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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended December 31, 2005
Commission file number 1-10254
TOTAL SYSTEM SERVICES, INC.
(Exact name of registrant as specified in its charter)
Georgia
|
58-1493818 | |||
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.) | |||
1600 First Avenue |
||||
Columbus, Georgia
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31901 | |||
(Address of principal executive offices)
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(Zip Code) | |||
(Registrant’s telephone number, including area code)
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(706) 649-5220 | |||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Name of each exchange on which registered | |
Common Stock, $.10 Par Value
|
New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act.
YES o NO þ
Indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act.
YES o NO þ
Indicate by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past 90 days.
YES þ NO o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s
knowledge, in definitive proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated
filer” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer o | Accelerated Filer þ | Non-accelerated filer o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).
YES o NO þ
As of June 30, 2005, the aggregate market value of the registrant’s common stock held by
non-affiliates of the registrant was approximately $658,338,000 based on the closing sale price as
reported on the New York Stock Exchange.
As of February 14, 2006, there were 197,433,707 shares of the registrant’s common stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
| Incorporated Documents | Form 10-K Reference Locations | |
Portions of the Annual Report to Shareholders
for the year ended December 31, 2005 (“Annual Report”)
|
Parts I, II, III and IV | |
Portions of the 2006 Proxy Statement for the Annual
Meeting of Shareholders to be held April 20, 2006
(“Proxy Statement”)
|
Part III |
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PART I
Safe Harbor Statement
We have included or incorporated by reference in this Annual Report on Form
10-K, and from time to time our management may make, statements that may constitute
“forward-looking statements” within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts but
instead represent only our belief regarding future events, many of which by their nature are
inherently uncertain and outside our control. These statements include statements other than
historical information or statements of current condition and may relate to our future plans,
objectives and results, among other things, and also include (without limitation) statements made
in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part
II, Item 7 of this Annual Report. It is possible that our actual results may differ, possibly
materially, from the anticipated results indicated in these forward-looking statements. Important
factors that could cause actual results to differ from those in the forward-looking statements
include, among others, those discussed under “Risk Factors” in Part I, Item 1A of this Annual
Report and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
in Part II, Item 7 of this Annual Report.
Accordingly, you are cautioned not to place undue reliance on forward-looking statements,
which speak only as of the date on which they are made. We undertake no obligation to update
publicly or revise any forward-looking statements to reflect the impact of circumstances or events
that arise after the dates they are made, whether as a result of new information, future events or
otherwise except as required by applicable law. You should, however, consult further disclosures
we may make in future filings of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K, and any amendments thereto.
Item 1. Business
Business. We provide electronic payment processing and related services to financial and
nonfinancial institutions. Services include processing consumer, retail, commercial, government
services, stored value and debit cards. Based in Columbus, Georgia, and traded on the New York
Stock Exchange under the symbol “TSS,” we provide services to financial and nonfinancial
institutions throughout the United States, Canada, Mexico, Honduras, Puerto Rico and Europe. We
currently offer merchant services to financial institutions and other organizations in the United
States through our wholly owned subsidiary, Vital Processing Services, L.L.C., and in Japan through
our majority owned subsidiary, GP Network Corporation. We also offer optional value added products
and services to support our core processing services. Value added products and services include:
risk management tools and techniques, such as credit evaluation, fraud detection and prevention and
behavior analysis tools; and revenue enhancement tools and customer retention programs, such as
loyalty programs and bonus rewards. Synovus Financial Corp., a diverse financial services company
with more than $27 billion in assets, owns 81% of us.
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The services we provide are divided into three operating segments, domestic-based support
services, which accounted for approximately 75% of our revenues in 2005, international-based
support services, which accounted for approximately 9% of our revenues in 2005 and merchant
processing services, which accounted for approximately 16% of our revenues in 2005.
Seasonality. Due to the somewhat seasonal nature of the credit card industry, our revenues
and results of operations have generally increased in the fourth quarter of each year because of
increased transaction and authorization volumes during the traditional holiday shopping season.
Intellectual Property. Our intellectual property portfolio is a component of our ability to
be a leading electronic payment services provider. We diligently protect and work to build our
intellectual property rights through patent, servicemark and trade secret laws. We also use
various licensed intellectual property to conduct our business. In addition to using our
intellectual property in our own operations, we grant licenses to certain of our clients to use our
intellectual property.
Major Customers. A significant amount of our revenues is derived from long-term contracts
with large clients, including our major customer, Bank of America Corporation. In December 2005,
we received official notification from Bank of America of its intent, pending its acquisition of
MBNA Corporation, to shift the processing of its consumer card portfolio in house in October 2006.
