TSYS Reports 2012 Earnings Per Share Up 13.1%

Provides 2013 EPS Guidance of 10%-12% Growth

COLUMBUS, Ga.--(BUSINESS WIRE)-- TSYS (NYS: TSS) today reported results for the fourth quarter and full year with basic earnings per share (EPS) at $0.33 for the quarter, an increase of 3.7%, and $1.30 for the full year, an increase of 13.1% over 2011. Revenues before reimbursable items for the quarter were $418.6 million, an increase of 2.7%, and $1,618.5 million for the year, an increase of 5.0% over 2011. Total revenues were $479.1 million for the quarter and $1,871.0 million for the full year, increases of 1.5% and 3.4%, respectively, as compared to 2011. Total revenues were impacted by decreases of $4.0 million for the quarter and $15.8 million for the year in reimbursable items.


Operating margin excluding reimbursable items for the year was 22.1%, an increase of 117 basis points over last year. The increase is attributable to a 5.0% increase in revenues before reimbursable items, while expenses before reimbursable items were up only 3.5%.

"We are pleased to report that we exceeded the high end of our net income and EPS guidance for 2012. These results reflect continued strong same client transaction growth of 12.0% in our card issuer processing business. Point-Of-Sale transactions, excluding deconverted clients in the indirect merchant business, were up 9.9% and sales volume in the direct merchant business was up 12.9%. Excluding the impact of acquisitions, sales volume was up 3.2%. Also contributing to our strong results was our consolidated internal revenue growth of 5.1% for the year, combined with acquisitions in the acquiring space, which added 1.8% to our growth in revenues before reimbursable items," said Philip W. Tomlinson, chairman and chief executive officer of TSYS.

"Our guidance for 2013 is included in the table below and we expect 6% to 8 % growth in revenues before reimbursable items and 10% to 12% EPS growth. This is the second year in a row that we have projected double digit EPS growth. We remain focused on executing our strategy of growing our existing businesses, adding strategic acquisitions and deploying capital to enhance shareholder return. In support of this strategy during 2012, we purchased 3.2 million shares of our stock for $75 million, used $190 million to invest in acquisitions, and returned $94 million in dividends to our shareholders, for a total spend of $359 million," said Tomlinson.

2013 Guidance
Range        

(in millions, except per
share amounts)

Percent

Change

Total revenues $1,955     to     $1,995 5%     to     7%
Revenues before reimbursable items $1,711 to $1,746 6% to 8%
Net Income attributable to TSYS common shareholders

$266

to

$272

9%

to

11%

EPS attributable to TSYS common shareholders

$1.43

to

$1.45

10%

to

12%

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, January 22. The conference call can be accessed via simultaneous Internet broadcast at tsys.com by clicking on the link under "Webcasts" on the main homepage. The replay will be archived for 12 months and will be available approximately 30 minutes after the completion of the call. A slide presentation to accompany the call will be available by clicking on the link under "Webcasts" on the main homepage of tsys.com.

Non-GAAP Measures

The financial highlights section of this release and this release contain the non-GAAP financial measures of revenues and operating results on a constant currency basis, and revenues and operating margin excluding reimbursable items, respectively, to describe TSYS' performance. Management uses these non-GAAP financial measures to better understand and assess TSYS' operating results and financial performance. TSYS believes these non-GAAP financial measures provide meaningful additional information about TSYS to assist investors in understanding and evaluating its operating results.

Additional information about non-GAAP financial measures and a reconciliation of those measures to the most directly comparable GAAP measures are included on pages 11 and 12 of this release.

About TSYS

At TSYS, (NYS: TSS) , we believe payments should revolve around people — not the other way around. We call this belief "People-Centered PaymentsSM." By putting people at the center of every decision we make, with unmatched customer service and industry insight, TSYS is able to support financial institutions, businesses and governments in more than 80 countries. Offering merchant payment-acceptance solutions as well as services in credit, debit, prepaid, mobile, chip, healthcare and more, we make it possible for those in the global marketplace to conduct safe and secure electronic transactions with trust and convenience.

TSYS' headquarters are located in Columbus, Georgia, with local offices spread across the Americas, EMEA and Asia-Pacific. TSYS provides services to more than half of the top 20 international banks, is a Fortune 1000 company and was named one of the 2012 World's Most Ethical Companies by Ethisphere magazine. For more information, please visit us at www.tsys.com.

