SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act
of 1934 for the fiscal year ended 1996 or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from ____________ to______________.
Commission file number 1-10254
TOTAL SYSTEM SERVICES, INC.
(Exact Name of Registrant as specified in its charter)
Georgia 58-1493818
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1200 Sixth Avenue,
Columbus, Georgia 31901
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (706) 649-2204
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- --------------------------- -----------------------------------------
Common Stock, $.10 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO___________
-----------
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of February 12, 1997, 129,289,680 shares of the $.10 par value common
stock of Total System Services, Inc. were outstanding, and the aggregate market
value of the shares of $.10 par value common stock of Total System Services,
Inc. held by non-affiliates was approximately $554,512,500 (based upon the
closing per share price of such stock on said date.)
Portions of the 1996 Annual Report to Shareholders of Registrant are
incorporated in Parts I, II, III and IV of this report. Portions of the Proxy
Statement of Registrant dated March 13, 1997 are incorporated in Part III of
this report.
Registrant's Documents Incorporated by Reference
Part Number and Item
Document Incorporated Number of Form 10-K
by Reference Into Which Incorporated
- ------------------------------- -----------------------
Pages 18 through 25, 30 through Part I, Item 1, Business
33, and 37 of Registrant's
1996 Annual Report to Shareholders
Pages 30 through 34, and 37 of Part I, Item 2, Properties
Registrant's 1996 Annual
Report to Shareholders
Page 37 of Registrant's 1996 Part I, Item 3, Legal
Annual Report to Shareholders Proceedings
Page 39 of Registrant's 1996 Part II, Item 5, Market
Annual Report to Shareholders for Registrant's Common
Equity and Related Stock-
holder Matters
Page 17 of Registrant's 1996 Part II, Item 6, Selected
Annual Report to Shareholders Financial Data
Pages 18 through 25 of Registrant's Part II, Item 7, Management's
1996 Annual Report to Shareholders Discussion and Analysis of
Financial Condition and
Results of Operations
Pages 26 through 39 Part II, Item 8, Financial
of Registrant's 1996 Annual Statements and Supplementary
Report to Shareholders Data
Pages 2 through 4, 6 and 7, and 18 Part III, Item 10,
of Registrant's Proxy Directors and Executive
Statement in connection with Officers of the Registrant
the Annual Meeting of Shareholders
to be held on April 14, 1997
Pages 7 through 10, and 13 and 14 Part III, Item 11,
of Registrant's Proxy Statement Executive Compensation
in connection with the Annual Meeting
of Shareholders to be held on April 14, 1997
Page 5, and 15 through 17 of Part III, Item 12, Security
Registrant's Proxy Ownership of Certain
Statement in connection with the Beneficial Owners and
Annual Meeting of Management
Shareholders to be held on April 14, 1997
Pages 13 through 15, and 17 and 18 Part III, Item 13,
of Registrant's Proxy Statement in Certain Relationships
connection with the Annual Meeting and Related Transactions
of Shareholders to be held on April 14, 1997
and pages 32 and 33 of Registrant's 1996
Annual Report to Shareholders
Pages 26 through 38 of Registrant's Part IV, Item 14, Exhibits,
1996 Annual Report to Shareholders Financial Statement
Schedules and Reports
on Form 8-K
Cross Reference Sheet
Item No. Caption Page No.
Part I
1. Business
2. Properties
3. Legal Proceedings
4. Submission of Matters to a Vote of
Security Holders
Part II
5. Market for Registrant's Common Equity
and Related Stockholder Matters
6. Selected Financial Data
7. Management's Discussion and Analysis
of Financial Condition and Results
of Operations
8. Financial Statements and Supplementary
Data
9. Changes In and Disagreements With Accountants
on Accounting and Financial Disclosure
Part III
10. Directors and Executive Officers of
the Registrant
11. Executive Compensation
12. Security Ownership of Certain
Beneficial Owners and Management
13. Certain Relationships and Related
Transactions
Part IV
14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K
Item 1. Business.
