TOTAL SYSTEM SERVICES INC - FORM 8-K - EX-99.1

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8-K - 8-K - TOTAL SYSTEM SERVICES INC	d246540d8k.htm
EX-99.2 - EX-99.2 - TOTAL SYSTEM SERVICES INC	d246540dex992.htm

Exhibit 99.1

LOGO


Total System Services, Inc.			+1.706.649.2307
One TSYS Way			+1.706.649.5740
Post Office Box 2567			www.tsys.com
Columbus GA 31902-2567

For immediate release:

Contact:

Shawn Roberts

TSYS Investor Relations

+1.706.644.6081

shawnroberts@tsys.com

TSYS Reports Third Quarter 2011 EPS Up 30.6%, Raises Guidance and

Increases Quarterly Dividend by 42.9%

COLUMBUS, Ga., October 25, 2011 — TSYS (NYSE: TSS) today reported results for the third quarter 2011 with total revenues of $459.7 million, an increase of 6.1% over 2010. Basic earnings per share (EPS) were $0.30, an increase of 30.6% over 2010. Total issuer cardholder transactions increased 12.7% for the quarter, the seventh consecutive quarter of increased growth and the fourth straight quarter with double digit growth. Accounts on file were 392.4 million, an increase of 15.7% over last year.

For the nine months ended September 30, 2011, total revenues increased 4.6% over 2010 and were up 7.4% excluding 2010 termination fees. Basic EPS were $0.83, a 12.1% increase over 2010, and increased 30.8% excluding 2010 termination fees.

TSYS today also announced that its Board of Directors approved a 42.9% increase in the regular quarterly dividend payable on TSYS common stock from $0.07 per share to $0.10 per share, payable on January 3, 2012 to shareholders of record as of the close of business on December 15, 2011.

“Given the resiliency of the card market, the increase in transactions, addition of new accounts from our sales pipeline and associated fees, we are raising our revenue guidance to a range of 4% to 5% for total revenues and 5% to 6% for revenues before reimbursable items. As a result of improved operations, lower effective tax rates and share repurchases, which are partially offset by negative currency impact, we are raising our guidance for income from continuing operations to a range of $219 to $221 million, and our EPS guidance to a range of $1.14 to $1.15,” said Philip W. Tomlinson, chairman and chief executive officer of TSYS.

“In the third quarter, we purchased 2.2 million shares for $37.2 million, bringing the year-to-date total to 4.2 million shares for $72.9 million. During the year, we returned $40.6 million to shareholders through dividends. We are pleased to announce an increase to shareholder return by raising our quarterly dividend 42.9%, to $0.10 per share. We believe this demonstrates our ongoing confidence in the long-term strength of our business and rewards our shareholders,” said Tomlinson.

Page 1 of 11

LOGO

TSYS’ revised guidance for 2011 is as follows:


	Revised 2011 Guidance
	Range (in millions, except per share amounts)					Percent Change
Total revenues	$	1,786	to	$	1,800		4	%	to	5	%
Reimbursable items	$	266	to	$	270		(3	%)	to	(2	%)
Revenues before reimbursable items	$	1,520	to	$	1,530		5	%	to	6	%
Income from continuing operations	$	219	to	$	221		11	%	to	12	%
EPS from continuing operations*	$	1.14	to	$	1.15		14	%	to	15	%
Average Shares Outstanding		192.0

*	EPS Calculations reflect the impact of TSYS’ share repurchase program

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, October 25. The conference call can be accessed via simultaneous Internet broadcast at tsys.com by clicking on the link under “Webcasts” on the main homepage. The replay will be archived for 12 months and will be available approximately 30 minutes after the completion of the call. A slide presentation to accompany the call will be available by clicking on the link under “Webcasts” on the main homepage of tsys.com.

Non-GAAP Measures

This press release and the financial highlights section of this release contain the non-GAAP financial measures of revenues and basic EPS excluding revenues from termination fees and revenues and operating results on a constant currency basis, respectively, to describe TSYS’ performance. Management uses these non-GAAP financial measures to better understand and assess TSYS’ operating results and financial performance. TSYS believes these non-GAAP financial measures provide meaningful additional information about TSYS to assist investors in understanding and evaluating its operating results.

Additional information about non-GAAP financial measures and a reconciliation of those measures to the most directly comparable GAAP measures are included on pages 10 and 11 of this release.