Forward-Looking Statements

This press release contains "forward-looking statements" - that is, statements related to future, not past, events. Forward-looking statements often address our expected future business and financial performance and often contain words such as "expect," "anticipate," "intend," "believe," "should," "plan," "will," "could," and similar expressions. These forward-looking statements include, among others, statements regarding TSYS' earnings guidance for 2013 total revenues, revenues before reimbursable items, net income attributable to TSYS common shareholders and EPS attributable to TSYS common shareholders, and the assumptions underlying such statements. These statements are based on the current beliefs and expectations of TSYS' management, are based on management's assumptions 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 our forward-looking statements in this press release. Many of these factors are beyond TSYS' ability to control or predict. These factors include, but are not limited to, the effect of current domestic and worldwide economic conditions; the material breach of security of any of TSYS' systems; the impact of potential and completed acquisitions, including the costs associated therewith and their being more difficult to integrate than anticipated; adverse developments with respect to foreign currency exchange rates; expenses are incurred associated with the signing of a significant client; the deconversion of a significant client; changes occur in laws, rules, regulations, credit card association rules or other industry standards affecting TSYS and our clients that may result in costly new compliance burdens on TSYS and our clients and lead to a decrease in the volume and/or number of transactions processed; the costs and effects of litigation, investigations or similar matters or adverse facts and developments relating thereto; adverse developments with respect to the credit card industry in general, including a decline in the use of credit cards as a payment mechanism; and growth rates of TSYS' existing clients are lower than anticipated or attrition rates of existing clients are higher than anticipated. Additional risks and other factors that could cause actual results to differ materially from those contemplated in this release can be found in TSYS' filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise.

TSYS Announces Fourth Quarter 2012 Earnings                  
Page 4 of 12
 
 
                                 
TSYS
Financial Highlights
(unaudited)
(in thousands, except per share data)
 
Three Months Ended Twelve Months Ended
December 31, December 31,
Percent Percent
2012 2011 Change 2012 2011 Change
 
Total revenues $ 479,100 472,234 1.5 % $ 1,870,972 1,808,966 3.4 %
 
Cost of services 315,698 322,946 (2.2 ) 1,262,310 1,257,970 0.3
Selling, general and administrative expenses 73,571   59,570   23.5 251,010   228,540   9.8
 
Operating income 89,831 89,718 0.1 357,652 322,456 10.9
 
Nonoperating income (expenses) 5   (541 ) nm (2,798 ) (5,905 ) 52.6
 
Income before income taxes, noncontrolling interests
and equity in income of equity investments 89,836 89,177 0.7 354,854 316,551 12.1
Income taxes 30,767   29,497   4.3 115,102   102,597   12.2
Income before noncontrolling interests and
equity in income of equity investments 59,069 59,680 (1.0 ) 239,752 213,954 12.1
Equity in income of equity investments 3,188   1,234   nm 10,171   8,708   16.8
Net income 62,257 60,914 2.2 249,923 222,662 12.2
Net income attributable to noncontrolling interests (1,395 ) (1,040 ) (34.1 ) (5,643 ) (2,103 ) nm
 
Net income attributable to TSYS common shareholders $ 60,862   59,874   1.7 % $ 244,280   220,559   10.8 %
 
Basic earnings per share $ 0.33   0.31   3.7 % $ 1.30   1.15   13.1 %
 
Diluted earnings per share $ 0.32   0.31   3.4 % $ 1.29   1.15   12.5 %
 
 
Dividends declared per share $ 0.10   0.10   $ 0.40   0.31  
 
nm = not meaningful
TSYS Announces Fourth Quarter 2012 Earnings            
Page 5 of 12    
   
 
                             
TSYS
Consolidated Statements of Comprehensive Income
(unaudited)
(in thousands)
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
 
2012 2011 2012 2011
 
Net income $ 62,257 60,914 249,923 222,662
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments (2,257 ) (2,944 ) 678 1,133
Postretirement healthcare plan adjustments (415 ) 263   (1,665 ) 1,056
Other comprehensive income (loss) (2,672 ) (2,681 ) (987 ) 2,189
Comprehensive income 59,585 58,233 248,936 224,851
Comprehensive income attributable to
noncontrolling interests (1,041 ) (1,146 ) 2,803   2,152
Comprehensive income attributable to
TSYS common shareholders $ 60,626   59,379   246,133   222,699
 
TSYS Announces Fourth Quarter 2012 Earnings                          
Page 6 of 12
 
 
                                               
TSYS
Earnings Per Share
(unaudited)
(in thousands, except per share data)
 

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