Exhibit 99.2
TSYS Announces 14.8% Increase in Earnings for First Six Months of 2003
Page 4 of 8
TSYS
Financial Highlights
(In thousands, except per share data)
-------------------------------------------- --------------------------------------
Three months ended Six months ended
June 30, June 30,
-------------------------------------------- ---------------------------------------
Percentage Percentage
2003 2002 Change 2003 2002 Change
--------------- ------------- ------------ -------------- --------- -------------
Revenues
Electronic payment processing services $ 177,306 153,579 15.5 % 345,132 296,736 16.3 %
Other services 25,755 27,986 (8.0) 50,808 55,645 (8.7)
--------------- ------------- ------------ ------------
Revenues before reimbursables 203,061 181,565 11.8 395,940 352.381 12.4
Reimbursable items 54,638 60,041 (9.0) 113,112 117,148 (3.5)
--------------- ------------- ------------ ------------
Total revenues 257,699 241,606 6.7 509,052 469,529 8.4
--------------- ------------- ------------ ------------
Expenses
Employment 83,600 73,588 13.6 159,696 142,320 12.2
Occupancy & equipment 50,407 41,719 20.8 102,027 85,949 18.7
Other 24,311 27,984 (13.1) 46,328 49,864 (7.1)
(Gain)/Loss on disposal of equipment (13) (1) nm (35) 1 nm
--------------- ------------- ------------ ------------
Expenses before reimbursables 158,305 143,290 10.5 308,016 278,134 10.7
Reimbursable items 54,638 60,041 (9.0) 113,112 117,148 (3.5)
--------------- ------------- ------------ ------------
Total operating expenses 212,943 203,331 4.7 421,128 395,282 6.5
--------------- ------------- ------------ ------------
Operating Income 44,756 38,275 16.9 87,924 74,247 18.4
Other Income 3,001 1,174 155.5 3,013 1,353 122.6
--------------- ------------- ------------ ------------
Income before Income Taxes, Minority Interest
and Equity in Income of Joint Ventures 47,757 39,449 21.1 90,937 75,600 20.3
Income Taxes 18,108 14,154 27.9 33,622 27,411 22.7
Minority Interest (142) (47) nm (260) (33) nm
Equity in Income of Joint Ventures 4,800 4,904 (2.1) 8,988 9,378 (4.2)
--------------- ------------- ------------ ------------
Net Income $ 34,307 30,152 13.8 66,043 57,534 14.8
=============== ============= ============ ============
Basic Earnings Per Share $ 0.17 0.15 13.9 % 0.34 0.29 14.9 %
=============== ============= ============ ============
Diluted Earnings Per Share $ 0.17 0.15 14.1 % 0.33 0.29 15.1 %
=============== ============= ============ ============
Dividend Declared Per Share $ 0.0200 0.0175 0.0375 0.0325
=============== ============= ============ ============
Average Common Shares Outstanding 196,703,341 197,003,560 196,875,450 196,983,384
=============== ============= ============ ============
Average Common and Common
Equivalent Shares Outstanding 197,207,696 197,690,794 197,242,500 197,735,727
=============== ============= ============ ============
Effective Tax Rate 34.6 % 32.0 % 33.7 % 32.3 %
=============== ============= ============ ============
Note: nm = not meaningful
TSYS Announces 14.8% Increase in Earnings for First Six Months of 2003
Page 5 of 8
TSYS
Segment Breakdown
(In thousands)
Three Months Ended June 30, 2003 Three Months Ended June 30, 2002
-------------------------------------------------- -------------------------------------------------------
Domestic-based International-based Domestic-based International-based
Transaction Transaction Transaction Transaction
Processing Processing Consolidated Processing Processing Consolidated
---------------- ------------------- ------------ ---------------- -------------------- -----------------
Total revenue $ 237,848 20,485 258,333 225,484 16,669 242,153
Intersegment revenue (1) (633) (634) (156) (391) (547)
---------------- ------------------- ------------ ---------------- -------------------- ---------------
Revenues from
external customers $ 237,847 19,852 257,699 225,328 16,278 241,606
================ =================== ============ ================ ==================== ===============
Depreciation and
amortization $ 20,942 2,553 23,495 15,998 2,088 18,086
================ =================== ============ ================ ==================== ===============
Segment operating
income $ 41,485 3,271 44,756 37,078 1,197 38,275
================ =================== ============ ================ ==================== ===============
Income tax expense $ 16,732 1,376 18,108 13,483 671 14,154
================ =================== ============ ================ ==================== ===============
Equity in income
of joint ventures $ 4,550 250 4,800 4,690 214 4,904
================ =================== ============ ================ ==================== ===============
Net Income $ 32,181 2,126 34,307 29,147 1,005 30,152
================ =================== ============ ================ ==================== ===============
Average accounts
on file 247,659 12,992 260,651 217,278 11,824 229,102