About TSYS

TSYS (NYSE: TSS) is reshaping a new era in digital commerce, connecting consumers, merchants, financial institutions, businesses and governments. Through unmatched customer service and industry insight, TSYS creates a better experience for buyers and sellers, supporting cross-border payments in more than 85 countries. Offering merchant payment-acceptance solutions as well as services in credit, debit, prepaid, mobile, chip, healthcare, installments, money transfer and more, TSYS makes it possible for those in the global marketplace to conduct safe and secure electronic transactions with trust and convenience.

TSYS’ headquarters are located in Columbus, Georgia, with local offices spread across the Americas, EMEA and Asia-Pacific. TSYS provides services to more than half of the top 20 international banks. For more information, please visit us at www.tsys.com.

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LOGO

Forward-Looking Statements

This press release contains “forward-looking statements” – that is, statements related to future, not past, events. Forward-looking statements often address our expected future business and financial performance and often contain words such as “expect,” “anticipate,” “intend,” “believe,” “should,” “plan,” “will,” “could,” and similar expressions. These forward-looking statements include, among others, statements regarding TSYS’ earnings guidance for 2011 total revenues, revenues before reimbursable items, income from continuing operations and EPS from continuing operations, and the assumptions underlying such statements. These statements are based on the current beliefs and expectations of TSYS’ management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements. A number of important factors could cause actual results to differ materially from those contemplated by our forward-looking statements in this press release. Many of these factors are beyond TSYS’ ability to control or predict. These factors include, but are not limited to: continued consolidation and turmoil in the financial services and other industries during 2011, including the merger of TSYS clients with entities that are not TSYS processing clients, the sale of portfolios by TSYS clients to entities that are not TSYS processing clients and the nationalization or seizure by banking regulators of TSYS clients; TSYS is unable to control expenses and increase market share both domestically and internationally; TSYS is unable to manage the impact of slowing economic conditions and consumer spending; the material breach of security of any of TSYS’ systems; the impact of potential and completed acquisitions, including the costs associated therewith and their being more difficult to integrate than anticipated; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on TSYS and on our clients; changes occur in laws, rules, regulations, credit card association rules or other industry standards affecting TSYS and our clients that may result in costly new compliance burdens on TSYS and our clients and lead to a decrease in the volume and/or number of transactions processed; the costs and effects of litigation, investigations or similar matters or adverse facts and developments relating thereto; adverse developments with respect to the credit card industry in general, including a decline in the use of credit cards as a payment mechanism; and internal growth rates of TSYS’ existing clients are lower than anticipated whether as a result of unemployment rates, card delinquencies and charge-off rates or otherwise. Additional risks and other factors that could cause actual results to differ materially from those contemplated in this release can be found in TSYS’ filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise.

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TSYS Announces Third Quarter 2011 Earnings

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TSYS

Financial Highlights

(unaudited)

(in thousands, except per share data)


	Three Months Ended September 30,									Nine Months Ended September 30,
	2011			2010			Percent Change			2011			2010			Percent Change
Total revenues	$	459,747			433,236			6.1	%	$	1,336,732			1,277,586			4.6	%
Cost of services		321,481			302,692			6.2			935,024			889,110			5.2
Selling, general and administrative expenses		57,086			51,630			10.6			168,970			150,021			12.6

Operating income		81,180			78,914			2.9			232,738			238,455			(2.4	)
Nonoperating expenses		(3,794	)		31			nm			(5,363	)		(1,402	)		nm

Income from continuing operations before income taxes, noncontrolling interests and equity in income of equity investments		77,386			78,945			(2.0	)		227,375			237,053			(4.1	)
Income taxes		24,286			27,879			(12.9	)		73,102			84,249			(13.2	)

Income from continuing operations before noncontrolling interests and equity in income of equity investments		53,100			51,066			4.0			154,273			152,804			1.0
Equity in income of equity investments		4,588			1,103			nm			7,475			4,363			71.3

Income from continuing operations, net of tax		57,688			52,169			10.6			161,748			157,167			2.9
Loss from discontinued operations, net of tax		—			(2,463	)		nm			—			(3,164	)		nm

Net income		57,688			49,706			16.1			161,748			154,003			5.0
Net income attributable to noncontrolling interests		460			(3,963	)		nm			(1,064	)		(7,230	)		85.3

Net income attributable to TSYS common shareholders	$	58,148			45,743			27.1	%	$	160,684			146,773			9.5	%

Basic earnings per share:
Income from continuing operations to TSYS common shareholders*	$	0.30			0.25			23.9	%	$	0.83			0.76			9.7	%