Business. Established in 1983 as an outgrowth of an on-line accounting and
bankcard data processing system developed for Columbus Bank and Trust
Company(R), Total System Services, Inc.(sm) ("TSYS(R)") is now one of the
world's largest credit, debit, commercial, and private-label card processing
companies. Based in Columbus, Georgia, and traded on the New York Stock Exchange
under the symbol "TSS," TSYS provides a comprehensive on-line system of data
processing services marketed as THE TOTAL SYSTEM(sm), servicing issuing
institutions throughout the United States, Puerto Rico, Canada and Mexico,
representing more than 79 million cardholder accounts. TSYS provides card
production, domestic and international clearing, statement preparation, customer
service support, merchant accounting, and management support. Synovus Financial
Corp.(R), an $8.6 billion asset, multi-financial services company, owns 80.7
percent of TSYS.
TSYS has four wholly owned subsidiaries: (1) Columbus Depot Equipment
Company(sm) ("CDEC (sm)"), which sells and leases computer related equipment
associated with TSYS' bankcard data processing services and bank data processing
services provided by an affiliate; (2) Mailtek, Inc.(sm) ("Mailtek"), which
provides full-service direct mail production services and offers data
processing, list management, laser printing, computer output microfiche, card
embossing, encoding and mailing services; (3) Lincoln Marketing, Inc.(sm)
("LMI"), which provides correspondence, fulfillment, telemarketing, data
processing and mailing services; and (4) Columbus Productions, Inc.(sm) ("CPI"),
which provides full-service commercial printing and related services. TSYS also
holds a 49% equity interest in a joint venture company named Total System
Services de Mexico, S.A. de C.V.("TSM"), which provides credit card related
processing services to Mexican banks, and a 50% interest in Vital Processing
Services L.L.C., a joint venture with Visa U.S.A. that combines the front-end
authorizations and back-end accounting and settlement processing of financial
and nonfinancial institutions and their merchant customers.
Service Marks. TSYS owns a family of service marks containing the name
Total System, and the federally registered service marks TSYS and TS2, to which
TSYS believes strong customer identification attaches. TSYS also owns service
marks associated with its subsidiaries. Management does not believe the loss of
such marks would have a material impact on the business of TSYS.
Major Customers. A significant amount of TSYS' revenues are derived from
certain major customers who are processed under long-term contracts. For the
year ended December 31, 1996, AT&T Universal Card Services Corp. and NationsBank
accounted for 17.6% and 11.9%, respectively, of TSYS' total revenues. As a
result, the loss of one of TSYS' major customers could have a material
adverse effect on TSYS' financial condition and results of operations.
- ------------------------------------
Synovus Financial Corp., Synovus, Columbus Bank and Trust Company and CB&T are
federally registered service marks of Synovus Financial Corp. Total System
Services, Inc., "THE TOTAL SYSTEM," Columbus Depot Equipment Company, CDEC,
Lincoln Marketing, Inc., Mailtek, Inc. and Columbus Productions, Inc. are
service marks of Total System Services, Inc. TSYS and TS2 are federally
registered service marks of Total System Services, Inc.
1
Competition. TSYS encounters vigorous competition in providing bankcard
data processing services from several different sources. The national market in
third party bankcard data processors is presently being provided by
approximately five vendors. TSYS believes that it is the second largest third
party bankcard processor in the United States. In addition, TSYS competes
against software vendors which provide their products to institutions which
process in-house. TSYS is presently encountering, and in the future anticipates
continuing to encounter, substantial competition from bankcard associations,
data processing and bankcard computer service firms and other such third party
vendors located throughout the United States.
TSYS' major competitor in the bankcard data processing industry is First
Data Resources, Inc., a wholly owned subsidiary of First Data Corporation, which
is headquartered in Omaha, Nebraska, and provides bankcard data processing
services, including authorization and data entry services. The principal methods
of competition between TSYS and First Data Resources are price and the type and
quality of services provided. Certain other subsidiaries of First Data
Corporation also compete with TSYS. In addition, there are a number of other
companies which have the necessary financial resources and the technological
ability to develop or acquire products and, in the future, to provide services
similar to those being offered by TSYS.