================ =================== ============ ================ ==================== ===============
Six Months Ended June 30, 2003 Six Months Ended June 30, 2002
--------------------------------------------------- -----------------------------------------------------
Domestic-based International-based Domestic-based International-based
Transaction Transaction Transaction Transaction
Processing Processing Consolidated Processing Processing Consolidated
---------------- ------------------- -------------- --------------- -------------------- ----------------
Total revenue $ 470,968 39,196 510,164 438,882 31,743 470,625
Intersegment revenue (3) (1,109) (1,112) (307) (789) (1,096)
---------------- ------------------- ------------ --------------- -------------------- ----------------
Revenues from
external customers $ 470,965 38,087 509,052 438,575 30,954 469,529
================ =================== ============ =============== ==================== ================
Depreciation and
amortization $ 40,548 5,050 45,598 30,672 4,089 34,761
================ =================== ============ =============== ==================== ================
Segment operating
income $ 82,966 4,958 87,924 73,105 1,142 74,247
================ =================== ============ =============== ==================== ================
Income tax expense $ 31,629 1,993 33,622 26,634 777 27,411
================ =================== ============ =============== ==================== ================
Equity in income
of joint ventures $ 8,492 496 8,988 8,917 461 9,378
================ =================== ============ =============== ==================== ================
Net Income $ 62,988 3,055 66,043 56,561 973 57,534
================ =================== ============ =============== ==================== ================
Average accounts
on file 243,612 12,817 256,429 220,383 11,764 232,147
================ =================== ============ =============== ==================== ================
Note: Revenues for domestic-based processing services include electronic
payment processing services and other services provided from the
United States to clients domiciled in the United States or other
countries. Revenues from international-based processing services
include electronic payment processing services and other services
provided outside the United States to clients based outside the
United States.
- more -
TSYS Announces 14.8% Increase in Earnings for First Six Months of 2003
Page 6 of 8
Balance Sheet Information:
(in thousands) Jun 2003 Dec 2002
------------------------- --------------------
Assets
Current assets:
Cash and cash equivalents $ 48,175 109,171
Restricted cash 8,943 4,035
Accounts receivable, net 137,679 121,439
Prepaid expenses and other current assets 37,629 31,334
------------------------- --------------------
Total current assets 232,066 265,979
Property, plant and equipment, net 218,950 120,835
Computer software, net 204,971 200,297
Contract acquisition costs, net 129,434 123,729
Goodwill, net 29,612 3,619
Equity investments, net 57,867 54,181
Other assets 20,047 14,228
----------------------- --------------------
Total assets 892,947 782,868
$ ======================= ====================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable 17,457 10,366
Accrued salaries and employee benefits 24,178 43,315
Current portion of long-term debt and obligations under
capital leases 294 68
Billings in excess of costs on uncompleted contracts 28,473 -
Other current liabilities 70,512 60,233
------------------------- --------------------
Total current liabilities 140,914 113,982
Long-term debt and obligations under capital leases, excluding
current portion 20,548 67
Other accounts payable 188 563
Deferred income tax liabilities 74,601 63,306
------------------------- --------------------
Total liabilities 236,251 177,918
------------------------- --------------------
Minority interest in consolidated subsidiary 3,013 2,744
------------------------- --------------------
Shareholders' Equity:
Common stock 19,725 19,725
Additional paid-in capital 35,104 35,143
Accumulated other comprehensive income (loss) 2,676 1,053
Treasury stock (12,087) (3,316)
Retained earnings 608,265 549,601
------------------------- --------------------
Total shareholders' equity 653,683 602,206
------------------------- --------------------
Total liabilities and shareholders' equity $ 892,947 782,868
========================= ====================
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TSYS Announces 14.8% Increase in Earnings for First Six Months of 2003
Page 7 of 8
Cash Flow Information: Six Months Ending:
(in thousands) June 2003 June 2002
-------------------------- --------------------
Cash flows from operating activities:
Net income $ 66,043 57,534
Adjustments to reconcile net income to net cash
