations or cash flows.

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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 accruals 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. Legal costs are expensed as incurred. 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.

Korthals Matter

Central Payment Co., LLC (CPAY), a majority owned joint venture of the Company, has been named as a defendant in a purported class action complaint, Heidarpour v. Central Payment Co., LLC, Civil Action No. 4:15-cv-00139, filed August 18, 2015 in the United States District Court for the Middle District of Georgia, relating to the activities of Korthals, LLC (“Korthals”) and its sole shareholder, an independent sales agent of CPAY. The complaint alleges that CPAY retained Korthals to send unsolicited commercial pre-recorded messages to residential phone numbers in violation of the Telephone Consumer Protection Act (47 U.S.C. §§227 et seq.). The complaint seeks damages and injunctive relief among other remedies.

On December 20, 2016, the parties entered into a settlement agreement with regard to this matter.  Among other things, the settlement agreement requires CPAY to create a settlement fund of $6.5 million for a nationwide class of plaintiffs.  The settlement agreement was preliminarily approved by the United States District Court for the Middle District of Georgia on January 17, 2017, and a final approval hearing for the settlement is scheduled for May 4, 2017.

Federal Trade Commission (FTC) Matter

The Company has been in discussions with the FTC regarding an investigation by the FTC staff of certain marketing practices of NetSpend Corporation (NetSpend), a subsidiary of the Company. After lengthy discussions with staff and the FTC commissioners relating to whether the FTC should proceed with litigation and the potential for settlement, the FTC voted 2-1 to authorize the filing of a complaint, filed on November 10, 2016 in the U.S. District Court for the Northern District of Georgia, Federal Trade Commission v. NetSpend Corporation, Case No. 1:16-CV-4203. The complaint alleges that NetSpend violated Section 5 of the Federal Trade Commission Act as a result of certain marketing practices. NetSpend filed a motion to dismiss the complaint on December 14, 2016, arguing that the complaint failed to state a claim on which relief could be granted. As of December 31, 2016, the parties were engaged in active settlement discussions. While NetSpend believes that it has substantial defenses, it agreed to the structure of a potential settlement with FTC staff in early February 2017, in order to save costs and avoid the risks of on-going litigation. However, NetSpend also raised with the FTC the propriety of the suit being brought in the first instance and any settlement requires FTC approval followed by court approval. The timing of the FTC’s consideration of issues relating to NetSpend’s position and the potential settlement is uncertain. Should a settlement not be reached, the Company will vigorously defend the case. We are not in a position to estimate the chances of success.  The Company incurred a charge of $13.0 million to GAAP operating income in the fourth quarter of 2016 in connection with the settlement discussions.

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, LLP, et. al (Case No. 5:14-CV-00316-D) filed on June

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5, 2014 in the United States District Court of North Carolina, (iv) Todd Cook v. TelexElectric LLP 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 LLP 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, LLP 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,

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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, 2016. As of December 31, 2016, the Company’s estimated gross settlement exposure was $13.8 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 bankswill 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, 2016 and 2015, cardholders’ overdrawn account balances totaled $21.2 million and $17.9 million, respectively. As of December 31, 2016 and 2015, 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 $10.5 million and$9.4 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, 2016 and 2015, the Company had made contributions to the funds of $20.1 million and $15.0 million, respectively. The Company had investments, including gains, totaling $22.8 million and $17.6 million, respectively, as of December 31, 2016 and 2015. The Company recognized gains of $0.8 million, $4.0 million, and $0.8 million due to increases in fair value for the years ended December 31, 2016, 2015 and 2014, respectively.

Note 16 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 2016 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, 2016, 2015 and 2014 are as follows:

(in thousands)	2016		2015	2014
TSYS Retirement Savings Plan	$	21,077	24,169	17,531
TSYS Stock Purchase Plan		1,514	1,378	1,288

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 17 Equity

DIVIDENDS:  Dividends on common stock of $73.4 million were paid in 2016, compared to $73.7 million and $74.8 million in 2015 and 2014, respectively. 

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EQUITY COMPENSATION PLANS:  The following table summarizes TSYS' equity compensation plans by category as of December 31, 2016:

	(a)	(b)		(c)
(in thousands, except per share data) Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted- average exercise price of outstanding options, warrants and rights		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	4,891	$ 32.78	2	6,962	1

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

¹ 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.

² Weighted-average exercise price represents 2.9 million options only and does not include restricted share units that have no exercise price.

Note 18 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.

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 are settled in shares, or are exchanged with the Committee's permission, prior to the issuance of shares, forawards 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’ share-based compensation costs are expensed, rather than capitalized, as these awards are typically granted to individuals not involved in capitalizable activities. For the year ended December 31, 2016, share-based compensation was $43.7 million compared to $41.5 million and $30.8 million for the same periods in 2015 and 2014, 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 and vest over a period of up to four years. The grants to the Board of Directors were fully vested on the date of grant. The market value of the TSYS common stock at the date of issuance is charged as compensation expense over the vesting periods or derived service periods.

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

	2016		2015	2014
Number of shares granted		362,804	388,211	672,724
Market value (in millions)	$	16.8	14.9	20.6

A summary of the status of TSYS' nonvested shares as of December 31, 2016, 2015 and 2014 and the changes during the periods are presented below:

	2016			2015			2014
(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	1,146	$	31.11	1,769	$	26.75	1,783	$	24.19
Granted	363		46.23	388		38.38	673		30.67
Vested	(562)		29.95	(930)		26.05	(602)		23.74
Forfeited/canceled/adjusted	(84)		36.79	(81)		28.78	(85)		25.47
Outstanding at end of year	863	$	37.78	1,146	$	31.11	1,769	$	26.75

As of December 31, 2016, there was approximately $17.7 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 1.7 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 2016 and 2015, the Compensation Committee established performance goals based on adjusted EPS, Merchant Segment net revenue, corporate accountability operating income, attainment of synergies from the TransFirst acquisition, 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-based 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 over the derived service period. 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, the vesting period, or the derived service period. As of December 31, 2016, there was approximately $18.6 million of unrecognized compensation cost related to TSYS performance-based awards that is expected to be recognized through December 2018. As of December 31, 2016, there was approximately $1.9 million of unrecognized compensation cost related to TSYS market-based awards that is expected to be recognized through December 2018.

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The following table summarizes the market-based awards granted during the years 2016 and 2015:

Year Awarded	Performance Period Ending	Performance Measure	Number of Shares Granted	Period Expensed Through
2016	December 2017	TSR	6,403	December 2017
2016	December 2018	TSR	52,404	December 2018
2015	July 2016, 2017 and 2018	TSR	25,000	July 2018
2015	December 2017	TSR	57,982	December 2017

The following table summarizes the performance-based awards granted during the years 2016, 2015 and 2014:

Year Awarded	Performance Period Ending	Performance Measure	Number of Shares Granted	Period Expensed Through
2016	December 2016	Revenues before Reimbursable Items and Adjusted EPS	15,605	December 2016
2016	December 2017	Adjusted EPS	14,940	December 2017
2016	December 2018	Merchant Segment Net Revenue, Corporate Accountability Operating Income and attainment of synergies from TransFirst acquisition	29,332	December 2018
2016	December 2018	Revenues before Reimbursable Items and Adjusted Operating Income	67,517	December 2018
2016	December 2018	Merchant Segment Net Revenue and Corporate Accountability Operating Income	78,220	December 2018
2016	December 2018	Adjusted EPS	122,284	December 2018
2016	December 2016	Revenues before Reimbursable Items and Adjusted EPS	144,995	December 2018
2015	December 2017	Adjusted EPS	135,289	December 2017
2015	December 2015	Revenues before Reimbursable Items and Adjusted EPS	165,543	December 2018
2014	December 2016	Revenues before Reimbursable Items and Adjusted EPS	211,593	December 2016

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

	Total Number of Shares Awarded1	Potential Number of Performance-and Market- Based Shares to be Vested2	Year Potential Performance-and Market- Based Shares Will Fully Vest
2016	531,700	903,364	2019
2015	383,814	687,015	2018
2014	211,593	389,242	2017

¹ Shares awarded does not include dividend equivalents

² Includes dividend equivalents

A summary of the status of TSYS' performance- and market-based nonvested shares as of December 31, 2016, 2015 and 2014 and changes during those periods are presented below:

	2016			2015			2014
(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	918	$	31.19	766	$	25.86	1,049	$	22.75
Granted	540		45.91	384		36.84	211		30.89
Vested	(140)		37.91	(241)		22.92	(258)		17.57
Forfeited/canceled/adjusted	(336)		37.70	9		22.20	(236)		25.62
Outstanding at end of year	982	$	33.43	918	$	31.19	766	$	25.86

Stock Option Awards

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

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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.

During 2016, 2015 and 2014, 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 weighted average fair value of the options granted was estimated on the date of grant using the Black-Scholes-Merton option-pricing model.

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

	2016				2015			2014
Number of options granted		687,685			613,473			1,046,372
Weighted average exercise price	$	47.01		$	39.01		$	30.96
Risk-free interest rate		1.24	%		1.73	%		2.01	%
Expected volatility		21.53	%		20.80	%		25.06	%
Expected term (years)		4.5			6.3			6.5
Dividend yield		0.86	%		1.04	%		1.29	%
Weighted average fair value	$	8.50		$	8.27		$	7.66

A summary of TSYS' stock option activity as of December 31, 2016, 2015 and 2014, and changes during the years ended on those dates is presented below:

	2016			2015			2014
Options: (in thousands, except per share data)	Options	Weighted Average Exercise Price		Options	Weighted Average Exercise Price		Options	Weighted Average Exercise Price
Outstanding at beginning of year	2,887	$	28.07	4,892	$	23.83	5,752	$	20.96
Granted	688		47.01	613		39.01	1,046		30.96
Exercised	(500)		23.43	(2,586)		22.68	(1,850)		18.79
Forfeited/canceled	(79)		43.49	(32)		20.79	(56)		28.88
Outstanding at end of year	2,996	$	32.78	2,887	$	28.07	4,892	$	23.83
Options exercisable at year-end	1,877	$	28.45	1,439	$	25.17	2,781	$	22.86
Weighted average fair value of options granted during the year		$	8.50		$	8.27		$	7.66

As of December 31, 2016 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)		7.3	6.6
Aggregate intrinsic value (in thousands)	$	49,323	39,066

Shares Issued for Options Exercised

During 2016, 2015 and 2014, 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
2016	500	$	12,984
2015	2,586		67,702
2014	1,850		22,883

For awards granted before January 1, 2006 that were not fully vested on January 1, 2006, the Company recorded 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 recognized tax benefits, the Company recorded 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 elected to use the short-cut method to calculate its historical pool of windfall tax benefits.

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As of December 31, 2016, there was approximately $2.7 million of total unrecognized compensation cost related to TSYS stock options that is expected to be recognized over a remaining weighted average period of 1.6 years.

Note 19 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
2016	19,314	$	646,047
2015	19,988		641,664
2014	17,836		453,230

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. In January 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.

The table below summarizes these repurchases by year:

(in thousands, except per share data)	Total Number of Shares Purchased	Average Price Paid per Share		Repurchased Shares Cost
2016	500	$	48.57	$	24,287
2015	5,150		47.01		242,085
2014	5,200		31.79		165,297

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, 2016:

(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 2016	-		$	-	5,150	14,850
November 2016	200			49.29	5,350	14,650
December 2016	312	1		48.13	5,650	14,350
Total	512		$	48.59

¹ Includes 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 2016 and 2015, the Company acquired 144,839 shares for approximately $6.0 million and acquired 3,344 shares for approximately $0.2 million, respectively, as a result of share withholding for taxes.

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Note 20 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, 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 noncontrolling interest (NCI)		28	-	-		-		28
Loss 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)
Foreign currency translation adjustments	$	(35,041)	(36,341)	(5,872)	$	(30,469)	$	(65,510)
Transfer from NCI		28	-	-		-		28
Gain on available for sale securities		2,503	11,394	4,035		7,359		9,862
Change in AOCI related to postretirement healthcare plans		(1,034)	775	279		496		(538)
As of December 31, 2016	$	(33,544)	(24,172)	(1,558)	$	(22,614)	$	(56,158)

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 21 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 April 2016, TSYS completed its acquisition of TransFirst which is part of the Merchant Services segment and its results are included in the following tables. Refer to Note 23 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 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. The information utilized by the CODM consists of the financial statements and the main metrics monitored are revenue growth and growth in profitability.

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TSYS’ operating segments share certain resources, such as information technology support, that TSYS allocates asymmetrically.

Operating Segments	Years Ended December 31,
(in thousands)		2016	2015	2014
Operating income (GAAP) (a)	$	573,382	534,107	431,640
Share-based compensation		43,728	41,549	30,790
TransFirst and Netspend M&A and integration expenses1		28,176	-	3,217
Litigation, claims, judgments or settlements		21,719	-	-
Acquisition intangible amortization		189,990	92,521	96,970
Adjusted operating income (non-GAAP) (b)	$	856,995	668,177	562,617
Adjusted operating income by segment (non-GAAP):
North America Services (c)	$	468,251	429,064	351,512
International Services (d)		56,774	60,087	55,123
Merchant Services (e)		307,595	150,225	134,872
Netspend (f)		160,371	137,837	128,285
Corporate Administration and Other		(135,996)	(109,036)	(107,175)
Adjusted segment operating income2 (non-GAAP)	$	856,995	668,177	562,617
Total revenues (GAAP) (g)	$	4,170,077	2,779,541	2,446,877
Less: reimbursable items		259,543	280,192	253,899
Revenue before reimbursable items		3,910,534	2,499,349	2,192,978
Intersegment revenues		39,880	33,481	21,224
Segment revenue before reimbursable items (non-GAAP)	$	3,950,414	2,532,830	2,214,202
Segment revenue before reimbursable items (non-GAAP):
North America Services	$	1,206,013	1,147,254	954,082
International Services		313,631	331,159	341,785
Merchant Services		1,767,191	474,040	435,649
Netspend		663,579	580,377	482,686
Segment revenue before reimbursable items (non-GAAP)	$	3,950,414	2,532,830	2,214,202
Total revenues (GAAP) (g)	$	4,170,077	2,779,541	2,446,877
Less: reimbursable items		259,543	280,192	253,899
Revenue before reimbursable items		3,910,534	2,499,349	2,192,978
Less: interchange and assessments expenses		868,658	-	-
Net revenue2 (non-GAAP) (h)		3,041,876	2,499,349	2,192,978
Intersegment revenues		39,880	33,481	21,224
Segment net revenue (non-GAAP)	$	3,081,756	2,532,830	2,214,202
Segment net revenue (non-GAAP):
North America Services (i)	$	1,206,013	1,147,254	954,082
International Services (j)		313,631	331,159	341,785
Merchant Services (k)		898,533	474,040	435,649
Netspend (l)		663,579	580,377	482,686
Segment net revenue (non-GAAP)	$	3,081,756	2,532,830	2,214,202
Segment external net revenue (non-GAAP):
North America Services	$	1,174,304	1,118,332	936,957
International Services		308,552	326,834	338,126
Merchant Services		898,175	473,806	435,209
Netspend		660,845	580,377	482,686
Segment external net revenue (non-GAAP)	$	3,041,876	2,499,349	2,192,978
Operating margin (GAAP) (a)/(g)		13.8%	19.2%	17.6%
Adjusted operating margin on net revenue (non-GAAP) (b)/(h)		28.2%	26.7%	25.7%
Adjusted segment operating margin on net revenue (non-GAAP):
North America Services (c)/(i)		38.8%	37.4%	36.8%
International Services (d)/(j)		18.1%	18.1%	16.1%
Merchant Services (e)/(k)		34.2%	31.7%	31.0%
Netspend (f)/(l)		24.2%	23.7%	26.6%

¹ Excludes share-based compensation

² Net revenue and adjusted segment operating income are non-GAAP measures. Net revenue is total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment networks that are recorded by TSYS as expense.  Adjusted segment operating income excludes acquisition intangible amortization, TransFirst M&A expenses, share-based compensation and expenses associated with Corporate Administration and Other.

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The following table presents the Company’s depreciation expense by segment:

Operating Segments	Years Ended December 31,
(in thousands)		2016	2015	2014
Depreciation and amortization:
North America Services	$	110,343	99,544	86,513
International Services		30,966	34,892	38,909
Merchant Services		25,553	18,268	14,571
Netspend		13,133	10,686	7,509
Segment depreciation and amortization		179,995	163,390	147,502
Acquisition intangible amortization		189,990	92,521	96,970
Corporate Administration and Other		3,561	2,353	2,148
Total depreciation and amortization	$	373,546	258,264	246,620

The following table presents the Company’s total assets by segment:

	As of December 31,
(in thousands)	2016		2015
North America Services	$	5,595,747	3,485,924
Merchant Services		3,295,509	689,781
Netspend		1,474,595	1,504,740
International Services		296,663	348,714
Intersegment assets		(4,296,337)	(2,151,264)
Total assets	$	6,366,177	3,877,895

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

	As of December 31,
(in thousands)	2016		2015
United States	$	236,913	241,814
Europe		38,866	41,953
Other		6,566	6,131
Total	$	282,345	289,898

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The following tables reconcile geographic revenues to external revenues by operating segment based on the domicile of the Company’s customers for the years ended December 31:

	2016
(in thousands)	North America Services		International Services	Merchant Services	Netspend	Total		Percentage of Revenues
United States	$	1,032,381	-	1,826,775	660,845	$	3,520,001	84.4	%
Europe1		788	306,106	227	-		307,121	7.4
Canada1		284,005	23	705	-		284,733	6.8
Mexico		14,887	447	-	-		15,334	0.4
Other1		17,804	24,322	762	-		42,888	1.0
Total	$	1,349,865	330,898	1,828,469	660,845	$	4,170,077	100.0	%

	2015
(in thousands)	North America Services		International Services	Merchant Services	Netspend	Total		Percentage of Revenues
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		Percentage of Revenues
United States	$	778,766	-	508,747	482,686	$	1,770,199	72.3	%
Europe1		781	304,308	-	-		305,089	12.5
Canada1		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	%

¹ Revenues are impacted by movements in foreign currency exchange rates

MAJOR CUSTOMER:  For the years ended December 31, 2016, 2015 and 2014, the Company had no major customers.

Note 22 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 Acquired Under Capital Lease Obligations and Software Acquired Under License Agreements

The Company acquired computer equipment under capital leases and software under license agreements in the amount of $1.8 million, $4.1 million and $17.9 million in 2016, 2015 and 2014, respectively.

Software Acquired Under Direct Financing

The Company did not acquire any software under direct financing in 2016. The Company acquired software under direct financing in the amount of $30.0 million and $13.6 million in 2015 and 2014, respectively. Refer to Note 12 for more information.

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Note 23 Acquisitions

TransFirst

2016

On April 1, 2016, the Company acquired all of the outstanding capital stock of TransFirst for an aggregate purchase price of $2.35 billion in cash as of the closing, which was subject to certain working capital and other adjustments, as described in the Purchase Agreement. TransFirst previously operated as a privately held company, under the ownership of Vista Equity Partners. The results of the newly acquired business are being reported by TSYS as part of the Merchant Services segment.

The Company funded the cash consideration and the payment of transaction related expenses through a combination of cash-on-hand and proceeds from debt financings, including proceeds drawn under the Company’s 2016 Credit Agreement and the proceeds from the issuance of the 2016 Notes, which together included proceeds of approximately $2.35 billion.

The goodwill amount of $1.7 billion arising from the acquisition is primarily attributable to the expansion of the Merchant Services Segment’s customer base, differentiated distribution channels and economies of scale expected from combining the operations of TSYS and TransFirst. All of the goodwill was assigned to TSYS’ Merchant Services segment. The goodwill recognized is not expected to be deductible for income tax purposes.

The following table summarizes the consideration paid for TransFirst and the preliminary recognized amounts of the identifiable assets acquired and liabilities assumed on April 1, 2016 (the acquisition date) as of December 31, 2016.

(in thousands)
Consideration
Cash	$	2,351,400
Fair value of total consideration transferred	$	2,351,400
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	5,907
Accounts receivable, net		62,313
Property, equipment and software		12,726
Identifiable intangible assets		814,131
Deferred tax asset		2,244
Other assets		7,509
Deferred tax liability		(224,654)
Other liabilities		(56,864)
Total identifiable net assets		623,312
Goodwill		1,728,088
Total identifiable assets acquired and liabilities assumed	$	2,351,400

During 2016, there was a $55,000 increase in the purchase price due to the working capital adjustment required by the Purchase Agreement. In addition, there was a $2.0 million decrease in identifiable intangible assets, a $363,700 increase in  liabilities and an $18.0 million increase in deferred tax liabilities that resulted in a net increase to goodwill of $20.4 million. The measurement period during which changes in assets, liabilities, equity interests, or items of consideration are subject to adjustment ends up to one year following the acquisition date.

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Identifiable intangible assets acquired in the TransFirst acquisition include merchant relationships, channel partners, current technology, the TransFirst trade name, non-compete agreements and a favorable lease. The identifiable intangible assets had no significant estimated residual value. These intangible assets are being amortized over their estimated useful lives of one to ten 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 $814.1 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 acquisition and the related estimated weighted average useful lives are as follows:

(inmillions)		Fair Value	Weighted Average Useful Life (in years)
Merchant relationships	$	588.0	7.0
Channel partners		121.0	10.0
Current technology		72.0	5.0
Trade name		16.0	1.0
Covenants not-to-compete		15.0	3.0
Favorable lease		2.1	5.6
Total acquired identifiable intangible assets	$	814.1	7.1

The fair value measurement of the identifiable intangible assets represents Level 2 and Level 3 measurements as defined by GAAP. Key assumptions include (a) cash flow projections based on market participant and internal data, (b) a discount rate of 8.5%, (c) a pre-tax royalty rate range of 1%- 3%, (d) attrition rates of 11%-  16%, (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 $32.3 million in acquisition related costs primarily related to professional, legal and accounting costs, and integration expenses which are recorded in selling, general and administrative expenses and $9.8 million related to the bridge term loan facility, which is included in interest expense. These costs are expensed as incurred and are included on the income statement for the twelve months ended December 31, 2016. The Company recorded $1.3 billion of revenue and $30.0 million of operating income since the acquisition date that is included in the consolidated results through the twelve months ended December 31, 2016 as a result of the TransFirst acquisition.

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Pro Forma Results of Operations

The following unaudited pro forma information shows the results of operations for the twelve months ended December 31, 2016 and December 31, 2015 as if the acquisition of TransFirst had occurred on January 1, 2015. The unaudited pro forma information reflects certain pro forma adjustments to the combined historical financial information of TSYS and TransFirst. The pro forma adjustments include incremental amortization and depreciation expense, incremental interest expense associated with new long-term debt, a reduction of revenues and operating expenses associated with contracts existing between the companies and the elimination of nonrecurring transaction costs directly related to the acquisition.

	Actual			Supplemental pro forma
	Years Ended December 31,			Years Ended December 31,
	2016		2015	2016	2015
(in thousands, except per share data)
Revenue	$	4,170,077	2,779,541	4,562,236	3,230,703
Net income attributable to TSYS common shareholders	$	319,638	364,044	347,248	317,549
Basic EPS attributable to TSYS common shareholders	$	1.74	1.98	1.89	1.73
Diluted EPS attributable to TSYS common shareholders	$	1.73	1.97	1.88	1.72

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 TransFirst’s operations had occurred prior to January 1, 2015, 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 transaction 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 TransFirst into TSYS.

EMEA

2016

In March 2016, the Company completed the acquisition of the remaining 45% interest in TSYS Managed Services EMEA Limited (EMEA) from Merchants Limited. The Company acquired the outstanding stock from Merchants Limited for approximately £4.2 million, or $5.9 million, in cash. In connection with the purchase, the Company repaid the outstanding balance of the existing debt between EMEA and Merchants Limited of approximately £2.2 million, or $3.0 million.

Netspend

2016

In 2016, TSYS adjusted the goodwill associated with the Netspend acquisition by $584,000 as a result of adjustments to the deferred tax assets acquired in the transaction.

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.

In 2015, the Company adjusted goodwill for Netspend to include an additional $627,000 for a change in deferred taxes associated with the acquisition. For more information, refer to Note 6.

79

2014

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. In 2014, the Company increased goodwill for Netspend by $8.5 million due to changes during the measurement period.

Redeemable Noncontrolling Interest

The fair value of the noncontrolling interest in CPAY, owned by CPC Holding Company, LLC, a California limited liability 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 was not redeemable on December 31, 2016, but redemption was 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, 2016, the redemption value was estimated to be approximately $27.4 million. The Company did not accrete any changes to the redemption value as the balance as of December 31, 2016 exceeded the accretion fair value amount.

Note 24 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.

80

Note 25 Earnings Per Share

The following table illustrates basic and diluted EPS under the guidance of GAAP for the years ended December 31, 2016, 2015 and 2014:

	2016		2015		2014
(in thousands, except per share data)	Common Stock		Common Stock		Common Stock
Basic EPS:
Net income attributable to TSYS common shareholders	$	319,638	$	364,044	$	322,872
Less income allocated to nonvested awards		(1,557)		(3,164)		(3,308)
Net income allocated to common stock for  EPS calculation(a)		318,081	$	360,880	$	319,564
Average common shares outstanding(b)		182,744		182,465		184,297
Basic EPS(a)/(b)	$	1.74	$	1.98	$	1.73
Diluted EPS:
Net income attributable to TSYS common shareholders	$	319,638	$	364,044	$	322,872
Less income allocated to nonvested awards		(1,557)		(3,148)		(3,288)
Add income allocated to nonvested awards1		1,557		-		-
Net income allocated to common stock for  EPS calculation(c)	$	319,638	$	360,896	$	319,584
Average common shares outstanding		182,744		182,465		184,297
Increase due to assumed issuance of shares related to common equivalent shares outstanding		813		1,157		1,459
Average nonvested awards1		891		-		-
Average common and common equivalent shares outstanding(d)		184,448		183,622		185,756
Diluted EPS(c)/(d)	$	1.73	$	1.97	$	1.72
	2016		2015		2014
(in thousands, except per share data)	Participating Securities		Participating Securities		Participating Securities
Basic EPS:
Net income allocated to nonvested awards(a)	$	1,557		3,164		3,308
Nonvested awards(b)		911		1,617		1,925
Basic EPS(a)/(b)	$	1.71		1.96		1.72
Diluted EPS:
Net income allocated to nonvested awards(c)	$	1,552		3,148		3,288
Average common and common equivalent shares outstanding(d)		911		1,617		1,925
Diluted EPS(c)/(d)	$	1.70		1.95		1.71

¹ In accordance with the diluted EPS guidance under the two-class method, the Company uses the approach – either the treasury stock method or the two-class method assuming a participating security is not exercised- that is more dilutive. In 2016, the Company used the two-class method. In 2015 and 2014, the Company used the treasury stock method.