Regulation and Examination. TSYS is subject to being examined, and is
indirectly regulated, by the Office of the Comptroller of the Currency, the
Federal Reserve Board ("Board"), the Federal Deposit Insurance Corporation, the
Office of Thrift Supervision, the National Credit Union Administration, and the
various state financial regulatory agencies which supervise and regulate the
banks, savings institutions and credit unions for which TSYS provides bankcard
data processing services. Matters reviewed and examined by these federal and
state financial institution regulatory agencies have included TSYS' internal
controls in connection with its present performance of bankcard data processing
services, and the agreements pursuant to which TSYS provides such services.
On January 4, 1990, the Federal Reserve Bank of Atlanta approved Synovus'
indirect retention of its ownership of TSYS through Columbus Bank and Trust
Company ("CB&T") and TSYS is now subject to direct regulation by the Board. TSYS
was formed with the prior written approval of, and is subject to regulation and
examination by, the Department of Banking and Finance of the State of Georgia as
a subsidiary of CB&T and is authorized to engage in only those activities which
CB&T itself is authorized to engage in directly, which includes the bankcard and
other data processing services presently being provided by TSYS. As TSYS and its
subsidiaries operate as subsidiaries of CB&T, they are subject to regulation by
the Federal Deposit Insurance Corporation.
Employees. As of February 28, 1997, TSYS had 2,664 full-time employees and
94 part-time employees.
See the "Financial Review" Section on pages 18 through 25 and Note 1, Note
4 and Note 10 of Notes to Consolidated Financial Statements on pages 30 through
32, page 33, and page 37 of TSYS' 1996 Annual Report to Shareholders which are
specifically incorporated herein by reference.
2
Item 2. Properties.
TSYS owns its 73,000 square foot South Center located at 1000 Fifth Avenue,
Columbus, Georgia 31901, and owns its 60,000 square foot Annex Building located
at 420 10th Street, Columbus, Georgia 31901. TSYS also owns a warehouse
facility, various other tracts of real estate located near or adjacent to its
South Center and Annex Building which are used for parking and/or future
expansion needs, and leases additional office space in Columbus, Georgia,
Atlanta, Georgia, and Jacksonville, Florida.
The approximately 32,000 square foot Columbus Depot, located at 1200 Sixth
Avenue, Columbus, Georgia 31901, which is owned by TSYS and is on the National
Register of Historic Places, houses TSYS' executive offices and several
corporate divisions.
TSYS also owns a 252,000 square foot production center which is located on
a 40.4 acre tract of land in north Columbus, Georgia. Primarily a production
center, this facility houses TSYS' primary data processing computer operations,
statement preparation, mail handling, microfiche production and purchasing, as
well as other related operations. Additional space will be added to this
facility in 1997 to house TSYS' card production services.
During 1995, TSYS purchased a 110,000 square foot building on a 23-acre
site in Columbus, Georgia, to accommodate current and future office space needs.
On March 7, 1996, TSYS announced its plans to purchase approximately 50
acres in downtown Columbus, Georgia, on which it will begin building a
campus-like complex for its corporate headquarters in 1997.
All properties owned and leased by TSYS are in good repair and suitable
condition for the purposes for which they are used.
In addition to its real property, TSYS owns and/or leases a substantial
amount of computer equipment.
See Note 1, Note 2, Note 3, Note 4, Note 6 and Note 10 of Notes to
Consolidated Financial Statements on pages 30 through 33, page 34, and page 37
of TSYS' 1996 Annual Report to Shareholders which are specifically incorporated
herein by reference.
Item 3. Legal Proceedings.
See Note 10 of Notes to Consolidated Financial Statements on page 37 of
TSYS' 1996 Annual Report to Shareholders which is specifically incorporated
herein by reference.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
3
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The "Quarterly Financial Data, Stock Price, Dividend Information" Section
which is set forth on page 39 of TSYS' 1996 Annual Report to Shareholders is
specifically incorporated herein by reference.