For the year ended December 31, 2005, Bank of America accounted for approximately 22.3% of our
total revenues and all relationships with Bank of America and MBNA on a combined basis accounted
for approximately 23.9% of our total revenues. As a result, the loss of Bank of America, or other
large clients, could have a material adverse effect on our financial position, results of
operations and cash flows. See “Major Customers” under the “Financial Review” Section on pages 47
and 48 of the Annual Report which is incorporated in this document by reference.
Competition. We encounter vigorous competition in providing electronic payment processing
services from several different sources. Most of the national market in third party card
processors is presently being provided by approximately three vendors. We believe that as of
December 31, 2005 we are the second largest third party card processor in the United States. In
addition, we compete with in house processors and software vendors which provide their products to
institutions which process in house. We are presently encountering, and in the future anticipate
continuing to encounter, substantial competition from card associations, data processing and
bankcard computer service firms and other such third party vendors located throughout the United
States and from certain international processors with respect to international-based support
services. Based upon available market share data that includes cards processed in house, we
believe we hold a 39.1% share of the domestic consumer card processing market, an 84.6% share of
the Visa and MasterCard domestic commercial card processing market, a 14.4% share of the domestic
retail card processing market and a 4.8% share of the domestic signature debit processing market.
With respect to merchant processing, we believe
that Vital has a 13% market share of all authorizations originating at U.S. merchant locations
and a 20% market share of all bank-card accepting merchant locations in the U.S.
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Our major competitor in the card processing industry is First Data Resources, Inc., a wholly
owned subsidiary of First Data Corporation, which provides card processing services. The principal
methods of competition between us and First Data Resources are price, system performance and
reliability, breadth of features and functionality, disaster recovery capabilities, data security,
scalability and flexibility of infrastructure and servicing capability. Certain other subsidiaries
of First Data Corporation also compete with us with respect to the provision of merchant processing
services.
Backlog of Accounts. As of January 31, 2006, we had a pipeline of approximately 75 million
accounts associated with new clients. We expect to convert our entire backlog of 75 million new
accounts in 2006.
Regulation and Examination. We are subject to being examined, and are indirectly regulated,
by the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit
Insurance Corporation, the Office of Thrift Supervision, the National Credit Union Administration,
and the various state financial regulatory agencies which supervise and regulate the financial
institutions for which we provide electronic payment processing services. Matters reviewed and
examined by these federal and state financial institution regulatory agencies have included our
internal controls in connection with our present performance of electronic payment processing
services, and the agreements pursuant to which we provide such services. In addition, we are
registered with Visa and MasterCard as a service provider for member institutions and are subject
to applicable card association rules.
As the Federal Reserve Bank of Atlanta has approved Synovus’ indirect ownership of us through
Columbus Bank and Trust Company, we are subject to direct regulation by the Federal Reserve Board.
We were formed with the prior written approval of, and are subject to regulation and examination
by, the Department of Banking and Finance of the State of Georgia as a subsidiary of Columbus Bank
and Trust Company. In addition, as we and our subsidiaries operate as subsidiaries of Columbus
Bank and Trust Company, we are subject to regulation by the Federal Deposit Insurance Corporation.
Employees. As of December 31, 2005, we had 6,603 full-time employees.
Available Information. Our website address is www.tsys.com. You may obtain free electronic
copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form
8-K, and all amendments to those reports in the Investors section of our website under the heading
“Financials” and then under “SEC Filings.” These reports are available on our website as soon as
reasonably practicable after we electronically file them with the Securities and Exchange
Commission.
We have adopted a Code of Business Conduct and Ethics for our directors, officers
and employees and have also adopted Corporate Governance Guidelines. Our Code of
Business Conduct and Ethics, Corporate Governance Guidelines and the charters of
our board committees are available in the Corporate Governance section of our website at
www.tsys.com/ir/governance. Copies of these documents are also available in print upon written
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request to the Corporate Secretary, Total System Services, Inc., 1111 Bay Avenue, Suite 500,
Columbus, Georgia 31901.
See the “Financial Overview” Section on pages 36 through 38, the “Financial Review” Section on
pages 38 through 61 and Note 1, Note 5, Note 14, Note 17 and Note 19 of Notes to Consolidated
Financial Statements on pages 66 through 73, page 76, page 83, pages 85 through 89, and pages 90
and 91 of the Annual Report which are incorporated in this document by reference.
