TSYS Reports Fourth Quarter and Full Year Earnings

By: TSYS via Business Wire News Releases

January 24, 2017 at 16:15 PM EST

TSYS (NYSE: TSS) today reported results for the fourth quarter and full year of 2016.

“2016 was truly an exceptional year in the history of our company. We delivered record financial results, completed our largest acquisition in TransFirst that doubled the size of our Merchant business, and finished the year with results in all four segments having met or exceeded our goals,“ said M. Troy Woods, chairman and chief executive officer of TSYS.

Highlights for the fourth quarter of 2016 include:

Total revenues were $1.1 billion, an increase of 57.9% over last year’s $716.8 million.
Net revenue (non-GAAP), which excludes reimbursable items, interchange and assessment expense, was $785.7 million, an increase of 21.8% over last year’s $645.1 million.
Income from continuing operations attributable to TSYS common shareholders was $74.0 million, a decrease of 9.2% from last year’s $81.4 million. Basic earnings per share (EPS) from continuing operations were $0.40 per share, a decrease of 9.3% from last year’s $0.44.
Adjusted earnings from continuing operations (non-GAAP) were $129.6 million, an increase of 24.7% over last year’s $103.9 million. 4th quarter ‘16 adjusted EPS from continuing operations (non-GAAP) was $0.71, an increase of 24.5% over last year’s $0.57.
Adjusted EBITDA (non-GAAP) was $266.5 million, an increase of 36.7% over last year’s $195.0 million.

Highlights for the full year of 2016 include:

Total revenues were $4.2 billion, an increase of 50.0% over last year’s $2.8 billion.
Net revenue (non-GAAP), which excludes reimbursable items, interchange and assessment expense, was $3.0 billion, an increase of 21.7% over last year’s $2.5 billion.
Income from continuing operations attributable to TSYS common shareholders was $319.6 million, a decrease of 11.9% from last year’s $362.6 million. Basic EPS was $1.74 per share, a decrease of 11.6% from last year’s $1.97.
Adjusted earnings from continuing operations (non-GAAP) were $516.4 million, an increase of 14.2% over last year’s $452.1 million. Adjusted EPS from continuing operations (non-GAAP) was $2.81, an increase of 14.5% over last year’s $2.46.
Adjusted EBITDA (non-GAAP) was $1.0 billion, an increase of 24.8% over last year’s $833.9 million.

“We expect the momentum of 2016 to continue in 2017. We are projecting strong organic revenue growth and double digit earnings growth as we remain laser focused on executing our strategic plans and delivering outstanding results,” said Woods.

2017 Segment Changes

As a result of combining our North America and International segments, TSYS has included in the financial schedules of this release a schedule recasting its 2016 and 2015 quarterly segment results as if its Issuer Solutions Segment was combined for all of 2016 and 2015.

2017 Outlook

Beginning in 2017, TSYS will provide adjusted EPS figures based upon diluted shares to be more comparative to our industry peers. The 2017 guidance is below.


	2017 Financial Outlook Range			Percent Change
(in millions, except per share amounts)
Revenue:
Total revenues (GAAP)	$4,750	to	$4,850	14%	to	16%
Net revenue (non-GAAP)	$3,275	to	$3,375	8%	to	11%

Earnings per share:
Diluted EPS (GAAP)	$2.14	to	$2.21	23%	to	28%
Adjusted diluted EPS attributable to TSYS common shareholders (non-GAAP)	$3.05	to	$3.15	9%	to	12%
Average diluted weighted shares		185

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, January 24. The conference call can be accessed via simultaneous Internet broadcast on the “Investor Relations” section of TSYS’ website at investors.tsys.com where an accompanying slide presentation will also be available. The replay will be archived for 12 months and will be available approximately 30 minutes after the completion of the call.

Non-GAAP Measures

This press release contains information prepared in conformity with GAAP as well as non-GAAP information. It is management’s intent to provide non-GAAP financial information to enhance understanding of its consolidated financial information as prepared in accordance with GAAP. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure and the most directly comparable GAAP financial measure are presented so as not to imply that more emphasis should be placed on the non-GAAP measure. The non-GAAP financial information presented may be determined or calculated differently by other companies.

Additional information about non-GAAP financial measures, including, but not limited to, net revenue, adjusted earnings, adjusted EBITDA and adjusted EPS, and a reconciliation of those measures to the most directly comparable GAAP measures is included on pages 11 to 15 in the financial schedules of this release.

About TSYS

TSYS® (NYSE: TSS) unlocks opportunities in payments for payment providers, businesses and consumers. Our headquarters are in Columbus, Georgia, USA, and we operate in more than 80 countries with local offices across the Americas, EMEA and Asia-Pacific.