Loss from discontinued operations to TSYS common shareholders*		—			(0.01	)		nm			—			(0.02	)		nm

Net income attributable to TSYS common shareholders*	$	0.30			0.23			30.6	%	$	0.83			0.74			12.1	%

Diluted earnings per share:
Income from continuing operations to TSYS common shareholders*	$	0.30			0.25			23.8	%	$	0.83			0.76			9.5	%

Loss from discontinued operations to TSYS common shareholders*		—			(0.01	)		nm			—			(0.02	)		nm

Net income attributable to TSYS common shareholders*	$	0.30			0.23			30.4	%	$	0.83			0.74			11.9	%

Dividends declared per share	$	0.07			0.07					$	0.21			0.21

Amounts attributable to TSYS common shareholders:
Income from continuing operations, net of tax	$	58,148			48,206			20.6	%	$	160,684			149,937			7.2	%
(Loss) income from discontinued operations, net of tax		—			(2,463	)		nm			—			(3,164	)		nm

Net income	$	58,148			45,743			27.1	%	$	160,684			146,773			9.5	%

nm = not meaningful

*	Basic and diluted EPS amounts for continuing operations and net income do not total due to rounding.

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TSYS Announces Third Quarter 2011 Earnings

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TSYS

Earnings Per Share

(unaudited)

(in thousands, except per share data)


	Three Months Ended September 30, 2011					Three Months Ended September 30, 2010					Nine Months Ended September 30, 2011					Nine Months Ended September 30, 2010
	Common Stock			Participating Securities		Common Stock			Participating Securities		Common Stock			Participating Securities		Common Stock			Participating Securities
Basic Earnings per share:
Net income	$	58,148					45,743				$	160,684					146,773
Less income allocated to nonvested awards		(208	)		208		(226	)		226		(592	)		592		(738	)		738

Net income allocated to common stock for EPS calculation (a)	$	57,940			208		45,517			226	$	160,092			592		146,035			738

Average common shares outstanding (b)		190,706			691		195,679			974		191,823			715		196,060			996

Average common shares and participating securities		191,397					196,653					192,538					197,056

Basic Earnings per share (a)/(b)	$	0.30			0.30		0.23			0.23	$	0.83			0.83		0.74			0.74

Diluted Earnings per share:
Net income	$	58,148					45,743				$	160,684					146,773
Less income allocated to nonvested awards		(208	)		208		(225	)		225		(591	)		591		(739	)		739

Net income allocated to common stock for EPS calculation (c)	$	57,940			208		45,518			225	$	160,093			591		146,034			739

Average common shares outstanding		190,706			691		195,679			974		191,823			715		196,060			996
Increase due to assumed issuance of shares related to common equivalent shares outstanding		376					78					392					86

Average common and common equivalent shares outstanding (d)		191,082			691		195,757			974		192,215			715		196,146			996

Average common and common equivalent shares and participating securities		191,773					196,731					192,930					197,142

Diluted Earnings per share (c)/(d)	$	0.30			0.30		0.23			0.23	$	0.83			0.83		0.74			0.74

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TSYS Announces Third Quarter 2011 Earnings

Page 6 of 11

TSYS

Segment Breakdown

(unaudited)

(in thousands)


	Three Months Ended September 30,												Nine Months Ended September 30,
							Change												Change
	2011			2010			$			%			2011			2010			$			%
Revenues before reimbursable items
North America Services	$	206,087			192,900			13,187			6.8	%		599,451			610,271			(10,820	)		(1.8	)%
International Services		96,140			82,249			13,891			16.9	%		277,337			233,299			44,038			18.9	%
Merchant Services		93,220			95,034			(1,814	)		(1.9	)%		272,780			243,695			29,085			11.9	%
Intersegment revenues		(5,286	)		(6,991	)		1,705			24.4	%		(16,553	)		(18,673	)		2,120			11.4	%

Revenues before reimbursable items from external customers	$	390,161			363,192			26,969			7.4	%		1,133,015			1,068,592			64,423			6.0	%

Total revenues
North America Services	$	243,899			231,547			12,352			5.3	%		708,360			722,585			(14,225	)		(2.0	)%
International Services		99,891			85,327			14,564			17.1	%		288,271			242,706			45,565			18.8	%
Merchant Services		122,933			125,178			(2,245	)		(1.8	)%		361,774			336,402			25,372			7.5	%
Intersegment revenues		(6,976	)		(8,816	)		1,840			20.9	%		(21,673	)		(24,107	)		2,434			10.1	%

