Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 16, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | TOTAL SYSTEM SERVICES INC | ||
Entity Central Index Key | 721,683 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 181,725,568 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 10,573,813,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents (Note 3) | $ 450,357 | $ 425,354 |
Accounts receivable, net of allowances for doubtful accounts and billing adjustments of $5.9 million and $4.8 million as of 2017 and 2016, respectively | 412,322 | 432,847 |
Prepaid expenses and other current assets (Note 4) | 216,565 | 164,488 |
Total current assets | 1,079,244 | 1,022,689 |
Goodwill (Notes 1 and 5) | 3,264,071 | 3,270,952 |
Other intangible assets, net of accumulated amortization of $600.9 million and $420.6 million as of 2017 and 2016, respectively (Note 6) | 727,146 | 906,676 |
Intangible assets - computer software, net of accumulated amortization of $849.3 million and $757.4 million as of 2017 and 2016, respectively (Note 7) | 383,715 | 423,188 |
Property and equipment, net of accumulated depreciation and amortization of $521.1 million and $480.7 million as of 2017 and 2016, respectively (Note 8) | 325,218 | 282,345 |
Contract acquisition costs, net of accumulated amortization of $342.7 million and $309.7 million as of 2017 and 2016, respectively (Note 9) | 258,665 | 235,700 |
Equity investments, net (Note 10) | 163,518 | 133,556 |
Deferred income tax asset (Note 13) | 6,091 | 7,055 |
Other assets | 124,021 | 84,016 |
Total assets | 6,331,689 | 6,366,177 |
Current liabilities: | ||
Current portion of long-term borrowings (Note 11) | 559,050 | 48,040 |
Accounts payable | 62,310 | 38,712 |
Accrued salaries and employee benefits | 82,135 | 67,655 |
Current portion of obligations under capital leases and license agreements (Note 11) | 6,762 | 2,687 |
Other current liabilities (Note 12) | 278,835 | 263,259 |
Total current liabilities | 989,092 | 420,353 |
Long-term borrowings, excluding current portion (Note 11) | 2,591,949 | 3,312,215 |
Deferred income tax liabilities (Note 13) | 238,317 | 419,552 |
Obligations under capital leases and license agreements, excluding current portion (Note 11) | 36,053 | 1,061 |
Other long-term liabilities | 119,596 | 88,983 |
Total liabilities | 3,975,007 | 4,242,164 |
Redeemable noncontrolling interest in consolidated subsidiary | 115,689 | 24,093 |
Commitments and contingencies (Note 14) | ||
Shareholders' Equity | ||
Common stock- $0.10 par value. Authorized 600,000 shares; 202,765 issued as of 2017 and 2016; 180,903 and 183,451 outstanding as of 2017 and 2016, respectively | 20,277 | 20,276 |
Additional paid-in capital | 162,806 | 279,627 |
Accumulated other comprehensive loss, net (Note 19) | (36,148) | (56,158) |
Treasury stock, at cost (21,862 and 19,314 shares as of 2017 and 2016, respectively (Note 18) | (909,960) | (646,047) |
Retained earnings | 3,004,018 | 2,502,222 |
Total shareholders' equity | 2,240,993 | 2,099,920 |
Total liabilities and shareholders' equity | $ 6,331,689 | $ 6,366,177 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets | ||
Accounts receivable, allowances for doubtful accounts and billing adjustments | $ 5,900 | $ 4,800 |
Other intangible assets, accumulated amortization | 600,888 | 420,607 |
Intangible assets - computer software, accumulated amortization | 849,283 | 757,394 |
Property and equipment, accumulated depreciation and amortization | 521,084 | 480,690 |
Contract acquisition costs, accumulated amortization | $ 342,700 | $ 309,700 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, issued (in shares) | 202,765,000 | 202,765,000 |
Common stock, outstanding (in shares) | 180,903,000 | 183,451,000 |
Treasury stock (in shares) | 21,862,000 | 19,314,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Income | |||
Total revenues (Note 20) | $ 4,927,965 | $ 4,170,077 | $ 2,779,541 |
Cost of services | 3,577,320 | 2,993,062 | 1,855,181 |
Selling, general and administrative expenses | 616,601 | 603,633 | 390,253 |
Total operating expenses | 4,193,921 | 3,596,695 | 2,245,434 |
Operating income | 734,044 | 573,382 | 534,107 |
Nonoperating expenses, net | (116,482) | (112,350) | (40,543) |
Income before income taxes and equity in income of equity investments | 617,562 | 461,032 | 493,564 |
Income taxes (Note 13) | 65,878 | 161,175 | 151,364 |
Income before equity in income of equity investments | 551,684 | 299,857 | 342,200 |
Equity in income of equity investments, net of tax | 40,532 | 26,115 | 25,430 |
Income from continuing operations, net of tax | 592,216 | 325,972 | 367,630 |
Income from discontinued operations, net of tax | 1,411 | ||
Net income | 592,216 | 325,972 | 369,041 |
Net income attributable to noncontrolling interests | (6,031) | (6,334) | (4,997) |
Net income attributable to Total System Services, Inc. (TSYS) common shareholders | $ 586,185 | $ 319,638 | $ 364,044 |
Basic earnings per share (EPS) attributable to TSYS common shareholders (Note 24): | |||
Income from continuing operations to TSYS common shareholders (in dollars per share) | $ 3.19 | $ 1.74 | $ 1.97 |
Gain from discontinued operations to TSYS common shareholders (in dollars per share) | 0.01 | ||
Net income attributable to TSYS common shareholders (in dollars per share) | 3.19 | 1.74 | 1.98 |
Diluted EPS attributable to TSYS common shareholders (Note 24): | |||
Income from continuing operations to TSYS common shareholders (in dollars per share) | 3.16 | 1.73 | 1.96 |
Gain from discontinued operations to TSYS common shareholders (in dollars per share) | 0.01 | ||
Net income attributable to TSYS common shareholders (in dollars per share) | $ 3.16 | $ 1.73 | $ 1.97 |
Amounts attributable to TSYS common shareholders: | |||
Income from continuing operations | $ 586,185 | $ 319,638 | $ 362,633 |
Gain from discontinued operations | 1,411 | ||
Net income attributable to Total System Services, Inc. (TSYS) common shareholders | $ 586,185 | $ 319,638 | $ 364,044 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 592,216 | $ 325,972 | $ 369,041 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 22,018 | (30,801) | (21,719) |
Postretirement healthcare plan adjustments | (592) | 496 | (1,567) |
Unrealized (loss) gain on available-for-sale securities | (1,416) | 7,359 | 1,398 |
Other comprehensive income (loss) | 20,010 | (22,946) | (21,888) |
Comprehensive income | 612,226 | 303,026 | 347,153 |
Comprehensive income attributable to noncontrolling interests | (6,031) | (6,002) | (4,727) |
Comprehensive income attributable to TSYS common shareholders | $ 606,195 | $ 297,024 | $ 342,426 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 592,216 | $ 325,972 | $ 369,041 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 405,906 | 373,546 | 258,264 |
Provisions for cardholder losses | 51,194 | 49,363 | 41,264 |
Share-based compensation | 42,409 | 43,728 | 41,549 |
Provisions for bad debt expenses and billing adjustments | 10,169 | 7,584 | 4,495 |
Charges for transaction processing provisions | 11,716 | 5,351 | 6,976 |
Amortization of debt issuance costs | 4,307 | 13,570 | 1,841 |
Dividends received from equity investments | 20,589 | 15,246 | 12,097 |
Loss (gain) on foreign currency | 907 | (1,748) | 388 |
Amortization of bond discount | 907 | 750 | 397 |
Loss on disposal of equipment, net | 2,307 | 774 | (397) |
Loss on impairment | 1,298 | ||
Excess tax benefit from share-based payment arrangements | (9,905) | (24,357) | |
Deferred income tax (benefit) expense | (172,488) | 7,435 | (4,083) |
Gain on disposal of subsidiaries | (3,568) | ||
Equity in income of equity investments, net of tax | (40,532) | (26,115) | (25,430) |
Changes in operating assets and liabilities, net of effects of acquisitions: | |||
Accrued salaries and employee benefits | 13,538 | (2,597) | 29,168 |
Accounts receivable | (29,729) | (73,235) | (39,218) |
Prepaid expenses, other current assets and other long-term assets | 3,089 | (58,345) | (7,372) |
Accounts payable | 17,653 | (12,562) | (3,987) |
Other current liabilities and other long-term liabilities | (78,964) | 59,217 | (55,034) |
Net cash provided by operating activities | 856,492 | 718,029 | 602,034 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (70,039) | (51,132) | (54,640) |
Additions to contract acquisition costs | (69,806) | (45,847) | (58,728) |
Additions to internally developed computer software | (30,265) | (34,043) | (39,219) |
Additions to licensed computer software from vendors | (25,916) | (11,551) | (50,729) |
Cash used in acquisitions, net of cash acquired | (2,345,493) | (750) | |
Other investing activities | (2,718) | (4,930) | 42 |
Net cash used in investing activities | (198,744) | (2,492,996) | (204,024) |
Cash flows from financing activities: | |||
Principal payments on long-term borrowings and capital lease obligations | (421,306) | (724,084) | (54,719) |
Purchase of noncontrolling interest | (70,000) | (5,878) | |
Dividends paid on common stock | (79,017) | (73,378) | (73,677) |
Subsidiary dividends paid to noncontrolling shareholders | (5,997) | (5,548) | (5,028) |
Repurchase of common stock under plans and tax withholding | (284,237) | (30,275) | (242,235) |
Debt issuance costs | (26,555) | ||
Excess tax benefit from share-based payment arrangements | 9,905 | 24,357 | |
Proceeds from borrowings of long-term debt | 200,000 | 2,666,295 | 1,912 |
Proceeds from exercise of stock options | 21,832 | 11,708 | 58,636 |
Net cash (used in) provided by financing activities | (638,725) | 1,822,190 | (290,754) |
Cash and cash equivalents: | |||
Effect of exchange rate changes on cash and cash equivalents | 5,980 | (11,197) | (7,111) |
Net increase in cash and cash equivalents | 25,003 | 36,026 | 100,145 |
Cash and cash equivalents at beginning of period | 425,354 | 389,328 | 289,183 |
Cash and cash equivalents at end of period | 450,357 | 425,354 | 389,328 |
Supplemental cash flow information: | |||
Interest paid | 112,705 | 84,420 | 40,425 |
Income taxes paid, net | $ 269,113 | $ 87,428 | $ 171,455 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Retained Earnings | Noncontrolling Interest | Total |
Balance at Dec. 31, 2014 | $ 22,492 | ||||||
Changes in Redeemable Noncontrolling Interests | |||||||
Net income | 5,945 | ||||||
Subsidiary dividends paid to noncontrolling interests | (5,027) | ||||||
Balance at Dec. 31, 2015 | 23,410 | ||||||
Balance at Dec. 31, 2014 | $ 20,278 | $ 171,270 | $ (11,926) | $ (453,230) | $ 1,966,370 | $ 6,882 | 1,699,644 |
Balance (in shares) at Dec. 31, 2014 | 202,775 | ||||||
Changes in Total Equity | |||||||
Net income | 364,044 | (948) | 363,096 | ||||
Other comprehensive income (Note 19) | (21,618) | (270) | (21,888) | ||||
Common stock issued from treasury shares for exercise of stock options (Note 17) | 12,273 | 46,363 | 58,636 | ||||
Common stock unissued due to forfeiture of nonvested awards | $ (1) | 702 | (701) | ||||
Common stock unissued due to forfeiture of nonvested awards (in shares) | (6) | ||||||
Common stock issued from treasury shares for nonvested awards (Note 17) | (7,982) | 7,982 | |||||
Share-based compensation (Note 17) | 41,179 | 41,179 | |||||
Common stock issued from treasury shares for dividend equivalents (Note 17) | 186 | 163 | 349 | ||||
Cash dividends declared ($0.46, $0.40 and $0.40 per share for the years ended December 31, 2017, 2016 and 2015, respectively) | (74,356) | (74,356) | |||||
Purchase of treasury shares (Note 18) | 6 | (242,241) | (242,235) | ||||
Tax benefits associated with share-based compensation | 24,257 | 24,257 | |||||
Balance at Dec. 31, 2015 | $ 20,277 | 241,891 | (33,544) | (641,664) | 2,256,058 | 5,664 | 1,848,682 |
Balance (in shares) at Dec. 31, 2015 | 202,769 | ||||||
Changes in Redeemable Noncontrolling Interests | |||||||
Net income | 6,231 | ||||||
Subsidiary dividends paid to noncontrolling interests | (5,548) | ||||||
Balance at Dec. 31, 2016 | 24,093 | ||||||
Changes in Total Equity | |||||||
Net income | 319,638 | 103 | 319,741 | ||||
Other comprehensive income (Note 19) | (22,614) | (332) | (22,946) | ||||
Common stock issued from treasury shares for exercise of stock options (Note 17) | 1,824 | 9,884 | 11,708 | ||||
Common stock unissued due to forfeiture of nonvested awards | $ (1) | 1,197 | (1,196) | ||||
Common stock unissued due to forfeiture of nonvested awards (in shares) | (4) | ||||||
Common stock issued from treasury shares for nonvested awards (Note 17) | (17,204) | 17,204 | |||||
Share-based compensation (Note 17) | 42,457 | 42,457 | |||||
Cash dividends declared ($0.46, $0.40 and $0.40 per share for the years ended December 31, 2017, 2016 and 2015, respectively) | (73,474) | (73,474) | |||||
Purchase of treasury shares (Note 18) | (30,275) | (30,275) | |||||
Subsidiary repurchase of noncontrolling interests | (443) | $ (5,435) | (5,878) | ||||
Tax benefits associated with share-based compensation | 9,905 | 9,905 | |||||
Balance at Dec. 31, 2016 | $ 20,276 | 279,627 | (56,158) | (646,047) | 2,502,222 | $ 2,099,920 | |
Balance (in shares) at Dec. 31, 2016 | 202,765 | 202,765 | |||||
Changes in Redeemable Noncontrolling Interests | |||||||
Net income | $ 6,031 | ||||||
Adjustments to redemption value of redeemable noncontrolling interest | 101,405 | ||||||
Subsidiary repurchase of noncontrolling interests | (9,843) | ||||||
Subsidiary dividends paid to noncontrolling interests | (5,997) | ||||||
Balance at Dec. 31, 2017 | 115,689 | ||||||
Changes in Total Equity | |||||||
Net income | 586,185 | 586,185 | |||||
Other comprehensive income (Note 19) | 20,010 | 20,010 | |||||
Common stock issued from treasury shares for exercise of stock options (Note 17) | 10,474 | 11,358 | 21,832 | ||||
Common stock unissued due to forfeiture of nonvested awards | $ 1 | 1,230 | (1,231) | ||||
Common stock issued from treasury shares for nonvested awards (Note 17) | (10,197) | 10,197 | |||||
Share-based compensation (Note 17) | 43,234 | 43,234 | |||||
Cash dividends declared ($0.46, $0.40 and $0.40 per share for the years ended December 31, 2017, 2016 and 2015, respectively) | (84,389) | (84,389) | |||||
Purchase of treasury shares (Note 18) | (284,237) | (284,237) | |||||
Adjustments to redemption value of redeemable noncontrolling interest | (101,405) | (101,405) | |||||
Subsidiary repurchase of noncontrolling interests | (60,157) | (60,157) | |||||
Balance at Dec. 31, 2017 | $ 20,277 | $ 162,806 | $ (36,148) | $ (909,960) | $ 3,004,018 | $ 2,240,993 | |
Balance (in shares) at Dec. 31, 2017 | 202,765 | 202,765 |
Consolidated Statements of Cha8
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Changes in Equity | |||
Cash dividends declared, per share | $ 0.46 | $ 0.40 | $ 0.40 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 1: Basis of Presentation and Summary of Significant Accounting Policies BUSINESS: Total System Services, Inc.’s (TSYS’ or the Company’s) revenues are derived from providing payment processing, merchant services and related payment services to financial and nonfinancial institutions, generally under long-term processing contracts. The Company also derives revenues by providing general-purpose reloadable (GPR) prepaid debit and payroll cards, demand deposit accounts and other financial services to underbanked and other consumers and businesses. The Company’s services are provided through three operating segments: Issuer Solutions, Merchant Solutions and Netspend. Through the Company’s Issuer Solutions segment, TSYS processes information through its cardholder systems to financial and nonfinancial institutions throughout the United States and internationally. The Company’s Merchant Solutions segment provides merchant services to merchant acquirers and merchants mainly in the United States. The Company’s Netspend segment provides services to consumers in the United States. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION: The accompanying consolidated financial statements, which are prepared in accordance with U.S. generally accepted accounting principles (GAAP) include the accounts of TSYS and its wholly- and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In addition, the Company evaluates its relationships with other entities to identify whether they are variable interest entities and to assess whether it is the primary beneficiary of such entities. If the determination is made that the Company is the primary beneficiary, then that entity is included in the consolidated financial statements. RISKS AND UNCERTAINTIES AND USE OF ESTIMATES: Factors that could affect the Company's future operating results and cause actual results to vary materially from expectations include, but are not limited to, lower than anticipated growth from existing clients, an inability to attract new clients and grow internationally, loss of a major customer or other significant client, loss of a major supplier, an inability to grow through acquisitions or successfully integrate acquisitions, an inability to control expenses, technology changes, the impact of the application of and/or changes in accounting principles, financial services consolidation, changes in regulatory requirements, a decline in the use of cards as a payment mechanism, disruption of the Company's international operations, breach of the Company's security systems, a decline in the financial stability of the Company's clients and uncertain economic conditions. Negative developments in these or other risk factors could have a material adverse effect on the Company's financial position, results of operations and cash flows. The Company has prepared the accompanying consolidated financial statements in conformity with U.S. GAAP. The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. These estimates and assumptions are developed based upon all information available. Actual results could differ from estimated amounts. ACQUISITIONS — PURCHASE PRICE ALLOCATION: TSYS' purchase price allocation methodology requires the Company to make assumptions and to apply judgment to estimate the fair value of acquired assets and liabilities. TSYS estimates the fair value of assets and liabilities based upon appraised market values, the carrying value of the acquired assets and widely accepted valuation techniques, including the cost approach, discounted cash flows and market multiple analyses. Management determines the fair value of fixed assets and identifiable intangible assets such as developed technology or customer relationships, and any other significant assets or liabilities. TSYS adjusts the purchase price allocation, as necessary, up to one year after the acquisition closing date as TSYS obtains more information regarding asset valuations and liabilities assumed. Unanticipated events or circumstances may occur which could affect the accuracy of the Company's fair value estimates, including assumptions regarding industry economic factors and business strategies, and may result in an impairment or a new allocation of purchase price. TSYS may allocate part of the purchase price of future acquisitions to contingent consideration as required by GAAP for business combinations. The fair value calculation of contingent consideration will involve a number of assumptions that are subjective in nature and which may differ significantly from actual results. TSYS may experience volatility in its earnings to some degree in future reporting periods as a result of these fair value measurements. DISCONTINUED OPERATIONS: The Company sold all of its stock of GP Network Corporation (representing 54% ownership of the company) and all of its stock of TSYS Japan Godo Kaisha (representing 100% ownership of the company) in April 2014. In 2015, the Company recorded an additional gain of $1.4 million, net of tax, related to the return of cash that was placed in escrow during closing and tax adjustments associated with the transaction. CASH AND CASH EQUIVALENTS: Cash on hand and investments with a maturity of three months or less when purchased are considered to be cash equivalents. ACCOUNTS RECEIVABLE: Accounts receivable balances are stated net of allowances for doubtful accounts and billing adjustments. TSYS records an allowance for doubtful accounts when it is probable that the accounts receivable balance will not be collected. When estimating the allowance for doubtful accounts, the Company takes into consideration such factors as its day-to-day knowledge of the financial position of specific clients, the industry and size of its clients, the overall composition of its accounts receivable aging, prior history with specific customers of accounts receivable write-offs and prior experience of allowances in proportion to the overall receivable balance. This analysis includes an ongoing and continuous communication with its largest clients and those clients with past due balances. A financial decline of any one of the Company's large clients could have a material adverse effect on collectability of receivables and thus the adequacy of the allowance for doubtful accounts. Increases in the allowance for doubtful accounts are recorded as charges to bad debt expense and are reflected in selling, general and administrative expenses in the Company's Consolidated Statements of Income. Write-offs of uncollectible accounts are charged against the allowance for doubtful accounts. TSYS records an allowance for billing adjustments for actual and potential billing discrepancies. When estimating the allowance for billing adjustments, the Company considers its overall history of billing adjustments, as well as its history with specific clients and known disputes. Increases in the allowance for billing adjustments are recorded as a reduction of revenues in the Company's Consolidated Statements of Income and actual adjustments to invoices are charged against the allowance for billing adjustments. GOODWILL: Goodwill results from the excess of cost over the fair value of net assets of businesses acquired. Goodwill is tested for impairment at least annually. Equity investment goodwill, which is not reported as goodwill in the Company's Consolidated Balance Sheet, but is reported as a component of the equity investment, was $48.8 million and $46.1 million as of December 31, 2017 and 2016, respectively. OTHER INTANGIBLE ASSETS: Identifiable intangible assets relate primarily to merchant relationships, customer relationships, databases, channel relationships, covenants-not-to-compete, trade names and trade associations resulting from acquisitions. These identifiable intangible assets are amortized using the straight-line method over periods not exceeding the estimated useful lives, which range from three to ten years. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with GAAP. Amortization expenses are charged to selling, general and administrative expenses in the Company's Consolidated Statements of Income. LICENSED COMPUTER SOFTWARE: The Company licenses software from third parties that is used in providing services to clients. Licensed software is obtained through perpetual licenses, term licenses, site licenses and through agreements based on processing capacity. Perpetual and site licenses are amortized using the straight-line method over their estimated useful lives which range from three to ten years. Term licenses are amortized over the term of the agreement. Mainframe software that is licensed based on processing capacity is amortized using a units-of-production basis over the estimated useful life of the software, generally not to exceed ten years. At each balance sheet date, the Company evaluates impairment losses on long-lived assets used in operations in accordance with GAAP. ACQUISITION TECHNOLOGY INTANGIBLES: These identifiable intangible assets are software technology assets resulting from acquisitions. These assets are amortized using the straight-line method over periods not exceeding their estimated useful lives, which range from five to nine years. GAAP requires that intangible assets with estimated useful lives be amortized over their respective estimated useful lives to their residual values, and reviewed for impairment. Acquisition technology intangibles’ net book values are included in computer software, net in the accompanying balance sheets. Amortization expenses are charged to cost of services in the Company's Consolidated Statements of Income. SOFTWARE DEVELOPMENT COSTS: Costs of computer software to be sold, leased or otherwise marketed are capitalized once technological feasibility of the software product has been established. Costs incurred prior to establishing technological feasibility are expensed as incurred. Technological feasibility is established when the Company has completed a detailed program design and has determined that a product can be produced to meet its design specifications, including functions, features and technical performance requirements. Capitalization of costs ceases when the product is generally available to clients. In evaluating software development costs for recoverability, expected cash flows are estimated by management should events indicate a loss may have been triggered. The Company evaluates the unamortized capitalized costs of software development, the impairment of which is determined by expected undiscounted future operating cash flows of the software as compared to the carrying amount of the software product. The amount by which the unamortized software development costs exceed the lower of the carrying amount or fair value is written off in the period that such determination is made. If the actual cash flows are not consistent with the Company's estimates, a material write-off may result and net income may be materially different than was initially recorded. Assumptions and estimates about future cash flows and remaining useful lives of software are complex and subjective. They can be affected by a variety of factors, including industry and economic trends, changes in the Company’s business strategy and changes in the internal forecasts. The amount by which the unamortized software development costs exceed the net realizable value is written off in the period that such determination is made. Software development costs are amortized using the straight-line method over its estimated useful life, which ranges from three to ten years. The Company also develops software that is used internally. Internal-use software development costs are capitalized once: (1) the preliminary project stage is completed, (2) management authorizes and commits to funding a computer software project, and (3) it is probable that the project will be completed and the software will be used to perform the function intended. Costs incurred prior to meeting the qualifications are expensed as incurred. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. Internal-use software development costs are amortized using the straight-line method over its estimated useful life which ranges from three to ten years. Software development costs may become impaired in situations where development efforts are abandoned due to the viability of the planned project becoming doubtful or due to technological obsolescence of the planned software product. PROPERTY AND EQUIPMENT: Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Buildings and improvements are depreciated over estimated useful lives of 5-40 years, computer and other equipment over estimated useful lives of 2-5 years, and furniture and other equipment over estimated useful lives of 3-15 years. The Company evaluates impairment losses on long-lived assets used in operations in accordance with the provisions of GAAP. All ordinary repairs and maintenance costs are expensed as incurred. Maintenance costs that extend the asset life are capitalized and amortized over the remaining estimated life of the asset. CONTRACT ACQUISITION COSTS: The Company capitalizes contract acquisition costs related to signing incentives for signing or renewing long-term contracts. The Company capitalizes internal conversion costs in accordance with GAAP. Contract acquisition costs are amortized using the straight-line method over the contract term or the expected customer relationship period when a renewal is anticipated, beginning when the client's cardholder accounts are converted and producing revenues. The amortization of contract acquisition costs associated with cash payments for client incentives is included as a reduction of revenues in the Company's Consolidated Statements of Income. The amortization of contract acquisition costs associated with conversion activity is recorded as cost of services in the Company's Consolidated Statements of Income. EQUITY METHOD INVESTMENTS: TSYS' 49% investment in Total System Services de México, S.A. de C.V. (TSYS de México), an electronic payment processing support operation located in Toluca, México, is accounted for using the equity method of accounting, as is TSYS' 44.56% investment in China UnionPay Data Co., Ltd. (CUP Data) headquartered in Shanghai, China. The Company has entered into limited partnership agreements in connection with investing in two Atlanta-based venture capital funds focused exclusively on investing in technology-enabled financial services companies. TSYS' equity investments are recorded initially at cost and subsequently adjusted for equity in earnings, cash contributions and distributions, and foreign currency translation adjustments. INCOME TAXES: Income taxes reflected in TSYS' consolidated financial statements are computed based on the taxable income of TSYS and its affiliated subsidiaries. A consolidated U.S. federal income tax return is filed for TSYS and its majority- owned U.S. subsidiaries. Additionally, income tax returns are also filed in states where TSYS and its subsidiaries have filing obligations and in foreign jurisdictions where TSYS has a foreign affiliate. The Company accounts for income taxes in accordance with the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Reserves against the carrying value of a deferred tax asset are established when necessary to reflect the decreased likelihood of realization of a deferred asset in the future. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Income tax provisions require the use of management judgments, which are subject to challenge by various taxing authorities. Contingency reserves are periodically established where the amount of the contingency can be reasonably determined and is likely to occur. Reductions in contingency reserves are recognized when tax disputes are settled or examination periods lapse. Significant estimates used in accounting for income taxes relate to the determination of taxable income, the determination of temporary differences between book and tax basis, as well as estimates on the realizability of tax credits and net operating losses. TSYS recognizes potential interest and penalties related to the underpayment of income taxes as income tax expense in the Consolidated Statements of Income. UP-FRONT DISTRIBUTOR AND PARTNER PAYMENTS: The Company makes up-front contractual payments to third-party distributors and partners. The Company assesses each up-front payment to determine whether it meets the criteria of an asset as defined by U.S. GAAP. If these criteria are met, the Company capitalizes the up-front payment and recognizes the capitalized amount as expense ratably over the benefit period, which is generally the contract period. If the contract requires the distributor or partner to perform specific acts (i.e., achieve a sales goal) and no other conditions exist for the distributor or partner to earn or retain the up-front payment, then the Company capitalizes the payment and recognizes it as an expense when the performance conditions have been met. Up-front distributor and partner payments are classified on the Consolidated Balance Sheets as other non-current assets and recorded as a cost of services in the Consolidated Statements of Income. IMPAIRMENT OF LONG-LIVED ASSETS: The Company reviews long-lived assets, such as property and equipment and intangibles subject to amortization, including contract acquisition costs and certain computer software, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If upon a triggering event the Company determines that the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet. TRANSACTION PROCESSING PROVISIONS: The Company has recorded an accrual for contract contingencies (performance penalties) and processing errors. A significant number of the Company's contracts with large clients contain service level agreements which can result in TSYS incurring performance penalties if contractually required service levels are not met. When providing for these accruals, the Company takes into consideration such factors as the prior history of performance penalties and processing errors incurred, actual contractual penalty charge rates in the Company's contracts, progress towards milestones and known processing errors. As of December 31, 2017 and 2016, the Company had transaction processing provisions of $2.2 million and $2.9 million, respectively. These accruals are included in other current liabilities in the accompanying Consolidated Balance Sheets. Increases and decreases in transaction processing provisions are charged to cost of services in the Company's Consolidated Statements of Income, and payments or credits for performance penalties and processing errors are charged against the accrual. PROVISION FOR CARDHOLDER LOSSES: The Company is exposed to losses due to cardholder fraud, payment defaults and other forms of cardholder activity as well as losses due to non-performance of third parties who receive cardholder funds for transmittal to the issuing banks (banks that issue MasterCard International or Visa USA, Inc. branded cards to customers). The Company establishes a reserve for the losses it estimates will arise from processing customer transactions, debit card overdrafts, chargebacks for unauthorized card use and merchant-related chargebacks due to non-delivery of goods and services. These reserves are established based upon historical loss and recovery rates and cardholder activity for which specific losses can be identified. The provision for cardholder losses was approximately $9.5 million and $10.5 million as of December 31, 2017 and 2016, respectively. The charges to provisions for cardholder losses are included in cost of services in the Consolidated Statements of Income and other current liabilities in the Consolidated Balance Sheets. The Company regularly updates its reserve estimate as new facts become known and events occur that may impact the settlement or recovery of losses. PROVISION FOR MERCHANT LOSSES: The Company has potential liability for losses resulting from disputes between a cardholder and a merchant that arise as a result of, among other things, the cardholder's dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant's favor. In these cases, the transaction is "charged back" to the merchant, which means the purchase price is refunded to the customer by the card-issuing bank and charged to the merchant. If the merchant is unable to fund the refund, TSYS must do so. TSYS also bears the risk of reject losses arising from the fact that TSYS collects fees from its merchants after the monthly billing period. If the merchant has gone out of business during such period, TSYS may be unable to collect such fees. TSYS maintains cash deposits or requires the pledge of a letter of credit from certain merchants, generally those with higher average transaction size where the card is not present when the charge is made or the product or service is delivered after the charge is made, in order to offset potential contingent liabilities such as chargebacks and reject losses that would arise if the merchant went out of business. Most chargeback and reject losses are charged to cost of services as they are incurred. However, the Company also maintains a provision against losses, including major fraud losses, which are both less predictable and involve larger amounts. The loss provision was established using historical loss rates, applied to recent bankcard processing volume. As of December 31, 2017 and 2016 , the Company had a merchant loss provision in the amount of $4.3 million and $2.0 million, respectively. LEASES: The Company is obligated under noncancelable leases for computer equipment, software and facilities. As these leases expire, they will be evaluated and renewed or replaced by similar leases based on need. For purposes of applying the accounting and reporting standards, leases are classified from the standpoint of the lessee as capital or operating leases. Rental payments on operating leases are charged to expense over the lease term. If rental payments are not made on a straight-line basis, rental expense nevertheless shall be recognized on a straight-line basis unless another systematic and rational basis is more representative of the time pattern in which use benefit is derived from the leased property, in which case that basis shall be used. Certain of the Company's operating leases are for office space. The Company will make various alterations (leasehold improvements) to the office space and capitalize these costs as part of property and equipment. Leasehold improvements are amortized on a straight-line basis over the useful life of the improvement or the term of the lease, whichever is shorter. REDEEMABLE NONCONTROLLING INTEREST: In connection with the acquisition of Central Payment Co., LLC (CPAY), the Company is party to call and put arrangements with respect to the membership units that represent the remaining noncontrolling interest of CPAY. The call arrangement is exercisable by TSYS and the put arrangement is exercisable by the seller. The put arrangement is outside the control of the Company by requiring the Company to purchase the seller’s entire equity interest in CPAY at a put price at fair value. The put arrangement is recorded on the consolidated balance sheet and is classified as redeemable noncontrolling interest outside of permanent equity. TREASURY STOCK: The Company uses the cost method when it purchases its own common stock as treasury shares or issues treasury stock upon option exercises and displays treasury stock as a reduction of shareholders' equity. FAIR VALUES OF FINANCIAL INSTRUMENTS: The Company uses financial instruments in the normal course of its business. The carrying values of cash equivalents, accounts receivable, accounts payable, accrued salaries and employee benefits, and other current liabilities approximate their fair value due to the short-term maturities of these assets and liabilities. The fair value of the Company's long-term debt and obligations under capital leases is not significantly different from its carrying value. Investments in equity method investments are accounted for using the equity method of accounting and pertain to privately held companies. The Company believes the fair values of its investments in equity method investments exceed their respective carrying values. FOREIGN CURRENCY TRANSLATION: The Company maintains several different foreign operations whose functional currency is their local currency. Foreign currency financial statements of the Company's Mexican and Chinese equity investments, the Company's wholly owned subsidiaries and the Company's majority owned subsidiaries, as well as the Company's division and branches in the United Kingdom and China, are translated into U.S. dollars at current exchange rates, except for revenues, costs and expenses, and net income which are translated at the average exchange rates for each reporting period. Net gains or losses resulting from the currency translation of assets and liabilities of the Company's foreign operations, net of tax when applicable, are accumulated in a separate section of shareholders' equity titled accumulated other comprehensive income (loss). Gains and losses on transactions denominated in currencies other than the functional currencies are included in determining net income for the period in which exchange rates change. REVENUE RECOGNITION: Revenue is recognized when it is realized or realizable and earned, which is deemed to occur when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been performed; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. The Company accrues for rights of refund, processing errors or penalties, or other related allowances based on historical experience. The Company's Issuer Solutions revenues are derived from long-term processing contracts with financial and nonfinancial institutions and are generally recognized as the services are performed. Payment processing services revenues are generated primarily from charges based on: · The number of accounts on file; · Transactions and authorizations processed; · Statements mailed; and · Cards embossed and mailed and other processing services for cardholder accounts on file. Most of these contracts have prescribed annual revenue minimums, penalties for early termination, and service level agreements which may impact contractual fees if certain service levels are not achieved. Revenue is recognized as the services are performed, primarily on a per unit basis. Processing contracts generally range from three to ten years in length. When providing payment processing services, the Company frequently enters into customer arrangements to provide multiple services that may also include conversion or implementation services, business process outsourcing services such as call center services, web-based services, and other payment processing-related services. Revenue for these services is generally recognized as they are performed on a per unit basis each month or ratably over the term of the contract. The Company’s Merchant Solutions revenues are partially derived from relationships with thousands of individual merchants whose contracts range from thirty days to five years. Additionally, part of the revenues are derived from long-term processing contracts with large financial institutions, other merchant acquirers and merchant organizations which generally range from three to eight years and provide for penalties for early termination. Merchant services revenue is generated primarily from processing all payment forms including credit, debit and electronic benefits transfer for merchants of all sizes across a wide array of retail market segments. The products and services offered include: · Authorization and capture of electronic transactions; · Clearing and settlement of electronic transactions; · Information reporting services related to electronic transactions; · Merchant billing services; and · Point-of-sale terminal services. Revenue is recognized for merchant services as those services are performed, primarily measured on a per unit basis. When providing merchant processing services, the Company frequently enters into customer arrangements to provide multiple services that may also include conversion or implementation services, business process outsourcing services such as call center services, terminal services, and other merchant processing-related services. Revenue for these services is generally recognized as they are performed on a per unit basis each month or ratably over the term of the contract. Revenues on point-of-sale terminal equipment are recognized upon the transfer of ownership and shipment of product. With the acquisition of TransFirst Holdings Corp. (TransFirst) on April 1, 2016, TSYS included TransFirst’s results as part of the Merchant Solutions segment. TransFirst’s revenues are reported gross, which includes amounts paid for interchange and assessments, as TransFirst is the principal in the contractual relationship with its customers. Expenses covering interchange and payment network fees are included in TransFirst’s cost of services and are directly attributable to processing fee revenues and are recognized in the same period as the related revenue. The Company’s Netspend revenues principally consist of a portion of the service fees collected from cardholders and interchange revenues received by the issuing banks in connection with the programs Netspend manages. Cardholders are charged fees in connection with Netspend’s products and services as follows: · Transactions - Cardholders are typically charged a fee for each Personal Identification Number (PIN) and signature-based purchase transaction made using their GPR cards, unless the cardholder is on a monthly or annual service plan, in which case the cardholder is instead charged a monthly or annual subscription fee, as applicable. Cardholders are also charged fees for Automated Teller Machines (ATM) withdrawals and other transactions conducted at ATMs. · Customer Service and Maintenance - Cardholders are typically charged fees for balance inquiries made through Netspend’s call centers. Cardholders are also charged a monthly maintenance fee after a specified period of inactivity. · Additional Products and Services - Cardholders are charged fees associated with additional products and |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurement | |
