TSYS Reports Second Quarter 2011 Results

TSYS Reports Second Quarter 2011 Results

 

COLUMBUS, Ga., (PaymentsMarket) -- TSYS today reported results for the second quarter of 2011 with total revenues of $447.6 million, an increase of 3.9% over 2010. Excluding a 2010 termination fee, total revenues were up 6.2%. Basic earnings per share from continuing operations were $0.28, an increase of 10.1% over 2010, and increased 25.4% excluding the 2010 termination fee.

"We continue to see the improvements that we expected in 2011 as evidenced by our year over year quarterly revenue growth with and without the termination fee. Our North America Services segment had an increase in revenues before reimbursable items of 3.2% and operating income growth of 13.0% excluding the 2010 termination fee. In our International Services segment, revenues before reimbursable items increased 14.1% on a constant currency basis as a result of new business and organic growth. Our Merchant Services segment had an increase in revenues before reimbursable items of 1.3% and operating income growth of 10.0%," said Philip W. Tomlinson, chairman and chief executive officer of TSYS.

For the six months ended June 30, 2011, total revenues increased 3.9% over 2010 and were up 8.1% excluding 2010 termination fees. Basic earnings per share from continuing operations were $0.53, a 3.0% increase over 2010, and increased 29.8% excluding 2010 termination fees.

"Our year to date results confirm our confidence in the improving economic conditions and our expectation that we will be successful at achieving our full year guidance for 2011. Since the beginning of 2011, we have deployed approximately $252 million of capital for share repurchases and acquisitions as we continue to invest in our future growth," said Tomlinson.

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, July 26. 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

This press release and the financial highlights section of this release contain the non-GAAP financial measures of revenues and basic EPS excluding revenues from termination fees and revenues and operating results on a constant currency basis, 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 10 and 11 of this release.

About TSYS

TSYS is reshaping a new era in digital commerce, connecting consumers, merchants, financial institutions, businesses and governments. Through unmatched customer service and industry insight, TSYS creates a better experience for buyers and sellers, supporting cross-border payments in more than 85 countries. Offering merchant payment-acceptance solutions as well as services in credit, debit, prepaid, mobile, chip, healthcare, installments, money transfer and more, TSYS makes 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. 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' belief that it will achieve its financial guidance for 2011, and the assumptions underlying such statements. These statements are based on 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 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: adverse developments with respect to entering into contracts with new clients and retaining current clients; continued consolidation and turmoil in the financial services and other industries during 2011, 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 the nationalization or seizure by banking regulators of TSYS clients; TSYS is unable to control expenses and increase market share both domestically and internationally; TSYS is unable to manage the impact of slowing economic conditions and consumer spending; 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; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on TSYS and on our clients; 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 internal growth rates of TSYS' existing clients are lower than anticipated whether as a result of unemployment rates, card delinquencies and charge-off rates or otherwise. 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
                                                                    Financial Highlights
                                                                         (unaudited)
                                                     (in thousands, except per share data)
        ------------------------------------------------------------------------------------------------------------------------------
                                                                             Three Months Ended                         Six Months Ended
                                                                                  June 30,                                  June 30,
                                                                    ------------------------------------      ------------------------------------
                                                                                                Percent                                   Percent
                                                                       2011         2010        Change           2011         2010        Change
                                                                    -----------  -----------  ----------      -----------  -----------  ----------
        Total revenues                                            $ 447,554      430,887        3.9     %   $ 876,985      844,350        3.9     %
        Cost of services                                            312,052      295,880        5.5           613,543      586,418        4.6
        Selling, general and administrative expenses                 56,973       55,178        3.3           111,885       98,391       13.7
                                                                    -------      -------                      -------      -------
        Operating income                                             78,529       79,829       (1.6)         151,557      159,541       (5.0)
        Nonoperating expenses                                          (841)     (1,172)     28.2            (1,568)     (1,433)     (9.4)
                                                                    ------- --   ------- --                   ------- --   ------- --
        Income from continuing operations before income
           taxes, noncontrolling interests and equity in income
           of equity investments                                     77,688       78,657       (1.2)         149,989      158,108       (5.1)
        Income taxes                                                 23,658       28,272      (16.3)          48,815       56,369      (13.4)
                                                                    -------      -------                      -------      -------
        Income from continuing operations before noncontrolling
           interests and equity in income of equity investments      54,030       50,385        7.2           101,174      101,739       (0.6)
         Equity in income of equity investments                         617        2,366      (73.9)           2,885        3,259      (11.5)
                                                                    -------      -------                      -------      -------
         Income from continuing operations, net of tax               54,647       52,751        3.6           104,059      104,998       (0.9)
         Loss from discontinued operations, net of tax                    -         (273)           nm             -         (701)           nm
                                                                    -------      ------- --                   -------      ------- --
        Net income                                                   54,647       52,478        4.1           104,059      104,297       (0.2)
        Net income attributable to noncontrolling interests            (900)     (2,774)     67.6            (1,522)     (3,267)     53.4
                                                                    ------- --   ------- --                   ------- --   ------- --
        Net income attributable to TSYS common shareholders       $  53,747       49,704        8.1     %   $ 102,537      101,030        1.5     %
                                                                    =======      =======                      =======      =======
        Basic earnings per share:
        Income from continuing operations to TSYS
          common shareholders                                     $    0.28         0.25       10.1     %   $    0.53         0.52        3.0     %
                                                                    =======      =======                      =======      =======
        Loss from discontinued operations to TSYS
          common shareholders                                             -        (0.00)           nm             -        (0.00)           nm
                                                                    =======      ======= ==                   =======      ======= ==
        Net income attributable to TSYS common shareholders       $    0.28         0.25       10.8     %   $    0.53         0.51        3.7     %
                                                                    =======      =======                      =======      =======
        Diluted earnings per share:
        Income from continuing operations to TSYS
          common shareholders                                     $    0.28         0.25       10.0     %   $    0.53         0.52        2.8     %
                                                                    =======      =======                      =======      =======
        Loss from discontinued operations to TSYS
          common shareholders                                             -        (0.00)           nm             -        (0.00)           nm
                                                                    =======      ======= ==                   =======      ======= ==
        Net income attributable to TSYS common shareholders       $    0.28         0.25       10.5     %   $    0.53         0.51        3.5     %
                                                                    =======      =======                      =======      =======
        Dividends declared per share                              $    0.07         0.07                    $    0.14         0.14
                                                                    =======      =======                      =======      =======
        Amounts attributable to TSYS common shareholders:
          Income from continuing operations, net of tax           $  53,747       49,977        7.5     %   $ 102,537      101,731        0.8     %
         (Loss) income from discontinued operations, net of tax           -         (273)           nm             -         (701)           nm
                                                                    -------      ------- --                   -------      ------- --
          Net income                                              $  53,747       49,704        8.1     %   $ 102,537      101,030        1.5     %
                                                                    =======      =======                      =======      =======
        nm = not meaningful
        


