Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 27, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | TSS | |
Entity Registrant Name | TOTAL SYSTEM SERVICES INC | |
Entity Central Index Key | 721,683 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 183,989,416 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents (Note 4) | $ 447,850 | $ 289,183 |
Accounts receivable, net of allowance for doubtful accounts and billing adjustments of $4.8 million and $5.2 million as of 2015 and 2014, respectively | 333,467 | 283,203 |
Deferred income tax assets | 19,860 | 15,190 |
Prepaid expenses and other current assets (Note 4) | 91,752 | 98,974 |
Current assets of discontinued operations (Note 2) | 3,395 | 4,003 |
Total current assets | 896,324 | 690,553 |
Goodwill | 1,545,888 | 1,547,397 |
Computer software, net of accumulated amortization of $661.9 million and $613.3 million as of 2015 and 2014, respectively | 354,598 | 366,148 |
Other intangible assets, net of accumulated amortization of $238.3 million and $181.9 million as of 2015 and 2014, respectively | 348,017 | 404,107 |
Property and equipment, net of accumulated depreciation and amortization of $449.5 million and $423.2 million as of 2015 and 2014, respectively | 287,098 | 290,585 |
Contract acquisition costs, net of accumulated amortization of $304.6 million and $276.1 million as of 2015 and 2014, respectively (Note 4) | 252,669 | 236,305 |
Equity investments, net | 101,127 | 100,468 |
Deferred income tax assets, net | 5,885 | 7,002 |
Other assets | 97,916 | 91,016 |
Total assets | 3,889,522 | 3,733,581 |
Current liabilities: | ||
Accounts payable | 55,111 | 48,793 |
Accrued salaries and employee benefits | 43,180 | 38,001 |
Current portion of long-term borrowings | 38,203 | 43,784 |
Current portion of obligations under capital leases | 3,574 | 7,127 |
Other current liabilities (Note 4) | 181,898 | 154,805 |
Current liabilities of discontinued operations (Note 2) | 3,395 | 4,003 |
Total current liabilities | 325,361 | 296,513 |
Long-term borrowings, excluding current portion | 1,373,592 | 1,398,132 |
Deferred income tax liabilities, net | 189,682 | 211,820 |
Obligations under capital leases, excluding current portion | 4,335 | 6,974 |
Other long-term liabilities | 92,385 | 98,006 |
Total liabilities | 1,985,355 | 2,011,445 |
Redeemable noncontrolling interest in consolidated subsidiary | $ 23,001 | $ 22,492 |
Commitments and contingencies (Note 10) | ||
Shareholders' equity: | ||
Common stock - $0.10 par value. Authorized 600,000 shares; 202,770 and 202,775 issued as of 2015 and 2014, respectively; 183,978 and 184,939 outstanding as of 2015 and 2014, respectively | $ 20,277 | $ 20,278 |
Additional paid-in capital | 206,715 | 171,270 |
Accumulated other comprehensive loss, net (Note 4) | (27,164) | (11,926) |
Treasury stock, at cost (18,792 and 17,836 shares as of 2015 and 2014, respectively) | (516,197) | (453,230) |
Retained earnings | 2,191,984 | 1,966,370 |
Total shareholders' equity | 1,875,615 | 1,692,762 |
Noncontrolling interest in consolidated subsidiary | 5,551 | 6,882 |
Total equity | 1,881,166 | 1,699,644 |
Total liabilities and equity | $ 3,889,522 | $ 3,733,581 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Accounts receivable, allowance for doubtful accounts and billing adjustments | $ 4.8 | $ 5.2 |
Computer software, accumulated amortization | 661.9 | 613.3 |
Other intangible assets, accumulated amortization | 238.3 | 181.9 |
Property and equipment, accumulated depreciation and amortization | 449.5 | 423.2 |
Contract acquisition costs, accumulated amortization | $ 304.6 | $ 276.1 |
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, authorized | 600,000,000 | 600,000,000 |
Common stock, issued | 202,770,000 | 202,775,000 |
Common stock, outstanding | 183,978,000 | 184,939,000 |
Treasury stock, shares | 18,792,000 | 17,836,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Total revenues | $ 707,890 | $ 616,891 | $ 2,062,698 | $ 1,811,774 | |
Cost of services | 456,465 | 407,391 | 1,366,141 | 1,246,763 | |
Selling, general and administrative expenses | 88,321 | 80,093 | 280,355 | 256,144 | |
Total operating expenses | 544,786 | 487,484 | 1,646,496 | 1,502,907 | |
Operating income | 163,104 | 129,407 | 416,202 | 308,867 | |
Nonoperating expenses, net | (8,564) | (9,997) | (27,982) | (30,195) | |
Income before income taxes and equity in income of equity investments | 154,540 | 119,410 | 388,220 | 278,672 | |
Income taxes | 37,825 | 39,227 | 119,204 | 94,333 | |
Income before equity in income of equity investments | 116,715 | 80,183 | 269,016 | 184,339 | |
Equity in income of equity investments, net of tax | 5,336 | 4,135 | 15,309 | 11,831 | |
Income from continuing operations, net of tax | 122,051 | 84,318 | 284,325 | 196,170 | |
Income from discontinued operations, net of tax | 880 | 51,993 | |||
Net income | 122,051 | 85,198 | 284,325 | 248,163 | |
Net income attributable to noncontrolling interests | (1,429) | (1,393) | (3,109) | (5,151) | |
Net income | $ 120,622 | $ 83,805 | $ 281,216 | $ 243,012 | |
Basic earnings per share (EPS) attributable to TSYS common shareholders (Note 11): | |||||
Income from continuing operations | $ 0.66 | $ 0.45 | $ 1.53 | $ 1.03 | |
Gain from discontinued operations | 0 | 0.27 | |||
Net income | [1] | 0.66 | 0.45 | 1.53 | 1.30 |
Diluted EPS attributable to TSYS common shareholders (Note 11): | |||||
Income from continuing operations | 0.65 | 0.44 | 1.52 | 1.02 | |
Gain from discontinued operations | 0 | 0.27 | |||
Net Income | [1] | $ 0.65 | $ 0.45 | $ 1.52 | $ 1.29 |
Amounts attributable to TSYS common shareholders: | |||||
Income from continuing operations | $ 120,622 | $ 82,925 | $ 281,216 | $ 192,018 | |
Gain from discontinued operations | 880 | 50,994 | |||
Net income | $ 120,622 | $ 83,805 | $ 281,216 | $ 243,012 | |
[1] | EPS amounts may not total due to rounding |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net income | $ 122,051 | $ 85,198 | $ 284,325 | $ 248,163 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (12,943) | (11,329) | (16,663) | 907 |
Less reclassifications of foreign currency translation adjustments to net income | 3,514 | |||
Total foreign currency translation adjustments | (12,943) | (11,329) | (16,663) | (2,607) |
Postretirement healthcare plan adjustments | 147 | 147 | 441 | 442 |
Unrealized gain (loss) on available-for-sale securities | (186) | (598) | 849 | (640) |
Other comprehensive loss | (12,982) | (11,780) | (15,373) | (2,805) |
Comprehensive income | 109,069 | 73,418 | 268,952 | 245,358 |
Comprehensive income attributable to noncontrolling interests | (1,215) | (1,071) | (2,973) | (5,050) |
Comprehensive income attributable to TSYS common shareholders | $ 107,854 | $ 72,347 | $ 265,979 | $ 240,308 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 284,325 | $ 248,163 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 191,219 | 184,827 |
Share-based compensation | 31,468 | 23,019 |
Provisions for fraud and other losses | 29,621 | 29,923 |
Dividends received from equity investments | 12,092 | 9,189 |
Provisions for bad debt expenses and billing adjustments | 3,519 | 1,982 |
Charges for transaction processing provisions | 3,471 | 5,081 |
Amortization of debt issuance costs | 1,378 | 1,361 |
Net loss on foreign currency | 468 | 1,715 |
Amortization of bond discount | 297 | 286 |
Loss on disposal of equipment, net | 4 | 27 |
Gain on disposal of subsidiaries | (87,013) | |
Changes in value of private equity investments | (3,448) | (239) |
Excess tax benefit from share-based payment arrangements | (4,892) | (6,538) |
Equity in income of equity investments | (15,309) | (11,831) |
Deferred income tax benefit | (25,960) | (15,989) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (55,911) | (50,450) |
Prepaid expenses, other current assets and other long-term assets | 1,356 | (10,784) |
Accrued salaries and employee benefits | 5,589 | (8,462) |
Other current liabilities and other long-term liabilities | 2,430 | 65,192 |
Accounts payable | (1,163) | 10,655 |
Net cash provided by operating activities | 460,554 | 390,114 |
Cash flows from investing activities: | ||
Additions to contract acquisition costs | (50,971) | (66,540) |
Purchases of property and equipment | (36,505) | (55,356) |
Additions to internally developed computer software | (31,654) | (31,263) |
Additions to licensed computer software from vendors | (17,052) | (14,497) |
Purchase of private equity investments | (3,525) | (3,290) |
Cash used in acquisitions, net of cash acquired | (750) | (38,584) |
Proceeds from dispositions, net of expenses paid and cash disposed | 45,002 | |
Proceeds from sale of private equity investment | 1,839 | |
Net cash used in investing activities | (138,618) | (164,528) |
Cash flows from financing activities: | ||
Repurchase of common stock under plans and tax withholding | (83,635) | (120,894) |
Dividends paid on common stock | (55,277) | (56,159) |
Principal payments on long-term borrowings and capital lease obligations | (42,215) | (48,682) |
Subsidiary dividends paid to noncontrolling shareholders | (3,796) | (6,369) |
Purchase of noncontrolling interest | (37,500) | |
Proceeds from borrowings of long-term debt | 1,912 | |
Excess tax benefit from share-based payment arrangements | 4,892 | 6,538 |
Proceeds from exercise of stock options | 19,690 | 26,877 |