Revenues from external customers	$	459,747			433,236			26,511			6.1	%		1,336,732			1,277,586			59,146			4.6	%

Depreciation and amortization
North America Services	$	19,996			19,523			473			2.4	%		59,387			58,817			570			1.0	%
International Services		12,847			10,143			2,704			26.7	%		36,515			27,335			9,180			33.6	%
Merchant Services		8,772			9,725			(953	)		(9.8	)%		27,232			30,516			(3,284	)		(10.8	)%
Corporate Admin		753			663			90			13.6	%		2,269			2,255			14			0.6	%

Total depreciation and amortization	$	42,368			40,054			2,314			5.8	%		125,403			118,923			6,480			5.4	%

Segment operating income
North America Services	$	68,016			52,645			15,371			29.2	%		187,284			188,650			(1,366	)		(0.7	)%
International Services		8,279			12,305			(4,026	)		(32.7	)%		29,426			35,260			(5,834	)		(16.5	)%
Merchant Services		27,398			31,439			(4,041	)		(12.9	)%		80,029			72,662			7,367			10.1	%
Corporate Admin		(22,513	)		(17,475	)		(5,038	)		(28.8	)%		(64,001	)		(58,117	)		(5,884	)		(10.1	)%

Operating income	$	81,180			78,914			2,266			2.9	%		232,738			238,455			(5,717	)		(2.4	)%

Other:
Reimbursable items:
North America Services	$	37,812			38,647			(835	)		(2.2	)%		108,909			112,315			(3,406	)		(3.0	)%
International Services		3,751			3,078			673			21.9	%		10,934			9,407			1,527			16.2	%
Merchant Services		29,713			30,144			(431	)		(1.4	)%		88,993			92,707			(3,714	)		(4.0	)%
Intersegment revenues		(1,690	)		(1,825	)		135			7.4	%		(5,119	)		(5,435	)		316			5.8	%

Reimbursable items	$	69,586			70,044			(458	)		(0.7	)%		203,717			208,994			(5,277	)		(2.5	)%

Volumes:
FTEs (continuing operations)
North America Services														4,306			4,323			(17	)		(0.4	)%
International Services														2,318			2,006			312			15.6	%
Merchant Services														1,167			1,110			57			5.1	%
Corporate Admin														398			329			69			21.0	%

FTEs														8,189			7,768			421			5.4	%


													At						Change
Total assets (in thousands)													9/30/2011			12/31/2010			$			%
North America Services														1,609,814			1,632,882			(23,068	)		(1.4	)%
International Services														439,927			408,880			31,047			7.6	%
Merchant Services														475,722			460,750			14,972			3.2	%
Intersegment assets														(676,413	)		(550,251	)		(126,162	)		(22.9	)%

Total assets														1,849,050			1,952,261			(103,211	)		(5.3	)%


	Three Months Ended September 30,										Nine Months Ended September 30,
					Change										Change
	2011		2010		Inc(Dec)			%			2011		2010		Inc(Dec)			%
North America Segment:
Accounts on File (AOF) (in millions)												341.9		293.8		48.1			16.4	%
Transactions (in millions)		1,872.8		1,658.3		214.5			12.9	%		5,294.7		4,680.2		614.5			13.1	%
International Segment:
AOF (in millions)												50.5		45.4		5.1			11.3	%
Transactions (in millions)		360.5		322.9		37.6			11.7	%		1,027.2		902.0		125.2			13.9	%
Merchant Segment:
Point-of-sale Transactions (in millions)		1,263.3		1,344.9		(81.6	)		(6.1	)%		3,739.1		4,079.7		(340.6	)		(8.3	)%

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TSYS Announces Third Quarter 2011 Earnings

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TSYS

Balance Sheet

(unaudited)

(in thousands)


	Sep 30, 2011			Dec 31, 2010
Assets
Current assets:
Cash and cash equivalents	$	280,713			394,795
Restricted cash		43			434
Accounts receivable, net		246,971			237,646
Deferred income tax assets		10,340			11,090
Prepaid expenses and other current assets		93,724			77,848

Total current assets		631,791			721,813
Property and equipment, net		286,464			300,102
Computer software, net		219,057			246,424
Contract acquisition costs, net		162,475			166,251
Goodwill		355,917			320,399
Equity investments, net		81,036			77,127
Other intangible assets, net		82,269			83,118
Deferred income tax assets, net		5,189			2,704
Other assets		24,852			34,323