Fair Value Measurement | Note 2 Fair Value Measurements GAAP requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant level of inputs. The three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows: Level 1 — Quoted prices for identical assets and liabilities in active markets. Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 — Unobservable inputs for the asset or liability. The Company had no transfers between Level 1, Level 2, or Level 3 during the years ended December 31, 2017, 2016 or 2015. Goodwill is assessed annually for impairment in the second quarter of each year using fair value measurement techniques. Specifically, goodwill impairment is determined using a two-step test. Step 0 is a qualitative analysis of relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit (RU) with its book value, including goodwill. If the fair value of the RU exceeds its book value, goodwill is considered not impaired. If the book value of the RU exceeds its fair value, an impairment charge is recognized for the amount by which the carrying amount exceeds the fair value of the RU. The estimate of fair value of the Company’s RUs is determined using various valuation techniques, including using an equally weighted combination of the market approach and the income approach. The market approach, which contains Level 2 inputs, utilizes readily available market valuation multiples to estimate fair value. The income approach is a valuation technique that utilizes the discounted cash flow (DCF) method, which includes Level 3 inputs. Under the DCF method, the fair value of the RU reflects the present value of the projected earnings that will be generated by each RU after taking into account the revenues and expenses associated with the asset, the relative risk that the cash flows will occur, the contribution of other assets, and an appropriate discount rate to reflect the value of the invested capital. Cash flows are estimated for future periods based upon historical data and projections by management. As of December 31, 2017, the Company had recorded goodwill in the amount of $3.3 billion. The Company performed its annual impairment test of its goodwill balances as of May 31, 2017, and this test did not indicate any impairment. The fair value of the RUs substantially exceeds the carrying value. Refer to Note 5 for more information regarding goodwill. The fair value of the Company’s long-term debt and obligations under capital leases is not significantly different from its carrying value, except for the Company’s Senior Notes, which are discussed in Note 11. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents | |
Cash and Cash Equivalents | Note 3 Cash and Cash Equivalents Cash and cash equivalent balances as of December 31, 2017 and 2016 are summarized as follows: (in thousands) 2017 2016 Cash and cash equivalents in domestic accounts $ 396,577 375,122 Cash and cash equivalents in foreign accounts 53,780 50,232 Total $ 450,357 425,354 The Company maintains operating accounts outside the United States denominated in currencies other than the U.S. dollar. All amounts in domestic accounts are denominated in U.S. dollars. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expenses and Other Current Assets | |
Prepaid Expenses and Other Current Assets | Note 4 Prepaid Expenses and Other Current Assets Significant components of prepaid expenses and other current assets as of December 31, 2017 and 2016 are summarized as follows: (in thousands) 2017 2016 Prepaid expenses $ 65,159 84,173 Income taxes receivable 41,400 - R&D state tax credit 22,642 - Supplies inventory 17,072 17,105 Other 70,292 63,210 Total $ 216,565 164,488 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill | |
Goodwill | Note 5 Goodwill In 2016, the Company completed the TransFirst acquisition resulting in an additional $1.7 billion of goodwill being recorded. In addition, there was a downward adjustment to goodwill of $584,000 related to income tax reserves associated with the Netspend acquisition. In 2017, the Company adjusted the Netspend goodwill due to a tax adjustment of $1.8 million relating to uncertain tax positions. In 2017, the Company decreased the Merchant Solutions goodwill due to deferred tax adjustments of $12.1 million and the write-off of a note receivable of $727,000 on the opening balance sheet of TransFirst. The gross amount and accumulated impairment losses of goodwill as of December 31, 2017 and 2016 are as follows: 2017 (in thousands) Issuer Solutions Merchant Netspend Consolidated Gross amount $ 99,465 2,132,653 1,035,965 $ 3,268,083 Accumulated impairment losses (1,787) (2,225) - (4,012) Goodwill, net $ 97,678 2,130,428 1,035,965 $ 3,264,071 2016 Issuer Solutions Merchant Netspend Consolidated Gross amount $ 96,733 2,144,061 1,034,170 $ 3,274,964 Accumulated impairment losses (1,787) (2,225) - (4,012) Goodwill, net $ 94,946 2,141,836 1,034,170 $ 3,270,952 Below are the balances of goodwill as of December 31, 2017 and 2016 along with the related changes in carrying value. (in thousands) Issuer Solutions Merchant Netspend Consolidated Balance as of December 31, 2015 $ 98,090 413,748 1,033,586 $ 1,545,424 Netspend tax adjustment - - 584 584 TransFirst acquisition - 1,728,088 - 1,728,088 Currency translation adjustments (3,144) - - (3,144) Balance as of December 31, 2016 $ 94,946 2,141,836 1,034,170 $ 3,270,952 Netspend tax adjustment - - 1,795 1,795 TransFirst acquisition adjustments - (11,408) - (11,408) Currency translation adjustments 2,732 - - 2,732 Balance as of December 31, 2017 $ 97,678 2,130,428 1,035,965 $ 3,264,071 Refer to Note 22 for more information on acquisitions. |
Other Intangible Assets, Net
Other Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2017 | |
Other intangible assets | |
Intangible assets | |
Other Intangible Assets, net | Note 6 Other Intangible Assets, Net Significant components of other intangible assets as of December 31, 2017 and 2016 are summarized as follows: 2017 (in thousands) Gross Accumulated Net Merchant relationships $ 588,000 (147,000) $ 441,000 Channel relationships 439,398 (200,540) 238,858 Customer relationships 167,222 (139,969) 27,253 Trade name 62,468 (58,068) 4,400 Covenants-not-to-compete 29,940 (20,815) 9,125 Database 28,000 (25,200) 2,800 Trade association 10,000 (7,750) 2,250 Favorable lease 3,006 (1,546) 1,460 Total $ 1,328,034 (600,888) $ 727,146 2016 (in thousands) Gross Accumulated Net Merchant relationships $ 588,000 (63,000) $ 525,000 Channel relationships 439,600 (148,815) 290,785 Customer relationships 166,340 (122,465) 43,875 Trade name 62,397 (45,197) 17,200 Covenants-not-to-compete 29,940 (13,869) 16,071 Database 28,000 (19,600) 8,400 Trade association 10,000 (6,750) 3,250 Favorable lease 3,006 (911) 2,095 Total $ 1,327,283 (420,607) $ 906,676 Amortization related to other intangible assets, which is recorded in selling, general and administrative expenses, was $179.5 million, $163.8 million and $75.8 million for 2017, 2016 and 2015, respectively. The weighted average useful life for each component of other intangible assets, and in total, as of December 31, 2017 is as follows: Weighted Average Amortization Period (Years) Merchant relationships 7.0 Channel relationships 8.6 Customer relationships 8.2 Trade name 3.9 Covenants-not-to-compete 4.3 Database 5.0 Trade association 10.0 Favorable lease 5.1 Total 7.4 Estimated future amortization expense of other intangible assets as of December 31, 2017 for the next five years is: (in thousands) 2018 $ 162,131 2019 145,457 2020 140,193 2021 119,620 2022 99,420 |
Intangible Assets - Computer So
Intangible Assets - Computer Software, Net | 12 Months Ended |
Dec. 31, 2017 | |
Computer Software | |
Computer software | |
Intangible Assets - Computer Software, Net | Note 7 Intangible Assets - Computer Software, Net Computer software as of December 31, 2017 and 2016 is summarized as follows: (in thousands) 2017 2016 Licensed computer software $ 543,198 513,790 Software development costs 450,789 428,581 Acquisition technology intangibles 239,011 238,211 Total computer software 1,232,998 1,180,582 Less accumulated amortization: Licensed computer software 360,160 315,591 Software development costs 325,443 307,190 Acquisition technology intangibles 163,680 134,613 Total accumulated amortization 849,283 757,394 Computer software, net $ 383,715 423,188 The Company held the following computer software under license agreements as of December 31, 2017 and 2016: (in thousands) 2017 2016 Licensed computer software (acquired under license agreements) $ 24,421 23,665 Accumulated amortization (15,918) (14,634) Licensed computer software, net $ 8,503 9,031 Amortization expense includes amounts for computer software acquired under license agreements. The Company had the following amortization expense related to computer software for the years ended December 31, 2017, 2016 and 2015: (in thousands) 2017 2016 2015 Amortization expense related to: Licensed computer software $ 51,247 45,655 41,823 Software development costs 27,461 26,478 22,740 Acquisition technology intangibles 28,267 26,217 16,734 The weighted average useful life for each component of computer software, and in total, as of December 31, 2017, is as follows: Weighted Average Amortization Period (Years) Licensed computer software 5.8 Software development costs 6.0 Acquisition technology intangibles 6.1 Total 6.0 Estimated future amortization expense of licensed computer software, software development costs and acquisition technology intangibles as of December 31, 2017 for the next five years is: (in thousands) Licensed Computer Software Development Acquisition Technology 2018 $ 45,008 23,503 25,793 2019 29,007 18,758 25,793 2020 24,388 14,588 20,134 2021 15,638 10,292 3,600 2022 12,606 6,138 - |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment, Net | |
Property and Equipment, net | Note 8 Property and Equipment, Net Property and equipment balances as of December 31, 2017 and 2016 are as follows: (in thousands) 2017 2016 Computer and other equipment $ 424,957 356,358 Buildings and improvements 262,499 246,577 Furniture and other equipment 141,927 141,836 Land 16,195 15,877 Other 724 2,387 Total property and equipment 846,302 763,035 Less accumulated depreciation and amortization (521,084) (480,690) Property and equipment, net $ 325,218 282,345 The Company has various types of equipment under capital lease arrangements. The Company has the following amounts of equipment under capital lease obligations as of December 31, 2017 and 2016: (in thousands) 2017 2016 Computer and other equipment (acquired under capital lease arrangements) $ 92,553 51,702 Furniture and other equipment (acquired under capital lease arrangements) 5,451 5,412 Total equipment 98,004 57,114 Less accumulated depreciation: Computer and other equipment (44,327) (39,060) Furniture and other equipment (4,520) (3,788) Total accumulated depreciation (48,847) (42,848) Total equipment, net $ 49,157 14,266 Depreciation and amortization expense includes amounts for computer equipment, furniture and other equipment acquired under capital lease. Depreciation and amortization expense related to property and equipment was $68.0 million, $62.5 million and $56.6 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Contract Acquisition Costs, Net
Contract Acquisition Costs, Net | 12 Months Ended |
Dec. 31, 2017 | |
Contract Acquisition Costs, Net | |
Contract Acquisition Costs, Net | Note 9 Contract Acquisition Costs, Net Significant components of contract acquisition costs as of December 31, 2017 and 2016 are summarized as follows: (in thousands) 2017 2016 Conversion costs, net of accumulated amortization of $176.4 million and $164.4 million as of 2017 and 2016, respectively $ 139,249 144,173 Payments for processing rights, net of accumulated amortization of $166.3 million and $145.3 million as of 2017 and 2016, respectively 119,416 91,527 Total $ 258,665 235,700 Amortization expense related to contract acquisition costs for the years ended December 31, 2017, 2016 and 2015 is as follows: (in thousands) 2017 2016 2015 Amortization expense related to: Conversion costs $ 29,625 28,811 27,392 Payments for processing rights 21,357 19,804 17,039 The weighted average useful life for each component of contract acquisition costs, and in total, as of December 31, 2017 is as follows: Weighted Average Amortization Period (Years) Conversion costs 13.1 Payments for processing rights 16.3 Total 14.7 Estimated future amortization expense of conversion costs and payments for processing rights as of December 31, 2017 for the next five years is: (in thousands) Conversion Costs Payments for 2018 $ 36,890 27,211 2019 29,673 24,210 2020 23,475 21,786 2021 21,491 19,275 2022 16,581 15,123 |
Equity Investments
Equity Investments | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments | |
Equity Investments | Note 10 Equity Investments The Company has an equity investment in CUP Data and records its 44.56% ownership using the equity method of accounting. CUP Data is sanctioned by the People's Bank of China, China's central bank. CUP Data currently provides transaction processing, disaster recovery and other services for banks and bankcard issuers in China. The Company also has an equity investment in TSYS de México and records its 49% ownership using the equity method of accounting. The operation prints statements and provides card-issuing support services to its clients. The Company invests in limited partnership agreements in connection with investing in two Atlanta-based venture capital funds focused exclusively on investing in technology-enabled financial services companies. Pursuant to each limited partnership agreement, the Company has committed to invest up to $20.0 million in each fund so long as its ownership interest in each fund does not exceed 50%. As of December 31, 2017 and 2016, the Company had made contributions to the funds of $22.8 million and $20.1 million, respectively. TSYS' equity investments are recorded initially at cost and subsequently adjusted for equity in earnings, cash contributions and distributions, and foreign currency translation adjustments. TSYS believes the carrying value approximates the underlying net assets of the equity investments. TSYS' equity in income of equity investments (net of tax) for the years ended December 31, 2017, 2016 and 2015 was $40.5 million, $26.1 million and $25.4 million, respectively. A summary of TSYS' equity investments as of December 31, 2017 and 2016 is as follows: (in thousands) 2017 2016 CUP Data $ 127,367 101,638 Other 36,151 31,918 Total $ 163,518 133,556 |
Long-term Borrowings, Capital L
Long-term Borrowings, Capital Lease Obligations and License Agreements | 12 Months Ended |
Dec. 31, 2017 | |
Long-term Borrowings, Capital Lease Obligations and License Agreements | |
Long-Term Borrowings, Capital Lease Obligations and License Agreements | Note 11 Long-term Borrowings, Capital Lease Obligations and License Agreements Long-term debt as of December 31, 2017 and 2016 consists of: (in thousands) 2017 2016 3.800% Senior Notes due April 1, 2021 (5 year tranche), net of discount and debt issuance costs 1 $ 745,000 743,625 4.800% Senior Notes due April 1, 2026 (10 year tranche), net of discount and debt issuance costs 1 743,042 742,383 2.375% Senior Notes due June 1, 2018 (5 year tranche), net of discount and debt issuance costs 1 549,532 548,615 3.750% Senior Notes due June 1, 2023 (10 year tranche), net of discount and debt issuance costs 1 544,780 543,947 LIBOR + 1.500%, unsecured term facility, due February 23, 2021, with quarterly principal and interest payments, net of debt issuance costs 368,645 697,832 LIBOR + 1.300%, unsecured revolving loan, due February 23, 2021, with monthly interest payments on outstanding balances 200,000 70,000 1.380% note payable due December 31, 2017, with monthly interest and principal payments - 13,853 Total debt 3,150,999 3,360,255 Less current portion (559,050) (48,040) Noncurrent portion of long-term debt $ 2,591,949 3,312,215 1 As of December 31, 2017 and 2016, the estimated fair values of the Company’s Senior Notes totaled $2.684 billion and $2.678 billion, respectively. The estimated fair values of the Company’s Senior Notes were based on quoted prices in an active market and are considered to be level 1 measurements. Bilateral Loan Facility Commitment Letter On December 16, 2017, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with PCP CYN Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company, MW CYN Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company, Cayan Holdings LLC, a Delaware limited liability company (“Cayan”), PCP MW Holding Corp., a Delaware corporation and equityholder of Cayan (“PCP”), and Parthenon Investors IV L.P., a Delaware limited partnership, solely in its capacity as the representative of the equityholders of Cayan and PCP. In connection with the execution of the Merger Agreement, on December 16, 2017, the Company entered into a commitment letter with Bank of America N.A. (the “Commitment Party”), pursuant to which the Commitment Party has committed to provide a $450.0 million two-year, bilateral loan facility (the “Bilateral Loan Facility”) to finance the mergers to the extent the Company has not obtained alternative financing to pay the merger consideration on or prior to the closing. See Note 25 for further discussion of the Company’s completion of the Cayan acquisition on January 11, 2018. Senior Notes Concurrently with entering into the Stock Purchase Agreement to acquire TransFirst, the Company obtained commitments for a $2.0 billion 364-day bridge term loan facility from JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, Merrill Lynch, On March 17, 2016, the Company closed its sale of $750 million aggregate principal amount of 3.800% Senior Notes due 2021 and $750 million aggregate principal amount of 4.800% Senior Notes due 2026 (collectively, the “2016 Notes”) pursuant to an agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the underwriters, whereby the Company agreed to sell and the Underwriters agreed to purchase the 2016 Notes from the Company, subject to and upon the terms and conditions set forth in the Underwriting Agreement. The Company used the net proceeds of the transaction to pay a portion of the approximately $2.35 billion purchase price of the Company’s acquisition of TransFirst and related fees and expenses. The 2016 Notes were issued pursuant to a Senior Indenture, dated as of March 17, 2016, between the Company and Regions Bank, as trustee. The balance as of December 31, 2017 was $745.0 million net of discount and debt issuance costs for the Senior Notes due April 1, 2021 and $743.0 million net of discount and debt issuance costs for the Senior Notes due April 1, 2026. In May 2013, the Company closed its issuance of $550.0 million aggregate principal amount of 2.375% Senior Notes due 2018 and $550.0 million aggregate principal amount of 3.750% Senior Notes due 2023 (collectively, the “2013 Notes”) pursuant to an Underwriting Agreement with J.P. Morgan Securities LLC, as representative of certain underwriters (the “Underwriters”), whereby the Company agreed to sell and the Underwriters agreed to purchase the 2013 Notes from the Company, subject to and upon the terms and conditions set forth in the Underwriting Agreement. The interest on the 2013 Notes are payable semiannually. The Company paid fees in 2013 associated with the issuance of these 2013 Notes of approximately $8.9 million and recorded discounts of approximately $4.3 million that are being amortized over the life of the 2013 Notes. The Company used the net proceeds of the transaction to pay a portion of the $1.4 billion purchase price of the Company’s acquisition of Netspend and related fees and expenses. The 2013 Notes were issued pursuant to an Indenture dated as of May 22, 2013 between the Company and Wells Fargo Bank, National Association, as trustee. The balance as of December 31, 2017 was $549.5 million net of discount and debt issuance costs for the Senior Notes due June 2018 and $544.8 million net of discount and debt issuance costs for the Senior Notes due June 2023. Term Loans and Other Borrowings On February 23, 2016, the Company entered into the 2016 Credit Agreement with JPMorgan Chase Bank, N.A., as Administrative Agent and L/C Issuer, Bank of America, N.A., as Syndication Agent and L/C Issuer, The Bank of Tokyo-Mitsubishi UFJ, LTD., U.S. Bank National Association and Wells Fargo Bank, National Association, as Co-Documentation Agents, and the other lenders party thereto, with J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, The Bank of Tokyo-Mitsubishi UFJ, LTD., U.S. Bank National Association and Wells Fargo Securities, LLC as joint lead arrangers and joint bookrunners. The 2016 Credit Agreement provided the Company with a $700 million five-year term loan facility (the “Term Loan Facility”) consisting of (i) a $300 million term loan (the “Refinancing Term Loan”) funded upon entry into the 2016 Credit Agreement and (ii) the Delayed Draw Term Loan. The 2016 Credit Agreement also provided the Company with the Revolving Loan Facility, which includes a $50 million sub-facility for the issuance of standby letters of credit. The balance as of December 31, 2017 was $368.6 million net of discount and debt issuance costs on the Term Loan Facility. Borrowings under the 2016 Credit Agreement will accrue interest at the base rate (as defined in the 2016 Credit Agreement) or, for certain euro-denominated borrowings, the London Interbank Offered Rate (“LIBOR”), in each case plus a margin that is set based on the Company’s corporate credit ratings. The applicable margin for loans bearing interest based on LIBOR ranges from 0.900% to 1.500% for revolving loans and 1.000% to 1.750% for term loans. The applicable margin for loans bearing interest based on the base rate ranges from 0.000% to 0.500% for revolving loans and 0.000% to 0.750% for term loans. In addition, the Company will pay the lenders a facility fee ranging from 0.100% to 0.250% per annum, depending on the Company’s corporate credit ratings, on the commitments under the Revolving Loan Facility (regardless of usages) and the undrawn commitment amount in respect of the Delayed Draw Term Loan. Based on the Company’s current corporate credit ratings, (i) the applicable margin for loans accruing interest at the base rate is 0.500% for term loans and 0.300% for revolving loans and (ii) the applicable margin for loans accruing interest at LIBOR is 1.500% for term loans and 1.300% for revolving loans. The 2016 Credit Agreement contains customary covenants regarding, among other matters, the maintenance of insurance, the preservation and maintenance of the Company’s corporate existence, material compliance with laws and the payment of taxes and other material obligations. During the year ended December 31, 2017, the Company repaid $70.0 million on the Revolving Loan Facility. As of December 31, 2017, the outstanding balance on the Revolving Loan Facility was $200.0 million. The Refinancing Term Loan was used to repay in full the Company’s outstanding loans and other obligations under that certain credit agreement, dated as of September 10, 2012, by and among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent thereunder, as amended, and that certain credit agreement, dated as of April 8, 2013, by and among the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent thereunder, as amended. The Delayed Draw Term Loan was used to finance, in part, the TransFirst acquisition and related transactions, upon satisfaction of a limited set of conditions precedent. The Revolving Loan Facility is available for draws for purposes of working capital and other general corporate purposes, including to finance, in part, the acquisition and related transactions upon satisfaction of a limited set of conditions precedent. The creditor group of the modified debt remained consistent before and after the debt was amended. Any exceptions were minor. In December 2015, the Company entered into a $30.0 million financing agreement for perpetual software licenses. The agreement was paid during 2017 and no outstanding balance remains. Debt Covenants The 2013 and 2016 Notes also contain various affirmative and negative covenants, including those that create limitations on the Company’s: · creation of liens; · merging or selling assets unless certain conditions are met; and · entering into sale/leaseback transactions. The 2013 and 2016 Notes also contain a provision that requires the Company to repurchase all or any portion of a holder’s notes, at the holder’s option, if a Change in Control Repurchase Event occurs, as defined in the Prospectus Supplements for the 2013 and 2016 Notes offerings. Annual Principal Payments on Long-term Debt Required annual principal payments on long-term debt for the five years subsequent to December 31, 2017 are summarized as follows: (in thousands) 2018 $ 560,000 2019 40,000 2020 40,000 2021 1,230,000 2022 - Capital Lease Obligations and License Agreements Capital lease obligations and license agreements as of December 31, 2017 and 2016 consist of: (in thousands) 2017 2016 Capital lease obligations $ 37,950 3,748 License agreements 4,865 - Total capital lease obligations and license agreements 42,815 3,748 Less current portion (6,762) (2,687) Noncurrent portion of capital leases and license agreements $ 36,053 1,061 The Company acquires various computer equipment, software, machinery and equipment and furniture and fixtures under capital lease obligations and license agreements. Refer to Notes 7, 8 and 21 for more information. The capital lease and license agreements obligations have various payment terms for each capital lease obligation, including single payment leases, monthly, quarterly and annually. The lease terms for the equipment and software range from one to six years. The future minimum lease payments under capital leases and license agreements as of December 31, 2017 are summarized as follows: (in thousands) Capital Leases License Agreements 2018 $ 6,652 1,449 2019 6,204 1,621 2020 6,127 1,275 2021 6,127 691 2022 6,095 39 Thereafter 11,484 - Total minimum lease payments 42,689 5,075 Less amount representing interest (4,739) (210) Principal minimum lease payments $ 37,950 4,865 |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Other Current Liabilities | |
Other Current Liabilities | Note 12 Other Current Liabilities Significant components of other current liabilities as of December 31, 2017 and 2016 are summarized as follows: (in thousands) 2017 2016 Deferred revenues $ 52,913 40,473 Accrued expenses 38,018 32,861 Accrued third-party commissions 34,276 28,310 Dividends payable 24,886 19,513 Accrued interest 19,330 19,029 Litigation settlements 1,380 20,795 Income taxes payable 185 1,673 Other 107,847 100,605 Total $ 278,835 263,259 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | Note 13 Income Taxes The provision for income taxes includes income taxes currently payable and those deferred because of temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities. The components of income tax expense included in the Consolidated Statements of Income are as follows: Years Ended December 31, (in thousands) 2017 2016 2015 Current income tax expense: Federal $ 210,550 140,079 139,228 State 20,316 9,218 9,255 Foreign 7,500 4,443 4,762 Total current income tax expense 238,366 153,740 153,245 Deferred income tax (benefit) expense: Federal (178,879) 8,393 (2,198) State 5,093 (65) 442 Foreign 1,298 (893) (125) Total deferred income tax (benefit) expense (172,488) 7,435 (1,881) Total income tax expense $ 65,878 161,175 151,364 Years Ended December 31, (in thousands) 2017 2016 2015 Components of income before income tax expense: Domestic $ 603,260 454,628 485,191 Foreign 14,302 6,404 8,373 Total income before income tax expense $ 617,562 461,032 493,564 Income tax expense differs from the amounts computed by applying the statutory U.S. federal income tax rate of 35% to income before income taxes, noncontrolling interest and equity in income of equity investments as a result of the following: Years Ended December 31, (in thousands) 2017 2016 2015 Computed "expected" income tax expense $ 216,147 161,425 173,911 Increase (decrease) in income tax expense resulting from: International tax rate differential and equity income 11,953 8,715 8,367 State income tax expense, net of federal income tax effect 12,470 9,127 7,101 Increase (decrease) in valuation allowance 8,230 2,855 (517) Tax credits (20,998) (15,695) (28,831) Share-based compensation (14,310) — — Deduction for domestic production activities (17,150) (12,950) (11,550) Re-measurement of deferred tax asset / deferred tax liability (146,093) — — Permanent differences and other, net 15,629 7,698 2,883 Total income tax expense $ 65,878 161,175 151,364 Temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities that give rise to significant portions of the net deferred tax liability as of December 31, 2017 and 2016 relate to the following: As of December 31, (in thousands) 2017 2016 Deferred income tax assets: Net operating loss and income tax credit carryforwards $ 35,089 34,490 Allowances for doubtful accounts and billing adjustments 852 1,512 Deferred revenue 17,813 27,461 Share-based compensation 15,170 25,497 Foreign currency translation — 4,019 Other, net 14,915 38,341 Total deferred income tax assets 83,839 131,320 Less valuation allowance for deferred income tax assets (29,531) (21,301) Net deferred income tax assets 54,308 110,019 Deferred income tax liabilities: Excess tax over financial statement depreciation (43,056) (63,432) Computer software development costs (48,244) (80,837) Purchased intangibles (42,467) (344,547) Foreign currency translation (942) — Partnership interests (143,908) (18,776) Other, net (7,917) (14,924) Total deferred income tax liabilities (286,534) (522,516) Net deferred income tax liabilities $ (232,226) (412,497) Total net deferred tax assets (liabilities): Noncurrent deferred tax asset $ 6,091 7,055 Noncurrent deferred tax liability (238,317) (419,552) Net deferred tax liability $ (232,226) (412,497) As of December 31, 2017, TSYS had recognized deferred tax assets from net operating losses, capital losses and federal and state income tax credit carryforwards of $6.6 million, $0.3 million and $28.2 million, respectively. As of December 31, 2016, TSYS had recognized deferred tax assets from net operating losses, capital losses, and federal and state income tax credit carryforwards of $8.5 million, $0.4 million, and $25.6 million, respectively. Additionally, net deferred income tax liabilities were decreased by $144.5 million as a result of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). In assessing the realizability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Management believes it is more likely than not that TSYS will realize the benefits of these deductible differences, net of existing valuation allowances. The valuation allowance for deferred tax assets was $29.5 million and $21.3 million at December 31, 2017 and 2016, respectively. The increase in the valuation allowance for deferred income tax assets was $8.2 million for 2017. The increase relates to foreign tax credits and foreign net operating losses which, more likely than not, will not be realized in later years. On December 22, 2017, the President signed into law the Tax Act. Some key provisions of this law impacted the Company. One such provision was the reduction of the Federal corporate income tax rate from 35% to 21%. This required the Company to remeasure its U.S. deferred tax assets and liabilities. Upon remeasurement of such, TSYS recognized a benefit of $144.5 million as a discrete item in 2017. Another provision of the Tax Act that impacted TSYS during this reporting period was the one-time transition tax on the deemed repatriation of foreign accumulated earnings. This deemed repatriation mandated the Company to calculate effective tax rates of 15% and 8% respectively on cash and non-cash foreign accumulated earnings. Additionally, the Company was obligated to recognize certain tax credits and reassess the realizability of certain deferred tax assets. The net impact of this one-time transition tax was an expense of $4.9 million. Additionally, the Tax Act provides for two U.S. tax base erosion provisions which begin in 2018. They are the global intangible low-taxed income (GILTI) and the base-erosion and anti-abuse tax (BEAT). TSYS’s calculation indicate no impact related to GILTI in 2017. However, TSYS will perform all necessary calculations, make any needed elections and report any 2018 impacts of GILTI as appropriate. Currently, TSYS is not expected and does not expect to be impacted by BEAT in the future. TSYS has adopted the permanent reinvestment exception under GAAP, with respect to earnings of certain foreign subsidiaries. As a result, TSYS considers foreign earnings related to these foreign operations to be permanently reinvested. However, pursuant to U.S. tax requirements, a provision for U.S. federal and state incomes taxes has been made in the consolidated financial statements for those non-U.S. subsidiaries whose earnings were deemed to be repatriated. The amount of undistributed earnings considered to be “reinvested” which may be subject to tax upon distribution was approximately $103.3 million as of December 31, 2017. Although TSYS does not intend to repatriate these earnings, a distribution of these non-U.S. earnings in the form of dividends, or otherwise, may subject the Company to withholding taxes payable to the various non-U.S. countries. TSYS is the parent of an affiliated group that files a consolidated U.S. federal income tax return and most state and foreign income tax returns on a separate entity basis. In the normal course of business, the Company is subject to examinations by these taxing authorities unless statutory examination periods lapse. TSYS is no longer subject to U.S. federal income tax examinations for years before 2011 and with few exceptions, the Company is no longer subject to income tax examinations from state and local or foreign tax authorities for years before 2011. There are currently federal income tax examinations in progress for the years 2011 through 2013. Additionally, a number of tax examinations are in progress by the relevant state tax authorities. Although TSYS is unable to determine the ultimate outcome of these examinations, TSYS believes that its liability for uncertain tax positions relating to these jurisdictions for such years is adequate. GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken in a tax return. During the year ended December 31, 2017, TSYS increased its liability for uncertain income tax positions by a net amount of approximately $7.3 million. The Company is not able to reasonably estimate the amount by which the liability will increase or decrease over time; however, at this time, the Company does not expect any significant changes related to these obligations within the next twelve months. A reconciliation of the beginning and ending amount of unrecognized tax liabilities is as follows 1 : Years Ended December 31, (in millions) 2017 2016 2015 Beginning balance $ 16.5 13.1 6.7 Current activity: Additions based on tax positions related to current year 4.9 3.4 2.3 Additions for tax positions of prior years 4.6 3.0 4.7 Reductions for tax positions of prior years — — (0.6) Decreases resulting from settlements with tax authorities (2.2) (3.0) — Net current activity 7.3 3.4 6.4 Ending balance $ 23.8 16.5 13.1 1 Unrecognized state tax liabilities are not adjusted for the federal tax impact. TSYS recognizes potential interest and penalties related to the underpayment of income taxes as income tax expense in the Consolidated Statements of Income. Gross accrued interest and penalties on unrecognized tax benefits totaled $2.0 