Net cash used in financing activities | (158,429) | (236,189) |
Cash and cash equivalents: | ||
Effect of exchange rate changes on cash and cash equivalents | (4,840) | (1,586) |
Net increase (decrease) in cash and cash equivalents | 158,667 | (12,189) |
Cash and cash equivalents at beginning of period | 289,183 | 278,230 |
Cash and cash equivalents at end of period | 447,850 | 266,041 |
Supplemental cash flow information: | ||
Interest paid | 21,994 | 30,736 |
Income taxes paid, net | $ 122,180 | $ 96,050 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | Note 1 —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 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 for financial and nonfinancial institutions throughout the United States and internationally. The Company’s North America Services segment provides these services to clients in the United States, Canada, Mexico and the Caribbean. The Company’s International Services segment provides services to clients in Europe, India, Middle East, Africa, Asia Pacific and Brazil. The Company’s Merchant Services segment provides merchant services to merchant acquirers and merchants mainly in the United States. The Company’s NetSpend segment provides services to consumers in the United States. Basis of Presentation The accompanying unaudited consolidated financial statements of TSYS include the accounts of TSYS and its wholly- and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. These financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and, therefore, do not include all information and footnotes required by U.S. GAAP for complete financial statements. The preparation of the consolidated financial statements requires management of the Company to make estimates and assumptions relating to the reported amounts of assets and liabilities as of 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. All adjustments, consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair presentation of financial position and results of operations for the periods covered by this report, have been included. Certain prior period amounts may have been reclassified to conform to the current period’s presentation. As discussed in Note 2, the Company’s financial statements reflect GP Network Corporation (GP Net) and TSYS Japan Godo Kaisha (TSYS Japan), formerly TSYS Japan Co., Ltd., as discontinued operations. The Company has segregated the net assets, net liabilities and operating results from continuing operations on the Unaudited Consolidated Balance Sheets and Unaudited Consolidated Statements of Income for all periods presented. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s summary of significant accounting policies, consolidated financial statements and related notes appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the Securities and Exchange Commission (SEC). Results of interim periods are not necessarily indicative of results to be expected for the year. Recently Adopted Accounting Pronouncements In January 2015, the Company adopted Accounting Standards Update (ASU) 2014-08, “ Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” New Accounting Pronouncements In September 2015, the FASB issued ASU 2015-16 “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments In June 2015, the FASB issued ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements – Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting.” In April 2015, the FASB issued ASU 2015-05 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” In April 2015, the FASB issued ASU 2015-03 “ Interest — Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs.” In January 2015, the FASB issued ASU 2015-01 “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers” |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2015 | |
Discontinued Operations | Note 2—Discontinued Operations In accordance with GAAP, the Company determined its Japan-based businesses became discontinued operations in the first quarter of 2014. The Company sold all of its stock of GP Net (representing 54% ownership of the company) and all of its stock of TSYS Japan (representing 100% ownership of the company) in April 2014. Both entities were part of the International Services segment. The sale of the Company’s stock in both of its operations in Japan was the result of management’s decision during the first quarter of 2014, to divest non-strategic businesses and focus resources on core products and services. GP Net and TSYS Japan were not significant components of TSYS’ consolidated results. The following table presents the main classes of assets and liabilities associated with discontinued operations as of September 30, 2015 and December 31, 2014: (in thousands) September 30, 2015 December 31, 2014 Current assets $ 3,395 4,003 Current liabilities 3,395 4,003 The following table presents the summarized results of discontinued operations for the three and nine months ended September 30, 2014: (in thousands) Three months ended Nine months ended Total revenues $ — 16,248 Loss before taxes $ — (51 ) Income tax benefit $ — (39 ) Loss from discontinued operations, net of tax $ — (12 ) Gain on dispositions, net of tax $ 880 52,005 Income from discontinued operations, net of tax $ 880 51,993 Income from discontinued operations, net of tax, attributable to noncontrolling interest $ — 999 Income from discontinued operations, net of tax, attributable to TSYS common shareholders $ 880 50,994 The Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 include GP Net and TSYS Japan and are not considered material. |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurement | Note 3 — Fair Value Measurement Refer to Note 3 of the Company’s audited financial statements for the year ended December 31, 2014, which are included as Exhibit 13.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC, for a discussion regarding 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 assets during the three months ended September 30, 2015. As of September 30, 2015, the Company had recorded goodwill in the amount of $1.5 billion. The Company performed its annual impairment testing of its goodwill balance as of May 31, 2015, and this test did not indicate any impairment. The fair value of the reporting units substantially exceeds their carrying value. The Company had nonrecurring fair value measurements related to discontinued operations. The Company determined that the carrying value of its assets and liabilities as of September 30, 2015 and December 31, 2014, approximate their fair values. |
Supplementary Balance Sheet Inf
Supplementary Balance Sheet Information | 9 Months Ended |
Sep. 30, 2015 | |
Supplementary Balance Sheet Information | Note 4 — Supplementary Balance Sheet Information Cash and Cash Equivalents The Company maintains 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. Cash and cash equivalent balances are summarized as follows: (in thousands) September 30, 2015 December 31, 2014 Cash and cash equivalents in domestic accounts $ 392,133 225,396 Cash and cash equivalents in foreign accounts 55,717 63,787 Total $ 447,850 289,183 Prepaid Expenses and Other Current Assets Significant components of prepaid expenses and other current assets are summarized as follows: (in thousands) September 30, 2015 December 31, 2014 Prepaid expenses $ 34,368 35,334 Supplies inventory 13,115 14,340 Other 44,269 49,300 Total $ 91,752 98,974 Contract Acquisition Costs, net Significant components of contract acquisition costs, net of accumulated amortization, are summarized as follows: (in thousands) September 30, 2015 December 31, 2014 Conversion costs, net of accumulated amortization of $156.5 million and $138.7 million as of 2015 and 2014, respectively $ 161,615 159,339 Payments for processing rights, net of accumulated amortization of $148.1 million and $137.4 million as of 2015 and 2014, respectively 91,054 76,966 Total $ 252,669 236,305 Amortization expense related to conversion costs, which is recorded in cost of services, was $7.0 million and $4.5 million for the three months ended September 30, 2015 and 2014, respectively. For the nine months ended September 30, 2015 and 2014, amortization related to conversion costs was $20.1 million and $12.9 million, respectively. Amortization related to payments for processing rights, which is recorded as a reduction of revenues, was $4.6 million and $4.4 million for the three months ended September 30, 2015 and 2014, respectively. For the nine months ended September 30, 2015 and 2014, amortization related to payments for processing rights was $12.4 million and $11.5 million, respectively. Other Current Liabilities Significant components of other current liabilities are summarized as follows: (in thousands) September 30, 2015 December 31, 2014 Deferred revenues $ 40,680 41,773 Accrued expenses 29,046 23,617 Dividends payable 18,982 19,006 Accrued interest 11,246 2,819 Accrued income taxes 8,043 — Other 73,901 67,590 Total $ 181,898 154,805 Accumulated Other Comprehensive Income (AOCI) The income tax effects allocated to and the cumulative balance of accumulated other comprehensive income (loss) attributable to TSYS shareholders are as follows: (in thousands) Beginning Pretax Tax Net-of-Tax Ending Balance Foreign currency translation adjustments and transfers from noncontrolling interests $ (13,564 ) (17,150 ) (622 ) (16,528 ) $ (30,092 ) Unrealized gain on available-for-sale securities 1,105 1,346 497 849 1,954 Change in AOCI related to postretirement healthcare plans 533 691 250 441 974 Total $ (11,926 ) (15,113 ) 125 (15,238 ) $ (27,164 ) There were no reclassifications of AOCI to net income or to other accounts for the nine months ended September 30, 2015. |