On January 3, 1994, TSYS issued 404,492 shares of its $.10 par value common
stock ("TSYS Common Stock") to CB&T in exchange for all 98,360 of the issued and
outstanding shares of $5.00 par value common stock of CPI, which existed as a
wholly owned subsidiary of CB&T.
On November 6, 1995, TSYS issued 4,156 shares of TSYS Common Stock to an
individual for no monetary consideration in connection with his employment by
TSYS.
On January 28, 1994 and January 29, 1996, TSYS issued 46,816 and 21,978
shares, respectively, to the two former shareholders of Mailtek. These shares
were issued pursuant to the Acquisition Agreement between TSYS, Mailtek and the
shareholders of Mailtek pursuant to which TSYS purchased all 10,000 of the
issued and outstanding shares of $.05 par value common stock of Mailtek on July
15, 1992.
All of the shares of TSYS Common Stock referenced above were issued
pursuant to the exemption from registration set forth in Section 4(2) of the
Securities Act of 1933 as they were issued to a limited number of persons.
Item 6. Selected Financial Data.
The "Selected Financial Data" Section which is set forth on page 17 of
TSYS' 1996 Annual Report to Shareholders is specifically incorporated herein by
reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The "Financial Review" Section which is set forth on pages 18 through 25 of
TSYS' 1996 Annual Report to Shareholders, which includes the information
encompassed within "Management's Discussion and Analysis of Financial Condition
and Results of Operations," is specifically incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
The "Quarterly Financial Data, Stock Price, Dividend Information" Section,
which is set forth on page 39, and the "Consolidated Balance Sheets,
Consolidated Statements of Income, Consolidated Statements of Shareholders'
Equity, Consolidated Statements of Cash Flows, Notes to Consolidated Financial
Statements and Report of Independent Auditors" Sections, which are set forth on
pages 26 through 38 of TSYS' 1996 Annual Report to Shareholders are specifically
incorporated herein by reference.
4
Item 9. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.
None.
Item 10. Directors and Executive Officers of the Registrant.
The "ELECTION OF DIRECTORS - Information Concerning Number and
Classification of Directors and Nominees" Section which is set forth on pages 2
and 3, the "ELECTION OF DIRECTORS - Information Concerning Directors and
Nominees for Class II Directors - General Information" Section which is set
forth on pages 3 and 4, the "ELECTION OF DIRECTORS - Executive Officers" Section
which is set forth on pages 6 and 7, and the "SECTION 16(a) Beneficial Ownership
Reporting Compliance" Section which is set forth on page 18 of TSYS' Proxy
Statement in connection with the Annual Meeting of Shareholders of TSYS to be
held on April 14, 1997 are specifically incorporated herein by reference.
Item 11. Executive Compensation.
The "EXECUTIVE COMPENSATION - Summary Compensation Table; Stock Option
Exercises and Grants; Compensation of Directors; Change in Control Arrangements;
and Compensation Committee Interlocks and Insider Participation" Sections which
are set forth on pages 7 through 10, and pages 13 and 14 of TSYS' Proxy
Statement in connection with the Annual Meeting of Shareholders of TSYS to be
held on April 14, 1997 are specifically incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The "ELECTION OF DIRECTORS - Information Concerning Directors and Nominees
for Class II Directors - TSYS Common Stock Ownership of Directors and
Management" Section which is set forth on page 5, the "RELATIONSHIPS BETWEEN
TSYS, SYNOVUS, CB&T AND CERTAIN OF SYNOVUS' SUBSIDIARIES - Beneficial Ownership
of TSYS Common Stock by CB&T" Section which is set forth on page 15, and the
"RELATIONSHIPS BETWEEN TSYS, SYNOVUS, CB&T AND CERTAIN OF SYNOVUS' SUBSIDIARIES
- - Synovus Common Stock Ownership of Directors and Management" Section which is
set forth on pages 15 through 17 of TSYS' Proxy Statement in connection with the