The diluted EPS calculation excludes stock options and nonvested awards that are exercisable into 0.4 million, 0.6 million and 1.1 million common shares for the years ended December 31, 2016, 2015 and 2014, respectively, because their inclusion would have been anti-dilutive.

Note 26 Subsequent Events

On February 3, 2017, the Company acquired an additional 10% equity interest in CPAY from a privately-owned company for $70.0 million. This purchase reduced the remaining redeemable noncontrolling interest in CPAY to 15% of its total outstanding equity and extended the put call arrangement until April 2018.

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 events requiring disclosure.

81

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, 2016 and 2015, 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, 2016. We also have audited the Company's internal control over financial reporting as of December 31, 2016, 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.

The Company acquired TransFirst Holdings Corp. during 2016, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2016, TransFirst Holdings Corp.’s internal control over financial reporting associated with total assets of $2.6 billion and total revenues of $1.3 billion included in the consolidated financial statements of the Company as of and for the year ended December 31, 2016. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of TransFirst Holdings Corp.

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, 2016 and 2015, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2016, 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, 2016, 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 23, 2017

82

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, 2016.

The Company acquired TransFirst Holdings Corp. (TransFirst) during 2016, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2016, TransFirst’s internal control over financial reporting associated with 41.0% of total consolidated assets and 30.3% of total consolidated revenues included in the consolidated financial statements of Total System Services, Inc. and subsidiaries as of and for the year ended December 31, 2016.

Based on our assessment, management believes that, as of December 31, 2016, the Company's internal control over financial reporting is effective based on those criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in Internal Control — Integrated Framework 2013.

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, 2016 that appears on the preceding page.

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

83

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 17, 2017, there were 18,854 holders of record of TSYS common stock, some of whom are holders in nominee name for the benefit of different shareholders.

The 2016 fourth quarter dividend of $0.10 per share was declared on December 2, 2016, and was paid January 3, 2017, to shareholders of record on December 15, 2016. 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. Total dividends declared in 2016 and in 2015 amounted to $73.5 million and $73.7 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, 2016 and 2015.

(in thousands, except per share data)	First Quarter		Second Quarter	Third Quarter	Fourth Quarter
2016 Revenues	$	739,378	1,151,587	1,146,889	1,132,224
Cost of services		484,507	841,923	840,301	826,331
Operating income		151,687	135,821	155,327	130,547
Net income attributable to TSYS common shareholders		90,628	69,707	85,352	73,950
Basic earnings per share (EPS) attributable to TSYS common shareholders		0.49	0.38	0.46	0.40
Diluted EPS attributable to TSYS common shareholders		0.49	0.38	0.46	0.40
Cash dividends declared		0.10	0.10	0.10	0.10
Stock prices:
High		48.55	54.81	56.43	51.61
Low		37.96	47.90	46.58	46.77
Close		47.58	48.50	47.15	49.03
2015 Revenues	$	662,156	692,652	707,890	716,843
Cost of services		449,715	459,961	456,465	489,039
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 EPS attributable to TSYS common shareholders		0.42	0.45	0.66	0.45
Diluted EPS 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

84

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, 2011 and reinvestment of all dividends).

	2011		2012		2013		2014		2015		2016
TSYS	$	100.00	$	111.41	$	175.72	$	181.62	$	268.71	$	266.74
S&P 500	$	100.00	$	116.00	$	153.58	$	174.60	$	177.01	$	198.18
S&P SS	$	100.00	$	115.23	$	153.13	$	188.36	$	208.08	$	235.62

85

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF TOTAL SYSTEM SERVICES, INC.

Ownership Percentage	Name	Place of Incorporation
	100%     Columbus Depot Equipment Company	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
	85%     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 (1)	Brazil
	100%     TSYS International Management Limited (2)	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 (3)	India
	100%     TSYS – Rus L.L.C.	Russia
	100%     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 (1)	India
	100%     NetSpend Holdings, Inc.	Delaware
	100%     NetSpend Corporation (4)	Delaware
	100%     Skylight Acquisition I, Inc.	Delaware
	100%     TransFirst Parent Corp.	Delaware
	100%     TransFirst Group, Inc.	Delaware
	100%     TSYS Merchant Solutions, LLC (5)	Delaware
	100%     TransFirst, LLC	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)	Less than .1% is owned by Columbus Depot Equipment Company.
(2)	1% is owned by Columbus Depot Equipment Company.
(3)	Less than .1% is owned by TSYS Card Tech Services (Malaysia) Limited.
(4)	25% is owned by Skylight Acquisition I, Inc.
(5)	26.35% is owned by Columbus Depot Equipment Company and .22% is owned by TSYS U.S. Holdings, Inc.

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. 333-210148) on Form S-3 of Total System Services, Inc. of our reports dated February 23, 2017, with respect to the consolidated balance sheets of  Total System Services, Inc. as of December 31, 2016 and 2015, 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, 2016, and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of December 31, 2016, which reports appear in the December 31, 2016 annual report on Form 10-K of Total System Services, Inc.

The Company acquired TransFirst Holdings Corp. during 2016, and management excluded from its assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2016, TransFirst Holdings Corp.'s internal control over financial reporting associated with total assets of $2.6 billion and total revenues of $1.3billion included in the consolidated financial statements of the Company as of and for the year ended December 31, 2016. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of the TransFirst Holdings Corp.

/s/KPMG LLP

Atlanta, Georgia
February 23, 2017

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 23, 2017/s/M. Troy Woods

M. Troy Woods

Chairman 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 23, 2017 /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 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, 2016 (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 23, 2017/s/M. Troy Woods

M. Troy Woods

Chairman and

Chief Executive Officer

February 23, 2017/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, 2016	Feb. 17, 2017	Jun. 30, 2016
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
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		183,354,641
Entity Public Float			$ 9,575,381,000

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents (Note 4)	$ 425,354	$ 389,328
Accounts receivable, net of allowances for doubtful accounts and billing adjustments of $4.8 million and $4.0 million as of 2016 and 2015, respectively	432,847	314,705
Prepaid expenses and other current assets (Note 5)	164,488	154,199
Total current assets	1,022,689	858,232
Goodwill (Note 6)	3,270,952	1,545,424
Other intangible assets, net of accumulated amortization of $420.6 million and $257.1 million as of 2016 and 2015, respectively (Note 7)	906,676	328,320
Computer software, net of accumulated amortization of $757.4 million and $680.6 million as of 2016 and 2015, respectively (Note 8)	423,188	405,070
Property and equipment, net of accumulated depreciation and amortization of $480.7 million and $457.3 million as of 2016 and 2015, respectively (Note 9)	282,345	289,898
Contract acquisition costs, net of accumulated amortization of $309.7 million and $287.9 million as of 2016 and 2015, respectively (Note 10)	235,700	247,811
Equity investments, net (Note 11)	110,793	106,118
Deferred income tax assets (Note 14)	7,055	6,242
Other assets	106,779	90,780
Total assets	6,366,177	3,877,895
Current liabilities:
Accrued salaries and employee benefits	67,655	66,594
Current portion of long-term borrowings (Note 12)	48,040	50,078
Accounts payable	38,712	52,213
Current portion of obligations under capital leases (Note 12)	2,687	3,468
Other current liabilities (Note 13)	263,259	166,579
Total current liabilities	420,353	338,932
Long-term borrowings, excluding current portion (Note 12)	3,312,215	1,373,878
Deferred income tax liabilities (Note 14)	419,552	192,444
Obligations under capital leases, excluding current portion (Note 12)	1,061	3,663
Other long-term liabilities	88,983	96,886
Total liabilities	4,242,164	2,005,803
Redeemable noncontrolling interest in consolidated subsidiary	24,093	23,410
Commitments and contingencies (Note 15)
Shareholders' equity: (Notes 17, 18, 19 and 20)
Common stock - $0.10 par value. Authorized 600,000 shares; 202,765 and 202,769 issued as of 2016 and 2015 respectively; 183,451 and 182,781 outstanding as of 2016 and 2015, respectively	20,276	20,277
Additional paid-in capital	279,627	241,891
Accumulated other comprehensive loss, net (Note 20)	(56,158)	(33,544)
Treasury stock, at cost (19,314 and 19,988 shares as of 2016 and 2015, respectively)	(646,047)	(641,664)
Retained earnings	2,502,222	2,256,058
Total shareholders' equity	2,099,920	1,843,018
Noncontrolling interest in consolidated subsidiary		5,664
Total equity	2,099,920	1,848,682
Total liabilities and equity	$ 6,366,177	$ 3,877,895

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Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Accounts receivable, allowances for doubtful accounts, billing adjustments and merchant losses	$ 4,800	$ 4,000
Computer software, accumulated amortization	757,394	680,582
Intangible assets, accumulated amortization	420,607	257,096
Property and equipment, accumulated depreciation and amortization	$ 480,690	$ 457,328
Common stock, par value	$ 0.10	$ 0.10
Common stock, authorized	600,000	600,000
Common stock, issued	202,765	202,769
Common stock, outstanding	183,451	182,781
Treasury stock, shares	19,314	19,988
Contract Acquisition Costs
Intangible assets, accumulated amortization	$ 309,700	$ 287,900

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Consolidated Statements of Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Consolidated Statements of Income
Total revenues (Note 21)	$ 4,170,077	$ 2,779,541	$ 2,446,877
Cost of services	2,993,062	1,855,181	1,668,892
Selling, general and administrative expenses	603,633	390,253	346,345
Total operating expenses	3,596,695	2,245,434	2,015,237
Operating income	573,382	534,107	431,640
Nonoperating expenses, net	(112,168)	(37,219)	(38,711)
Income before income taxes and equity in income of equity investments	461,214	496,888	392,929
Income taxes (Note 14)	161,175	151,364	129,761
Income before equity in income of equity investments	300,039	345,524	263,168
Equity in income of equity investments, net of tax (Note 11)	25,933	22,106	17,583
Income from continuing operations, net of tax	325,972	367,630	280,751
Income from discontinued operations, net of tax		1,411	48,655
Net income	325,972	369,041	329,406
Net income attributable to noncontrolling interests	(6,334)	(4,997)	(6,534)
Net income attributable to Total System Services, Inc. (TSYS) common shareholders	$ 319,638	$ 364,044	$ 322,872
Basic EPS:
Income from continuing operations to TSYS common shareholders	$ 1.74	$ 1.97	$ 1.48
Gain from discontinued operations to TSYS common shareholders		0.01	0.26
Net income attributable to TSYS common shareholders	1.74	1.98	1.73
Diluted EPS:
Income from continuing operations to TSYS common shareholders	1.73	1.96	1.47
Gain from discontinued operations to TSYS common shareholders		0.01	0.25
Net income attributable to TSYS common shareholders	$ 1.73	$ 1.97	$ 1.72
Amounts attributable to TSYS common shareholders:
Income from continuing operations	$ 319,638	$ 362,633	$ 275,216
Gain from discontinued operations		1,411	47,656
Net income	$ 319,638	$ 364,044	$ 322,872

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Consolidated Statements of Comprehensive Income
Net income	$ 325,972	$ 369,041	$ 329,406
Other comprehensive income (loss), net of tax:
Litigation, claims, judgments or settlements	(30,801)	(21,719)	(19,531)
Less reclassifications of foreign currency translation adjustments to net income			3,514
Total foreign currency translation adjustments	(30,801)	(21,719)	(16,017)
Postretirement healthcare plan adjustments	496	(1,567)	589
Unrealized gain (loss) on available-for-sale securities	7,359	1,398	(668)
Other comprehensive loss	(22,946)	(21,888)	(16,096)
Comprehensive income	303,026	347,153	313,310
Comprehensive income attributable to noncontrolling interests	(6,002)	(4,727)	(6,113)
Comprehensive income attributable to TSYS common shareholders	$ 297,024	$ 342,426	$ 307,197

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities:
Net income	$ 325,972	$ 369,041	$ 329,406
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	373,546	258,264	248,018
Provisions for cardholder losses	49,362	41,264	38,381
Share-based compensation	43,728	41,549	30,790
Dividends received from equity investments	15,246	12,097	9,189
Amortization of debt issuance costs	13,570	1,841	1,817
Provisions for bad debt expenses, billing adjustments and merchant losses	7,584	4,495	2,823
Deferred income tax (benefit) expense	7,435	(4,083)	(8,963)
Charges for transaction processing provisions	5,351	6,976	9,468
Loss (gain) on disposal of equipment, net	774	(397)	(293)
Amortization of bond discount	750	397	383
Gain on disposal of subsidiaries		(3,568)	(86,961)
Changes in value of private equity investments	(811)	(4,038)	(793)
(Gain) loss on foreign currency	(1,748)	388	999
Excess tax benefit from share-based payment arrangements	(9,905)	(24,357)	(7,185)
Equity in income of equity investments	(25,933)	(22,106)	(17,583)
Changes in operating assets and liabilities, net of effect of acquisition:
Accounts receivable	(73,235)	(39,218)	(33,406)
Prepaid expenses, other current assets and other long-term assets	(57,835)	(8,498)	(10,525)
Accounts payable	(12,562)	(3,987)	8,765
Accrued salaries and employee benefits	(2,597)	29,168	414
Other current liabilities and other long-term liabilities	59,217	(55,034)	45,457
Net cash provided by operating activities	717,909	600,194	560,201
Cash flows from investing activities:
Cash used in acquisitions, net of cash acquired	(2,345,493)	(750)	(38,584)
Purchases of property and equipment	(51,132)	(54,640)	(75,913)
Additions to contract acquisition costs	(45,847)	(58,728)	(88,871)
Additions to internally developed computer software	(34,043)	(39,219)	(41,501)
Additions to licensed computer software from vendors	(11,551)	(50,729)	(29,638)
Purchase of private equity investments	(4,930)	(3,525)	(3,291)
Proceeds from insurance recovery for loss on disposal			6,212
Proceeds from dispositions, net of expenses paid and cash disposed		3,568	44,979
Proceeds from sale of private equity investment	120	1,839
Net cash used in investing activities	(2,492,876)	(202,184)	(226,607)
Cash flows from financing activities:
Proceeds from long-term borrowings	2,666,295	1,912	1,396
Proceeds from exercise of stock options	11,708	58,636	34,869
Excess tax benefit from share-based payment arrangements	9,905	24,357	7,185
Subsidiary dividends paid to noncontrolling shareholders	(5,548)	(5,028)	(7,172)
Purchase of noncontrolling interest	(5,878)		(37,500)
Debt issuance costs	(26,555)
Repurchase of common stock under plans and tax withholding	(30,275)	(242,235)	(170,516)
Dividends paid on common stock	(73,378)	(73,677)	(74,796)
Principal payments on long-term borrowings and capital lease obligations	(724,084)	(54,719)	(69,939)
Net cash provided by (used in) financing activities	1,822,190	(290,754)	(316,473)
Cash and cash equivalents:
Effect of exchange rate changes on cash and cash equivalents	(11,197)	(7,111)	(6,168)
Net increase in cash and cash equivalents	36,026	100,145	10,953
Cash and cash equivalents at beginning of period	389,328	289,183	278,230
Cash and cash equivalents at end of period	425,354	389,328	289,183
Supplemental cash flow information:
Interest paid	84,420	40,425	40,969
Income taxes paid, net	$ 87,428	$ 171,455	$ 135,770

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Consolidated Statements of Changes in Equity - USD ($) shares in Thousands, $ in Thousands	Redeemable Noncontrolling Interests	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss) (OCI)	Treasury Stock	Retained Earnings	Noncontrolling Interest	Total
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2013	$ 39,652	$ 20,279	$ 165,841	$ 3,749	$ (326,996)	$ 1,718,204	$ 21,349	$ 1,602,426
Beginning Balance (in shares) at Dec. 31, 2013		202,790
Net income	4,650					322,872	1,884	324,756
Other comprehensive income (Note 20)				(15,675)			(421)	(16,096)
Common stock issued from treasury shares for exercise of stock options (Note 18)			1,955		32,914			34,869
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 18)			(11,142)		11,142
Share-based compensation (Note 18)			30,312					30,312
Common stock issued from treasury shares for dividend equivalents (Note 18)			185		226			411
Cash dividends declared ($0.40 per share)						(74,706)		(74,706)
Purchase of treasury shares (Note 19)					(170,516)			(170,516)
Subsidiary repurchase of noncontrolling interests	15,078		22,422					22,422
Subsidiary dividends paid to noncontrolling interests	(6,732)						(440)	(440)
Disposition of noncontrolling interest (Note 2)							(15,490)	(15,490)
Tax benefits associated with share-based compensation			6,540					6,540
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2014	22,492	$ 20,278	171,270	(11,926)	(453,230)	1,966,370	6,882	1,699,644
Ending Balance (in shares) at Dec. 31, 2014		202,775
Net income	5,945					364,044	(948)	363,096
Other comprehensive income (Note 20)				(21,618)			(270)	(21,888)
Common stock issued from treasury shares for exercise of stock options (Note 18)			12,273		46,363			58,636
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 18)			(7,982)		7,982
Share-based compensation (Note 18)			41,179					41,179
Common stock issued from treasury shares for dividend equivalents (Note 18)			186		163			349
Cash dividends declared ($0.40 per share)						(74,356)		(74,356)
Purchase of treasury shares (Note 19)			6		(242,241)			(242,235)
Subsidiary dividends paid to noncontrolling interests	(5,027)
Tax benefits associated with share-based compensation			24,257					24,257
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2015	23,410	$ 20,277	241,891	(33,544)	(641,664)	2,256,058	5,664	1,848,682
Ending Balance (in shares) at Dec. 31, 2015		202,769
Net income	6,231					319,638	103	319,741
Other comprehensive income (Note 20)				(22,614)			(332)	(22,946)
Common stock issued from treasury shares for exercise of stock options (Note 18)			1,824		9,884			11,708
Common stock unissued due to forfeiture of nonvested awards		$ (1)	1,197		(1,196)
Common stock unissued due to forfeiture of nonvested awards (in shares)		(4)
Common stock issued from treasury shares for nonvested awards (Note 18)			(17,204)		17,204
Share-based compensation (Note 18)			42,457					42,457
Cash dividends declared ($0.40 per share)						(73,474)		(73,474)
Purchase of treasury shares (Note 19)					(30,275)			(30,275)
Subsidiary repurchase of noncontrolling interests			443				$ 5,435	5,878
Subsidiary dividends paid to noncontrolling interests	(5,548)
Tax benefits associated with share-based compensation			9,905					9,905
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2016	$ 24,093	$ 20,276	$ 279,627	$ (56,158)	$ (646,047)	$ 2,502,222		$ 2,099,920
Ending Balance (in shares) at Dec. 31, 2016		202,765

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Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Consolidated Statements of Changes in Equity
Cash dividends declared, per share	$ 0.40	$ 0.40	$ 0.40

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Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2016

Basis of Presentation and Summary of Significant Accounting Policies

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 Latin America. 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 the cost approach, 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 may result in an impairment or a new allocation of purchase price.

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 and billing adjustments.

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.

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. In evaluating software development costs for recoverability, expected cash flows are estimated by management should events indicate a loss may have been triggered. The Company evaluates the unamortized capitalized costs of software development, the impairment of which is determined by expected undiscounted future operating cash flows of the software as compared to the carrying amount of the software product. The amount by which the unamortized software development costs exceed the lower of the carrying amount or fair 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. 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.

In evaluating contract acquisition costs for recoverability, expected cash flows are estimated by management should events indicate a loss may have been triggered. 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, 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 METHOD 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, México, 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 $46.1 million as of December 31, 2016.

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 method investments are accounted for using the equity method of accounting and pertain to privately held companies. The Company believes the fair values of its investments in equity method 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, 2016, the Company had transaction processing provisions of $2.9 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 $10.5 million as of December 31, 2016. The charges to provisions for cardholder losses are included in cost of services in the Consolidated Statements of Income and other current liabilities in the Consolidated Balance Sheets. 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 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, 2016, the Company had a merchant loss provision in the amount of $2.0 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 and electronic benefits transfer 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.

With the acquisition of TransFirst Holdings Corp. (TransFirst) on April 1, 2016, TSYS included TransFirst’s results as part of the Merchant Services segment. TransFirst’s revenues are reported gross, which includes amounts paid for interchange and assessments, as TransFirst is the principal in the contractual relationship with its customers. Expenses covering interchange and assessment fees are included in TransFirst’s cost of services and are directly attributable to processing fee revenues and are recognized in the same period as the related revenue.

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, 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 during the years ended December 31, 2016, 2015 and 2014 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.

INTERCHANGE AND ASSESSMENTS:  Interchange and assessment fees are charged by the card associations or payment networks.Depending upon the transaction type, the fees are a percentage of the transaction’s dollar value, a fixed amount, or a combination of the two methods.

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% for executive level employees and up to 8% for other employees.

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 specified 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 2016, 2015 and 2014 was $11.5 million, $9.6 million and $5.7 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 carryforwards. 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. In March 2016, the Company acquired the remaining interest in EMEA. Refer to Note 23 for more information on acquisitions.

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 2015 and 2014 financial statements to conform to the presentation adopted in 2016. The most significant changes include the reclass of debt issuance costs from assets to contra-liability accounts offsetting the associated debt and the reclassification of deferred income tax assets and liabilities from current to noncurrent in connection with the adoption of new accounting standards.                                                                   

Recently Adopted Accounting Pronouncements

The Company adopted the following Accounting Standards Updates (ASUs) on January 1, 2016:

ASU 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” 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 Company early adopted this ASU resulting in $24.7 million of current net deferred tax assets as of December 31, 2015 being moved to noncurrent. The guidance was applied retrospectively. The adoption of this ASU did not have a material impact on the Company’s results of operations or cash flows.

ASU 2015-16 “Business Combinations (Topic 805): Simplifying the Accounting for Measurement Period Adjustments” 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 adoption of this ASU did not have a material impact on the Company’s financial position, results of operations or cash flows. 

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” and  ASU 2015-03 “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” 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, and allow entities to defer and present debt issuance costs associated with a line-of-credit as an asset and subsequently amortize deferred debt issuance costs ratably over the term of a line-of-credit arrangement. The guidance was applied retrospectively. The adoption of this guidance resulted in $6.4 million of debt issuance costs as of December 31, 2015 being moved from noncurrent assets on the Company’s balance sheet to liabilities that offset both the current and noncurrent portions of the debt which these costs are associated as of December 31, 2016. The Company continues to include debt issuance costs associated with a line-of-credit in its noncurrent assets. The adoption of this guidance did not have a material impact on the Company’s results of operations or cash flows.

ASU 2015-05 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” provides guidance about whether a cloud computing arrangement includes a software license or a service agreement. The Company adopted this ASU on a prospective basis. The adoption of this ASU did not have a material impact on the Company’s financial position, results of operations or cash flows.

ASU 2015-01 “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items” eliminates from GAAP the concept of extraordinary items. The adoption of this ASU did not have a material impact on the financial position, results of operations or cash flows of the Company.

Recent Accounting Pronouncements

In December 2016, the FASB issued ASU 2016-19 “Technical Corrections,” which represent changes to clarify, correct errors or make minor improvements to the ASC. Most of the amendments in this Update do not require transition guidance and are effective upon issuance of this Update. Six amendments in this Update clarify guidance or correct references in the ASC that could potentially result in changes in current practice because of either misapplication or misunderstanding of current guidance. Early adoption is permitted for the amendments that require transition guidance. The Company will be impacted by the amendment to Subtopic 350-40, Intangibles - Goodwill and Other - Internal-Use Software, which adds a reference to guidance to use when accounting for internal-use software licensed from third parties that is within the scope of Subtopic 350-40. The transition guidance for that amendment is the same as the transition guidance in ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” to which the amendment relates. 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 November 2016, the FASB issued ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash,” which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The ASU is effective for the Company on January 1, 2018. 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 March 2016, the FASB issued ASU 2016-09 “Improvements to Employee Share‑Based Payment Accounting,” which simplifies several aspects of the accounting for employee share‑based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The adoption of this ASU will result in excess tax benefits and deficiencies associated with share-based payments being recorded on the income statement at the time they are deducted on the income tax return instead of being recorded in additional paid-in capital. The excess tax benefits are recorded along with other income tax cash flows as an operating activity in the statement of cash flows. The Company will adopt this ASU on January 1, 2017. The Company has reviewed this standard, noting adoption of the standard will result in a benefit to the income tax provision and an immaterial dilutive effect on diluted EPS.

In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” ASU 2016-02 introduces a lessee model that brings most leases on the balance sheet and aligns many of the underlying principles of the new lessor model with those in the FASB’s new revenue recognition standard. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than twelve months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The new guidance will be effective for the Company on January 1, 2019 with early adoption permitted. The Company expects to adopt the new standard on its effective date.The Company expects the standard will have a material effect on the its financial statements.  At December 31, 2016, the Company had approximately $472.8 million of operating leases that would be recorded on the balance sheet if the standard was already effective. The Company has not determined the remaining effect on its ongoing financial reporting for adoption of this ASU. The Company expects to elect all of the available practical expedients on adoption.

Recent Revenue Recognition Accounting Pronouncements

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 FASB has issued several additional ASUs since this time that add additional clarification to certain issues existing after the original ASU was released. All of the new standards are effective for the Company on January 1, 2018, with early adoption permitted no sooner than January 1, 2017. The standards permit the use of either the retrospective or cumulative effect transition method. The Company has not determined the effect on its ongoing financial reporting for adoption of these ASUs.

The Company is reviewing the requirements of the new revenue standard, and amendments described below, while following activities of the FASB and the American Institute of Certified Public Accountants (AICPA) for certain interpretive guidance applicable to IT outsourcers and payment processors. The Company is evaluating customer contracts under the new standard for each type of significant revenue stream (and related costs) identified to evaluate differences from current accounting. TSYS plans to adopt ASU 2014-09, as well as all other clarifications and technical guidance issued by the FASB and AICPA related to this new revenue standard, on January 1, 2018 using the modified retrospective transition method. Such adoption method may result in an adjustment to the opening balance of retained earnings (or other appropriate components of net assets in the statement of financial position) for the cumulative effect, if any, of applying the standard to contracts that are not completed on January 1, 2018. Under the modified retrospective transition method, the Company is required to disclose the impact of changes to financial statement line items due to the application of the new revenue standard, including an explanation of the reasons for any significant changes.

The new standard could change the amount and timing of revenue and costs for certain significant revenue streams, increase areas of judgment and related internal controls requirements, change the presentation of revenue for certain contract arrangements and possibly require changes to the Company’s software systems to assist in both internally capturing accounting differences and externally reporting such differences through enhanced disclosure requirements.

In March 2016, the FASB issued ASU 2016-08 “Revenue from Contracts with Customers (Topic  606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),"  which improves the operability and understandability of the implementation guidance on principal versus agent considerations by providing indicators as to which party controls the good or service provided to a customer (the principal).