        
                                                                                             TSYS
                                                                                      Earnings Per Share
                                                                                          (unaudited)
                                                                             (in thousands, except per share data)
        -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Three Months Ended            Three Months Ended               Six Months Ended              Six Months Ended
                                                                       June 30, 2011                 June 30, 2010                   June 30, 2011                 June 30, 2010
                                                               ----------------------------  ----------------------------    ----------------------------  ----------------------------
                                                                  Common      Participating     Common      Participating       Common      Participating     Common      Participating
                                                                   Stock       Securities        Stock       Securities          Stock       Securities        Stock       Securities
                                                               ------------  -------------   ------------  -------------     ------------  -------------   ------------  -------------
        Basic Earnings per share:
           Net income                                        $  53,747                        49,704                       $ 102,537                       101,030
           Less income allocated to nonvested awards              (191)               191      (250)               250        (383)               383      (514)               514
                                                               ------- ---   -------------   ------- ---   -------------     ------- ---   -------------   ------- ---   -------------
              Net income allocated to common stock for
                 EPS calculation (a)                       $  53,556                 191    49,454                 250   $ 102,154                 383   100,516                 514
                                                               =======       =============   =======       =============     =======       =============   =======       =============
        Average common shares outstanding (b)                191,935                 690   196,346                 998     192,390                 727   196,253               1,007
                                                               =======       =============   =======       =============     =======       =============   =======       =============
        Average common shares and participating securities     192,625                       197,344                         193,117                       197,260
                                                               =======                       =======                         =======                       =======
        Basic Earnings per share (a)/(b)                 $    0.28                0.28      0.25                0.25   $    0.53                0.53      0.51                0.51
                                                               =======       =============   =======       =============     =======       =============   =======       =============
        Diluted Earnings per share:
           Net income                                        $  53,747                        49,704                       $ 102,537                       101,030
           Less income allocated to nonvested awards              (190)               190      (250)               250        (382)               382      (514)               514
                                                               ------- ---   -------------   ------- ---   -------------     ------- ---   -------------   ------- ---   -------------
              Net income allocated to common stock for
                 EPS calculation (c)                       $  53,557                 190    49,454                 250   $ 102,155                 382   100,516                 514
                                                               =======       =============   =======       =============     =======       =============   =======       =============
        Average common shares outstanding                      191,935                 690   196,346                 998     192,390                 727   196,253               1,007
        Increase due to assumed issuance of shares related
          to common equivalent shares outstanding                  459                            85                             366                            87
                                                               -------                       -------                         -------                       -------
        Average common and common
          equivalent shares outstanding (d)                  192,394                 690   196,431                 998     192,756                 727   196,340               1,007
                                                               =======       =============   =======       =============     =======       =============   =======       =============
        Average common and common
          equivalent shares and participating securities       193,084                       197,429                         193,483                       197,347
                                                               =======                       =======                         =======                       =======
        Diluted Earnings per share (c)/(d)               $    0.28                0.28      0.25                0.25   $    0.53                0.53      0.51                0.51
                                                               =======       =============   =======       =============     =======       =============   =======       =============
        