Total assets	$	1,849,050			1,952,261

Liabilities
Current liabilities:
Current portion of notes payable	$	40,155			39,557
Accrued salaries and employee benefits		26,283			27,414
Accounts payable		25,763			36,068
Current portion of obligations under capital leases		13,919			13,191
Other current liabilities		110,359			111,040

Total current liabilities		216,479			227,270
Notes payable, excluding current portion		184,783			194,703
Deferred income tax liabilities		40,701			42,547
Obligations under capital leases, excluding current portion		26,280			30,573
Other long-term liabilities		63,104			53,363

Total liabilities		531,347			548,456

Redeemable noncontrolling interest		—			146,000

Equity
Shareholders’ equity:
Common stock		20,161			20,133
Additional paid-in capital		124,741			119,722
Accumulated other comprehensive income, net		51			(2,585	)
Treasury stock		(186,452	)		(115,449	)
Retained earnings		1,339,672			1,219,303

Total shareholders’ equity		1,298,173			1,241,124

Noncontrolling interests in consolidated subsidiaries		19,530			16,681

Total equity		1,317,703			1,257,805

Total liabilities and equity	$	1,849,050			1,952,261

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TSYS Announces Third Quarter 2011 Earnings

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TSYS

Cash Flow

(unaudited)

(in thousands)


	Nine Months Ended September 30,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	161,748			154,003
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income of equity investments		(7,475	)		(4,363	)
Dividends received from equity investments		6,835			6,572
Net loss (gain) on currency translation adjustments		2,751			34
Depreciation and amortization		125,403			119,107
Amortization of debt issuance costs		115			115
Share-based compensation		12,693			11,727
Excess tax benefit from share-based payment arrangements		(50	)		(111	)
Asset impairments		798			—
Provisions for (recoveries of) bad debt expense and billing adjustments		328			(162	)
Charges for transaction processing provisions		3,684			2,860
Deferred income tax expense (benefit)		15,833			13,022
(Gain) loss on disposal of equipment, net		(1,396	)		224
Gain on disposal of subsidiary		—			1,641
Changes in operating assets and liabilities:
Accounts receivable		(4,382	)		(33,997	)
Prepaid expenses, other current assets and other long-term assets		(766	)		(22,352	)
Accounts payable		(15,629	)		34,340
Accrued salaries and employee benefits		(2,610	)		(27,616	)
Other current liabilities and other long-term liabilities		(215	)		24,858

Net cash provided by operating activities		297,665			279,902

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net		(18,121	)		(29,848	)
Additions to licensed computer software from vendors		(10,033	)		(27,224	)
Additions to internally developed computer software		(13,331	)		(15,220	)
Proceeds from sale of tradename		4,500			—
Proceeds from disposition, net of expenses paid and cash disposed		—			4,224
Cash used in acquisitions, net of cash acquired		(45,309	)		(148,531	)
Purchase of private equity investments		(1,573	)		—
Additions to contract acquisition costs		(22,506	)		(42,774	)

Net cash used in investing activities		(106,373	)		(259,373	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt borrowings and capital lease obligations		(21,052	)		(11,938	)
Proceeds from exercise of stock options		1,743			543
Excess tax benefit from share-based payment arrangements		50			111
Repurchase of common stock		(73,361	)		(46,228	)
Purchase of noncontrolling interests		(174,050	)		—
Subsidiary dividends paid to noncontrolling shareholders		(433	)		(250	)
Dividends paid on common stock		(40,616	)		(41,432	)

Net cash used in financing activities		(307,719	)		(99,194	)

CASH AND CASH EQUIVALENTS:
Effect of exchange rate changes on cash and cash equivalents		2,345			1,310

Net increase (decrease) in cash and cash equivalents		(114,082	)		(77,355	)
Cash and cash equivalents at beginning of period		394,795			449,955

Cash and cash equivalents at end of period	$	280,713			372,600

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TSYS Announces Third Quarter 2011 Earnings

Page 9 of 11

Supplemental Information:


	Accounts on File
	Total
(in millions)	Sep 2011		Sep 2010		% Change
Consumer Credit		194.2		180.2		7.7
Government Services		32.6		26.9		21.4
Retail		23.2		23.1		0.2

Total Consumer		250.0		230.2		8.6
Commercial		59.6		51.9		14.7
Other		7.0		5.7		23.6

Subtotal		316.6		287.8		10.0
Prepaid/Stored Value		75.8		51.4		47.7

Total AOF		392.4		339.2		15.7

Growth in Accounts on File (in millions):