In April 2016, the FASB issued ASU 2016-10 “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” which clarifies two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas.

In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients,” which affects only the following narrow aspects of Topic 606: Assessing the Collectability Criterion; Presentation of Sales and Other Taxes Collected from Customers; Noncash Consideration; Contract Modification at Transition; Completed Contracts at Transition; and Technical Correction.

In December 2016, the FASB issued ASU 2016-20 “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” which affects only the following narrow aspects of Topic 606: Disclosure of Remaining Performance Obligations as it relates to entities such as processors which may not be required to estimate revenue under ASU 2014-09 due to direct allocation of variable consideration; Disclosure of Prior - Period Performance Obligations; Loan Guarantee Fees; Contract Costs - Impairment Testing; Contract Costs - Interaction of Impairment Testing with Guidance in Other Topics; Provisions for Losses on Construction - Type and Production Type Contracts; Contracts within the scope of Topic 944 (insurance)are excluded from the scope of Topic 606; Contract Modifications; Contract Asset versus Receivable; Refund Liability; Advertising Costs; Fixed - Odds Wagering Contracts in the Casino Industry.

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Discontinued Operations

12 Months Ended

Dec. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 2 Discontinued Operations

In accordance with GAAP, the Company determined its Japan-based businesses became discontinued operations in 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 in 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 in 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 summarized results of discontinued operations for the years ended December 31, 2015 and 2014:

(in thousands)	2015		2014
Total revenues	$	-	16,376
Income before taxes	$	-	1
Income tax benefit	$	-	(39)
Income from operating activities of discontinued operations, net of tax	$	-	40
Gain on dispositions, net of tax	$	1,411	48,615
Income from discontinued operations, net of tax	$	1,411	48,655
Income from discontinued operations, net of tax, attributable to noncontrolling interest	$	-	999
Income from discontinued operations, net of tax, attributable to TSYS common shareholders	$	1,411	47,656

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Fair Value Measurement

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

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, 2016, 2015 or 2014. 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 three-step test. Step 0 is a qualitative analysis of relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. 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, 2016, the Company had recorded goodwill in the amount of $3.3 billion. The Company performed its annual impairment test of its goodwill balances as of May 31, 2016, and this test did not indicate any impairment. The fair value of the RUs substantially exceeds the carrying value. Refer to Note 6 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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Cash and Cash Equivalents

12 Months Ended

Dec. 31, 2016

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents

Note 4 Cash and Cash Equivalents

Cash and cash equivalent balances as of December 31, 2016 and 2015 are summarized as follows:

(in thousands)	2016		2015
Cash and cash equivalents in domestic accounts	$	375,122	307,578
Cash and cash equivalents in foreign accounts		50,232	81,750
Total	$	425,354	389,328

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, 2016

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Current Assets

Note 5 Prepaid Expenses and Other Current Assets

Significant components of prepaid expenses and other current assets as of December 31, 2016 and 2015 are summarized as follows:

(in thousands)	2016		2015
Prepaid expenses	$	84,173	37,961
Supplies inventory		17,105	15,114
Income taxes receivable		-	51,322
Other		63,210	49,802
Total	$	164,488	154,199

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Goodwill

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Note 6 Goodwill

In 2016, the Company completed the TransFirst acquisition resulting in an additional $1.7 billion of goodwill being recorded. In addition, there was a downward adjustment to goodwill of $584,000 related to income tax reserves associated with the Netspend acquisition. In 2015, the Company adjusted the Netspend goodwill allocation to include an additional $627,000 for an adjustment to the sales tax reserves associated with the acquisition.

The gross amount and accumulated impairment losses of goodwill as of December 31, 2016 and 2015 are as follows:

	2016
(in thousands)	North America Services		International Services	Merchant Services	Netspend	Consolidated
Gross amount	$	70,796	25,937	2,144,061	1,034,170	$	3,274,964
Accumulated impairment losses		(182)	(1,605)	(2,225)	-		(4,012)
Goodwill, net	$	70,614	24,332	2,141,836	1,034,170	$	3,270,952

	2015
	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

Below are the balances of goodwill as of December 31, 2016 and 2015 along with the related changes in carrying value.

(in thousands)	North America Services		International Services		Merchant Services		Netspend		Consolidated
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
Netspend tax adjustment		-		-		-		584		584
TransFirst acquisition		-		-		1,728,088		-		1,728,088
Currency translation adjustments		-		(3,144)		-		-		(3,144)
Balance as of December 31, 2016	$	70,614		24,332		2,141,836		1,034,170	$	3,270,952

Refer to Note 23 for more information on acquisitions.

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Other Intangible Assets, Net

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Other Intangible Assets, net

Note 7 Other Intangible Assets, Net

In 2016, the changes in other intangible assets related to foreign currency translation and the acquisition of TransFirst. Refer to Note 23 for more information on acquisitions.

Significant components of other intangible assets as of December 31, 2016 and 2015 are summarized as follows:

	2016
(in thousands)	Gross		Accumulated Amortization	Net
Merchant relationships	$	588,000	(63,000)	$	525,000
Channel relationships		439,600	(148,815)		290,785
Customer relationships		166,340	(122,465)		43,875
Trade name		62,397	(45,197)		17,200
Covenants-not-to-compete		29,940	(13,869)		16,071
Database		28,000	(19,600)		8,400
Trade association		10,000	(6,750)		3,250
Favorable lease		3,006	(911)		2,095
Total	$	1,327,283	(420,607)	$	906,676

	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
Covenants-not-to-compete		14,940	(7,834)		7,106
Database		28,000	(14,000)		14,000
Trade association		10,000	(5,750)		4,250
Favorable lease		875	(445)		430
Total	$	585,416	(257,096)	$	328,320

Amortization related to other intangible assets, which is recorded in selling, general and administrative expenses, was $163.8 million, $75.8 million and $77.3 million for 2016, 2015 and 2014, respectively.

The weighted average useful life for each component of other intangible assets, and in total, as of December 31, 2016 is as follows:

	WeightedAverage Amortization Period (Yrs)
Merchant relationships	7.0
Channel relationships	8.6
Customer relationships	8.2
Trade name	3.9
Covenants-not-to-compete	4.1
Database	5.0
Trade association	10.0
Favorable lease	5.4
Total	7.4

Estimated future amortization expense of other intangible assets as of December 31, 2016 for the next five years is:

(in thousands)
2017	$	180,304
2018		161,647
2019		145,601
2020		140,193
2021		119,617

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Computer Software, Net

12 Months Ended

Dec. 31, 2016

Research and Development [Abstract]

Computer Software, net

Note 8 Computer Software, Net

Computer software as of December 31, 2016 and 2015 is summarized as follows:

(in thousands)	2016		2015
Licensed computer software	$	513,790	513,443
Software development costs		428,581	404,238
Acquisition technology intangibles		238,211	167,971
Total computer software		1,180,582	1,085,652
Less accumulated amortization:
Licensed computer software		315,591	282,563
Software development costs		307,190	287,863
Acquisition technology intangibles		134,613	110,156
Total accumulated amortization		757,394	680,582
Computer software, net	$	423,188	405,070

The Company held the following computer software under license agreements as of December 31, 2016 and 2015:

(in thousands)	2016		2015
Licensed computer software	$	23,665	18,206
Accumulated amortization		(14,634)	(8,175)
Licensed computer software, net	$	9,031	10,031

Amortization expense includes amounts for computer software acquired under license agreements. The Company had the following amortization expense related to computer software for the years ended December 31, 2016, 2015 and 2014:

(in thousands)	2016		2015	2014
Amortization expense related to:
Licensed computer software	$	45,655	41,823	36,775
Software development costs		26,478	22,740	25,248
Acquisition technology intangibles		26,217	16,734	19,683

The weighted average useful life for each component of computer software, and in total, as of December 31, 2016, is as follows:

	Weighted Average Amortization Period (Yrs)
Licensed computer software		5.8
Software development costs		6.1
Acquisition technology intangibles		6.2
Total		6.0

Estimated future amortization expense of licensed computer software, software development costs and acquisition technology intangibles as of December 31, 2016 for the next five years is:

(in thousands)	Licensed Computer Software		Software Development Costs	Acquisition Technology Intangibles
2017	$	42,937	23,777	28,268
2018		34,142	18,225	25,793
2019		21,071	13,414	25,793
2020		17,010	9,646	20,134
2021		9,293	6,787	3,600

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Property and Equipment, Net

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Note 9 Property and Equipment, Net

Property and equipment balances as of December 31, 2016 and 2015 are as follows:

(in thousands)	2016		2015
Computer and other equipment	$	356,358	346,387
Buildings and improvements		246,577	244,938
Furniture and other equipment		141,836	138,727
Land		15,877	16,577
Other		2,387	597
Total property and equipment		763,035	747,226
Less accumulated depreciation and amortization		480,690	457,328
Property and equipment, net	$	282,345	289,898

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, 2016 and 2015:

(in thousands)	2016		2015
Computer and other equipment	$	51,702	55,450
Furniture and other equipment		5,412	5,374
Total equipment		57,114	60,824
Less accumulated depreciation:
Computer and other equipment		(39,060)	(36,134)
Furniture and other equipment		(3,788)	(2,731)
Total accumulated depreciation		(42,848)	(38,865)
Total equipment, net	$	14,266	21,959

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 $62.5 million, $56.6 million and $53.5 million for the years ended December 31, 2016, 2015 and 2014, respectively.

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Contract Acquisition Costs, Net

12 Months Ended

Dec. 31, 2016

Contract Acquisition Costs, Net

Contract Acquisition Costs, net

Note 10 Contract Acquisition Costs, Net

Significant components of contract acquisition costs as of December 31, 2016 and 2015 are summarized as follows:

(in thousands)	2016		2015
Conversion costs, net of accumulated amortization of $164.4 million and $150.0 million as of 2016 and 2015, respectively	$	144,173	159,000
Payments for processing rights, net of accumulated amortization of $145.3 million and $137.9 million as of 2016 and 2015, respectively		91,527	88,811
Total	$	235,700	247,811

Amortization expense related to contract acquisition costs for the years ended December 31, 2016, 2015 and 2014 is as follows:

(in thousands)	2016		2015	2014
Amortization expense related to:
Conversion costs	$	28,811	27,392	17,816
Payments for processing rights		19,804	17,039	16,209

The weighted average useful life for each component of contract acquisition costs, and in total, as of December 31, 2016 is as follows:

	Weighted Average Amortization Period (Yrs)
Conversion costs	12.9
Payments for processing rights	15.6
Total	14.1

Estimated future amortization expense of conversion costs and payments for processing rights as of December 31, 2016 for the next five years is:

(in thousands)	Conversion Costs		Payments for Processing Rights
2017	$	32,830	19,487
2018		29,727	18,084
2019		24,480	15,220
2020		20,037	12,955
2021		18,197	10,704

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Equity Investments

12 Months Ended

Dec. 31, 2016

Equity Method Investments and Joint Ventures [Abstract]

Equity Investments

Note 11 Equity Investments

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.

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.

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 net assets of the equity investments.

TSYS' equity in income of equity investments (net of tax) for the years ended December 31, 2016, 2015 and 2014 was $25.9 million, $22.1 million and $17.6 million, respectively.

A summary of TSYS' equity investments as of December 31, 2016 and 2015 is as follows:

(in thousands)	2016		2015
CUP Data	$	101,638	98,518
Other		9,155	7,600
Total	$	110,793	106,118

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Long-term Borrowings and Capital Lease Obligations

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

Long-term Borrowings and Capital Lease Obligations

Note 12 Long-term Borrowings and Capital Lease Obligations

Long-term debt as of December 31, 2016 and 2015 consists of:

(in thousands)	2016		2015
3.800% Senior Notes due April 1, 2021 (5 year tranche), net of discount and debt issuance costs	$	743,625	-
4.800% Senior Notes due April 1, 2026 (10 year tranche), net of discount and debt issuance costs		742,383	-
LIBOR + 1.500%, unsecured term facility, due February 23, 2021, with quarterly principal and interest payments, net of debt issuance costs		697,832	-
2.375% Senior Notes due June 1, 2018 (5 year tranche), net of discount and debt issuance costs		548,615	547,720
3.750% Senior Notes due June 1, 2023 (10 year tranche), net of discount and debt issuance costs		543,947	543,153
LIBOR + 1.300%, unsecured revolving loan, due February 23, 2021, with monthly interest payments on outstanding balances		70,000	-
1.380% note payable due December 31, 2017, with monthly interest and principal payments		13,853	30,000
LIBOR + 1.125%, unsecured term loan, due April 8, 2018, with quarterly principal and interest payments, net of debt issuance costs		-	174,652
LIBOR + 1.125%, unsecured term loan, due September 10, 2017, with quarterly principal and interest payments, net of debt issuance costs		-	119,761
1.500% note payable, due September 30, 2016, with monthly interest and principal payments		-	5,132
LIBOR + 2.000%, unsecured term loan, due December 7, 2017, with monthly interest payments and principal paid at maturity		-	3,202
1.500% note payable, due January 31, 2016, with monthly interest and principal payments		-	336
Total debt		3,360,255	1,423,956
Less current portion		48,040	50,078
Noncurrent portion of long-term debt	$	3,312,215	1,373,878

On January 26, 2016, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Vista Equity Partners Fund V, L.P., a Delaware limited partnership (“Fund V”), Vista Equity Partners Fund V-A, L.P., a Cayman Islands limited partnership (“Fund V-A”), Vista Equity Partners Fund V-B, L.P., a Cayman Islands limited partnership (“Fund V-B”), Vista Equity Partners Fund V Executive, L.P., a Delaware limited partnership (“Fund V Executive”), VEPF V FAF, L.P., a Delaware limited partnership (“VEPF V”), Vista Equity Associates, LLC, a Delaware limited liability company (“Associates LLC” and, together with Fund V, Fund V-A, Fund V-B, Fund V Executive and VEPF V, the “Sellers”), and TransFirst, a Delaware corporation, pursuant to which, and upon the terms and subject to the conditions set forth in the Purchase Agreement, the Company acquired all of the outstanding capital stock of TransFirst from the Sellers on April 1, 2016.

On February 23, 2016, the Company entered into a Credit Agreement (the “2016 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 2016 Credit Agreement provides the Company with a $700 million five-year term loan facility (the “Term Loan Facility”) consisting of (i) a $300 million term loan (the “Refinancing Term Loan”) funded upon entry into the 2016 Credit Agreement and (ii) a $400 million term loan (the “Delayed Draw Term Loan”). The 2016 Credit Agreement also provides the Company with a $800 million unsecured revolving credit facility (the “Revolving Loan Facility”), which includes a $50 million sub-facility for the issuance of standby letters of credit. The balance as of December 31, 2016 was $697.8 million net of discount and debt issuance costs on the Term Loan Facility. There is no outstanding balance as of December 31, 2016 on the Revolving Loan Facility.

The Refinancing Term Loan was used to repay in full the Company’s 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 was used to finance, in part, the acquisition and related transactions, upon satisfaction of a limited set of conditions precedent. The Revolving Loan Facility is available for draws for purposes of working capital and other general corporate purposes, including to finance, in part, the acquisition and related transactions upon satisfaction of a limited set of conditions precedent. The creditor group of the modified debt remained consistent before and after the debt was amended. Any exceptions were minor.

Concurrently with entering into the Purchase Agreement, the Company obtained commitments for a $2.0 billion 364-day bridge term loan facility from JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bank of America N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd, U.S. Bank National Association, Wells Fargo Securities, LLC and Wells Fargo Bank, National Association (collectively, the “Commitment Parties”). Thereafter, the Commitment Parties assigned portions of their commitments to certain other bridge facility lenders. Based on the terms of the bridge term loan facility commitment letter, upon entering into the 2016 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. The bridge term loan facility was terminated in March 2016 after the issuance of the Notes described below.

Borrowings under the 2016 Credit Agreement will accrue interest at the base rate (as defined in the 2016 Credit Agreement) or, for certain euro-denominated borrowings, the London Interbank Offered Rate (“LIBOR”), in each case plus a margin that is set based on the Company’s corporate credit ratings. The applicable margin for loans bearing interest based on LIBOR ranges from 0.900% to 1.500% for revolving loans and 1.000% to 1.750% for term loans. The applicable margin for loans bearing interest based on the base rate ranges from 0.000% to 0.500% for revolving loans and 0.000% to 0.750% for term loans. In addition, the Company will pay the lenders a facility fee ranging from 0.100% to 0.250% per annum, depending on the Company’s corporate credit ratings, on the commitments under the Revolving Loan Facility (regardless of usages) and the undrawn commitment amount in respect of the Delayed Draw Term Loan. Based on the Company’s current corporate credit ratings, (i) the applicable margin for loans accruing interest at the base rate is 0.500% for term loans and 0.300% for revolving loans and (ii) the applicable margin for loans accruing interest at LIBOR is 1.500% for term loans and 1.300% for revolving loans. The 2016 Credit Agreement contains customary covenants regarding, among other matters, the maintenance of insurance, the preservation and maintenance of the Company’s corporate existence, material compliance with laws and the payment of taxes and other material obligations. During the year ended December 31, 2016, the Company repaid $400.0 million on the Revolving Loan Facility. As of December 31, 2016, the outstanding balance on the Revolving Loan Facility was $70.0 million.

On March 17, 2016, the Company closed its sale (the “Transaction”) of $750 million aggregate principal amount of 3.800% Senior Notes due 2021 and $750 million aggregate principal amount of 4.800% Senior Notes due 2026 (collectively, the “2016 Notes”) pursuant to an agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the underwriters, whereby the Company agreed to sell and the Underwriters agreed to purchase the 2016 Notes from the Company, subject to and upon the terms and conditions set forth in the Underwriting Agreement. The Company used the net proceeds of the Transaction to pay a portion of the approximately $2.35 billion purchase price of the Company’s acquisition of TransFirst and related fees and expenses. The 2016 Notes were issued pursuant to a Senior Indenture, dated as of March 17, 2016, between the Company and Regions Bank, as trustee. The balance as of December 31, 2016 was $743.5 million net of discount and debt issuance costs for the Senior Notes due June 2021 and $743.0 million net of discount and debt issuance costs for the Senior Notes due June 2026.

During December 2014, EMEA obtained a £900,000, or approximately $1.4 million term loan. In September 2015, TSYS increased the loanby £1.3 million, or approximately $1.9 million. The loan bears interest at a rate of LIBOR plus two percent. The loan maturity date was December 2017, and had monthly interest payments. The lender in this transaction was Merchants Limited, who had a noncontrolling interest in EMEA. In 2016, the Company purchased the remaining ownership interest in EMEA from Merchants Limited. In addition, the debt was paid off in conjunction with the acquisition.

In December 2015, the Company entered into a $30.0 million financing agreement for perpetual software licenses. The balance as of December 31, 2016 was $13.9 million.

In September 2014, the Company entered into a $13.6 million financing agreement for perpetual software licenses. The agreement was paid during 2016 and no outstanding balance remained.

In April 2013, the Company entered into a Credit Agreement (the “2013 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 2013 Credit Agreement provided for a five-year term loan to the Company in the amount of $200.0 million (the “Term Loan”) and bore interest at LIBOR plus 1.125%, which was subject to adjustment based on changes in the Company’s credit ratings, with margins ranging from 1.00% to 1.75%. The 2013 Credit Agreement was paid during 2016 and no outstanding balance remains.

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 “2013 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 2013 Notes from the Company, subject to and upon the terms and conditions set forth in the Underwriting Agreement. The interest on the 2013 Notes are payable semiannually. The Company paid fees in 2013 associated with the issuance of these 2013 Notes of approximately $8.9 million and recorded discounts of approximately $4.3 million that are being amortized over the life of the 2013 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 2013 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, 2016 was $548.1 million net of discount and debt issuance costs for the Senior Notes due June 2018 and $544.0 million net of discount and debt issuance costs for the Senior Notes due June 2023.

The 2013 and 2016 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 2013 and 2016 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, as defined in the Prospectus Supplements for the 2013 and 2016 Notes offerings.

Required annual principal payments on long-term debt for the five years subsequent to December 31, 2016 are summarized as follows:

(in thousands)
2017	$	48,853
2018		611,250
2019		70,000
2020		70,000
2021		1,283,750

Capital lease obligations as of December 31, 2016 and 2015 consist of:

(in thousands)	2016		2015
Capital lease obligations	$	3,748	7,131
Less current portion		2,687	3,468
Noncurrent portion of capital leases	$	1,061	3,663

The Company acquires various computer equipment, software, machinery and equipment and furniture and fixtures under capital lease obligations. Refer to Notes 8, 9 and 22 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, 2016 are summarized as follows:

(in thousands)
2017	$	2,754
2018		1,019
2019		63
2020		-
2021		-
Total minimum lease payments		3,836
Less amount representing interest		88
Principal minimum lease payments	$	3,748

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Other Current Liabilities

12 Months Ended

Dec. 31, 2016

Contract Acquisition Costs, Net

Other Current Liabilities

Note 13 Other Current Liabilities

Significant components of other current liabilities as of December 31, 2016 and 2015 are summarized as follows:

(in thousands)	2016		2015
Deferred revenues	$	40,473	39,863
Accrued expenses		32,861	26,017
Accrued third-party commissions		28,310	9,810
Litigation settlements		20,795	1,290
Dividends payable		19,513	19,367
Accrued interest		19,029	2,820
Other		102,278	67,412
Total	$	263,259	166,579

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Income Taxes

12 Months Ended

Dec. 31, 2016

Income Taxes

Income Taxes

Note 14 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 are as follows:

	Years Ended December 31,
(in thousands)	2016		2015	2014
Current income tax expense:
Federal	$	140,079	139,228	126,203
State		9,218	9,255	5,161
Foreign		4,443	4,762	7,694
Total current income tax expense		153,740	153,245	139,058
Deferred income tax expense (benefit):
Federal		8,393	(2,198)	(3,623)
State		(65)	442	(2,039)
Foreign		(893)	(125)	(3,635)
Total deferred income tax expense (benefit)		7,435	(1,881)	(9,297)
Total income tax expense	$	161,175	151,364	129,761

	Years Ended December 31,
(in thousands)	2016		2015	2014
Components of income before income tax expense:
Domestic	$	454,763	488,515	369,888
Foreign		6,451	8,373	23,041
Total income before income tax expense	$	461,214	496,888	392,929

Income tax expense differs 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)	2016		2015	2014
Computed "expected" income tax expense	$	161,425	173,911	137,525
Increase (decrease) in income tax expense resulting from:
International tax rate differential and equity income		8,715	8,367	6,541
State income tax expense, net of federal income tax effect		9,127	7,101	4,823
Increase (decrease) in valuation allowance		2,855	(517)	(4,550)
Tax credits		(15,695)	(28,831)	(3,459)
Deduction for domestic production activities		(12,950)	(11,550)	(8,750)
Permanent differences and other, net		7,698	2,883	(2,369)
Total income tax expense	$	161,175	151,364	129,761

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, 2016 and 2015 relate to the following:

	As of December 31,
(in thousands)	2016		2015
Deferred income tax assets:
Net operating loss and income tax credit carryforwards	$	34,490	29,522
Allowances for doubtful accounts and billing adjustments		1,512	1,399
Deferred revenue		27,461	31,713
Share-based compensation		25,497	22,088
Foreign currency translation		4,019	-
Other, net		38,341	34,673
Total deferred income tax assets		131,320	119,395
Less valuation allowance for deferred income tax assets		(21,301)	(18,446)
Net deferred income tax assets		110,019	100,949
Deferred income tax liabilities:
Excess tax over financial statement depreciation		(63,432)	(61,161)
Computer software development costs		(80,837)	(82,835)
Purchase accounting adjustments		(344,547)	(114,171)
Foreign currency translation		-	(4,522)
Other, net		(33,700)	(24,462)
Total deferred income tax liabilities		(522,516)	(287,151)
Net deferred income tax liabilities	$	(412,497)	(186,202)
Total net deferred tax assets (liabilities):
Noncurrent deferred tax asset	$	7,055	6,242
Noncurrent deferred tax liability		(419,552)	(192,444)
Net deferred tax liability	$	(412,497)	(186,202)

As of December 31, 2016, TSYS had recognized deferred tax assets from net operating losses, capital losses and federal and state income tax credit carryforwards of $8.5 million, $0.4 million and $25.6 million, respectively. 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. Net deferred income tax liabilities were also adjusted for acquisition activities. Refer to Note 23 for more information on acquisitions.

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 $21.3 million and $18.4 million at December 31, 2016 and 2015, respectively. The increase in the valuation allowance for deferred income tax assets was $2.9 million for 2016. The increase relates to foreign tax credits 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 $81.1 million as of December 31, 2016.  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 2011 through 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, 2016, TSYS increased its liability for uncertain income tax positions by a net amount of approximately $3.4 million. 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, 2016
Beginning balance	$	13.1
Current activity:
Additions based on tax positions related to current year		3.4
Additions for tax positions of prior years		3.0
Decreases resulting from settlements with tax authorities		(3.0)
Net, current activity		3.4
Ending balance	$	16.5

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 $1.8 million and $0.7 million as of December 31, 2016 and December 31, 2015, respectively. The total amounts of unrecognized income tax benefits as of December 31, 2016 and December 31, 2015 that, if recognized, would affect the effective tax rates are $17.0 million and $13.2 million (net of the federal benefit on state tax issues), respectively, which includes interest and penalties of $1.2 million and $0.5 million, respectively.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 15 Commitments and Contingencies

LEASE AND PURCHASE COMMITMENTS:  TSYS is obligated under noncancelable operating leases for computer equipment, software and facilities. Additionally, the Company has long-term obligations which consist of required minimum future payments under contracts withthe Company’s distributors and other service providers.

The future minimum lease payments under noncancelable operating leases and purchase commitments with remaining terms greater than one year for the next five years and thereafter and in the aggregate as of December 31, 2016, are as follows:

(in thousands)
2017	$	129,120
2018		132,015
2019		132,242
2020		57,083
2021		21,035
Thereafter		34,644
Total future minimum commitment payments	$	506,139

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 2016, 2015 and 2014 was $122.9 million, $124.8 million and $105.2 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 amaterial 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 accruals 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. Legal costs are expensed as incurred. 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.

Korthals Matter

Central Payment Co., LLC (CPAY), a majority owned joint venture of the Company, has been named as a defendant in a purported class action complaint, Heidarpour v. Central Payment Co., LLC, Civil Action No. 4:15-cv-00139, filed August 18, 2015 in the United States District Court for the Middle District of Georgia, relating to the activities of Korthals, LLC (“Korthals”) and its sole shareholder, an independent sales agent of CPAY. The complaint alleges that CPAY retained Korthals to send unsolicited commercial pre-recorded messages to residential phone numbers in violation of the Telephone Consumer Protection Act (47 U.S.C. §§227 et seq.). The complaint seeks damages and injunctive relief among other remedies.