Annual Meeting of Shareholders of TSYS to be held on April 14, 1997 are
specifically incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
The "EXECUTIVE COMPENSATION - Compensation Committee Interlocks and Insider
Participation" Section which is set forth on pages 13 and 14, "EXECUTIVE
COMPENSATION - Transactions with Management" Section which is set forth on page
14, the "RELATIONSHIPS BETWEEN TSYS, SYNOVUS, CB&T AND CERTAIN OF SYNOVUS'
SUBSIDIARIES - Beneficial Ownership of TSYS Common Stock by CB&T" Section
which is set forth on page 15, the "RELATIONSHIPS BETWEEN TSYS,
5
SYNOVUS, CB&T AND CERTAIN OF SYNOVUS' SUBSIDIARIES - Interlocking Directorates
of TSYS, Synovus and CB&T" Section which is set forth on page 15, and the
"RELATIONSHIPS BETWEEN TSYS, SYNOVUS, CB&T, AND CERTAIN OF SYNOVUS' SUBSIDIARIES
- - Bankcard Data Processing Services Provided to CB&T and Certain of Synovus'
Subsidiaries; Other Agreements Between TSYS, Synovus, CB&T and Certain of
Synovus' Subsidiaries" Section which is set forth on pages 17 and 18 of TSYS'
Proxy Statement in connection with the Annual Meeting of Shareholders of TSYS to
be held on April 14, 1997 are specifically incorporated herein by reference.
See also Note 2 of Notes to Consolidated Financial Statements on pages 32
and 33 of TSYS' 1996 Annual Report to Shareholders which is specifically
incorporated herein by reference.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) 1. Financial Statements
The following Consolidated Financial Statements of TSYS are
specifically incorporated by reference from pages 26 through 38 of TSYS' 1996
Annual Report to Shareholders to Item 8, Part II, Financial Statements and
Supplementary Data.
Consolidated Balance Sheets - December 31, 1996 and 1995.
Consolidated Statements of Income - Years Ended December 31,
1996, 1995 and 1994.
Consolidated Statements of Shareholders' Equity - Years Ended
December 31, 1996, 1995 and 1994.
Consolidated Statements of Cash Flows - Years Ended December
31, 1996, 1995 and 1994.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
2. Index to Financial Statement Schedules
The following report of independent auditors and consolidated
financial statement schedule of Total System Services, Inc. are included:
Report of Independent Auditors.
Schedule II - Valuation and Qualifying Accounts - Years Ended
December 31, 1996, 1995 and 1994.
All other schedules are omitted because they are inapplicable
6
or the required information is included in the Notes to Consolidated Financial
Statements.
3. Exhibits
Exhibit
Number Description
3.1 Articles of Incorporation of Total System Services,
Inc. ("TSYS"), as amended, incorporated by reference
to Exhibit 3.1 of TSYS' Annual Report on Form 10-K
for the fiscal year ended December 31, 1990, as filed
with the Commission on March 19, 1991.
3.2 Bylaws of TSYS.
10. EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
10.1 Director Stock Purchase Plan of TSYS, incorporated by
reference to Exhibit 10.1 of TSYS' Annual Report on
Form 10-K for the fiscal year ended December 31,
1992, as filed with the Commission on March 18, 1993.
10.2 Group "Y" Key Executive Restricted Stock Bonus Plan
of TSYS, incorporated by reference to Exhibit 10.2 of
TSYS' Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, as filed with the Commission
on March 18, 1993.
10.3 1985 Key Employee Restricted Stock Bonus Plan of
TSYS, incorporated by reference to Exhibit 10.3 of
TSYS' Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, as filed with the Commission
on March 18, 1993.
10.4 1990 Key Employee Restricted Stock Bonus Plan of
TSYS, incorporated by reference to Exhibit 10.4 of
TSYS' Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, as filed with the Commission
on March 18, 1993.
10.5 Total System Services, Inc. 1992 Long-Term Incentive
Plan, incorporated by reference to Exhibit 10.5 of
TSYS' Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, as filed with the Commission
on March 18, 1993.