	Sep 2010 to Sep 2011			Sep 2009 to Sep 2010
Beginning balance		339.2			342.1
Change in accounts on file due to:
Internal growth of existing clients		31.2			20.8
New clients		32.9			33.2
Purges/Sales		(10.0	)		(40.3	)
Deconversions		(0.9	)		(16.6	)

Ending balance		392.4			339.2

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TSYS Announces Third Quarter 2011 Earnings

Page 10 of 11

Reconciliation of GAAP to Non-GAAP

Non-GAAP Measures

The schedule below provides a reconciliation of revenues and operating results on a constant currency basis to reported revenues and operating income. This non-GAAP measure presents year-to-date 2011 financial results using the previous year’s foreign currency exchange rates. On a year-to-date constant currency basis, TSYS’ total revenues grew 3.3% as compared to a reported GAAP increase of 4.6%. The schedule below also provides a reconciliation of revenues and basic EPS excluding revenues from termination fees.

The non-GAAP financial measures of constant currency and revenues and basic EPS excluding revenues from termination fees, with respect to year-to-date revenues and basic EPS presented by TSYS, are utilized by management to better understand and assess TSYS’ operating results and financial performance. TSYS also uses the non-GAAP financial measures to evaluate and assess TSYS’ financial performance against budget, as well as to evaluate financial performance for executive and management compensation purposes.

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

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

TSYS believes that its use of non-GAAP financial measures provides investors with the same key financial performance indicators that are utilized by management to assess TSYS’ operating results, evaluate the business and make operational decisions on a prospective, going-forward basis. Hence, management provides disclosure of non-GAAP financial measures to give shareholders and potential investors an opportunity to see TSYS as viewed by management, to assess TSYS with some of the same tools that management utilizes internally and to be able to compare such information with prior periods. TSYS believes that the presentation of GAAP financial measures alone would not provide its shareholders and potential investors with the ability to appropriately analyze its ongoing operational results, and therefore expected future results. TSYS therefore believes that inclusion of non-GAAP financial measures provides investors with additional information to help them better understand its financial statements just as management utilizes these non-GAAP financial measures to better understand the business, manage budgets and allocate resources.

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TSYS Announces Third Quarter 2011 Earnings

Page 11 of 11

Reconciliation of GAAP to Non-GAAP

Constant Currency Comparison

(unaudited)

(in thousands)


	Three Months Ended Sep 30,								Nine Months Ended Sep 30,
	2011			2010		Percent Change			2011		2010		Percent Change
Consolidated
Constant currency (1)	$	454,852			433,236		5.0	%	$	1,319,653		1,277,586		3.3	%
Foreign currency (2)		4,895			—					17,079		—

Total revenues	$	459,747			433,236		6.1	%	$	1,336,732		1,277,586		4.6	%

Constant currency (1)	$	81,655			78,914		3.5	%	$	231,685		238,455		(2.8	)%
Foreign currency (2)		(475	)		—					1,053		—

Operating income	$	81,180			78,914		2.9	%	$	232,738		238,455		(2.4	)%

International Services
Constant currency (1)	$	94,975			85,327		11.3	%
Foreign currency (2)		4,916			—

Total revenues	$	99,891			85,327		17.1	%

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

(2)	Reflects the impact of calculated changes in foreign currency rates from the comparable period.

Revenue and BASIC EPS Excluding Termination Fees

(unaudited)

(in thousands, except per share data)


	Nine Months Ended Sep 30,
	2011		2010		Percent Change
Consolidated
Total Revenues	$	1,336,732		1,277,586		4.6	%
Less:
Termination Fees		—		32,667

Total revenues excluding termination fees	$	1,336,732		1,244,919		7.4	%

Net income attributable to TSYS common shareholders	$	160,684		146,773		9.5	%
Less:
Termination Fees, net of tax		—		21,011
Net Income excluding termination fees, net of tax, attributable to TSYS common shareholders	$	160,684		125,762		27.8	%

Average common shares and participating securities		192,538		197,056

BASIC EPS - Net income attributable to TSYS common shareholders	$	0.83		0.74		12.1	%
Less:
Termination Fees, net of tax		—		0.11

BASIC EPS - Net Income excluding termination fees, net of tax, attributable to TSYS common shareholders	$	0.83		0.64		30.8	%

Note: Earnings per share may not foot due to rounding.

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TOTAL SYSTEM SERVICES INC - FORM 8-K - EX-99.1 - October 25, 2011

Attached files

TOTAL SYSTEM SERVICES INC Reports