        
                                                                                     TSYS
                                                                               Segment Breakdown
                                                                                  (unaudited)
                                                                                (in thousands)
        ---------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Three Months Ended June 30,                              Six Months Ended June 30,
                                                          ----------------------------------------------      -------------------------------------------------------
                                                                                           Change                                                      Change
                                                                                  -------------------------                                  --------------------------
                                                             2011        2010           $            %            2011            2010              $            %
                                                          ----------- ----------- ------------ ------------   -------------  --------------  --------------  --------
        Revenues before reimbursable items
           North America Services                      $  198,775     202,061     (3,286)      (1.6)   %      393,365         417,371       (24,006)       (5.8)  %
           International Services                          93,778      74,769     19,009        25.4     %      181,198         151,050        30,148         20.0    %
           Merchant Services                               93,041      91,889      1,152         1.3     %      179,560         148,661        30,899         20.8    %
           Intersegment revenues                           (5,383)    (5,980)      597        10.0     %      (11,269)       (11,682)         413          3.5    %
                                                          ------- --  ------- --  ------                      --------- --   ---------- --   --------
                Revenues before reimbursable items
                      from external customers          $  380,211     362,739     17,472         4.8     %      742,854         705,400        37,454          5.3    %
                                                          =======     =======     ======                      =========      ==========      ========
        Total revenues
           North America Services                      $  233,903     236,810     (2,907)      (1.2)   %      464,461         491,038       (26,577)       (5.4)  %
           International Services                          97,670      77,987     19,683        25.2     %      188,380         157,379        31,001         19.7    %
           Merchant Services                              123,084     123,906       (822)      (0.7)   %      238,840         211,225        27,615         13.1    %
           Intersegment revenues                           (7,103)    (7,816)      713         9.1     %      (14,696)       (15,292)         596          3.9    %
                                                          ------- --  ------- --  ------                      --------- --   ---------- --   --------
                Revenues from external customers       $  447,554     430,887     16,667         3.9     %      876,985         844,350        32,635          3.9    %
                                                          =======     =======     ======                      =========      ==========      ========
        Depreciation and amortization
           North America Services                      $   19,926      18,891      1,035         5.5     %       39,392          39,294            98          0.2    %
           International Services                          11,960       8,597      3,363        39.1     %       23,668          17,192         6,476         37.7    %
           Merchant Services                                9,313      12,253     (2,940)     (24.0)   %       18,460          20,791        (2,331)      (11.2)  %
           Corporate Admin                                    768         611        157        25.7     %        1,515           1,593           (78)       (4.9)  %
                                                          -------     -------     ------                      ---------      ----------      -------- ----
           Total depreciation and amortization         $   41,967      40,352      1,615         4.0     %       83,035          78,870         4,165          5.3    %
                                                          =======     =======     ======                      =========      ==========      ========
        Segment operating income
           North America Services                      $   64,068      66,218     (2,150)      (3.2)   %      119,268         136,006       (16,738)      (12.3)  %
           International Services                          10,122      11,673     (1,551)     (13.3)   %       21,147          22,956        (1,809)       (7.9)  %
           Merchant Services                               25,708      23,367      2,341        10.0     %       52,631          41,223        11,408         27.7    %
           Corporate Admin                                (21,369)   (21,429)       60         0.3     %      (41,489)       (40,644)        (845)       (2.1)  %
                                                          ------- --  ------- --  ------                      --------- --   ---------- --   -------- ----
            Operating income                           $   78,529      79,829     (1,300)      (1.6)   %      151,557         159,541        (7,984)       (5.0)  %
                                                          =======     =======     ====== ====                 =========      ==========      ======== ====
        Other:
        Reimbursable items:
           North America Services                      $   35,128      34,749        379         1.1     %       71,096          73,667        (2,571)       (3.5)  %
           International Services                           3,892       3,218        674        20.9     %        7,183           6,329           854         13.5    %
           Merchant Services                               30,043      32,017     (1,974)      (6.2)   %       59,280          62,563        (3,283)       (5.2)  %
           Intersegment revenues                           (1,719)    (1,836)      117         6.4     %       (3,428)        (3,609)         181          5.0    %
                                                          ------- --  ------- --  ------                      --------- --   ---------- --   --------
            Reimbursable items                         $   67,344      68,148       (804)      (1.2)   %      134,131         138,950        (4,819)       (3.5)  %
                                                          =======     =======     ====== ====                 =========      ==========      ======== ====
        Volumes:
        FTEs (continuing operations)
           North America Services                                                                                 4,327           4,433          (106)       (2.4)  %
           International Services                                                                                 2,217           1,921           296         15.4    %
           Merchant Services                                                                                      1,185           1,096            89          8.1    %
           Corporate Admin                                                                                          380             330            50         15.2    %
                                                                                                              ---------      ----------      --------
            FTEs                                                                                                  8,109           7,780           329          4.2    %
                                                                                                              =========      ==========      ========
                                                                                                                           At                         Change
                                                                                                              -----------------------------  ------------------------
        Total assets (in thousands)                                                                           6/30/2011      12/31/2010             $           %
                                                                                                              ---------      ----------      --------        -----
           North America Services                                                                             1,605,973       1,632,882       (26,909)       (1.6)  %
           International Services                                                                               434,458         408,880        25,578          6.3    %
           Merchant Services                                                                                    492,929         460,750        32,179          7.0    %
           Intersegment assets                                                                                 (701,082)      (550,251)    (150,831)      (27.4)  %
                                                                                                              --------- --   ---------- --   -------- ----
                Total assets                                                                                  1,832,278       1,952,261      (119,983)       (6.1)  %
                                                                                                              =========      ==========      ======== ====
                                                                     Three Months Ended June 30,                              Six Months Ended June 30,
                                                          -------------------------------------------------   ---------------------------------------------------------
                                                                                           Change                                                      Change
                                                                                  -------------------------                                  --------------------------
                                                             2011        2010       Inc(Dec)       %              2011            2010          Inc(Dec)         %
                                                          ----------- ----------- ------------ ---------      -------------  --------------  --------------  --------
        North America Segment:
           Accounts on File (AOF) (in millions)                                                                   328.3           290.7          37.6         12.9    %
           Transactions (in millions)                     1,795.1     1,563.7      231.4        14.8     %      3,421.9         3,021.9         400.0         13.2    %
        International Segment:
           AOF (in millions)                                                                                       47.8            42.1           5.6         13.4    %
           Transactions (in millions)                       340.6       297.9       42.8        14.4     %        666.6           579.1          87.5         15.1    %
        Merchant Segment:
           Point-of-sale Transactions (in millions)       1,269.0     1,420.5     (151.5)     (10.7)   %      2,475.8         2,734.8        (258.9)       (9.5)  %
        