We provide seamless, secure and innovative solutions across the payments spectrum — from issuer processing and merchant acquiring to prepaid program management — delivered through partnership and expertise. We succeed because we put people, and their needs, at the heart of every decision. It’s an approach we call ‘People-Centered Payments®’.

Our industry is changing every day — and we’re leading the way toward the payments of tomorrow. We routinely post all important information on our website. For more, visit us at tsys.com.

Forward-Looking Statements

This press release contains “forward-looking statements” – that is, statements related to future, not past, events. Forward-looking statements often address our expected future business and financial performance and often contain words such as “expect,” “anticipate,” “intend,” “believe,” “should,” “plan,” “potential,” “will,” “could,” and similar expressions. These forward-looking statements include, among others, statements regarding TSYS’ earnings guidance for 2017 total revenues, net revenue, diluted EPS and adjusted diluted EPS, and the assumptions underlying such statements. These statements are based on the current beliefs and expectations of TSYS’ management, are based on management’s assumptions and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements. A number of important factors could cause actual results or events to differ materially from those contemplated by our forward-looking statements in this press release. Many of these factors are beyond TSYS’ ability to control or predict. These factors include, but are not limited to, the material breach of security of any of TSYS’ systems; TSYS’ ability to integrate acquisitions and achieve the anticipated growth opportunities and other benefits of the acquisitions, particularly the TransFirst acquisition; the effect of current domestic and worldwide economic conditions; risks associated with foreign operations, including adverse developments with respect to foreign currency exchange rates, and in particular with respect to the current environment, adverse developments with respect to foreign currency exchange rates as a result of the United Kingdom’s decision to leave the European Union (Brexit); expenses incurred associated with the signing of a significant client; TSYS does not convert clients’ portfolios as scheduled; the deconversion of a significant client; changes occur in laws, rules, regulations, credit card association rules, prepaid industry rules or other industry standards affecting TSYS and our clients that may result in costly new compliance burdens on TSYS and our clients and lead to a decrease in the volume and/or number of transactions processed or limit the types and amounts of fees that can be charged to customers, and in particular the CFPB’s new rule regarding prepaid financial products; the costs and effects of litigation, investigations or similar matters or adverse facts and developments relating thereto; adverse developments with respect to the payment card industry in general, including a decline in the use of cards as a payment mechanism; and growth rates of TSYS’ existing clients are lower than anticipated or attrition rates of existing clients are higher than anticipated. Additional risks and other factors that could cause actual results or events to differ materially from those contemplated in this release can be found in TSYS’ filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. TSYS disclaims any obligation to update any forward-looking statements as a result of new information, future developments or otherwise except as required by law.



TSYS
Financial Highlights
(unaudited)
(in thousands, except per share data)

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
						Percent								Percent
		2016		2015		Change				2016		2015		Change

Total revenues	$	1,132,224		716,843		57.9		%	$	4,170,077		2,779,541		50.0		%

Cost of services		826,332		489,040		69.0				2,993,062		1,855,181		61.3
Selling, general and administrative expenses		175,345		109,898		59.6				603,633		390,253		54.7
Total expenses		1,001,677		598,938		67.2				3,596,695		2,245,434		60.2

Operating income		130,547		117,905		10.7				573,382		534,107		7.4

Nonoperating expenses		(29,662	)	(9,237	)	nm				(112,168	)	(37,219	)	nm

Income before income taxes, noncontrolling interests and equity in income of equity investments		100,885		108,668		(7.2	)			461,214		496,888		(7.2	)
Income taxes		33,209		32,160		3.3				161,175		151,364		6.5
Income before noncontrolling interests and equity in income of equity investments		67,676		76,508		(11.5	)			300,039		345,524		(13.2	)
Equity in income of equity investments, net of tax		6,699		6,797		(1.4	)			25,933		22,106		17.3
Income from continuing operations, net of tax		74,375		83,305		(10.7	)			325,972		367,630		(11.3	)
Gain from discontinued operations, net of tax		-		1,411		nm				-		1,411		nm
Net income		74,375		84,716		(12.2	)			325,972		369,041		(11.7	)
Net income attributable to noncontrolling interests		(425	)	(1,888	)	77.5				(6,334	)	(4,997	)	(26.8	)

Net income attributable to TSYS common shareholders	$	73,950		82,828		(10.7	)	%	$	319,638		364,044		(12.2	)	%

Earnings per share (EPS):
Income from continuing operations to TSYS common shareholders	$	0.40		0.44		(9.3	)	%	$	1.74		1.97		(11.6	)	%
Gain from discontinued operations to TSYS common shareholders		-		0.01		nm				-		0.01		nm
Basic EPS	$	0.40		0.45		(10.8	)	%	$	1.74		1.98		(12.0	)	%