million and $1.8 million as of December 31, 2017 and December 31, 2016, respectively. The total amounts of unrecognized income tax benefits as of December 31, 2017 and December 31, 2016 that, if recognized, would affect the effective tax rates are $24.5 million and $17.0 million (net of the federal benefit on state tax issues), respectively, which includes interest and penalties of $1.3 million and $1.2 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 14 Commitments and Contingencies LEASE AND PURCHASE COMMITMENTS: TSYS is obligated under noncancelable operating leases for computer equipment, software and facilities. Additionally, the Company has long-term obligations which consist of required minimum future payments under contracts with the Company’s distributors and other service providers. The future minimum lease payments under noncancelable operating leases and purchase commitments with remaining terms greater than one year for the next five years and thereafter and in the aggregate as of December 31, 2017, are as follows: (in thousands) 2018 $ 145,866 2019 148,006 2020 71,651 2021 38,803 2022 28,095 Thereafter 77,555 Total future minimum commitment payments $ 509,976 The majority of computer equipment lease commitments come with a renewal option or an option to terminate the lease. These lease commitments may be replaced with new leases which allow the Company to continually update its computer equipment. Total rental expense under all operating leases in 2017, 2016 and 2015 was $134.0 million, $122.9 million and $124.8 million, respectively. CONTRACTUAL COMMITMENTS: In the normal course of its business, the Company maintains long-term processing contracts with its clients. These processing contracts contain commitments, including, but not limited to, minimum standards and time frames against which the Company's performance is measured. In the event the Company does not meet its contractual commitments with its clients, the Company may incur penalties and certain clients may have the right to terminate their contracts with the Company. The Company does not believe that it will fail to meet its contractual commitments to an extent that will result in a material adverse effect on its financial position, results of operations or cash flows. CONTINGENCIES: Legal Proceedings – General The Company is subject to various legal proceedings and claims and is also subject to information requests, inquiries and investigations arising out of the ordinary conduct of its business. The Company establishes accruals for litigation and similar matters when those matters present loss contingencies that TSYS determines to be both probable and reasonably estimable in accordance with GAAP. Legal costs are expensed as incurred. In the opinion of management, based on current knowledge and in part upon the advice of legal counsel, all matters not specifically discussed below are believed to be adequately covered by insurance, or, if not covered, the possibility of losses from such matters are believed to be remote or such matters are of such kind or involve such amounts that would not have a material adverse effect on the financial position, results of operations or cash flows of the Company if disposed of unfavorably. TelexFree Matter ProPay, Inc. (ProPay), a subsidiary of the Company, has been named as one of a number of defendants (including other merchant processors) in several purported class action lawsuits relating to the activities of TelexFree, Inc. and its affiliates and principals. TelexFree is a former merchant customer of ProPay. With regard to TelexFree, each purported class action lawsuit generally alleges that TelexFree engaged in an improper multi-tier marketing scheme involving voice-over Internet protocol telephone services. The plaintiffs in each of the purported class action complaints generally allege that the various merchant processor defendants, including ProPay, aided and abetted the improper activities of TelexFree. TelexFree filed for bankruptcy protection in Nevada. The bankruptcy proceeding was subsequently transferred to the Massachusetts Bankruptcy Court. Specifically, ProPay has been named as one of a number of defendants (including other merchant processors) in each of the following purported class action complaints relating to TelexFree: (i) Waldermara Martin, et al. v. TelexFree, Inc., et al. (Case No. BK-S-14-12524-ABL) (Bankr. D. Nev.); (ii) Anthony Cellucci, et al. v. TelexFree, Inc., et. al. (Case No. 4:14-BK-40987) (Bankr. D. Mass.); (iii) Maduako C. Ferguson Sr., et al. v. Telexelectric, LLP, et. al (Case No. 5:14-CV-00316-D) (E.D.N.C.); (iv) Todd Cook v. TelexElectric LLP et al. (Case No. 2:14-CV-00134) (N.D. Ga.); (v) Felicia Guevara v. James M. Merrill et al., CA No. 1:14-cv-22405-DPG) (S.D. Fla.); (vi) Reverend Jeremiah Githere, et al. v. TelexElectric LLP et al. (Case No. 1:14-CV-12825-GAO) (D. Mass.); (vii) Paulo Eduardo Ferrari et al. v. Telexfree, Inc. et al. (Case No. 14-04080) (Bankr. D. Mass); (viii) Magalhaes v. TelexFree, Inc., et al., No. 14-cv-12437 (D. Mass.); (ix) Griffith v. Merrill et al., No. 14-CV-12058 (D. Mass.); (x) Abelgadir v. Telexelectric, LLP, No. 14-09857 (S.D.N.Y.); and (xi) Rita Dos Santos, v. TelexElectric, LLP et al ., 2:15-cv-01906-NVW (D. Ariz.) (together, the “Actions”). On October 21, 2014, the Judicial Panel on Multidistrict Litigation (“JPML”) transferred and consolidated the Actions filed before that date to the United States District Court for the District of Massachusetts (the “Consolidated Action”). The JPML subsequently transferred the remaining Actions to the Consolidated Action. The Consolidated Action is styled In Re: TelexFree Securities Litigation (4:14-md-02566-TSH) (D. Mass.). The plaintiffs in the Consolidated Action filed a First Consolidated Amended Complaint on March 31, 2015 and filed a Second Consolidated Amended Complaint (the “Second Amended Complaint”) on April 30, 2015. The Second Amended Complaint, which supersedes the complaints filed prior to consolidation of the Actions, purports to bring claims on behalf of all persons who purchased certain TelexFree “memberships” and suffered a “net loss” between January 1, 2012 and April 16, 2014. With respect to ProPay, the Second Amended Complaint alleges that ProPay aided and abetted tortious acts committed by TelexFree, and that ProPay was unjustly enriched in the course of providing payment processing services to TelexFree. Several defendants, including ProPay, moved to dismiss the Second Amended Complaint on June 2, 2015. The court held a hearing on the motions to dismiss on November 2, 2015, but has not yet issued a ruling. At present, pursuant to a court order, all discovery in the action is stayed pending the resolution of parallel criminal proceedings against certain former principals of TelexFree, Inc. Despite that stay of discovery, the lead plaintiffs have subpoenaed documents previously produced by ProPay pursuant to the Federal Rules of Bankruptcy Procedure to the court-appointed trustee in the TelexFree bankruptcy proceeding. ProPay has filed a motion to quash that subpoena. ProPay’s motion remains pending before the Court. On April 4, 2017, lead plaintiffs moved the court for leave to further amend the Second Amended Complaint, and submitted a proposed amendment with their motion. The proposed amendment seeks to add new defendants to the case but does not make any new or additional allegations against ProPay. ProPay, along with certain other defendants in the litigation, have not opposed the lead plaintiffs’ motion to further amend the Second Amended Complaint so long as the amendment, if allowed by the court, would not delay the court’s decision on the pending motions to dismiss. Lead plaintiffs’ motion for leave to amend is pending before the court. ProPay has also received various subpoenas, a seizure warrant and other inquiries requesting information regarding TelexFree from (i) the Commonwealth of Massachusetts, Securities Division, (ii) United States Securities and Exchange Commission, (iii) US Immigration and Customs Enforcement, and (iv) the bankruptcy Trustee of the Chapter 11 entities of TelexFree, Inc., TelexFree, LLC and TelexFree Financial, Inc. Pursuant to the seizure warrant served by the United States Attorney’s Office for the District of Massachusetts, ProPay delivered all funds associated with TelexFree held for chargeback and other purposes by ProPay to US Immigration and Customs Enforcement. In addition, ProPay received a notice of potential claim from the bankruptcy Trustee as a result of the relationship of ProPay with TelexFree and its affiliates. The above proceedings and actions are preliminary in nature. While the Company and ProPay intend to vigorously defend matters arising out of the relationship of ProPay with TelexFree and believe ProPay has substantial defenses related to these purported claims, the Company currently cannot reasonably estimate losses attributable to these matters. GUARANTEES AND INDEMNIFICATIONS: The Company has entered into processing and licensing agreements with its clients that include intellectual property indemnification clauses. Under these clauses, the Company generally agrees to indemnify its clients, subject to certain exceptions, against legal claims that TSYS' services or systems infringe on certain third party patents, copyrights or other proprietary rights. In the event of such a claim, the Company is generally obligated to hold the client harmless and pay for related losses, liabilities, costs and expenses, including, without limitation, court costs and reasonable attorney's fees. The Company has not made any indemnification payments pursuant to these indemnification clauses. A portion of the Company’s business is conducted through distributors that provide load and reload services to cardholders at their locations. Members of the Company’s distribution and reload network collect cardholder funds and remit them by electronic transfer to the issuing banks for deposit in the cardholder accounts. The Company’s issuing banks typically receive cardholders’ funds no earlier than three business days after they are collected by the distributor. If any distributor fails to remit cardholders’ funds to the Company’s issuing banks, the Company typically reimburses the issuing banks for the shortfall created thereby. The Company manages the risk associated with this process through a formalized set of credit standards, volume limits and deposit requirements for certain distributors and by typically maintaining the right to offset any settlement shortfall against the commissions payable to the relevant distributor. To date, the Company has not experienced any significant losses associated with settlement failures and the Company had not recorded a settlement guarantee liability as of December 31, 2017. As of December 31, 2017 and 2016, the Company’s estimated gross settlement exposure was $16.7 million and $13.8 million, respectively. GPR cardholders can incur charges in excess of the funds available in their accounts and are liable for the resulting overdrawn account balance. Although the Company generally declines authorization attempts for amounts that exceed the available balance in a cardholder's account, the application of the Networks' rules and regulations, the timing of the settlement of transactions and the assessment of subscription, maintenance or other fees can, among other things, result in overdrawn card accounts. The Company also provides, as a courtesy and in its discretion, certain cardholders with a "cushion" that allows them to overdraw their card accounts by up to $10. In addition, eligible cardholders may enroll in the issuing banks' overdraft protection programs and fund transactions that exceed the available balance in their accounts. The Company generally provides the funds used as part of these overdraft programs (one of the Company’s issuing banks will advance the first $1.0 million on behalf of its cardholders) and is responsible to the issuing banks for any losses associated with any overdrawn account balances. As of December 31, 2017 and 2016, cardholders’ overdrawn account balances totaled $25.5 million and $21.2 million, respectively. As of December 31, 2017 and 2016, the Company’s reserves for the losses it estimates will arise from processing customer transactions, debit card overdrafts, chargebacks for unauthorized card use and merchant-related chargebacks due to non-delivery of goods or services was $9.5 million and $10.5 million, respectively. The Company has not recorded a liability for guarantees or indemnities in the accompanying consolidated balance sheet since the maximum amount of potential future payments under such guarantees and indemnities is not determinable. PRIVATE EQUITY INVESTMENTS: The Company has limited partnership agreements with two Atlanta-based venture capital funds focused exclusively on investing in technology-enabled financial services companies. Pursuant to each limited partnership agreement, the Company has committed to invest up to $20.0 million in each fund so long as its ownership interest in each fund does not exceed 50%. As of December 31, 2017 and 2016, the Company had made contributions to the funds of $22.8 million and $20.1 million, respectively. The Company had investments, including equity in income, totaling $26.1 million and $22.8 million, respectively, as of December 31, 2017 and 2016. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefit Plans | |
Employee Benefit Plans | Note 15 Employee Benefit Plans The Company provides benefits to its employees by offering employees participation in certain defined contribution plans. The employee benefit plans through which TSYS provided benefits to its employees during 2017 are described as follows: RETIREMENT SAVINGS AND STOCK PURCHASE PLANS: TSYS maintains a single plan, the TSYS Retirement Savings Plan, which is designed to reward all team members of TSYS U.S.-based companies with a uniform employer contribution. The terms of the plan provide for the Company to match 100% of the employee contribution up to 4% of eligible compensation. The Company can make discretionary contributions up to another 4% based upon business conditions. The Company also maintains a stock purchase plan for employees. The Company contributes 15% of employee contributions. The funds are used to purchase presently issued and outstanding shares of TSYS common stock on the open market at fair market value for the benefit of participants. The Company's contributions to the plans charged to expense for the years ended December 31, 2017, 2016 and 2015 are as follows: (in thousands) 2017 2016 2015 TSYS Retirement Savings Plan $ 23,113 21,077 24,169 TSYS Stock Purchase Plan 1,600 1,514 1,378 POSTRETIREMENT MEDICAL BENEFITS PLAN: TSYS provides certain medical benefits to qualified retirees through a postretirement medical benefits plan, which is immaterial to the Company's consolidated financial statements. The measurement of the benefit expense and accrual of benefit costs associated with the plan do not reflect the effects of the 2003 Medicare Act. Additionally, the benefit expense and accrued benefit cost associated with the plan, as well as any potential impact of the effects of the 2003 Medicare Act, are not significant to the Company's consolidated financial statements. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity | |
Equity | Note 16 Equity DIVIDENDS: Dividends on common stock of $79.0 million were paid in 2017, compared to $73.4 million and $73.7 million in 2016 and 2015, respectively. EQUITY COMPENSATION PLANS: The following table summarizes TSYS' equity compensation plans by category as of December 31, 2017: (a) (b) (c) (in thousands, except per share data) Plan Category Number of Weighted- Number of securities Equity compensation plans approved by security holders 4,561 $ 37.15 1 14,888 2 The Company does not have any equity compensation plans that were not approved by security holders. 1 Weighted-average exercise price represents 2.7 million options only and does not include restricted share units that have no exercise price. 2 Shares available for future grants under the Total System Services, Inc. 2017 Omnibus Plan, which could be in the form of options, nonvested awards and performance shares. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Share-Based Compensation | |
Share-Based Compensation | Note 17 Share-Based Compensation TSYS has various long-term incentive plans under which the Compensation Committee of the Board of Directors has the authority to grant share-based compensation to TSYS employees. Share-Based Compensation and Long-Term Incentive Plans TSYS maintains the Total System Services, Inc. 2017 Omnibus Plan, Total System Services, Inc. 2012 Omnibus Plan, Total System Services, Inc. 2007 Omnibus Plan, Total System Services, Inc. 2002 Long-Term Incentive Plan, Total System Services, Inc. 2000 Long-Term Incentive Plan and the Amended and Restated Netspend Holdings, Inc. 2004 Equity Incentive Plan for Options and Restricted Shares Assumed by Total System Services, Inc. to advance the interests of TSYS and its shareholders through awards that give employees and directors a personal stake in TSYS' growth, development and financial success. Awards under these plans are designed to motivate employees and directors to devote their best efforts to the business of TSYS. Awards will also help TSYS attract and retain the services of employees and directors who are in a position to make significant contributions to TSYS' success. The plans are administered by the Compensation Committee of the Company's Board of Directors and enable the Company to grant nonqualified and incentive stock options, stock appreciation rights, restricted stock and restricted stock units, performance units or performance shares, cash-based awards and other stock-based awards. All stock options must have a maximum life of no more than ten years from the date of grant. The exercise price will not be less than 100% of the fair market value of TSYS' common stock at the time of grant. Any shares related to awards which terminate by expiration, forfeiture, cancellation or otherwise without the issuance of shares, are settled in shares, or are exchanged with the Committee's permission, prior to the issuance of shares, for awards not involving shares, shall be available again for grant under theTotal System Services, Inc. 2017 Omnibus Plan. Effective as of, or prior to, April 27, 2017, no additional awards may be made from any of the other plans. The aggregate number of shares of TSYS stock which may be granted, or could have been granted, to participants pursuant to awards granted under the various plans may not exceed the following: Total System Services, Inc. 2017 Omnibus Plan – 15 million shares; Total System Services, Inc. 2012 Omnibus Plan - 17 million shares; Total System Services, Inc. 2007 Omnibus Plan - 5 million shares; Total System Services, Inc. 2002 Long – Term Incentive Plan - 9.4 million shares; and Total System Services, Inc. 2000 Long-Term Incentive Plan - 2.4 million shares. Share-based compensation costs are classified as selling, general and administrative expenses on the Company’s consolidated statements of income and corporate administration and other expenses for segment reporting purposes. TSYS’ share-based compensation costs are expensed, rather than capitalized, as these awards are typically granted to individuals not involved in capitalizable activities. For the year ended December 31, 2017, share-based compensation was $42.4 million compared to $43.7 million and $41.5 million for the same periods in 2016 and 2015, respectively. Nonvested Awards The Company granted shares of TSYS common stock to certain key employees and non-management members of its Board of Directors. The grants to certain key employees were issued under nonvested stock bonus awards and are typically for services to be provided in the future and vest over a period of up to four years. The grants to the Board of Directors were fully vested on the date of grant. The market value of the TSYS common stock at the date of issuance is charged as compensation expense over the vesting periods or derived service periods. The following table summarizes the number of shares granted each year: 2017 2016 2015 Number of shares granted 329,051 362,804 388,211 Market value ( in millions ) $ 18.1 16.8 14.9 A summary of the status of TSYS' nonvested shares as of December 31, 2017, 2016 and 2015 and the changes during the periods are presented below: 2017 2016 2015 (in thousands, except per share data) Nonvested shares Shares Weighted Shares Weighted Shares Weighted Outstanding at beginning of year 863 $ 37.78 1,146 $ 31.11 1,769 $ 26.75 Granted 329 55.06 363 46.23 388 38.38 Vested (458) 36.01 (563) 29.95 (930) 26.05 Forfeited/canceled/adjusted (100) 43.82 (84) 36.79 (81) 28.78 Outstanding at end of year 634 $ 47.19 863 $ 37.78 1,146 $ 31.11 As of December 31, 2017, there was approximately $15.8 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements. That cost is expected to be recognized over a remaining weighted average period of 1.8 years. Performance- and Market-Based Awards The Company granted performance- and market-based shares to certain key executives. The Company has also granted performance-based shares to certain key employees. The performance- and market-based goals are established by the Compensation Committee of the Board of Directors and will vest up to a maximum of 200% of target. During 2017 and 2016, the Compensation Committee established performance goals based on various financial and market-based measures. Compensation expense for performance-based shares is measured on the grant date based on the quoted market price of TSYS common stock. The Company estimates the probability of achieving the goals through the performance period and expenses the awards on a straight-line basis over the derived service period. The fair value of market-based awards is estimated on the grant date using a Monte Carlo simulation model. The Company expenses market-based awards on a straight-line basis. Compensation costs related to performance- and market-based shares are recognized through the longer of the performance period, the vesting period, or the derived service period. As of December 31, 2017, there was approximately $16.0 million of unrecognized compensation cost related to TSYS performance-based awards that is expected to be recognized through December 2018. As of December 31, 2017, there was approximately $1.6 million of unrecognized compensation cost related to TSYS market-based awards that is expected to be recognized through December 2018. The following table summarizes the market-based awards granted during the years 2017, 2016 and 2015: Year Performance Performance Number of Period Expensed 2017 December 2019 TSR December 2019 2016 December 2017 TSR December 2017 2016 December 2018 TSR December 2018 2015 July 2016, 2017 and 2018 TSR July 2018 2015 December 2017 TSR December 2017 The following table summarizes the performance-based awards granted during the years 2017, 2016 and 2015: Year Performance Performance Number of Period Expensed 2017 December 2019 Adjusted Diluted EPS 1 December 2019 2017 December 2017 Net Revenue and Adjusted Diluted EPS 1 December 2019 2017 December 2017 Issuer Solutions Segment Net Revenue and Adjusted Segment Operating Income 2 December 2019 2016 December 2016 Revenues before Reimbursable Items 4 and Adjusted EPS 3 December 2016 2016 December 2017 Adjusted EPS 3 December 2017 2016 December 2018 Merchant Segment Net Revenue, Corporate Accountability Operating Income (CAOI) 2 and attainment of synergies from TransFirst acquisition December 2018 2016 December 2018 Revenue Growth and CAOI Growth 2 December 2018 2016 December 2018 Merchant Segment Net Revenue and CAOI 2 December 2018 2016 December 2018 Adjusted EPS 3 December 2018 2016 December 2016 Revenues before Reimbursable Items 4 and Adjusted EPS 3 December 2018 2015 December 2017 Adjusted EPS 3 December 2017 2015 December 2015 Revenues before Reimbursable Items 4 and Adjusted EPS 3 December 2018 1 Adjusted Diluted EPS is adjusted earnings divided by weighted average diluted shares outstanding used for diluted EPS calculations. Adjusted earnings is net income excluding the after-tax impact of share-based compensation expenses, amortization of acquisition intangibles, merger and acquisition expenses for completed acquisitions and litigation claims, judgments or settlement expenses and related legal expenses. 2 CAOI is adjusted segment operating income and includes corporate administrative expenses. Adjusted segment operating income is defined in Note 20. 3 Adjusted EPS is adjusted earnings divided by weighted average shares outstanding used for basic EPS. 4 Revenues before Reimbursable Items is total revenue less reimbursable items which consist of out-of-pocket expenses which are reimbursed by the Company’s clients. These expenses consist primarily of postage, access fees and third-party software. A summary of the awards authorized in each year is below: Total Number of Shares Awarded 1 Potential Number of Performance-and Market-Based Shares to be Vested 2 Year Potential Performance-and Market-Based Shares Will Fully Vest 3 2017 319,811 596,192 2016 531,700 903,364 2015 383,814 687,015 1 Shares awarded does not include dividend equivalents 2 Includes dividend equivalents 3 Represents year in which authorized performance and market-based shares will fully vest if they had been granted during 2017, 2016, and 2015, respectively. A summary of the status of TSYS' performance- and market-based nonvested shares as of December 31, 2017, 2016 and 2015 and changes during those periods are presented below: 2017 2016 2015 (in thousands, except per share data) Performance- and market-based nonvested shares Shares 1 Weighted Shares 1 Weighted Shares 1 Weighted Outstanding at beginning of year 982 $ 33.43 918 $ 31.19 766 $ 25.86 Granted 618 52.48 540 45.91 384 36.84 Vested (621) 14.85 (140) 37.91 (241) 22.92 Forfeited/canceled/adjusted (174) 46.98 (336) 37.70 9 22.20 Outstanding at end of year 805 $ 45.41 982 $ 33.43 918 $ 31.19 1 Includes dividend equivalents Stock Option Awards Stock options generally become exercisable in three equal annual installments on the anniversaries of the date of grant and expire ten years from the date of grant. The required service period for retirement eligible employees is typically 12 or 18 months. For retirement eligible employees who retire prior to completing this required service period, the options vest on a pro-rata basis based upon the number of months employed during the full service period. For retirement eligible employees who retire after the required 18-month service period, the options become fully vested upon retirement. For retirement eligible employees who retire after the required 12-month service period, the option holder is deemed to have continued employment through the end of the vesting period and the options continue to vest in accordance with their terms. During 2017, 2016 and 2015, the Company granted stock options to key TSYS executive officers and non-management members of its Board of Directors. The grants to key TSYS executive officers were issued for services to be provided in the future and vest over a period of three years. The grants to the Board of Directors were fully vested on the date of grant. The weighted average fair value of the options granted was estimated on the date of grant using the Black-Scholes-Merton option-pricing model. The following table summarizes the weighted average assumptions, and the weighted average fair value of the options: 2017 2016 2015 Number of options granted 550,527 687,685 613,473 Weighted average exercise price $ 54.97 47.01 $ 39.01 Risk-free interest rate 1.78 % 1.24 % 1.73 % Expected volatility 21.72 % 21.53 % 20.80 % Expected term (years) 4.6 4.5 6.3 Dividend yield 0.73 % 0.86 % 1.04 % Weighted average fair value $ 10.85 8.50 $ 8.27 A summary of TSYS' stock option activity as of December 31, 2017, 2016 and 2015, and changes during the years ended on those dates is presented below: 2017 2016 2015 Options: (in thousands, except per share data) Options Weighted Options Weighted Options Weighted Outstanding at beginning of year 2,996 $ 32.78 2,887 $ 28.07 4,892 $ 23.83 Granted 551 54.97 688 47.01 613 39.01 Exercised (730) 30.05 (500) 23.43 (2,586) 22.68 Forfeited/canceled (122) 52.76 (79) 43.49 (32) 20.79 Outstanding at end of year 2,695 $ 37.15 2,996 $ 32.78 2,887 $ 28.07 Options exercisable at year-end 1,758 $ 31.00 1,877 $ 28.45 1,439 $ 25.17 Weighted average fair value of options granted during the year $ 10.85 $ 8.50 $ 8.27 As of December 31, 2017 the average remaining contractual life and intrinsic value of TSYS’ outstanding and exercisable stock options were as follows: Outstanding Exercisable Average remaining contractual life (in years) 6.9 6.1 Aggregate intrinsic value (in thousands) $ 112,964 84,572 Shares Issued for Options Exercised During 2017, 2016 and 2015, employees of the Company exercised options for shares of TSYS common stock that were issued from treasury. The table below summarizes these stock option exercises by year: (in thousands) Options Exercised and Intrinsic Value 2017 730 $ 23,629 2016 500 12,984 2015 2,586 67,702 For awards granted before January 1, 2006 that were not fully vested on January 1, 2006, the Company recorded the tax benefits from the exercise of stock options as increases to the "Additional paid-in capital" line item of the Consolidated Balance Sheets. Through December 31, 2016, if the Company recognized tax benefits, the Company recorded these tax benefits from share-based compensation costs as cash inflows in the financing section and cash outflows in the operating section in the Consolidated Statement of Cash Flows. The Company elected to use the short-cut method to calculate its historical pool of windfall tax benefits. As discussed in Note 1, the Company adopted ASU 2016-09 effective January 1, 2017 on a prospective basis. As of December 31, 2017, there was approximately $2.9 million of total unrecognized compensation cost related to TSYS stock options that is expected to be recognized over a remaining weighted average period of 1.6 years. |
Treasury Stock
Treasury Stock | 12 Months Ended |
Dec. 31, 2017 | |
Treasury Stock | |
Treasury Stock | Note 18 Treasury Stock The following table summarizes shares held as treasury stock and their related carrying value as of December 31: (in thousands) Number of Treasury Treasury Shares Cost 2017 21,862 $ 909,960 2016 19,314 646,047 2015 19,988 641,664 Stock Repurchase Plan In April 2010, TSYS announced a stock repurchase plan to purchase up to 10 million shares of TSYS stock. The shares may be purchased from time to time over the next two years at prices considered attractive to the Company. By January 2014, the TSYS Board had approved several increases in the number of shares that could be repurchased under its share repurchase plan to up to 28 million shares of TSYS stock. The expiration date of the plan was extended to April 30, 2015. In January 2015, TSYS announced that its Board had approved a new stock repurchase plan to purchase up to 20 million shares of TSYS stock. The shares may be purchased from time to time at prices considered appropriate. There is no expiration date for the plan. The previous plan was terminated. The table below summarizes these repurchases by year: (in thousands, except per share data) Total Number of Average Price Paid Repurchased Shares Cost 2017 3,850 $ 73.41 $ 282,645 2016 500 48.57 24,287 2015 5,150 47.01 242,085 The following table sets forth information regarding the Company's purchases of its common stock on a monthly basis during the three months ended December 31, 2017: (in thousands, except per share data) Total Number of Shares Purchased Average Price Paid per Share 1 Total Number of Cumulative shares Purchased as Part of Publicly announced Plans or Programs 2 Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs 2 October 2017 300 $ 71.26 6,350 13,650 November 2017 1,500 73.05 7,850 12,150 December 2017 1,667 1 75.22 9,500 10,500 Total 3,467 3 $ 73.41 1 Denotes a total of 16,837 shares (not rounded) in December withheld for payment of taxes. 2 In January 2015, TSYS’ Board of Directors approved a stock repurchase plan to repurchase up to 20 million shares of TSYS stock. The shares may be purchased from time to time at prices considered appropriate. There is no expiration date for the plan. 3 Total number of shares purchased amounts may not total due to rounding. Treasury Shares In 2008, the Compensation Committee approved "share withholding for taxes" for all employee nonvested awards, and also for employee stock options under specified circumstances. The dollar amount of the income tax liability from each exercise is converted into TSYS shares and withheld at the statutory minimum. The shares are added to the treasury account and TSYS remits funds to the Internal Revenue Service to settle the tax liability. During 2017 and 2016, the Company acquired 20,875 shares for approximately $1.6 million and acquired 144,839 shares for approximately $6.0 million, respectively, as a result of share withholding for taxes. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Other Comprehensive Income (Loss) | |
Other Comprehensive Income (Loss) | Note 19 Other Comprehensive Income (Loss) Comprehensive income (loss) for TSYS consists of net income, cumulative foreign currency translation adjustments, unrealized gains on available for sale securities and the recognition of an overfunded or underfunded status of a defined benefit postretirement plan recorded as a component of shareholders' equity. The income tax effects allocated to and the cumulative balance of each component of accumulated other comprehensive income (AOCI) (loss) are as follows: (in thousands) Beginning Pretax Tax Net-of-tax Ending As of December 31, 2014 $ 3,749 (17,280) (1,605) (15,675) $ (11,926) Foreign currency translation adjustments $ (13,592) (22,997) (1,548) (21,449) $ (35,041) Transfer from noncontrolling interest (NCI) 28 - - - 28 Gain on available for sale securities 1,105 2,177 779 1,398 2,503 Change in AOCI related to postretirement healthcare plans 533 (2,449) (882) (1,567) (1,034) As of December 31, 2015 $ (11,926) (23,269) (1,651) (21,618) $ (33,544) Foreign currency translation adjustments $ (35,041) (36,341) (5,872) (30,469) $ (65,510) Transfer from NCI 28 - - - 28 Gain on available for sale securities 2,503 11,394 4,035 7,359 9,862 Change in AOCI related to postretirement healthcare plans (1,034) 775 279 496 (538) As of December 31, 2016 $ (33,544) (24,172) (1,558) (22,614) $ (56,158) Foreign currency translation adjustments $ (65,510) 24,794 2,776 22,018 $ (43,492) Transfer from NCI 28 - - - 28 Loss on available for sale securities 9,862 (2,050) (634) (1,416) 8,446 Change in AOCI related to postretirement healthcare plans (538) (682) (90) (592) (1,130) As of December 31, 2017 $ (56,158) 22,062 2,052 20,010 $ (36,148) Consistent with its overall strategy of pursuing international investment opportunities, TSYS adopted the permanent reinvestment exception under GAAP, with respect to future earnings of certain foreign subsidiaries. Its decision to permanently reinvest foreign earnings offshore means TSYS will no longer allocate taxes to foreign currency translation adjustments associated with these foreign subsidiaries accumulated in other comprehensive income. |
Segment Reporting, including Ge
Segment Reporting, including Geographic Area Data and Major Customers | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting, including Geographic Area Data and Major Customers | |
Segment Reporting, including Geographic Area Data and Major Customers | Note 20 Segment Reporting, including Geographic Area Data and Major Customers TSYS provides global payment processing and other services to card-issuing and merchant acquiring institutions in the United States and internationally through online accounting and electronic payment processing systems. Corporate expenses, such as finance, legal, human resources, mergers and acquisitions and investor relations are categorized as Corporate Administration and Other. In the first quarter of 2017, the Company combined the North America Services and International Services segments for purposes of segment reporting into the new Issuer Solutions segment, since they provide similar services to similar customers and to reflect the manner in which decisions on allocation of resources are made. As a result, beginning in 2017, the Company reports its financial performance based on three operating segments - Issuer Solutions, Merchant Solutions and Netspend. All prior periods have been restated to conform to the new presentation. In April 2016, TSYS completed its acquisition of TransFirst which is part of the Merchant Solutions segment and its results are included in the following tables. Refer to Note 22 for more information on acquisitions. Issuer Solutions includes electronic payment processing services and other services provided from within the North America region and internationally. Merchant Solutions includes electronic processing and other services provided to merchants and merchant acquirers. The Netspend segment provides GPR prepaid debit and payroll cards, demand deposit accounts and other financial service solutions to the underbanked and other consumers and businesses in the United States. At TSYS, the chief operating decision maker (CODM) is a group consisting of Senior Executive Management. The information utilized by the CODM consists of the financial statements and the main metrics monitored are revenue growth and growth in profitability. TSYS’ operating segments share certain resources, such as information technology support, that TSYS allocates based on various metrics depending on the nature of the service. Operating Segments Years Ended December 31, (in thousands) 2017 2016 2015 Adjusted operating income by segment: Issuer Solutions (a) $ 574,580 525,025 489,151 Merchant Solutions (b) 391,466 307,595 150,225 Netspend (c) 182,082 160,371 137,837 Corporate Administration and Other (148,564) (135,996) (109,036) Adjusted segment operating income 1 (d) 999,564 856,995 668,177 Less: Share-based compensation 42,409 43,728 41,549 TransFirst and Cayan M&A and integration expenses 2 13,367 28,176 - Litigation, claims, judgments or settlements 1,947 21,719 - Acquisition intangible amortization 207,797 189,990 92,521 Operating income 734,044 573,382 534,107 Nonoperating expenses, net (116,482) (112,350) (40,543) Income before income taxes and equity in income of equity investments $ 617,562 461,032 493,564 Net revenue by segment: Issuer Solutions (e) $ 1,594,959 1,515,462 1,473,914 Merchant Solutions (f) 1,103,682 898,533 474,040 Netspend (g) 746,870 663,579 580,377 Segment net revenue 3,445,511 3,077,574 2,528,331 Less: intersegment revenues 45,179 35,698 28,982 Net revenue 3 (h) 3,400,332 3,041,876 2,499,349 Add: reimbursable items, interchange and payment network fees 1,527,633 1,128,201 280,192 Total revenues $ 4,927,965 4,170,077 2,779,541 Adjusted segment operating margin on net revenue: Issuer Solutions (a)/(e) Merchant Solutions (b)/(f) Netspend (c)/(g) Adjusted segment operating margin on net revenue (d)/(h) 1 Adjusted segment operating income excludes acquisition intangible amortization, TransFirst and Cayan M&A and integration expenses, share-based compensation and expenses associated with Corporate Administration and Other. 2 Excludes share-based compensation 3 Net revenue is total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and payment network fees charged by the card associations or payment networks that are recorded by TSYS as expense . Adjusted segment operating income excludes acquisition intangible amortization, TransFirst and Cayan M&A expenses, share-based compensation and expenses associated with Corporate Administration and Other. The following table presents the Company’s depreciation expense by segment: Operating Segments Years Ended December 31, (in thousands) 2017 2016 2015 Depreciation and amortization: Issuer Solutions $ 147,914 141,309 134,436 Merchant Solutions 29,477 25,553 18,268 Netspend 15,838 13,133 10,686 Segment depreciation and amortization 193,229 179,995 163,390 Acquisition intangible amortization 207,797 189,990 92,521 Corporate Administration and Other 4,880 3,561 2,353 Total depreciation and amortization $ 405,906 373,546 258,264 The following table presents the Company’s total assets by segment: As of December 31, (in thousands) 2017 2016 Issuer Solutions $ 5,735,195 5,667,280 Merchant Solutions 3,136,395 3,295,509 Netspend 1,418,644 1,474,595 Intersegment assets (3,958,545) (4,071,207) Total assets $ 6,331,689 6,366,177 The Company maintains property and equipment, net of accumulated depreciation and amortization, in the following geographic areas: As of (in thousands) December 31, 2017 December 31, 2016 United States $ 273,690 236,913 Europe 43,586 38,866 Other 7,942 6,566 Total $ 325,218 282,345 The following tables reconcile geographic revenues to external revenues by operating segment based on the domicile of the Company’s customers for the years ended December 31: 2017 (in thousands) Issuer Solutions Merchant Netspend Total Percentage of Revenues United States $ 1,051,292 2,428,327 745,235 $ 4,224,854 85.7 % Europe 1 320,400 284 - 320,684 6.5 Canada 1 313,674 1,496 - 315,170 6.4 Other 1 66,102 1,155 - 67,257 1.4 Total $ 1,751,468 2,431,262 745,235 $ 4,927,965 100.0 % 2016 (in thousands) Issuer Solutions Merchant Netspend Total Percentage of Revenues United States $ 1,032,381 1,826,775 660,845 $ 3,520,001 84.4 % Europe 1 306,894 227 - 307,121 7.4 Canada 1 284,028 705 - 284,733 6.8 Other 1 57,460 762 - 58,222 1.4 Total $ 1,680,763 1,828,469 660,845 $ 4,170,077 100.0 % 2015 (in thousands) Issuer Solutions Merchant Netspend Total Percentage of Revenues United States $ 981,588 548,079 580,377 $ 2,110,044 75.9 % Europe 1 304,628 22 - 304,650 11.0 Canada 1 288,728 355 - 289,083 10.4 Other 1 75,085 679 - 75,764 2.7 Total $ 1,650,029 549,135 580,377 $ 2,779,541 100.0 % 1 Certain of these revenues are impacted by movements in foreign currency exchange rates. MAJOR CUSTOMER: For the years ended December 31, 2017, 2016 and 2015, the Company had no major customers. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | Note 21 Supplemental Cash Flow Information Nonvested Share Awards The Company has issued shares of TSYS common stock to certain key employees and non-management members of its Board of Directors. The grants to certain key employees were issued in the form of nonvested stock bonus awards for services to be provided in the future by such officers and employees. The grants to the Board of Directors were fully vested on the date of grant. Refer to Note 18 for more information on nonvested share awards. Equipment Acquired Under Capital Lease Obligations and Software Acquired Under License Agreements The Company acquired computer equipment under capital leases and software under license agreements in the amount of $40.8 million, $1.8 million and $4.1 million in 2017, 2016 and 2015, respectively. Software Acquired Under Direct Financing The Company did not acquire any software under direct financing in 2017 or 2016. The Company acquired software under direct financing in the amount of $30.0 million in 2015. Refer to Note 11 for more information. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions | |
Acquisitions | Note 22 Acquisitions Redeemable Noncontrolling Interest - CPAY 2017 On February 3, 2017, the Company acquired an additional 10% equity interest in CPAY from a privately-owned company for $70.0 million. This purchase reduced the remaining redeemable noncontrolling interest in CPAY to 15% of its total outstanding equity and extended the put call arrangement until April 2018. The transaction resulted in a decrease to noncontrolling interest of $9.8 million and a decrease to additional paid-in-capital of $60.2 million TransFirst 2017 In 2017, the Company decreased the Merchant Solutions goodwill due to deferred tax adjustments of $12.1 million and the write-off of a note receivable of $727,000 on the opening balance sheet of TransFirst. 2016 On April 1, 2016, the Company acquired all of the outstanding capital stock of TransFirst for an aggregate purchase price of $2.35 billion in cash as of the closing, which was subject to certain working capital and other adjustments, as described in the Purchase Agreement. TransFirst previously operated as a privately held company, under the ownership of Vista Equity Partners. The results of the newly acquired business are being reported by TSYS as part of the Merchant Solutions segment. The Company funded the cash consideration and the payment of transaction related expenses through a combination of cash-on-hand and proceeds from debt financings, including proceeds drawn under the Company’s 2016 Credit Agreement and the proceeds from the issuance of the 2016 Notes, which together included proceeds of approximately $2.35 billion. The goodwill amount of $1.7 billion arising from the acquisition is primarily attributable to the expansion of the Merchant Solutions Segment’s customer base, differentiated distribution channels and economies of scale expected from combining the operations of TSYS and TransFirst. All of the goodwill was assigned to TSYS’ Merchant Solutions segment. The goodwill recognized is not expected to be deductible for income tax purposes. The following table summarizes the consideration paid for TransFirst and the initially recognized amounts of the identifiable assets acquired and liabilities assumed on April 1, 2016 (the acquisition date). (in thousands) Consideration Cash $ 2,351,400 Fair value of total consideration transferred $ 2,351,400 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash $ 5,907 Accounts receivable, net 62,313 Property, equipment and software 12,726 Identifiable intangible assets 814,131 Deferred tax asset 2,244 Other assets 7,509 Deferred tax liability (224,654) Other liabilities (56,864) Total identifiable net assets 623,312 Goodwill 1,728,088 Total identifiable assets acquired and liabilities assumed $ 2,351,400 During 2016, there was a $55,000 increase in the purchase price due to the working capital adjustment required by the Purchase Agreement. In addition, there was a $2.0 million decrease in identifiable intangible assets, a $363,700 increase in liabilities and an $18.0 million increase in deferred tax liabilities that resulted in a net increase to goodwill of $20.4 million. The measurement period during which changes in assets, liabilities, equity interests, or items of consideration are subject to adjustment ends up to one year following the acquisition date. Identifiable intangible assets acquired in the TransFirst acquisition include merchant relationships, channel relationships, current technology, the TransFirst trade name, not-to-compete agreements and a favorable lease. The identifiable intangible assets had no significant estimated residual value. These intangible assets are being amortized over their estimated useful lives of one to ten years based on the pattern of expected future economic benefit, which approximates a straight-line basis over the useful lives of the assets. The fair value of the acquired identifiable intangible assets of $814.1 million was estimated using the income approach (discounted cash flow and relief from royalty methods) and cost approach. The fair values and useful lives of the identified intangible assets were primarily determined using forecasted cash flows, which included estimates for certain assumptions such as revenues, expenses, attrition rates and royalty rates. The estimated fair value of identifiable intangible assets acquired in the acquisition and the related estimated weighted average useful lives are as follows: (in millions) Fair Value Weighted Average Useful Life (in years) Merchant relationships $ 588.0 Channel relationships 121.0 Current technology 72.0 Trade name 16.0 Covenants not-to-compete 15.0 Favorable lease 2.1 Total acquired identifiable intangible assets $ 814.1 7.1 The fair value measurement of the identifiable intangible assets represents Level 2 and Level 3 measurements as defined by GAAP. Key assumptions include (a) cash flow projections based on market participant and internal data, (b) a discount rate of 8.5%, (c) a pre-tax royalty rate range of 1%-3%, (d) attrition rates of 11%-16%, (e) an effective tax rate of 40%, and (f) a terminal value based on a long-term sustainable growth rate of 3%. In connection with the acquisition, TSYS incurred $32.3 million in acquisition related costs primarily related to professional, legal and accounting costs, and integration expenses which are recorded in selling, general and administrative expenses and $9.8 million related to the bridge term loan facility, which is included in interest expense. These costs are expensed as incurred and are included on the income statement for the twelve months ended December 31, 2016. The Company recorded $1.3 billion of revenue and $30.0 million of operating income since the acquisition date that is included in the consolidated results through the twelve months ended December 31, 2016 as a result of the TransFirst acquisition. EMEA 2016 In March 2016, the Company completed the acquisition of the remaining 45% interest in TSYS Managed Services EMEA Limited (EMEA) from Merchants Limited. The Company acquired the outstanding stock from Merchants Limited for approximately £4.2 million, or $5.9 million, in cash. In connection with the purchase, the Company repaid the outstanding balance of the existing debt between EMEA and Merchants Limited of approximately £2.2 million, or $3.0 million. Netspend 2017 In 2017, the Company adjusted the Netspend goodwill due to a tax adjustment of $1.8 million relating to uncertain tax positions. 2016 In 2016, TSYS adjusted the goodwill associated with the Netspend acquisition by $584,000 as a result of adjustments to the deferred tax assets acquired in the transaction. 2015 In September 2015, TSYS purchased certain assets for its Netspend segment for $750,000. The purchase qualifies as a business combination in accordance with GAAP. The Company recorded an acquisition technology intangible asset for the amount of the purchase price. This acquisition intangible asset represents software and is being amortized over a five year life. There were no other material assets included in the purchase. The acquisition included the employment of certain key employees which resulted in the transaction qualifying as a business combination. In 2015, the Company adjusted goodwill for Netspend to include an additional $627,000 for a change in deferred taxes associated with the acquisition. For more information, refer to Note 5. |
Collaborative Arrangement
Collaborative Arrangement | 12 Months Ended |
Dec. 31, 2017 | |
Collaborative Arrangement | |
Collaborative Arrangement | Note 23 Collaborative Arrangement TSYS has a 45% ownership interest in an enterprise jointly owned with two other entities which operates aircraft for the owners' internal use. The arrangement allows each entity access to the aircraft and each entity pays for its usage of the aircraft. Each quarter, the net operating costs of the enterprise are shared among the owners. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share | |
Earnings Per Share | Note 24 Earnings Per Share The following table illustrates basic and diluted EPS under the guidance of GAAP for the years ended December 31, 2017, 2016 and 2015: 2017 2016 2015 (in thousands, except per share data) Common Common Common Basic EPS: Net income attributable to TSYS common shareholders $ 586,185 319,638 364,044 Less income allocated to nonvested awards (1,373) (1,557) (3,164) Net income allocated to common stock for EPS calculation (a) $ 584,812 318,081 360,880 Average common shares outstanding (b) 183,309 182,744 182,465 Basic EPS (a)/(b) $ 3.19 1.74 1.98 Diluted EPS: Net income attributable to TSYS common shareholders $ 586,185 319,638 364,044 Less income allocated to nonvested awards (1,373) (1,557) (3,148) Add income allocated to nonvested awards 1 1,373 1,557 - Net income allocated to common stock for EPS calculation (c) $ 586,185 319,638 360,896 Average common shares outstanding 183,309 182,744 182,465 Increase due to assumed issuance of shares related to common equivalent shares outstanding 1,162 813 1,157 Average nonvested awards 1 959 891 - Average common and common equivalent shares outstanding (d) 185,430 184,448 183,622 Diluted EPS (c)/(d) $ 3.16 1.73 1.97 1 In accordance with the diluted EPS guidance under the two-class method, the Company uses the approach-either the treasury stock method or the two-class method assuming a participating security is not exercised- that is more dilutive. In 2017 and 2016, the Company used the two-class method. In 2015, the Company used the treasury stock method. 2017 2016 2015 (in thousands, except per share data) Participating Securities Participating Securities Participating Securities Basic EPS: Net income allocated to nonvested awards (a) $ 1,373 1,557 3,164 Nonvested awards (b) 435 911 1,617 Basic EPS (a)/(b) $ 3.16 1.71 1.96 Diluted EPS: Net income allocated to nonvested awards (c) $ 1,366 1,552 3,148 Average common and common equivalent shares outstanding (d) 435 911 1,617 Diluted EPS (c)/(d) $ 3.14 1.70 1.95 The diluted EPS calculation excludes stock options and nonvested awards that are exercisable into 0.3 million, 0.4 million and 0.6 million common shares for the years ended December 31, 2017, 2016 and 2015, respectively, because their inclusion would have been anti-dilutive. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events | |
Subsequent Events | Note 25 Subsequent Events CFPB Finalizes Changes to Prepaid Accounts Rule On January 25, 2018, the Consumer Financial Protection Bureau (the CFPB) announced that it has finalized updates to its 2016 prepaid rule. The CFPB’s 2016 prepaid rule put in place requirements for treatment of funds on lost or stolen cards, error resolution and investigation, upfront fee disclosures, access to account information, and overdraft features if offered in conjunction with prepaid accounts. The changes announced by the CFPB adjust requirements for resolving errors on unregistered accounts, provide greater flexibility for credit cards linked to digital wallets, and extend the effective date of the rule by one year to April 2019. Acquisition of Cayan On December 18, 2017, TSYS announced it entered into an agreement to acquire Cayan, a payment technology company focused on integrated payment solutions and merchant acquiring, in an all cash transaction valued at approximately $1.05 billion. On January 11, 2018, the Company completed the acquisition of Cayan. The Company funded the acquisition through a combination of cash-on-hand and proceeds from borrowings, including the credit agreement discussed below. Term Loan Facility On January 10, 2018, TSYS entered into a Credit Agreement (the “Credit Agreement”) with Bank of America, N.A. as Administrative Agent and other lenders party thereto from time to time. The Credit Agreement provides the Company with a $450 million two-year term loan facility (the “Term Loan Facility”). The Term Loan Facility was used to finance, in part, the Company’s acquisition of Cayan. Borrowings under the Credit Agreement will accrue interest at the base rate (as defined in the Credit Agreement) or, for certain euro-denominated borrowings, the London Interbank Offered Rate (“LIBOR”), in each case plus a margin based on the Company’s corporate credit ratings. The applicable margin for loans bearing interest based on LIBOR ranges from 1.000% to 1.750%. The applicable margin for loans bearing interest based on the base rate ranges from 0.000% to 0.750%. The Credit Agreement contains customary covenants regarding, among other matters, the maintenance of insurance, the preservation and maintenance of the Company’s corporate existence, material compliance with laws and the payment of taxes and other material obligations. The Credit Agreement also contains financial covenants requiring the maintenance as of the end of each fiscal quarter of (i) a minimum fixed charge coverage ratio of 2.5 to 1.0 and (ii) a maximum consolidated leverage ratio of 3.5 to 1.0, which may be increased upon the occurrence of certain events (including the consummation of the acquisition of Cayan). Management performed an evaluation of the Company’s activity as of the date these audited financial statements were issued and has concluded that, other than as set forth above, there are no significant events requiring disclosure. |
Schedule II Schedule - Valuatio
Schedule II Schedule - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Schedule II Schedule - Valuation and Qualifying Accounts | |
Schedule II Schedule - Valuation and Qualifying Accounts | Schedule II Schedule — Valuation and Qualifying Accounts TOTAL SYSTEM SERVICES, INC. Schedule II Valuation and Qualifying Accounts (in thousands) Additions Changes in Balance at allowances, charges to Balance at beginning expenses and changes end of period to other accounts Deductions of period Year ended December 31, 2015: Provision for doubtful accounts $ 3,222 (58) (1) (3) $ Provision for billing adjustments $ 866 (114) (1) (3) $ Provision for merchant losses $ 1,118 4,667 (1) (3) $ Transaction processing provisions - processing errors $ 4,630 6,976 (2) (3) $ Provision for fraud losses $ 6,312 41,264 (4) (3) $ Deferred tax valuation allowance $ 18,963 541 (5) (6) $ Year ended December 31, 2016: Provision for doubtful accounts $ 1,757 6,970 (1) (3) $ Provision for billing adjustments $ 926 614 (1) (3) $ Provision for merchant losses $ 1,366 1,682 (1) (3) $ Transaction processing provisions - processing errors $ 6,457 3,669 (2) (3) $ Provision for fraud losses $ 9,391 49,362 (4) (3) $ Deferred tax valuation allowance $ 18,446 4,124 (5) (6) $ Year ended December 31, 2017: Provision for doubtful accounts $ 3,482 10,796 (1) (3) $ Provision for billing adjustments $ 1,360 (627) (1) (3) $ Provision for merchant losses $ 2,039 5,002 (1) (3) $ Transaction processing provisions - processing errors $ 2,851 6,714 (2) (3) $ Provision for fraud losses $ 10,527 51,194 (4) (3) $ Deferred tax valuation allowance $ 21,301 8,648 (5) (6) $ (1) Amount reflected includes charges to (recoveries of) bad debt expense which are classified in selling, general and administrative expenses and the charges for billing adjustment which are recorded against revenues. (2) Amount reflected is the change in transaction processing provisions reflected in cost of services expenses. (3) Accounts deemed to be uncollectible and written off during the year as it relates to bad debts. Amounts that relate to billing adjustments and transaction processing provisions reflect actual billing adjustments and processing errors charged against the allowances. Amounts that related to cardholder losses reflect write-offs against the provision for cardholder losses. (4) Amount represents the charges in the provision for cardholder losses reflected in cost of services expenses. (5) Amount represents an increase in the amount of deferred tax assets, which more likely than not, will not be realized. (6) Amount represents a decrease in the amount of deferred tax assets, which more likely than not, will not be realized. |
Basis of Presentation and Sum35
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Intangible assets | |
PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION | PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION: The accompanying consolidated financial statements, which are prepared in accordance with U.S. generally accepted accounting principles (GAAP) include the accounts of TSYS and its wholly- and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In addition, the Company evaluates its relationships with other entities to identify whether they are variable interest entities and to assess whether it is the primary beneficiary of such entities. If the determination is made that the Company is the primary beneficiary, then that entity is included in the consolidated financial statements. |
RISKS AND UNCERTAINTIES AND USE OF ESTIMATES | RISKS AND UNCERTAINTIES AND USE OF ESTIMATES: Factors that could affect the Company's future operating results and cause actual results to vary materially from expectations include, but are not limited to, lower than anticipated growth from existing clients, an inability to attract new clients and grow internationally, loss of a major customer or other significant client, loss of a major supplier, an inability to grow through acquisitions or successfully integrate acquisitions, an inability to control expenses, technology changes, the impact of the application of and/or changes in accounting principles, financial services consolidation, changes in regulatory requirements, a decline in the use of cards as a payment mechanism, disruption of the Company's international operations, breach of the Company's security systems, a decline in the financial stability of the Company's clients and uncertain economic conditions. Negative developments in these or other risk factors could have a material adverse effect on the Company's financial position, results of operations and cash flows. The Company has prepared the accompanying consolidated financial statements in conformity with U.S. GAAP. The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. These estimates and assumptions are developed based upon all information available. Actual results could differ from estimated amounts. |
ACQUISITIONS - PURCHASE PRICE ALLOCATION | ACQUISITIONS — PURCHASE PRICE ALLOCATION: TSYS' purchase price allocation methodology requires the Company to make assumptions and to apply judgment to estimate the fair value of acquired assets and liabilities. TSYS estimates the fair value of assets and liabilities based upon appraised market values, the carrying value of the acquired assets and widely accepted valuation techniques, including the cost approach, discounted cash flows and market multiple analyses. Management determines the fair value of fixed assets and identifiable intangible assets such as developed technology or customer relationships, and any other significant assets or liabilities. TSYS adjusts the purchase price allocation, as necessary, up to one year after the acquisition closing date as TSYS obtains more information regarding asset valuations and liabilities assumed. Unanticipated events or circumstances may occur which could affect the accuracy of the Company's fair value estimates, including assumptions regarding industry economic factors and business strategies, and may result in an impairment or a new allocation of purchase price. TSYS may allocate part of the purchase price of future acquisitions to contingent consideration as required by GAAP for business combinations. The fair value calculation of contingent consideration will involve a number of assumptions that are subjective in nature and which may differ significantly from actual results. TSYS may experience volatility in its earnings to some degree in future reporting periods as a result of these fair value measurements. |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS: The Company sold all of its stock of GP Network Corporation (representing 54% ownership of the company) and all of its stock of TSYS Japan Godo Kaisha (representing 100% ownership of the company) in April 2014. In 2015, the Company recorded an additional gain of $1.4 million, net of tax, related to the return of cash that was placed in escrow during closing and tax adjustments associated with the transaction. |
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS: Cash on hand and investments with a maturity of three months or less when purchased are considered to be cash equivalents. |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE: Accounts receivable balances are stated net of allowances for doubtful accounts and billing adjustments. TSYS records an allowance for doubtful accounts when it is probable that the accounts receivable balance will not be collected. When estimating the allowance for doubtful accounts, the Company takes into consideration such factors as its day-to-day knowledge of the financial position of specific clients, the industry and size of its clients, the overall composition of its accounts receivable aging, prior history with specific customers of accounts receivable write-offs and prior experience of allowances in proportion to the overall receivable balance. This analysis includes an ongoing and continuous communication with its largest clients and those clients with past due balances. A financial decline of any one of the Company's large clients could have a material adverse effect on collectability of receivables and thus the adequacy of the allowance for doubtful accounts. Increases in the allowance for doubtful accounts are recorded as charges to bad debt expense and are reflected in selling, general and administrative expenses in the Company's Consolidated Statements of Income. Write-offs of uncollectible accounts are charged against the allowance for doubtful accounts. TSYS records an allowance for billing adjustments for actual and potential billing discrepancies. When estimating the allowance for billing adjustments, the Company considers its overall history of billing adjustments, as well as its history with specific clients and known disputes. Increases in the allowance for billing adjustments are recorded as a reduction of revenues in the Company's Consolidated Statements of Income and actual adjustments to invoices are charged against the allowance for billing adjustments. |
GOODWILL | GOODWILL: Goodwill results from the excess of cost over the fair value of net assets of businesses acquired. Goodwill is tested for impairment at least annually. Equity investment goodwill, which is not reported as goodwill in the Company's Consolidated Balance Sheet, but is reported as a component of the equity investment, was $48.8 million and $46.1 million as of December 31, 2017 and 2016, respectively. |
SOFTWARE DEVELOPMENT COSTS | SOFTWARE DEVELOPMENT COSTS: Costs of computer software to be sold, leased or otherwise marketed are capitalized once technological feasibility of the software product has been established. Costs incurred prior to establishing technological feasibility are expensed as incurred. Technological feasibility is established when the Company has completed a detailed program design and has determined that a product can be produced to meet its design specifications, including functions, features and technical performance requirements. Capitalization of costs ceases when the product is generally available to clients. In evaluating software development costs for recoverability, expected cash flows are estimated by management should events indicate a loss may have been triggered. The Company evaluates the unamortized capitalized costs of software development, the impairment of which is determined by expected undiscounted future operating cash flows of the software as compared to the carrying amount of the software product. The amount by which the unamortized software development costs exceed the lower of the carrying amount or fair value is written off in the period that such determination is made. If the actual cash flows are not consistent with the Company's estimates, a material write-off may result and net income may be materially different than was initially recorded. Assumptions and estimates about future cash flows and remaining useful lives of software are complex and subjective. They can be affected by a variety of factors, including industry and economic trends, changes in the Company’s business strategy and changes in the internal forecasts. The amount by which the unamortized software development costs exceed the net realizable value is written off in the period that such determination is made. Software development costs are amortized using the straight-line method over its estimated useful life, which ranges from three to ten years. The Company also develops software that is used internally. Internal-use software development costs are capitalized once: (1) the preliminary project stage is completed, (2) management authorizes and commits to funding a computer software project, and (3) it is probable that the project will be completed and the software will be used to perform the function intended. Costs incurred prior to meeting the qualifications are expensed as incurred. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. Internal-use software development costs are amortized using the straight-line method over its estimated useful life which ranges from three to ten years. Software development costs may become impaired in situations where development efforts are abandoned due to the viability of the planned project becoming doubtful or due to technological obsolescence of the planned software product. |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT: Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Buildings and improvements are depreciated over estimated useful lives of 5-40 years, computer and other equipment over estimated useful lives of 2-5 years, and furniture and other equipment over estimated useful lives of 3-15 years. The Company evaluates impairment losses on long-lived assets used in operations in accordance with the provisions of GAAP. All ordinary repairs and maintenance costs are expensed as incurred. Maintenance costs that extend the asset life are capitalized and amortized over the remaining estimated life of the asset. |
CONTRACT ACQUISITION COSTS | CONTRACT ACQUISITION COSTS: The Company capitalizes contract acquisition costs related to signing incentives for signing or renewing long-term contracts. The Company capitalizes internal conversion costs in accordance with GAAP. Contract acquisition costs are amortized using the straight-line method over the contract term or the expected customer relationship period when a renewal is anticipated, beginning when the client's cardholder accounts are converted and producing revenues. The amortization of contract acquisition costs associated with cash payments for client incentives is included as a reduction of revenues in the Company's Consolidated Statements of Income. The amortization of contract acquisition costs associated with conversion activity is recorded as cost of services in the Company's Consolidated Statements of Income. |
EQUITY METHOD INVESTMENTS | EQUITY METHOD INVESTMENTS: TSYS' 49% investment in Total System Services de México, S.A. de C.V. (TSYS de México), an electronic payment processing support operation located in Toluca, México, is accounted for using the equity method of accounting, as is TSYS' 44.56% investment in China UnionPay Data Co., Ltd. (CUP Data) headquartered in Shanghai, China. The Company has entered into limited partnership agreements in connection with investing in two Atlanta-based venture capital funds focused exclusively on investing in technology-enabled financial services companies. TSYS' equity investments are recorded initially at cost and subsequently adjusted for equity in earnings, cash contributions and distributions, and foreign currency translation adjustments. |
INCOME TAXES | INCOME TAXES: Income taxes reflected in TSYS' consolidated financial statements are computed based on the taxable income of TSYS and its affiliated subsidiaries. A consolidated U.S. federal income tax return is filed for TSYS and its majority- owned U.S. subsidiaries. Additionally, income tax returns are also filed in states where TSYS and its subsidiaries have filing obligations and in foreign jurisdictions where TSYS has a foreign affiliate. The Company accounts for income taxes in accordance with the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Reserves against the carrying value of a deferred tax asset are established when necessary to reflect the decreased likelihood of realization of a deferred asset in the future. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Income tax provisions require the use of management judgments, which are subject to challenge by various taxing authorities. Contingency reserves are periodically established where the amount of the contingency can be reasonably determined and is likely to occur. Reductions in contingency reserves are recognized when tax disputes are settled or examination periods lapse. Significant estimates used in accounting for income taxes relate to the determination of taxable income, the determination of temporary differences between book and tax basis, as well as estimates on the realizability of tax credits and net operating losses. TSYS recognizes potential interest and penalties related to the underpayment of income taxes as income tax expense in the Consolidated Statements of Income. |
UP-FRONT DISTRIBUTOR AND PARTNER PAYMENTS | UP-FRONT DISTRIBUTOR AND PARTNER PAYMENTS: The Company makes up-front contractual payments to third-party distributors and partners. The Company assesses each up-front payment to determine whether it meets the criteria of an asset as defined by U.S. GAAP. If these criteria are met, the Company capitalizes the up-front payment and recognizes the capitalized amount as expense ratably over the benefit period, which is generally the contract period. If the contract requires the distributor or partner to perform specific acts (i.e., achieve a sales goal) and no other conditions exist for the distributor or partner to earn or retain the up-front payment, then the Company capitalizes the payment and recognizes it as an expense when the performance conditions have been met. Up-front distributor and partner payments are classified on the Consolidated Balance Sheets as other non-current assets and recorded as a cost of services in the Consolidated Statements of Income. |
IMPAIRMENT OF LONG-LIVED ASSETS | IMPAIRMENT OF LONG-LIVED ASSETS: The Company reviews long-lived assets, such as property and equipment and intangibles subject to amortization, including contract acquisition costs and certain computer software, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If upon a triggering event the Company determines that the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet. |
TRANSACTION PROCESSING PROVISIONS | TRANSACTION PROCESSING PROVISIONS: The Company has recorded an accrual for contract contingencies (performance penalties) and processing errors. A significant number of the Company's contracts with large clients contain service level agreements which can result in TSYS incurring performance penalties if contractually required service levels are not met. When providing for these accruals, the Company takes into consideration such factors as the prior history of performance penalties and processing errors incurred, actual contractual penalty charge rates in the Company's contracts, progress towards milestones and known processing errors. As of December 31, 2017 and 2016, the Company had transaction processing provisions of $2.2 million and $2.9 million, respectively. These accruals are included in other current liabilities in the accompanying Consolidated Balance Sheets. Increases and decreases in transaction processing provisions are charged to cost of services in the Company's Consolidated Statements of Income, and payments or credits for performance penalties and processing errors are charged against the accrual. |
PROVISION FOR CARDHOLDER LOSSES | PROVISION FOR CARDHOLDER LOSSES: The Company is exposed to losses due to cardholder fraud, payment defaults and other forms of cardholder activity as well as losses due to non-performance of third parties who receive cardholder funds for transmittal to the issuing banks (banks that issue MasterCard International or Visa USA, Inc. branded cards to customers). The Company establishes a reserve for the losses it estimates will arise from processing customer transactions, debit card overdrafts, chargebacks for unauthorized card use and merchant-related chargebacks due to non-delivery of goods and services. These reserves are established based upon historical loss and recovery rates and cardholder activity for which specific losses can be identified. The provision for cardholder losses was approximately $9.5 million and $10.5 million as of December 31, 2017 and 2016, respectively. The charges to provisions for cardholder losses are included in cost of services in the Consolidated Statements of Income and other current liabilities in the Consolidated Balance Sheets. The Company regularly updates its reserve estimate as new facts become known and events occur that may impact the settlement or recovery of losses. |
PROVISION FOR MERCHANT LOSSES | PROVISION FOR MERCHANT LOSSES: The Company has potential liability for losses resulting from disputes between a cardholder and a merchant that arise as a result of, among other things, the cardholder's dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant's favor. In these cases, the transaction is "charged back" to the merchant, which means the purchase price is refunded to the customer by the card-issuing bank and charged to the merchant. If the merchant is unable to fund the refund, TSYS must do so. TSYS also bears the risk of reject losses arising from the fact that TSYS collects fees from its merchants after the monthly billing period. If the merchant has gone out of business during such period, TSYS may be unable to collect such fees. TSYS maintains cash deposits or requires the pledge of a letter of credit from certain merchants, generally those with higher average transaction size where the card is not present when the charge is made or the product or service is delivered after the charge is made, in order to offset potential contingent liabilities such as chargebacks and reject losses that would arise if the merchant went out of business. Most chargeback and reject losses are charged to cost of services as they are incurred. However, the Company also maintains a provision against losses, including major fraud losses, which are both less predictable and involve larger amounts. The loss provision was established using historical loss rates, applied to recent bankcard processing volume. As of December 31, 2017 and 2016 , the Company had a merchant loss provision in the amount of $4.3 million and $2.0 million, respectively. |
LEASES | LEASES: The Company is obligated under noncancelable leases for computer equipment, software and facilities. As these leases expire, they will be evaluated and renewed or replaced by similar leases based on need. For purposes of applying the accounting and reporting standards, leases are classified from the standpoint of the lessee as capital or operating leases. Rental payments on operating leases are charged to expense over the lease term. If rental payments are not made on a straight-line basis, rental expense nevertheless shall be recognized on a straight-line basis unless another systematic and rational basis is more representative of the time pattern in which use benefit is derived from the leased property, in which case that basis shall be used. Certain of the Company's operating leases are for office space. The Company will make various alterations (leasehold improvements) to the office space and capitalize these costs as part of property and equipment. Leasehold improvements are amortized on a straight-line basis over the useful life of the improvement or the term of the lease, whichever is shorter. |
REDEEMABLE NONCONTROLLING INTEREST | REDEEMABLE NONCONTROLLING INTEREST: In connection with the acquisition of Central Payment Co., LLC (CPAY), the Company is party to call and put arrangements with respect to the membership units that represent the remaining noncontrolling interest of CPAY. The call arrangement is exercisable by TSYS and the put arrangement is exercisable by the seller. The put arrangement is outside the control of the Company by requiring the Company to purchase the seller’s entire equity interest in CPAY at a put price at fair value. The put arrangement is recorded on the consolidated balance sheet and is classified as redeemable noncontrolling interest outside of permanent equity. |
TREASURY STOCK | TREASURY STOCK: The Company uses the cost method when it purchases its own common stock as treasury shares or issues treasury stock upon option exercises and displays treasury stock as a reduction of shareholders' equity. |