On December 20, 2016, the parties entered into a settlement agreement with regard to this matter.  Among other things, the settlement agreement requires CPAY to create a settlement fund of $6.5 million for a nationwide class of plaintiffs.  The settlement agreement was preliminarily approved by the United States District Court for the Middle District of Georgia on January 17, 2017, and a final approval hearing for the settlement is scheduled for May 4, 2017.

Federal Trade Commission (FTC) Matter

The Company has been in discussions with the FTC regarding an investigation by the FTC staff of certain marketing practices of NetSpend Corporation (NetSpend), a subsidiary of the Company. After lengthy discussions with staff and the FTC commissioners relating to whether the FTC should proceed with litigation and the potential for settlement, the FTC voted 2-1 to authorize the filing of a complaint, filed on November 10, 2016 in the U.S. District Court for the Northern District of Georgia, Federal Trade Commission v. NetSpend Corporation, Case No. 1:16-CV-4203. The complaint alleges that NetSpend violated Section 5 of the Federal Trade Commission Act as a result of certain marketing practices. NetSpend filed a motion to dismiss the complaint on December 14, 2016, arguing that the complaint failed to state a claim on which relief could be granted. As of December 31, 2016, the parties were engaged in active settlement discussions. While NetSpend believes that it has substantial defenses, it agreed to the structure of a potential settlement with FTC staff in early February 2017, in order to save costs and avoid the risks of on-going litigation. However, NetSpend also raised with the FTC the propriety of the suit being brought in the first instance and any settlement requires FTC approval followed by court approval. The timing of the FTC’s consideration of issues relating to NetSpend’s position and the potential settlement is uncertain. Should a settlement not be reached, the Company will vigorously defend the case. We are not in a position to estimate the chances of success.  The Company incurred a charge of $13.0 million to GAAP operating income in the fourth quarter of 2016 in connection with the settlement discussions.

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, LLP, 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 LLP 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 LLP 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, LLP 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, 2016. As of December 31, 2016, the Company’s estimated gross settlement exposure was $13.8 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 bankswill 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, 2016 and 2015, cardholders’ overdrawn account balances totaled $21.2 million and $17.9 million, respectively. As of December 31, 2016 and 2015, 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 $10.5 million and$9.4 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, 2016 and 2015, the Company had made contributions to the funds of $20.1 million and $15.0 million, respectively. The Company had investments, including gains, totaling $22.8 million and $17.6 million, respectively, as of December 31, 2016 and 2015. The Company recognized gains of $0.8 million, $4.0 million, and $0.8 million due to increases in fair value for the years ended December 31, 2016, 2015 and 2014, respectively.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

Note 16 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 2016 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, 2016, 2015 and 2014 are as follows:

(in thousands)	2016		2015	2014
TSYS Retirement Savings Plan	$	21,077	24,169	17,531
TSYS Stock Purchase Plan		1,514	1,378	1,288

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, 2016

Equity

Equity

Note 17 Equity

DIVIDENDS:  Dividends on common stock of $73.4 million were paid in 2016, compared to $73.7 million and $74.8 million in 2015 and 2014, respectively. 

EQUITY COMPENSATION PLANS:  The following table summarizes TSYS' equity compensation plans by category as of December 31, 2016:

	(a)	(b)		(c)
(in thousands, except per share data) Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted- average exercise price of outstanding options, warrants and rights		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	4,891	$ 32.78	2	6,962	1

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

¹ 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.

² Weighted-average exercise price represents 2.9 million options only and does not include restricted share units that have no exercise price.

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Share-Based Compensation

12 Months Ended

Dec. 31, 2016

Share-Based Compensation.

Share-Based Compensation

Note 18 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.

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 are settled in shares, or are exchanged with the Committee's permission, prior to the issuance of shares, forawards 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’ share-based compensation costs are expensed, rather than capitalized, as these awards are typically granted to individuals not involved in capitalizable activities. For the year ended December 31, 2016, share-based compensation was $43.7 million compared to $41.5 million and $30.8 million for the same periods in 2015 and 2014, 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 and vest over a period of up to four years. The grants to the Board of Directors were fully vested on the date of grant. The market value of the TSYS common stock at the date of issuance is charged as compensation expense over the vesting periods or derived service periods.

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

	2016		2015	2014
Number of shares granted		362,804	388,211	672,724
Market value (in millions)	$	16.8	14.9	20.6

A summary of the status of TSYS' nonvested shares as of December 31, 2016, 2015 and 2014 and the changes during the periods are presented below:

	2016			2015			2014
(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	1,146	$	31.11	1,769	$	26.75	1,783	$	24.19
Granted	363		46.23	388		38.38	673		30.67
Vested	(562)		29.95	(930)		26.05	(602)		23.74
Forfeited/canceled/adjusted	(84)		36.79	(81)		28.78	(85)		25.47
Outstanding at end of year	863	$	37.78	1,146	$	31.11	1,769	$	26.75

As of December 31, 2016, there was approximately $17.7 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 1.7 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 2016 and 2015, the Compensation Committee established performance goals based on adjusted EPS, Merchant Segment net revenue, corporate accountability operating income, attainment of synergies from the TransFirst acquisition, 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-based 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 over the derived service period. 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, the vesting period, or the derived service period. As of December 31, 2016, there was approximately $18.6 million of unrecognized compensation cost related to TSYS performance-based awards that is expected to be recognized through December 2018. As of December 31, 2016, there was approximately $1.9 million of unrecognized compensation cost related to TSYS market-based awards that is expected to be recognized through December 2018.

The following table summarizes the market-based awards granted during the years 2016 and 2015:

Year Awarded	Performance Period Ending	Performance Measure	Number of Shares Granted	Period Expensed Through
2016	December 2017	TSR	6,403	December 2017
2016	December 2018	TSR	52,404	December 2018
2015	July 2016, 2017 and 2018	TSR	25,000	July 2018
2015	December 2017	TSR	57,982	December 2017

The following table summarizes the performance-based awards granted during the years 2016, 2015 and 2014:

Year Awarded	Performance Period Ending	Performance Measure	Number of Shares Granted	Period Expensed Through
2016	December 2016	Revenues before Reimbursable Items and Adjusted EPS	15,605	December 2016
2016	December 2017	Adjusted EPS	14,940	December 2017
2016	December 2018	Merchant Segment Net Revenue, Corporate Accountability Operating Income and attainment of synergies from TransFirst acquisition	29,332	December 2018
2016	December 2018	Revenues before Reimbursable Items and Adjusted Operating Income	67,517	December 2018
2016	December 2018	Merchant Segment Net Revenue and Corporate Accountability Operating Income	78,220	December 2018
2016	December 2018	Adjusted EPS	122,284	December 2018
2016	December 2016	Revenues before Reimbursable Items and Adjusted EPS	144,995	December 2018
2015	December 2017	Adjusted EPS	135,289	December 2017
2015	December 2015	Revenues before Reimbursable Items and Adjusted EPS	165,543	December 2018
2014	December 2016	Revenues before Reimbursable Items and Adjusted EPS	211,593	December 2016

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

	Total Number of Shares Awarded1	Potential Number of Performance-and Market- Based Shares to be Vested2	Year Potential Performance-and Market- Based Shares Will Fully Vest
2016	531,700	903,364	2019
2015	383,814	687,015	2018
2014	211,593	389,242	2017

¹ Shares awarded does not include dividend equivalents

² Includes dividend equivalents

A summary of the status of TSYS' performance- and market-based nonvested shares as of December 31, 2016, 2015 and 2014 and changes during those periods are presented below:

	2016			2015			2014
(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	918	$	31.19	766	$	25.86	1,049	$	22.75
Granted	540		45.91	384		36.84	211		30.89
Vested	(140)		37.91	(241)		22.92	(258)		17.57
Forfeited/canceled/adjusted	(336)		37.70	9		22.20	(236)		25.62
Outstanding at end of year	982	$	33.43	918	$	31.19	766	$	25.86

Stock Option Awards

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.

During 2016, 2015 and 2014, 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 weighted average fair value of the options granted was estimated on the date of grant using the Black-Scholes-Merton option-pricing model.

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

	2016				2015			2014
Number of options granted		687,685			613,473			1,046,372
Weighted average exercise price	$	47.01		$	39.01		$	30.96
Risk-free interest rate		1.24	%		1.73	%		2.01	%
Expected volatility		21.53	%		20.80	%		25.06	%
Expected term (years)		4.5			6.3			6.5
Dividend yield		0.86	%		1.04	%		1.29	%
Weighted average fair value	$	8.50		$	8.27		$	7.66

A summary of TSYS' stock option activity as of December 31, 2016, 2015 and 2014, and changes during the years ended on those dates is presented below:

	2016			2015			2014
Options: (in thousands, except per share data)	Options	Weighted Average Exercise Price		Options	Weighted Average Exercise Price		Options	Weighted Average Exercise Price
Outstanding at beginning of year	2,887	$	28.07	4,892	$	23.83	5,752	$	20.96
Granted	688		47.01	613		39.01	1,046		30.96
Exercised	(500)		23.43	(2,586)		22.68	(1,850)		18.79
Forfeited/canceled	(79)		43.49	(32)		20.79	(56)		28.88
Outstanding at end of year	2,996	$	32.78	2,887	$	28.07	4,892	$	23.83
Options exercisable at year-end	1,877	$	28.45	1,439	$	25.17	2,781	$	22.86
Weighted average fair value of options granted during the year		$	8.50		$	8.27		$	7.66

As of December 31, 2016 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)		7.3	6.6
Aggregate intrinsic value (in thousands)	$	49,323	39,066

Shares Issued for Options Exercised

During 2016, 2015 and 2014, 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
2016	500	$	12,984
2015	2,586		67,702
2014	1,850		22,883

For awards granted before January 1, 2006 that were not fully vested on January 1, 2006, the Company recorded 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 recognized tax benefits, the Company recorded 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 elected to use the short-cut method to calculate its historical pool of windfall tax benefits.

As of December 31, 2016, there was approximately $2.7 million of total unrecognized compensation cost related to TSYS stock options that is expected to be recognized over a remaining weighted average period of 1.6 years.

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Treasury Stock

12 Months Ended

Dec. 31, 2016

Treasury Stock.

Treasury Stock

Note 19 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
2016	19,314	$	646,047
2015	19,988		641,664
2014	17,836		453,230

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. In January 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.

The table below summarizes these repurchases by year:

(in thousands, except per share data)	Total Number of Shares Purchased	Average Price Paid per Share		Repurchased Shares Cost
2016	500	$	48.57	$	24,287
2015	5,150		47.01		242,085
2014	5,200		31.79		165,297

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, 2016:

(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 2016	-		$	-	5,150	14,850
November 2016	200			49.29	5,350	14,650
December 2016	312	1		48.13	5,650	14,350
Total	512		$	48.59

¹ Includes 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 2016 and 2015, the Company acquired 144,839 shares for approximately $6.0 million and acquired 3,344 shares for approximately $0.2 million, respectively, as a result of share withholding for taxes.

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Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2016

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

Note 20 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, 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 noncontrolling interest (NCI)		28	-	-		-		28
Loss 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)
Foreign currency translation adjustments	$	(35,041)	(36,341)	(5,872)	$	(30,469)	$	(65,510)
Transfer from NCI		28	-	-		-		28
Gain on available for sale securities		2,503	11,394	4,035		7,359		9,862
Change in AOCI related to postretirement healthcare plans		(1,034)	775	279		496		(538)
As of December 31, 2016	$	(33,544)	(24,172)	(1,558)	$	(22,614)	$	(56,158)

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, 2016

Segment Reporting, including Geographic Area Data and Major Customers

Segment Reporting, including Geographic Area Data and Major Customers

Note 21 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 April 2016, TSYS completed its acquisition of TransFirst which is part of the Merchant Services segment and its results are included in the following tables. Refer to Note 23 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 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. The information utilized by the CODM consists of the financial statements and the main metrics monitored are revenue growth and growth in profitability.

TSYS’ operating segments share certain resources, such as information technology support, that TSYS allocates asymmetrically.

Operating Segments	Years Ended December 31,
(in thousands)		2016	2015	2014
Operating income (GAAP) (a)	$	573,382	534,107	431,640
Share-based compensation		43,728	41,549	30,790
TransFirst and Netspend M&A and integration expenses1		28,176	-	3,217
Litigation, claims, judgments or settlements		21,719	-	-
Acquisition intangible amortization		189,990	92,521	96,970
Adjusted operating income (non-GAAP) (b)	$	856,995	668,177	562,617
Adjusted operating income by segment (non-GAAP):
North America Services (c)	$	468,251	429,064	351,512
International Services (d)		56,774	60,087	55,123
Merchant Services (e)		307,595	150,225	134,872
Netspend (f)		160,371	137,837	128,285
Corporate Administration and Other		(135,996)	(109,036)	(107,175)
Adjusted segment operating income2 (non-GAAP)	$	856,995	668,177	562,617
Total revenues (GAAP) (g)	$	4,170,077	2,779,541	2,446,877
Less: reimbursable items		259,543	280,192	253,899
Revenue before reimbursable items		3,910,534	2,499,349	2,192,978
Intersegment revenues		39,880	33,481	21,224
Segment revenue before reimbursable items (non-GAAP)	$	3,950,414	2,532,830	2,214,202
Segment revenue before reimbursable items (non-GAAP):
North America Services	$	1,206,013	1,147,254	954,082
International Services		313,631	331,159	341,785
Merchant Services		1,767,191	474,040	435,649
Netspend		663,579	580,377	482,686
Segment revenue before reimbursable items (non-GAAP)	$	3,950,414	2,532,830	2,214,202
Total revenues (GAAP) (g)	$	4,170,077	2,779,541	2,446,877
Less: reimbursable items		259,543	280,192	253,899
Revenue before reimbursable items		3,910,534	2,499,349	2,192,978
Less: interchange and assessments expenses		868,658	-	-
Net revenue2 (non-GAAP) (h)		3,041,876	2,499,349	2,192,978
Intersegment revenues		39,880	33,481	21,224
Segment net revenue (non-GAAP)	$	3,081,756	2,532,830	2,214,202
Segment net revenue (non-GAAP):
North America Services (i)	$	1,206,013	1,147,254	954,082
International Services (j)		313,631	331,159	341,785
Merchant Services (k)		898,533	474,040	435,649
Netspend (l)		663,579	580,377	482,686
Segment net revenue (non-GAAP)	$	3,081,756	2,532,830	2,214,202
Segment external net revenue (non-GAAP):
North America Services	$	1,174,304	1,118,332	936,957
International Services		308,552	326,834	338,126
Merchant Services		898,175	473,806	435,209
Netspend		660,845	580,377	482,686
Segment external net revenue (non-GAAP)	$	3,041,876	2,499,349	2,192,978
Operating margin (GAAP) (a)/(g)		13.8%	19.2%	17.6%
Adjusted operating margin on net revenue (non-GAAP) (b)/(h)		28.2%	26.7%	25.7%
Adjusted segment operating margin on net revenue (non-GAAP):
North America Services (c)/(i)		38.8%	37.4%	36.8%
International Services (d)/(j)		18.1%	18.1%	16.1%
Merchant Services (e)/(k)		34.2%	31.7%	31.0%
Netspend (f)/(l)		24.2%	23.7%	26.6%

¹ Excludes share-based compensation

² Net revenue and adjusted segment operating income are non-GAAP measures. Net revenue is total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment networks that are recorded by TSYS as expense.  Adjusted segment operating income excludes acquisition intangible amortization, TransFirst M&A expenses, share-based compensation and expenses associated with Corporate Administration and Other.

The following table presents the Company’s depreciation expense by segment:

Operating Segments	Years Ended December 31,
(in thousands)		2016	2015	2014
Depreciation and amortization:
North America Services	$	110,343	99,544	86,513
International Services		30,966	34,892	38,909
Merchant Services		25,553	18,268	14,571
Netspend		13,133	10,686	7,509
Segment depreciation and amortization		179,995	163,390	147,502
Acquisition intangible amortization		189,990	92,521	96,970
Corporate Administration and Other		3,561	2,353	2,148
Total depreciation and amortization	$	373,546	258,264	246,620

The following table presents the Company’s total assets by segment:

	As of December 31,
(in thousands)	2016		2015
North America Services	$	5,595,747	3,485,924
Merchant Services		3,295,509	689,781
Netspend		1,474,595	1,504,740
International Services		296,663	348,714
Intersegment assets		(4,296,337)	(2,151,264)
Total assets	$	6,366,177	3,877,895

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

	As of December 31,
(in thousands)	2016		2015
United States	$	236,913	241,814
Europe		38,866	41,953
Other		6,566	6,131
Total	$	282,345	289,898

The following tables reconcile geographic revenues to external revenues by operating segment based on the domicile of the Company’s customers for the years ended December 31:

	2016
(in thousands)	North America Services		International Services	Merchant Services	Netspend	Total		Percentage of Revenues
United States	$	1,032,381	-	1,826,775	660,845	$	3,520,001	84.4	%
Europe1		788	306,106	227	-		307,121	7.4
Canada1		284,005	23	705	-		284,733	6.8
Mexico		14,887	447	-	-		15,334	0.4
Other1		17,804	24,322	762	-		42,888	1.0
Total	$	1,349,865	330,898	1,828,469	660,845	$	4,170,077	100.0	%

	2015
(in thousands)	North America Services		International Services	Merchant Services	Netspend	Total		Percentage of Revenues
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		Percentage of Revenues
United States	$	778,766	-	508,747	482,686	$	1,770,199	72.3	%
Europe1		781	304,308	-	-		305,089	12.5
Canada1		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	%

¹ Revenues are impacted by movements in foreign currency exchange rates

MAJOR CUSTOMER:  For the years ended December 31, 2016, 2015 and 2014, the Company had no major customers.

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Supplementary Cash Flow Information

12 Months Ended

Dec. 31, 2016

Supplemental Cash Flow Elements [Abstract]

Supplementary Cash Flow Information

Note 22 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 Acquired Under Capital Lease Obligations and Software Acquired Under License Agreements

The Company acquired computer equipment under capital leases and software under license agreements in the amount of $1.8 million, $4.1 million and $17.9 million in 2016, 2015 and 2014, respectively.

Software Acquired Under Direct Financing

The Company did not acquire any software under direct financing in 2016. The Company acquired software under direct financing in the amount of $30.0 million and $13.6 million in 2015 and 2014, respectively. Refer to Note 12 for more information.

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Acquisitions

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

Acquisitions

Note 23 Acquisitions

TransFirst

2016

On April 1, 2016, the Company acquired all of the outstanding capital stock of TransFirst for an aggregate purchase price of $2.35 billion in cash as of the closing, which was subject to certain working capital and other adjustments, as described in the Purchase Agreement. TransFirst previously operated as a privately held company, under the ownership of Vista Equity Partners. The results of the newly acquired business are being reported by TSYS as part of the Merchant Services segment.

The Company funded the cash consideration and the payment of transaction related expenses through a combination of cash-on-hand and proceeds from debt financings, including proceeds drawn under the Company’s 2016 Credit Agreement and the proceeds from the issuance of the 2016 Notes, which together included proceeds of approximately $2.35 billion.

The goodwill amount of $1.7 billion arising from the acquisition is primarily attributable to the expansion of the Merchant Services Segment’s customer base, differentiated distribution channels and economies of scale expected from combining the operations of TSYS and TransFirst. All of the goodwill was assigned to TSYS’ Merchant Services segment. The goodwill recognized is not expected to be deductible for income tax purposes.

The following table summarizes the consideration paid for TransFirst and the preliminary recognized amounts of the identifiable assets acquired and liabilities assumed on April 1, 2016 (the acquisition date) as of December 31, 2016.

(in thousands)
Consideration
Cash	$	2,351,400
Fair value of total consideration transferred	$	2,351,400
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	5,907
Accounts receivable, net		62,313
Property, equipment and software		12,726
Identifiable intangible assets		814,131
Deferred tax asset		2,244
Other assets		7,509
Deferred tax liability		(224,654)
Other liabilities		(56,864)
Total identifiable net assets		623,312
Goodwill		1,728,088
Total identifiable assets acquired and liabilities assumed	$	2,351,400

During 2016, there was a $55,000 increase in the purchase price due to the working capital adjustment required by the Purchase Agreement. In addition, there was a $2.0 million decrease in identifiable intangible assets, a $363,700 increase in  liabilities and an $18.0 million increase in deferred tax liabilities that resulted in a net increase to goodwill of $20.4 million. The measurement period during which changes in assets, liabilities, equity interests, or items of consideration are subject to adjustment ends up to one year following the acquisition date.

Identifiable intangible assets acquired in the TransFirst acquisition include merchant relationships, channel partners, current technology, the TransFirst trade name, non-compete agreements and a favorable lease. The identifiable intangible assets had no significant estimated residual value. These intangible assets are being amortized over their estimated useful lives of one to ten 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 $814.1 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 acquisition and the related estimated weighted average useful lives are as follows:

(inmillions)		Fair Value	Weighted Average Useful Life (in years)
Merchant relationships	$	588.0	7.0
Channel partners		121.0	10.0
Current technology		72.0	5.0
Trade name		16.0	1.0
Covenants not-to-compete		15.0	3.0
Favorable lease		2.1	5.6
Total acquired identifiable intangible assets	$	814.1	7.1

The fair value measurement of the identifiable intangible assets represents Level 2 and Level 3 measurements as defined by GAAP. Key assumptions include (a) cash flow projections based on market participant and internal data, (b) a discount rate of 8.5%, (c) a pre-tax royalty rate range of 1%- 3%, (d) attrition rates of 11%-    16%, (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 $32.3 million in acquisition related costs primarily related to professional, legal and accounting costs, and integration expenses which are recorded in selling, general and administrative expenses and $9.8 million related to the bridge term loan facility, which is included in interest expense. These costs are expensed as incurred and are included on the income statement for the twelve months ended December 31, 2016. The Company recorded $1.3 billion of revenue and $30.0 million of operating income since the acquisition date that is included in the consolidated results through the twelve months ended December 31, 2016 as a result of the TransFirst acquisition.

Pro Forma Results of Operations

The following unaudited pro forma information shows the results of operations for the twelve months ended December 31, 2016 and December 31, 2015 as if the acquisition of TransFirst had occurred on January 1, 2015. The unaudited pro forma information reflects certain pro forma adjustments to the combined historical financial information of TSYS and TransFirst. The pro forma adjustments include incremental amortization and depreciation expense, incremental interest expense associated with new long-term debt, a reduction of revenues and operating expenses associated with contracts existing between the companies and the elimination of nonrecurring transaction costs directly related to the acquisition.

	Actual			Supplemental pro forma
	Years Ended December 31,			Years Ended December 31,
	2016		2015	2016	2015
(in thousands, except per share data)
Revenue	$	4,170,077	2,779,541	4,562,236	3,230,703
Net income attributable to TSYS common shareholders	$	319,638	364,044	347,248	317,549
Basic EPS attributable to TSYS common shareholders	$	1.74	1.98	1.89	1.73
Diluted EPS attributable to TSYS common shareholders	$	1.73	1.97	1.88	1.72

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 TransFirst’s operations had occurred prior to January 1, 2015, 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 transaction 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 TransFirst into TSYS.

EMEA

2016

In March 2016, the Company completed the acquisition of the remaining 45% interest in TSYS Managed Services EMEA Limited (EMEA) from Merchants Limited. The Company acquired the outstanding stock from Merchants Limited for approximately £4.2 million, or $5.9 million, in cash. In connection with the purchase, the Company repaid the outstanding balance of the existing debt between EMEA and Merchants Limited of approximately £2.2 million, or $3.0 million.

Netspend

2016

In 2016, TSYS adjusted the goodwill associated with the Netspend acquisition by $584,000 as a result of adjustments to the deferred tax assets acquired in the transaction.

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.

In 2015, the Company adjusted goodwill for Netspend to include an additional $627,000 for a change in deferred taxes associated with the acquisition. For more information, refer to Note 6.

2014

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. In 2014, the Company increased goodwill for Netspend by $8.5 million due to changes during the measurement period.

Redeemable Noncontrolling Interest

The fair value of the noncontrolling interest in CPAY, owned by CPC Holding Company, LLC, a California limited liability 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 was not redeemable on December 31, 2016, but redemption was 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, 2016, the redemption value was estimated to be approximately $27.4 million. The Company did not accrete any changes to the redemption value as the balance as of December 31, 2016 exceeded the accretion fair value amount.

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Collaborative Arrangement

12 Months Ended

Dec. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Collaborative Arrangement

Note 24 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.

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Earnings Per Share

12 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Earnings Per Share

Note 25 Earnings Per Share

The following table illustrates basic and diluted EPS under the guidance of GAAP for the years ended December 31, 2016, 2015 and 2014:

	2016		2015		2014
(in thousands, except per share data)	Common Stock		Common Stock		Common Stock
Basic EPS:
Net income attributable to TSYS common shareholders	$	319,638	$	364,044	$	322,872
Less income allocated to nonvested awards		(1,557)		(3,164)		(3,308)
Net income allocated to common stock for  EPS calculation(a)		318,081	$	360,880	$	319,564
Average common shares outstanding(b)		182,744		182,465		184,297
Basic EPS(a)/(b)	$	1.74	$	1.98	$	1.73
Diluted EPS:
Net income attributable to TSYS common shareholders	$	319,638	$	364,044	$	322,872
Less income allocated to nonvested awards		(1,557)		(3,148)		(3,288)
Add income allocated to nonvested awards1		1,557		-		-
Net income allocated to common stock for  EPS calculation(c)	$	319,638	$	360,896	$	319,584
Average common shares outstanding		182,744		182,465		184,297
Increase due to assumed issuance of shares related to common equivalent shares outstanding		813		1,157		1,459
Average nonvested awards1		891		-		-
Average common and common equivalent shares outstanding(d)		184,448		183,622		185,756
Diluted EPS(c)/(d)	$	1.73	$	1.97	$	1.72
	2016		2015		2014
(in thousands, except per share data)	Participating Securities		Participating Securities		Participating Securities
Basic EPS:
Net income allocated to nonvested awards(a)	$	1,557		3,164		3,308
Nonvested awards(b)		911		1,617		1,925
Basic EPS(a)/(b)	$	1.71		1.96		1.72
Diluted EPS:
Net income allocated to nonvested awards(c)	$	1,552		3,148		3,288
Average common and common equivalent shares outstanding(d)		911		1,617		1,925
Diluted EPS(c)/(d)	$	1.70		1.95		1.71

¹ In accordance with the diluted EPS guidance under the two-class method, the Company uses the approach – either the treasury stock method or the two-class method assuming a participating security is not exercised- that is more dilutive. In 2016, the Company used the two-class method. In 2015 and 2014, the Company used the treasury stock method.