Diluted EPS:
Income from continuing operations to TSYS common shareholders	$	0.40		0.44		(9.2	)	%	$	1.73		1.96		(11.5	)	%
Gain from discontinued operations to TSYS common shareholders		-		0.01		nm				-		0.01		nm
Diluted EPS	$	0.40		0.45		(10.7	)	%	$	1.73		1.97		(11.8	)	%

Weighted average shares outstanding:
(includes participating securities)
Basic		183,665		183,376						183,655		184,082
Diluted		184,533		184,581						184,448		185,239

Dividends declared per share	$	0.10		0.10					$	0.40		0.40

Amounts attributable to TSYS common shareholders:
Income from continuing operations, net of tax	$	73,950		81,417		(9.2	)	%	$	319,638		362,633		(11.9	)	%
Gain from discontinued operations, net of tax		-		1,411		nm				-		1,411		nm
Net income	$	73,950		82,828		(10.7	)	%	$	319,638		364,044		(12.2	)	%

Non-GAAP measures:*
Net revenue	$	785,709		645,095		21.8		%	$	3,041,876		2,499,349		21.7		%

Adjusted EBITDA	$	266,547		195,031		36.7		%	$	1,040,551		833,920		24.8		%

Adjusted EPS	$	0.71		0.57		24.5		%	$	2.81		2.46		14.5		%

* See reconciliation of non-GAAP measures.
nm = not meaningful



TSYS
Segment Breakdown
(unaudited)
(in thousands)

		Three Months Ended December 31,										Twelve Months Ended December 31,
						Change										Change
		2016		2015		$		%				2016		2015		$		%
Operating income (a)	$	130,547		117,905		12,642		10.7		%	$	573,382		534,107		39,275		7.4		%
Share-based compensation		9,937		10,080		(143	)	(1.4	)			43,728		41,548		2,180		5.2
TransFirst M&A expenses		2,267		-		2,267		na				28,175		-		28,175		na
Litigation, claims, judgments or settlements		21,719		-		21,719		na				21,719		-		21,719		na
Acquisition intangible amortization		55,243		22,920		32,323		nm				189,991		92,522		97,469		nm
Adjusted operating income (b)	$	219,713		150,905		68,808		45.6		%	$	856,995		668,177		188,818		28.3		%

Adjusted segment operating income:
North America Services (c)	$	117,296		104,162		13,134		12.6		%	$	468,251		429,064		39,187		9.1		%
International Services (d)		15,210		21,381		(6,171	)	(28.9	)			56,774		60,087		(3,313	)	(5.5	)
Merchant Services (e)		88,539		33,033		55,506		nm				307,595		150,225		157,370		nm
NetSpend (f)		34,834		28,614		6,220		21.7				160,371		137,837		22,534		16.3
Corporate admin and other		(36,166	)	(36,285	)	119		0.3				(135,996	)	(109,036	)	(26,960	)	(24.7	)
Adjusted segment operating income	$	219,713		150,905		68,808		45.6		%	$	856,995		668,177		188,818		28.3		%

Total revenues (g)	$	1,132,224		716,843		415,381		57.9		%	$	4,170,077		2,779,541		1,390,536		50.0		%
Less: reimbursable items		62,354		71,748		(9,394	)	(13.1	)			259,543		280,192		(20,649	)	(7.4	)
Revenue before reimbursable items		1,069,870		645,095		424,775		65.8				3,910,534		2,499,349		1,411,185		56.5
Less: interchange and assessments expenses		284,161		-		284,161		na				868,658		-		868,658		na
Net revenue (h)		785,709		645,095		140,614		21.8				3,041,876		2,499,349		542,527		21.7
Intersegment revenues		10,379		8,383		1,996		23.8				39,880		33,481		6,399		19.1
Segment net revenue	$	796,088		653,478		142,610		21.8		%	$	3,081,756		2,532,830		548,926		21.7		%

Segment net revenue
North America Services (i)	$	304,450		300,265		4,185		1.4		%	$	1,206,013		1,147,254		58,759		5.1		%
International Services (j)		77,061		87,126		(10,065	)	(11.6	)			313,631		331,159		(17,528	)	(5.3	)
Merchant Services (k)		253,960		122,053		131,907		nm				898,533		474,040		424,493		89.5
NetSpend (l)		160,617		144,034		16,583		11.5				663,579		580,377		83,202		14.3
Segment net revenue	$	796,088		653,478		142,610		21.8		%	$	3,081,756		2,532,830		548,926		21.7		%