        
                                                    TSYS
                                                Balance Sheet
                                               (in thousands)
        ---------------------------------------------------------------------------------------------
                                                                          Jun 30, 2011   Dec 31, 2010
                                                                           (unaudited)    (unaudited)
                                                                          ------------   ------------
        Assets
          Current assets:
           Cash and cash equivalents                                    $   263,334        394,795
           Restricted cash                                                       18            434
           Accounts receivable, net                                         226,327        238,283
           Deferred income tax assets                                        12,090         11,090
           Prepaid expenses and other current assets                         85,892         77,211
                Total current assets                                        587,661        721,813
          Property and equipment, net                                       293,637        300,102
          Computer software, net                                            228,521        246,424
          Contract acquisition costs, net                                   167,450        166,251
          Goodwill                                                          357,151        320,399
          Equity investments, net                                            81,951         77,127
          Other intangible assets, net                                       85,596         83,118
          Other assets                                                       30,311         37,027
                Total assets                                            $ 1,832,278      1,952,261
                                                                          =========      =========
         Liabilities
           Current liabilities:
              Current portion of notes payable                          $    38,813         39,557
              Accrued salaries and employee benefits                         19,457         27,414
              Accounts payable                                               29,189         36,068
              Current portion of obligations under capital leases            13,293         13,191
              Other current liabilities                                     128,452        111,040
                Total current liabilities                                   229,204        227,270
            Notes payable, excluding current portion                        188,102        194,703
            Deferred income tax liabilities                                     189         42,547
            Obligations under capital leases, excluding current portion      25,913         30,573
            Other long-term liabilities                                      60,212         53,363
                Total liabilities                                           503,620        548,456
                                                                          ---------      ---------
         Redeemable noncontrolling interest                                       -        146,000
                                                                          ---------      ---------
         Equity
         Shareholders' equity:
            Common stock                                                     20,140         20,133
            Additional paid-in capital                                      136,072        119,722
            Accumulated other comprehensive income, net                       8,334         (2,585)
            Treasury stock                                                 (149,194)     (115,449)
            Retained earnings                                             1,294,877      1,219,303
                                                                          ---------      ---------
               Total shareholders' equity                                 1,310,229      1,241,124
                                                                          ---------      ---------
         Noncontrolling interests in consolidated subsidiaries               18,429         16,681
                                                                          ---------      ---------
               Total equity                                               1,328,658      1,257,805
                                                                          ---------      ---------
                Total liabilities and equity                            $ 1,832,278      1,952,261
                                                                          =========      =========
        