The diluted EPS calculation excludes stock options and nonvested awards that are exercisable into 0.4 million, 0.6 million and 1.1 million common shares for the years ended December 31, 2016, 2015 and 2014, respectively, because their inclusion would have been anti-dilutive.

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Subsequent Events

12 Months Ended

Dec. 31, 2016

Subsequent Events [Abstract]

Subsequent Events

Note 26 Subsequent Events

On February 3, 2017, the Company acquired an additional 10% equity interest in CPAY from a privately-owned company for $70.0 million. This purchase reduced the remaining redeemable noncontrolling interest in CPAY to 15% of its total outstanding equity and extended the put call arrangement until April 2018.

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 events requiring disclosure.

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Schedule II Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2016

Valuation and Qualifying Accounts [Abstract]

Schedule II Valuation and Qualifying Accounts

Schedule II

Schedule — Valuation and Qualifying Accounts

TOTAL SYSTEM SERVICES, INC.

Schedule II

Valuation and Qualifying Accounts

(in thousands)

			Additions
			Changes in
	Balance at		allowances, charges to				Balance at
	beginning		expenses and changes				end
	of period		to other accounts		Deductions		of period
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 fraud losses	$	5,784	38,381	(4)	(37,853)	(3)	$	6,312
Deferred tax valuation allowance	$	14,691	5,534	(5)	(1,262)	(6)	$	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 fraud losses	$	6,312	41,264	(4)	(38,185)	(3)	$	9,391
Deferred tax valuation allowance	$	18,963	541	(5)	(1,058)	(6)	$	18,446
Year ended December 31, 2016:
Provision for doubtful accounts	$	1,757	6,970	(1)	(5,245)	(3)	$	3,482
Provision for billing adjustments	$	926	614	(1)	(180)	(3)	$	1,360
Provision for merchant losses	$	1,366	1,682	(1)	(1,009)	(3)	$	2,039
Transaction processing provisions - processing errors	$	6,457	3,669	(2)	(7,275)	(3)	$	2,851
Provision for fraud losses	$	9,391	49,362	(4)	(48,226)	(3)	$	10,527
Deferred tax valuation allowance	$	18,446	4,124	(5)	(1,269)	(6)	$	21,301

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

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

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 (Policies)

12 Months Ended

Dec. 31, 2016

Basis of Presentation and Summary of Significant Accounting Policies

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 the cost approach, 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 may result in an impairment or a new allocation of purchase price.

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 and billing adjustments.

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.

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. In evaluating software development costs for recoverability, expected cash flows are estimated by management should events indicate a loss may have been triggered. The Company evaluates the unamortized capitalized costs of software development, the impairment of which is determined by expected undiscounted future operating cash flows of the software as compared to the carrying amount of the software product. The amount by which the unamortized software development costs exceed the lower of the carrying amount or fair 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. 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.

In evaluating contract acquisition costs for recoverability, expected cash flows are estimated by management should events indicate a loss may have been triggered. 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, 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 METHOD INVESTMENTS

EQUITY METHOD 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, México, 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 $46.1 million as of December 31, 2016.

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 method investments are accounted for using the equity method of accounting and pertain to privately held companies. The Company believes the fair values of its investments in equity method 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, 2016, the Company had transaction processing provisions of $2.9 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 $10.5 million as of December 31, 2016. The charges to provisions for cardholder losses are included in cost of services in the Consolidated Statements of Income and other current liabilities in the Consolidated Balance Sheets. 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 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, 2016, the Company had a merchant loss provision in the amount of $2.0 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 and electronic benefits transfer 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.

With the acquisition of TransFirst Holdings Corp. (TransFirst) on April 1, 2016, TSYS included TransFirst’s results as part of the Merchant Services segment. TransFirst’s revenues are reported gross, which includes amounts paid for interchange and assessments, as TransFirst is the principal in the contractual relationship with its customers. Expenses covering interchange and assessment fees are included in TransFirst’s cost of services and are directly attributable to processing fee revenues and are recognized in the same period as the related revenue.

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, 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 during the years ended December 31, 2016, 2015 and 2014 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.

INTERCHANGE AND ASSESSMENTS

INTERCHANGE AND ASSESSMENTS:  Interchange and assessment fees are charged by the card associations or payment networks.Depending upon the transaction type, the fees are a percentage of the transaction’s dollar value, a fixed amount, or a combination of the two methods.

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% for executive level employees and up to 8% for other employees.

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 specified 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 2016, 2015 and 2014 was $11.5 million, $9.6 million and $5.7 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 carryforwards. 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. In March 2016, the Company acquired the remaining interest in EMEA. Refer to Note 23 for more information on acquisitions.

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 2015 and 2014 financial statements to conform to the presentation adopted in 2016. The most significant changes include the reclass of debt issuance costs from assets to contra-liability accounts offsetting the associated debt and the reclassification of deferred income tax assets and liabilities from current to noncurrent in connection with the adoption of new accounting standards.

Recent Revenue Recognition Accounting Pronouncements

Recently Adopted Accounting Pronouncements

The Company adopted the following Accounting Standards Updates (ASUs) on January 1, 2016:

ASU 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” 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 Company early adopted this ASU resulting in $24.7 million of current net deferred tax assets as of December 31, 2015 being moved to noncurrent. The guidance was applied retrospectively. The adoption of this ASU did not have a material impact on the Company’s results of operations or cash flows.

ASU 2015-16 “Business Combinations (Topic 805): Simplifying the Accounting for Measurement Period Adjustments” 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 adoption of this ASU did not have a material impact on the Company’s financial position, results of operations or cash flows. 

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” and  ASU 2015-03 “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” 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, and allow entities to defer and present debt issuance costs associated with a line-of-credit as an asset and subsequently amortize deferred debt issuance costs ratably over the term of a line-of-credit arrangement. The guidance was applied retrospectively. The adoption of this guidance resulted in $6.4 million of debt issuance costs as of December 31, 2015 being moved from noncurrent assets on the Company’s balance sheet to liabilities that offset both the current and noncurrent portions of the debt which these costs are associated as of December 31, 2016. The Company continues to include debt issuance costs associated with a line-of-credit in its noncurrent assets. The adoption of this guidance did not have a material impact on the Company’s results of operations or cash flows.

ASU 2015-05 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” provides guidance about whether a cloud computing arrangement includes a software license or a service agreement. The Company adopted this ASU on a prospective basis. The adoption of this ASU did not have a material impact on the Company’s financial position, results of operations or cash flows.

ASU 2015-01 “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items” eliminates from GAAP the concept of extraordinary items. The adoption of this ASU did not have a material impact on the financial position, results of operations or cash flows of the Company.

Recent Accounting Pronouncements

In December 2016, the FASB issued ASU 2016-19 “Technical Corrections,” which represent changes to clarify, correct errors or make minor improvements to the ASC. Most of the amendments in this Update do not require transition guidance and are effective upon issuance of this Update. Six amendments in this Update clarify guidance or correct references in the ASC that could potentially result in changes in current practice because of either misapplication or misunderstanding of current guidance. Early adoption is permitted for the amendments that require transition guidance. The Company will be impacted by the amendment to Subtopic 350-40, Intangibles - Goodwill and Other - Internal-Use Software, which adds a reference to guidance to use when accounting for internal-use software licensed from third parties that is within the scope of Subtopic 350-40. The transition guidance for that amendment is the same as the transition guidance in ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” to which the amendment relates. 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 November 2016, the FASB issued ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash,” which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The ASU is effective for the Company on January 1, 2018. 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 March 2016, the FASB issued ASU 2016-09 “Improvements to Employee Share‑Based Payment Accounting,” which simplifies several aspects of the accounting for employee share‑based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The adoption of this ASU will result in excess tax benefits and deficiencies associated with share-based payments being recorded on the income statement at the time they are deducted on the income tax return instead of being recorded in additional paid-in capital. The excess tax benefits are recorded along with other income tax cash flows as an operating activity in the statement of cash flows. The Company will adopt this ASU on January 1, 2017. The Company has reviewed this standard, noting adoption of the standard will result in a benefit to the income tax provision and an immaterial dilutive effect on diluted EPS.

In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” ASU 2016-02 introduces a lessee model that brings most leases on the balance sheet and aligns many of the underlying principles of the new lessor model with those in the FASB’s new revenue recognition standard. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than twelve months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The new guidance will be effective for the Company on January 1, 2019 with early adoption permitted. The Company expects to adopt the new standard on its effective date.The Company expects the standard will have a material effect on the its financial statements.  At December 31, 2016, the Company had approximately $472.8 million of operating leases that would be recorded on the balance sheet if the standard was already effective. The Company has not determined the remaining effect on its ongoing financial reporting for adoption of this ASU. The Company expects to elect all of the available practical expedients on adoption.

Recent Revenue Recognition Accounting Pronouncements

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 FASB has issued several additional ASUs since this time that add additional clarification to certain issues existing after the original ASU was released. All of the new standards are effective for the Company on January 1, 2018, with early adoption permitted no sooner than January 1, 2017. The standards permit the use of either the retrospective or cumulative effect transition method. The Company has not determined the effect on its ongoing financial reporting for adoption of these ASUs.

The Company is reviewing the requirements of the new revenue standard, and amendments described below, while following activities of the FASB and the American Institute of Certified Public Accountants (AICPA) for certain interpretive guidance applicable to IT outsourcers and payment processors. The Company is evaluating customer contracts under the new standard for each type of significant revenue stream (and related costs) identified to evaluate differences from current accounting. TSYS plans to adopt ASU 2014-09, as well as all other clarifications and technical guidance issued by the FASB and AICPA related to this new revenue standard, on January 1, 2018 using the modified retrospective transition method. Such adoption method may result in an adjustment to the opening balance of retained earnings (or other appropriate components of net assets in the statement of financial position) for the cumulative effect, if any, of applying the standard to contracts that are not completed on January 1, 2018. Under the modified retrospective transition method, the Company is required to disclose the impact of changes to financial statement line items due to the application of the new revenue standard, including an explanation of the reasons for any significant changes.

The new standard could change the amount and timing of revenue and costs for certain significant revenue streams, increase areas of judgment and related internal controls requirements, change the presentation of revenue for certain contract arrangements and possibly require changes to the Company’s software systems to assist in both internally capturing accounting differences and externally reporting such differences through enhanced disclosure requirements.

In March 2016, the FASB issued ASU 2016-08 “Revenue from Contracts with Customers (Topic  606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),"  which improves the operability and understandability of the implementation guidance on principal versus agent considerations by providing indicators as to which party controls the good or service provided to a customer (the principal).

In April 2016, the FASB issued ASU 2016-10 “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” which clarifies two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas.

In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients,” which affects only the following narrow aspects of Topic 606: Assessing the Collectability Criterion; Presentation of Sales and Other Taxes Collected from Customers; Noncash Consideration; Contract Modification at Transition; Completed Contracts at Transition; and Technical Correction.

In December 2016, the FASB issued ASU 2016-20 “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” which affects only the following narrow aspects of Topic 606: Disclosure of Remaining Performance Obligations as it relates to entities such as processors which may not be required to estimate revenue under ASU 2014-09 due to direct allocation of variable consideration; Disclosure of Prior - Period Performance Obligations; Loan Guarantee Fees; Contract Costs - Impairment Testing; Contract Costs - Interaction of Impairment Testing with Guidance in Other Topics; Provisions for Losses on Construction - Type and Production Type Contracts; Contracts within the scope of Topic 944 (insurance)are excluded from the scope of Topic 606; Contract Modifications; Contract Asset versus Receivable; Refund Liability; Advertising Costs; Fixed - Odds Wagering Contracts in the Casino Industry.

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Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Financial Results for Discontinued Operations

(in thousands)	2015		2014
Total revenues	$	-	16,376
Income before taxes	$	-	1
Income tax benefit	$	-	(39)
Income from operating activities of discontinued operations, net of tax	$	-	40
Gain on dispositions, net of tax	$	1,411	48,615
Income from discontinued operations, net of tax	$	1,411	48,655
Income from discontinued operations, net of tax, attributable to noncontrolling interest	$	-	999
Income from discontinued operations, net of tax, attributable to TSYS common shareholders	$	1,411	47,656

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Cash and Cash Equivalents (Tables)

12 Months Ended

Dec. 31, 2016

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalent Balances

(in thousands)	2016		2015
Cash and cash equivalents in domestic accounts	$	375,122	307,578
Cash and cash equivalents in foreign accounts		50,232	81,750
Total	$	425,354	389,328

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Prepaid Expenses and Other Current Assets (Tables)

12 Months Ended

Dec. 31, 2016

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Significant Components of Prepaid Expenses and Other Current Assets

(in thousands)	2016		2015
Prepaid expenses	$	84,173	37,961
Supplies inventory		17,105	15,114
Income taxes receivable		-	51,322
Other		63,210	49,802
Total	$	164,488	154,199

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Goodwill (Tables)

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Gross Amount and Accumulated Impairment Loss of Goodwill

	2016
(in thousands)	North America Services		International Services	Merchant Services	Netspend	Consolidated
Gross amount	$	70,796	25,937	2,144,061	1,034,170	$	3,274,964
Accumulated impairment losses		(182)	(1,605)	(2,225)	-		(4,012)
Goodwill, net	$	70,614	24,332	2,141,836	1,034,170	$	3,270,952

	2015
	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

Changes in Carrying Amount of Goodwill

(in thousands)	North America Services		International Services		Merchant Services		Netspend		Consolidated
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
Netspend tax adjustment		-		-		-		584		584
TransFirst acquisition		-		-		1,728,088		-		1,728,088
Currency translation adjustments		-		(3,144)		-		-		(3,144)
Balance as of December 31, 2016	$	70,614		24,332		2,141,836		1,034,170	$	3,270,952

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Other Intangible Assets, Net (Tables) - Other intangible assets

12 Months Ended

Dec. 31, 2016

Significant Components of Contract Acquisition Costs, Net of Accumulated Amortization

	2016
(in thousands)	Gross		Accumulated Amortization	Net
Merchant relationships	$	588,000	(63,000)	$	525,000
Channel relationships		439,600	(148,815)		290,785
Customer relationships		166,340	(122,465)		43,875
Trade name		62,397	(45,197)		17,200
Covenants-not-to-compete		29,940	(13,869)		16,071
Database		28,000	(19,600)		8,400
Trade association		10,000	(6,750)		3,250
Favorable lease		3,006	(911)		2,095
Total	$	1,327,283	(420,607)	$	906,676

	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
Covenants-not-to-compete		14,940	(7,834)		7,106
Database		28,000	(14,000)		14,000
Trade association		10,000	(5,750)		4,250
Favorable lease		875	(445)		430
Total	$	585,416	(257,096)	$	328,320

Weighted Average Useful Life

The weighted average useful life for each component of other intangible assets, and in total, as of December 31, 2016 is as follows:

	WeightedAverage Amortization Period (Yrs)
Merchant relationships	7.0
Channel relationships	8.6
Customer relationships	8.2
Trade name	3.9
Covenants-not-to-compete	4.1
Database	5.0
Trade association	10.0
Favorable lease	5.4
Total	7.4

Estimated Future Amortization Expense

(in thousands)
2017	$	180,304
2018		161,647
2019		145,601
2020		140,193
2021		119,617

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Computer Software, Net (Tables)

12 Months Ended

Dec. 31, 2016

Amortization Expense Related to Computer Software

(in thousands)	2016		2015	2014
Amortization expense related to:
Licensed computer software	$	45,655	41,823	36,775
Software development costs		26,478	22,740	25,248
Acquisition technology intangibles		26,217	16,734	19,683

Computer Software, Intangible Asset

Significant Components of Contract Acquisition Costs, Net of Accumulated Amortization

(in thousands)	2016		2015
Licensed computer software	$	513,790	513,443
Software development costs		428,581	404,238
Acquisition technology intangibles		238,211	167,971
Total computer software		1,180,582	1,085,652
Less accumulated amortization:
Licensed computer software		315,591	282,563
Software development costs		307,190	287,863
Acquisition technology intangibles		134,613	110,156
Total accumulated amortization		757,394	680,582
Computer software, net	$	423,188	405,070

Weighted Average Useful Life

	Weighted Average Amortization Period (Yrs)
Licensed computer software		5.8
Software development costs		6.1
Acquisition technology intangibles		6.2
Total		6.0

Estimated Future Amortization Expense

(in thousands)	Licensed Computer Software		Software Development Costs	Acquisition Technology Intangibles
2017	$	42,937	23,777	28,268
2018		34,142	18,225	25,793
2019		21,071	13,414	25,793
2020		17,010	9,646	20,134
2021		9,293	6,787	3,600

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Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2016

Computer Software, Intangible Asset

Asset Under Capital Lease

(in thousands)	2016		2015
Licensed computer software	$	23,665	18,206
Accumulated amortization		(14,634)	(8,175)
Licensed computer software, net	$	9,031	10,031

Property, Plant and Equipment

Asset Under Capital Lease

(in thousands)	2016		2015
Computer and other equipment	$	51,702	55,450
Furniture and other equipment		5,412	5,374
Total equipment		57,114	60,824
Less accumulated depreciation:
Computer and other equipment		(39,060)	(36,134)
Furniture and other equipment		(3,788)	(2,731)
Total accumulated depreciation		(42,848)	(38,865)
Total equipment, net	$	14,266	21,959

Property and Equipment Balances

(in thousands)	2016		2015
Computer and other equipment	$	356,358	346,387
Buildings and improvements		246,577	244,938
Furniture and other equipment		141,836	138,727
Land		15,877	16,577
Other		2,387	597
Total property and equipment		763,035	747,226
Less accumulated depreciation and amortization		480,690	457,328
Property and equipment, net	$	282,345	289,898

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Contract Acquisition Costs, Net (Tables)

12 Months Ended

Dec. 31, 2016

Amortization Expense Related to Computer Software

(in thousands)	2016		2015	2014
Amortization expense related to:
Licensed computer software	$	45,655	41,823	36,775
Software development costs		26,478	22,740	25,248
Acquisition technology intangibles		26,217	16,734	19,683

Contract Acquisition Costs

Significant Components of Contract Acquisition Costs, Net of Accumulated Amortization

(in thousands)	2016		2015
Conversion costs, net of accumulated amortization of $164.4 million and $150.0 million as of 2016 and 2015, respectively	$	144,173	159,000
Payments for processing rights, net of accumulated amortization of $145.3 million and $137.9 million as of 2016 and 2015, respectively		91,527	88,811
Total	$	235,700	247,811

Amortization Expense Related to Computer Software

(in thousands)	2016		2015	2014
Amortization expense related to:
Conversion costs	$	28,811	27,392	17,816
Payments for processing rights		19,804	17,039	16,209

Weighted Average Useful Life

	Weighted Average Amortization Period (Yrs)
Conversion costs	12.9
Payments for processing rights	15.6
Total	14.1

Estimated Future Amortization Expense

(in thousands)	Conversion Costs		Payments for Processing Rights
2017	$	32,830	19,487
2018		29,727	18,084
2019		24,480	15,220
2020		20,037	12,955
2021		18,197	10,704

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Equity Investments (Tables)

12 Months Ended

Dec. 31, 2016

Equity Method Investments and Joint Ventures [Abstract]

Summary of TSYS Equity Investments

(in thousands)	2016		2015
CUP Data	$	101,638	98,518
Other		9,155	7,600
Total	$	110,793	106,118

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Long-term Borrowings and Capital Lease Obligations (Tables)

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

Summary of Long-term Debt

(in thousands)	2016		2015
3.800% Senior Notes due April 1, 2021 (5 year tranche), net of discount and debt issuance costs	$	743,625	-
4.800% Senior Notes due April 1, 2026 (10 year tranche), net of discount and debt issuance costs		742,383	-
LIBOR + 1.500%, unsecured term facility, due February 23, 2021, with quarterly principal and interest payments, net of debt issuance costs		697,832	-
2.375% Senior Notes due June 1, 2018 (5 year tranche), net of discount and debt issuance costs		548,615	547,720
3.750% Senior Notes due June 1, 2023 (10 year tranche), net of discount and debt issuance costs		543,947	543,153
LIBOR + 1.300%, unsecured revolving loan, due February 23, 2021, with monthly interest payments on outstanding balances		70,000	-
1.380% note payable due December 31, 2017, with monthly interest and principal payments		13,853	30,000
LIBOR + 1.125%, unsecured term loan, due April 8, 2018, with quarterly principal and interest payments, net of debt issuance costs		-	174,652
LIBOR + 1.125%, unsecured term loan, due September 10, 2017, with quarterly principal and interest payments, net of debt issuance costs		-	119,761
1.500% note payable, due September 30, 2016, with monthly interest and principal payments		-	5,132
LIBOR + 2.000%, unsecured term loan, due December 7, 2017, with monthly interest payments and principal paid at maturity		-	3,202
1.500% note payable, due January 31, 2016, with monthly interest and principal payments		-	336
Total debt		3,360,255	1,423,956
Less current portion		48,040	50,078
Noncurrent portion of long-term debt	$	3,312,215	1,373,878

Required Annual Principal Payments on Long-term Debt

(in thousands)
2017	$	48,853
2018		611,250
2019		70,000
2020		70,000
2021		1,283,750

Capital Lease Obligations

(in thousands)	2016		2015
Capital lease obligations	$	3,748	7,131
Less current portion		2,687	3,468
Noncurrent portion of capital leases	$	1,061	3,663

Future Minimum Lease Payments under Capital Leases

(in thousands)
2017	$	2,754
2018		1,019
2019		63
2020		-
2021		-
Total minimum lease payments		3,836
Less amount representing interest		88
Principal minimum lease payments	$	3,748

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Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2016

Contract Acquisition Costs, Net

Significant Components of Other Current Liabilities

(in thousands)	2016		2015
Deferred revenues	$	40,473	39,863
Accrued expenses		32,861	26,017
Accrued third-party commissions		28,310	9,810
Litigation settlements		20,795	1,290
Dividends payable		19,513	19,367
Accrued interest		19,029	2,820
Other		102,278	67,412
Total	$	263,259	166,579

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Income Taxes

Components of Income Tax Expense Included in Consolidated Statements of Income

	Years Ended December 31,
(in thousands)	2016		2015	2014
Current income tax expense:
Federal	$	140,079	139,228	126,203
State		9,218	9,255	5,161
Foreign		4,443	4,762	7,694
Total current income tax expense		153,740	153,245	139,058
Deferred income tax expense (benefit):
Federal		8,393	(2,198)	(3,623)
State		(65)	442	(2,039)
Foreign		(893)	(125)	(3,635)
Total deferred income tax expense (benefit)		7,435	(1,881)	(9,297)
Total income tax expense	$	161,175	151,364	129,761

Components of Income Tax Before Income Tax

	Years Ended December 31,
(in thousands)	2016		2015	2014
Components of income before income tax expense:
Domestic	$	454,763	488,515	369,888
Foreign		6,451	8,373	23,041
Total income before income tax expense	$	461,214	496,888	392,929

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

	Years Ended December 31,
(in thousands)	2016		2015	2014
Computed "expected" income tax expense	$	161,425	173,911	137,525
Increase (decrease) in income tax expense resulting from:
International tax rate differential and equity income		8,715	8,367	6,541
State income tax expense, net of federal income tax effect		9,127	7,101	4,823
Increase (decrease) in valuation allowance		2,855	(517)	(4,550)
Tax credits		(15,695)	(28,831)	(3,459)
Deduction for domestic production activities		(12,950)	(11,550)	(8,750)
Permanent differences and other, net		7,698	2,883	(2,369)
Total income tax expense	$	161,175	151,364	129,761

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

	As of December 31,
(in thousands)	2016		2015
Deferred income tax assets:
Net operating loss and income tax credit carryforwards	$	34,490	29,522
Allowances for doubtful accounts and billing adjustments		1,512	1,399
Deferred revenue		27,461	31,713
Share-based compensation		25,497	22,088
Foreign currency translation		4,019	-
Other, net		38,341	34,673
Total deferred income tax assets		131,320	119,395
Less valuation allowance for deferred income tax assets		(21,301)	(18,446)
Net deferred income tax assets		110,019	100,949
Deferred income tax liabilities:
Excess tax over financial statement depreciation		(63,432)	(61,161)
Computer software development costs		(80,837)	(82,835)
Purchase accounting adjustments		(344,547)	(114,171)
Foreign currency translation		-	(4,522)
Other, net		(33,700)	(24,462)
Total deferred income tax liabilities		(522,516)	(287,151)
Net deferred income tax liabilities	$	(412,497)	(186,202)
Total net deferred tax assets (liabilities):
Noncurrent deferred tax asset	$	7,055	6,242
Noncurrent deferred tax liability		(419,552)	(192,444)
Net deferred tax liability	$	(412,497)	(186,202)

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

(in millions)	Year Ended December 31, 2016
Beginning balance	$	13.1
Current activity:
Additions based on tax positions related to current year		3.4
Additions for tax positions of prior years		3.0
Decreases resulting from settlements with tax authorities		(3.0)
Net, current activity		3.4
Ending balance	$	16.5

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, 2016

Commitments and Contingencies Disclosure [Abstract]

Future Minimum Lease Payments Under Noncancelable Operating Leases

(in thousands)
2017	$	129,120
2018		132,015
2019		132,242
2020		57,083
2021		21,035
Thereafter		34,644
Total future minimum commitment payments	$	506,139

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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Contributions Charged to Expense

(in thousands)	2016		2015	2014
TSYS Retirement Savings Plan	$	21,077	24,169	17,531
TSYS Stock Purchase Plan		1,514	1,378	1,288

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Equity (Tables)

12 Months Ended

Dec. 31, 2016

Equity

Summary of Equity Compensation Plans

	(a)	(b)		(c)
(in thousands, except per share data) Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted- average exercise price of outstanding options, warrants and rights		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	4,891	$ 32.78	2	6,962	1

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

¹ 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.