Item 1A. Risk Factors
This section highlights specific risks that could affect our business and us. Although this
section attempts to highlight key factors, please be aware that other risks may prove to be
important in the future. New risks may emerge at any time and we cannot predict such risks or
estimate the extent to which they may affect our financial performance. In addition to the factors
discussed elsewhere or incorporated by reference in this report, among the other factors that could
cause actual results to differ materially are the following:
If we do not successfully renew or renegotiate our agreements with our clients, our business will
suffer.
A significant amount of our revenues is derived from long-term contracts with large clients,
including a major customer. Consolidation among financial institutions has resulted in an
increasingly concentrated client base. The financial position of these clients and their
willingness to pay for our products and services are affected by general market positions,
competitive pressures, and operating margins within their industries. Renewal or renegotiation
time presents our clients with the opportunity to consider other providers. The loss or
renegotiation of our contracts with existing clients or a significant decline in the number of
transactions we process for them could have a material adverse effect on our financial position and
results of operation.
Consolidation among financial institutions, including the merger of TSYS clients with entities that
are not TSYS clients or the sale of portfolios by TSYS clients to entities that are not TSYS
clients could materially impact our financial position and results of operation.
Consolidation among financial institutions, particularly in the area of credit card
operations, continues to be a major risk. Specifically, we face risk that our clients may merge
with entities that are not our clients or our clients may sell portfolios to entities that are not
our clients, thereby impacting our existing agreements and projected revenues with these clients.
During 2005, for example, Bank of America acquired MBNA Corporation, making it one of the
largest card issuers in the U.S. In December 2005, we received official notification from Bank of
America of its intent to shift the processing of its consumer card portfolio in house in October
2006 in connection with the acquisition of MBNA. This kind of consolidation and the loss of any
significant client by us could have a material adverse effect on our financial position and results
of operations.
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Accounts on file may be lower than anticipated and internal growth rates for our existing clients
may be lower than anticipated.
At December 31, 2005, we had approximately 438 million accounts on file. By the end of 2006,
we anticipate that there will be approximately 395 million to 405 million accounts on file. There
is no guarantee, however, that accounts on file will be as we anticipate and this could have a
material adverse effect on our financial position and results of operations. Furthermore, a
significant amount of our revenues is derived from certain large clients and internal growth rates
for these existing clients may be lower than anticipated, thereby negatively impacting our
business.
We may incur expenses associated with the signing of a significant client to our processing system
and in connection with our efforts to grow internationally or incur other costs that may hurt our
financial results.
We incur significant up-front expenses prior to converting a significant client to our
processing system. In the event we enter into a processing contract with a significant client,
these expenses will directly affect our earnings results. In addition, we provide services to our
clients worldwide and plan to continue to expand our service offerings internationally in the
future. We are likely to incur costs in growing our business internationally, and there is no
guarantee that such international expansion will be successful. We may also incur other expenses
and costs, such as operating and marketing expenses. If we are unable to successfully manage these
expenses as our business develops, changes and expands, our financial position and results of
operations could be negatively impacted. In addition, changes in accounting policies can
significantly affect how we calculate expenses and earnings.
There may be a decline in the use of credit cards as a payment mechanism for consumers or adverse
developments with respect to the credit card industry in general.
If consumers do not continue to use credit cards as a payment mechanism for their transactions
or if there is a change in the mix of payments between cash, credit cards and debit cards, it could
have a material adverse effect on our financial position and results of operations. We believe
future growth in the use of credit cards will be driven by the cost, ease-of-use, and quality of
products and services offered to consumers and businesses. In order to consistently increase and
maintain our profitability, consumers and businesses must continue to use credit cards. Moreover,
if there is an adverse development in the credit card industry in general, such as new legislation
or regulation that makes it more difficult for our clients to do business, our financial position
and results of operations may be adversely affected.
We may not convert and deconvert clients’ portfolios as scheduled.
We anticipate conversion of Capital One’s North American portfolio of consumer and small
business credit card accounts and deconversion of Citibank’s Sears, Roebuck and Co. card portfolio
and Bank of America’s consumer card portfolio during 2006. There is no guarantee, however, that
these conversions and deconversions will occur as anticipated and this may have a
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material adverse
effect on our financial position and results of operations.
We have pursued various strategic acquisitions and these acquisitions may be more difficult to
integrate than anticipated.
We regularly explore opportunities for strategic acquisitions and expect to grow, in part,
through such acquisitions. Difficulty in integrating an acquired company may cause us not to
realize expected revenue increases, cost savings, increases in geographic or product presence,
and/or other projected benefits of the acquisition. The integration could result in loss of key
employees, disruption of our business or the business of the acquired company, or otherwise
adversely affect our ability to maintain relationships with clients or achieve the anticipated
benefits of the acquisition. These factors could contribute to us not achieving the anticipated
benefits of the acquisition within the desired time frames, if at all.