10.6 Excess Benefit Agreement of TSYS, incorporated by
reference to Exhibit 10.6 of TSYS' Annual Report on
Form 10-K for the fiscal year ended December 31,
1992, as filed with the Commission on March 18, 1993.
10.7 Wage Continuation Agreement of TSYS, incorporated by
7
reference to Exhibit 10.7 of TSYS' Annual Report on
Form 10-K for the fiscal year ended December 31,
1992, as filed with the Commission on March 18, 1993.
10.8 Incentive Bonus Plan of Synovus Financial Corp. in
which executive officers of TSYS participate,
incorporated by reference to Exhibit 10.8 of TSYS'
Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, as filed with the Commission on
March 18, 1993.
10.9 Agreement in connection with use of aircraft,
incorporated by reference to Exhibit 10.9 of TSYS'
Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, as filed with the Commission on
March 18, 1993.
10.10 Split Dollar Insurance Agreement of TSYS,
incorporated by reference to Exhibit 10.10 of TSYS'
Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, as filed with the Commission on
March 22, 1994.
10.11 Synovus Financial Corp. 1994 Long-Term Incentive Plan
in which executive officers of TSYS participate,
incorporated by reference to Exhibit 10.11 of TSYS'
Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, as filed with the Commission on
March 9, 1995.
10.12 Synovus Financial Corp. Executive Bonus Plan in which
executive officers of TSYS participate, incorporated
by reference to Exhibit 10.12 of TSYS' Annual Report
on Form 10-K for the fiscal year ended December 31,
1995, as filed with the Commission on March 19, 1996.
10.13 Change of Control Agreements for executive officers
of TSYS, incorporated by reference to Exhibit 10.13
of TSYS' Annual Report on Form 10-K for the fiscal
year ended December 31, 1995, as filed with the
Commission on March 19, 1996.
10.14 Stock Option Agreement of Samuel A. Nunn.
11.1 Statement re Computation of Per Share Earnings.
13.1 Certain specified pages of TSYS' 1996 Annual Report
to Shareholders which are specifically incorporated
herein by reference.
8
20.1 Proxy Statement for the Annual Meeting of
Shareholders of TSYS to be held on April 14, 1997,
certain pages of which are specifically incorporated
herein by reference.
21.1 Subsidiaries of Total System Services, Inc.
23.1 Independent Auditor' Consent.
24.1 Powers of Attorney contained on the signature pages
of the 1996 Annual Report on Form 10-K.
27.1 Financial Data Schedule (for SEC use only).
99.1 Annual Report on Form 11-K for the Total System
Services, Inc. Employee Stock Purchase Plan for the
year ended December 31, 1996 (to be filed as an
amendment hereto within 120 days of the end of the
period covered by this report.)
99.2 Annual Report on Form 11-K for the Total System
Services, Inc. Director Stock Purchase Plan for the
year ended December 31, 1996 (to be filed as an
amendment hereto within 120 days of the end of the
period covered by this report.)
(b) Reports on Form 8-K
On September 20, 1996, TSYS filed a Form 8-K with the
Commission in connection with the announcement of its expectation that earnings
for 1996 would exceed current analysts' estimates by approximately 10%.
TSYS\TSYS96.10K
9
Report of Independent Auditors
The Board of Directors
Total System Services, Inc.
Under date of January 22, 1997, we reported on the consolidated balance sheets
of Total System Services, Inc. and subsidiaries as of December 31, 1996 and
1995, and the related consolidated statements of income, shareholders' equity,
and cash flows for each of the years in the three-year period ended December
31, 1996, as contained in the Total System Services, Inc. 1996 Annual Report to
Shareholders. These consolidated financial statements and our report thereon are
incorporated by reference in the Total System Services, Inc. Annual Report on
Form 10-K for the year 1996. In connection with our audits of the aforementioned
consolidated financial statements, we also audited the related financial
statement schedule in Item 14(a)2. The financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
/s/KPMG Peat Marwick LLP
KPMG PEAT MARWICK LLP
Atlanta, Georgia
January 22, 1997
Total System Services, Inc.