provided by operating activities:
Minority interest in consolidated subsidiary's net income 260 33
Equity in income of joint ventures (8,988) (9,378)
(Gain) loss on currency translation adjustments, net (1,162) 4
Depreciation and amortization 45,598 34,761
Charges for bad debts and billing adjustments (97) 4,828
Charges for transaction processing 2,164 6,915
Billings in excess of costs on uncompleted contracts 28,472 -
Accounts payable 4,597 (12,240)
Accrued salaries and employee benefits (19,179) (19,580)
Other working capital (7,044) 13,255
-------------------------- --------------------
Net cash provided by operating activities 110,664 76,132
-------------------------- --------------------
Cash flows from investing activities:
Purchase of property and equipment (107,432) (7,815)
Additions to computer software (29,033) (35,644)
Increase in contract acquisition costs (13,379) (27,684)
Cash acquired in acquisition of subsidiary 4,442 2,858
Cash used in acquisition (36,000) -
Other 5,344 17,864
-------------------------- --------------------
Net cash used in investing activities (176,058) (50,421)
-------------------------- --------------------
Cash flows from financing activities:
Purchase of common stock (9,485) -
Proceeds from issuance of long-term debt 20,234 -
Other (6,312) (5,721)
-------------------------- --------------------
Net cash used in financing activities 4,437 (5,721)
-------------------------- --------------------
Effect of foreign currency translation on cash and cash equivalents (39) (1,615)
-------------------------- --------------------
Net increase (decrease) in cash and cash equivalents (60,996) 18,375
Cash and cash equivalents at beginning of year 109,171 58,659
-------------------------- --------------------
Cash and cash equivalents at end of period $ 48,175 77,034
========================== ====================
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TSYS Announces 14.8% Increase in Earnings for First Six Months of 2003
Page 8 of 8
Supplemental Information:
Accounts on file at:
-------------------------------------------------------------------------------
June 2003 % June 2002 % % Chg
-------------------- ------- ----------------------- --------- ----------------
Accounts on File (in millions):
Consumer 144,998 55.2 121,817 53.8 19.0 %
Debit/Stored Value 7,870 3.0 4,982 2.2 58.0
Government services/EBT 6,718 2.6 526 0.1 nm
Retail 82,623 31.5 80,594 35.6 2.5
Commercial 20,245 7.7 18,738 8.3 8.0
-------------------- ------- ----------------------- ---------
262,454 100.0 226,657 100.0 15.8 %
==================== ======= ======================= =========
nm = not meaningful
QTD Average Accounts on File (in millions) 260,651 229,102 13.8 %
YTD Average Accounts on File (in millions) 256,429 232,147 10.5 %
Accounts on file at:
-------------------------------------------------------------------------------
June 2003 % June 2002 % % Chg
-------------------- ------- ----------------------- --------- ----------------
Accounts on File (in millions):
Domestic 217,249 82.8 197,772 87.8 9.8 %
International 45,205 17.2 28,885 12.2 56.5
----------------- ------- ----------------------- ---------
262,454 100.0 226,657 100.0 15.8 %
==================== ======= ======================= =========
Note: The accounts on file between domestic and international is based on the
geographic domicile of processing clients.
Geographic Area Data: The following geographic area data represents revenues
for the three months and six months ended June 30 on where the client is
located:
Three Months Ended June 30,
-------------------------------------------------------------------------------
2003 % 2002 % % Chg
-------------------- ------- ----------------------- --------- ----------------
(dollars in millions):
United States $ 209,024 81.2 206,685 85.6 1.1 %
Canada* 19,137 7.4 11,016 4.6 73.7
Europe 16,921 6.6 13,782 5.7 22.8
Mexico 9,117 3.5 7,094 2.9 28.5
Japan 2,931 1.1 2,496 1.0 17.4
Other 569 0.2 533 0.2 6.8
-------------------- ------- ----------------------- ---------
$ 257,699 100.0 241,606 100.0 6.7
==================== ======= ======================= =========
Six Months Ended June 30,
-------------------------------------------------------------------------------
2003 % 2002 % % Chg
-------------------- ------- ----------------------- --------- ----------------
(dollars in millions):
United States $ 417,620 82.0 403,335 85.9 3.5 %
Canada* 35,129 6.9 21,043 4.5 66.9
Europe 32,354 6.4 26,022 5.5 24.3
Mexico 17,086 3.4 13,105 2.8 30.4
Japan 5,733 1.1 4,931 1.1 16.2
Other 1,130 0.2 1,093 0.2 3.4
-------------------- ------- ----------------------- ---------
$ 509,052 100.0 469,529 100.0 8.4
==================== ======= ======================= =========
* These revenues include those generated from the Caribbean accounts owned by
a Canadian institution.
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