Long-Term Borrowings
Long-Term Borrowings | 9 Months Ended |
Sep. 30, 2015 | |
Long-Term Borrowings | Note 5 — Long-Term Borrowings Refer to Note 13 of the Company’s audited financial statements for the year ended December 31, 2014, which are included as Exhibit 13.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC, for a discussion regarding long-term borrowings. During September 2015, TSYS increased an existing loan by £1.3 million, or approximately $1.9 million. The pound-denominated loan bears interest at a rate of LIBOR plus two percent. The loan matures in December 2017, and has monthly interest payments. The lender in this transaction is Merchants Limited, which has a noncontrolling interest in TSYS Managed Services. The balance of the loan as of September 30, 2015 was $3.3 million. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Share-Based Compensation | Note 6— Share-Based Compensation Refer to Notes 1 and 19 of the Company’s audited financial statements for the year ended December 31, 2014, which are included as Exhibit 13.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC, for a discussion regarding the Company’s share-based compensation plans and policy. 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 typically 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 three months ended September 30, 2015, share-based compensation was $11.3 million, compared to $5.4 million for the same period in 2014. For the nine months ended September 30, 2015, share-based compensation was $31.5 million, compared to $23.0 million for the same period in 2014. Nonvested Share Awards The Company granted shares of TSYS common stock to certain key employees and non-management members of its Board of Directors. The nonvested stock bonus awards to employees are typically for services to be provided in the future and vest over a period of up to four years. The stock bonus awards granted to the non-management members of the Board of Directors were fully vested on the date of issuance. The market value of the TSYS common stock as of the date of issuance is charged as compensation expense over the vesting periods of the awards. Nine months ended September 30, 2015 2014 Number of shares granted 388,211 663,624 Market value ( in millions $ 14.9 20.3 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 the first nine months of 2015 and 2014, the Compensation Committee established performance goals based on adjusted EPS, revenue growth and revenues before reimbursable items and market goals based on Total Shareholder Return (TSR) as compared to the TSR of the companies in the S&P 500 over the performance period. Compensation expense for performance shares is measured on the grant date based on the quoted market price of TSYS common stock. The Company estimates the probability of achieving the goals through the performance period and expenses the awards on a straight-line basis. The fair value of market-based awards is estimated on the grant date using a Monte Carlo simulation model. The Company expenses market-based awards on a straight-line basis. Compensation costs related to performance- and market-based shares are recognized through the longer of the performance period or the vesting period. As of September 30, 2015, there was approximately $13.3 million of unrecognized compensation cost related to TSYS performance-based awards that is expected to be recognized through December 2018. As of September 30, 2015, there was approximately $2.0 million of unrecognized compensation cost related to TSYS market-based awards that is expected to be recognized through July 2018. The following table summarizes the performance- and market- based awards granted during the first nine months of 2015 and 2014: Year Type of Award Performance Period Ending Performance Measure Number of Period Expensed 2015 Market July 2016, 2017 and 2018 Total Shareholder Return 25,000 July 2018 2015 Performance December 2017 Adjusted EPS 135,289 December 2017 2015 Market December 2017 Total Shareholder Return 57,982 December 2017 2015 Performance December 2015 Revenues before Reimbursable Items and Adjusted EPS 165,543 December 2018 2014 Performance December 2016 Revenues before Reimbursable Items and Adjusted EPS 211,593 December 2016 Stock Option Awards The Company granted stock options to certain key executives and non-management members of its Board of Directors. The grants to executives will vest over a period of up to three years. The grants to the non-management members of the Board of Directors were fully vested at the date of grant. The weighted average fair value of the option grants was estimated on the date of grant using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions: Nine months ended September 30, 2015 2014 Number of options granted 613,473 1,046,372 Weighted average exercise price $ 39.01 30.96 Risk-free interest rate 1.73 % 2.01 % Expected volatility 20.80 % 25.06 % Expected term (years) 6.3 6.5 Dividend yield 1.04 % 1.29 % Weighted average fair value $ 8.27 7.66 As of September 30, 2015, there was approximately $4.1 million of unrecognized compensation cost related to TSYS stock options that is expected to be recognized over a remaining weighted average period of 1.5 years. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes | Note 7 — Income Taxes Refer to Notes 1 and 15 of the Company’s audited financial statements for the year ended December 31, 2014, which are included as Exhibit 13.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC, for a discussion regarding income taxes. 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 2008. There are currently federal income tax examinations in progress for the years 2009 through 2012 for a subsidiary which TSYS acquired in 2013. Additionally, a number of tax examinations are in progress by the relevant state tax authorities. Although TSYS is unable to determine the ultimate outcome of these examinations, TSYS believes that its liability for uncertain tax positions relating to these jurisdictions for such years is adequate. TSYS’ effective income tax rate for the three months ended September 30, 2015 was 24.3%, compared to 32.2% for the same period in 2014. TSYS’ effective income tax rate for the nine months ended September 30, 2015 was 30.1%, compared to 32.9% for the same period in 2014. The primary differences in the 2015 rates compared to 2014 rates reflect changes in discrete items primarily due to increased federal tax credits realized during both the three and nine months ended September 30, 2015. The calculation of the effective tax rate is income taxes adjusted for income taxes associated with noncontrolling interest and equity income divided by TSYS’ pretax income adjusted for noncontrolling interest in consolidated subsidiaries’ net income and equity pre-tax earnings of its equity investments. 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. The amount of unrecognized tax benefits increased by $4.9 million during the nine months ended September 30, 2015. TSYS recognizes potential interest and penalties related to the underpayment of income taxes as income tax expense in the consolidated statements of income. Gross accrued interest and penalties on unrecognized tax benefits totaled $0.7 million and $0.3 million as of September 30, 2015 and December 31, 2014, respectively. The total amounts of unrecognized income tax benefits as of September 30, 2015 and December 31, 2014, that, if recognized, would affect the effective tax rates are $11.6 million and $6.5 million (net of the federal benefit on state tax issues), respectively, which include interest and penalties of $0.5 million and $0.2 million, respectively. TSYS does not expect any material changes to its calculation of uncertain tax positions during the next twelve months. |
Segment Reporting and Major Cus