Segment revenue before reimbursable items
North America Services	$	304,450		300,265		4,185		1.4		%	$	1,206,013		1,147,254		58,759		5.1		%
International Services		77,061		87,126		(10,065	)	(11.6	)			313,631		331,159		(17,528	)	(5.3	)
Merchant Services		538,121		122,053		416,068		nm				1,767,191		474,040		1,293,151		nm
NetSpend		160,617		144,034		16,583		11.5				663,579		580,377		83,202		14.3
Segment revenue before reimbursable items	$	1,080,249		653,478		426,771		65.3		%	$	3,950,414		2,532,830		1,417,584		56.0		%

Operating margin (GAAP) (a)/(g)		11.53	%	16.45	%							13.75	%	19.22	%

Adjusted operating margin on net revenue (b)/(h)		27.96	%	23.39	%							28.17	%	26.73	%

Adjusted segment operating margin on net revenue
North America Services(c)/(i)		38.53	%	34.69	%							38.83	%	37.40	%
International Services (d)/(j)		19.74	%	24.54	%							18.10	%	18.14	%
Merchant Services (e)/(k)		34.86	%	27.06	%							34.23	%	31.69	%
NetSpend (f)/(l)		21.69	%	19.87	%							24.17	%	23.75	%

nm = not meaningful
na = not applicable



TSYS
Segment Breakdown
(unaudited)
(in thousands)

		Three Months Ended December 31,								Twelve Months Ended December 31,
				Change										Change
		2016	2015	$		%				2016		2015		$		%
Depreciation and amortization:
North America Services	$	27,878	26,712	1,166		4.4		%	$	110,343		99,544		10,799		10.8		%
International Services		7,572	8,808	(1,236	)	(14.0	)			30,966		34,892		(3,926	)	(11.3	)
Merchant Services		6,851	4,874	1,977		40.6				25,553		18,268		7,285		39.9
NetSpend		3,667	3,139	528		16.8				13,133		10,686		2,447		22.9
Segment depreciation and amortization		45,968	43,533	2,435		5.6				179,995		163,390		16,605		10.2
Acquisition intangible amortization		55,243	22,920	32,323		nm				189,991		92,522		97,469		nm
Corporate admin and other		866	593	273		46.0				3,560		2,352		1,208		51.4
Total depreciation and amortization	$	102,077	67,046	35,031		52.2		%	$	373,546		258,264		115,282		44.6		%



Segment statistical data:

Transactions (in millions)
North America Services:		4,482.7	4,264.9	217.8		5.1		%		17,140.3		15,774.5		1,365.8		8.7		%
International Services:		742.1	661.7	80.4		12.2				2,717.8		2,473.6		244.2		9.9
Total transactions		5,224.8	4,926.6	298.2		6.1		%		19,858.1		18,248.1		1,610.0		8.8		%

Accounts on file (AOF) (in millions)
North America Services:										662.8		654.1		8.7		1.3		%
International Services:										88.7		78.5		10.2		13.0
Total AOF										751.5		732.5		19.0		2.6		%

Traditional accounts on file (AOF) (in millions)
North America Services:										454.1		415.1		39.0		9.4		%
International Services:										67.7		65.1		2.6		4.1
Total Traditional AOF										521.8		480.2		41.6		8.7		%

Merchant Services
Point-of-sale transactions (in millions)		1,120.5	1,075.2	45.3		4.2		%		4,548.1		4,266.5		281.6		6.6		%
Dollar sales volume (in millions)	$	28,710.2	12,401.1	16,309.1		nm		%	$	97,735.1		48,072.7		49,662.4		nm		%

NetSpend
Gross dollar volume (in millions)	$	6,579.1	5,692.0	887.1		15.6		%	$	28,722.3		24,274.9		4,447.4		18.3		%

Direct deposit 90-day active cards (in thousands)										2,136.0		1,895.0		241.0		12.7		%
90-day active cards (in thousands)										4,295.0		3,894.1		400.9		10.3		%
% of 90-day active cards with direct deposit										49.7	%	48.7	%

nm = not meaningful



TSYS
Condensed Balance Sheet
(unaudited)
(in thousands)

		December 31, 2016	December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	425,354	389,328
Accounts receivable, net		432,847	314,705
Other current assets		164,488	154,199
Total current assets		1,022,689	858,232
Goodwill		3,270,952	1,545,424
Other intangible assets, net		906,676	328,320
Property, equipment and software, net		705,533	694,968
Other long term assets		460,327	450,951
Total assets	$	6,366,177	3,877,895