FAIR VALUES OF FINANCIAL INSTRUMENTS | FAIR VALUES OF FINANCIAL INSTRUMENTS: The Company uses financial instruments in the normal course of its business. The carrying values of cash equivalents, accounts receivable, accounts payable, accrued salaries and employee benefits, and other current liabilities approximate their fair value due to the short-term maturities of these assets and liabilities. The fair value of the Company's long-term debt and obligations under capital leases is not significantly different from its carrying value. Investments in equity method investments are accounted for using the equity method of accounting and pertain to privately held companies. The Company believes the fair values of its investments in equity method investments exceed their respective carrying values. |
FOREIGN CURRENCY TRANSLATION | FOREIGN CURRENCY TRANSLATION: The Company maintains several different foreign operations whose functional currency is their local currency. Foreign currency financial statements of the Company's Mexican and Chinese equity investments, the Company's wholly owned subsidiaries and the Company's majority owned subsidiaries, as well as the Company's division and branches in the United Kingdom and China, are translated into U.S. dollars at current exchange rates, except for revenues, costs and expenses, and net income which are translated at the average exchange rates for each reporting period. Net gains or losses resulting from the currency translation of assets and liabilities of the Company's foreign operations, net of tax when applicable, are accumulated in a separate section of shareholders' equity titled accumulated other comprehensive income (loss). Gains and losses on transactions denominated in currencies other than the functional currencies are included in determining net income for the period in which exchange rates change. |
REVENUE RECOGNITION | REVENUE RECOGNITION: Revenue is recognized when it is realized or realizable and earned, which is deemed to occur when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been performed; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. The Company accrues for rights of refund, processing errors or penalties, or other related allowances based on historical experience. The Company's Issuer Solutions revenues are derived from long-term processing contracts with financial and nonfinancial institutions and are generally recognized as the services are performed. Payment processing services revenues are generated primarily from charges based on: · The number of accounts on file; · Transactions and authorizations processed; · Statements mailed; and · Cards embossed and mailed and other processing services for cardholder accounts on file. Most of these contracts have prescribed annual revenue minimums, penalties for early termination, and service level agreements which may impact contractual fees if certain service levels are not achieved. Revenue is recognized as the services are performed, primarily on a per unit basis. Processing contracts generally range from three to ten years in length. When providing payment processing services, the Company frequently enters into customer arrangements to provide multiple services that may also include conversion or implementation services, business process outsourcing services such as call center services, web-based services, and other payment processing-related services. Revenue for these services is generally recognized as they are performed on a per unit basis each month or ratably over the term of the contract. The Company’s Merchant Solutions revenues are partially derived from relationships with thousands of individual merchants whose contracts range from thirty days to five years. Additionally, part of the revenues are derived from long-term processing contracts with large financial institutions, other merchant acquirers and merchant organizations which generally range from three to eight years and provide for penalties for early termination. Merchant services revenue is generated primarily from processing all payment forms including credit, debit and electronic benefits transfer for merchants of all sizes across a wide array of retail market segments. The products and services offered include: · Authorization and capture of electronic transactions; · Clearing and settlement of electronic transactions; · Information reporting services related to electronic transactions; · Merchant billing services; and · Point-of-sale terminal services. Revenue is recognized for merchant services as those services are performed, primarily measured on a per unit basis. When providing merchant processing services, the Company frequently enters into customer arrangements to provide multiple services that may also include conversion or implementation services, business process outsourcing services such as call center services, terminal services, and other merchant processing-related services. Revenue for these services is generally recognized as they are performed on a per unit basis each month or ratably over the term of the contract. Revenues on point-of-sale terminal equipment are recognized upon the transfer of ownership and shipment of product. With the acquisition of TransFirst Holdings Corp. (TransFirst) on April 1, 2016, TSYS included TransFirst’s results as part of the Merchant Solutions segment. TransFirst’s revenues are reported gross, which includes amounts paid for interchange and assessments, as TransFirst is the principal in the contractual relationship with its customers. Expenses covering interchange and payment network fees are included in TransFirst’s cost of services and are directly attributable to processing fee revenues and are recognized in the same period as the related revenue. The Company’s Netspend revenues principally consist of a portion of the service fees collected from cardholders and interchange revenues received by the issuing banks in connection with the programs Netspend manages. Cardholders are charged fees in connection with Netspend’s products and services as follows: · Transactions - Cardholders are typically charged a fee for each Personal Identification Number (PIN) and signature-based purchase transaction made using their GPR cards, unless the cardholder is on a monthly or annual service plan, in which case the cardholder is instead charged a monthly or annual subscription fee, as applicable. Cardholders are also charged fees for Automated Teller Machines (ATM) withdrawals and other transactions conducted at ATMs. · Customer Service and Maintenance - Cardholders are typically charged fees for balance inquiries made through Netspend’s call centers. Cardholders are also charged a monthly maintenance fee after a specified period of inactivity. · Additional Products and Services - Cardholders are charged fees associated with additional products and services offered in connection with certain GPR cards, including the use of overdraft features, a variety of bill payment options, custom card designs and card-to-card transfers of funds initiated through the call centers. · Other - Cardholders are charged fees in connection with the acquisition and reloading of the GPR cards at retailers and the Company receives a portion of these amounts in some cases. Revenue resulting from the service fees charged to the cardholders described above is recognized when the fees are charged because the earnings process is substantially complete, except for revenue resulting from the initial activation of cards and annual subscription fees. Revenue resulting from the initial activation of cards is recognized ratably, net of commissions paid to distributors, over the average account life, which is approximately six months for GPR cards. Revenue resulting from annual subscription fees is recognized ratably over the annual period to which the fees relate. Revenues also include fees charged in connection with program management and processing services the Company provides for private-label programs. Revenue resulting from these fees is recognized when the Company has fulfilled its obligations under the underlying service agreements. Netspend derives revenue from a portion of the interchange fees remitted by merchants when cardholders make purchases using their GPR cards. Subject to applicable law, interchange fees are fixed by the card associations and network organizations (Networks). Interchange revenue is recognized net of sponsorship, licensing and processing fees charged by the Networks for services they provide in processing purchase transactions routed through them. Interchange revenue is recognized during the period that the purchase transactions occur. Also included in interchange revenue are fees earned from branding agreements with the Networks. When a sale involves multiple deliverables, revenue recognition is affected by the determination of the number of deliverables in an arrangement, whether those deliverables may be separated into multiple units of accounting, and the standalone selling price of each unit of accounting which affects the amount of revenue allocated to each unit. Pursuant to Accounting Standards Codification (ASC) 605, the Company uses vendor-specific objective evidence (VSOE) of the standalone selling price of its services when it exists to determine the amount of revenue to allocate to each unit of accounting. The Company establishes VSOE using the price charged when the same service is sold separately (on a standalone basis). In most situations, the Company does not have sufficient VSOE. In these situations, TSYS considers whether sufficient third party evidence (TPE) of standalone selling price exists for the Company’s services. However, the Company typically is not able to determine TPE and has not used this measure of selling price due to the unique and proprietary nature of some of its services and the inability to reliably verify relevant standalone third party prices. When there is insufficient evidence of VSOE and TPE, the Company has made its best estimate of the standalone selling price (ESP) of that service for purposes of allocating revenue to each unit of accounting. When determining ESP, TSYS uses limited standalone sales data that do not meet the Company’s criteria to establish VSOE, management pricing strategies, residual selling price data when VSOE exists for a group of elements, the cost of providing the services and the related margin objectives. Consideration is also given to geographies in which the services are sold or delivered, customer classifications, and market conditions including competitor pricing strategies and benchmarking studies. Revenue is recognized when the revenue recognition criteria for each unit of accounting have been met. There were no material changes or impact to revenue for current contractual arrangements during the years ended December 31, 2017, 2016 and 2015 due to any changes in the determination of the number of deliverables in an arrangement, units of accounting, or estimates of VSOE or ESP. In many situations, the Company enters into arrangements with customers to provide conversion or implementation services in addition to processing services where the conversion or implementation services do not have standalone value. For these arrangements, conversion or implementation services that do not have standalone value, are recognized over the expected customer relationship (contract term) as the related processing services are performed. The Company’s other services generally have standalone value and constitute separate units of accounting for revenue recognition purposes. Customer arrangements entered into prior to 2011 (prior to the adoption of Accounting Standards Update (ASU) 2009-13 “ Multiple-Deliverable Revenue Arrangements, ” an update to ASC Topic 605 “ Revenue Recognition, ” and formerly known as EITF 08-1, “ Revenue Arrangements with Multiple Deliverables ”) often included services for which sufficient objective and reliable evidence of fair value did not exist. In these situations, the deliverables were combined and recognized as a single unit of accounting based on the proportional performance for the combined unit. For pre-2011 arrangements that have not expired, have not been materially modified or amended, or terminated, the Company continues to recognize revenue in accordance with these policies in the accompanying consolidated financial statements. Beginning in 2011, services in new or materially modified arrangements of this nature were divided into separate units of accounting and revenue is now allocated to each unit of accounting based on the relative selling price method as disclosed above. As the services in the pre-2011 arrangements are generally delivered over the same term with consistent patterns of performance, there is no material difference in the timing or pattern of revenue recognition for each group of arrangements (pre-2011 arrangements and those new or materially modified thereafter). The Company’s multiple element arrangements may include one or more elements that are subject to other topics including software revenue recognition and leasing guidance. The consideration for these multiple element arrangements is allocated to each group of deliverables – those subject to ASC 605-25 and those subject to other topics based on the revised guidance in ASU 2009-13. Arrangement revenue for each group of deliverables is then further separated, allocated, and recognized based on applicable guidance. In regards to taxes assessed by a governmental authority imposed directly on a revenue producing transaction, the Company reports its revenues on a net basis. |
REIMBURSABLE ITEMS | REIMBURSABLE ITEMS: Reimbursable items consist of out-of-pocket expenses which are reimbursed by the Company's clients. These expenses consist primarily of postage, access fees and third party software. Reimbursable items are recorded on a gross basis in total revenues and cost of services. |
INTERCHANGE AND PAYMENT NETWORK FEES | INTERCHANGE AND PAYMENT NETWORK FEES: Interchange and payment network fees are charged by the card associations or payment networks . Depending upon the transaction type, the fees are a percentage of the transaction’s dollar value, a fixed amount, or a combination of the two methods. Certain interchange and payment network fees are recorded in both total revenues and cost of services. |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION: GAAP establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. A public entity must measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award. The Company estimates forfeitures when recognizing compensation cost. The estimate of forfeitures will be adjusted by the Company as actual forfeitures differ from its estimates, resulting in compensation cost only for those awards that actually vest. The effect of the change in estimated forfeitures is recognized as compensation costs in the period the change in estimate occurred. In estimating its forfeiture rate, the Company stratified its data based upon historical experience to determine separate forfeiture rates for the different award grants. The Company currently estimates a forfeiture rate for existing stock option grants to TSYS non-executive employees, and other TSYS share-based awards. Currently, TSYS estimates a forfeiture rate in the range of 0% for executive level employees and up to 8% for other employees. The Company has issued its vested awards to directors and nonvested awards to certain employees. The market value of the common stock at the date of issuance is recognized as compensation expense immediately for vested awards and over the vesting period of the nonvested awards. For nonvested award grants that have pro rata vesting, the Company recognizes compensation expense using the straight-line method over the vesting period of the award. |
ADVERTISING | ADVERTISING: Advertising costs are expensed as incurred or the first time the advertising takes place except for direct-response advertising and television advertising production costs. Direct-response advertising consists of commission paid to affiliate marketers for the new funded customer accounts generated by them. Direct-response advertising costs are capitalized and amortized over the average life of the new accounts, which is approximately one year. Television advertising production costs consist of the costs of developing and filming television ads. Television advertising production costs are capitalized when the production services are received and expensed in the period when the advertising first takes place. Advertising expense for 2017, 2016 and 2015 was $13.2 million, $11.5 million and $9.6 million, respectively. |
NONCONTROLLING INTEREST | NONCONTROLLING INTEREST: Noncontrolling interest in earnings of subsidiaries represents the minority shareholders' share of the net income or loss of CPAY. Refer to Note 22 for more information on acquisitions. |
EARNINGS PER SHARE | EARNINGS PER SHARE: Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated to reflect the potential dilution that would occur if stock options or other contracts to issue common stock were exercised. Diluted EPS is calculated by dividing net income by weighted average common and common equivalent shares outstanding. Common equivalent shares are calculated using the treasury stock method. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are "participating securities" as defined by GAAP, and therefore should be included in EPS using the two-class method. The two-class method is an earnings allocation method for computing EPS when an entity's capital structure includes two or more classes of common stock or common stock and participating securities. It determines EPS based on dividends declared on common stock and participating securities and participation rights of participating securities in any undistributed earnings. |
RECLASSIFICATIONS | RECLASSIFICATIONS: The Company had investments in private equity funds as of December 31, 2016 with a value of $24.5 million. During the year ended December 31, 2017 and in prior periods, this investment was reclassified from other assets to equity investments on the consolidated balance sheets. The income statement impact was to reclassify an immaterial amount of gains and losses from nonoperating expenses to equity in income of equity investments. |
Recently Adopted and Recent Accounting Pronouncements and Recent Revenue Recognition Accounting Pronouncements | Recently Adopted Accounting Pronouncements The Company adopted the following Accounting Standards Updates (ASUs) on January 1, 2017: ASU 2017- 04 “Intangibles – Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment,” which modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. An entity should apply the amendments in this Update on a prospective basis. The ASU is effective for the Company on January 1, 2020. Early adoption is permitted by all entities for interim or annual goodwill impairment test performed on testing dates after January 1, 2017. The Company early adopted this ASU in May 2017 in conjunction with its annual goodwill impairment testing. The adoption of this ASU did not have a material impact on the Company’s financial position, results of operations or cash flows. ASU 2016-19 “ Technical Corrections,” which required changes to clarify, correct errors or make minor improvements to the ASC. Most of the amendments in this Update do not require transition guidance and were effective upon issuance of this Update. Six amendments in this Update clarify guidance or correct references in the ASC that could potentially result in changes in current practice because of either misapplication or misunderstanding of current guidance. Early adoption is permitted for the amendments that require transition guidance. The Company was impacted by the amendment to Subtopic 350-40, Intangibles - Goodwill and Other - Internal-Use Software , which adds a reference to guidance to use when accounting for internal-use software licensed from third parties that is within the scope of Subtopic 350-40. The transition guidance for that amendment is the same as the transition guidance in ASU 2015-05, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” to which the amendment relates and was adopted on a prospective basis. The adoption of this ASU resulted in the Company's recording of acquired software of $13.9 million as an intangible asset at present value rather than treating the software as a lease arrangement. During the year ended December 31, 2017, $5.3 million was classified as amortization expense instead of rental expense. ASU 2016-09 “Improvements to Employee Share-Based Payment Accounting,” which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the consolidated statement of cash flows. The adoption of this standard results in the excess tax benefits and deficiencies associated with share-based payments being recorded on the income statement at the time they are deducted on the income tax return instead of being recorded in additional paid-in capital. The excess tax benefits are recorded along with other income tax cash flows as an operating activity in the statement of cash flows. The Company recorded excess tax benefits of $14.3 million in its provision for income taxes rather than as an increase to additional paid-in capital for the year ended December 31, 2017 on a prospective basis. Therefore, the prior period presented has not been adjusted. The Company excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share using the treasury stock method, which did not have a material impact on its diluted earnings per share for the year ended December 31, 2017. The Company elected to apply the presentation requirement for cash flows related to excess tax benefits prospectively, and thus, the prior period presented has not been adjusted. This adoption resulted in an increase in net cash provided by operating activities and a decrease in net cash from financing activities of $14.3 million for the year ended December 31, 2017. In March 2016, the FASB issued ASU 2016-07 ‘‘ Simplifying the Transition to the Equity Method of Accounting ,’’ which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. The ASU further requires that unrealized holding gains or losses in accumulated other comprehensive income related to an available-for-sale security that becomes eligible for the equity method be recognized in earnings as of the date on which the investment qualifies for the equity method. The guidance in the ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. Entities are required to apply the guidance prospectively to increases in the level of ownership interest or degree of influence occurring after the ASU’s effective date. The adoption of this ASU did not have a material impact on the Company’s financial position, results of operations or cash flows. Recent Accounting Pronouncements In February 2018, the FASB issued ASU 2018-02 “Income Statement – Reporting Comprehensive Income (Topic 220 ) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ” ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments in this ASU eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this ASU is permitted. The amendments in this ASU should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is evaluating the effect of ASU 2018-02 on its consolidated financial statements. In September 2017, the FASB issued ASU 2017-13 “Revenue Recognition (Topic 605), Revenues from Customers (Topic 606), Leases (Topic 840) and Leases (Topic 842)”, which made amendments to SEC paragraphs pursuant to the Staff Announcement at the July 20, 2017 Emerging Issues Task Force (EITF) Meeting and rescission of prior SEC Staff Announcements and Observer comments. This guidance, which is effective immediately, generally relates to the adoption of ASC 606 and 842. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows. In May 2017, the FASB issued ASU 2017-09 “Compensation - Stock Compensation (Topic 718), Scope of Modification Accounting,” to provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless all the following are met: 1. The fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification. 2. The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. 3. The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The ASU is effective for the Company on January 1, 2018. Early adoption is permitted, including adoption in any interim period, for (a) public business entities for reporting periods for which financial statements have not yet been issued and (b) all other entities for reporting periods for which financial statements have not yet been made available for issuance. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows. In January 2017, the FASB issued ASU 2017-01 “Business Combinations (Topic 805), Clarifying the Definition of a Business,” which provides a more robust framework to use in determining when a set of assets and activities is a business. The framework assists entities in evaluating whether both an input and a substantive process are present. The framework includes two sets of criteria to consider that depend on whether a set has outputs. Although outputs are not required for a set to be a business, outputs generally are a key element of a business; therefore, the FASB has developed more stringent criteria for sets without outputs. The ASU is effective for the Company on January 1, 2018. Early application of the amendments in this Update is allowed under certain circumstances. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows. In November 2016, the FASB issued ASU 2016-18 ‘‘ Statement of Cash Flows (Topic 230): Restricted Cash ,’’ which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The ASU is effective for the Company on January 1, 2018. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows. The Company had restricted cash of $1.0 million, $ 0.5 million, and $0.2 million as of December 31, 2017, 2016 and 2017, respectively. In October 2016, the FASB issued ASU 2016-16 ‘‘ Income Taxes (Topic 740): Intra-Equity Transfers of Assets Other Than Inventory, ’’ which requires that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs and eliminates the exception for an intra-entity transfer of an asset other than inventory. The ASU is effective for the Company on January 1, 2018. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows. In August 2016, the FASB issued ASU 2016-15 ‘‘ Statement of Cash Flow (Topic 230): Classification of Certain Receipts and Cash Payments ,’’ which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flow. The ASU is effective for the Company on January 1, 2018. Early adoption is permitted by all entities. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows. In June 2016, the FASB issued ASU 2016-13, " Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial instruments ." The amendments in this update change how companies measure and recognize credit impairment for many financial assets. The new expected credit loss model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets (including trade receivables) that are in the scope of the update. The update also made amendments to the current impairment model for held-to-maturity and available-for-sale debt securities and certain guarantees. The ASU is effective for the Company on January 1, 2020. Early adoption is permitted for periods beginning on or after January 1, 2019. The Company is evaluating the effect of ASU 2016-13 on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842),” which introduces a lessee model that brings most leases on the balance sheet and aligns many of the underlying principles of the new lessor model with those in the FASB’s new revenue recognition standard. The ASU also addresses other concerns related to the current leases model. The new guidance will be effective for fiscal years and interim periods within those years beginning after December 15, 2018. Early adoption will be permitted for all entities. The Company plans to adopt ASU 2016-02 on January 1, 2019. While the Company is continuing to evaluate the effects of this ASU, the Company expects to record material right of use assets and lease liabilities on its consolidated balance sheet upon adoption. In January 2016, the FASB issued ASU 2016-01 ‘‘ Recognition and Measurement of Financial Assets and Financial Liabilities, ’’ which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. The ASU significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The new standard is effective for fiscal years and interim periods within those years beginning after December 15, 2017. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows. Recent Revenue Recognition Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers (Topic 606),” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The FASB has issued several additional ASUs (included below) since this time that add additional clarification to certain issues existing after the original ASU was released. All of the new standards are effective for the Company on January 1, 2018. The standards permit the use of either the full retrospective or modified retrospective transition method. In March 2016, the FASB issued ASU 2016-08 “ Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)," which improves the operability and understandability of the implementation guidance on principal versus agent considerations by providing indicators as to which party controls the good or service provided to a customer (the principal). In April 2016, the FASB issued ASU 2016-10 “ Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” which clarifies two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients,” which affects only the following narrow aspects of Topic 606: Assessing the Collectability Criterion; Presentation of Sales and Other Taxes Collected from Customers; Noncash Consideration; Contract Modification at Transition; Completed Contracts at Transition; and Technical Correction. In December 2016, the FASB issued ASU 2016-20 “ Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, ” which affects only the following narrow aspects of Topic 606: Disclosure of Remaining Performance Obligations as it relates to entities such as processors which may not be required to estimate revenue under ASU 2014-09 due to direct allocation of variable consideration; Disclosure of Prior - Period Performance Obligations; Loan Guarantee Fees; Contract Costs – Impairment Testing; Contract Costs - Interaction of Impairment Testing with Guidance in Other Topics; Provisions for Losses on Construction-Type and Production Type Contracts; Contracts within the scope of Topic 944 (Insurance) are excluded from the scope of Topic 606; Contract Modifications; Contract Asset versus Receivable; Refund Liability; Advertising Costs; Fixed - Odds Wagering Contracts in the Casino Industry . TSYS will adopt the new revenue standard, effective January 1, 2018, using the modified retrospective transition method. Under this method, the Company could elect to apply the cumulative effect method to either all contracts as of the date of initial application or only to contracts that are not complete as of that date. TSYS elected to apply the modified retrospective method to contracts that are not complete as of January 1, 2018. The cumulative impact of adopting the standard as of January 1, 2018 is expected to be an increase in opening retained earnings between $1.0 million and $4.0 million. The most significant impact of adopting ASC 606 in 2018 is primarily the result of gross versus net presentation of interchange and payment network fees. In 2018, these fees collected on behalf of the payment networks and card issuers will be presented "net" of the amounts paid to them, as opposed to the "gross" presentation for certain of these fees in 2017. As a result of this change, the Company’s total revenues for the year ending December 31, 2018 are expected to be lower by approximately $1.575 billion to $1.6 billion. The Company’s diluted EPS for the year ending December 31, 2018 is expected to be lower by approximately $0.03 to $0.04 per share due primarily to changes in revenue recognition for certain contracts in the Issuer Solutions segment. The quantitative ranges provided represent management’s best estimate of the effect of adopting ASC 606 at the time of preparation of this Annual Report on Form 10-K. The actual impact of adopting ASC 606 is subject to change from this estimate, pending the completion of the Company’s assessment in the first quarter of 2018. The adoption of this guidance requires the implementation of new accounting processes, procedures and internal controls over financial reporting surrounding the adoption of the standard, periodic reporting and expanded disclosures. Additionally, the Company implemented a new revenue tool solution to facilitate compliance with the standard. In preparation for adoption, the Company reviewed the requirements of the new revenue standard, and amendments described above, while following activities of the FASB and the American Institute of Certified Public Accountants (AICPA) for certain interpretive guidance applicable to Information Technology (IT) outsourcers and payment processors. The Company evaluated customer contracts under the new standard for each type of significant revenue stream (and related costs) to evaluate differences from current accounting, as described further below. Issuer Solutions Issuer Solutions revenues typically include a performance obligation to provide processing services to financial and non-financial institutions. The Company has determined that these processing services represent a stand-ready series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. In many cases, Issuer Solutions arrangements may include additional performance obligations relating to loyalty redemption services and other professional services. Similar to processing services, the Company has determined that loyalty redemption services represent a stand-ready series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. Professional services represent performance obligations that are satisfied over time. The Company has determined that the vast majority of performance obligations to provide processing services and loyalty redemption services meet the allocation of variable consideration exception criteria (“direct allocation”) in that (a) the terms of a variable payment relate specifically to the entity’s efforts to satisfy the performance obligation or transfer the distinct service and (b) allocating the variable amount of consideration entirely to the performance obligation or the distinct good or service is consistent with the allocation objective when considering all of the performance obligations and payment terms in the contract. As a result, for those performance obligations qualifying for direct allocation, the Company will allocate and recognize variable consideration in the period it has the contractual right to invoice the customer. In certain instances when a performance obligation does not meet the criteria for direct allocation, the Company will recognize revenue either on a straight-line basis or a blended rate method (i.e., the estimated per transaction fee based on estimated total contract revenue and volumes, multiplied by the actual monthly transaction volume) over the term of the contract. The Company determined that straight-line or blended rate are the most appropriate methods of measuring progress toward completion for performance obligations that do not meet the criteria for direct allocation. For professional services, the Company will recognize revenue based on the labor hours incurred for time and materials projects or on a straight-line basis for fixed fee projects. For Issuer Solutions contracts that contain multiple performance obligations, the transaction price is allocated to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. The Issuer Solutions segment also enters into licensing arrangements with customers. Under these arrangements, the Company provides the customer with a term license (functional IP), implementation services and unspecified upgrades and enhancements. The Company has determined that these promised goods and services represent one combined performance obligation since the individual promised goods or services are not distinct in the context of the contract. The Company will recognize revenue over the contract period, on a straight-line basis, for this performance obligation. For separate performance obligations relating to professional services, revenue will be recognized on a percentage of completion basis. Merchant Solutions Merchant Solutions revenues typically include one performance obligation to provide processing services to individual merchants, large financial institutions, other merchant acquirers and merchant organizations. The Company has determined that merchant processing services represent a stand-ready series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. Merchant Solutions arrangements also include other promised goods or services (such as point of sale terminals and merchant statement services) that are immaterial in the context of the contract. As a result, the Company has determined that Merchant Solutions arrangements represent one performance obligation. The Company has determined that the performance obligations to provide merchant processing services meet the allocation of variable consideration exception criteria (“direct allocation”) in that (a) the terms of a variable payment relate specifically to the entity’s efforts to satisfy the performance obligation or transfer the distinct service and (b) allocating the variable amount of consideration entirely to the performance obligation or the distinct good or service is consistent with the allocation objective when considering all of the performance obligations and payment terms in the contract. As a result, the Company will allocate and recognize variable consideration in the period it has the contractual right to invoice the customer. Gross vs. net presentation considerations for interchange and payment network fees Interchange and payment network fees are charged by the card associations or payment networks. Depending upon the transaction type, the fees are a percentage of the transaction’s dollar value, a fixed amount, or a combination of the two methods. Interchange and payment network fees primarily relate to the Company’s Issuer Solutions and Merchant Solutions segments. With respect to interchange and payment network fees, the Company evaluated whether it is the principal or the agent. With the adoption of ASC 606, the Company determined that interchange and payment network fees are not provided in return or exchange for services that the Company controls or acts as the principal, and, therefore, are not part of the consideration paid for its services. These fees collected on behalf of the payment networks and card issuers will be presented “net” of the amounts paid to them. Accordingly, the Company is acting as an agent and presents the fees collected from merchants on behalf of the payment networks and card issuers net of the amounts paid to them. In reaching this determination, the Company considered a number of factors including indicators of control such as the party primarily responsible and the party who has discretion in establishing prices. Netspend Netspend revenues include one performance obligation to provide account access and facilitate purchase transactions. The Company has determined that Netspend services represent a stand-ready series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. Further, the Company has determined that the performance obligation to provide account access and facilitate purchase transactions meets the criteria for the “as invoiced” practical expedient in that the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date. As a result, the Company will recognize revenue in the amount to which the Company has a right to invoice. Costs to obtain or fulfill a contract The Company will capitalize the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The incremental costs of obtaining a contract are those that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, a sales commission). The Company capitalizes the costs incurred to fulfill a contract only if those costs meet all of the following criteria: a. The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify. b. The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future. c. The costs are expected to be recovered. The Company will capitalize contract acquisition and fulfillment costs related to signing or renewing long-term contracts and costs related to cash payments for rights to provide processing services. Contract acquisition and fulfillment cost will be amortized using the straight-line method over the expected period of benefit (ranging from 20 months to seven years or the longer of the contract term) beginning when the client’s cardholder accounts are converted or activated and producing revenues. The amortization of contract acquisition costs associated with cash payments for client incentives will be included as a reduction of revenues in the Company’s Consolidated Statements of Income. The amortization of contract fulfillment costs associated with conversion activity will be recorded as cost of services in the Company’s Consolidated Statements of Income. The amortization of contract acquisition costs associated with sales commissions that qualify for capitalization will be recorded as selling, general and administrative expense in the Company’s Consolidated Statements of Income. Costs to obtain or fulfill a contract will be classified as contract cost assets in the Company’s Consolidated Balance Sheets. |