Segment Reporting and Major Customers | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting and Major Customers | Note 8 — Segment Reporting and Major Customers Refer to Note 22 of the Company’s audited financial statements for the year ended December 31, 2014, which are included as Exhibit 13.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC, for a discussion regarding segment reporting and major customers. The following table presents the Company’s operating results by segment: Operating Segments Three months ended September 30, Nine months ended September 30, (in thousands) 2015 2014 2015 2014 Revenues before reimbursable items North America Services $ 293,571 240,957 846,989 698,543 International Services 86,446 87,385 244,033 248,890 Merchant Services 123,721 115,012 351,987 327,972 NetSpend 139,648 114,048 436,343 363,521 Intersegment revenues (7,000 ) (4,542 ) (25,098 ) (15,248 ) Revenues before reimbursable items from external customers $ 636,386 552,860 1,854,254 1,623,678 Total revenues North America Services $ 341,416 282,833 984,493 818,335 International Services 92,177 91,865 261,597 264,710 Merchant Services 143,100 134,117 409,676 384,824 NetSpend 139,648 114,048 436,343 363,521 Intersegment revenues (8,451 ) (5,972 ) (29,411 ) (19,616 ) Revenues from external customers $ 707,890 616,891 2,062,698 1,811,774 Depreciation and amortization North America Services $ 25,300 22,173 72,831 63,377 International Services 8,678 9,610 26,084 29,176 Merchant Services 4,670 3,624 13,394 10,591 NetSpend 2,632 2,155 7,547 5,779 Segment depreciation and amortization 41,280 37,562 119,856 108,923 Acquisition intangible amortization 22,883 24,210 69,601 72,805 Corporate Administration and Other 336 662 1,762 1,702 Total depreciation and amortization $ 64,499 62,434 191,219 183,430 Adjusted segment operating income North America Services $ 113,946 92,736 324,902 251,892 International Services 18,370 15,976 38,706 32,274 Merchant Services 42,387 40,409 117,192 103,473 NetSpend 37,315 36,123 109,224 95,543 Total adjusted segment operating income 212,018 185,244 590,024 483,182 Acquisition intangible amortization (22,883 ) (24,210 ) (69,601 ) (72,805 ) NetSpend merger and acquisition operating expenses — (779 ) — (3,213 ) Share-based compensation (11,295 ) (5,420 ) (31,468 ) (23,019 ) Corporate Administration and Other (14,736 ) (25,428 ) (72,753 ) (75,278 ) Operating income $ 163,104 129,407 416,202 308,867 As of September 30, 2015 December 31, 2014 Total assets North America Services $ 3,496,252 3,327,160 International Services 339,186 356,590 Merchant Services 697,154 695,744 NetSpend 1,518,196 1,556,369 Intersegment eliminations (2,161,266 ) (2,202,282 ) Total assets $ 3,889,522 3,733,581 Revenues by Geographic Area The following tables reconcile geographic revenues to external revenues by operating segment based on the domicile of the Company’s customers: Three months ended September 30, 2015 (in millions) North America International Merchant NetSpend Total United States $ 257.8 — 142.8 139.6 $ 540.2 Canada* 68.4 — 0.1 — 68.5 Europe* 0.2 79.4 — — 79.6 Mexico 4.0 — — — 4.0 Other* 4.3 11.1 0.2 — 15.6 Total $ 334.7 90.5 143.1 139.6 $ 707.9 Nine months ended September 30, 2015 (in millions) North America International Merchant NetSpend Total United States $ 716.1 — 408.7 436.3 $ 1,561.1 Canada* 218.6 — 0.3 — 218.9 Europe* 0.6 223.7 — — 224.3 Mexico 12.4 — — — 12.4 Other* 14.1 31.4 0.5 — 46.0 Total $ 961.8 255.1 409.5 436.3 $ 2,062.7 Three months ended September 30, 2014 (in millions) North America International Merchant NetSpend Total United States $ 195.8 — 133.8 114.0 $ 443.6 Canada* 75.4 — 0.1 — 75.5 Europe* 0.2 78.2 — — 78.4 Mexico 4.0 — — — 4.0 Other* 4.1 11.1 0.2 — 15.4 Total $ 279.5 89.3 134.1 114.0 $ 616.9 Nine months ended September 30, 2014 (in millions) North America International Merchant NetSpend Total United States $ 573.4 — 384.0 363.5 $ 1,320.9 Canada* 207.4 — 0.2 — 207.6 Europe* 0.5 224.3 — — 224.8 Mexico 12.2 — — — 12.2 Other* 11.9 33.9 0.5 — 46.3 Total $ 805.4 258.2 384.7 363.5 $ 1,811.8 * Revenues are impacted by movements in foreign currency exchange rates. The Company maintains property and equipment, net of accumulated depreciation and amortization, in the following geographic areas: As of (in millions) September 30, 2015 December 31, 2014 United States $ 237.3 237.9 Europe* 43.1 45.5 Other* 6.7 7.2 Total $ 287.1 290.6 * Property and equipment are impacted by movements in foreign currency exchange rates. Major Customers For the three and nine months ended September 30, 2015 and 2014, the Company did not have any major customers. |
Supplementary Cash Flow Informa
Supplementary Cash Flow Information | 9 Months Ended |
Sep. 30, 2015 | |
Supplementary Cash Flow Information | Note 9 — Supplementary Cash Flow Information Nonvested Awards The Company issued shares of common stock to certain key employees during the first nine months of 2015 and 2014, respectively. The grants were issued under nonvested stock bonus awards for services to be provided in the future. Refer to Note 6 for more information. Equipment and Software Acquired Under Capital Lease Obligations The Company acquired equipment and software under capital lease obligations in the amount of $3.8 million and $5.2 million during the first nine months of 2015 and 2014, respectively, related to software and other peripheral hardware. Equipment and Software Acquired Under Direct Financing The Company did not acquire any equipment or software under direct financing during the first nine months of 2015. The Company acquired software under direct financing during the first nine months of 2014. Refer to Note 5 for more information. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies | Note 10 — Commitments and Contingencies Refer to Note 16 of the Company’s audited financial statements for the year ended December 31, 2014, which are included as Exhibit 13.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC, for a discussion regarding commitments and contingencies. Income Taxes The total liability for uncertain tax positions as of September 30, 2015 was $11.6 million. Refer to Note 7 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 a significant change related to these obligations within the next twelve months. 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. In the opinion of management, based on current knowledge and in part upon the advice of legal counsel, all matters not specifically discussed below are believed to be adequately covered by insurance, or, if not covered, the possibility of losses from such matters are believed to be remote or such matters are of such kind or involve such amounts that would not have a material adverse effect on the financial position, results of operations or cash flows of the Company if disposed of unfavorably. Telexfree Matter ProPay, Inc. (“ProPay”), a subsidiary of the Company, has been named as one of a number of defendants (including other merchant processors) in several purported class action lawsuits relating to the activities of Telexfree, Inc. and its affiliates and principals. Telexfree is a former merchant customer of ProPay. With regard to Telexfree, each purported class action lawsuit generally alleges that Telexfree engaged in an improper multi-tier marketing scheme involving voice-over Internet protocol telephone services. The plaintiffs in each of the purported class action complaints generally allege that the various merchant processor defendants, including ProPay, aided and abetted the improper activities of Telexfree. Telexfree filed for bankruptcy protection in Nevada. The bankruptcy proceeding was subsequently transferred to the Massachusetts Bankruptcy Court. Specifically, ProPay has been named as one of a number of defendants (including other merchant processors) in each of the following purported class action complaints relating to Telexfree: (i) Waldermara Martin, et al. v. TelexFree, Inc., et al. (Case No. BK-S-14-12524-ABL) filed on May 3, 2014 in the United States Bankruptcy Court District of Nevada, (ii) Anthony Cellucci, et al. v. TelexFree, Inc., et. al. (Case No. 4:14-BK-40987) filed on May 15, 2014 in the United States Bankruptcy Court District of Massachusetts, (iii) Maduako C. Ferguson Sr., et al. v. Telexelectric, LLLP, et. al (Case No. 5:14-CV-00316-D) filed on June 5, 2014 in the United States District Court of North Carolina, (iv) Todd Cook v. TelexElectric LLLP et al. (Case No. 2:14-CV-00134), filed on June 24, 2014 in the United States District Court for the Northern District of Georgia, (v) Felicia Guevara v. James M. Merrill et al., CA No. 1:14-cv-22405-DPG), filed on June 27, 2014 in the United State District Court for the Southern District of Florida, and (vi) Reverend Jeremiah Githere, et al. v. TelexElectric LLLP et al. (Case No. 1:14-CV-12825-GAO), filed on June 30, 2014 in the United States District Court for the District of Massachusetts (together, the “Actions”). On October 21, 2014, the Judicial Panel on Multidistrict Litigation transferred and consolidated the Actions before the United States District Court for the District of Massachusetts (the “Consolidated Action”). Following the Judicial Panel on Multidistrict Litigation’s October 21, 2014 order, four additional cases arising from the alleged TelexFree scheme were transferred to the United States District Court for the District of Massachusetts for coordinated or consolidated proceedings, including (i) Paulo Eduardo Ferrari et al. v. Telexfree, Inc. et al. (Case No. 14-04080); (ii) Magalhaes v. TelexFree, Inc., et al., No. 14-cv-12437 (D. Mass.); (iii) Griffith v. Merrill et al., No. 14-CV-12058 (D. Mass.); Abelgadir v. Telexelectric, LLP, No. 14-09857 (S.D.N.Y.) In addition, on September 23, 2015, a putative class action relating to TelexFree was filed in the United States District Court for the District of Arizona, styled Rita Dos Santos, Putative Class Representatives and those Similarly Situated v. TelexElectric, LLLP et al 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. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share | Note 11 – Earnings Per Share The following tables illustrate basic and diluted EPS for the three months ended September 30, 2015 and 2014: Three months ended September 30, 2015 2014 (in thousands, except per share data) Common Participating Common Stock Participating Basic EPS: Net income attributable to TSYS common shareholders $ 120,622 83,805 Less income allocated to nonvested awards (991 ) 991 (843 ) 843 Net income allocated to common stock for EPS calculation (a) $ 119,631 991 82,962 843 Average common shares outstanding (b) 182,431 1,523 183,692 1,885 Basic EPS (a)/(b) $ 0.66 0.65 0.45 0.45 Diluted EPS: Net income attributable to TSYS common shareholders $ 120,622 83,805 Less income allocated to nonvested awards (985 ) 985 (836 ) 836 Net income allocated to common stock for EPS calculation (c) $ 119,637 985 82,969 836 Average common shares outstanding 182,431 1,523 183,692 1,885 Increase due to assumed issuance of shares related to common equivalent shares outstanding 1,327 1,995 Average common and common equivalent shares outstanding (d) 183,758 1,523 185,687 1,885 Diluted EPS (c)/(d) $ 0.65 0.65 0.45 0.44 Nine months ended September 30, 2015 2014 (in thousands, except per share data) Common Participating Common Stock Participating Basic EPS: Net income attributable to TSYS common shareholders $ 281,216 243,012 Less income allocated to nonvested awards (2,445 ) 2,445 (2,477 ) 2,477 Net income allocated to common stock for EPS calculation (a) $ 278,771 2,445 240,535 2,477 Average common shares outstanding (b) 182,701 1,619 184,641 1,918 Basic EPS (a)/(b) $ 1.53 1.51 1.30 1.29 Diluted EPS: Net income attributable to TSYS common shareholders $ 281,216 243,012 Less income allocated to nonvested awards (2,432 ) 2,432 (2,454 ) 2,454 Net income allocated to common stock for EPS calculation (c) $ 278,784 2,432 240,558 2,454 Average common shares outstanding 182,701 1,619 184,641 1,918 Increase due to assumed issuance of shares related to common equivalent shares outstanding 1,214 2,277 Average common and common equivalent shares outstanding (d) 183,915 1,619 186,918 1,918 Diluted EPS (c)/(d) $ 1.52 1.50 1.29 1.28 The diluted EPS calculation excludes stock options and nonvested awards that are convertible into 0.5 million common shares for both the three and nine months ended September 30, 2015, respectively, and excludes 1.2 million common shares for both the three and nine months ended September 30, 2014, respectively, because their inclusion would have been anti-dilutive. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Acquisitions | Note 12 — Acquisitions 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. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events | Note 13 — Subsequent Events Management performed an evaluation of the Company’s activity and has concluded that there are no significant subsequent events requiring disclosure. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements of TSYS include the accounts of TSYS and its wholly- and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. These financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and, therefore, do not include all information and footnotes required by U.S. GAAP for complete financial statements. The preparation of the consolidated financial statements requires management of the Company to make estimates and assumptions relating to the reported amounts of assets and liabilities as of 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. All adjustments, consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair presentation of financial position and results of operations for the periods covered by this report, have been included. Certain prior period amounts may have been reclassified to conform to the current period’s presentation. As discussed in Note 2, the Company’s financial statements reflect GP Network Corporation (GP Net) and TSYS Japan Godo Kaisha (TSYS Japan), formerly TSYS Japan Co., Ltd., as discontinued operations. The Company has segregated the net assets, net liabilities and operating results from continuing operations on the Unaudited Consolidated Balance Sheets and Unaudited Consolidated Statements of Income for all periods presented. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s summary of significant accounting policies, consolidated financial statements and related notes appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the Securities and Exchange Commission (SEC). Results of interim periods are not necessarily indicative of results to be expected for the year. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In January 2015, the Company adopted Accounting Standards Update (ASU) 2014-08, “ Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” |
New Accounting Pronouncements | New Accounting Pronouncements In September 2015, the FASB issued ASU 2015-16 “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments In June 2015, the FASB issued ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements – Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting.” In April 2015, the FASB issued ASU 2015-05 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” In April 2015, the FASB issued ASU 2015-03 “ Interest — Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs.” In January 2015, the FASB issued ASU 2015-01 “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers” |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Financial Results for Discontinued Operations | The following table presents the main classes of assets and liabilities associated with discontinued operations as of September 30, 2015 and December 31, 2014: (in thousands) September 30, 2015 December 31, 2014 Current assets $ 3,395 4,003 Current liabilities 3,395 4,003 The following table presents the summarized results of discontinued operations for the three and nine months ended September 30, 2014: (in thousands) Three months ended Nine months ended Total revenues $ — 16,248 Loss before taxes $ — (51 ) Income tax benefit $ — (39 ) Loss from discontinued operations, net of tax $ — (12 ) Gain on dispositions, net of tax $ 880 52,005 Income from discontinued operations, net of tax $ 880 51,993 Income from discontinued operations, net of tax, attributable to noncontrolling interest $ — 999 Income from discontinued operations, net of tax, attributable to TSYS common shareholders $ 880 50,994 |
Supplementary Balance Sheet I22
Supplementary Balance Sheet Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Cash and Cash Equivalent Balances | Cash and cash equivalent balances are summarized as follows: (in thousands) September 30, 2015 December 31, 2014 Cash and cash equivalents in domestic accounts $ 392,133 225,396 Cash and cash equivalents in foreign accounts 55,717 63,787 Total $ 447,850 289,183 |
Significant Components of Prepaid Expenses and Other Current Assets | Significant components of prepaid expenses and other current assets are summarized as follows: (in thousands) September 30, 2015 December 31, 2014 Prepaid expenses $ 34,368 35,334 Supplies inventory 13,115 14,340 Other 44,269 49,300 Total $ 91,752 98,974 |
Significant Components of Contract Acquisition Costs, Net of Accumulated Amortization | Significant components of contract acquisition costs, net of accumulated amortization, are summarized as follows: (in thousands) September 30, 2015 December 31, 2014 Conversion costs, net of accumulated amortization of $156.5 million and $138.7 million as of 2015 and 2014, respectively $ 161,615 159,339 Payments for processing rights, net of accumulated amortization of $148.1 million and $137.4 million as of 2015 and 2014, respectively 91,054 76,966 Total $ 252,669 236,305 |
Significant Components of Other Current Liabilities | Significant components of other current liabilities are summarized as follows: (in thousands) September 30, 2015 December 31, 2014 Deferred revenues $ 40,680 41,773 Accrued expenses 29,046 23,617 Dividends payable 18,982 19,006 Accrued interest 11,246 2,819 Accrued income taxes 8,043 — Other 73,901 67,590 Total $ 181,898 154,805 |
Income Tax Effects Allocated to and Cumulative Balance of Accumulated Other Comprehensive Income (Loss) | The income tax effects allocated to and the cumulative balance of accumulated other comprehensive income (loss) attributable to TSYS shareholders are as follows: (in thousands) Beginning Pretax Tax Net-of-Tax Ending Balance Foreign currency translation adjustments and transfers from noncontrolling interests $ (13,564 ) (17,150 ) (622 ) (16,528 ) $ (30,092 ) Unrealized gain on available-for-sale securities 1,105 1,346 497 849 1,954 Change in AOCI related to postretirement healthcare plans 533 691 250 441 974 Total $ (11,926 ) (15,113 ) 125 (15,238 ) $ (27,164 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Nonvested Share Awards | The market value of the TSYS common stock as of the date of issuance is charged as compensation expense over the vesting periods of the awards. Nine months ended September 30, 2015 2014 Number of shares granted 388,211 663,624 Market value ( in millions $ 14.9 20.3 |
Summary of Performance- and Market- Based Awards Granted | The following table summarizes the performance- and market- based awards granted during the first nine months of 2015 and 2014: Year Type of Award Performance Period Ending Performance Measure Number of Period Expensed 2015 Market July 2016, 2017 and 2018 Total Shareholder Return 25,000 July 2018 2015 Performance December 2017 Adjusted EPS 135,289 December 2017 2015 Market December 2017 Total Shareholder Return 57,982 December 2017 2015 Performance December 2015 Revenues before Reimbursable Items and Adjusted EPS 165,543 December 2018 2014 Performance December 2016 Revenues before Reimbursable Items and Adjusted EPS 211,593 December 2016 |