        
                                                           TSYS
                                                         Cash Flow
                                                        (unaudited)
                                                      (in thousands)
        -----------------------------------------------------------------------------------------------------------
                                                                                        Six Months Ended June 30,
                                                                                      -----------------------------
                                                                                          2011            2010
                                                                                      -------------   -------------
        CASH FLOWS FROM OPERATING ACTIVITIES:
           Net income                                                               $  104,059         104,297
           Adjustments to reconcile net income to net cash
            provided by operating activities:
               Equity in income of equity investments                                   (2,885)        (3,259)
               Dividends received from equity investments                                   13           2,698
               Net loss (gain) on currency translation adjustments                         574             136
               Depreciation and amortization                                            83,035          78,966
               Amortization of debt issuance costs                                          77              77
               Share-based compensation                                                  8,644           7,956
               Excess tax benefit from share-based payment arrangements                    (54)          (111)
               Asset impairments                                                         1,298               -
               Provisions for (recoveries of) bad debt expense and billing
                  adjustments                                                              873            (366)
               Charges for transaction processing provisions                             2,632           2,109
               Deferred income tax expense (benefit)                                    (9,738)         7,754
               (Gain) loss on disposal of equipment, net                                (1,429)            11
               Gain on disposal of subsidiary                                                -            (131)
         Changes in operating assets and liabilities:
                Accounts receivable                                                     19,410          (2,698)
                Prepaid expenses, other current assets and other long-term assets        4,508         (25,383)
                Accounts payable                                                       (13,239)        27,276
                Accrued salaries and employee benefits                                 (11,489)       (14,031)
                Other current liabilities and other long-term liabilities               13,005          10,407
                                                                                      --------        --------
                   Net cash provided by operating activities                           199,294         195,708
                                                                                      --------        --------
        CASH FLOWS FROM INVESTING ACTIVITIES:
           Purchases of property and equipment, net                                    (12,543)       (17,189)
           Additions to licensed computer software from vendors                         (5,882)       (20,812)
           Additions to internally developed computer software                          (9,242)        (9,406)
           Proceeds from sale of tradename                                               4,500               -
           Cash used in acquisitions, net of cash acquired                             (45,287)      (148,531)
           Additions to contract acquisition costs                                     (16,007)       (19,888)
                                                                                      -------- ---    -------- ---
                   Net cash used in investing activities                               (84,461)      (215,826)
                                                                                      -------- ---    -------- ---
        CASH FLOWS FROM FINANCING ACTIVITIES:
           Principal payments on long-term debt borrowings and
             capital lease obligations                                                 (14,494)        (7,858)
           Proceeds from exercise of stock options                                       1,339             378
           Excess tax benefit from share-based payment arrangements                         54             111
           Repurchase of common stock                                                  (35,700)        (1,075)
           Purchase of noncontrolling interests                                       (174,050)             -
           Subsidiary dividends paid to noncontrolling shareholders                       (448)          (250)
           Dividends paid on common stock                                              (27,129)       (27,605)
                                                                                      -------- ---    -------- ---
                   Net cash used in financing activities                              (250,428)       (36,299)
                                                                                      -------- ---    -------- ---
        CASH AND CASH EQUIVALENTS:
         Effect of exchange rate changes on cash and cash equivalents                    4,134          (5,545)
                                                                                      --------        -------- ---
         Net increase (decrease) in cash and cash equivalents                         (131,461)       (61,962)
         Cash and cash equivalents at beginning of period                              394,795         449,955
                                                                                      --------        --------
         Cash and cash equivalents at end of period                                 $  263,334         387,993
                                                                                      ========        ========
        