Liabilities
Current liabilities:
Accounts payable	$	38,712	52,213
Notes payable and capital leases		50,727	53,546
Other current liabilities		330,914	233,173
Total current liabilities		420,353	338,932
Bonds payable, notes payable and capital leases, excluding current portion		3,313,276	1,377,541
Deferred tax liability		419,552	192,445
Other long-term liabilities		88,983	96,885
Total liabilities		4,242,164	2,005,803
Redeemable noncontrolling interest		24,093	23,410
Equity
Shareholders' equity		2,099,920	1,843,018
Noncontrolling interests in consolidated subsidiaries		-	5,664
Total equity		2,099,920	1,848,682
Total liabilities and equity	$	6,366,177	3,877,895



Note: TSYS adopted Accounting Standards Update (ASU) 2015-03 "Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Cost" on January 1, 2016. This ASU requires TSYS to present debt issuance costs in the balance sheet as a direct deduction from the carrying amount of the corresponding debt liability, consistent with debt discounts. All prior periods presented have been restated for this ASU.

TSYS also adopted ASU 2015-17 "Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes" on January 1, 2016. This ASU requires the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. All prior periods presented have been restated for this ASU.


TSYS
Selected Cash Flow Highlights
(unaudited)
(in thousands)

		Twelve Months Ended December 31,
		2016		2015
Cash flows from operating activities:
Net income	$	325,972		369,041
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposal of subsidiaries		-		(3,568	)
Equity in income of equity investments		(25,933	)	(22,106	)
Dividends received from equity investments		15,246		12,097
Depreciation and amortization		373,546		258,264
Amortization of debt issuance costs		13,570		1,841
Share-based compensation		43,728		41,548
Deferred income tax expense (benefit)		7,435		(4,083	)
Other noncash adjustments		51,357		24,728
Changes in operating assets and liabilities		(87,012	)	(77,568	)
Net cash provided by operating activities		717,909		600,194

Net cash used in investing activities		(2,492,876	)	(202,184	)

Net cash provided by (used in) financing activities		1,822,190		(290,754	)

Cash and cash equivalents:
Effect of exchange rate changes on cash and cash equivalents		(11,197	)	(7,111	)
Net increase in cash and cash equivalents		36,026		100,145
Cash and cash equivalents at beginning of period		389,328		289,183
Cash and cash equivalents at end of period	$	425,354		389,328



TSYS
Supplemental Information
(unaudited)




Other
AOF:		Total Accounts on File
(in millions)		At December 2016		At December 2015		% Change
Consumer		442.9		408.2		8.5
Commercial		47.9		45.4		5.4
Other		31.0		26.6		16.8
Traditional AOF		521.8		480.2		8.7
Prepaid*/Stored Value		57.8		97.2		(40.5	)
Government Services		88.7		79.3		11.7
Commercial Card Single Use		83.2		75.8		9.8
Total AOF		751.5		732.5		2.6
* Prepaid does not include NetSpend accounts

Growth in Accounts on File (in millions):
		December 2015 to December 2016		December 2014 to December 2015
Beginning balance		732.5		616.7
Change in accounts on file due to:
	Internal growth of existing clients	53.1		42.2
	New clients	27.8		145.6
	Purges/Sales	(12.9	)	(29.0	)
	Deconversions	(49.0	)	(43.0	)
Ending balance		751.5		732.5

Reconciliation of GAAP to Non-GAAP Financial Measures

Non-GAAP Measures

The schedules below provide a reconciliation of revenues and operating results on a constant currency basis to reported revenues and operating income. This non-GAAP measure presents fourth quarter 2016 financial results using the previous year’s foreign currency exchange rates. On a constant currency basis, TSYS’ total revenues for 2016 grew 51.6% as compared to a reported GAAP increase of 50.0%.

The schedules below also provide a reconciliation of EPS to adjusted EPS.

The schedules below also provide a reconciliation of net income to EBITDA and adjusted EBITDA.

The schedules below also provide a reconciliation of cash flows from operating activities and capital expenditures to free cash flow.

The schedules below also provide a reconciliation of 2017 guidance of total revenues to net revenue and diluted EPS to adjusted diluted EPS. TSYS has also provided historical diluted EPS and adjusted diluted EPS

The tax rate used in the calculation of adjusted EPS for the quarter and year is equal to an estimate of our annual effective tax rate on GAAP income. This effective rate is estimated annually and may be adjusted during the year to take into account events or trends that materially impact the effective tax rate including, but not limited to, significant changes resulting from tax legislation, material changes in the mix of revenues and expenses by entity and other significant events.

TSYS believes that non-GAAP financial measures are important to enable investors to understand and evaluate its ongoing operating results. Accordingly, TSYS includes non-GAAP financial measures when reporting its financial results to shareholders and potential investors in order to provide them with an additional tool to evaluate TSYS’ ongoing business operations. TSYS believes that the non-GAAP financial measures are representative of comparative financial performance that reflects the economic substance of TSYS’ current and ongoing business operations.