Weighted Average Fair Value Of Option Grants | The weighted average fair value of the option grants was estimated on the date of grant using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions: Nine months ended September 30, 2015 2014 Number of options granted 613,473 1,046,372 Weighted average exercise price $ 39.01 30.96 Risk-free interest rate 1.73 % 2.01 % Expected volatility 20.80 % 25.06 % Expected term (years) 6.3 6.5 Dividend yield 1.04 % 1.29 % Weighted average fair value $ 8.27 7.66 |
Segment Reporting and Major C24
Segment Reporting and Major Customers (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Operating Segments | The following table presents the Company’s operating results by segment: Operating Segments Three months ended September 30, Nine months ended September 30, (in thousands) 2015 2014 2015 2014 Revenues before reimbursable items North America Services $ 293,571 240,957 846,989 698,543 International Services 86,446 87,385 244,033 248,890 Merchant Services 123,721 115,012 351,987 327,972 NetSpend 139,648 114,048 436,343 363,521 Intersegment revenues (7,000 ) (4,542 ) (25,098 ) (15,248 ) Revenues before reimbursable items from external customers $ 636,386 552,860 1,854,254 1,623,678 Total revenues North America Services $ 341,416 282,833 984,493 818,335 International Services 92,177 91,865 261,597 264,710 Merchant Services 143,100 134,117 409,676 384,824 NetSpend 139,648 114,048 436,343 363,521 Intersegment revenues (8,451 ) (5,972 ) (29,411 ) (19,616 ) Revenues from external customers $ 707,890 616,891 2,062,698 1,811,774 Depreciation and amortization North America Services $ 25,300 22,173 72,831 63,377 International Services 8,678 9,610 26,084 29,176 Merchant Services 4,670 3,624 13,394 10,591 NetSpend 2,632 2,155 7,547 5,779 Segment depreciation and amortization 41,280 37,562 119,856 108,923 Acquisition intangible amortization 22,883 24,210 69,601 72,805 Corporate Administration and Other 336 662 1,762 1,702 Total depreciation and amortization $ 64,499 62,434 191,219 183,430 Adjusted segment operating income North America Services $ 113,946 92,736 324,902 251,892 International Services 18,370 15,976 38,706 32,274 Merchant Services 42,387 40,409 117,192 103,473 NetSpend 37,315 36,123 109,224 95,543 Total adjusted segment operating income 212,018 185,244 590,024 483,182 Acquisition intangible amortization (22,883 ) (24,210 ) (69,601 ) (72,805 ) NetSpend merger and acquisition operating expenses — (779 ) — (3,213 ) Share-based compensation (11,295 ) (5,420 ) (31,468 ) (23,019 ) Corporate Administration and Other (14,736 ) (25,428 ) (72,753 ) (75,278 ) Operating income $ 163,104 129,407 416,202 308,867 As of September 30, 2015 December 31, 2014 Total assets North America Services $ 3,496,252 3,327,160 International Services 339,186 356,590 Merchant Services 697,154 695,744 NetSpend 1,518,196 1,556,369 Intersegment eliminations (2,161,266 ) (2,202,282 ) Total assets $ 3,889,522 3,733,581 |
Reconciliation of Geographic Revenues to External Revenues by Operating Segments | The following tables reconcile geographic revenues to external revenues by operating segment based on the domicile of the Company’s customers: Three months ended September 30, 2015 (in millions) North America International Merchant NetSpend Total United States $ 257.8 — 142.8 139.6 $ 540.2 Canada* 68.4 — 0.1 — 68.5 Europe* 0.2 79.4 — — 79.6 Mexico 4.0 — — — 4.0 Other* 4.3 11.1 0.2 — 15.6 Total $ 334.7 90.5 143.1 139.6 $ 707.9 Nine months ended September 30, 2015 (in millions) North America International Merchant NetSpend Total United States $ 716.1 — 408.7 436.3 $ 1,561.1 Canada* 218.6 — 0.3 — 218.9 Europe* 0.6 223.7 — — 224.3 Mexico 12.4 — — — 12.4 Other* 14.1 31.4 0.5 — 46.0 Total $ 961.8 255.1 409.5 436.3 $ 2,062.7 Three months ended September 30, 2014 (in millions) North America International Merchant NetSpend Total United States $ 195.8 — 133.8 114.0 $ 443.6 Canada* 75.4 — 0.1 — 75.5 Europe* 0.2 78.2 — — 78.4 Mexico 4.0 — — — 4.0 Other* 4.1 11.1 0.2 — 15.4 Total $ 279.5 89.3 134.1 114.0 $ 616.9 Nine months ended September 30, 2014 (in millions) North America International Merchant NetSpend Total United States $ 573.4 — 384.0 363.5 $ 1,320.9 Canada* 207.4 — 0.2 — 207.6 Europe* 0.5 224.3 — — 224.8 Mexico 12.2 — — — 12.2 Other* 11.9 33.9 0.5 — 46.3 Total $ 805.4 258.2 384.7 363.5 $ 1,811.8 * Revenues are impacted by movements in foreign currency exchange rates. |
Property and Equipment, Net of Accumulated Depreciation and Amortization | The Company maintains property and equipment, net of accumulated depreciation and amortization, in the following geographic areas: As of (in millions) September 30, 2015 December 31, 2014 United States $ 237.3 237.9 Europe* 43.1 45.5 Other* 6.7 7.2 Total $ 287.1 290.6 * Property and equipment are impacted by movements in foreign currency exchange rates. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Basic and Diluted Earnings Per Share | The following tables illustrate basic and diluted EPS for the three months ended September 30, 2015 and 2014: Three months ended September 30, 2015 2014 (in thousands, except per share data) Common Participating Common Stock Participating Basic EPS: Net income attributable to TSYS common shareholders $ 120,622 83,805 Less income allocated to nonvested awards (991 ) 991 (843 ) 843 Net income allocated to common stock for EPS calculation (a) $ 119,631 991 82,962 843 Average common shares outstanding (b) 182,431 1,523 183,692 1,885 Basic EPS (a)/(b) $ 0.66 0.65 0.45 0.45 Diluted EPS: Net income attributable to TSYS common shareholders $ 120,622 83,805 Less income allocated to nonvested awards (985 ) 985 (836 ) 836 Net income allocated to common stock for EPS calculation (c) $ 119,637 985 82,969 836 Average common shares outstanding 182,431 1,523 183,692 1,885 Increase due to assumed issuance of shares related to common equivalent shares outstanding 1,327 1,995 Average common and common equivalent shares outstanding (d) 183,758 1,523 185,687 1,885 Diluted EPS (c)/(d) $ 0.65 0.65 0.45 0.44 Nine months ended September 30, 2015 2014 (in thousands, except per share data) Common Participating Common Stock Participating Basic EPS: Net income attributable to TSYS common shareholders $ 281,216 243,012 Less income allocated to nonvested awards (2,445 ) 2,445 (2,477 ) 2,477 Net income allocated to common stock for EPS calculation (a) $ 278,771 2,445 240,535 2,477 Average common shares outstanding (b) 182,701 1,619 184,641 1,918 Basic EPS (a)/(b) $ 1.53 1.51 1.30 1.29 Diluted EPS: Net income attributable to TSYS common shareholders $ 281,216 243,012 Less income allocated to nonvested awards (2,432 ) 2,432 (2,454 ) 2,454 Net income allocated to common stock for EPS calculation (c) $ 278,784 2,432 240,558 2,454 Average common shares outstanding 182,701 1,619 184,641 1,918 Increase due to assumed issuance of shares related to common equivalent shares outstanding 1,214 2,277 Average common and common equivalent shares outstanding (d) 183,915 1,619 186,918 1,918 Diluted EPS (c)/(d) $ 1.52 1.50 1.29 1.28 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2015Segment | |
NetSpend Holdings Inc | |
Significant Accounting Policies [Line Items] | |
Operating segments | 4 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) | 1 Months Ended |
Apr. 30, 2014 | |
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% |
Main Classes of Assets and Liab
Main Classes of Assets and Liabilities Held for Sale (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Current assets | $ 3,395 | $ 4,003 |
Current liabilities | $ 3,395 | $ 4,003 |
Summarized Results of Discontin
Summarized Results of Discontinued Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total revenues | $ 16,248 | |
Loss before taxes | (51) | |
Income tax benefit | (39) | |
Loss from discontinued operations, net of tax | (12) | |
Gain on dispositions, net of tax | $ 880 | 52,005 |
Income from discontinued operations, net of tax | 880 | 51,993 |
Income from discontinued operations, net of tax, attributable to noncontrolling interest | 999 | |
Income from discontinued operations, net of tax, attributable to TSYS common shareholders | $ 880 | $ 50,994 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Goodwill | $ 1,545,888 | $ 1,547,397 |
Cash and Cash Equivalent Balanc
Cash and Cash Equivalent Balances (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 |
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents in domestic accounts | $ 392,133 | $ 225,396 | |
Cash and cash equivalents in foreign accounts | 55,717 | 63,787 | |
Total | $ 447,850 | $ 289,183 | $ 266,041 |
Significant Components of Prepa
Significant Components of Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | ||
Prepaid expenses | $ 34,368 | $ 35,334 |
Supplies inventory | 13,115 | 14,340 |
Other | 44,269 | 49,300 |
Total | $ 91,752 | $ 98,974 |
Significant Components of Contr
Significant Components of Contract Acquisition Costs (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Conversion costs, net of accumulated amortization of $156.5 million and $138.7 million as of 2015 and 2014, respectively | $ 161,615 | $ 159,339 |
Payments for processing rights, net of accumulated amortization of $148.1 million and $137.4 million as of 2015 and 2014, respectively | 91,054 | 76,966 |
Total | $ 252,669 | $ 236,305 |
Significant Components of Con34
Significant Components of Contract Acquisition Costs (Parenthetical) (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Conversion costs, accumulated amortization | $ 156.5 | $ 138.7 |