        
        Supplemental Information:
                                                                        Accounts on File
                                                                  ----------------------------
                                                                              Total
                                                                  ----------------------------
        (in millions)                                                June      June       %
                                                                     2011      2010    Change
                                                                    -----     -----    ------
        Consumer Credit                                             187.6     180.9       3.7
        Government Services                                          30.0      27.0      11.3
        Retail                                                       23.7      23.6       0.4
                                                                    -----     -----
           Total Consumer                                           241.3     231.5       4.2
        Commercial                                                   55.2      48.2      14.7
        Other                                                         6.7       5.5      20.1
                                                                    -----     -----
           Subtotal                                                 303.2     285.2       6.3
        Prepaid/Stored Value                                         72.8      47.6      53.1
                                                                    -----     -----
        Total AOF                                                   376.0     332.8      13.0
                                                                    =====     =====
        Growth in Accounts on File (in millions):
        -----------------------------------------
                                                     June 2010 to          June 2009 to
                                                       June 2011             June 2010
                                                     --------       ----------------
        Beginning balance                                332.8                 349.5
        Change in accounts on file due to:
               Internal growth of existing clients       26.3                  22.5
                                       New clients       33.0                  31.4
                                      Purges/Sales      (14.7)                (41.2)
                                     Deconversions       (1.4)                (29.4)
                                                     -------------  --------------------------
        Ending balance                                   376.0                 332.8
                                                     =============  ==========================
        


        
                         Reconciliation of GAAP to Non-GAAP
        Non-GAAP Measures
        The schedule below provides a reconciliation of revenues and
        operating results on a constant currency basis to reported revenues
        and operating income. This non-GAAP measure presents year-to-date
        2011 financial results using the previous year's foreign currency
        exchange rates. On a year-to-date constant currency basis, TSYS'
        total revenues grew 3.9% as compared to a reported GAAP increase of
        2.4%. The schedule below also provides a reconciliation of revenues
        and basic EPS excluding revenues from termination fees.
        The non-GAAP financial measures of constant currency and revenues
        and basic EPS excluding revenues from termination fees, with respect
        to year to date revenues and basic EPS presented by TSYS, are
        utilized by management to better understand and assess TSYS'
        operating results and financial performance. TSYS also uses the
        non-GAAP financial measures to evaluate and assess TSYS' financial
        performance against budget, as well as to evaluate financial
        performance for executive and management compensation purposes.
        TSYS believes that non-GAAP financial measures are important to
        enable investors to understand and evaluate its ongoing operating
        results. Accordingly, TSYS includes non-GAAP financial measures when
        reporting its financial results to shareholders and investors in
        order to provide them with an additional tool to evaluate TSYS'
        ongoing business operations. TSYS believes that the non-GAAP
        financial measures are representative of comparative financial
        performance that reflects the economic substance of TSYS' current
        and ongoing business operations.
        Although non-GAAP financial measures are often used to measure TSYS'
        operating results and assess its financial performance, they are not
        necessarily comparable to similarly titled captions of other
        companies due to potential inconsistencies in the method of
        calculation.
        TSYS believes that its use of non-GAAP financial measures provides
        investors with the same key financial performance indicators that
        are utilized by management to assess TSYS' operating results,
        evaluate the business and make operational decisions on a
        prospective, going-forward basis. Hence, management provides
        disclosure of non-GAAP financial measures to give shareholders and
        potential investors an opportunity to see TSYS as viewed by
        management, to assess TSYS with some of the same tools that
        management utilizes internally and to be able to compare such
        information with prior periods. TSYS believes that the
        presentation of GAAP financial measures alone would not provide
        its shareholders and potential investors with the ability to
        appropriately analyze its ongoing operational results, and
        therefore expected future results. TSYS therefore believes that
        inclusion of non-GAAP financial measures provides investors with
        additional information to help them better understand its
        financial statements just as management utilizes these non-GAAP
        financial measures to better understand the business, manage
        budgets and allocate resources.
        