Other intangible assets | |
Intangible assets | |
OTHER INTANGIBLE ASSETS, LICENSED COMPUTER SOFTWARE and ACQUISITION TECHNOLOGY INTANGIBLES | OTHER INTANGIBLE ASSETS: Identifiable intangible assets relate primarily to merchant relationships, customer relationships, databases, channel relationships, covenants-not-to-compete, trade names and trade associations resulting from acquisitions. These identifiable intangible assets are amortized using the straight-line method over periods not exceeding the estimated useful lives, which range from three to ten years. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with GAAP. Amortization expenses are charged to selling, general and administrative expenses in the Company's Consolidated Statements of Income. |
Licensed computer software | |
Intangible assets | |
OTHER INTANGIBLE ASSETS, LICENSED COMPUTER SOFTWARE and ACQUISITION TECHNOLOGY INTANGIBLES | LICENSED COMPUTER SOFTWARE: The Company licenses software from third parties that is used in providing services to clients. Licensed software is obtained through perpetual licenses, term licenses, site licenses and through agreements based on processing capacity. Perpetual and site licenses are amortized using the straight-line method over their estimated useful lives which range from three to ten years. Term licenses are amortized over the term of the agreement. Mainframe software that is licensed based on processing capacity is amortized using a units-of-production basis over the estimated useful life of the software, generally not to exceed ten years. At each balance sheet date, the Company evaluates impairment losses on long-lived assets used in operations in accordance with GAAP. |
Acquisition (current) technology intangibles | |
Intangible assets | |
OTHER INTANGIBLE ASSETS, LICENSED COMPUTER SOFTWARE and ACQUISITION TECHNOLOGY INTANGIBLES | ACQUISITION TECHNOLOGY INTANGIBLES: These identifiable intangible assets are software technology assets resulting from acquisitions. These assets are amortized using the straight-line method over periods not exceeding their estimated useful lives, which range from five to nine years. GAAP requires that intangible assets with estimated useful lives be amortized over their respective estimated useful lives to their residual values, and reviewed for impairment. Acquisition technology intangibles’ net book values are included in computer software, net in the accompanying balance sheets. Amortization expenses are charged to cost of services in the Company's Consolidated Statements of Income. |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents | |
Schedule of cash and cash equivalent balances | (in thousands) 2017 2016 Cash and cash equivalents in domestic accounts $ 396,577 375,122 Cash and cash equivalents in foreign accounts 53,780 50,232 Total $ 450,357 425,354 |
Prepaid Expenses and Other Cu37
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expenses and Other Current Assets | |
Schedule of significant components of prepaid expenses and other current assets | (in thousands) 2017 2016 Prepaid expenses $ 65,159 84,173 Income taxes receivable 41,400 - R&D state tax credit 22,642 - Supplies inventory 17,072 17,105 Other 70,292 63,210 Total $ 216,565 164,488 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill | |
Schedule of gross amount, accumulated impairment losses and changes in carrying value of goodwill by segment | The gross amount and accumulated impairment losses of goodwill as of December 31, 2017 and 2016 are as follows: 2017 (in thousands) Issuer Solutions Merchant Netspend Consolidated Gross amount $ 99,465 2,132,653 1,035,965 $ 3,268,083 Accumulated impairment losses (1,787) (2,225) - (4,012) Goodwill, net $ 97,678 2,130,428 1,035,965 $ 3,264,071 2016 Issuer Solutions Merchant Netspend Consolidated Gross amount $ 96,733 2,144,061 1,034,170 $ 3,274,964 Accumulated impairment losses (1,787) (2,225) - (4,012) Goodwill, net $ 94,946 2,141,836 1,034,170 $ 3,270,952 Below are the balances of goodwill as of December 31, 2017 and 2016 along with the related changes in carrying value. (in thousands) Issuer Solutions Merchant Netspend Consolidated Balance as of December 31, 2015 $ 98,090 413,748 1,033,586 $ 1,545,424 Netspend tax adjustment - - 584 584 TransFirst acquisition - 1,728,088 - 1,728,088 Currency translation adjustments (3,144) - - (3,144) Balance as of December 31, 2016 $ 94,946 2,141,836 1,034,170 $ 3,270,952 Netspend tax adjustment - - 1,795 1,795 TransFirst acquisition adjustments - (11,408) - (11,408) Currency translation adjustments 2,732 - - 2,732 Balance as of December 31, 2017 $ 97,678 2,130,428 1,035,965 $ 3,264,071 |
Other Intangible Assets, Net (T
Other Intangible Assets, Net (Tables) - Other intangible assets | 12 Months Ended |
Dec. 31, 2017 | |
Intangible assets | |
Schedule of significant components of other intangible assets | Significant components of other intangible assets as of December 31, 2017 and 2016 are summarized as follows: 2017 (in thousands) Gross Accumulated Net Merchant relationships $ 588,000 (147,000) $ 441,000 Channel relationships 439,398 (200,540) 238,858 Customer relationships 167,222 (139,969) 27,253 Trade name 62,468 (58,068) 4,400 Covenants-not-to-compete 29,940 (20,815) 9,125 Database 28,000 (25,200) 2,800 Trade association 10,000 (7,750) 2,250 Favorable lease 3,006 (1,546) 1,460 Total $ 1,328,034 (600,888) $ 727,146 2016 (in thousands) Gross Accumulated Net Merchant relationships $ 588,000 (63,000) $ 525,000 Channel relationships 439,600 (148,815) 290,785 Customer relationships 166,340 (122,465) 43,875 Trade name 62,397 (45,197) 17,200 Covenants-not-to-compete 29,940 (13,869) 16,071 Database 28,000 (19,600) 8,400 Trade association 10,000 (6,750) 3,250 Favorable lease 3,006 (911) 2,095 Total $ 1,327,283 (420,607) $ 906,676 |
Schedule of weighted average useful life for each component of other intangible assets | The weighted average useful life for each component of other intangible assets, and in total, as of December 31, 2017 is as follows: Weighted Average Amortization Period (Years) Merchant relationships 7.0 Channel relationships 8.6 Customer relationships 8.2 Trade name 3.9 Covenants-not-to-compete 4.3 Database 5.0 Trade association 10.0 Favorable lease 5.1 Total 7.4 |
Schedule of estimated future amortization expense of other intangible assets | Estimated future amortization expense of other intangible assets as of December 31, 2017 for the next five years is: (in thousands) 2018 $ 162,131 2019 145,457 2020 140,193 2021 119,620 2022 99,420 |
Intangible Assets - Computer 40
Intangible Assets - Computer Software, Net (Tables) - Computer Software | 12 Months Ended |
Dec. 31, 2017 | |
Computer software | |
Summary of computer software and computer software under license agreements | Computer software as of December 31, 2017 and 2016 is summarized as follows: (in thousands) 2017 2016 Licensed computer software $ 543,198 513,790 Software development costs 450,789 428,581 Acquisition technology intangibles 239,011 238,211 Total computer software 1,232,998 1,180,582 Less accumulated amortization: Licensed computer software 360,160 315,591 Software development costs 325,443 307,190 Acquisition technology intangibles 163,680 134,613 Total accumulated amortization 849,283 757,394 Computer software, net $ 383,715 423,188 The Company held the following computer software under license agreements as of December 31, 2017 and 2016: (in thousands) 2017 2016 Licensed computer software (acquired under license agreements) $ 24,421 23,665 Accumulated amortization (15,918) (14,634) Licensed computer software, net $ 8,503 9,031 |
Schedule of amortization expense related to computer software | (in thousands) 2017 2016 2015 Amortization expense related to: Licensed computer software $ 51,247 45,655 41,823 Software development costs 27,461 26,478 22,740 Acquisition technology intangibles 28,267 26,217 16,734 |
Schedule of weighted average useful life for each component of computer software | The weighted average useful life for each component of computer software, and in total, as of December 31, 2017, is as follows: Weighted Average Amortization Period (Years) Licensed computer software 5.8 Software development costs 6.0 Acquisition technology intangibles 6.1 Total 6.0 |
Schedule of estimated future amortization expense of licensed computer software, software development costs and acquisition technology intangibles | Estimated future amortization expense of licensed computer software, software development costs and acquisition technology intangibles as of December 31, 2017 for the next five years is: (in thousands) Licensed Computer Software Development Acquisition Technology 2018 $ 45,008 23,503 25,793 2019 29,007 18,758 25,793 2020 24,388 14,588 20,134 2021 15,638 10,292 3,600 2022 12,606 6,138 - |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment, Net | |
Schedule of property and equipment balances | (in thousands) 2017 2016 Computer and other equipment $ 424,957 356,358 Buildings and improvements 262,499 246,577 Furniture and other equipment 141,927 141,836 Land 16,195 15,877 Other 724 2,387 Total property and equipment 846,302 763,035 Less accumulated depreciation and amortization (521,084) (480,690) Property and equipment, net $ 325,218 282,345 |
Schedule of equipment under capital lease arrangements | (in thousands) 2017 2016 Computer and other equipment (acquired under capital lease arrangements) $ 92,553 51,702 Furniture and other equipment (acquired under capital lease arrangements) 5,451 5,412 Total equipment 98,004 57,114 Less accumulated depreciation: Computer and other equipment (44,327) (39,060) Furniture and other equipment (4,520) (3,788) Total accumulated depreciation (48,847) (42,848) Total equipment, net $ 49,157 14,266 |
Contract Acquisition Costs, N42
Contract Acquisition Costs, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Contract Acquisition Costs, Net | |
Schedule of significant components, amortization expense, weighted average useful life and estimated future amortization of contract acquisition costs | Significant components of contract acquisition costs as of December 31, 2017 and 2016 are summarized as follows: (in thousands) 2017 2016 Conversion costs, net of accumulated amortization of $176.4 million and $164.4 million as of 2017 and 2016, respectively $ 139,249 144,173 Payments for processing rights, net of accumulated amortization of $166.3 million and $145.3 million as of 2017 and 2016, respectively 119,416 91,527 Total $ 258,665 235,700 Amortization expense related to contract acquisition costs for the years ended December 31, 2017, 2016 and 2015 is as follows: (in thousands) 2017 2016 2015 Amortization expense related to: Conversion costs $ 29,625 28,811 27,392 Payments for processing rights 21,357 19,804 17,039 The weighted average useful life for each component of contract acquisition costs, and in total, as of December 31, 2017 is as follows: Weighted Average Amortization Period (Years) Conversion costs 13.1 Payments for processing rights 16.3 Total 14.7 Estimated future amortization expense of conversion costs and payments for processing rights as of December 31, 2017 for the next five years is: (in thousands) Conversion Costs Payments for 2018 $ 36,890 27,211 2019 29,673 24,210 2020 23,475 21,786 2021 21,491 19,275 2022 16,581 15,123 |
Equity Investments (Tables)
Equity Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments | |
Summary of TSYS Equity Investments | (in thousands) 2017 2016 CUP Data $ 127,367 101,638 Other 36,151 31,918 Total $ 163,518 133,556 |
Long-term Borrowings, Capital44
Long-term Borrowings, Capital Lease Obligations and License Agreements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Long-term Borrowings, Capital Lease Obligations and License Agreements | |
Summary of long-term debt | (in thousands) 2017 2016 3.800% Senior Notes due April 1, 2021 (5 year tranche), net of discount and debt issuance costs 1 $ 745,000 743,625 4.800% Senior Notes due April 1, 2026 (10 year tranche), net of discount and debt issuance costs 1 743,042 742,383 2.375% Senior Notes due June 1, 2018 (5 year tranche), net of discount and debt issuance costs 1 549,532 548,615 3.750% Senior Notes due June 1, 2023 (10 year tranche), net of discount and debt issuance costs 1 544,780 543,947 LIBOR + 1.500%, unsecured term facility, due February 23, 2021, with quarterly principal and interest payments, net of debt issuance costs 368,645 697,832 LIBOR + 1.300%, unsecured revolving loan, due February 23, 2021, with monthly interest payments on outstanding balances 200,000 70,000 1.380% note payable due December 31, 2017, with monthly interest and principal payments - 13,853 Total debt 3,150,999 3,360,255 Less current portion (559,050) (48,040) Noncurrent portion of long-term debt $ 2,591,949 3,312,215 1 As of December 31, 2017 and 2016, the estimated fair values of the Company’s Senior Notes totaled $2.684 billion and $2.678 billion, respectively. The estimated fair values of the Company’s Senior Notes were based on quoted prices in an active market and are considered to be level 1 measurements. |
Schedule of required annual principal payments on long-term debt | Required annual principal payments on long-term debt for the five years subsequent to December 31, 2017 are summarized as follows: (in thousands) 2018 $ 560,000 2019 40,000 2020 40,000 2021 1,230,000 2022 - |
Schedule of capital lease obligations and license agreements | (in thousands) 2017 2016 Capital lease obligations $ 37,950 3,748 License agreements 4,865 - Total capital lease obligations and license agreements 42,815 3,748 Less current portion (6,762) (2,687) Noncurrent portion of capital leases and license agreements $ 36,053 1,061 |
Schedule of future minimum lease payments under capital leases and license agreements | The future minimum lease payments under capital leases and license agreements as of December 31, 2017 are summarized as follows: (in thousands) Capital Leases License Agreements 2018 $ 6,652 1,449 2019 6,204 1,621 2020 6,127 1,275 2021 6,127 691 2022 6,095 39 Thereafter 11,484 - Total minimum lease payments 42,689 5,075 Less amount representing interest (4,739) (210) Principal minimum lease payments $ 37,950 4,865 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Current Liabilities | |
Schedule of significant components of other current liabilities | (in thousands) 2017 2016 Deferred revenues $ 52,913 40,473 Accrued expenses 38,018 32,861 Accrued third-party commissions 34,276 28,310 Dividends payable 24,886 19,513 Accrued interest 19,330 19,029 Litigation settlements 1,380 20,795 Income taxes payable 185 1,673 Other 107,847 100,605 Total $ 278,835 263,259 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Schedule of components of income tax expense | Years Ended December 31, (in thousands) 2017 2016 2015 Current income tax expense: Federal $ 210,550 140,079 139,228 State 20,316 9,218 9,255 Foreign 7,500 4,443 4,762 Total current income tax expense 238,366 153,740 153,245 Deferred income tax (benefit) expense: Federal (178,879) 8,393 (2,198) State 5,093 (65) 442 Foreign 1,298 (893) (125) Total deferred income tax (benefit) expense (172,488) 7,435 (1,881) Total income tax expense $ 65,878 161,175 151,364 |
Schedule of components of income before income tax expense | Years Ended December 31, (in thousands) 2017 2016 2015 Components of income before income tax expense: Domestic $ 603,260 454,628 485,191 Foreign 14,302 6,404 8,373 Total income before income tax expense $ 617,562 461,032 493,564 |
Schedule of reconciliation of income tax expense to amounts computed by applying statutory income tax rate | Years Ended December 31, (in thousands) 2017 2016 2015 Computed "expected" income tax expense $ 216,147 161,425 173,911 Increase (decrease) in income tax expense resulting from: International tax rate differential and equity income 11,953 8,715 8,367 State income tax expense, net of federal income tax effect 12,470 9,127 7,101 Increase (decrease) in valuation allowance 8,230 2,855 (517) Tax credits (20,998) (15,695) (28,831) Share-based compensation (14,310) — — Deduction for domestic production activities (17,150) (12,950) (11,550) Re-measurement of deferred tax asset / deferred tax liability (146,093) — — Permanent differences and other, net 15,629 7,698 2,883 Total income tax expense $ 65,878 161,175 151,364 |
Schedule of significant components of net deferred tax liability | As of December 31, (in thousands) 2017 2016 Deferred income tax assets: Net operating loss and income tax credit carryforwards $ 35,089 34,490 Allowances for doubtful accounts and billing adjustments 852 1,512 Deferred revenue 17,813 27,461 Share-based compensation 15,170 25,497 Foreign currency translation — 4,019 Other, net 14,915 38,341 Total deferred income tax assets 83,839 131,320 Less valuation allowance for deferred income tax assets (29,531) (21,301) Net deferred income tax assets 54,308 110,019 Deferred income tax liabilities: Excess tax over financial statement depreciation (43,056) (63,432) Computer software development costs (48,244) (80,837) Purchased intangibles (42,467) (344,547) Foreign currency translation (942) — Partnership interests (143,908) (18,776) Other, net (7,917) (14,924) Total deferred income tax liabilities (286,534) (522,516) Net deferred income tax liabilities $ (232,226) (412,497) Total net deferred tax assets (liabilities): Noncurrent deferred tax asset $ 6,091 7,055 Noncurrent deferred tax liability (238,317) (419,552) Net deferred tax liability $ (232,226) (412,497) |
Schedule of reconciliation of unrecognized tax liabilities | Years Ended December 31, (in millions) 2017 2016 2015 Beginning balance $ 16.5 13.1 6.7 Current activity: Additions based on tax positions related to current year 4.9 3.4 2.3 Additions for tax positions of prior years 4.6 3.0 4.7 Reductions for tax positions of prior years — — (0.6) Decreases resulting from settlements with tax authorities (2.2) (3.0) — Net current activity 7.3 3.4 6.4 Ending balance $ 23.8 16.5 13.1 1 Unrecognized state tax liabilities are not adjusted for the federal tax impact. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Schedule of future minimum lease payments under noncancelable operating leases and purchase commitments | The future minimum lease payments under noncancelable operating leases and purchase commitments with remaining terms greater than one year for the next five years and thereafter and in the aggregate as of December 31, 2017, are as follows: (in thousands) 2018 $ 145,866 2019 148,006 2020 71,651 2021 38,803 2022 28,095 Thereafter 77,555 Total future minimum commitment payments $ 509,976 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefit Plans | |
Schedule of contributions to plans charged to expense | (in thousands) 2017 2016 2015 TSYS Retirement Savings Plan $ 23,113 21,077 24,169 TSYS Stock Purchase Plan 1,600 1,514 1,378 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity | |
Summary of equity compensation plans by category | (a) (b) (c) (in thousands, except per share data) Plan Category Number of Weighted- Number of securities Equity compensation plans approved by security holders 4,561 $ 37.15 1 14,888 2 The Company does not have any equity compensation plans that were not approved by security holders. 1 Weighted-average exercise price represents 2.7 million options only and does not include restricted share units that have no exercise price. 2 Shares available for future grants under the Total System Services, Inc. 2017 Omnibus Plan, which could be in the form of options, nonvested awards and performance shares. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation | |
Summary of status and changes for nonvested shares | 2017 2016 2015 (in thousands, except per share data) Nonvested shares Shares Weighted Shares Weighted Shares Weighted Outstanding at beginning of year 863 $ 37.78 1,146 $ 31.11 1,769 $ 26.75 Granted 329 55.06 363 46.23 388 38.38 Vested (458) 36.01 (563) 29.95 (930) 26.05 Forfeited/canceled/adjusted (100) 43.82 (84) 36.79 (81) 28.78 Outstanding at end of year 634 $ 47.19 863 $ 37.78 1,146 $ 31.11 |
Summary of awards authorized and status and changes for performance and market based nonvested shares | A summary of the awards authorized in each year is below: Total Number of Shares Awarded 1 Potential Number of Performance-and Market-Based Shares to be Vested 2 Year Potential Performance-and Market-Based Shares Will Fully Vest 3 2017 319,811 596,192 2016 531,700 903,364 2015 383,814 687,015 1 Shares awarded does not include dividend equivalents 2 Includes dividend equivalents 3 Represents year in which authorized performance and market-based shares will fully vest if they had been granted during 2017, 2016, and 2015, respectively. A summary of the status of TSYS' performance- and market-based nonvested shares as of December 31, 2017, 2016 and 2015 and changes during those periods are presented below: 2017 2016 2015 (in thousands, except per share data) Performance- and market-based nonvested shares Shares 1 Weighted Shares 1 Weighted Shares 1 Weighted Outstanding at beginning of year 982 $ 33.43 918 $ 31.19 766 $ 25.86 Granted 618 52.48 540 45.91 384 36.84 Vested (621) 14.85 (140) 37.91 (241) 22.92 Forfeited/canceled/adjusted (174) 46.98 (336) 37.70 9 22.20 Outstanding at end of year 805 $ 45.41 982 $ 33.43 918 $ 31.19 1 Includes dividend equivalents |
Summary of weighted average assumptions, and weighted average fair value of options | 2017 2016 2015 Number of options granted 550,527 687,685 613,473 Weighted average exercise price $ 54.97 47.01 $ 39.01 Risk-free interest rate 1.78 % 1.24 % 1.73 % Expected volatility 21.72 % 21.53 % 20.80 % Expected term (years) 4.6 4.5 6.3 Dividend yield 0.73 % 0.86 % 1.04 % Weighted average fair value $ 10.85 8.50 $ 8.27 |
Summary of stock option activity, changes, remaining contractual life and intrinsic value | 2017 2016 2015 Options: (in thousands, except per share data) Options Weighted Options Weighted Options Weighted Outstanding at beginning of year 2,996 $ 32.78 2,887 $ 28.07 4,892 $ 23.83 Granted 551 54.97 688 47.01 613 39.01 Exercised (730) 30.05 (500) 23.43 (2,586) 22.68 Forfeited/canceled (122) 52.76 (79) 43.49 (32) 20.79 Outstanding at end of year 2,695 $ 37.15 2,996 $ 32.78 2,887 $ 28.07 Options exercisable at year-end 1,758 $ 31.00 1,877 $ 28.45 1,439 $ 25.17 Weighted average fair value of options granted during the year $ 10.85 $ 8.50 $ 8.27 As of December 31, 2017 the average remaining contractual life and intrinsic value of TSYS’ outstanding and exercisable stock options were as follows: Outstanding Exercisable Average remaining contractual life (in years) 6.9 6.1 Aggregate intrinsic value (in thousands) $ 112,964 84,572 |
Summary of options exercised for shares of common stock | (in thousands) Options Exercised and Intrinsic Value 2017 730 $ 23,629 2016 500 12,984 2015 2,586 67,702 |
Nonvested Share Awards | |
Share-based Compensation | |
Summary of shares granted | 2017 2016 2015 Number of shares granted 329,051 362,804 388,211 Market value ( in millions ) $ 18.1 16.8 14.9 |
Market Based Share Awards | |
Share-based Compensation | |
Summary of shares granted | Year Performance Performance Number of Period Expensed 2017 December 2019 TSR December 2019 2016 December 2017 TSR December 2017 2016 December 2018 TSR December 2018 2015 July 2016, 2017 and 2018 TSR July 2018 2015 December 2017 TSR December 2017 |
Performance Based Awards | |
Share-based Compensation | |
Summary of shares granted | Year Performance Performance Number of Period Expensed 2017 December 2019 Adjusted Diluted EPS 1 December 2019 2017 December 2017 Net Revenue and Adjusted Diluted EPS 1 December 2019 2017 December 2017 Issuer Solutions Segment Net Revenue and Adjusted Segment Operating Income 2 December 2019 2016 December 2016 Revenues before Reimbursable Items 4 and Adjusted EPS 3 December 2016 2016 December 2017 Adjusted EPS 3 December 2017 2016 December 2018 Merchant Segment Net Revenue, Corporate Accountability Operating Income (CAOI) 2 and attainment of synergies from TransFirst acquisition December 2018 2016 December 2018 Revenue Growth and CAOI Growth 2 December 2018 2016 December 2018 Merchant Segment Net Revenue and CAOI 2 December 2018 2016 December 2018 Adjusted EPS 3 December 2018 2016 December 2016 Revenues before Reimbursable Items 4 and Adjusted EPS 3 December 2018 2015 December 2017 Adjusted EPS 3 December 2017 2015 December 2015 Revenues before Reimbursable Items 4 and Adjusted EPS 3 December 2018 1 Adjusted Diluted EPS is adjusted earnings divided by weighted average diluted shares outstanding used for diluted EPS calculations. Adjusted earnings is net income excluding the after-tax impact of share-based compensation expenses, amortization of acquisition intangibles, merger and acquisition expenses for completed acquisitions and litigation claims, judgments or settlement expenses and related legal expenses. 2 CAOI is adjusted segment operating income and includes corporate administrative expenses. Adjusted segment operating income is defined in Note 20. 3 Adjusted EPS is adjusted earnings divided by weighted average shares outstanding used for basic EPS. 4 Revenues before Reimbursable Items is total revenue less reimbursable items which consist of out-of-pocket expenses which are reimbursed by the Company’s clients. These expenses consist primarily of postage, access fees and third-party software. |
Treasury Stock (Tables)
Treasury Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Treasury Stock | |
Summary of shares held as treasury stock and related carrying value | The following table summarizes shares held as treasury stock and their related carrying value as of December 31: (in thousands) Number of Treasury Treasury Shares Cost 2017 21,862 $ 909,960 2016 19,314 646,047 2015 19,988 641,664 |
Summary of repurchases under stock repurchase plan by year | (in thousands, except per share data) Total Number of Average Price Paid Repurchased Shares Cost 2017 3,850 $ 73.41 $ 282,645 2016 500 48.57 24,287 2015 5,150 47.01 242,085 |
Schedule of purchases of common stock on a monthly basis | The following table sets forth information regarding the Company's purchases of its common stock on a monthly basis during the three months ended December 31, 2017: (in thousands, except per share data) Total Number of Shares Purchased Average Price Paid per Share 1 Total Number of Cumulative shares Purchased as Part of Publicly announced Plans or Programs 2 Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs 2 October 2017 300 $ 71.26 6,350 13,650 November 2017 1,500 73.05 7,850 12,150 December 2017 1,667 1 75.22 9,500 10,500 Total 3,467 3 $ 73.41 1 Denotes a total of 16,837 shares (not rounded) in December withheld for payment of taxes. 2 In January 2015, TSYS’ Board of Directors approved a stock repurchase plan to repurchase up to 20 million shares of TSYS stock. The shares may be purchased from time to time at prices considered appropriate. There is no expiration date for the plan. 3 Total number of shares purchased amounts may not total due to rounding. |
Other Comprehensive Income (L52
Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Comprehensive Income (Loss) | |
Schedule of income tax effects allocated to and cumulative balance of each component of accumulated other comprehensive income (loss) | (in thousands) Beginning Pretax Tax Net-of-tax Ending As of December 31, 2014 $ 3,749 (17,280) (1,605) (15,675) $ (11,926) Foreign currency translation adjustments $ (13,592) (22,997) (1,548) (21,449) $ (35,041) Transfer from noncontrolling interest (NCI) 28 - - - 28 Gain on available for sale securities 1,105 2,177 779 1,398 2,503 Change in AOCI related to postretirement healthcare plans 533 (2,449) (882) (1,567) (1,034) As of December 31, 2015 $ (11,926) (23,269) (1,651) (21,618) $ (33,544) Foreign currency translation adjustments $ (35,041) (36,341) (5,872) (30,469) $ (65,510) Transfer from NCI 28 - - - 28 Gain on available for sale securities 2,503 11,394 4,035 7,359 9,862 Change in AOCI related to postretirement healthcare plans (1,034) 775 279 496 (538) As of December 31, 2016 $ (33,544) (24,172) (1,558) (22,614) $ (56,158) Foreign currency translation adjustments $ (65,510) 24,794 2,776 22,018 $ (43,492) Transfer from NCI 28 - - - 28 Loss on available for sale securities 9,862 (2,050) (634) (1,416) 8,446 Change in AOCI related to postretirement healthcare plans (538) (682) (90) (592) (1,130) As of December 31, 2017 $ (56,158) 22,062 2,052 20,010 $ (36,148) |
Segment Reporting, including 53
Segment Reporting, including Geographic Area Data and Major Customers (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting, including Geographic Area Data and Major Customers | |
Schedule of operating income and revenue by segment | Operating Segments Years Ended December 31, (in thousands) 2017 2016 2015 Adjusted operating income by segment: Issuer Solutions (a) $ 574,580 525,025 489,151 Merchant Solutions (b) 391,466 307,595 150,225 Netspend (c) 182,082 160,371 137,837 Corporate Administration and Other (148,564) (135,996) (109,036) Adjusted segment operating income 1 (d) 999,564 856,995 668,177 Less: Share-based compensation 42,409 43,728 41,549 TransFirst and Cayan M&A and integration expenses 2 13,367 28,176 - Litigation, claims, judgments or settlements 1,947 21,719 - Acquisition intangible amortization 207,797 189,990 92,521 Operating income 734,044 573,382 534,107 Nonoperating expenses, net (116,482) (112,350) (40,543) Income before income taxes and equity in income of equity investments $ 617,562 461,032 493,564 Net revenue by segment: Issuer Solutions (e) $ 1,594,959 1,515,462 1,473,914 Merchant Solutions (f) 1,103,682 898,533 474,040 Netspend (g) 746,870 663,579 580,377 Segment net revenue 3,445,511 3,077,574 2,528,331 Less: intersegment revenues 45,179 35,698 28,982 Net revenue 3 (h) 3,400,332 3,041,876 2,499,349 Add: reimbursable items, interchange and payment network fees 1,527,633 1,128,201 280,192 Total revenues $ 4,927,965 4,170,077 2,779,541 Adjusted segment operating margin on net revenue: Issuer Solutions (a)/(e) Merchant Solutions (b)/(f) Netspend (c)/(g) Adjusted segment operating margin on net revenue (d)/(h) 1 Adjusted segment operating income excludes acquisition intangible amortization, TransFirst and Cayan M&A and integration expenses, share-based compensation and expenses associated with Corporate Administration and Other. 2 Excludes share-based compensation 3 Net revenue is total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and payment network fees charged by the card associations or payment networks that are recorded by TSYS as expense . Adjusted segment operating income excludes acquisition intangible amortization, TransFirst and Cayan M&A expenses, share-based compensation and expenses associated with Corporate Administration and Other. |
Schedule of depreciation expense by segment | Operating Segments Years Ended December 31, (in thousands) 2017 2016 2015 Depreciation and amortization: Issuer Solutions $ 147,914 141,309 134,436 Merchant Solutions 29,477 25,553 18,268 Netspend 15,838 13,133 10,686 Segment depreciation and amortization 193,229 179,995 163,390 Acquisition intangible amortization 207,797 189,990 92,521 Corporate Administration and Other 4,880 3,561 2,353 Total depreciation and amortization $ 405,906 373,546 258,264 |
Schedule of total assets by segment | As of December 31, (in thousands) 2017 2016 Issuer Solutions $ 5,735,195 5,667,280 Merchant Solutions 3,136,395 3,295,509 Netspend 1,418,644 1,474,595 Intersegment assets (3,958,545) (4,071,207) Total assets $ 6,331,689 6,366,177 |
Schedule of property and equipment, net by geographic area | As of (in thousands) December 31, 2017 December 31, 2016 United States $ 273,690 236,913 Europe 43,586 38,866 Other 7,942 6,566 Total $ 325,218 282,345 |
Schedule of reconciliation of geographic revenues to external revenues by operating segment | 2017 (in thousands) Issuer Solutions Merchant Netspend Total Percentage of Revenues United States $ 1,051,292 2,428,327 745,235 $ 4,224,854 85.7 % Europe 1 320,400 284 - 320,684 6.5 Canada 1 313,674 1,496 - 315,170 6.4 Other 1 66,102 1,155 - 67,257 1.4 Total $ 1,751,468 2,431,262 745,235 $ 4,927,965 100.0 % 2016 (in thousands) Issuer Solutions Merchant Netspend Total Percentage of Revenues United States $ 1,032,381 1,826,775 660,845 $ 3,520,001 84.4 % Europe 1 306,894 227 - 307,121 7.4 Canada 1 284,028 705 - 284,733 6.8 Other 1 57,460 762 - 58,222 1.4 Total $ 1,680,763 1,828,469 660,845 $ 4,170,077 100.0 % 2015 (in thousands) Issuer Solutions Merchant Netspend Total Percentage of Revenues United States $ 981,588 548,079 580,377 $ 2,110,044 75.9 % Europe 1 304,628 22 - 304,650 11.0 Canada 1 288,728 355 - 289,083 10.4 Other 1 75,085 679 - 75,764 2.7 Total $ 1,650,029 549,135 580,377 $ 2,779,541 100.0 % 1 Certain of these revenues are impacted by movements in foreign currency exchange rates. |
Acquisitions (Tables)
Acquisitions (Tables) - TransFirst | 12 Months Ended |
Dec. 31, 2017 | |
Summary of consideration paid and recognized identifiable assets acquired and liabilities assumed | The following table summarizes the consideration paid for TransFirst and the initially recognized amounts of the identifiable assets acquired and liabilities assumed on April 1, 2016 (the acquisition date). (in thousands) Consideration Cash $ 2,351,400 Fair value of total consideration transferred $ 2,351,400 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash $ 5,907 Accounts receivable, net 62,313 Property, equipment and software 12,726 Identifiable intangible assets 814,131 Deferred tax asset 2,244 Other assets 7,509 Deferred tax liability (224,654) Other liabilities (56,864) Total identifiable net assets 623,312 Goodwill 1,728,088 Total identifiable assets acquired and liabilities assumed $ 2,351,400 |
Schedule of estimated fair value of identifiable intangible assets acquired and weighted average useful lives | (in millions) Fair Value Weighted Average Useful Life (in years) Merchant relationships $ 588.0 Channel relationships 121.0 Current technology 72.0 Trade name 16.0 Covenants not-to-compete 15.0 Favorable lease 2.1 Total acquired identifiable intangible assets $ 814.1 7.1 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share | |
Schedule of basic and diluted EPS | 2017 2016 2015 (in thousands, except per share data) Common Common Common Basic EPS: Net income attributable to TSYS common shareholders $ 586,185 319,638 364,044 Less income allocated to nonvested awards (1,373) (1,557) (3,164) Net income allocated to common stock for EPS calculation (a) $ 584,812 318,081 360,880 Average common shares outstanding (b) 183,309 182,744 182,465 Basic EPS (a)/(b) $ 3.19 1.74 1.98 Diluted EPS: Net income attributable to TSYS common shareholders $ 586,185 319,638 364,044 Less income allocated to nonvested awards (1,373) (1,557) (3,148) Add income allocated to nonvested awards 1 1,373 1,557 - Net income allocated to common stock for EPS calculation (c) $ 586,185 319,638 360,896 Average common shares outstanding 183,309 182,744 182,465 Increase due to assumed issuance of shares related to common equivalent shares outstanding 1,162 813 1,157 Average nonvested awards 1 959 891 - Average common and common equivalent shares outstanding (d) 185,430 184,448 183,622 Diluted EPS (c)/(d) $ 3.16 1.73 1.97 1 In accordance with the diluted EPS guidance under the two-class method, the Company uses the approach-either the treasury stock method or the two-class method assuming a participating security is not exercised- that is more dilutive. In 2017 and 2016, the Company used the two-class method. In 2015, the Company used the treasury stock method. 2017 2016 2015 (in thousands, except per share data) Participating Securities Participating Securities Participating Securities Basic EPS: Net income allocated to nonvested awards (a) $ 1,373 1,557 3,164 Nonvested awards (b) 435 911 1,617 Basic EPS (a)/(b) $ 3.16 1.71 1.96 Diluted EPS: Net income allocated to nonvested awards (c) $ 1,366 1,552 3,148 Average common and common equivalent shares outstanding (d) 435 911 1,617 Diluted EPS (c)/(d) $ 3.14 1.70 1.95 |
Basis of Presentation and Sum56
Basis of Presentation and Summary of Significant Accounting Policies - Operating Segments (Details) | 12 Months Ended |
Dec. 31, 2017segment | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Operating segments | 3 |
Basis of Presentation and Sum57
Basis of Presentation and Summary of Significant Accounting Policies - Discontinued Operations (Details) - GP Network Corporation and TSYS Japan Godo Kaisha - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2015 | |
Discontinued operations, for sale | GP Network Corporation | ||
Discontinued operations | ||
Ownership prior to sale of stock (as a percent) | 54.00% | |
Discontinued operations, for sale | TSYS Japan Godo Kaisha | ||
Discontinued operations | ||
Ownership prior to sale of stock (as a percent) | 100.00% | |
Discontinued operations, sold | ||
Discontinued operations | ||
Additional gain recorded | $ 1.4 |
Basis of Presentation and Sum58
Basis of Presentation and Summary of Significant Accounting Policies - Goodwill (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Basis of Presentation and Summary of Significant Accounting Policies | ||
Equity investment goodwill | $ 48.8 | $ 46.1 |
Basis of Presentation and Sum59
Basis of Presentation and Summary of Significant Accounting Policies - Estimated Useful Lives of Other Intangible Assets and Computer Software Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Other intangible assets | Minimum | |
Computer software | |
Estimated useful life | 3 years |
Other intangible assets | Maximum | |
Computer software | |
Estimated useful life | 10 years |
Computer software under perpetual and site licenses | Minimum | |
Computer software | |
Estimated useful life | 3 years |
Computer software under perpetual and site licenses | Maximum | |
Computer software | |
Estimated useful life | 10 years |
Mainframe software license | Maximum | |
Computer software | |
Estimated useful life | 10 years |
Acquisition (current) technology intangibles | Minimum | |
Computer software | |
Estimated useful life | 5 years |
Acquisition (current) technology intangibles | Maximum | |
Computer software | |
Estimated useful life | 9 years |
Software development costs, client use | Minimum | |
Computer software | |
Estimated useful life | 3 years |
Software development costs, client use | Maximum | |
Computer software | |
Estimated useful life | 10 years |
Software development costs, internal use | Minimum | |
Computer software | |
Estimated useful life | 3 years |
Software development costs, internal use | Maximum | |
Computer software | |
Estimated useful life | 10 years |
Basis of Presentation and Sum60
Basis of Presentation and Summary of Significant Accounting Policies - Estimated Useful lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Buildings and improvements | Minimum | |
Property and equipment | |
Estimated useful life | 5 years |
Buildings and improvements | Maximum | |
Property and equipment | |
Estimated useful life | 40 years |
Computer and other equipment | Minimum | |
Property and equipment | |
Estimated useful life | 2 years |
Computer and other equipment | Maximum | |
Property and equipment | |
Estimated useful life | 5 years |
Furniture and other equipment | Minimum | |
Property and equipment | |
Estimated useful life | 3 years |
Furniture and other equipment | Maximum | |