Schedule II
Valuation and Qualifying Accounts
__________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________
Additions
________________________
Charged to
Balance at Charged to other Balance at
beginning costs and accounts-- Deductions-- end of
Description of period expenses describe describe period
__________________________________________________________________________________________________________________________
Year ended December 31, 1994: (16,347)<F1>
Allowance for doubtful accounts $ 815,073 - - (542,958)<F2> $ 255,768
======= ======= ======= ======== ========
Year ended December 31, 1995:
Allowance for doubtful accounts $ 255,768 509,500 - (50,894)<F1> $ 714,374
======= ======= ======= ======== ========
Year ended December 31, 1996:
Allowance for doubtful accounts $ 714,374 94,500 - (104,392)<F1> $ 704,482
======= ======= ======= ======== ========
<FN>
- --------------------
<F1> Accounts deemed to be uncollectible and written off during the year.
<F2> Reversal of provision for bad debt expense to adjust allowance for doubtful accounts to appropriate amounts.
</FN>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, Total System Services, Inc. has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TOTAL SYSTEM SERVICES, INC.
(Registrant)
March 20, 1997 By:/s/Richard W. Ussery
-----------------------------------
Richard W. Ussery,
Chairman and
Principal Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James H. Blanchard, Richard W. Ussery and
Philip W. Tomlinson, and each of them, his true and lawful attorney(s)-in-fact
and agent(s), with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any or all
amendments to this report and to file the same, with all exhibits and schedules
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney(s)-in-fact and agent(s) full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney(s)-in-fact and agent(s), or their substitute(s), may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, this report has been signed by the following
persons in the capacities and on the dates indicated.
/s/James H. Blanchard Date: March 20, 1997
- ------------------------------------------------
James H. Blanchard,
Director and Chairman of the
Executive Committee
/s/Richard W. Ussery Date: March 20, 1997
- ------------------------------------------------
Richard W. Ussery,
Chairman of the Board
and Principal Executive Officer
/s/Philip W. Tomlinson Date: March 20, 1997
- --------------------------------------------------
Philip W. Tomlinson,
President
and Director
/s/James B. Lipham Date: March 20, 1997
- -------------------------------------------------
James B. Lipham,
Executive Vice President, Treasurer, Principal
Accounting and Financial Officer
/s/William A. Pruett Date: March 20, 1997
- -------------------------------------------------
William A. Pruett,
Executive Vice President
/s/M. Troy Woods Date: March 20, 1997
- -------------------------------------------------
M. Troy Woods,
Executive Vice President
/s/Griffin B. Bell Date: March 20, 1997
- -------------------------------------------------
Griffin B. Bell,
Director
/s/Richard Y. Bradley Date: March 20, 1997
- -------------------------------------------------
Richard Y. Bradley,
Director
/s/Gardiner W. Garrard, Jr., Date: March 20, 1997
- -------------------------------------------------
Gardiner W. Garrard, Jr.,
Director
/s/John P. Illges, III Date: March 20, 1997
- -------------------------------------------------
John P. Illges, III,
Director
/s/Mason H. Lampton Date: March 20, 1997
- -------------------------------------------------
Mason H. Lampton,
Director
/s/Samuel A. Nunn Date: March 20, 1997
- -------------------------------------------------
Samuel A. Nunn,
Director
/s/H. Lynn Page Date: March 20, 1997
- -------------------------------------------------
H. Lynn Page,
Director
/s/W. Walter Miller, Jr. Date: March 20, 1997
- -------------------------------------------------
W. Walter Miller, Jr.,
Director
/s/William B. Turner Date: March 20, 1997
- -------------------------------------------------
William B. Turner,
Director
/s/George C. Woodruff, Jr. Date: March 20, 1997
- -------------------------------------------------
George C. Woodruff, Jr.,
Director
/s/James D. Yancey Date: March 20, 1997
- -------------------------------------------------
James D. Yancey,
Director
filings/tss\confo.sig