The costs and effects of litigation, investigations or similar matters, or adverse facts and
developments related thereto, could materially affect our financial position and results of
operations.
We may be involved from time to time in a variety of litigation, investigations or similar
matters arising out of our business. Our insurance may not cover all claims that may be asserted
against it, and any claims asserted against us, regardless of merit or eventual outcome, may harm
our reputation. Should the ultimate judgments or settlements in any litigation or investigation
significantly exceed our insurance coverage, they could have a material adverse effect on our
financial position and results of operations. In addition, we may not be able to obtain
appropriate types or levels of insurance in the future, nor may we be able to obtain adequate
replacement policies with acceptable terms, if at all.
Changes in accounting policies and practices, as may be adopted by the regulatory agencies, the
Financial Accounting Standards Board, or other authoritative bodies, could materially impact our
financial statements.
Our accounting policies and methods are fundamental to how we record and report our financial
position and results of operations. From time to time, the regulatory agencies, the Financial
Accounting Standards Board, and other authoritative bodies change the financial accounting and
reporting standards that govern the preparation of our financial statements. These changes can be
hard to predict and can materially impact how we record and report our financial position and
results of operations.
If we do not anticipate and respond to rapid technological change or changes in industry standards,
particularly with respect to e-commerce, our services could become obsolete and we could lose our
clients.
Our success depends, in part, on our ability to timely, successfully and cost-effectively
improve and implement processing systems to provide new products, increased functionality and
increased efficiencies. The widespread adoption of new technologies could require us to make
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substantial expenditures to modify or adopt our existing products and services, and we may not be
successful in improving and implementing our processing systems or in achieving market acceptance
of these new technologies. If competitors introduce new products and services embodying new
technologies, or if new industry standards and practices emerge, particularly with respect to
e-commerce, our existing product and service offerings, proprietary technology and systems may
become obsolete. Further, if we fail to adopt or develop these new technologies or to adapt our
products and services to emerging industry standards, we may lose current and future clients, which
could have a material adverse effect on our financial position and results of operations. Our
industry is changing rapidly. To remain competitive, we must continue to enhance and improve the
functionality and features of our processing systems, products, services and technologies.
Changes in the laws, regulations, credit card association rules or other industry standards
affecting our business may require significant product redevelopment efforts or may reduce the
market for or value of our products.
There may be changes in the laws, regulations, credit card association rules or other industry
standards that affect our operating environment in substantial and unpredictable ways. Changes to
statutes, regulations or industry standards, including interpretation and implementation of
statutes, regulations or standards, could increase or decrease the cost of doing business or affect
the competitive balance. We cannot predict whether any of this potential legislation will be
enacted or whether any credit card association rule or other industry standard will change, and if
enacted or changed, the effect that it would have on our financial position or results of
operations. These changes may require us to incur significant expenses to redevelop our products,
but there is no guarantee that we would be successful or that there would be a market for or value
of our products. Also, if we do not comply with laws, regulations, policies or standards, we could
receive regulatory sanctions and damage to our reputation.
We may not be able to successfully manage our intellectual property and may be subject to
infringement claims.
In the rapidly developing legal framework, we rely on a combination of contractual rights and
copyright, trademark, patent and trade secret laws to establish and protect our proprietary
technology. Despite our efforts to protect our intellectual property, third parties may infringe
or misappropriate our intellectual property or may develop software or technology competitive to
us. Our competitors may independently develop similar technology, duplicate our products or
services or design around our intellectual property rights. We may have to litigate to enforce and
protect our intellectual property rights, trade secrets and know-how or to determine their scope,
validity or enforceability, which is expensive and could cause a diversion of resources and may not
prove successful. The loss of intellectual property protection or the inability to secure or
enforce intellectual property protection could harm our business and ability to compete.
We may also be subject to costly litigation in the event our products and technology infringe
upon another party’s proprietary rights. Third parties may have, or may eventually be issued,
patents that would be infringed by our products or technology. Any of these third parties
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could make a claim of infringement against us with respect to our products or technology. We may also be
subject to claims by third parties for breach of copyright, trademark or license usage rights. Any
such claims and any resulting litigation could subject us to significant liability for damages. An
adverse determination in any litigation of this type could require us to design around a third
party’s patent or to license alternative technology from another party. In addition, litigation is
time consuming and expensive to defend and could result in the diversion of the time and attention
of our management and employees. Any claim from third parties may result in limitation on our
ability to use the intellectual property subject to these claims.