Although non-GAAP financial measures are often used to measure TSYS’ operating results and assess its financial performance, they are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation.

TSYS believes that its provision of non-GAAP financial measures provides investors with important key financial performance indicators that are utilized by management to assess TSYS’ operating results, evaluate the business and make operational decisions on a prospective, going-forward basis. Hence, management provides disclosure of non-GAAP financial measures to give shareholders and potential investors an opportunity to see TSYS as viewed by management, to assess TSYS with some of the same tools that management utilizes internally and to be able to compare such information with prior periods. TSYS believes that inclusion of non-GAAP financial measures provides investors with additional information to help them better understand its financial statements just as management utilizes these non-GAAP financial measures to better understand the business, manage budgets and allocate resources.


Reconciliation of GAAP to Non-GAAP

Constant Currency Comparison
(unaudited)
(in thousands)

		Three Months Ended December 31,							Twelve Months Ended December 31,
					Percent								Percent
		2016		2015	Change				2016		2015		Change
Consolidated
Constant currency (1)	$	1,148,810		716,843	60.3		%	$	4,212,598			2,779,541	51.6		%
Foreign currency impact (2)		(16,586	)	-					(42,521	)		-
Total revenues	$	1,132,224		716,843	57.9		%	$	4,170,077			2,779,541	50.0		%

Constant currency (1)	$	801,145		645,095	24.2		%	$	3,081,534			2,499,349	23.3		%
Foreign currency impact (2)		(15,436	)	-					(39,658	)		-
Net revenue	$	785,709		645,095	21.8		%	$	3,041,876			2,499,349	21.7		%

Constant currency (1)	$	137,738		117,905	16.8		%	$	589,934			534,107	10.5		%
Foreign currency impact (2)		(7,191	)	-					(16,552	)		-
Operating income	$	130,547		117,905	10.7		%	$	573,382			534,107	7.4		%

International Services
Constant currency (1)	$	99,180		93,128	6.5		%	$	378,512			354,725	6.7		%
Foreign currency impact (2)		(16,618	)	-					(42,535	)		-
Total revenues	$	82,562		93,128	(11.3	)	%	$	335,977			354,725	(5.3	)	%

Constant currency (1)	$	92,531		87,126	6.2		%	$	353,303			331,159	6.7		%
Foreign currency impact (2)		(15,470	)	-					(39,672	)		-
Net revenue	$	77,061		87,126	(11.6	)	%	$	313,631			331,159	(5.3	)	%

(1) Reflects current period results on a non-GAAP basis as if foreign currency rates did not change from the comparable prior year period.
(2) Reflects the impact of calculated changes in foreign currency rates from the comparable period.

Net Revenue
(unaudited)
(in thousands)

		Three Months Ended December 31,							Twelve Months Ended December 31,
					Percent								Percent
		2016		2015	Change				2016			2015	Change
Total revenues	$	1,132,224		716,843	57.9		%	$	4,170,077			2,779,541	50.0		%
Less: reimbursable items		62,354		71,748	(13.1	)			259,543			280,192	(7.4	)
Revenue before reimbursable items		1,069,870		645,095	65.8				3,910,534			2,499,349	56.5
Less: interchange and assessments expenses		284,161		-	na				868,658			-	na
Net revenue	$	785,709		645,095	21.8		%	$	3,041,876			2,499,349	21.7		%

na = not applicable


Reconciliation of GAAP to Non-GAAP

Adjusted Earnings per Share
(unaudited)
(in thousands, except per share data)

		Three Months Ended December 31,								Twelve Months Ended December 31,
						Percent								Percent
		2016		2015		Change				2016		2015		Change
Income from continuing operations attributable to TSYS common shareholders	$	73,950		81,417		(9.2	)	%	$	319,638		362,633		(11.9	)	%
Adjust for amounts attributable to TSYS common shareholders:
Add: Acquisition intangible amortization	$	54,967		22,645		nm			$	188,887		91,418		nm
Add: Share-based compensation		9,925		10,076		(1.5	)			43,691		41,535		5.2
Add: TransFirst M&A expenses*		2,268		-		na				37,957		-		na
Add: Litigation, claims, judgments or settlements**		19,913		-		na				19,913		-		na
Less: Tax impact of adjustments***		(31,403	)	(10,208	)	nm				(93,667	)	(43,474	)	nm
Adjusted earnings	$	129,620		103,930		24.7		%	$	516,419		452,112		14.2		%

Basic EPS - Income from continuing operations attributable to TSYS common shareholders
As reported (GAAP)	$	0.40		0.44		(9.3	)	%	$	1.74		1.97		(11.6	)	%

Adjusted EPS	$	0.71		0.57		24.5		%	$	2.81		2.46		14.5		%

Weighted average shares outstanding		183,665		183,376						183,655		184,082

* Costs associated with the TransFirst acquisition and integration that are included in selling, general and administrative expenses and nonoperating expenses.
** Litigation settlement or settlement discussions and related legal expenses in the 4th quarter.
*** Certain of these merger and acquisition costs are nondeductible for income tax purposes. Income tax impact includes a discrete item as a result of the acquisition.