Weighted-average exercise price represents 2.9 million options only and does not include restricted share units that have no exercise price

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Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2016

Summary of Performance- and Market- Based Awards Granted

The following table summarizes the market-based awards granted during the years 2016 and 2015:

Year Awarded	Performance Period Ending	Performance Measure	Number of Shares Granted	Period Expensed Through
2016	December 2017	TSR	6,403	December 2017
2016	December 2018	TSR	52,404	December 2018
2015	July 2016, 2017 and 2018	TSR	25,000	July 2018
2015	December 2017	TSR	57,982	December 2017

The following table summarizes the performance-based awards granted during the years 2016, 2015 and 2014:

Year Awarded	Performance Period Ending	Performance Measure	Number of Shares Granted	Period Expensed Through
2016	December 2016	Revenues before Reimbursable Items and Adjusted EPS	15,605	December 2016
2016	December 2017	Adjusted EPS	14,940	December 2017
2016	December 2018	Merchant Segment Net Revenue, Corporate Accountability Operating Income and attainment of synergies from TransFirst acquisition	29,332	December 2018
2016	December 2018	Revenues before Reimbursable Items and Adjusted Operating Income	67,517	December 2018
2016	December 2018	Merchant Segment Net Revenue and Corporate Accountability Operating Income	78,220	December 2018
2016	December 2018	Adjusted EPS	122,284	December 2018
2016	December 2016	Revenues before Reimbursable Items and Adjusted EPS	144,995	December 2018
2015	December 2017	Adjusted EPS	135,289	December 2017
2015	December 2015	Revenues before Reimbursable Items and Adjusted EPS	165,543	December 2018
2014	December 2016	Revenues before Reimbursable Items and Adjusted EPS	211,593	December 2016

Summary of Weighted Average Assumptions and Fair Value of Options

	2016				2015			2014
Number of options granted		687,685			613,473			1,046,372
Weighted average exercise price	$	47.01		$	39.01		$	30.96
Risk-free interest rate		1.24	%		1.73	%		2.01	%
Expected volatility		21.53	%		20.80	%		25.06	%
Expected term (years)		4.5			6.3			6.5
Dividend yield		0.86	%		1.04	%		1.29	%
Weighted average fair value	$	8.50		$	8.27		$	7.66

Summary of Stock Option Activity and Changes during Year

	2016			2015			2014
Options: (in thousands, except per share data)	Options	Weighted Average Exercise Price		Options	Weighted Average Exercise Price		Options	Weighted Average Exercise Price
Outstanding at beginning of year	2,887	$	28.07	4,892	$	23.83	5,752	$	20.96
Granted	688		47.01	613		39.01	1,046		30.96
Exercised	(500)		23.43	(2,586)		22.68	(1,850)		18.79
Forfeited/canceled	(79)		43.49	(32)		20.79	(56)		28.88
Outstanding at end of year	2,996	$	32.78	2,887	$	28.07	4,892	$	23.83
Options exercisable at year-end	1,877	$	28.45	1,439	$	25.17	2,781	$	22.86
Weighted average fair value of options granted during the year		$	8.50		$	8.27		$	7.66

As of December 31, 2016 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)		7.3	6.6
Aggregate intrinsic value (in thousands)	$	49,323	39,066

Summary of Stock Option Exercises

(in thousands)	Options Exercised and Issued from Treasury	Intrinsic Value
2016	500	$	12,984
2015	2,586		67,702
2014	1,850		22,883

Performance Shares

Summary of Number of Shares Granted Each Year

	2016		2015	2014
Number of shares granted		362,804	388,211	672,724
Market value (in millions)	$	16.8	14.9	20.6

Summary of Awards Authorized

	Total Number of Shares Awarded1	Potential Number of Performance-and Market- Based Shares to be Vested2	Year Potential Performance-and Market- Based Shares Will Fully Vest
2016	531,700	903,364	2019
2015	383,814	687,015	2018
2014	211,593	389,242	2017

¹ Shares awarded does not include dividend equivalents

² Includes dividend equivalents

Summarized Status of Performance-based Nonvested Shares and Changes during Period

	2016			2015			2014
(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	918	$	31.19	766	$	25.86	1,049	$	22.75
Granted	540		45.91	384		36.84	211		30.89
Vested	(140)		37.91	(241)		22.92	(258)		17.57
Forfeited/canceled/adjusted	(336)		37.70	9		22.20	(236)		25.62
Outstanding at end of year	982	$	33.43	918	$	31.19	766	$	25.86

Unvested Restricted Awards

Summarized Status of Nonvested Shares and Changes during Periods

	2016			2015			2014
(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	1,146	$	31.11	1,769	$	26.75	1,783	$	24.19
Granted	363		46.23	388		38.38	673		30.67
Vested	(562)		29.95	(930)		26.05	(602)		23.74
Forfeited/canceled/adjusted	(84)		36.79	(81)		28.78	(85)		25.47
Outstanding at end of year	863	$	37.78	1,146	$	31.11	1,769	$	26.75

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Treasury Stock (Tables)

12 Months Ended

Dec. 31, 2016

Summary of Shares Held as Treasury Stock and Related Carrying Value

(in thousands)	Number of Treasury Shares	Treasury Shares Cost
2016	19,314	$	646,047
2015	19,988		641,664
2014	17,836		453,230

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, 2016:

(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 2016	-		$	-	5,150	14,850
November 2016	200			49.29	5,350	14,650
December 2016	312	1		48.13	5,650	14,350
Total	512		$	48.59

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

TSYS Stock Repurchase Plan

Purchases of Common Stock on Monthly Basis

(in thousands, except per share data)	Total Number of Shares Purchased	Average Price Paid per Share		Repurchased Shares Cost
2016	500	$	48.57	$	24,287
2015	5,150		47.01		242,085
2014	5,200		31.79		165,297

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Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2016

Equity

Income Tax Effects Allocated to and Cumulative Balance of Accumulated Other Comprehensive Income (Loss)

(in thousands)	Beginning Balance		Pretax amount	Tax effect		Net-of-tax Amount		Ending Balance
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 noncontrolling interest (NCI)		28	-	-		-		28
Loss 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)
Foreign currency translation adjustments	$	(35,041)	(36,341)	(5,872)	$	(30,469)	$	(65,510)
Transfer from NCI		28	-	-		-		28
Gain on available for sale securities		2,503	11,394	4,035		7,359		9,862
Change in AOCI related to postretirement healthcare plans		(1,034)	775	279		496		(538)
As of December 31, 2016	$	(33,544)	(24,172)	(1,558)	$	(22,614)	$	(56,158)

XML

Segment Reporting, including Geographic Area Data and Major Customers (Tables)

12 Months Ended

Dec. 31, 2016

Segment Reporting, including Geographic Area Data and Major Customers

Operating Segments

Operating Segments	Years Ended December 31,
(in thousands)		2016	2015	2014
Operating income (GAAP) (a)	$	573,382	534,107	431,640
Share-based compensation		43,728	41,549	30,790
TransFirst and Netspend M&A and integration expenses1		28,176	-	3,217
Litigation, claims, judgments or settlements		21,719	-	-
Acquisition intangible amortization		189,990	92,521	96,970
Adjusted operating income (non-GAAP) (b)	$	856,995	668,177	562,617
Adjusted operating income by segment (non-GAAP):
North America Services (c)	$	468,251	429,064	351,512
International Services (d)		56,774	60,087	55,123
Merchant Services (e)		307,595	150,225	134,872
Netspend (f)		160,371	137,837	128,285
Corporate Administration and Other		(135,996)	(109,036)	(107,175)
Adjusted segment operating income2 (non-GAAP)	$	856,995	668,177	562,617
Total revenues (GAAP) (g)	$	4,170,077	2,779,541	2,446,877
Less: reimbursable items		259,543	280,192	253,899
Revenue before reimbursable items		3,910,534	2,499,349	2,192,978
Intersegment revenues		39,880	33,481	21,224
Segment revenue before reimbursable items (non-GAAP)	$	3,950,414	2,532,830	2,214,202
Segment revenue before reimbursable items (non-GAAP):
North America Services	$	1,206,013	1,147,254	954,082
International Services		313,631	331,159	341,785
Merchant Services		1,767,191	474,040	435,649
Netspend		663,579	580,377	482,686
Segment revenue before reimbursable items (non-GAAP)	$	3,950,414	2,532,830	2,214,202
Total revenues (GAAP) (g)	$	4,170,077	2,779,541	2,446,877
Less: reimbursable items		259,543	280,192	253,899
Revenue before reimbursable items		3,910,534	2,499,349	2,192,978
Less: interchange and assessments expenses		868,658	-	-
Net revenue2 (non-GAAP) (h)		3,041,876	2,499,349	2,192,978
Intersegment revenues		39,880	33,481	21,224
Segment net revenue (non-GAAP)	$	3,081,756	2,532,830	2,214,202
Segment net revenue (non-GAAP):
North America Services (i)	$	1,206,013	1,147,254	954,082
International Services (j)		313,631	331,159	341,785
Merchant Services (k)		898,533	474,040	435,649
Netspend (l)		663,579	580,377	482,686
Segment net revenue (non-GAAP)	$	3,081,756	2,532,830	2,214,202
Segment external net revenue (non-GAAP):
North America Services	$	1,174,304	1,118,332	936,957
International Services		308,552	326,834	338,126
Merchant Services		898,175	473,806	435,209
Netspend		660,845	580,377	482,686
Segment external net revenue (non-GAAP)	$	3,041,876	2,499,349	2,192,978
Operating margin (GAAP) (a)/(g)		13.8%	19.2%	17.6%
Adjusted operating margin on net revenue (non-GAAP) (b)/(h)		28.2%	26.7%	25.7%
Adjusted segment operating margin on net revenue (non-GAAP):
North America Services (c)/(i)		38.8%	37.4%	36.8%
International Services (d)/(j)		18.1%	18.1%	16.1%
Merchant Services (e)/(k)		34.2%	31.7%	31.0%
Netspend (f)/(l)		24.2%	23.7%	26.6%

¹ Excludes share-based compensation

² Net revenue and adjusted segment operating income are non-GAAP measures. Net revenue is total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment networks that are recorded by TSYS as expense.  Adjusted segment operating income excludes acquisition intangible amortization, TransFirst M&A expenses, share-based compensation and expenses associated with Corporate Administration and Other.

Total Assets by Segment

	As of December 31,
(in thousands)	2016		2015
North America Services	$	5,595,747	3,485,924
Merchant Services		3,295,509	689,781
Netspend		1,474,595	1,504,740
International Services		296,663	348,714
Intersegment assets		(4,296,337)	(2,151,264)
Total assets	$	6,366,177	3,877,895

Depreciation Expenses by segment

Operating Segments	Years Ended December 31,
(in thousands)		2016	2015	2014
Depreciation and amortization:
North America Services	$	110,343	99,544	86,513
International Services		30,966	34,892	38,909
Merchant Services		25,553	18,268	14,571
Netspend		13,133	10,686	7,509
Segment depreciation and amortization		179,995	163,390	147,502
Acquisition intangible amortization		189,990	92,521	96,970
Corporate Administration and Other		3,561	2,353	2,148
Total depreciation and amortization	$	373,546	258,264	246,620

Property and Equipment, Net of Accumulated Depreciation and Amortization

	As of December 31,
(in thousands)	2016		2015
United States	$	236,913	241,814
Europe		38,866	41,953
Other		6,566	6,131
Total	$	282,345	289,898

Revenues Based on Domicile of Company's Customers

	2016
(in thousands)	North America Services		International Services	Merchant Services	Netspend	Total		Percentage of Revenues
United States	$	1,032,381	-	1,826,775	660,845	$	3,520,001	84.4	%
Europe1		788	306,106	227	-		307,121	7.4
Canada1		284,005	23	705	-		284,733	6.8
Mexico		14,887	447	-	-		15,334	0.4
Other1		17,804	24,322	762	-		42,888	1.0
Total	$	1,349,865	330,898	1,828,469	660,845	$	4,170,077	100.0	%

	2015
(in thousands)	North America Services		International Services	Merchant Services	Netspend	Total		Percentage of Revenues
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		Percentage of Revenues
United States	$	778,766	-	508,747	482,686	$	1,770,199	72.3	%
Europe1		781	304,308	-	-		305,089	12.5
Canada1		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	%

¹ Revenues are impacted by movements in foreign currency exchange rates

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2016

Pro Forma Revenue and Earnings

	Actual			Supplemental pro forma
	Years Ended December 31,			Years Ended December 31,
	2016		2015	2016	2015
(in thousands, except per share data)
Revenue	$	4,170,077	2,779,541	4,562,236	3,230,703
Net income attributable to TSYS common shareholders	$	319,638	364,044	347,248	317,549
Basic EPS attributable to TSYS common shareholders	$	1.74	1.98	1.89	1.73
Diluted EPS attributable to TSYS common shareholders	$	1.73	1.97	1.88	1.72

TransFirst

Amounts of Assets Acquired and Liabilities Assumed Recognized

(in thousands)
Consideration
Cash	$	2,351,400
Fair value of total consideration transferred	$	2,351,400
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	5,907
Accounts receivable, net		62,313
Property, equipment and software		12,726
Identifiable intangible assets		814,131
Deferred tax asset		2,244
Other assets		7,509
Deferred tax liability		(224,654)
Other liabilities		(56,864)
Total identifiable net assets		623,312
Goodwill		1,728,088
Total identifiable assets acquired and liabilities assumed	$	2,351,400

Estimated Fair Value of Identifiable Intangible Assets Acquired

(inmillions)		Fair Value	Weighted Average Useful Life (in years)
Merchant relationships	$	588.0	7.0
Channel partners		121.0	10.0
Current technology		72.0	5.0
Trade name		16.0	1.0
Covenants not-to-compete		15.0	3.0
Favorable lease		2.1	5.6
Total acquired identifiable intangible assets	$	814.1	7.1

XML

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Basic and Diluted Earnings Per Share

	2016		2015		2014
(in thousands, except per share data)	Common Stock		Common Stock		Common Stock
Basic EPS:
Net income attributable to TSYS common shareholders	$	319,638	$	364,044	$	322,872
Less income allocated to nonvested awards		(1,557)		(3,164)		(3,308)
Net income allocated to common stock for  EPS calculation(a)		318,081	$	360,880	$	319,564
Average common shares outstanding(b)		182,744		182,465		184,297
Basic EPS(a)/(b)	$	1.74	$	1.98	$	1.73
Diluted EPS:
Net income attributable to TSYS common shareholders	$	319,638	$	364,044	$	322,872
Less income allocated to nonvested awards		(1,557)		(3,148)		(3,288)
Add income allocated to nonvested awards1		1,557		-		-
Net income allocated to common stock for  EPS calculation(c)	$	319,638	$	360,896	$	319,584
Average common shares outstanding		182,744		182,465		184,297
Increase due to assumed issuance of shares related to common equivalent shares outstanding		813		1,157		1,459
Average nonvested awards1		891		-		-
Average common and common equivalent shares outstanding(d)		184,448		183,622		185,756
Diluted EPS(c)/(d)	$	1.73	$	1.97	$	1.72
	2016		2015		2014
(in thousands, except per share data)	Participating Securities		Participating Securities		Participating Securities
Basic EPS:
Net income allocated to nonvested awards(a)	$	1,557		3,164		3,308
Nonvested awards(b)		911		1,617		1,925
Basic EPS(a)/(b)	$	1.71		1.96		1.72
Diluted EPS:
Net income allocated to nonvested awards(c)	$	1,552		3,148		3,288
Average common and common equivalent shares outstanding(d)		911		1,617		1,925
Diluted EPS(c)/(d)	$	1.70		1.95		1.71

In accordance with the diluted EPS guidance under the two-class method, the Company uses the approach – either the treasury stock method or the two-class method assuming a participating security is not exercised- that is more dilutive. In 2016, the Company used the two-class method. In 2015 and 2014, the Company used the treasury stock method.

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Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) segment	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Significant Accounting Policies [Line Items]
Software technology assets resulting from acquisitions, estimated useful live	7 years 1 month 6 days
Equity investments, net	$ 110,793	$ 106,118
Cardholders' loss reserve	10,500	9,400
Advertising expenses	$ 11,500	9,600	$ 5,700
Minimum
Significant Accounting Policies [Line Items]
Estimated forfeiture rate	0.00%
Maximum
Significant Accounting Policies [Line Items]
Estimated forfeiture rate	8.00%
CUP Data
Significant Accounting Policies [Line Items]
Equity method investment, percentage of ownership	44.56%
Equity investments, net	$ 101,638	$ 98,518
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	$ 2,000
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 [Member]
Significant Accounting Policies [Line Items]
Equity investments, net	$ 46,100
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	$ 10,500
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	$ 2,900

XML

Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) segment	Dec. 31, 2015 USD ($)
Significant Accounting Policies [Line Items]
Noncurrent deferred tax asset	$ 7,055	$ 6,242
Operating leases	$ 472,800
Accounting Standards Update 2015-17
Significant Accounting Policies [Line Items]
Deferred tax assets current		24,700
Noncurrent deferred tax asset		24,700
Accounting Standards Update 2015-15
Significant Accounting Policies [Line Items]
Deferred debt issuance costs, net		$ 6,400
Netspend Holdings Inc
Significant Accounting Policies [Line Items]
Operating segments | segment	4

XML

Discontinued Operations - Additional Information (Details) - 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

Summarized Results of Discontinued Operations (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Discontinued Operations and Disposal Groups [Abstract]
Total revenues		$ 16,376
Income before taxes		1
Income tax benefit		(39)
Income from operating activities of discontinued operations, net of tax		40
Gain on dispositions, net of tax	$ 1,411	48,615
Income from discontinued operations, net of tax	1,411	48,655
Income from discontinued operations, net of tax, attributable to noncontrolling interest		999
Income from discontinued operations, net of tax, attributable to TSYS common shareholders	$ 1,411	$ 47,656

XML

Fair Value Measurement - Additional Information (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Fair Value Disclosures [Abstract]
Goodwill	$ 3,270,952	$ 1,545,424

XML

Cash and Cash Equivalent (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Cash and Cash Equivalents [Abstract]
Cash and cash equivalents in domestic accounts	$ 375,122	$ 307,578
Cash and cash equivalents in foreign accounts	50,232	81,750
Cash and cash equivalents	$ 425,354	$ 389,328

XML

Prepaid Expenses and Other Current Assets - Significant Components (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Uncategorized [Abstract]
Prepaid expenses	$ 84,173	$ 37,961
Supplies inventory	17,105	15,114
Income taxes receivable		51,322
Other	63,210	49,802
Total	$ 164,488	$ 154,199

XML

Goodwill - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Goodwill [Line Items]
Goodwill	$ 3,270,952	$ 1,545,424
Netspend Holdings Inc
Goodwill [Line Items]
Addition to purchase price allocation	584	$ 627
TransFirst
Goodwill [Line Items]
Goodwill	$ 1,728,088

XML

Goodwill - Gross Amount and Accumulated Impairment Loss (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Goodwill [Line Items]
Gross amount	$ 3,274,964	$ 1,549,436
Accumulated impairment losses	(4,012)	(4,012)
Goodwill, net	3,270,952	1,545,424	$ 1,547,397
North America Services
Goodwill [Line Items]
Gross amount	70,796	70,796
Accumulated impairment losses	(182)	(182)
Goodwill, net	70,614	70,614	70,614
International Services
Goodwill [Line Items]
Gross amount	25,937	29,081
Accumulated impairment losses	(1,605)	(1,605)
Goodwill, net	24,332	27,476	30,076
Merchant Services
Goodwill [Line Items]
Gross amount	2,144,061	415,973
Accumulated impairment losses	(2,225)	(2,225)
Goodwill, net	2,141,836	413,748	413,748
Netspend
Goodwill [Line Items]
Gross amount	1,034,170	1,033,586
Goodwill, net	$ 1,034,170	$ 1,033,586	$ 1,032,959

XML

Goodwill - Changes in Carrying Amount (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Goodwill [Line Items]
Beginning Balance	$ 1,545,424	$ 1,547,397
Goodwill	3,270,952	1,545,424
Currency translation adjustments	(3,144)	(2,600)
Ending Balance	3,270,952	1,545,424
Netspend Holdings Inc
Goodwill [Line Items]
Tax adjustment	584	627
TransFirst
Goodwill [Line Items]
Goodwill	1,728,088
North America Services
Goodwill [Line Items]
Beginning Balance	70,614	70,614
Ending Balance	70,614	70,614
International Services
Goodwill [Line Items]
Beginning Balance	27,476	30,076
Currency translation adjustments	(3,144)	(2,600)
Ending Balance	24,332	27,476
Merchant Services
Goodwill [Line Items]
Beginning Balance	413,748	413,748
Ending Balance	2,141,836	413,748
Merchant Services | TransFirst
Goodwill [Line Items]
Goodwill	1,728,088
Netspend
Goodwill [Line Items]
Beginning Balance	1,033,586	1,032,959
Ending Balance	1,034,170	1,033,586
Netspend | Netspend Holdings Inc
Goodwill [Line Items]
Tax adjustment	$ 584	$ 627

XML

Other Intangible Assets, Net - Significant Components (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Gross	$ 1,327,283	$ 585,416
Accumulated Amortization	(420,607)	(257,096)
Intangible Assets, Net (Excluding Goodwill), Total	906,676	328,320
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross	588,000	318,600
Accumulated Amortization	(63,000)	(99,909)
Intangible Assets, Net (Excluding Goodwill), Total	525,000	218,691
Channel relationships
Finite-Lived Intangible Assets [Line Items]
Gross	439,600	166,579
Accumulated Amortization	(148,815)	(104,736)
Intangible Assets, Net (Excluding Goodwill), Total	290,785	61,843
Merchant relationships
Finite-Lived Intangible Assets [Line Items]
Gross	166,340
Accumulated Amortization	(122,465)
Intangible Assets, Net (Excluding Goodwill), Total	43,875
Trade name
Finite-Lived Intangible Assets [Line Items]
Gross	62,397	46,422
Accumulated Amortization	(45,197)	(24,422)
Intangible Assets, Net (Excluding Goodwill), Total	17,200	22,000
Covenants-Not-to-Compete
Finite-Lived Intangible Assets [Line Items]
Gross	29,940	14,940
Accumulated Amortization	(13,869)	(7,834)
Intangible Assets, Net (Excluding Goodwill), Total	16,071	7,106
Database
Finite-Lived Intangible Assets [Line Items]
Gross	28,000	28,000
Accumulated Amortization	(19,600)	(14,000)
Intangible Assets, Net (Excluding Goodwill), Total	8,400	14,000
Trade association
Finite-Lived Intangible Assets [Line Items]
Gross	10,000	10,000
Accumulated Amortization	(6,750)	(5,750)
Intangible Assets, Net (Excluding Goodwill), Total	3,250	4,250
Favorable lease
Finite-Lived Intangible Assets [Line Items]
Gross	3,006	875
Accumulated Amortization	(911)	(445)
Intangible Assets, Net (Excluding Goodwill), Total	$ 2,095	$ 430

XML

Other Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Amortization expenses recorded in selling, general and administrative expenses	$ 189,990	$ 92,521	$ 96,970
Other intangible assets
Finite-Lived Intangible Assets [Line Items]
Amortization expenses recorded in selling, general and administrative expenses	$ 163,800	$ 75,800	$ 77,300

XML

Other Intangible Assets, Net - Weighted Average Useful Life (Details) - Other intangible assets	12 Months Ended
	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	7 years 4 months 24 days
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	7 years
Channel relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	8 years 7 months 6 days
Merchant 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)	3 years 10 months 24 days
Covenants-Not-to-Compete
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	4 years 1 month 6 days
Database
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	5 years
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)	5 years 4 months 24 days

XML

Other Intangible Assets, Net - Estimated Future Amortization Expense (Details) - Other intangible assets $ in Thousands	Dec. 31, 2016 USD ($)
Finite-Lived Intangible Assets [Line Items]
2017	$ 180,304
2018	161,647
2019	145,601
2020	140,193
2021	$ 119,617

XML

Computer Software, Net - Summary (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Computer software	$ 1,180,582	$ 1,085,652
Computer software, accumulated amortization	757,394	680,582
Capitalized Computer Software, Net, Total	423,188	405,070
Licensed computer software
Finite-Lived Intangible Assets [Line Items]
Computer software	513,790	513,443
Computer software, accumulated amortization	315,591	282,563
Software development costs
Finite-Lived Intangible Assets [Line Items]
Computer software	428,581	404,238
Computer software, accumulated amortization	307,190	287,863
Acquisition technology intangibles
Finite-Lived Intangible Assets [Line Items]
Computer software	238,211	167,971
Computer software, accumulated amortization	$ 134,613	$ 110,156

XML

Computer Software, Net - Capital Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Capital Leased Assets [Line Items]
Gross	$ 57,114	$ 60,824
Accumulated Amortization	(42,848)	(38,865)
Net	14,266	21,959
Licensed computer software
Capital Leased Assets [Line Items]
Gross	23,665	18,206
Accumulated Amortization	(14,634)	(8,175)
Net	$ 9,031	$ 10,031

XML

Computer Software, Net - Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Amortization expense related to:
Acquisition intangible amortization	$ 189,990	$ 92,521	$ 96,970
Licensed computer software
Amortization expense related to:
Acquisition intangible amortization	45,655	41,823	36,775
Software development costs
Amortization expense related to:
Acquisition intangible amortization	26,478	22,740	25,248
Acquisition technology intangibles
Amortization expense related to:
Acquisition intangible amortization	$ 26,217	$ 16,734	$ 19,683

XML

Computer Software, Net - Weighted Average Useful Life (Details) - Computer Software, Intangible Asset	12 Months Ended
	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	6 years
Licensed computer software
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	5 years 9 months 18 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 2 months 12 days

XML

Computer Software, net - Estimated Future Amortization Expense (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Licensed computer software
Finite-Lived Intangible Assets [Line Items]
2017	$ 42,937
2018	34,142
2019	21,071
2020	17,010
2021	9,293
Software development costs
Finite-Lived Intangible Assets [Line Items]
2017	23,777
2018	18,225
2019	13,414
2020	9,646
2021	6,787
Acquisition technology intangibles
Finite-Lived Intangible Assets [Line Items]
2017	28,268
2018	25,793
2019	25,793
2020	20,134
2021	$ 3,600

XML

Property and Equipment, Net - Balances (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 763,035	$ 747,226
Property and equipment, accumulated depreciation and amortization	480,690	457,328
Property, Plant and Equipment, Net, Total	282,345	289,898
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	356,358	346,387
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	246,577	244,938
Furniture and other equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	141,836	138,727
Land
Property, Plant and Equipment [Line Items]
Property and equipment, gross	15,877	16,577
Other.
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,387	$ 597

XML

Property and Equipment, Net - Capital Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Capital Leased Assets [Line Items]
Gross	$ 57,114	$ 60,824
Accumulated Amortization	(42,848)	(38,865)
Net	14,266	21,959
Computer equipment
Capital Leased Assets [Line Items]
Gross	51,702	55,450
Accumulated Amortization	(39,060)	(36,134)
Furniture and other equipment
Capital Leased Assets [Line Items]
Gross	5,412	5,374
Accumulated Amortization	$ (3,788)	$ (2,731)

XML

Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense related to property and equipment	$ 62.5	$ 56.6	$ 53.5

XML

Contract Acquisition Costs, Net - Significant Components (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Conversion costs, net of accumulated amortization of $164.4 million and $150.0 million as of 2016 and 2015, respectively	$ 144,173	$ 159,000
Payments for processing rights, net of accumulated amortization of $145.3 million and $137.9 million as of 2016 and 2015, respectively	91,527	88,811
Total	235,700	247,811
Accumulated amortization	420,607	257,096
Conversion costs
Accumulated amortization	164,400	150,000
Payments for processing rights
Accumulated amortization	$ 145,300	$ 137,900