        
                                                    Reconciliation of GAAP to Non-GAAP
                                                       Constant Currency Comparison
                                                                (unaudited)
                                                              (in thousands)
        ---------------------------------------------------------------------------------------------------------------------------
                                                                 Three Months Ended June 30,          Six Months Ended June 30,
                                                                ----------------------------        ----------------------------
                                                                                    Percent                             Percent
                                                                  2011     2010     Change            2011     2010     Change
                                                                -------  -------  ----------        -------  -------  ----------
        Consolidated
        Constant currency (1)                                 $ 438,806  430,887   1.8      %     $ 864,801  844,350   2.4      %
        Foreign currency (2)                                      8,748        -                     12,184        -
                                                                -------  -------                    -------  -------
        Total revenues                                        $ 447,554  430,887   3.9      %     $ 876,985  844,350   3.9      %
                                                                -------  -------                    -------  -------
        Constant currency (1)                                 $  77,793   79,829  (2.6)    %     $ 150,029  159,541  (6.0)    %
        Foreign currency (2)                                        736        -                      1,528        -
                                                                -------  -------                    -------  -------
        Operating income                                      $  78,529   79,829  (1.6)    %     $ 151,557  159,541  (5.0)    %
                                                                -------  -------                    -------  -------
        International Services
        Constant currency (1)                                 $  85,335   74,769  14.1      %
        Foreign currency (2)                                      8,443        -
                                                                -------  -------
        Total revenues before reimbursable items              $  93,778   74,769  25.4      %
                                                                -------  -------
        (1) Reflects current period results on a non-GAAP basis as if
        foreign currency rates did not change from the comparable prior year
        period.
        (2) Reflects the impact of calculated changes in foreign currency
        rates from the comparable period.
                                            Revenue and BASIC EPS Excluding Termination Fees
                                                                (unaudited)
                                                   (in thousands except per share data)
        ---------------------------------------------------------------------------------------------------------------------------
                                                                 Three Months Ended June 30,          Six Months Ended June 30,
                                                                ----------------------------        ----------------------------
                                                                                    Percent                             Percent
                                                                  2011     2010     Change            2011     2010     Change
                                                                -------  -------  ----------        -------  -------  ----------
        Consolidated
        Total Revenues                                        $ 447,554  430,887   3.9      %     $ 876,985  844,350   3.9      %
        Less:
           Termination Fees                                           -    9,528                          -   32,667
        Total revenues excluding termination fees             $ 447,554  421,359   6.2      %     $ 876,985  811,683   8.0      %
                                                                -------  -------                    -------  -------
        Income from continuing operations, net of tax,        $  53,747   49,977   7.5      %     $ 102,537  101,731   0.8      %
        available to
        TSYS common shareholders
        Less:
           Termination Fees, net of tax                               -    6,085                          -   21,011
        Income from continuing operations, net of tax,
        available to
        TSYS common shareholders,
        excluding termination fees                            $  53,747   43,892  22.5      %     $ 102,537   80,720  27.0      %
                                                                -------  -------                    -------  -------
        Average common shares and participating securities      192,625  197,344                    193,117  197,260
                                                                -------  -------                    -------  -------
        BASIC EPS - Income from continuing operations,
        net of tax,
        available to TSYS
        common shareholders                                   $    0.28     0.25  10.1      %     $    0.53     0.52   3.0      %
        Less:
           Termination Fees, net of tax                               -     0.03                          -     0.11
        BASIC EPS - Income from continuing operations,
        net of tax,
        excluding termination fees
        available to TSYS common shareholders                 $    0.28     0.22  25.4      %     $    0.53     0.41  29.8      %
                                                                -------  -------                    -------  -------
        Note: Earnings per share may not foot due to rounding.
        


SOURCE: TSYS

        
        TSYS Investor Relations 
        Shawn Roberts, +1-706-644-6081 
        shawnroberts@tsys.com