Adjusted EBITDA
(unaudited)
(in thousands)

		Three Months Ended December 31,								Twelve Months Ended December 31,
						Percent								Percent
		2016		2015		Change				2016		2015		Change
Net income	$	74,375		84,716		(12.2	)	%	$	325,972		369,041		(11.7	)	%
Adjust for:
Less: Income from discontinued operations		-		(1,411	)	nm				-		(1,411	)	nm
Less: Equity in income of equity investments		(6,699	)	(6,797	)	1.4				(25,933	)	(22,106	)	(17.3	)
Add: Income taxes		33,209		32,160		3.3				161,175		151,364		6.5
Add: Nonoperating expense		29,662		9,237		nm				112,168		37,219		nm
Add: Depreciation and amortization		102,077		67,046		52.2				373,546		258,264		44.6
EBITDA	$	232,624		184,951		25.8		%	$	946,928		792,371		19.5		%
Adjust for:
Add: Share-based compensation		9,937		10,080		(1.4	)			43,728		41,549		5.2
Add: TransFirst M&A expenses*		2,267		-		na				28,176		-		na
Add: Litigation, claims, judgments or settlements		21,719		-		na				21,719		-		na
Adjusted EBITDA	$	266,547		195,031		36.7		%	$	1,040,551		833,920		24.8		%

* Costs associated with the TransFirst acquisition and integration that are included in selling, general and administrative expenses.
nm = not meaningful
na = not applicable


Reconciliation of GAAP to Non-GAAP

Free Cash Flow
(unaudited)
(in thousands)
			Twelve Months Ended
Free cash flow:			December 31,
			2016				2015

	Net cash provided by operating activities (GAAP)	$	717,909				600,194
	Capital expenditures		(142,573	)			(203,315	)
	Free cash flow (non-GAAP)	$	575,336				396,879


Guidance Summary
(unaudited)
(in millions, except per share data)


Revenue:			2017						% Change

	Total revenues (GAAP)	$	4,750		to	$	4,850		14	%	to	16	%

	Less: reimbursable items, interchange and assessments expenses		1,475		to		1,475
	Net revenue (non-GAAP)	$	3,275		to	$	3,375		8	%	to	11	%


Earnings per share (EPS):

	Diluted EPS (GAAP)	$	2.14		to	$	2.21		23	%	to	28	%

	Acquisition intangible amortization, share-based compensation, litigation, claims, judgments or settlements and TransFirst M&A expenses, less the tax impact of adjustments		0.91		to		0.94
	Adjusted diluted EPS attributable to TSYS common shareholders* (non-GAAP)	$	3.05		to	$	3.15		9	%	to	12	%

	* Average diluted weighted shares				185


Reconciliation of GAAP to Non-GAAP

Adjusted Diluted Earnings per Share
(unaudited)
(in thousands, except per share data)

		2015											2016
		Q1		Q2		Q3		Q4		YTD			Q1		Q2		Q3		Q4		YTD
Income from continuing operations attributable to TSYS common shareholders	$	77,755		82,839		120,622		81,417		362,633		$	90,628		69,708		85,352		73,950		319,638
Adjust for amounts attributable to TSYS common shareholders:
Add: Acquisition intangible amortization	$	23,590		22,576		22,607		22,645		91,418		$	22,645		58,210		53,065		54,967		188,887
Add: Share-based compensation		8,144		12,024		11,291		10,076		41,535			8,150		12,557		13,059		9,925		43,691
Add: TransFirst M&A expenses		-		-		-		-		-			13,183		20,676		1,830		2,268		37,957
Add: Litigation, claims, judgments or settlements		-		-		-		-		-			-		-		-		19,913		19,913
Less: Tax impact of adjustments		(10,532	)	(11,484	)	(11,250	)	(10,208	)	(43,474	)		(13,896	)	(25,735	)	(22,633	)	(31,403	)	(93,667	)
Adjusted earnings	$	98,957		105,955		143,270		103,930		452,112		$	120,710		135,416		130,673		129,620		516,419

Diluted EPS - Income from continuing operations attributable to TSYS common shareholders
As reported (GAAP)	$	0.42		0.45		0.65		0.44		1.96		$	0.49		0.38		0.46		0.40		1.73