Property and equipment | |
Estimated useful life | 15 years |
Basis of Presentation and Sum61
Basis of Presentation and Summary of Significant Accounting Policies - Equity Method Investments (Details) | Dec. 31, 2017 |
TSYS de Mexico | |
Equity method investments | |
Equity method investment ownership (as a percent) | 49.00% |
China Union Pay Data Co., Ltd | |
Equity method investments | |
Equity method investment ownership (as a percent) | 44.56% |
Basis of Presentation and Sum62
Basis of Presentation and Summary of Significant Accounting Policies - Loss Provisions (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Merchant losses | ||
Loss provisions | ||
Accrual for losses | $ 4.3 | $ 2 |
Other current liabilities | Transaction processing contract contingencies (performance penalties) and processing errors | ||
Loss provisions | ||
Accrual for losses | 2.2 | 2.9 |
Other current liabilities | Cardholder losses | ||
Loss provisions | ||
Accrual for losses | $ 9.5 | $ 10.5 |
Basis of Presentation and Sum63
Basis of Presentation and Summary of Significant Accounting Policies - Revenue (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Revenue | |
Account life for GPR cards | 6 months |
Minimum | Merchant contract | |
Revenue | |
Term of contract | 30 days |
Minimum | Merchant processing contracts | |
Revenue | |
Term of contract | 3 years |
Maximum | Merchant contract | |
Revenue | |
Term of contract | 5 years |
Maximum | Merchant processing contracts | |
Revenue | |
Term of contract | 8 years |
Basis of Presentation and Sum64
Basis of Presentation and Summary of Significant Accounting Policies - Forfeiture Rates of Share-Based Awards and Advertising Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Advertising | |||
Advertising expenses | $ 13.2 | $ 11.5 | $ 9.6 |
Executive officers | |||
Share-based Compensation | |||
Estimated forfeiture rate | 0.00% | ||
Other employees | |||
Share-based Compensation | |||
Estimated forfeiture rate | 8.00% |
Basis of Presentation and Sum65
Basis of Presentation and Summary of Significant Accounting Policies - Reclassification of Private Equity Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Equity method investments | ||
Other assets | $ 124,021 | $ 84,016 |
Equity investments | $ 163,518 | 133,556 |
Atlanta-based venture capital fund limited partnership private equity | ||
Equity method investments | ||
Equity investments | 24,500 | |
Atlanta-based venture capital fund limited partnership private equity | Reclassification adjustment | ||
Equity method investments | ||
Other assets | $ (24,500) |
Basis of Presentation and Sum66
Basis of Presentation and Summary of Significant Accounting Policies - ASU 2016-19 Technical Corrections Related to Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Prospective adoption | ||
Assets from acquired software | $ 1,232,998 | $ 1,180,582 |
ASU 2016-19 Technical Corrections | ||
Prospective adoption | ||
Assets from acquired software | 13,900 | |
Amortization expense | $ 5,300 |
Basis of Presentation and Sum67
Basis of Presentation and Summary of Significant Accounting Policies - Adoption of ASU 2016-09 - Improvements to Employee Share-Based Payment Accounting (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement | |||
Provision for income taxes | $ (65,878) | $ (161,175) | $ (151,364) |
Statement of Cash Flows | |||
Net cash provided by operating activities | 856,492 | 718,029 | 602,034 |
Net cash used in financing activities | 638,725 | $ (1,822,190) | $ 290,754 |
ASU 2016-09 Improvements to Employee Share-Based Payment Accounting | |||
Income Statement | |||
Provision for income taxes | 14,300 | ||
Statement of Cash Flows | |||
Net cash provided by operating activities | 14,300 | ||
Net cash used in financing activities | $ 14,300 |
Basis of Presentation and Sum68
Basis of Presentation and Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Basis of Presentation and Summary of Significant Accounting Policies | |||
Restricted cash | $ 1 | $ 0.5 | $ 0.2 |
Basis of Presentation and Sum69
Basis of Presentation and Summary of Significant Accounting Policies - Adoption of ASU 2016-09 - Adoption of New Revenue Standard (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2017USD ($)item$ / shares | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares | Jan. 01, 2018USD ($) | |
Adoption of Accounting Standards Updates | |||||
Retained earnings | $ 3,004,018 | $ 2,502,222 | |||
Total revenues | $ 4,927,965 | $ 4,170,077 | $ 2,779,541 | ||
Diluted EPS | $ / shares | $ 3.16 | $ 1.73 | $ 1.97 | ||
Number of methods to calculate interchange and payment network fees | item | 2 | ||||
Minimum | |||||
Adoption of Accounting Standards Updates | |||||
Expected period of benefit of contract with customer | 20 months | ||||
Maximum | |||||
Adoption of Accounting Standards Updates | |||||
Expected period of benefit of contract with customer | 7 years | ||||
Licensing arrangements with customers | |||||
Adoption of Accounting Standards Updates | |||||
Number of performance obligations | item | 1 | ||||
Merchant processing contracts | |||||
Adoption of Accounting Standards Updates | |||||
Number of performance obligations | item | 1 | ||||
Provide account access and facilitate purchase transactions | |||||
Adoption of Accounting Standards Updates | |||||
Number of performance obligations | item | 1 | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Expected | Minimum | Accounting Standards Update 2014-09 | |||||
Adoption of Accounting Standards Updates | |||||
Retained earnings | $ 1,000 | ||||
Total revenues | $ (1,575,000) | ||||
Diluted EPS | $ / shares | $ (0.03) | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Expected | Maximum | Accounting Standards Update 2014-09 | |||||
Adoption of Accounting Standards Updates | |||||
Retained earnings | $ 4,000 | ||||
Total revenues | $ (1,600,000) | ||||
Diluted EPS | $ / shares | $ (0.04) |
Fair Value Measurement - Change
Fair Value Measurement - Changes in Fair Value Levels (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value Measurement | |||
Asset transfers out of Level 1 into Level 2 | $ 0 | $ 0 | $ 0 |
Asset transfers out of Level 2 into Level 1 | 0 | 0 | 0 |
Asset transfers into (out of) Level 3 | 0 | 0 | 0 |
Liability transfers out of Level 1 into Level 2 | 0 | 0 | 0 |
Liability transfers out of Level 2 into Level 1 | 0 | 0 | 0 |
Liability transfers into (out of) Level 3 | $ 0 | $ 0 | $ 0 |
Fair Value Measurement - Goodwi
Fair Value Measurement - Goodwill and Impairment Testing (Details) - USD ($) $ in Thousands | May 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Measurement | ||||
Goodwill | $ 3,264,071 | $ 3,270,952 | $ 1,545,424 | |
Impairment of goodwill | $ 0 |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Cash and Cash Equivalents | ||||
Cash and cash equivalents in domestic accounts | $ 396,577 | $ 375,122 | ||
Cash and cash equivalents in foreign accounts | 53,780 | 50,232 | ||
Cash and cash equivalents | $ 450,357 | $ 425,354 | $ 389,328 | $ 289,183 |
Prepaid Expenses and Other Cu73
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Prepaid Expenses and Other Current Assets | ||
Prepaid expenses | $ 65,159 | $ 84,173 |
Income taxes receivable | 41,400 | |
R and D state tax credit | 22,642 | |
Supplies inventory | 17,072 | 17,105 |
Other | 70,292 | 63,210 |
Total | $ 216,565 | $ 164,488 |
Goodwill - Changes from Acquisi
Goodwill - Changes from Acquisitions (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
TransFirst | ||||
Goodwill | ||||
Goodwill recorded from acquisition | $ 1,728,088,000 | |||
Goodwill adjustment | $ 20,400,000 | |||
NetSpend, Inc. | ||||
Goodwill | ||||
Tax adjustment (increase) decrease to goodwill | $ (1,795,000) | (584,000) | $ (627,000) | |
Merchant Solutions | ||||
Goodwill | ||||
Goodwill adjustment | 727,000 | |||
Merchant Solutions | TransFirst | ||||
Goodwill | ||||
Goodwill recorded from acquisition | $ 1,728,088,000 | |||
Tax adjustment (increase) decrease to goodwill | 12,100,000 | |||
Goodwill adjustment | $ 727,000 |
Goodwill - Gross Amount and Acc
Goodwill - Gross Amount and Accumulated Impairment Losses by Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill | |||
Gross amount | $ 3,268,083 | $ 3,274,964 | |
Accumulated impairment losses | (4,012) | (4,012) | |
Goodwill, net | 3,264,071 | 3,270,952 | $ 1,545,424 |
Issuer Solutions | |||
Goodwill | |||
Gross amount | 99,465 | 96,733 | |
Accumulated impairment losses | (1,787) | (1,787) | |
Goodwill, net | 97,678 | 94,946 | 98,090 |
Merchant Solutions | |||
Goodwill | |||
Gross amount | 2,132,653 | 2,144,061 | |
Accumulated impairment losses | (2,225) | (2,225) | |
Goodwill, net | 2,130,428 | 2,141,836 | 413,748 |
Netspend | |||
Goodwill | |||
Gross amount | 1,035,965 | 1,034,170 | |
Goodwill, net | $ 1,035,965 | $ 1,034,170 | $ 1,033,586 |
Goodwill - Changes in Carrying
Goodwill - Changes in Carrying Value by Segment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill | |||
Balance | $ 3,270,952,000 | $ 1,545,424,000 | |
Currency translation adjustments | 2,732,000 | (3,144,000) | |
Balance | 3,264,071,000 | 3,270,952,000 | $ 1,545,424,000 |
NetSpend, Inc. | |||
Goodwill | |||
Tax adjustment | 1,795,000 | 584,000 | 627,000 |
TransFirst | |||
Goodwill | |||
Acquisition | 1,728,088,000 | ||
Acquisition adjustments | (11,408,000) | ||
Issuer Solutions | |||
Goodwill | |||
Balance | 94,946,000 | 98,090,000 | |
Currency translation adjustments | 2,732,000 | (3,144,000) | |
Balance | 97,678,000 | 94,946,000 | 98,090,000 |
Merchant Solutions | |||
Goodwill | |||
Balance | 2,141,836,000 | 413,748,000 | |
Balance | 2,130,428,000 | 2,141,836,000 | 413,748,000 |
Merchant Solutions | TransFirst | |||
Goodwill | |||
Tax adjustment | (12,100,000) | ||
Acquisition | 1,728,088,000 | ||
Acquisition adjustments | (11,408,000) | ||
Netspend | |||
Goodwill | |||
Balance | 1,034,170,000 | 1,033,586,000 | |
Balance | 1,035,965,000 | 1,034,170,000 | $ 1,033,586,000 |
Netspend | NetSpend, Inc. | |||
Goodwill | |||
Tax adjustment | $ 1,795,000 | $ 584,000 |
Other Intangible Assets, Net -
Other Intangible Assets, Net - Significant Components (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Intangible assets | ||
Other intangible assets, Gross | $ 1,328,034 | $ 1,327,283 |
Other intangible assets, Accumulated Amortization | (600,888) | (420,607) |
Other intangible assets, Net | 727,146 | 906,676 |
Merchant relationships | ||
Intangible assets | ||
Other intangible assets, Gross | 588,000 | 588,000 |
Other intangible assets, Accumulated Amortization | (147,000) | (63,000) |
Other intangible assets, Net | 441,000 | 525,000 |
Channel relationships | ||
Intangible assets | ||
Other intangible assets, Gross | 439,398 | 439,600 |
Other intangible assets, Accumulated Amortization | (200,540) | (148,815) |
Other intangible assets, Net | 238,858 | 290,785 |
Customer relationships | ||
Intangible assets | ||
Other intangible assets, Gross | 167,222 | 166,340 |
Other intangible assets, Accumulated Amortization | (139,969) | (122,465) |
Other intangible assets, Net | 27,253 | 43,875 |
Trade name | ||
Intangible assets | ||
Other intangible assets, Gross | 62,468 | 62,397 |
Other intangible assets, Accumulated Amortization | (58,068) | (45,197) |
Other intangible assets, Net | 4,400 | 17,200 |
Covenants not-to-compete | ||
Intangible assets | ||
Other intangible assets, Gross | 29,940 | 29,940 |
Other intangible assets, Accumulated Amortization | (20,815) | (13,869) |
Other intangible assets, Net | 9,125 | 16,071 |
Database | ||
Intangible assets | ||
Other intangible assets, Gross | 28,000 | 28,000 |
Other intangible assets, Accumulated Amortization | (25,200) | (19,600) |
Other intangible assets, Net | 2,800 | 8,400 |
Trade association | ||
Intangible assets | ||
Other intangible assets, Gross | 10,000 | 10,000 |
Other intangible assets, Accumulated Amortization | (7,750) | (6,750) |
Other intangible assets, Net | 2,250 | 3,250 |
Favorable lease | ||
Intangible assets | ||
Other intangible assets, Gross | 3,006 | 3,006 |
Other intangible assets, Accumulated Amortization | (1,546) | (911) |
Other intangible assets, Net | $ 1,460 | $ 2,095 |
Other Intangible Assets, Net 78
Other Intangible Assets, Net - Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other intangible assets | Selling, general and administrative expenses | |||
Intangible assets | |||
Amortization related to other intangible assets | $ 179.5 | $ 163.8 | $ 75.8 |
Other Intangible Assets, Net 79
Other Intangible Assets, Net - Weighted Average Useful Life (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Other intangible assets | |
Intangible assets | |
Weighted Average Amortization Period | 7 years 4 months 24 days |
Merchant relationships | |
Intangible assets | |
Weighted Average Amortization Period | 7 years |
Channel relationships | |
Intangible assets | |
Weighted Average Amortization Period | 8 years 7 months 6 days |
Customer relationships | |
Intangible assets | |
Weighted Average Amortization Period | 8 years 2 months 12 days |
Trade name | |
Intangible assets | |
Weighted Average Amortization Period | 3 years 10 months 24 days |
Covenants not-to-compete | |
Intangible assets | |
Weighted Average Amortization Period | 4 years 3 months 18 days |
Database | |
Intangible assets | |
Weighted Average Amortization Period | 5 years |
Trade association | |
Intangible assets | |
Weighted Average Amortization Period | 10 years |
Favorable lease | |
Intangible assets | |
Weighted Average Amortization Period | 5 years 1 month 6 days |
Other Intangible Assets, Net 80
Other Intangible Assets, Net - Estimated Future Amortization Expense (Details) - Other intangible assets $ in Thousands | Dec. 31, 2017USD ($) |
Intangible assets | |
2,018 | $ 162,131 |
2,019 | 145,457 |
2,020 | 140,193 |
2,021 | 119,620 |
2,022 | $ 99,420 |
Intangible Assets - Computer 81
Intangible Assets - Computer Software, Net - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Computer software | ||
Computer software, Gross | $ 1,232,998 | $ 1,180,582 |
Computer software, Accumulated Amortization | 849,283 | 757,394 |
Computer software, Net | 383,715 | 423,188 |
Licensed computer software | ||
Computer software | ||
Computer software, Gross | 543,198 | 513,790 |
Computer software, Accumulated Amortization | 360,160 | 315,591 |
Software development costs | ||
Computer software | ||
Computer software, Gross | 450,789 | 428,581 |
Computer software, Accumulated Amortization | 325,443 | 307,190 |
Acquisition (current) technology intangibles | ||
Computer software | ||
Computer software, Gross | 239,011 | 238,211 |
Computer software, Accumulated Amortization | $ 163,680 | $ 134,613 |
Intangible Assets - Computer 82
Intangible Assets - Computer Software, Net - License Agreements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Computer software | ||
Computer software, Gross | $ 1,232,998 | $ 1,180,582 |
Computer software, accumulated amortization | (849,283) | (757,394) |
Computer software, Net | 383,715 | 423,188 |
License Agreements | ||
Computer software | ||
Computer software, Gross | 24,421 | 23,665 |
Computer software, accumulated amortization | $ (15,918) | $ (14,634) |
Intangible Assets - Computer 83
Intangible Assets - Computer Software, Net - Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Licensed computer software | |||
Computer software | |||
Amortization expense | $ 51,247 | $ 45,655 | $ 41,823 |
Software development costs | |||
Computer software | |||
Amortization expense | 27,461 | 26,478 | 22,740 |
Acquisition (current) technology intangibles | |||
Computer software | |||
Amortization expense | $ 28,267 | $ 26,217 | $ 16,734 |
Intangible Assets - Computer 84
Intangible Assets - Computer Software, Net - Weighted Average Useful Life (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Computer Software | |
Computer software | |
Weighted Average Amortization Period | 6 years |
Licensed computer software | |
Computer software | |
Weighted Average Amortization Period | 5 years 9 months 18 days |
Software development costs | |
Computer software | |
Weighted Average Amortization Period | 6 years |
Acquisition (current) technology intangibles | |
Computer software | |
Weighted Average Amortization Period | 6 years 1 month 6 days |
Intangible Assets - Computer 85
Intangible Assets - Computer Software, Net - Estimated Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Licensed computer software | |
Computer software | |
2,018 | $ 45,008 |
2,019 | 29,007 |
2,020 | 24,388 |
2,021 | 15,638 |
2,022 | 12,606 |
Software development costs | |
Computer software | |
2,018 | 23,503 |
2,019 | 18,758 |
2,020 | 14,588 |
2,021 | 10,292 |
2,022 | 6,138 |
Acquisition (current) technology intangibles | |
Computer software | |
2,018 | 25,793 |
2,019 | 25,793 |
2,020 | 20,134 |
2,021 | $ 3,600 |
Property and Equipment, Net - B
Property and Equipment, Net - Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property and equipment | ||
Property and equipment, gross | $ 846,302 | $ 763,035 |
Less accumulated depreciation and amortization | (521,084) | (480,690) |
Property and equipment, net | 325,218 | 282,345 |
Computer and other equipment | ||
Property and equipment | ||
Property and equipment, gross | 424,957 | 356,358 |
Buildings and improvements | ||
Property and equipment | ||
Property and equipment, gross | 262,499 | 246,577 |
Furniture and other equipment | ||
Property and equipment | ||
Property and equipment, gross | 141,927 | 141,836 |
Land | ||
Property and equipment | ||
Property and equipment, gross | 16,195 | 15,877 |
Other | ||
Property and equipment | ||
Property and equipment, gross | $ 724 | $ 2,387 |
Property and Equipment, Net - A
Property and Equipment, Net - Amounts under Capital Lease Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Various equipment under capital lease arrangements | ||
Gross | $ 98,004 | $ 57,114 |
Accumulated Amortization | (48,847) | (42,848) |
Net | 49,157 | 14,266 |
Computer and other equipment | ||
Various equipment under capital lease arrangements | ||
Gross | 92,553 | 51,702 |
Accumulated Amortization | (44,327) | (39,060) |
Furniture and other equipment | ||
Various equipment under capital lease arrangements | ||
Gross | 5,451 | 5,412 |
Accumulated Amortization | $ (4,520) | $ (3,788) |
Property and Equipment, Net - D
Property and Equipment, Net - Depreciation and Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and Equipment, Net | |||
Depreciation and amortization expense related to property and equipment | $ 68 | $ 62.5 | $ 56.6 |
Contract Acquisition Costs, N89
Contract Acquisition Costs, Net - Significant Components (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Contractual arrangements | ||
Contract acquisition costs, net of accumulated amortization | $ 258,665 | $ 235,700 |
Contract acquisition costs, accumulated amortization | 342,700 | 309,700 |
Conversion | ||
Contractual arrangements | ||
Contract acquisition costs, net of accumulated amortization | 139,249 | 144,173 |
Contract acquisition costs, accumulated amortization | 176,400 | 164,400 |
Processing rights | ||
Contractual arrangements | ||
Contract acquisition costs, net of accumulated amortization | 119,416 | 91,527 |
Contract acquisition costs, accumulated amortization | $ 166,300 | $ 145,300 |
Contract Acquisition Costs, N90
Contract Acquisition Costs, Net - Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Conversion | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Amortization expense related to contract acquisition costs | $ 29,625 | $ 28,811 | $ 27,392 |
Processing rights | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Amortization expense related to contract acquisition costs | $ 21,357 | $ 19,804 | $ 17,039 |
Contract Acquisition Costs, N91
Contract Acquisition Costs, Net - Weighted Average Useful Life (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Contractual arrangements | |
Weighted average useful life for each component of contract acquisition costs | 14 years 8 months 12 days |
Conversion | |
Contractual arrangements | |
Weighted average useful life for each component of contract acquisition costs | 13 years 1 month 6 days |
Processing rights | |
Contractual arrangements | |
Weighted average useful life for each component of contract acquisition costs | 16 years 3 months 18 days |
Contract Acquisition Costs, N92
Contract Acquisition Costs, Net - Estimated Future Amortization on Payments for Processing and Conversion (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Conversion | |
Contractual arrangements | |
2,018 | $ 36,890 |
2,019 | 29,673 |
2,020 | 23,475 |
2,021 | 21,491 |
2,022 | 16,581 |
Processing rights | |
Contractual arrangements | |
2,018 | 27,211 |
2,019 | 24,210 |
2,020 | 21,786 |
2,021 | 19,275 |
2,022 | $ 15,123 |
Equity Investments - Ownership
Equity Investments - Ownership and Contributions (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)fund | Dec. 31, 2016USD ($) | |
Atlanta-based venture capital fund limited partnership private equity | Maximum | ||
Equity investments | ||
Ownership interest (as a percent) | 50.00% | |
China Union Pay Data Co., Ltd | ||
Equity investments | ||
Equity method investment ownership (as a percent) | 44.56% | |
TSYS de Mexico | ||
Equity investments | ||
Equity method investment ownership (as a percent) | 49.00% | |
Atlanta-based venture capital fund limited partnership private equity | ||
Equity investments | ||
Number of investment funds | fund | 2 | |
Cumulative contributions to the funds | $ 22.8 | $ 20.1 |
Atlanta-based venture capital fund limited partnership private equity | Maximum | ||
Equity investments | ||
Commitment to invest | $ 20 |
Equity Investments -Equity in I
Equity Investments -Equity in Income and Carrying Amounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity investments | |||
Equity in income of equity investments, net of tax | $ 40,532 | $ 26,115 | $ 25,430 |
Equity investments, net (Note 10) | 163,518 | 133,556 | |
China Union Pay Data Co., Ltd | |||
Equity investments | |||
Equity investments, net (Note 10) | 127,367 | 101,638 | |
Other | |||
Equity investments | |||
Equity investments, net (Note 10) | $ 36,151 | $ 31,918 |
Long-term Borrowings, Capital95
Long-term Borrowings, Capital Lease Obligations and License Agreements - Summary of Long-term Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Mar. 17, 2016 | Dec. 31, 2015 | May 31, 2013 | |
Long-Term Borrowings | |||||
Total debt | $ 3,150,999 | $ 3,360,255 | |||
Less current portion | (559,050) | (48,040) | |||
Noncurrent portion of long-term debt | 2,591,949 | 3,312,215 | |||
3.800% Senior Notes due April 1, 2021 | |||||
Long-Term Borrowings | |||||
Total debt | $ 745,000 | $ 743,625 | |||
Debt instruments | |||||
Stated interest rate (as a percent) | 3.80% | 3.80% | 3.80% | ||
Term | 5 years | 5 years | |||
4.800% Senior Notes due April 1, 2026 | |||||
Long-Term Borrowings | |||||
Total debt | $ 743,042 | $ 742,383 | |||
Debt instruments | |||||
Stated interest rate (as a percent) | 4.80% | 4.80% | 4.80% | ||
Term | 10 years | 10 years | |||
2.375% Senior Notes due June 1, 2018 | |||||
Long-Term Borrowings | |||||
Total debt | $ 549,532 | $ 548,615 | |||
Debt instruments | |||||
Stated interest rate (as a percent) | 2.375% | 2.375% | 2.375% | ||
Term | 5 years | 5 years | |||
3.750% Senior Notes due June 1, 2023 | |||||
Long-Term Borrowings | |||||
Total debt | $ 544,780 | $ 543,947 | |||
Debt instruments | |||||
Stated interest rate (as a percent) | 3.75% | 3.75% | 3.75% | 3.75% | |
Term | 10 years | 10 years | |||
Unsecured term facility, due February 23, 2021 | |||||
Long-Term Borrowings | |||||
Total debt | $ 368,645 | $ 697,832 | |||
Unsecured revolving loan, due February 23, 2021 | |||||
Long-Term Borrowings | |||||
Total debt | $ 200,000 | 70,000 | |||
1.380% note payable due December 31, 2017 | |||||
Long-Term Borrowings | |||||
Total debt | $ 13,853 | ||||
Debt instruments | |||||
Stated interest rate (as a percent) | 1.38% | 1.38% | |||
LIBOR | Unsecured term facility, due February 23, 2021 | |||||
Debt instruments | |||||
Margin added to variable rate (as a percent) | 1.50% | 1.50% | |||
LIBOR | Unsecured revolving loan, due February 23, 2021 | |||||
Debt instruments | |||||
Margin added to variable rate (as a percent) | 1.30% | 1.30% |
Long-term Borrowings, Capital96
Long-term Borrowings, Capital Lease Obligations and License Agreements - Fair Value of Senior Notes (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Estimated fair value | Senior Notes | Level 1 | ||
Fair value disclosure | ||
Fair value of long-term debt | $ 2,684 | $ 2,678 |
Long-term Borrowings, Capital97
Long-term Borrowings, Capital Lease Obligations and License Agreements - Bilateral Loan Facility Commitment (Details) - Consummation of Merger Agreement and alternative financing not obtained - Bilateral Loan Facility Commitment Letter - Term Loan Facility dated as of January 10, 2018 | Dec. 16, 2017USD ($) |
Long-Term Borrowings | |
Financing agreement amount | $ 450,000,000 |
Term | 2 years |
Long-term Borrowings, Capital98
Long-term Borrowings, Capital Lease Obligations and License Agreements - Bridge Term Loan Facility (Details) - USD ($) | Feb. 23, 2016 | Jan. 26, 2016 | Feb. 22, 2016 |
Credit Agreement dated as of February 23, 2016 | Delayed Draw Term Loan | |||
Short-term facility | |||
Principal amount | $ 400,000,000 | ||
Credit Agreement dated as of February 23, 2016 | Revolving Loan Facility | |||
Short-term facility | |||
Amount of facility | 800,000,000 | ||
Bridge term loan facility | |||
Short-term facility | |||
Principal amount | 1,150,000,000 | $ 2,000,000,000 | $ 2,000,000,000 |
Term | 364 days | ||
Decrease in loan amount | $ 350,000,000 |
Long-term Borrowings, Capital99
Long-term Borrowings, Capital Lease Obligations and License Agreements - 2016 Senior Notes (Details) - USD ($) | Apr. 01, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 17, 2016 |
Long-Term Borrowings | ||||
Amount outstanding, net of discount and debt issuance costs | $ 3,150,999,000 | $ 3,360,255,000 | ||
TransFirst | ||||
Long-Term Borrowings | ||||
Purchase price of acquisition | $ 2,351,400,000 | |||
3.800% Senior Notes due April 1, 2021 | ||||
Long-Term Borrowings | ||||
Principal amount | $ 750,000,000 | |||
Stated interest rate (as a percent) | 3.80% | 3.80% | 3.80% | |
Amount outstanding, net of discount and debt issuance costs | $ 745,000,000 | $ 743,625,000 | ||
4.800% Senior Notes due April 1, 2026 | ||||
Long-Term Borrowings | ||||
Principal amount | $ 750,000,000 | |||
Stated interest rate (as a percent) | 4.80% | 4.80% | 4.80% | |
Amount outstanding, net of discount and debt issuance costs | $ 743,042,000 | $ 742,383,000 |
Long-term Borrowings, Capita100
Long-term Borrowings, Capital Lease Obligations and License Agreements - 2013 Senior Notes (Details) - USD ($) | Jul. 01, 2013 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | May 31, 2013 |
Long-Term Borrowings | |||||
Amount outstanding, net of discount and debt issuance costs | $ 3,150,999,000 | $ 3,360,255,000 | |||
2013 Notes | |||||
Long-Term Borrowings | |||||
Fees associated with the issuance | $ 8,900,000 | ||||
Discount on issuance | 4,300,000 | ||||
2.375% Senior Notes due June 1, 2018 | |||||
Long-Term Borrowings | |||||
Principal amount | $ 550,000,000 | ||||
Stated interest rate (as a percent) | 2.375% | 2.375% | 2.375% | ||
Amount outstanding, net of discount and debt issuance costs | $ 549,532,000 | $ 548,615,000 | |||
3.750% Senior Notes due June 1, 2023 | |||||
Long-Term Borrowings | |||||
Principal amount | $ 550,000,000 | ||||
Stated interest rate (as a percent) | 3.75% | 3.75% | 3.75% | 3.75% | |
Amount outstanding, net of discount and debt issuance costs | $ 544,780,000 | $ 543,947,000 | |||
NetSpend, Inc. | |||||
Long-Term Borrowings | |||||
Purchase price of acquisition | $ 1,400,000,000 |
Long-term Borrowings, Capita101
Long-term Borrowings, Capital Lease Obligations and License Agreements - 2016 Credit Agreement (Details) - USD ($) | Feb. 23, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Long-Term Borrowings | |||
Amount outstanding, net of discount and debt issuance costs | $ 3,150,999,000 | $ 3,360,255,000 | |
Credit Agreement dated as of February 23, 2016 | Term Loan Facility | |||
Long-Term Borrowings | |||
Principal amount | $ 700,000,000 | ||
Term | 5 years | ||
Amount outstanding, net of discount and debt issuance costs | 368,600,000 | ||
Credit Agreement dated as of February 23, 2016 | Refinancing Term Loan | |||
Long-Term Borrowings | |||
Principal amount | $ 300,000,000 | ||
Credit Agreement dated as of February 23, 2016 | Delayed Draw Term Loan | |||
Long-Term Borrowings | |||
Principal amount | 400,000,000 | ||
Credit Agreement dated as of February 23, 2016 | Revolving Loan Facility | |||
Long-Term Borrowings | |||
Maximum borrowing capacity | 800,000,000 | ||
Outstanding balance | 200,000,000 | ||
Amounts repaid | $ 70,000,000 | ||
Credit Agreement dated as of February 23, 2016 | Standby letters of credit | |||
Long-Term Borrowings | |||
Maximum borrowing capacity | $ 50,000,000 | ||
Credit Agreement dated as of February 23, 2016 | Minimum | Delayed Draw Term Loan | |||
Long-Term Borrowings | |||
Commitment fee on undrawn commitment (as a percent) | 0.10% | ||
Credit Agreement dated as of February 23, 2016 | Minimum | Revolving Loan Facility | |||
Long-Term Borrowings | |||
Commitment fee regardless of usage (as a percent) | 0.10% | ||
Credit Agreement dated as of February 23, 2016 | Maximum | Delayed Draw Term Loan | |||
Long-Term Borrowings | |||
Commitment fee on undrawn commitment (as a percent) | 0.25% | ||
Credit Agreement dated as of February 23, 2016 | Maximum | Revolving Loan Facility | |||
Long-Term Borrowings | |||
Commitment fee regardless of usage (as a percent) | 0.25% | ||
LIBOR | Credit Agreement dated as of February 23, 2016 | Term Loan Facility | |||
Long-Term Borrowings | |||
Margin added to variable rate (as a percent) | 1.50% | ||
LIBOR | Credit Agreement dated as of February 23, 2016 | Revolving Loan Facility | |||
Long-Term Borrowings | |||
Margin added to variable rate (as a percent) | 1.30% | ||
LIBOR | Credit Agreement dated as of February 23, 2016 | Minimum | Term Loan Facility | |||
Long-Term Borrowings | |||
Margin added to variable rate (as a percent) | 1.00% | ||
LIBOR | Credit Agreement dated as of February 23, 2016 | Minimum | Revolving Loan Facility | |||
Long-Term Borrowings | |||
Margin added to variable rate (as a percent) | 0.90% | ||
LIBOR | Credit Agreement dated as of February 23, 2016 | Maximum | Term Loan Facility | |||
Long-Term Borrowings | |||
Margin added to variable rate (as a percent) | 1.75% | ||
LIBOR | Credit Agreement dated as of February 23, 2016 | Maximum | Revolving Loan Facility | |||
Long-Term Borrowings | |||
Margin added to variable rate (as a percent) | 1.50% | ||
Base rate | Credit Agreement dated as of February 23, 2016 | Term Loan Facility | |||
Long-Term Borrowings | |||
Margin added to variable rate (as a percent) | 0.50% | ||
Base rate | Credit Agreement dated as of February 23, 2016 | Revolving Loan Facility | |||
Long-Term Borrowings | |||
Margin added to variable rate (as a percent) | 0.30% | ||
Base rate | Credit Agreement dated as of February 23, 2016 | Minimum | Term Loan Facility | |||
Long-Term Borrowings | |||
Margin added to variable rate (as a percent) | 0.00% | ||
Base rate | Credit Agreement dated as of February 23, 2016 | Minimum | Revolving Loan Facility | |||
Long-Term Borrowings | |||
Margin added to variable rate (as a percent) | 0.00% | ||
Base rate | Credit Agreement dated as of February 23, 2016 | Maximum | Term Loan Facility | |||
Long-Term Borrowings | |||
Margin added to variable rate (as a percent) | 0.75% | ||
Base rate | Credit Agreement dated as of February 23, 2016 | Maximum | Revolving Loan Facility | |||
Long-Term Borrowings | |||
Margin added to variable rate (as a percent) | 0.50% |
Long-term Borrowings, Capita102
Long-term Borrowings, Capital Lease Obligations and License Agreements - Perpetual Software License (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Long-Term Borrowings | |||
Amount outstanding | $ 3,150,999,000 | $ 3,360,255,000 | |
1.380% note payable due December 31, 2017 | |||
Long-Term Borrowings | |||
Financing agreement amount | $ 30,000,000 | ||
Amount outstanding | $ 13,853,000 |
Long-term Borrowings, Capita103
Long-term Borrowings, Capital Lease Obligations and License Agreements - Annual Principal Payments on Long-Term Debt (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Required annual principal payments on long-term debt | |
2,018 | $ 560,000 |
2,019 | 40,000 |
2,020 | 40,000 |
2,021 | $ 1,230,000 |
Long-term Borrowings, Capita104
Long-term Borrowings, Capital Lease Obligations and License Agreements - Components of Capital Lease Obligations and License Agreements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Long-Term Borrowings | ||
Capital lease obligations | $ 42,815 | $ 3,748 |
Less current portion | (6,762) | (2,687) |
Obligations under capital leases, excluding current portion | 36,053 | 1,061 |
Capital Lease obligations | ||
Long-Term Borrowings | ||
Capital lease obligations | 37,950 | $ 3,748 |
License agreements | ||
Long-Term Borrowings | ||
Capital lease obligations | $ 4,865 |
Long-term Borrowings, Capita105
Long-term Borrowings, Capital Lease Obligations and License Agreements - Term and Future Minimum Lease Payments under Capital Leases and License Agreements (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Capital Lease obligations | |
Future minimum lease payments | |
2,018 | $ 6,652 |
2,019 | 6,204 |
2,020 | 6,127 |
2,021 | 6,127 |
2,022 | 6,095 |
Thereafter | 11,484 |
Total minimum lease payments | 42,689 |
Less amount representing interest | (4,739) |
Principal minimum lease payments | 37,950 |
License agreements | |
Future minimum lease payments | |
2,018 | 1,449 |
2,019 | 1,621 |
2,020 | 1,275 |
2,021 | 691 |
2,022 | 39 |
Total minimum lease payments | 5,075 |
Less amount representing interest | (210) |
Principal minimum lease payments | $ 4,865 |
Minimum | Capital Lease obligations | |
Various equipment under capital lease arrangements | |
Term of obligation | 1 year |
Maximum | Capital Lease obligations | |
Various equipment under capital lease arrangements | |
Term of obligation | 6 years |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Current Liabilities | ||
Deferred revenues | $ 52,913 | $ 40,473 |
Accrued expenses | 38,018 | 32,861 |
Accrued third-party commissions | 34,276 | 28,310 |
Dividends payable | 24,886 | 19,513 |
Accrued interest | 19,330 | 19,029 |
Litigation settlements | 1,380 | 20,795 |
Income taxes payable | 185 | 1,673 |
Other | 107,847 | 100,605 |
Total | $ 278,835 | $ 263,259 |
Income Taxes - Components of Ex
Income Taxes - Components of Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current income tax expense: | |||
Federal | $ 210,550 | $ 140,079 | $ 139,228 |
State | 20,316 | 9,218 | 9,255 |
Foreign | 7,500 | 4,443 | 4,762 |
Total current income tax expense | 238,366 | 153,740 | 153,245 |
Deferred income tax (benefit) expense: | |||
Federal | (178,879) | 8,393 | (2,198) |
State | 5,093 | (65) | 442 |
Foreign | 1,298 | (893) | (125) |
Total deferred income tax (benefit) expense | (172,488) | 7,435 | (1,881) |
Total income tax expense | $ 65,878 | $ 161,175 | $ 151,364 |
Income Taxes - Components of In
Income Taxes - Components of Income before Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of income before income tax expense: | |||
Domestic | $ 603,260 | $ 454,628 | $ 485,191 |
Foreign | 14,302 | 6,404 | 8,373 |
Income before income taxes and equity in income of equity investments | $ 617,562 | $ 461,032 | $ 493,564 |
Income Taxes - Reconciliation t
Income Taxes - Reconciliation to Amount Computed by Applying Statutory Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes | |||
Statutory U.S. federal income tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
Computed "expected" income tax expense | $ 216,147 | $ 161,425 | $ 173,911 |
International tax rate differential and equity income | 11,953 | 8,715 | 8,367 |
State income tax expense, net of federal income tax effect | 12,470 | 9,127 | 7,101 |
Increase (decrease) in valuation allowance | 8,230 | 2,855 | (517) |
Tax credits | (20,998) | (15,695) | (28,831) |
Share-Based Compensation | (14,310) | ||
Deduction for domestic production activities | (17,150) | (12,950) | (11,550) |
Re-measurement of deferred tax asset / deferred tax liability | (146,093) | ||
Permanent differences and other, net | 15,629 | 7,698 | 2,883 |
Total income tax expense | $ 65,878 | $ 161,175 | $ 151,364 |
Income Taxes - Significant Net
Income Taxes - Significant Net Deferred Tax Liability Components (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred income tax assets: | ||
Net operating loss and income tax credit carryforwards | $ 35,089 | $ 34,490 |
Allowances for doubtful accounts and billing adjustments | 852 | 1,512 |
Deferred revenue | 17,813 | 27,461 |
Share-based compensation | 15,170 | 25,497 |
Foreign currency translation | 4,019 | |
Other, net | 14,915 | 38,341 |
Total deferred income tax assets | 83,839 | 131,320 |
Less valuation allowance for deferred income tax assets | (29,531) | (21,301) |
Net deferred income tax assets | 54,308 | 110,019 |
Deferred income tax liabilities: | ||
Excess tax over financial statement depreciation | (43,056) | (63,432) |
Computer software development costs | (48,244) | (80,837) |
Purchased intangibles | (42,467) | (344,547) |
Foreign currency translation | (942) | |
Partnership interests | (143,908) | (18,776) |
Other, net | (7,917) | (14,924) |
Total deferred income tax liabilities | (286,534) | (522,516) |
Net deferred income tax liabilities | (232,226) | (412,497) |
Total net deferred tax assets (liabilities): | ||
Noncurrent deferred tax asset | 6,091 | 7,055 |
Noncurrent deferred tax liability | (238,317) | (419,552) |
Net deferred income tax liabilities | (232,226) | (412,497) |
Recognized deferred tax assets | ||
Carryforwards of net operating losses | 6,600 | 8,500 |
Carryforwards of capital losses | 300 | 400 |
Federal and state income tax credit carryforwards | 28,200 | $ 25,600 |
Tax Cut and Jobs Acts of 2017 | ||
Decrease to net deferred income tax liabilities | 144,500 | |
Valuation allowance | ||
Increase in the valuation allowance for deferred income tax assets | $ 8,200 |
Income Taxes - Tax Cuts and Job
Income Taxes - Tax Cuts and Jobs Act of 2017 (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Tax Cut and Jobs Acts of 2017 | ||||
Federal corporate income tax rate (as a percent) | 35.00% | 35.00% | 35.00% | |
Tax benefit recognized upon remeasurement of deferred tax assets and liabilities | $ 144.5 | |||
Effective tax rate on cash foreign accumulated earnings (as a percent) | 15.00% | |||
Effective tax rate on non-cash foreign accumulated earnings (as a percent) | 8.00% | |||
One-time net transition tax expense | $ 4.9 | |||
Impact related to GILTI | $ 0 | |||
Expected | ||||
Tax Cut and Jobs Acts of 2017 | ||||
Federal corporate income tax rate (as a percent) | 21.00% |
Income Taxes - Undistributed Ea
Income Taxes - Undistributed Earnings of Foreign Subsidiaries (Detail) $ in Millions | Dec. 31, 2017USD ($) |
Income Taxes | |
Undistributed earnings | $ 103.3 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of the beginning and ending amount of unrecognized tax liabilities | |||
Beginning Balance | $ 16.5 | $ 13.1 | $ 6.7 |
Additions based on tax positions related to current year | 4.9 | 3.4 | 2.3 |
Additions for tax positions of prior years | 4.6 | 3 | 4.7 |
Reductions for tax positions of prior years | (0.6) | ||
Decreases resulting from settlements with tax authorities | 2.2 | 3 | |
Net, current activity | 7.3 | 3.4 | 6.4 |
Ending Balance | 23.8 | 16.5 | $ 13.1 |
Income Tax Uncertainties [Abstract] | |||
Gross accrued interest and penalties on unrecognized tax benefits | 2 | 1.8 | |
Unrecognized income tax benefits that, if recognized, would affect the effective tax rates | 24.5 | 17 | |
Unrecognized income tax benefits that, if recognized, would affect the effective tax rates , interest and penalties | $ 1.3 | $ 1.2 |
Commitments and Contingencies -
Commitments and Contingencies - Lease and Purchase Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Future minimum lease payments under noncancelable operating leases and purchase commitments | |||
2,018 | $ 145,866 | ||
2,019 | 148,006 | ||
2,020 | 71,651 | ||
2,021 | 38,803 | ||
2,022 | 28,095 | ||
Thereafter | 77,555 | ||