XML

Contract Acquisition Costs, Net - Amortization Expense Related (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Finite Lived Intangible Assets Amortization Expense [Line Items]
Amortization expense	$ 189,990	$ 92,521	$ 96,970
Conversion costs
Finite Lived Intangible Assets Amortization Expense [Line Items]
Amortization expense	28,811	27,392	17,816
Payments for processing rights
Finite Lived Intangible Assets Amortization Expense [Line Items]
Amortization expense	$ 19,804	$ 17,039	$ 16,209

XML

Contract Acquisition Costs, Net - Weighted Average Useful Life (Details) - Contract Acquisition Costs	12 Months Ended
	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	14 years 1 month 6 days
Conversion costs
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	15 years 7 months 6 days
Payments for processing rights
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Yrs)	12 years 10 months 24 days

XML

Contract Acquisition Costs, Net - Estimated Future Amortization on Payments for Processing and Conversion (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Conversion costs
Finite-Lived Intangible Assets [Line Items]
2017	$ 32,830
2018	29,727
2019	24,480
2020	20,037
2021	18,197
Payments for processing rights
Finite-Lived Intangible Assets [Line Items]
2017	19,487
2018	18,084
2019	15,220
2020	12,955
2021	$ 10,704

XML

Equity Investments - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Schedule of Equity Method Investments [Line Items]
Equity in income of equity investments, net of tax	$ 25,933	$ 22,106	$ 17,583
CUP Data
Schedule of Equity Method Investments [Line Items]
Equity method investment, percentage of ownership	44.56%
Promocn Y Operacin, SA De CV
Schedule of Equity Method Investments [Line Items]
Equity method investment, percentage of ownership	49.00%

XML

Equity Investments - Summary (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Schedule of Equity Method Investments [Line Items]
Equity investments, net	$ 110,793	$ 106,118
Other
Schedule of Equity Method Investments [Line Items]
Equity investments, net	9,155	7,600
CUP Data
Schedule of Equity Method Investments [Line Items]
Equity investments, net	$ 101,638	$ 98,518

XML

Long-term Borrowings and Capital Lease Obligations - Summary of Long-term Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Long-term debt	$ 3,360,255	$ 1,423,956
Less current portion	48,040	50,078
Noncurrent portion of long-term debt	3,312,215	1,373,878
3.800% Senior Notes due 2021
Debt Instrument [Line Items]
Long-term debt	743,625
4.800% Senior Notes due 2026
Debt Instrument [Line Items]
Long-term debt	742,383
2.375% Senior Notes due 2018
Debt Instrument [Line Items]
Long-term debt	548,615	547,720
3.750% Senior Notes due 2023
Debt Instrument [Line Items]
Long-term debt	543,947	543,153
LIBOR + 1.500%, unsecured term facility | Unsecured term facility, due February 23, 2021
Debt Instrument [Line Items]
Long-term debt	697,832
LIBOR + 1.300%, unsecured revolving loan | Unsecured term facility, due February 23, 2021
Debt Instrument [Line Items]
Long-term debt	70,000
LIBOR + 1.125%, unsecured term loan | Unsecured term loan due on April 08, 2018
Debt Instrument [Line Items]
Long-term debt		174,652
LIBOR + 1.125%, unsecured term loan | Unsecured term loan due on September 10, 2017
Debt Instrument [Line Items]
Long-term debt		119,761
1.38% note payable | Due December 31, 2017
Debt Instrument [Line Items]
Long-term debt	$ 13,853	30,000
1.50% note payable | Due September 30, 2016
Debt Instrument [Line Items]
Long-term debt		5,132
1.50% note payable | Due January 31, 2016
Debt Instrument [Line Items]
Long-term debt		336
LIBOR + 2.0%, unsecured term loan
Debt Instrument [Line Items]
Long-term debt		$ 3,202

XML

Long-term Borrowings and Capital Lease Obligations - Summary of Long-term Debt Narrative (Details)		1 Months Ended	12 Months Ended		24 Months Ended
	Feb. 23, 2016	Sep. 30, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Mar. 17, 2016	May 31, 2013
Debt Instrument [Line Items]
Senior notes maturity , period	5 years
3.800% Senior Notes due 2021
Debt Instrument [Line Items]
Senior notes interest rate			3.80%	3.80%	3.80%	3.80%
Debt instrument, maturity date			Apr. 01, 2021	Apr. 01, 2021
Senior notes maturity , period			5 years	5 years
4.800% Senior Notes due 2026
Debt Instrument [Line Items]
Senior notes interest rate			4.80%	4.80%	4.80%	4.80%
Debt instrument, maturity date			Apr. 01, 2026	Apr. 01, 2026
Senior notes maturity , period			10 years	10 years
2.375% Senior Notes due 2018
Debt Instrument [Line Items]
Senior notes interest rate			2.375%	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]
Senior notes interest rate			3.75%	3.75%	3.75%		3.75%
Debt instrument, maturity date			Jun. 01, 2023	Jun. 01, 2023
Senior notes maturity , period					10 years
1.50% note payable | Due September 30, 2016
Debt Instrument [Line Items]
Senior notes interest rate			1.50%	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]
Senior notes interest rate			1.50%	1.50%	1.50%
Debt instrument, maturity date			Jan. 31, 2016	Jan. 31, 2016
LIBOR + 2.0%, unsecured term loan
Debt Instrument [Line Items]
Debt instrument, maturity date		Dec. 01, 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 facility, due February 23, 2021 | LIBOR + 1.500%, unsecured term facility
Debt Instrument [Line Items]
Debt instrument, maturity date			Feb. 23, 2021	Feb. 23, 2021
Debt instrument, margin rate			1.50%	1.50%
Unsecured term facility, due February 23, 2021 | LIBOR + 1.300%, unsecured revolving loan
Debt Instrument [Line Items]
Debt instrument, maturity date			Feb. 23, 2021	Feb. 23, 2021
Unsecured revolving loan, due February 23, 2021 | LIBOR + 1.300%, unsecured revolving loan
Debt Instrument [Line Items]
Debt instrument, margin rate			1.30%	1.30%
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
Debt instrument, margin rate			1.125%	1.125%
Unsecured term loan due on April 08, 2018 | 1.38% note payable
Debt Instrument [Line Items]
Senior notes interest rate			1.38%	1.38%	1.38%
Debt instrument, maturity date			Dec. 31, 2017	Dec. 31, 2017
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
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		24 Months Ended
	Mar. 17, 2016 USD ($)	Feb. 23, 2016 USD ($)	Apr. 08, 2013 USD ($)	Sep. 30, 2015 USD ($)	May 31, 2013 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2015 GBP (£)	Sep. 30, 2015 USD ($)	Dec. 31, 2014 GBP (£)	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)
Debt Instrument [Line Items]
Credit facility, Maximum Borrowing Capacity		$ 700,000,000
Debt Instrument, Term		5 years
Long-term debt						$ 3,360,255,000	$ 1,423,956,000	$ 3,360,255,000
Standby letters of credit
Debt Instrument [Line Items]
Credit facility, Maximum Borrowing Capacity		$ 50,000,000
Repayment of Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility, Outstanding						$ 0		$ 0
3.800% Senior Notes due 2021
Debt Instrument [Line Items]
Debt Instrument, Term						5 years	5 years
Aggregate principal amount	$ 750,000,000
Senior notes interest rate	3.80%					3.80%	3.80%	3.80%
Debt instrument, maturity date						Apr. 01, 2021	Apr. 01, 2021
Senior notes maturity year	2021
Long-term debt						$ 743,625,000		$ 743,625,000
4.800% Senior Notes due 2026
Debt Instrument [Line Items]
Debt Instrument, Term						10 years	10 years
Aggregate principal amount	$ 750,000,000
Senior notes interest rate	4.80%					4.80%	4.80%	4.80%
Debt instrument, maturity date						Apr. 01, 2026	Apr. 01, 2026
Senior notes maturity year	2026
Long-term debt						$ 742,383,000		$ 742,383,000
2.375% Senior Notes due 2018
Debt Instrument [Line Items]
Debt Instrument, Term						5 years	5 years
Aggregate principal amount					$ 550,000,000
Senior notes interest rate					2.375%	2.375%	2.375%	2.375%
Debt instrument, maturity date						Jun. 01, 2018	Jun. 01, 2018
Senior notes maturity year					2018
Long-term debt						$ 548,615,000	$ 547,720,000	$ 548,615,000
3.750% Senior Notes due 2023
Debt Instrument [Line Items]
Debt Instrument, Term								10 years
Aggregate principal amount					$ 550,000,000
Senior notes interest rate					3.75%	3.75%	3.75%	3.75%
Debt instrument, maturity date						Jun. 01, 2023	Jun. 01, 2023
Senior notes maturity year					2023
Long-term debt						$ 543,947,000	$ 543,153,000	$ 543,947,000
Netspend Holdings Inc
Debt Instrument [Line Items]
Business acquisition, cost of acquired entity, purchase price				$ 750,000		1,400,000,000
TransFirst
Debt Instrument [Line Items]
Business acquisition, cost of acquired entity, purchase price	$ 2,350,000,000					2,351,400,000
Term Loan
Debt Instrument [Line Items]
Credit facility, Maximum Borrowing Capacity			$ 200,000,000
Credit facility, Outstanding						697,800,000		697,800,000
Credit agreement term			5 years
Outstanding balance on the Credit Agreement							0
Term Loan | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument, margin rate		1.50%	1.125%
Term Loan | London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Debt instrument, margin rate		1.00%	1.00%
Term Loan | London Interbank Offered Rate (LIBOR) | Maximum
Debt Instrument [Line Items]
Debt instrument, margin rate		1.75%	1.75%
Term Loan | Base rate
Debt Instrument [Line Items]
Debt instrument, margin rate		0.50%
Term Loan | Base rate | Minimum
Debt Instrument [Line Items]
Debt instrument, margin rate		0.00%
Term Loan | Base rate | Maximum
Debt Instrument [Line Items]
Debt instrument, margin rate		0.75%
Bridge Loan Facility
Debt Instrument [Line Items]
Credit agreement commitment		$ 1,150,000,000
Bridge loan facility, term		364 days
Line of Credit, Current		$ 350,000,000
Bridge Loan Facility | Before Amendment
Debt Instrument [Line Items]
Credit agreement commitment		2,000,000,000
Unsecured revolving credit facility
Debt Instrument [Line Items]
Credit facility, Maximum Borrowing Capacity		800,000,000
Repayments of Debt		400,000,000
Credit facility, Outstanding		$ 70,000,000
Unsecured revolving credit facility | Minimum
Debt Instrument [Line Items]
Debt instrument, margin rate		0.10%
Unsecured revolving credit facility | Maximum
Debt Instrument [Line Items]
Debt instrument, margin rate		0.25%
Unsecured revolving credit facility | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument, margin rate		1.30%
Unsecured revolving credit facility | London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Debt instrument, margin rate		0.90%
Unsecured revolving credit facility | London Interbank Offered Rate (LIBOR) | Maximum
Debt Instrument [Line Items]
Debt instrument, margin rate		1.50%
Unsecured revolving credit facility | Base rate
Debt Instrument [Line Items]
Debt instrument, margin rate		0.30%
Unsecured revolving credit facility | Base rate | Minimum
Debt Instrument [Line Items]
Debt instrument, margin rate		0.00%
Unsecured revolving credit facility | Base rate | Maximum
Debt Instrument [Line Items]
Debt instrument, margin rate		0.50%
Refinancing Term Loan | Term Loan
Debt Instrument [Line Items]
Credit facility, Maximum Borrowing Capacity		$ 300,000,000
Delayed Draw Term Loan | Term Loan
Debt Instrument [Line Items]
Credit facility, Maximum Borrowing Capacity		$ 400,000,000
Financing agreement for perpetual software licenses
Debt Instrument [Line Items]
Aggregate principal amount						0	30,000,000	0				$ 13,600,000	$ 13,600,000
Financing agreement for perpetual software licenses | Financing Agreement In September 2014
Debt Instrument [Line Items]
Balance of financing agreement						0		0
Financing agreement for perpetual software licenses | Financing Agreement In December 2015
Debt Instrument [Line Items]
Balance of financing agreement						$ 13,900,000	$ 13,000,000	$ 13,900,000
LIBOR + 2.0%, unsecured term loan
Debt Instrument [Line Items]
Aggregate principal amount									£ 1,300,000	$ 1,900,000	£ 900,000	$ 1,400,000
Debt instrument, maturity date				Dec. 01, 2017		Dec. 07, 2017	Dec. 07, 2017
Long-term debt							$ 3,202,000
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

XML

Long-term Borrowings and Capital Lease Obligations - Required Annual Principal Payments (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Debt Disclosure [Abstract]
2016	$ 48,853
2017	611,250
2018	70,000
2019	70,000
2020	$ 1,283,750

XML

Long-term Borrowings and Capital Lease Obligations - Capital Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Capital lease obligations	$ 3,748	$ 7,131
Less current portion	2,687	3,468
Obligations under capital leases, excluding current portion	$ 1,061	$ 3,663
Minimum | Equipment And Software [Member]
Lease term range	1 year
Maximum | Equipment And Software [Member]
Lease term range	6 years

XML

Long-term Borrowings and Capital Lease Obligations - Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Leases [Abstract]
2016	$ 2,754
2017	1,019
2018	63
Total minimum lease payments	3,836
Less amount representing interest	88
Principal minimum lease payments	$ 3,748

XML

Other Current Liabilities - Significant Components (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Other Liabilities Disclosure [Abstract]
Deferred revenues	$ 40,473	$ 39,863
Accrued expenses	32,861	26,017
Accrued third-party commissions	28,310	9,810
Litigation settlements	20,795	1,290
Dividends payable	19,513	19,367
Accrued interest	19,029	2,820
Other	102,278	67,412
Total	$ 263,259	$ 166,579

XML

Income Taxes - Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Current income tax expense:
Federal	$ 140,079	$ 139,228	$ 126,203
State	9,218	9,255	5,161
Foreign	4,443	4,762	7,694
Total current income tax expense	153,740	153,245	139,058
Deferred income tax expense (benefit):
Federal	8,393	(2,198)	(3,623)
State	(65)	442	(2,039)
Foreign	(893)	(125)	(3,635)
Total deferred income tax expense (benefit)	7,435	(1,881)	(9,297)
Income Tax Expense (Benefit), Total	$ 161,175	$ 151,364	$ 129,761

XML

Income Taxes - Before Income Tax (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Components of income before income tax expense:
Domestic	$ 454,763	$ 488,515	$ 369,888
Foreign	6,451	8,373	23,041
Income before income taxes and equity in income of equity investments	$ 461,214	$ 496,888	$ 392,929

XML

Income Taxes - Tax Expense and Statutory Tax Rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Taxes
Statutory federal income tax rate	35.00%
Computed "expected" income tax expense	$ 161,425	$ 173,911	$ 137,525
International tax rate differential and equity income	8,715	8,367	6,541
State income tax expense, net of federal income tax effect	9,127	7,101	4,823
Increase (decrease) in valuation allowance	2,855	(517)	(4,550)
Tax credits	(15,695)	(28,831)	(3,459)
Deduction for domestic production activities	(12,950)	(11,550)	(8,750)
Permanent differences and other, net	7,698	2,883	(2,369)
Income Tax Expense (Benefit), Total	$ 161,175	$ 151,364	$ 129,761

XML

Income Taxes - Temporary Differences Net Deferred Tax Liability (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Deferred income tax assets:
Net operating loss and income tax credit carryforwards	$ 34,490	$ 29,522
Allowances for doubtful accounts and billing adjustments	1,512	1,399
Deferred revenue	27,461	31,713
Share-based compensation	25,497	22,088
Foreign currency translation	4,019
Other, net	38,341	34,673
Total deferred income tax assets	131,320	119,395
Less valuation allowance for deferred income tax assets	(21,301)	(18,446)
Net deferred income tax assets	110,019	100,949
Deferred income tax liabilities:
Excess tax over financial statement depreciation	(63,432)	(61,161)
Computer software development costs	(80,837)	(82,835)
Purchase accounting adjustments	(344,547)	(114,171)
Foreign currency translation		(4,522)
Other, net	(33,700)	(24,462)
Total deferred income tax liabilities	(522,516)	(287,151)
Net deferred income tax liabilities	(412,497)	(186,202)
Total net deferred tax assets (liabilities):
Noncurrent deferred tax asset	7,055	6,242
Noncurrent deferred tax liability	(419,552)	(192,444)
Net deferred tax liability	$ (412,497)	$ (186,202)

XML

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Taxes
Deferred tax assets from net operating losses carryforwards	$ 8,500	$ 4,500
Deferred tax assets from capital loss carry forward	400
Deferred tax assets from federal and state income tax credit carryforwards	25,600	25,000
Valuation allowance for deferred income tax assets	21,301	$ 18,446
Decrease in valuation allowance for deferred income tax assets	2,900
Undistributed earnings	81,100
Decrease in liability for prior year uncertain tax position	$ 3,400

XML

Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Taxes
Unrecognized Tax Benefits, Beginning Balance	$ 13.1
Additions based on tax positions related to current year	3.4
Additions for tax positions of prior years	3.0
Decreases resulting from settlements with tax authorities	3.0
Unrecognized Tax Benefits, Period Increase (Decrease), Total	3.4
Unrecognized Tax Benefits, Ending Balance	16.5
Gross accrued interest and penalties on unrecognized tax benefits	1.8	$ 0.7
Unrecognized income tax benefits that, if recognized, would affect the effective tax rates	17.0	13.2
Unrecognized income tax benefits that, if recognized, would affect the effective tax rates , interest and penalties	$ 1.2	$ 0.5

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Commitments and Contingencies - Future Minimum Lease Payments Under Noncancelable Operating Leases (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Leases [Abstract]
2017	$ 129,120
2018	132,015
2019	132,242
2020	57,083
2021	21,035
Thereafter	34,644
Total future minimum commitment payments	$ 506,139

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Commitments and Contingencies - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 20, 2016
Loss Contingencies [Line Items]
Rental expense under all operating leases		$ 122,900,000	$ 124,800,000	$ 105,200,000
Settlement fund					$ 6,500,000
Settlement expense	$ 13,000,000
Settlement for lawsuit		21,719,000
Estimated gross settlement exposure	13,800,000	13,800,000
Cardholders' overdrawn account balances	21,200,000	21,200,000	17,900,000
Cardholders' loss reserve	10,500,000	10,500,000	9,400,000
Recognized gain on investment		811,000	4,038,000	793,000
MetaBank
Loss Contingencies [Line Items]
Advance on behalf of cardholders	1,000,000	1,000,000
Maximum
Loss Contingencies [Line Items]
Cardholder overdraft limit	10	10
Private Equity Funds
Loss Contingencies [Line Items]
Contributions made	20,100,000	20,100,000	15,000,000
Investments, including gains	22,800,000	22,800,000	17,600,000
Recognized gain on investment		800,000	$ 4,000,000	$ 800,000
Private Equity Funds | Maximum
Loss Contingencies [Line Items]
Commitment to invest	$ 20,000,000	$ 20,000,000
Percentage of ownership interests	50.00%	50.00%

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Employee Benefit Plans - Additional Information (Details)	12 Months Ended
	Dec. 31, 2016
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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Employee Benefit Plans - Contributions Charged to Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
TSYS Retirement Savings Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Contributions charged to expense	$ 21,077	$ 24,169	$ 17,531
TSYS Stock Repurchase Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Contributions charged to expense	$ 1,514	$ 1,378	$ 1,288

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Equity - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Uncategorized [Abstract]
Dividends on common stock	$ 73.4	$ 73.7	$ 74.8

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Equity - Summary of Equity Compensation Plans (Details) - Equity compensation plans not approved by security holders shares in Thousands	Dec. 31, 2016 $ / 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	4,891
Weighted-average exercise price of outstanding options, warrants and rights | $ / shares	$ 32.78	[1]
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))	6,962	[2]

[1] Weighted-average exercise price represents 2.9 million options only and does not include restricted share units 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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Equity -Summary of Equity Compensation Plans Narrative (Details) - shares shares in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at end of year	2,996	2,887	4,892

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Share-Based Compensation - Additional Information (Detail) $ / shares in Units, $ in Thousands, shares in Millions	12 Months Ended
	Dec. 31, 2016 USD ($) item $ / shares shares	Dec. 31, 2015 USD ($) $ / shares	Dec. 31, 2014 USD ($) $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equal annual installments of stock options exercisable | item	3
Expiration period of employee stock option	10 years
Share-based compensation	$ 43,728	$ 41,549	$ 30,790
Weighted average fair value | $ / shares	$ 8.50	$ 8.27	$ 7.66
Weighted average exercise price | $ / shares	$ 47.01	$ 39.01	$ 30.96
Risk-free interest rate	1.24%	1.73%	2.01%
Expected volatility	21.53%	20.80%	25.06%
Expected term (years)	4 years 6 months	6 years 3 months 18 days	6 years 6 months
Dividend yield	0.86%	1.04%	1.29%
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	$ 18,600
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	$ 1,900
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	$ 2,700
Unrecognized compensation cost related to non vested share-based compensation arrangements, remaining weighted average recognition period	1 year 7 months 6 days
Weighted average fair value | $ / shares	$ 8.50	$ 8.27	$ 7.66
Weighted average exercise price | $ / shares	$ 47.01	$ 39.01	$ 30.96
Stock Options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period of employee stock option	10 years
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 | shares	5.0
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 | shares	17.0
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 | shares	9.4
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 | shares	2.4
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%
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	$ 17,700
Unrecognized compensation cost related to non vested share-based compensation arrangements, remaining weighted average recognition period	1 year 8 months 12 days

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Share-Based Compensation - Number of Shares Granted Annually (Details) - Unvested Restricted Awards - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted	362,804	388,211	672,724
Market value	$ 16.8	$ 14.9	$ 20.6

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Share-Based Compensation - Nonvested Shares (Details) - Unvested Restricted Awards - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Shares
Outstanding at beginning of year	1,146,000	1,769,000	1,783,000
Granted	362,804	388,211	672,724
Vested	(562,000)	(930,000)	(602,000)
Forfeited/canceled	(84,000)	(81,000)	(85,000)
Outstanding at end of year	863,000	1,146,000	1,769,000
Weighted Average Grant-Date Fair Value
Outstanding at beginning of year	$ 31.11	$ 26.75	$ 24.19
Granted	46.23	38.38	30.67
Vested	29.95	26.05	23.74
Forfeited/canceled/adjusted	36.79	28.78	25.47
Outstanding at end of year	$ 37.78	$ 31.11	$ 26.75

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Share-Based Compensation - Performance Based Awards Granted (Details) - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted	687,685	613,473	1,046,372
Market Based Share Awards | 2016 Market Based Share Plan | Performance Period Ending December 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted	6,403
Market Based Share Awards | 2016 Market Based Share Plan | Performance Period Ending December 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted	52,404
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]
Number of Shares Granted	57,982
Market Based Share Awards | 2015 Market-Based Share Plan | Performance Period Ending July 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted	25,000
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Other Than Options Expected to Vest	903,364	687,015	389,242
Performance Shares | 2016 Performance Share Plan | Performance Period Ending December 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted	15,605
Performance Shares | 2016 Performance Share Plan | Performance Period Ending December 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted	14,940
Performance Shares | 2016 Performance Share Plan | Performance Period Ending December 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted	29,332
Performance Shares | 2016 Performance Share Plan | Performance Period Ending December 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted	67,517
Performance Shares | 2016 Performance Share Plan | Performance Period Ending December 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted	78,220
Performance Shares | 2016 Performance Share Plan | Performance Period Ending December 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted	122,284
Performance Shares | 2016 Performance Share Plan | Performance Period Ending December 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted	144,995
Performance Shares | 2015 Performance Share Plan | Performance Period Ending December 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted		135,289
Performance Shares | 2015 Performance Share Plan | Performance Period Ending December 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted		165,543
Performance Shares | 2014 Performance Shares | Performance Period Ending December 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted			211,593

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Share-Based Compensation - Awards Authorized (Details) - Performance Shares - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Number of Shares Awarded	531,700	383,814	211,593
Potential Number of Performance-Based Shares to be Vested	903,364	687,015	389,242
Potential Number of Performance-Based Shares to be Vested period	2019	2018	2017

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Share-Based Compensation - Performance-based Nonvested Shares (Details) - Performance Shares - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Shares
Outstanding at beginning of year	918	766	1,049
Number of shares granted	540	384	211
Vested	(140)	(241)	(258)
Forfeited/canceled/adjusted	(336)	9	(236)
Outstanding at end of year	982	918	766
Weighted Average Grant Date Fair Value
Outstanding at beginning of year	$ 31.19	$ 25.86	$ 22.75
Granted	45.91	36.84	30.89
Vested	37.91	22.92	17.57
Forfeited/canceled/adjusted	37.70	22.20	25.62
Outstanding at end of year	$ 33.43	$ 31.19	$ 25.86

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Share-Based Compensation - Weighted Average Assumptions and Fair Value of Options (Details) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-Based Compensation.
Number of options granted	687,685	613,473	1,046,372
Weighted average exercise price	$ 47.01	$ 39.01	$ 30.96
Risk-free interest rate	1.24%	1.73%	2.01%
Expected volatility	21.53%	20.80%	25.06%
Expected term (years)	4 years 6 months	6 years 3 months 18 days	6 years 6 months
Dividend yield	0.86%	1.04%	1.29%
Weighted average fair value	$ 8.50	$ 8.27	$ 7.66

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Share-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Options:
Number of options granted	687,685	613,473	1,046,372
Weighted Average Exercise Price
Granted	$ 47.01	$ 39.01	$ 30.96
Weighted average fair value of options granted during the year	$ 8.50	$ 8.27	$ 7.66
Stock Options
Options:
Outstanding at beginning of year	2,887,000	4,892,000	5,752,000
Number of options granted	688,000	613,000	1,046,000
Exercised	(500,000)	(2,586,000)	(1,850,000)
Forfeited/canceled	(79,000)	(32,000)	(56,000)
Outstanding at end of year	2,996,000	2,887,000	4,892,000
Options exercisable at year-end	1,877,000	1,439,000	2,781,000
Weighted Average Exercise Price
Outstanding at beginning of year	$ 28.07	$ 23.83	$ 20.96
Granted	47.01	39.01	30.96
Exercised	23.43	22.68	18.79
Forfeited/canceled	43.49	20.79	28.88
Outstanding at end of year	32.78	28.07	23.83
Options exercisable at year-end	28.45	25.17	22.86
Weighted average fair value of options granted during the year	$ 8.50	$ 8.27	$ 7.66
Average remaining contractual life (in years)	7 years 3 months 18 days
Aggregate intrinsic value (in thousands)	$ 49,323
Average remaining contractual life (in years)	6 years 7 months 6 days
Aggregate intrinsic value (in thousands)	$ 39,066