Payments for processing rights, accumulated amortization | $ 148.1 | $ 137.4 |
Supplementary Balance Sheet I35
Supplementary Balance Sheet Information - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | ||||
Amortization expense related to conversion costs | $ 7,000,000 | $ 4,500,000 | $ 20,100,000 | $ 12,900,000 |
Amortization related to payments for processing rights | $ 4,600,000 | $ 4,400,000 | 12,400,000 | $ 11,500,000 |
Reclassifications of AOCI | $ 0 |
Significant Components of Other
Significant Components of Other Current Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Other Liabilities [Line Items] | ||
Deferred revenues | $ 40,680 | $ 41,773 |
Accrued expenses | 29,046 | 23,617 |
Dividends payable | 18,982 | 19,006 |
Accrued interest | 11,246 | 2,819 |
Accrued income taxes | 8,043 | |
Other | 73,901 | 67,590 |
Total | $ 181,898 | $ 154,805 |
Income Tax Effects Allocated to
Income Tax Effects Allocated to and Cumulative Balance of Accumulated Other Comprehensive Income (loss) (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning Balance | $ (11,926) |
Pretax Amount | (15,113) |
Tax Effect | 125 |
Net-of-Tax Amount | (15,238) |
Ending Balance | (27,164) |
Foreign currency translation adjustments and transfers from noncontrolling interests | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning Balance | (13,564) |
Pretax Amount | (17,150) |
Tax Effect | (622) |
Net-of-Tax Amount | (16,528) |
Ending Balance | (30,092) |
Unrealized gain on available-for-sale securities | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning Balance | 1,105 |
Pretax Amount | 1,346 |
Tax Effect | 497 |
Net-of-Tax Amount | 849 |
Ending Balance | 1,954 |
Change in AOCI related to postretirement healthcare plans | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning Balance | 533 |
Pretax Amount | 691 |
Tax Effect | 250 |
Net-of-Tax Amount | 441 |
Ending Balance | $ 974 |
Long-Term Borrowings - Addition
Long-Term Borrowings - Additional Information (Detail) - 1 months ended Sep. 30, 2015 - LIBOR + 2.0%, unsecured term loan £ in Millions, $ in Millions | USD ($) | GBP (£) |
Debt Instrument [Line Items] | ||
Aggregate principal amount | $ 1.9 | £ 1.3 |
Debt instrument, maturity month and year | 2017-12 | |
Long-term debt | $ 3.3 | |
London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Debt instrument, margin rate | 2.00% |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 11,300 | $ 5,400 | $ 31,468 | $ 23,019 |
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 | 13,030 | 13,030 | ||
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 | 2,000 | $ 2,000 | ||
Unvested Restricted Awards | Maximum | Certain key Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 4 years | |||
Performance Shares | 2015 Performance Share Plan | attained in 2017 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of performance shares grant expected to vest | 200.00% | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost related to non vested share-based compensation arrangements | $ 4,100 | $ 4,100 | ||
Unrecognized compensation cost related to non vested share-based compensation arrangements, remaining weighted average recognition period | 1 year 6 months | |||
Stock Options | Maximum | Certain key Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years |
Nonvested Share Awards (Detail)
Nonvested Share Awards (Detail) - Unvested Restricted Awards - Certain key Employees - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted | 388,211 | 663,624 |
Value of awards issued | $ 14.9 | $ 20.3 |
Summary of Performance- and Mar
Summary of Performance- and Market- Based Awards Granted (Detail) - shares | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Market Based Share Awards | 2015 Market-Based Share Plan | Performance Period Ending July 2016, 2017 and 2018 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance Measure | Total Shareholder Return | |
Number of Shares Granted | 25,000 | 25,000 |
Period Expensed Through | 2018-07 | 2018-07 |
Market Based Share Awards | 2015 Market-Based Share Plan | Performance Period Ending December 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance Measure | Total Shareholder Return | |
Number of Shares Granted | 57,982 | 57,982 |
Period Expensed Through | 2017-12 | 2017-12 |
Performance Shares | 2015 Performance Share Plan | Performance Period Ending December 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance Measure | Adjusted EPS | |
Number of Shares Granted | 135,289 | 135,289 |
Period Expensed Through | 2017-12 | 2017-12 |
Performance Shares | 2015 Performance Share Plan | Performance Period Ending December 2015 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance Measure | Revenues before Reimbursable Items and Adjusted EPS | |
Number of Shares Granted | 165,543 | 165,543 |
Period Expensed Through | 2017-12 | 2018-12 |
Performance Shares | 2014 Performance Shares | Performance Period Ending December 2016 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance Measure | Revenues before Reimbursable Items and Adjusted EPS | |
Number of Shares Granted | 211,593 | 211,593 |
Period Expensed Through | 2016-12 | 2016-12 |
Weighted Average Fair Value Of
Weighted Average Fair Value Of Option Grants (Detail) - Stock Options - $ / shares | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options granted | 613,473 | 1,046,372 |
Weighted average exercise price | $ 39.01 | $ 30.96 |
Risk-free interest rate | 1.73% | 2.01% |
Expected volatility | 20.80% | 25.06% |
Expected term (years) | 6 years 3 months 18 days | 6 years 6 months |
Dividend yield | 1.04% | 1.29% |
Weighted average fair value | $ 8.27 | $ 7.66 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Income Tax Contingency [Line Items] | |||||
Effective tax rate attributable to continuing operations | 24.30% | 32.20% | 30.10% | 32.90% | |
Increase in unrecognized tax benefits | $ 4.9 | ||||
Gross accrued interest and penalties on unrecognized tax benefits | $ 0.7 | 0.7 | $ 0.3 | ||
Unrecognized income tax benefits that, if recognized, would affect the effective tax rates | 11.6 | 11.6 | 6.5 | ||
Unrecognized income tax benefits that, if recognized, would affect the effective tax rates , interest and penalties | $ 0.5 | $ 0.5 | $ 0.2 |
Operating Segments (Detail)
Operating Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||
Revenues before reimbursable items | $ 636,386 | $ 552,860 | $ 1,854,254 | $ 1,623,678 | |
Revenue for reportable segment | 707,890 | 616,891 | 2,062,698 | 1,811,774 | |
Depreciation and amortization | 64,499 | 62,434 | 191,219 | 183,430 | |
Operating income | 163,104 | 129,407 | 416,202 | 308,867 | |
Total assets | 3,889,522 | 3,889,522 | $ 3,733,581 | ||
North America Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenue for reportable segment | 334,700 | 279,500 | 961,800 | 805,400 | |
International Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenue for reportable segment | 90,500 | 89,300 | 255,100 | 258,200 | |
Merchant Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenue for reportable segment | 143,100 | 134,100 | 409,500 | 384,700 | |
NetSpend | |||||
Segment Reporting Information [Line Items] | |||||
Revenue for reportable segment | 139,600 | 114,000 | 436,300 | 363,500 | |
Share Based Compensation | |||||
Segment Reporting Information [Line Items] | |||||
Operating income | (11,295) | (5,420) | (31,468) | (23,019) | |
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | 41,280 | 37,562 | 119,856 | 108,923 | |
Operating income | 212,018 | 185,244 | 590,024 | 483,182 | |
Operating Segments | North America Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenues before reimbursable items | 293,571 | 240,957 | 846,989 | 698,543 | |
Revenue for reportable segment | 341,416 | 282,833 | 984,493 | 818,335 | |
Depreciation and amortization | 25,300 | 22,173 | 72,831 | 63,377 | |
Operating income | 113,946 | 92,736 | 324,902 | 251,892 | |
Total assets | 3,496,253 | 3,496,253 | 3,327,160 | ||
Operating Segments | International Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenues before reimbursable items | 86,446 | 87,385 | 244,033 | 248,890 | |
Revenue for reportable segment | 92,177 | 91,865 | 261,597 | 264,710 | |
Depreciation and amortization | 8,678 | 9,610 | 26,084 | 29,176 | |
Operating income | 18,370 | 15,976 | 38,706 | 32,274 | |
Total assets | 339,186 | 339,186 | 356,590 | ||
Operating Segments | Merchant Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenues before reimbursable items | 123,721 | 115,012 | 351,987 | 327,972 | |
Revenue for reportable segment | 143,100 | 134,117 | 409,676 | 384,824 | |
Depreciation and amortization | 4,670 | 3,624 | 13,394 | 10,591 | |
Operating income | 42,387 | 40,409 | 117,192 | 103,473 | |
Total assets | 697,154 | 697,154 | 695,744 | ||
Operating Segments | NetSpend | |||||
Segment Reporting Information [Line Items] | |||||
Revenues before reimbursable items | 139,648 | 114,048 | 436,343 | 363,521 | |
Revenue for reportable segment | 139,648 | 114,048 | 436,343 | 363,521 | |
Depreciation and amortization | 2,632 | 2,155 | 7,547 | 5,779 | |
Operating income | 37,315 | 36,123 | 109,224 | 95,543 | |
Total assets | 1,518,196 | 1,518,196 | 1,556,369 | ||
Intersegment Elimination | |||||
Segment Reporting Information [Line Items] | |||||
Revenues before reimbursable items | (7,000) | (4,542) | (25,098) | (15,248) | |