Total future minimum commitment payments | 509,976 | ||
Operating lease rental expense | |||
Rental expense under all operating leases | $ 134,000 | $ 122,900 | $ 124,800 |
Commitments and Contingencie115
Commitments and Contingencies - Legal Proceedings (Details) | 12 Months Ended |
Dec. 31, 2017defendant | |
TelexFree Matter | Minimum | Propay | |
Commitments and Contingencies | |
Number of defendants | 1 |
Commitments and Contingencie116
Commitments and Contingencies - Guarantees and Indemnifications (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Guarantees and indemnifications | ||
Estimated gross settlement exposure | $ 16,700,000 | $ 13,800,000 |
Cardholder overdraft limit | 10 | |
Cardholders' overdrawn account balances | 25,500,000 | 21,200,000 |
Cardholders' loss reserve | 9,500,000 | $ 10,500,000 |
Recorded a liability for guarantees or indemnities | $ 0 | |
Minimum | ||
Guarantees and indemnifications | ||
Period after collection of cardholders' funds they are received by Issuing Bank | 3 days | |
Maximum | ||
Guarantees and indemnifications | ||
Advance on behalf of cardholders | $ 1,000,000 |
Commitments and Contingencie117
Commitments and Contingencies - Private Equity Investments (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)fund | Dec. 31, 2016USD ($) | |
Atlanta-based venture capital fund limited partnership private equity | Maximum | ||
Commitments | ||
Ownership interest (as a percent) | 50.00% | |
Atlanta-based venture capital fund limited partnership private equity | ||
Commitments | ||
Number of investment funds | fund | 2 | |
Cumulative contributions to the funds | $ 22.8 | $ 20.1 |
Investments | 26.1 | $ 22.8 |
Atlanta-based venture capital fund limited partnership private equity | Maximum | ||
Commitments | ||
Commitment to invest | $ 20 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Retirement Savings Plan | |||
Employee contribution matched (as a percent) | 100.00% | ||
Contributions charged to expense | $ 23,113 | $ 21,077 | $ 24,169 |
Stock purchase plan | |||
Employee contribution matched (as a percent) | 15.00% | ||
Contributions charged to expense | $ 1,600 | $ 1,514 | $ 1,378 |
Maximum | |||
Retirement Savings Plan | |||
Eligible employee compensation for matching contribution (as a percent) | 4.00% | ||
Company discretionary contributions (as a percent) | 4.00% |
Equity -Dividends (Details)
Equity -Dividends (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity | |||
Dividends paid on common stock | $ 79,017 | $ 73,378 | $ 73,677 |
Equity - Equity Compensation Pl
Equity - Equity Compensation Plans (Details) - $ / shares shares in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Options | |||||
Equity compensation plans | |||||
Weighted-average exercise price of outstanding options, warrants and rights (in dollars per share) | $ 37.15 | $ 32.78 | $ 28.07 | $ 23.83 | |
Number of securities to be issued upon exercise of outstanding options (in shares) | 2,695 | 2,996 | 2,887 | 4,892 | |
Equity compensation plans approved by security holders | |||||
Equity compensation plans | |||||
Number of securities to be issued upon exercise of outstanding options, warrants and rights (in shares) | 4,561 | ||||
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (in shares) | [1] | 14,888 | |||
Equity compensation plans approved by security holders | Stock Options | |||||
Equity compensation plans | |||||
Weighted-average exercise price of outstanding options, warrants and rights (in dollars per share) | [2] | $ 37.15 | |||
[1] | Weighted-average exercise price represents 2.7 million options only and does not include restricted share units that have no exercise price.Shares available for future grants under the Total System Services, Inc. 2017 Omnibus Plan, which could be in the form of options, nonvested awards and performance shares | ||||
[2] | Weighted-average exercise price represents 2.7 million options only and does not include restricted share units that have no exercise price. |
Share-Based Compensation - Gene
Share-Based Compensation - General (Detail) - shares | 12 Months Ended | |
Dec. 31, 2017 | Apr. 26, 2017 | |
Total System Services, Inc. 2017 Omnibus Plan | ||
Share-based Compensation | ||
Aggregate number of shares of stock which may be granted under plan | 15,000,000 | |
Total System Services, Inc. 2012 Omnibus Plan | ||
Share-based Compensation | ||
Aggregate number of shares of stock which may be granted under plan | 17,000,000 | |
Total System Services, Inc. 2007 Omnibus Plan | ||
Share-based Compensation | ||
Aggregate number of shares of stock which may be granted under plan | 5,000,000 | |
Total System Services, Inc. 2002 Long-Term Incentive Plan | ||
Share-based Compensation | ||
Aggregate number of shares of stock which may be granted under plan | 9,400,000 | |
Total System Services, Inc. 2000 Long-Term Incentive Plan | ||
Share-based Compensation | ||
Aggregate number of shares of stock which may be granted under plan | 2,400,000 | |
Stock Options | ||
Share-based Compensation | ||
Life of award | 10 years | |
Stock Options | Minimum | ||
Share-based Compensation | ||
Exercise price percentage of fair market value of common stock | 100.00% | |
Stock Options | Maximum | ||
Share-based Compensation | ||
Life of award | 10 years |
Share-Based Compensation - Expe
Share-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-Based Compensation | |||
Share-based compensation | $ 42,409 | $ 43,728 | $ 41,549 |
Selling, general and administrative expenses | |||
Share-Based Compensation | |||
Share-based compensation | $ 42,400 | $ 43,700 | $ 41,500 |
Share-Based Compensation - Nonv
Share-Based Compensation - Nonvested Awards - Vesting and Grants Cost (Details) - Nonvested Share Awards - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Shares granted | |||
Number of shares granted | 329,051 | 362,804 | 388,211 |
Market value | $ 18.1 | $ 16.8 | $ 14.9 |
Certain key employees | Maximum | |||
Share-based Compensation | |||
Award vesting period | 4 years |
Share-Based Compensation - N124
Share-Based Compensation - Nonvested Awards - Activity and Unrecognized Compensation Cost (Details) - Nonvested Share Awards - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Shares | |||
Outstanding at beginning of year (in shares) | 863,000 | 1,146,000 | 1,769,000 |
Granted (in shares) | 329,051 | 362,804 | 388,211 |
Vested (in shares) | (458,000) | (563,000) | (930,000) |
Forfeited/canceled/adjusted (in shares) | (100,000) | (84,000) | (81,000) |
Outstanding at end of year (in shares) | 634,000 | 863,000 | 1,146,000 |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 37.78 | $ 31.11 | $ 26.75 |
Granted (in dollars per share) | 55.06 | 46.23 | 38.38 |
Vested (in dollars per share) | 36.01 | 29.95 | 26.05 |
Forfeited/canceled/adjusted (in dollars per share) | 43.82 | 36.79 | 28.78 |
Outstanding at end of year (in dollars per share) | $ 47.19 | $ 37.78 | $ 31.11 |
Unrecognized compensation cost | |||
Unrecognized compensation cost | $ 15.8 | ||
Weighted average period of recognition of unrecognized compensation cost | 1 year 9 months 18 days |
Share-Based Compensation - Perf
Share-Based Compensation - Performance and Market-Based Award Vesting and Unrecognized Compensation Cost (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Performance Based Awards | |
Share-based Compensation | |
Unrecognized compensation cost (in dollars) | $ 16 |
Performance Based Awards | Maximum | |
Share-based Compensation | |
Vesting percentage | 200.00% |
Market Based Share Awards | |
Share-based Compensation | |
Unrecognized compensation cost (in dollars) | $ 1.6 |
Market Based Share Awards | Maximum | |
Share-based Compensation | |
Vesting percentage | 200.00% |
Share-Based Compensation - Mark
Share-Based Compensation - Market- Based Awards Granted (Details) - Market Based Share Awards - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Performance Period Ending December 2019 | |||
Share-based Compensation | |||
Number of shares granted | 44,275 | ||
Performance Period Ending December 2017 | |||
Share-based Compensation | |||
Number of shares granted | 6,403 | 57,982 | |
Performance Period Ending December 2018 | |||
Share-based Compensation | |||
Number of shares granted | 52,404 | ||
Performance Period Ending July 2016, 2017 and 2018 | |||
Share-based Compensation | |||
Number of shares granted | 25,000 |
Share-Based Compensation - P127
Share-Based Compensation - Performance-Based Awards Granted (Details) - Performance Based Awards - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Performance Period Ending December 2019 | |||
Share-based Compensation | |||
Number of shares granted | 103,297 | ||
Performance Period Ending December 2017, Tranche One | |||
Share-based Compensation | |||
Number of shares granted | 146,094 | ||
Performance Period Ending December 2017 Tranche Two | |||
Share-based Compensation | |||
Number of shares granted | 26,145 | ||
Performance Period Ending December 2016, Tranche One | |||
Share-based Compensation | |||
Number of shares granted | 15,605 | ||
Performance Period Ending December 2017 | |||
Share-based Compensation | |||
Number of shares granted | 14,940 | 135,289 | |
Performance Period Ending December 2018, Tranche One | |||
Share-based Compensation | |||
Number of shares granted | 29,332 | ||
Performance Period Ending December 2018, Tranche Two | |||
Share-based Compensation | |||
Number of shares granted | 67,517 | ||
Performance Period Ending December 2018, Tranche Three | |||
Share-based Compensation | |||
Number of shares granted | 78,220 | ||
Performance Period Ending December 2018, Tranche Four | |||
Share-based Compensation | |||
Number of shares granted | 122,284 | ||
Performance Period Ending December 2016, Tranche Two | |||
Share-based Compensation | |||
Number of shares granted | 144,995 | ||
Performance Period Ending December 2015 | |||
Share-based Compensation | |||
Number of shares granted | 165,543 |
Share-Based Compensation - P128
Share-Based Compensation - Performance and Market-Based Awards Authorized (Details) - Performance and Market Based Awards - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation | |||
Total Number of Shares Awarded | 319,811 | 531,700 | 383,814 |
Potential Number of Performance and Market-Based Shares to be Vested | 596,192 | 903,364 | 687,015 |
Share-Based Compensation - P129
Share-Based Compensation - Performance and Market-Based Nonvested Activity (Details) - Performance and Market Based Awards - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Shares | |||
Outstanding at beginning of year (in shares) | 982 | 918 | 766 |
Granted (in shares) | 618 | 540 | 384 |
Vested (in shares) | (621) | (140) | (241) |
Forfeited/canceled/adjusted | (174) | (336) | 9 |
Outstanding at end of year (in shares) | 805 | 982 | 918 |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 33.43 | $ 31.19 | $ 25.86 |
Granted (in dollars per share) | 52.48 | 45.91 | 36.84 |
Vested (in dollars per share) | 14.85 | 37.91 | 22.92 |
Forfeited/canceled/adjusted (in dollars per share) | 46.98 | 37.70 | 22.20 |
Outstanding at end of year (in dollars per share) | $ 45.41 | $ 33.43 | $ 31.19 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Award Vesting and Weighted Average Assumptions (Details) - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation | |||
Award vesting period | 3 years | ||
Award expiration period | 10 years | ||
Weighted average assumptions and weighted average fair value of options | |||
Number of options granted (in shares) | 550,527 | 687,685 | 613,473 |
Weighted average exercise price (in dollars per share) | $ 54.97 | $ 47.01 | $ 39.01 |
Risk-free interest rate (as a percent) | 1.78% | 1.24% | 1.73% |
Expected volatility (as a percent) | 21.72% | 21.53% | 20.80% |
Expected term | 4 years 7 months 6 days | 4 years 6 months | 6 years 3 months 18 days |
Dividend yield (as a percent) | 0.73% | 0.86% | 1.04% |
Weighted average fair value (in dollars per share) | $ 10.85 | $ 8.50 | $ 8.27 |
Maximum | |||
Share-based Compensation | |||
Award expiration period | 10 years | ||
Retirement-eligible employees | Minimum | |||
Share-based Compensation | |||
Required service period for retirement eligible employees | 12 months | ||
Retirement-eligible employees | Maximum | |||
Share-based Compensation | |||
Required service period for retirement eligible employees | 18 months | ||
Executive officers | |||
Share-based Compensation | |||
Award vesting period | 3 years | 3 years | 3 years |
Share-Based Compensation - S131
Share-Based Compensation - Stock Option Activity (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Options: | |||
Outstanding at beginning of year (in shares) | 2,996,000 | 2,887,000 | 4,892,000 |
Granted (in shares) | 550,527 | 687,685 | 613,473 |
Exercised (in shares) | (730,000) | (500,000) | (2,586,000) |
Forfeited/canceled (in shares) | (122,000) | (79,000) | (32,000) |
Outstanding at end of year (in shares) | 2,695,000 | 2,996,000 | 2,887,000 |
Options exercisable at year-end (in shares) | 1,758,000 | 1,877,000 | 1,439,000 |
Weighted Average Exercise Price | |||
Outstanding at beginning of year (in dollars per share) | $ 32.78 | $ 28.07 | $ 23.83 |
Granted (in dollars per share) | 54.97 | 47.01 | 39.01 |
Exercised (in dollars per share) | 30.05 | 23.43 | 22.68 |
Forfeited/canceled (in dollars per share) | 52.76 | 43.49 | 20.79 |
Outstanding at end of year (in dollars per share) | 37.15 | 32.78 | 28.07 |
Options exercisable at year-end (in dollars per share) | 31 | 28.45 | 25.17 |
Stock options | |||
Weighted average fair value of options granted during the year (in dollars per share) | $ 10.85 | $ 8.50 | $ 8.27 |
Outstanding, Average remaining contractual life | 6 years 10 months 24 days | ||
Outstanding, Aggregate intrinsic value | $ 112,964 | ||
Exercisable, Average remaining contractual life | 6 years 1 month 6 days | ||
Exercisable, Aggregate intrinsic value | $ 84,572 |
Share-Based Compensation - S132
Share-Based Compensation - Stock Options Exercised and Unrecognized Compensation Cost (Details) - Stock Options - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Common stock issued from treasury for options exercised | |||
Options Exercised and Issued from Treasury | 730 | 500 | 2,586 |
Intrinsic Value | $ 23,629 | $ 12,984 | $ 67,702 |
Unrecognized compensation cost | |||
Unrecognized compensation cost | $ 2,900 | ||
Weighted average period of recognition of unrecognized compensation cost | 1 year 7 months 6 days |
Treasury Stock - Summary and Re
Treasury Stock - Summary and Related Carrying Value (Details) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Treasury Stock | |||
Number of Treasury Shares | 21,862 | 19,314 | 19,988 |
Treasury Shares Cost | $ 909,960 | $ 646,047 | $ 641,664 |
Treasury Stock - Stock Repurcha
Treasury Stock - Stock Repurchase Plans and Repurchases by Year (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | 34 Months Ended | 35 Months Ended | 36 Months Ended | |||||||
Dec. 31, 2017 | Nov. 30, 2017 | Oct. 31, 2017 | Apr. 30, 2010 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2017 | Nov. 30, 2017 | Dec. 31, 2017 | Jan. 31, 2015 | Jan. 31, 2014 | |
Stock Repurchase Plan | |||||||||||||
Total Number of Shares Purchased | 1,667,000 | 1,500,000 | 300,000 | 3,467,000 | |||||||||
Average Price Paid per Share | $ 75.22 | $ 73.05 | $ 71.26 | $ 73.41 | |||||||||
Repurchased Shares Cost | $ 284,237 | $ 30,275 | $ 242,235 | ||||||||||
Stock repurchase plans | |||||||||||||
Stock Repurchase Plan | |||||||||||||
Total Number of Shares Purchased | 3,850,000 | 500,000 | 5,150,000 | ||||||||||
Average Price Paid per Share | $ 73.41 | $ 48.57 | $ 47.01 | ||||||||||
Repurchased Shares Cost | $ 282,645 | $ 24,287 | $ 242,085 | ||||||||||
April 2010 stock repurchase plan | |||||||||||||
Stock Repurchase Plan | |||||||||||||
Shares authorized to be repurchased | 10,000,000 | 28,000,000 | |||||||||||
Period over which shares may be purchased | 2 years | ||||||||||||
January 2015 stock repurchase plan | |||||||||||||
Stock Repurchase Plan | |||||||||||||
Shares authorized to be repurchased | 20,000,000 | ||||||||||||
Total Number of Shares Purchased | 6,350,000 | 7,850,000 | 9,500,000 |
Treasury Stock - Purchases of C
Treasury Stock - Purchases of Common Stock on a Monthly Basis (Details) - $ / shares | 1 Months Ended | 3 Months Ended | 12 Months Ended | 34 Months Ended | 35 Months Ended | 36 Months Ended | |||||
Dec. 31, 2017 | Nov. 30, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2017 | Nov. 30, 2017 | Dec. 31, 2017 | Jan. 31, 2015 | |
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Total Number of Shares Purchased/Total Number of Cumulative shares Purchased as Part of Publicly announced Plans or Programs | 1,667,000 | 1,500,000 | 300,000 | 3,467,000 | |||||||
Average Price Paid per Share | $ 75.22 | $ 73.05 | $ 71.26 | $ 73.41 | |||||||
Shares withheld for payment of taxes | 16,837 | 20,875 | 144,839 | ||||||||
January 2015 stock repurchase plan | |||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||
Total Number of Shares Purchased/Total Number of Cumulative shares Purchased as Part of Publicly announced Plans or Programs | 6,350,000 | 7,850,000 | 9,500,000 | ||||||||
Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs | 10,500,000 | 12,150,000 | 13,650,000 | 10,500,000 | 10,500,000 | 13,650,000 | 12,150,000 | 10,500,000 | |||
Shares authorized to be repurchased | 20,000,000 |
Treasury Stock - Share Withhold
Treasury Stock - Share Withholding for Taxes (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Treasury Stock | |||
Shares acquired for withholding for taxes on employee awards | 16,837 | 20,875 | 144,839 |
Value of shares acquired for withholding for taxes on employee awards | $ 1.6 | $ 6 |
Other Comprehensive Income (137
Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other comprehensive income (loss) | ||||
Beginning Balance | $ 2,099,920 | |||
Pretax Amount | 22,062 | $ (24,172) | $ (23,269) | $ (17,280) |
Tax Effect | 2,052 | (1,558) | (1,651) | (1,605) |
Net-of-tax Amount | 20,010 | (22,614) | (21,618) | (15,675) |
Ending Balance | 2,240,993 | 2,099,920 | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Other comprehensive income (loss) | ||||
Beginning Balance | (56,158) | (33,544) | (11,926) | 3,749 |
Ending Balance | (36,148) | (56,158) | (33,544) | (11,926) |
Foreign currency translation adjustments | ||||
Other comprehensive income (loss) | ||||
Beginning Balance | (65,510) | (35,041) | (13,592) | |
Pretax Amount | 24,794 | (36,341) | (22,997) | |
Tax Effect | 2,776 | (5,872) | (1,548) | |
Net-of-tax Amount | 22,018 | (30,469) | (21,449) | |
Ending Balance | (43,492) | (65,510) | (35,041) | (13,592) |
Transfer from noncontrolling interest (NCI) | ||||
Other comprehensive income (loss) | ||||
Beginning Balance | 28 | 28 | 28 | |
Ending Balance | 28 | 28 | 28 | 28 |
Available-for-sale securities | ||||
Other comprehensive income (loss) | ||||
Beginning Balance | 9,862 | 2,503 | 1,105 | |
Pretax Amount | (2,050) | 11,394 | 2,177 | |
Tax Effect | (634) | 4,035 | 779 | |
Net-of-tax Amount | (1,416) | 7,359 | 1,398 | |
Ending Balance | 8,446 | 9,862 | 2,503 | 1,105 |
Postretirement healthcare plans | ||||
Other comprehensive income (loss) | ||||
Beginning Balance | (538) | (1,034) | 533 | |
Pretax Amount | (682) | 775 | (2,449) | |
Tax Effect | (90) | 279 | (882) | |
Net-of-tax Amount | (592) | 496 | (1,567) | |
Ending Balance | $ (1,130) | $ (538) | $ (1,034) | $ 533 |
Segment Reporting, including138
Segment Reporting, including Geographic Area Data and Major Customers - Operating Results (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting | |||
Number of reportable operating segments | segment | 3 | ||
Adjusted operating income | $ 999,564 | $ 856,995 | $ 668,177 |
Share-based compensation | 42,409 | 43,728 | 41,549 |
Operating income | 734,044 | 573,382 | 534,107 |
Nonoperating expenses, net | (116,482) | (112,350) | (40,543) |
Income before income taxes and equity in income of equity investments | 617,562 | 461,032 | 493,564 |
Net revenue | 3,400,332 | 3,041,876 | 2,499,349 |
Add: reimbursable items, interchange and assessment expenses | 1,527,633 | 1,128,201 | 280,192 |
Total revenues | 4,927,965 | 4,170,077 | 2,779,541 |
Issuer Solutions | |||
Segment Reporting | |||
Total revenues | 1,751,468 | 1,680,763 | 1,650,029 |
Merchant Solutions | |||
Segment Reporting | |||
Total revenues | 2,431,262 | 1,828,469 | 549,135 |
Netspend | |||
Segment Reporting | |||
Total revenues | 745,235 | 660,845 | 580,377 |
Operating Segments | |||
Segment Reporting | |||
Net revenue | $ 3,445,511 | $ 3,077,574 | $ 2,528,331 |
Operating margin on net revenue | 29.40% | 28.20% | 26.70% |
Operating Segments | Issuer Solutions | |||
Segment Reporting | |||
Adjusted operating income | $ 574,580 | $ 525,025 | $ 489,151 |
Net revenue | $ 1,594,959 | $ 1,515,462 | $ 1,473,914 |
Operating margin on net revenue | 36.00% | 34.60% | 33.20% |
Operating Segments | Merchant Solutions | |||
Segment Reporting | |||
Adjusted operating income | $ 391,466 | $ 307,595 | $ 150,225 |
Net revenue | $ 1,103,682 | $ 898,533 | $ 474,040 |
Operating margin on net revenue | 35.50% | 34.20% | 31.70% |
Operating Segments | Netspend | |||
Segment Reporting | |||
Adjusted operating income | $ 182,082 | $ 160,371 | $ 137,837 |
Net revenue | $ 746,870 | $ 663,579 | $ 580,377 |
Operating margin on net revenue | 24.40% | 24.20% | 23.70% |
Corporate Administration and Other | |||
Segment Reporting | |||
Adjusted operating income | $ (148,564) | $ (135,996) | $ (109,036) |
Intersegment | |||
Segment Reporting | |||
Net revenue | (45,179) | (35,698) | (28,982) |
Segment Reconciling Items | |||
Segment Reporting | |||
TransFirst and Cayan M&A and integration expenses | 13,367 | 28,176 | |
Litigation, claims, judgements or settlements | 1,947 | 21,719 | |
Acquisition intangible amortization | $ 207,797 | $ 189,990 | $ 92,521 |
Segment Reporting, including139
Segment Reporting, including Geographic Area Data and Major Customers - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting | |||
Total depreciation and amortization | $ 405,906 | $ 373,546 | $ 258,264 |
Operating Segments | |||
Segment Reporting | |||
Depreciation and amortization | 193,229 | 179,995 | 163,390 |
Operating Segments | Issuer Solutions | |||
Segment Reporting | |||
Depreciation and amortization | 147,914 | 141,309 | 134,436 |
Operating Segments | Merchant Solutions | |||
Segment Reporting | |||
Depreciation and amortization | 29,477 | 25,553 | 18,268 |
Operating Segments | Netspend | |||
Segment Reporting | |||
Depreciation and amortization | 15,838 | 13,133 | 10,686 |
Segment Reconciling Items | |||
Segment Reporting | |||
Acquisition intangible amortization | 207,797 | 189,990 | 92,521 |
Corporate Administration and Other | |||
Segment Reporting | |||
Depreciation and amortization | $ 4,880 | $ 3,561 | $ 2,353 |
Segment Reporting, including140
Segment Reporting, including Geographic Area Data and Major Customers - Total Assets by Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting | ||
Total assets | $ 6,331,689 | $ 6,366,177 |
Operating Segments | Issuer Solutions | ||
Segment Reporting | ||
Total assets | 5,735,195 | 5,667,280 |
Operating Segments | Merchant Solutions | ||
Segment Reporting | ||
Total assets | 3,136,395 | 3,295,509 |
Operating Segments | Netspend | ||
Segment Reporting | ||
Total assets | 1,418,644 | 1,474,595 |
Intersegment | ||
Segment Reporting | ||
Total assets | $ (3,958,545) | $ (4,071,207) |
Segment Reporting, including141
Segment Reporting, including Geographic Area Data and Major Customers - Property and Equipment, net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property and equipment, net, by geographic areas | ||
Property and equipment, net of accumulated depreciation and amortization | $ 325,218 | $ 282,345 |
United States | ||
Property and equipment, net, by geographic areas | ||
Property and equipment, net of accumulated depreciation and amortization | 273,690 | 236,913 |
Europe | ||
Property and equipment, net, by geographic areas | ||
Property and equipment, net of accumulated depreciation and amortization | 43,586 | 38,866 |
Other | ||
Property and equipment, net, by geographic areas | ||
Property and equipment, net of accumulated depreciation and amortization | $ 7,942 | $ 6,566 |
Segment Reporting, including142
Segment Reporting, including Geographic Area Data and Major Customers - Geographic Revenues to External Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Geographic revenues to external revenues by operating segment | |||
Total revenues | $ 4,927,965 | $ 4,170,077 | $ 2,779,541 |
Percentage of Revenues | 100.00% | 100.00% | 100.00% |
United States | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | $ 4,224,854 | $ 3,520,001 | $ 2,110,044 |
Percentage of Revenues | 85.70% | 84.40% | 75.90% |
Europe | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | $ 320,684 | $ 307,121 | $ 304,650 |
Percentage of Revenues | 6.50% | 7.40% | 11.00% |
Canada | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | $ 315,170 | $ 284,733 | $ 289,083 |
Percentage of Revenues | 6.40% | 6.80% | 10.40% |
Other | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | $ 67,257 | $ 58,222 | $ 75,764 |
Percentage of Revenues | 1.40% | 1.40% | 2.70% |
Issuer Solutions | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | $ 1,751,468 | $ 1,680,763 | $ 1,650,029 |
Issuer Solutions | United States | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | 1,051,292 | 1,032,381 | 981,588 |
Issuer Solutions | Europe | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | 320,400 | 306,894 | 304,628 |
Issuer Solutions | Canada | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | 313,674 | 284,028 | 288,728 |
Issuer Solutions | Other | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | 66,102 | 57,460 | 75,085 |
Merchant Solutions | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | 2,431,262 | 1,828,469 | 549,135 |
Merchant Solutions | United States | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | 2,428,327 | 1,826,775 | 548,079 |
Merchant Solutions | Europe | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | 284 | 227 | 22 |
Merchant Solutions | Canada | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | 1,496 | 705 | 355 |
Merchant Solutions | Other | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | 1,155 | 762 | 679 |
Netspend | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | 745,235 | 660,845 | 580,377 |
Netspend | United States | |||
Geographic revenues to external revenues by operating segment | |||
Total revenues | $ 745,235 | $ 660,845 | $ 580,377 |
Supplemental Cash Flow Infor143
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Supplemental Cash Flow Information | |||
Acquisitions of computer equipment under capital leases and software under license agreements | $ 40.8 | $ 1.8 | $ 4.1 |
Acquisition of software under direct financing agreements | $ 0 | $ 0 | $ 30 |
Acquisitions - Redeemable Nonco
Acquisitions - Redeemable Noncontrolling Interest (Details) - USD ($) $ in Thousands | Feb. 03, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Redeemable Noncontrolling Interest | |||
Purchase of noncontrolling interest | $ 70,000 | $ 70,000 | $ 5,878 |
Decrease to noncontrolling interest from acquisition of additional interest in subsidiary | 9,800 | 9,843 | |
Decrease from acquisition of noncontrolling interest | 60,157 | 5,878 | |
Additional Paid-In Capital | |||
Redeemable Noncontrolling Interest | |||
Decrease from acquisition of noncontrolling interest | $ 60,200 | $ 60,157 | $ 443 |
Central Payments Co., LLC | |||
Redeemable Noncontrolling Interest | |||
Noncontrolling equity interest acquired (as a percent) | 10.00% | ||
Noncontrolling equity interest (as a percent) | 15.00% |
Acquisitions - TransFirst - Goo
Acquisitions - TransFirst - Goodwill Decrease (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Dec. 31, 2017 | |
TransFirst | ||
Acquisitions | ||
Goodwill adjustment | $ 20,400,000 | |
Merchant Solutions | ||
Acquisitions | ||
Goodwill adjustment | $ 727,000 | |
Merchant Solutions | TransFirst | ||
Acquisitions | ||
Decrease to goodwill due to deferred tax adjustments | 12,100,000 | |
Goodwill adjustment | $ 727,000 |
Acquisitions - TransFirst - Con
Acquisitions - TransFirst - Consideration and Recognized Assets and Liabilities (Details) - USD ($) | Apr. 01, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2015 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Goodwill | $ 3,270,952,000 | $ 3,264,071,000 | $ 1,545,424,000 | |
TransFirst | ||||
Consideration | ||||
Cash | $ 2,351,400,000 | |||
Fair value of total consideration transferred | 2,351,400,000 | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Cash | 5,907,000 | |||
Accounts receivable, net | 62,313,000 | |||
Property equipment and software | 12,726,000 | |||
Total acquired identifiable intangible assets | 814,131,000 | |||
Deferred tax asset | 2,244,000 | |||
Other assets | 7,509,000 | |||
Deferred tax liability | (224,654,000) | |||
Other liabilities | (56,864,000) | |||
Total identifiable net assets | 623,312,000 | |||
Goodwill | 1,728,088,000 | |||
Total identifiable assets acquired and liabilities assumed | $ 2,351,400,000 | |||
Adjustments to purchase price and recognized assets and liabilities | ||||
Increase in purchase price due to working capital adjustments | 55,000 | |||
Decrease in identifiable intangible assets | 2,000,000 | |||
Increase in liabilities | 363,700 | |||
Increase in deferred tax liabilities | 18,000,000 | |||
Goodwill adjustment | $ 20,400,000 |
Acquisitions - TransFirst - Ide
Acquisitions - TransFirst - Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Apr. 01, 2016 | Dec. 31, 2017 |
Merchant relationships | ||
Identifiable intangible assets acquired | ||
Weighted Average Amortization Period | 7 years | |
Channel relationships | ||
Identifiable intangible assets acquired | ||
Weighted Average Amortization Period | 8 years 7 months 6 days | |
Acquisition (current) technology intangibles | ||
Identifiable intangible assets acquired | ||
Weighted Average Amortization Period | 6 years 1 month 6 days | |
Trade name | ||
Identifiable intangible assets acquired | ||
Weighted Average Amortization Period | 3 years 10 months 24 days | |
Covenants not-to-compete | ||
Identifiable intangible assets acquired | ||
Weighted Average Amortization Period | 4 years 3 months 18 days | |
Favorable lease | ||
Identifiable intangible assets acquired | ||
Weighted Average Amortization Period | 5 years 1 month 6 days | |
TransFirst | ||
Identifiable intangible assets acquired | ||
Total acquired identifiable intangible assets | $ 814,131 | |
Weighted Average Amortization Period | 7 years 1 month 6 days | |
TransFirst | Minimum | ||
Identifiable intangible assets acquired | ||
Weighted Average Amortization Period | 1 year | |
TransFirst | Maximum | ||
Identifiable intangible assets acquired | ||
Weighted Average Amortization Period | 10 years | |
TransFirst | Amortizable intangible assets | Level 2 and Level 3 measurements | ||
Key fair value assumptions | ||
Discount rate (as a percent) | 8.50% | |
Effective tax rate (as a percent) | 40.00% | |
Long-term sustainable growth rate (as a percent) | 3.00% | |
TransFirst | Amortizable intangible assets | Level 2 and Level 3 measurements | Minimum | ||
Key fair value assumptions | ||
Pre-tax royalty rate (as a percent) | 1.00% | |
Attrition rate (as a percent) | 11.00% | |
TransFirst | Amortizable intangible assets | Level 2 and Level 3 measurements | Maximum | ||
Key fair value assumptions | ||
Pre-tax royalty rate (as a percent) | 3.00% | |
Attrition rate (as a percent) | 16.00% | |
TransFirst | Merchant relationships | ||
Identifiable intangible assets acquired | ||
Total acquired identifiable intangible assets | $ 588,000 | |
Weighted Average Amortization Period | 7 years | |
TransFirst | Channel relationships | ||
Identifiable intangible assets acquired | ||
Total acquired identifiable intangible assets | $ 121,000 | |
Weighted Average Amortization Period | 10 years | |
TransFirst | Acquisition (current) technology intangibles | ||
Identifiable intangible assets acquired | ||
Total acquired identifiable intangible assets | $ 72,000 | |
Weighted Average Amortization Period | 5 years | |
TransFirst | Trade name | ||
Identifiable intangible assets acquired | ||
Total acquired identifiable intangible assets | $ 16,000 | |
Weighted Average Amortization Period | 1 year | |
TransFirst | Covenants not-to-compete | ||
Identifiable intangible assets acquired | ||
Total acquired identifiable intangible assets | $ 15,000 | |
Weighted Average Amortization Period | 3 years | |
TransFirst | Favorable lease | ||
Identifiable intangible assets acquired | ||
Total acquired identifiable intangible assets | $ 2,100 | |
Weighted Average Amortization Period | 5 years 7 months 6 days |
Acquisitions - TransFirst - Acq
Acquisitions - TransFirst - Acquisition Costs and Actual Operating Results since Acquisition (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Bridge term loan facility | Interest expense | |
Acquisitions | |
Costs related to facility | $ 9.8 |
TransFirst | |
Acquisitions | |
Revenue since acquisition date | 1,300 |
Operating income since acquisition date | 30 |
TransFirst | Selling, general and administrative expenses | |
Acquisitions | |
Acquisition-related costs | $ 32.3 |
Acquisitions - EMEA (Details)
Acquisitions - EMEA (Details) - TSYS Managed Services EMEA Limited (EMEA) £ in Millions, $ in Millions | 1 Months Ended | |
Mar. 31, 2016GBP (£) | Mar. 31, 2016USD ($) | |
Acquisitions | ||
Interest acquired (as a percent) | 45.00% | 45.00% |
Cash paid | £ 4.2 | $ 5.9 |
Outstanding existing debt repaid | £ 2.2 | $ 3 |
Acquisitions - Netspend (Detail
Acquisitions - Netspend (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Acquisition (current) technology intangibles | ||||
Acquisitions | ||||
Life of asset | 6 years 1 month 6 days | |||
Purchase of assets, September 2015 | Netspend | ||||
Acquisitions | ||||
Cash paid | $ 750,000 | |||
Purchase of assets, September 2015 | Netspend | Acquisition (current) technology intangibles | ||||
Acquisitions | ||||
Life of asset | 5 years | |||
NetSpend, Inc. | ||||
Acquisitions | ||||
Adjustments to goodwill for tax adjustments | $ 1,795,000 | $ 584,000 | $ 627,000 | |
NetSpend, Inc. | Netspend | ||||
Acquisitions | ||||
Adjustments to goodwill for tax adjustments | $ 1,795,000 | $ 584,000 |
Collaborative Arrangement (Deta
Collaborative Arrangement (Details) | 12 Months Ended |
Dec. 31, 2017entity | |
Collaborative Arrangement | |
Ownership interest in collaborative arrangement enterprise (as a percent) | 45.00% |
Number of other owners | 2 |
Earnings Per Share - Common Sto
Earnings Per Share - Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Basic EPS: | |||
Net income | $ 586,185 | $ 319,638 | $ 364,044 |
Less income allocated to nonvested awards | (1,373) | (1,557) | (3,164) |
Net income allocated to common stock for EPS calculation | $ 584,812 | $ 318,081 | $ 360,880 |
Nonvested awards (in shares) | 183,309 | 182,744 | 182,465 |
Basic EPS | $ 3.19 | $ 1.74 | $ 1.98 |
Diluted EPS: | |||
Net income | $ 586,185 | $ 319,638 | $ 364,044 |
Less income allocated to nonvested awards | (1,373) | (1,557) | (3,148) |
Add income allocated to nonvested awards | 1,373 | 1,557 | |
Net income allocated to common stock for EPS calculation | $ 586,185 | $ 319,638 | $ 360,896 |
Average common shares outstanding | 183,309 | 182,744 | 182,465 |
Increase due to assumed issuance of shares related to common equivalent shares outstanding | 1,162 | 813 | 1,157 |
Average nonvested awards | 959 | 891 | |
Average common and common equivalent shares outstanding | 185,430 | 184,448 | 183,622 |
Diluted EPS | $ 3.16 | $ 1.73 | $ 1.97 |
Earnings Per Share - Participat
Earnings Per Share - Participating Securities (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Basic EPS: | |||
Nonvested awards (in shares) | 183,309 | 182,744 | 182,465 |
Basic EPS | $ 3.19 | $ 1.74 | $ 1.98 |
Diluted EPS: | |||
Average common and common equivalent shares outstanding(d) | 185,430 | 184,448 | 183,622 |
Diluted EPS | $ 3.16 | $ 1.73 | $ 1.97 |
Participating Securities | |||
Basic EPS: | |||
Net income allocated to nonvested awards | $ 1,373 | $ 1,557 | $ 3,164 |
Nonvested awards (in shares) | 435 | 911 | 1,617 |
Basic EPS | $ 3.16 | $ 1.71 | $ 1.96 |
Diluted EPS: | |||
Net income allocated to nonvested awards | $ 1,366 | $ 1,552 | $ 3,148 |
Average common and common equivalent shares outstanding(d) | 435 | 911 | 1,617 |
Diluted EPS | $ 3.14 | $ 1.70 | $ 1.95 |
Earnings Per Share - Anti-dilut
Earnings Per Share - Anti-dilutive Securities (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share | |||
Anti-dilutive stock options and nonvested awards excluded from diluted EPS calculation | 0.3 | 0.4 | 0.6 |
Subsequent Events (Details)
Subsequent Events (Details) | Jan. 25, 2018 | Jan. 11, 2018USD ($) | Jan. 10, 2018USD ($) | Dec. 18, 2017USD ($) |
Cayan | Cayan acquisition agreement | ||||
Subsequent Events | ||||
Agreement amount | $ 1,050,000,000 | |||
Subsequent Events | ||||
Subsequent Events | ||||
Period of extended effective date of Consumer Financial Protection Bureau prepaid rule changes | 1 year | |||
Subsequent Events | Term Loan Facility dated as of January 10, 2018 | ||||
Subsequent Events | ||||
Financing agreement amount | $ 450,000,000 | |||
Term | 2 years | |||
Subsequent Events | Term Loan Facility dated as of January 10, 2018 | Minimum | ||||
Subsequent Events | ||||
Fixed charge coverage ratio financial covenant | 2.5 | |||
Subsequent Events | Term Loan Facility dated as of January 10, 2018 | Maximum | ||||
Subsequent Events | ||||
Consolidated leverage ratio financial covenant | 3.5 | |||
Subsequent Events | Term Loan Facility dated as of January 10, 2018 | LIBOR | Minimum | ||||
Subsequent Events | ||||
Margin added to variable rate (as a percent) | 1.00% | |||
Subsequent Events | Term Loan Facility dated as of January 10, 2018 | LIBOR | Maximum | ||||
Subsequent Events | ||||
Margin added to variable rate (as a percent) | 1.75% | |||
Subsequent Events | Term Loan Facility dated as of January 10, 2018 | Base rate | Minimum | ||||
Subsequent Events | ||||
Margin added to variable rate (as a percent) | 0.00% | |||
Subsequent Events | Term Loan Facility dated as of January 10, 2018 | Base rate | Maximum | ||||
Subsequent Events | ||||
Margin added to variable rate (as a percent) | 0.75% | |||
Subsequent Events | Cayan | ||||
Subsequent Events | ||||
Cash transaction | $ 1,050,000,000 |
Schedule II Schedule - Valua156
Schedule II Schedule - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Doubtful accounts | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of period | $ 3,482 | $ 1,757 | $ 3,222 |
Additions - Changes in allowances, charges to expenses and changes to other accounts | 10,796 | 6,970 | (58) |
Deductions | (8,947) | (5,245) | (1,407) |
Balance at end of period | 5,331 | 3,482 | 1,757 |
Billing adjustments | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of period | 1,360 | 926 | 866 |
Additions - Changes in allowances, charges to expenses and changes to other accounts | (627) | 614 | (114) |
Deductions | (186) | (180) | 174 |
Balance at end of period | 547 | 1,360 | 926 |
Merchant losses | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of period | 2,039 | 1,366 | 1,118 |
Additions - Changes in allowances, charges to expenses and changes to other accounts | 5,002 | 1,682 | 4,667 |
Deductions | (2,715) | (1,009) | (4,419) |
Balance at end of period | 4,326 | 2,039 | 1,366 |
Transaction processing | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of period | 2,851 | 6,457 | 4,630 |
Additions - Changes in allowances, charges to expenses and changes to other accounts | 6,714 | 3,669 | 6,976 |
Deductions | (7,357) | (7,275) | (5,149) |
Balance at end of period | 2,208 | 2,851 | 6,457 |
Fraud losses | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of period | 10,527 | 9,391 | 6,312 |
Additions - Changes in allowances, charges to expenses and changes to other accounts | 51,194 | 49,362 | 41,264 |
Deductions | (52,202) | (48,226) | (38,185) |
Balance at end of period | 9,519 | 10,527 | 9,391 |
Deferred tax valuation allowance | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of period | 21,301 | 18,446 | 18,963 |
Additions - Changes in allowances, charges to expenses and changes to other accounts | 8,648 | 4,124 | 541 |
Deductions | (418) | (1,269) | (1,058) |
Balance at end of period | $ 29,531 | $ 21,301 | $ 18,446 |