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Share-Based Compensation - Stock Option Exercises (Details) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-Based Compensation.
Options Exercised and Issued from Treasury	500	2,586	1,850
Intrinsic Value	$ 12,984	$ 67,702	$ 22,883

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Treasury Stock - Summary and Related Carrying Value (Details) - USD ($) shares in Thousands, $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Uncategorized [Abstract]
Treasury stock, shares	19,314	19,988	17,836
Treasury Shares Cost	$ 646,047	$ 641,664	$ 453,230

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Treasury Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended				3 Months Ended	12 Months Ended
	Dec. 31, 2015	Nov. 30, 2015	Jan. 31, 2014	Apr. 30, 2010	Dec. 31, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	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
Total Number of Shares Purchased						500,000	5,150,000	5,200,000
Average Price Paid per Share	$ 48.13	$ 49.29			$ 48.59	$ 48.57	$ 47.01	$ 31.79
Stock repurchase value						$ 24,287	$ 242,085	$ 165,297
Treasury stock acquired as a result of share withholding for taxes						144,839	3,344
Value of treasury stock acquired as a result of share withholding for taxes						$ 6,000	$ 200
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

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Treasury Stock - Purchases of Common Stock on Monthly Basis (Details) - $ / shares shares in Thousands	1 Months Ended		3 Months Ended	12 Months Ended
	Dec. 31, 2015	Nov. 30, 2015	Dec. 31, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Oct. 31, 2015
Uncategorized [Abstract]
Total Number of Shares Purchased				500	5,150	5,200
Average Price Paid per Share	$ 48.13	$ 49.29	$ 48.59	$ 48.57	$ 47.01	$ 31.79
Total Number of Cumulative Shares Purchased as Part of Publicly Announced Plans or Programs	5,650	5,350			5,650		5,150
Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs	14,350	14,650			14,350		14,850

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Other Comprehensive Income (Loss) - Income Tax Effects Allocated to AOCI (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ (33,544)	$ (11,926)	$ 3,749	$ 1,408
Pretax Amount	(24,172)	(23,269)	(17,280)	4,441
Tax Effect	(1,558)	(1,651)	(1,605)	2,100
Net-of-Tax Amount	(22,614)	(21,618)	(15,675)	2,341
Ending Balance	(56,158)	(33,544)	(11,926)	3,749
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(35,041)	(13,592)	2,004
Pretax Amount	(36,341)	(22,997)	(17,143)
Tax Effect	(5,872)	(1,548)	(1,547)
Net-of-Tax Amount	(30,469)	(21,449)	(15,596)
Ending Balance	(65,510)	(35,041)	(13,592)	2,004
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	2,503	1,105	1,773
Pretax Amount	11,394	2,177	(1,058)
Tax Effect	4,035	779	(390)
Net-of-Tax Amount	7,359	1,398	(668)
Ending Balance	9,862	2,503	1,105	1,773
Change in AOCI related to postretirement healthcare plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(1,034)	533	(56)
Pretax Amount	775	(2,449)	921
Tax Effect	279	(882)	332
Net-of-Tax Amount	496	(1,567)	589
Ending Balance	$ (538)	$ (1,034)	$ 533	$ (56)

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Segment Reporting, including Geographic Area Data and Major Customers - Operating Segments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Operating income	$ 573,382	$ 534,107	$ 431,640
Share-based compensation	43,728	41,549	30,790
TransFirst and NetSpend M&A and integration expenses1	28,176		3,217
Litigation Settlement, Amount	21,719
Acquisition intangible amortization	189,990	92,521	96,970
Adjusted operating income (non-GAAP) (b)	856,995	668,177	562,617
Total revenues	4,170,077	2,779,541	2,446,877
Less: reimbursable items	259,543	280,192	253,899
Revenues before reimbursable items	3,910,534	2,499,349	2,192,978
Less: interchange and assessments expenses	868,658
Net revenue (non-GAAP) (h)	3,041,876	2,499,349	2,192,978
North America Services
Segment Reporting Information [Line Items]
Total revenues	1,349,865	1,305,999	1,102,316
Net revenue (non-GAAP) (h)	1,174,304	1,118,332	936,957
International Services
Segment Reporting Information [Line Items]
Total revenues	330,898	344,030	352,196
Net revenue (non-GAAP) (h)	308,552	326,834	338,126
Merchant Services
Segment Reporting Information [Line Items]
Total revenues	1,828,469	549,135	509,679
Net revenue (non-GAAP) (h)	898,175	473,806	435,209
Netspend
Segment Reporting Information [Line Items]
Total revenues	660,845	580,377	482,686
Net revenue (non-GAAP) (h)	660,845	580,377	482,686
Segment External
Segment Reporting Information [Line Items]
Net revenue (non-GAAP) (h)	3,041,876	2,499,349	2,192,978
Operating Segments
Segment Reporting Information [Line Items]
Revenues before reimbursable items	3,950,414	2,532,830	2,214,202
Net revenue (non-GAAP) (h)	$ 3,081,756	$ 2,532,830	$ 2,214,202
Operating margin	13.80%	19.20%	17.60%
Operating margin on net revenue	28.20%	26.70%	25.70%
Operating Segments | North America Services
Segment Reporting Information [Line Items]
Adjusted operating income (non-GAAP) (b)	$ 468,251	$ 429,064	$ 351,512
Revenues before reimbursable items	1,206,013	1,147,254	954,082
Net revenue (non-GAAP) (h)	$ 1,206,013	$ 1,147,254	$ 954,082
Operating margin on net revenue	38.80%	37.40%	36.80%
Operating Segments | International Services
Segment Reporting Information [Line Items]
Adjusted operating income (non-GAAP) (b)	$ 56,774	$ 60,087	$ 55,123
Revenues before reimbursable items	313,631	331,159	341,785
Net revenue (non-GAAP) (h)	$ 313,631	$ 331,159	$ 341,785
Operating margin on net revenue	18.10%	18.10%	16.10%
Operating Segments | Merchant Services
Segment Reporting Information [Line Items]
Adjusted operating income (non-GAAP) (b)	$ 307,595	$ 150,225	$ 134,872
Revenues before reimbursable items	1,767,191	474,040	435,649
Net revenue (non-GAAP) (h)	$ 898,533	$ 474,040	$ 435,649
Operating margin on net revenue	34.20%	31.70%	31.00%
Operating Segments | Netspend
Segment Reporting Information [Line Items]
Adjusted operating income (non-GAAP) (b)	$ 160,371	$ 137,837	$ 128,285
Revenues before reimbursable items	663,579	580,377	482,686
Net revenue (non-GAAP) (h)	$ 663,579	$ 580,377	$ 482,686
Operating margin on net revenue	24.20%	23.70%	26.60%
Operating Segments | Corporate Administration
Segment Reporting Information [Line Items]
Adjusted operating income (non-GAAP) (b)	$ (135,996)	$ (109,036)	$ (107,175)
Intersegment Elimination
Segment Reporting Information [Line Items]
Revenues before reimbursable items	39,880	33,481	21,224
Net revenue (non-GAAP) (h)	$ 39,880	$ 33,481	$ 21,224

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Segment Reporting, including Geographic Area Data and Major Customers - Total Assets by Segment (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Total assets	$ 6,366,177	$ 3,877,895
Operating Segments | North America Services
Segment Reporting Information [Line Items]
Total assets	5,595,747	3,485,924
Operating Segments | International Services
Segment Reporting Information [Line Items]
Total assets	296,663	348,714
Operating Segments | Merchant Services
Segment Reporting Information [Line Items]
Total assets	3,295,509	689,781
Operating Segments | Netspend
Segment Reporting Information [Line Items]
Total assets	1,474,595	1,504,740
Intersegment Elimination
Segment Reporting Information [Line Items]
Total assets	$ (4,296,337)	$ (2,151,264)

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Segment Reporting, including Geographic Area Data and Major Customers - Depreciation expense by Segment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Depreciation and amortization	$ 373,546	$ 258,264	$ 248,018
Acquisition intangible amortization	189,990	92,521	96,970
Depreciation and amortization, discontinued operations			246,620
Operating Segments
Segment Reporting Information [Line Items]
Depreciation and amortization	179,995	163,390
Depreciation and amortization, discontinued operations			147,502
Operating Segments | North America Services
Segment Reporting Information [Line Items]
Depreciation and amortization	110,343	99,544	86,513
Operating Segments | International Services
Segment Reporting Information [Line Items]
Depreciation and amortization	30,966	34,892
Depreciation and amortization, discontinued operations			38,909
Operating Segments | Merchant Services
Segment Reporting Information [Line Items]
Depreciation and amortization	25,553	18,268	14,571
Operating Segments | Netspend
Segment Reporting Information [Line Items]
Depreciation and amortization	13,133	10,686	7,509
Corporate Administration and Other
Segment Reporting Information [Line Items]
Depreciation and amortization	$ 3,561	$ 2,353	$ 2,148

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Segment Reporting, including Geographic Area Data and Major Customers - Property and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Property and equipment, net of accumulated depreciation and amortization	$ 282,345	$ 289,898
United States
Segment Reporting Information [Line Items]
Property and equipment, net of accumulated depreciation and amortization	236,913	241,814
Europe
Segment Reporting Information [Line Items]
Property and equipment, net of accumulated depreciation and amortization	38,866	41,953
Other
Segment Reporting Information [Line Items]
Property and equipment, net of accumulated depreciation and amortization	$ 6,566	$ 6,131

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Segment Reporting, including Geographic Area Data and Major Customers - Additional Information (Detail) - customer	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Segment Reporting, including Geographic Area Data and Major Customers
Entity-wide revenue, major customer, number	0	0	0

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Segment Reporting, including Geographic Area Data and Major Customers - Reconciliation by Operating Segments (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2016		Dec. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Total revenues		$ 4,170,077		$ 2,779,541	$ 2,446,877
Percentage Of Revenue		100.00%		100.00%	100.00%
United States
Segment Reporting Information [Line Items]
Total revenues		$ 3,520,001		$ 2,110,044	$ 1,770,199
Percentage Of Revenue		84.40%		75.90%	72.30%
Canada
Segment Reporting Information [Line Items]
Total revenues		$ 284,733	[1]	$ 289,083	$ 290,496
Percentage Of Revenue		6.80%	[1]	10.40%	11.90%
Europe
Segment Reporting Information [Line Items]
Total revenues	[1]	$ 307,121		$ 304,650	$ 305,089
Percentage Of Revenue	[1]	7.40%		11.00%	12.50%
Mexico
Segment Reporting Information [Line Items]
Total revenues		$ 15,334		$ 16,558	$ 16,216
Percentage Of Revenue		0.40%		0.60%	0.70%
Other
Segment Reporting Information [Line Items]
Total revenues	[1]	$ 42,888		$ 59,206	$ 64,877
Percentage Of Revenue	[1]	1.00%		2.10%	2.70%
North America Services
Segment Reporting Information [Line Items]
Total revenues		$ 1,349,865		$ 1,305,999	$ 1,102,316
North America Services | United States
Segment Reporting Information [Line Items]
Total revenues		1,032,381		981,588	778,766
North America Services | Canada
Segment Reporting Information [Line Items]
Total revenues		284,005	[1]	288,728	290,248
North America Services | Europe
Segment Reporting Information [Line Items]
Total revenues	[1]	788		796	781
North America Services | Mexico
Segment Reporting Information [Line Items]
Total revenues		14,887		16,558	16,216
North America Services | Other
Segment Reporting Information [Line Items]
Total revenues	[1]	17,804		18,329	16,305
International Services
Segment Reporting Information [Line Items]
Total revenues		330,898		344,030	352,196
International Services | Canada
Segment Reporting Information [Line Items]
Total revenues	[1]	23
International Services | Europe
Segment Reporting Information [Line Items]
Total revenues	[1]	306,106		303,832	304,308
International Services | Mexico
Segment Reporting Information [Line Items]
Total revenues		447
International Services | Other
Segment Reporting Information [Line Items]
Total revenues	[1]	24,322		40,198	47,888
Merchant Services
Segment Reporting Information [Line Items]
Total revenues		1,828,469		549,135	509,679
Merchant Services | United States
Segment Reporting Information [Line Items]
Total revenues		1,826,775		548,079	508,747
Merchant Services | Canada
Segment Reporting Information [Line Items]
Total revenues		705	[1]	355	248
Merchant Services | Europe
Segment Reporting Information [Line Items]
Total revenues	[1]	227		22
Merchant Services | Other
Segment Reporting Information [Line Items]
Total revenues	[1]	762		679	684
Netspend
Segment Reporting Information [Line Items]
Total revenues		660,845		580,377	482,686
Netspend | United States
Segment Reporting Information [Line Items]
Total revenues		$ 660,845		$ 580,377	$ 482,686

[1] 2014(in thousands)    North AmericaServices    InternationalServices    MerchantServices    Netspend    Total    Percentage of Revenues United States$ 778,766 - 508,747 482,686$ 1,770,199 72.3%Europe1 781 304,308 - - 305,089 12.5Canada1 290,248 - 248 - 290,496 11.9Mexico 16,216 - - - 16,216 0.7Other1 16,305 47,888 684 - 64,877 2.7Total$ 1,102,316 352,196 509,679 482,686$ 2,446,877 100.0%Revenues are impacted by movements in foreign currency exchange rates

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Supplementary Cash Flow Information - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Sep. 30, 2014
Supplemental cash flow information:
Equipment and software acquired under capital lease obligations	$ 1.8	$ 4.1	$ 17.9
Financing agreement for perpetual software licenses
Supplemental cash flow information:
Financing agreement amount	$ 0.0	$ 30.0	$ 13.6	$ 13.6

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Acquisitions - Additional Information (Details) $ / shares in Units, £ in Millions, shares in Millions		1 Months Ended			9 Months Ended	12 Months Ended
	Mar. 17, 2016 USD ($)	Mar. 31, 2016 GBP (£)	Mar. 31, 2016 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Feb. 28, 2014	Jul. 01, 2013 USD ($) shareholder $ / shares shares
Business Acquisition [Line Items]
Goodwill					$ 3,270,952,000	$ 3,270,952,000	$ 1,545,424,000
Identifiable intangible assets					814,100,000	814,100,000
Litigation Settlement, Amount						21,719,000
Purchase of noncontrolling interest						$ 5,878,000		$ 37,500,000
Business acquisition, noncontrolling interest, redemption period						2017
Business acquisition, noncontrolling interest, redemption value					27,400,000	$ 27,400,000
Netspend Holdings Inc
Business Acquisition [Line Items]
Business acquisition, cost of acquired entity, purchase price				$ 750,000		1,400,000,000
Number of shareholders | shareholder										5
Share price per share | $ / shares										$ 16.00
Shares held by dissenting shareholders | shares										1.6
Goodwill, Period Increase (Decrease)								$ 8,500,000
Value of shares held by dissenting shareholders										$ 25,700,000
Netspend Holdings Inc | Dissenting Shareholders
Business Acquisition [Line Items]
Litigation Settlement, Amount							$ 38,600,000
TransFirst
Business Acquisition [Line Items]
Business acquisition, cost of acquired entity, purchase price	$ 2,350,000,000					2,351,400,000
Goodwill					1,728,088,000	1,728,088,000
Identifiable intangible assets					$ 814,131,000	$ 814,131,000
Assumption used in fair value, measurement, discount rate					8.50%	8.50%
Assumption used in fair value measurement, royalty rate low range					1.00%	1.00%
Assumption used in fair value measurement, royalty rate high range					3.00%	3.00%
Assumption used in fair value measurement,, attrition rate low range					11.00%	11.00%
Assumption used in fair value measurement, attrition rate high range					16.00%	16.00%
Assumption used in fair value, measurement, effective tax rate					40.00%	40.00%
Assumption used in fair value, measurement, long-term sustainable growth rate						3.00%
Revenue since acquisition date					$ 1,300,000,000
Operating income since acquisition date					$ 30,000,000
TransFirst | Bridge Loan Facility | Selling, general and administrative expenses
Business Acquisition [Line Items]
Acquisition-related costs						$ 32,300,000
TransFirst | Bridge Loan Facility | Interest expense
Business Acquisition [Line Items]
Acquisition-related costs						$ 9,800,000
Merchants Limited | TSYS Managed Services EMEA Limited
Business Acquisition [Line Items]
Percentage of ownership interest acquired from minority interest holders		45.00%	45.00%
Purchase of noncontrolling interest		£ 4.2	$ 5,900,000
Repayment of debt assumed upon acquisition		£ 2.2	$ 3,000,000
CPAY
Business Acquisition [Line Items]
Percentage of equity interest									25.00%

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Acquisitions - Assets Acquired and Liabilities Assumed Recognized (Details) - USD ($)		12 Months Ended
	Mar. 17, 2016	Dec. 31, 2016	Dec. 31, 2015
Recognized amounts of identifiable assets acquired and liabilities assumed:
Identifiable intangible assets		$ 814,100,000
Goodwill		3,270,952,000	$ 1,545,424,000
TransFirst
Consideration
Cash		2,351,400,000
Fair value of total consideration transferred	$ 2,350,000,000	2,351,400,000
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash		5,907,000
Accounts receivable, net		62,313,000
Property equipment and software		12,726,000
Identifiable intangible assets		814,131,000
Deferred tax asset		2,244,000
Other assets		7,509,000
Deferred tax liability		(224,654,000)
Other liabilities		(56,864,000)
Total identifiable net assets		623,312,000
Goodwill		1,728,088,000
Total identifiable assets acquired and liabilities assumed		2,351,400,000
Increase in business acquisition, cost of acquired entity, purchase price		55,000
Increase in identifiable intangible assets		2,000,000
Increase in liabilities		363,700
Increase in deferred tax liability		18,000,000
Increase in goodwill		$ 20,400,000

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Acquisitions - Amounts of Assets Acquired and Liabilities Assumed Recognized (Details) - USD ($)	1 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2016	Dec. 31, 2015
Recognized amounts of identifiable assets acquired and liabilities assumed:
Identifiable intangible assets		$ 814,100,000
Goodwill		3,270,952,000	$ 1,545,424,000
Netspend Holdings Inc
Consideration
Business acquisition, cost of acquired entity, purchase price	$ 750,000	$ 1,400,000,000

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Acquisitions - Estimated Fair Value of Identifiable Intangible Assets Acquired (Details) $ in Millions	12 Months Ended
	Dec. 31, 2016 USD ($)
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 814.1
Acquired intangible assets, weighted average useful lives	7 years 1 month 6 days
Merchant Relationships
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 588.0
Acquired intangible assets, weighted average useful lives	7 years
Channel Partner
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 121.0
Acquired intangible assets, weighted average useful lives	10 years
Current Technology
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 72.0
Acquired intangible assets, weighted average useful lives	5 years
Trade name
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 16.0
Acquired intangible assets, weighted average useful lives	1 year
Covenants-Not-to-Compete
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 15.0
Acquired intangible assets, weighted average useful lives	3 years
Favorable Lease
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 2.1
Acquired intangible assets, weighted average useful lives	5 years 7 months 6 days

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Acquisitions - Estimated Fair Value of Identifiable Intangible Assets Acquired (Details) $ in Millions	12 Months Ended
	Dec. 31, 2016 USD ($)
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 814.1
Acquired intangible assets, weighted average useful lives	7 years 1 month 6 days
Current Technology
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 72.0
Acquired intangible assets, weighted average useful lives	5 years
Trade name
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 16.0
Acquired intangible assets, weighted average useful lives	1 year
Covenants-Not-to-Compete
Schedule Of Acquired Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Acquired identifiable intangible assets, fair value	$ 15.0
Acquired intangible assets, weighted average useful lives	3 years

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Acquisitions - Pro Forma Revenue and Earnings (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Business Acquisition, Pro Forma Information [Abstract]
Revenue	$ 4,170,077	$ 2,779,541	$ 2,446,877
Net income attributable to TSYS common shareholders	$ 319,638	$ 364,044	$ 322,872
Basic EPS attributable to TSYS common shareholders	$ 1.74	$ 1.98	$ 1.73
Diluted EPS attributable to TSYS common shareholders	$ 1.73	$ 1.97	$ 1.72
Revenue	$ 4,562,236	$ 3,230,703
Net income attributable to TSYS common shareholders	$ 347,248	$ 317,549
Basic EPS attributable to TSYS common shareholders	$ 1.89	$ 1.73
Diluted EPS attributable to TSYS common shareholders	$ 1.88	$ 1.72

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Acquisitions - Unaudited Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Business Acquisition, Pro Forma Information [Abstract]
Revenue	$ 4,170,077	$ 2,779,541	$ 2,446,877
Net income attributable to TSYS common shareholders	$ 319,638	$ 364,044	$ 322,872
Basic EPS attributable to TSYS common shareholders	$ 1.74	$ 1.98	$ 1.73
Diluted EPS attributable to TSYS common shareholders	$ 1.73	$ 1.97	$ 1.72
Revenue	$ 4,562,236	$ 3,230,703
Net income attributable to TSYS common shareholders	$ 347,248	$ 317,549
Basic EPS attributable to TSYS common shareholders	$ 1.89	$ 1.73
Diluted EPS attributable to TSYS common shareholders	$ 1.88	$ 1.72
Netspend
Business Acquisition, Pro Forma Information [Abstract]
Revenue	$ 660,845	$ 580,377	$ 482,686

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Collaborative Arrangement - Additional Information (Details)	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Percentage of ownership interest in an enterprise jointly owned with two other entities	45.00%

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Earnings Per Share - Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Basic EPS:
Net income attributable to TSYS common shareholders	$ 319,638	$ 364,044	$ 322,872
Basic EPS (a)/(b)	$ 1.74	$ 1.98	$ 1.73
Diluted EPS:
Net income attributable to TSYS common shareholders	$ 319,638	$ 364,044	$ 322,872
Diluted EPS (c)/(d)	$ 1.73	$ 1.97	$ 1.72
Common Stock
Basic EPS:
Net income attributable to TSYS common shareholders	$ 319,638	$ 364,044	$ 322,872
Add income allocated to nonvested awards1	1,557
Less income allocated to nonvested awards	(1,557)	(3,164)	(3,308)
Net income allocated to common stock for EPS calculation (a)	$ 318,081	$ 360,880	$ 319,564
Average common shares outstanding (b)	182,744	182,465	184,297
Basic EPS (a)/(b)	$ 1.74	$ 1.98	$ 1.73
Diluted EPS:
Net income attributable to TSYS common shareholders	$ 319,638	$ 364,044	$ 322,872
Less income allocated to nonvested awards	(1,557)	(3,148)	(3,288)
Add income allocated to nonvested awards1	1,557
Net income allocated to common stock for EPS calculation (c)	$ 319,638	$ 360,896	$ 319,584
Average common shares outstanding	182,744	182,465	184,297
Increase due to assumed issuance of shares related to common equivalent shares outstanding	813	1,157	1,459
Average nonvested awards	891
Average common and common equivalent shares outstanding (d)	184,448	183,622	185,756
Diluted EPS (c)/(d)	$ 1.73	$ 1.97	$ 1.72
Participating Securities
Basic EPS:
Less income allocated to nonvested awards	$ 1,557	$ 3,164	$ 3,308
Basic EPS (a)/(b)	$ 1.71	$ 1.96	$ 1.72
Diluted EPS:
Less income allocated to nonvested awards	$ 1,552	$ 3,148	$ 3,288
Average common and common equivalent shares outstanding (d)	911	1,617	1,925
Diluted EPS (c)/(d)	$ 1.70	$ 1.95	$ 1.71

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Earnings Per Share - Participating Securities (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Earnings Per Share Disclosure [Line Items]
Convertible stock options and nonvested awards excluded from diluted EPS calculation	400	600	1,100
Basic EPS:
Basic EPS (a)/(b)	$ 1.74	$ 1.98	$ 1.73
Diluted EPS (c)/(d)	$ 1.73	$ 1.97	$ 1.72
Participating Securities
Basic EPS:
Net income allocated to nonvested awards(a)	$ 1,557	$ 3,164	$ 3,308
Nonvested awards(b)	911	1,617	1,925
Basic EPS (a)/(b)	$ 1.71	$ 1.96	$ 1.72
Net income allocated to nonvested awards(c)	$ 1,552	$ 3,148	$ 3,288
Average common and common equivalent shares outstanding(d)	911	1,617	1,925
Diluted EPS (c)/(d)	$ 1.70	$ 1.95	$ 1.71

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Subsequent Events (Details) - CPAY - USD ($) $ in Millions		1 Months Ended
	Feb. 03, 2017	Feb. 28, 2014
Percentage of Additional Equity Ownership Interest in Subsidiary after Acquisition		15.00%
Payments to Acquire Additional Interest in Subsidiaries		$ 37.5
Redeemable noncontrolling interest		25.00%
Subsequent Event
Percentage of Additional Equity Ownership Interest in Subsidiary after Acquisition	10.00%
Payments to Acquire Additional Interest in Subsidiaries	$ 70.0
Redeemable noncontrolling interest	15.00%

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Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Provision for doubtful accounts
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period	$ 1,757	$ 3,222	$ 1,758
Additions Changes in allowances, charges to expenses and changes to other accounts	6,970	(58)	640
Deductions	(5,245)	(1,407)	824
Balance at end of period	3,482	1,757	3,222
Provision for billing adjustments
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period	926	866	504
Additions Changes in allowances, charges to expenses and changes to other accounts	614	(114)	497
Deductions	(180)	174	(135)
Balance at end of period	1,360	926	866
Provision for merchant losses
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period	1,366	1,118	1,122
Additions Changes in allowances, charges to expenses and changes to other accounts	1,682	4,667	1,686
Deductions	(1,009)	(4,419)	(1,690)
Balance at end of period	2,039	1,366	1,118
Transaction processing accruals - processing errors
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period	6,457	4,630	2,409
Additions Changes in allowances, charges to expenses and changes to other accounts	3,669	6,976	9,468
Deductions	(7,275)	(5,149)	(7,247)
Balance at end of period	2,851	6,457	4,630
Provision for fraud losses
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period	9,391	6,312	5,784
Additions Changes in allowances, charges to expenses and changes to other accounts	49,362	41,264	38,381
Deductions	(48,226)	(38,185)	(37,853)
Balance at end of period	10,527	9,391	6,312
Deferred tax valuation allowance
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at beginning of period	18,446	18,963	14,691
Additions Changes in allowances, charges to expenses and changes to other accounts	4,124	541	5,534
Deductions	(1,269)	(1,058)	(1,262)
Balance at end of period	$ 21,301	$ 18,446	$ 18,963

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Schedule II - Valuation and Qualifying Accounts Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Provision for fraud losses
Valuation and Qualifying Accounts Disclosure [Line Items]
Fraud losses related to the acquisition	$ 49,362	$ 41,264	$ 38,381