Revenue for reportable segment | (8,451) | (5,972) | (29,411) | (19,616) | |
Total assets | (2,161,267) | (2,161,267) | $ (2,202,282) | ||
Segment Reconciling Items | Acquisition Related Intangible Assets | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | 22,883 | 24,210 | 69,601 | 72,805 | |
Operating income | (22,883) | (24,210) | (69,601) | (72,805) | |
Corporate, Non-Segment | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | 336 | 662 | 1,762 | 1,702 | |
Corporate, Non-Segment | NetSpend | |||||
Segment Reporting Information [Line Items] | |||||
Operating income | (779) | (3,213) | |||
Corporate, Non-Segment | Corporate Administration | |||||
Segment Reporting Information [Line Items] | |||||
Operating income | $ (14,736) | $ (25,428) | $ (72,753) | $ (75,278) |
Reconciliation of Geographic Re
Reconciliation of Geographic Revenues to External Revenues by Operating Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Segment Reporting Information [Line Items] | |||||
Total revenues | $ 707,890 | $ 616,891 | $ 2,062,698 | $ 1,811,774 | |
Total revenues | 707,890 | 616,891 | 2,062,698 | 1,811,774 | |
United States | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 540,200 | 443,600 | 1,561,100 | 1,320,900 | |
Total revenues | 540,200 | 443,600 | 1,561,100 | 1,320,900 | |
Canada | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | [1] | 68,500 | 75,500 | 218,900 | 207,600 |
Total revenues | [1] | 68,500 | 75,500 | 218,900 | 207,600 |
Europe | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | [1] | 79,600 | 78,400 | 224,300 | 224,800 |
Total revenues | [1] | 79,600 | 78,400 | 224,300 | 224,800 |
Mexico | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 4,000 | 4,000 | 12,400 | 12,200 | |
Total revenues | 4,000 | 4,000 | 12,400 | 12,200 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | [1] | 15,600 | 15,400 | 46,000 | 46,300 |
Total revenues | [1] | 15,600 | 15,400 | 46,000 | 46,300 |
North America Services | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 334,700 | 279,500 | 961,800 | 805,400 | |
Total revenues | 334,700 | 279,500 | 961,800 | 805,400 | |
North America Services | United States | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 257,800 | 195,800 | 716,100 | 573,400 | |
Total revenues | 257,800 | 195,800 | 716,100 | 573,400 | |
North America Services | Canada | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | [1] | 68,400 | 75,400 | 218,600 | 207,400 |
Total revenues | [1] | 68,400 | 75,400 | 218,600 | 207,400 |
North America Services | Europe | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | [1] | 200 | 200 | 600 | 500 |
Total revenues | [1] | 200 | 200 | 600 | 500 |
North America Services | Mexico | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 4,000 | 4,000 | 12,400 | 12,200 | |
Total revenues | 4,000 | 4,000 | 12,400 | 12,200 | |
North America Services | Other | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | [1] | 4,300 | 4,100 | 14,100 | 11,900 |
Total revenues | [1] | 4,300 | 4,100 | 14,100 | 11,900 |
International Services | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 90,500 | 89,300 | 255,100 | 258,200 | |
Total revenues | 90,500 | 89,300 | 255,100 | 258,200 | |
International Services | Europe | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | [1] | 79,400 | 78,200 | 223,700 | 224,300 |
Total revenues | [1] | 79,400 | 78,200 | 223,700 | 224,300 |
International Services | Other | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | [1] | 11,100 | 11,100 | 31,400 | 33,900 |
Total revenues | [1] | 11,100 | 11,100 | 31,400 | 33,900 |
Merchant Services | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 143,100 | 134,100 | 409,500 | 384,700 | |
Total revenues | 143,100 | 134,100 | 409,500 | 384,700 | |
Merchant Services | United States | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 142,800 | 133,800 | 408,700 | 384,000 | |
Total revenues | 142,800 | 133,800 | 408,700 | 384,000 | |
Merchant Services | Canada | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | [1] | 100 | 100 | 300 | 200 |
Total revenues | [1] | 100 | 100 | 300 | 200 |
Merchant Services | Other | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | [1] | 200 | 200 | 500 | 500 |
Total revenues | [1] | 200 | 200 | 500 | 500 |
NetSpend | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 139,600 | 114,000 | 436,300 | 363,500 | |
Total revenues | 139,600 | 114,000 | 436,300 | 363,500 | |
NetSpend | United States | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 139,600 | 114,000 | 436,300 | 363,500 | |
Total revenues | $ 139,600 | $ 114,000 | $ 436,300 | $ 363,500 | |
[1] | Revenues are impacted by movements in foreign currency exchange rates. |
Property and Equipment, Net of
Property and Equipment, Net of Accumulated Depreciation and Amortization (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||
Property and equipment, net of accumulated depreciation and amortization | $ 287,098 | $ 290,585 | |
United States | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net of accumulated depreciation and amortization | 237,300 | 237,900 | |
Europe | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net of accumulated depreciation and amortization | [1] | 43,100 | 45,500 |
Other | |||
Segment Reporting Information [Line Items] | |||
Property and equipment, net of accumulated depreciation and amortization | [1] | $ 6,700 | $ 7,200 |
[1] | Property and equipment are impacted by movements in foreign currency exchange rates. |
Segment Reporting and Major C47
Segment Reporting and Major Customers - Additional Information (Detail) - Customer | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Entity-wide revenue, major customer, number | 0 | 0 | 0 | 0 |
Supplementary Cash Flow Infor48
Supplementary Cash Flow Information - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Schedule of Cash Flow, Supplemental [Line Items] | ||
Equipment and software acquired under capital lease obligations | $ 3,800,000 | $ 5,200,000 |
Financing agreement for perpetual software licenses | ||
Schedule of Cash Flow, Supplemental [Line Items] | ||
Financing agreement amount | $ 0 |
Commitments And Contingencies -
Commitments And Contingencies - Additional Information (Detail) $ in Millions | Sep. 30, 2015USD ($) |
Commitment And Contingencies [Line Items] | |
Liability for uncertain tax positions | $ 11.6 |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Share Under Guidance of ASC 260 (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Basic EPS: | |||||
Net income attributable to TSYS common shareholders | $ 120,622 | $ 83,805 | $ 281,216 | $ 243,012 | |
Basic EPS (a)/(b) | [1] | $ 0.66 | $ 0.45 | $ 1.53 | $ 1.30 |
Diluted EPS: | |||||
Net income attributable to TSYS common shareholders | $ 120,622 | $ 83,805 | $ 281,216 | $ 243,012 | |
Diluted EPS (c)/(d) | [1] | $ 0.65 | $ 0.45 | $ 1.52 | $ 1.29 |
Common Stock | |||||
Basic EPS: | |||||
Net income attributable to TSYS common shareholders | $ 120,622 | $ 83,805 | $ 281,216 | $ 243,012 | |
Less income allocated to nonvested awards | (991) | (843) | (2,445) | (2,477) | |
Net income allocated to common stock for EPS calculation (a) | $ 119,631 | $ 82,962 | $ 278,771 | $ 240,535 | |
Average common shares outstanding (b) | 182,431 | 183,692 | 182,701 | 184,641 | |
Basic EPS (a)/(b) | $ 0.66 | $ 0.45 | $ 1.53 | $ 1.30 | |
Diluted EPS: | |||||
Net income attributable to TSYS common shareholders | $ 120,622 | $ 83,805 | $ 281,216 | $ 243,012 | |
Less income allocated to nonvested awards | (985) | (836) | (2,432) | (2,454) | |
Net income allocated to common stock for EPS calculation (c) | $ 119,637 | $ 82,969 | $ 278,784 | $ 240,558 | |
Average common shares outstanding | 182,431 | 183,692 | 182,701 | 184,641 | |
Increase due to assumed issuance of shares related to common equivalent shares outstanding | 1,327 | 1,995 | 1,214 | 2,277 | |
Average common and common equivalent shares outstanding (d) | 183,758 | 185,687 | 183,915 | 186,918 | |
Diluted EPS (c)/(d) | $ 0.65 | $ 0.45 | $ 1.52 | $ 1.29 | |
Participating Securities | |||||
Basic EPS: | |||||
Less income allocated to nonvested awards | $ 991 | $ 843 | $ 2,445 | $ 2,477 | |
Net income allocated to common stock for EPS calculation (a) | $ 991 | $ 843 | $ 2,445 | $ 2,477 | |
Average common shares outstanding (b) | 1,523 | 1,885 | 1,619 | 1,918 | |
Basic EPS (a)/(b) | $ 0.65 | $ 0.45 | $ 1.51 | $ 1.29 | |
Diluted EPS: | |||||
Less income allocated to nonvested awards | $ 985 | $ 836 | $ 2,432 | $ 2,454 | |
Net income allocated to common stock for EPS calculation (c) | $ 985 | $ 836 | $ 2,432 | $ 2,454 | |
Average common shares outstanding | 1,523 | 1,885 | 1,619 | 1,918 | |
Average common and common equivalent shares outstanding (d) | 1,523 | 1,885 | 1,619 | 1,918 | |
Diluted EPS (c)/(d) | $ 0.65 | $ 0.44 | $ 1.50 | $ 1.28 | |
[1] | EPS amounts may not total due to rounding |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Computation of Earnings Per Share [Line Items] | ||||
Convertible stock options and nonvested awards excluded from diluted EPS calculation | 0.5 | 1.2 | 0.5 | 1.2 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - NetSpend Holdings Inc - Software And License | 1 Months Ended |
Sep. 30, 2015USD ($) | |
Business Acquisition [Line Items] | |
Business combination, assets purchased | $ 750,000 |
Intangible asset amortization period | 5 years |