Adjusted diluted EPS	$	0.53		0.57		0.77		0.56		2.44		$	0.66		0.73		0.71		0.70		2.80

Average diluted weighted shares		185,563		185,020		185,281		184,581		185,239			183,886		184,598		184,640		184,533		184,448



TSYS
Segment Breakdown Recast for New Segment Structure
(unaudited)
(in thousands)

		2015											2016
		Q1		Q2		Q3		Q4		YTD			Q1		Q2		Q3		Q4		YTD
Operating income (a)	$	122,496		130,602		163,104		117,905		534,107		$	151,687		135,821		155,327		130,547		573,382
Share-based compensation		8,143		12,030		11,295		10,080		41,548			8,158		12,566		13,069		9,937		43,730
TransFirst M&A expenses		-		-		-		-		-			3,401		20,676		1,830		2,267		28,174
Litigation, claims, judgments or settlements		-		-		-		-		-			-		-		-		21,719		21,719
Acquisition intangible amortization		23,867		22,852		22,883		22,920		92,522			22,921		58,486		53,341		55,243		189,991
Adjusted operating income (b)	$	154,506		165,484		197,282		150,905		668,177		$	186,167		227,549		223,567		219,713		856,996

Adjusted segment operating income:
Issuer Solutions (c)	$	109,553		121,738		132,316		125,543		489,151		$	135,077		128,493		128,949		132,506		525,025
Merchant Services (d)		34,115		40,690		42,387		33,033		150,225			38,357		89,915		90,784		88,539		307,595
NetSpend (e)		35,467		36,442		37,315		28,614		137,837			42,201		42,481		40,856		34,834		160,372
Corporate admin and other		(24,629	)	(33,386	)	(14,736	)	(36,285	)	(109,036	)		(29,468	)	(33,340	)	(37,022	)	(36,166	)	(135,996	)
Adjusted segment operating income	$	154,506		165,484		197,282		150,905		668,177		$	186,167		227,549		223,567		219,713		856,996

Total revenues (f)	$	662,156		692,652		707,890		716,843		2,779,541		$	739,378		1,151,587		1,146,889		1,132,224		4,170,078
Less: reimbursable items, interchange and assessments expenses		66,372		70,568		71,504		71,748		280,192			67,734		356,649		357,302		346,517		1,128,202
Net revenue (g)		595,784		622,084		636,386		645,095		2,499,349			671,644		794,938		789,587		785,707		3,041,876
Intersegment revenues		8,569		7,256		5,950		7,207		28,982			11,969		7,011		7,401		9,316		35,697
Segment net revenue	$	604,353		629,340		642,336		652,302		2,528,331		$	683,613		801,949		796,988		795,023		3,077,573

Segment net revenue
Issuer Solutions (h)	$	338,881		369,851		378,967		386,215		1,473,914		$	378,009		377,862		379,145		380,446		1,515,462
Merchant Services (i)		110,398		117,868		123,721		122,053		474,040			120,612		261,467		262,494		253,960		898,533
NetSpend (j)		155,074		141,621		139,648		144,034		580,377			184,992		162,620		155,349		160,617		663,578
Segment net revenue	$	604,353		629,340		642,336		652,302		2,528,331		$	683,613		801,949		796,988		795,023		3,077,573

Operating margin (GAAP) (a)/(g)		18.50	%	18.86	%	23.04	%	16.45	%	19.22	%		20.52	%	11.79	%	13.54	%	11.53	%	13.75	%

Adjusted operating margin on net revenue (b)/(h)		25.93	%	26.60	%	31.00	%	23.39	%	26.73	%		27.72	%	28.62	%	28.31	%	27.96	%	28.17	%

Adjusted segment operating margin on net revenue
Issuer Solutions(c)/(h)		32.33	%	32.92	%	34.91	%	32.51	%	33.19	%		35.73	%	34.01	%	34.01	%	34.83	%	34.64	%
Merchant Services (d)/(i)		30.90	%	34.52	%	34.26	%	27.06	%	31.69	%		31.80	%	34.39	%	34.59	%	34.86	%	34.23	%
NetSpend (e)/(j)		22.87	%	25.73	%	26.72	%	19.87	%	23.75	%		22.81	%	26.12	%	26.30	%	21.69	%	24.17	%

View source version on businesswire.com: http://www.businesswire.com/news/home/20170124006423/en/

Contacts:

TSYS Media Relations
Cyle Mims, +1-706-644-3110
cylemims@tsys.com
or
TSYS Investor Relations
Shawn Roberts, +1-706-644-6081
shawnroberts@tsys.com