Security and privacy breaches in our electronic transactions may damage customer relations and
inhibit our growth.
Any failures in our security and privacy measures could have a material adverse effect on our
financial position and results of operations. We electronically store personal information about
consumers who are customers of our clients. If we are unable to protect, or our clients perceive
that we are unable to protect, the security and privacy of our electronic transactions, our growth
could be materially adversely affected. A security or privacy breach may:
| • | cause our clients to lose confidence in our services; | ||
| • | harm our reputation; | ||
| • | expose us to liability; and | ||
| • | increase our expenses from potential remediation costs. |
While we believe we use proven applications designed for data security and integrity to
process electronic transactions, there can be no assurance that our use of these applications will
be sufficient to address changing market positions or the security and privacy concerns of existing
and potential clients.
If we lose key personnel or are unable to attract additional qualified personnel as we grow, our
business could be adversely affected.
We are dependent upon the ability and experience of a number of highly skilled technical,
management and sales and marketing personnel who have substantial experience with our operations,
the rapidly changing transaction processing industry and markets in which we offer our services.
It is possible that the loss of the services of one or a combination of our key
personnel would have an adverse effect on our operations. Our success also depends on our ability
to continue to attract, manage and retain additional qualified management and technical personnel
as we grow. Competition for the best people, particularly those individuals with technology
experience, is intense. We cannot guarantee that we will continue to attract or retain such
personnel.
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Bank of America may not deconvert as anticipated, amortization of related contract acquisition
costs may not be accelerated as anticipated and the termination fee may not be in the amount
anticipated.
Bank of America has notified us of its intent to shift the processing of its consumer card
portfolio in house in October 2006. Our processing agreement with Bank of America provides that
Bank of America may terminate its agreement with us for consumer credit card services upon the
payment of a termination fee, which is determined based upon several factors. Based upon the
expected October 2006 deconversion date, this fee is estimated to be approximately $69 million. As
a result of the anticipated deconversion in October 2006, we will accelerate the amortization of
approximately $7 million in contract acquisition costs. There is no guarantee, however, that the
deconversion will occur as anticipated in October 2006 and that we will be able to amortize the
anticipated related contract acquisition costs or receive the termination fee in the amount
anticipated from Bank of America.
Various domestic or international military or terrorist activities or conflicts could affect our
business and financial position.
Acts or threats of war or terrorism, actions taken by the U.S. or other governments in
response to acts or threats of terrorism and/or military conflicts, could negatively affect
business and economic positions in the U.S. If terrorist activity, acts of war or other
international hostilities cause an overall economic decline, our financial position and results of
operations could be materially adversely affected. The potential for future terrorist attacks, the
national and international responses to terrorist attacks or perceived threats to national security
and other actual or potential conflicts or acts of war, including conflict in the Middle East, have
created many economic and political uncertainties that could seriously harm our business and
results of operations in ways that cannot presently be predicted.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
As of December 31, 2005, we and our subsidiaries owned 12 facilities encompassing
approximately 1,412,719 square feet and leased from third parties 19 facilities encompassing
approximately 496,222 square feet. These facilities are used for operational, sales and
administrative purposes.
| Owned Facilities | Leased Facilities | |||||||||||||||
| Number | Square Footage | Number | Square Footage | |||||||||||||
Domestic-based support services |
10 | 1,316,351 | 11 | 296,239 | ||||||||||||
International-based support services |
2 | 96,368 | 3 | 1,800 | ||||||||||||
Merchant processing services |
-0- | -0- | 5 | 198,183 | ||||||||||||
We believe that our facilities are suitable and adequate for our current business; however, we
periodically review our space requirements and may acquire new space to meet the needs of our
businesses or consolidate and dispose of or sublet facilities which are no longer required.
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See Note 1, Note 6, Note 14 and Note 17 of Notes to Consolidated Financial Statements on pages
66 through 73, page 77, page 83, and pages 85 through 89 and “Operating Expenses” and “Property and
Equipment” under the “Financial Review” Section on pages 51 through 53, and page 56, respectively,
of the Annual Report which are incorporated in this document by reference.
Item 3. Legal Proceedings
See Note 14 of Notes to Consolidated Financial Statements on page 83 of the Annual Report
which is incorporated in this document by reference.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Repurchases of Equity Securities
The “Quarterly Financial Data, Stock Price, Dividend Information” Section which is set forth
on page 95, and “Stock Repurchase Plan” under the “Financial Review” Section on pages 58 and 59 of
the Annual Report are incorporated in this document by reference.
Item 6. Selected Financial Data
The “Selected Financial Data” Section which is set forth on page 35 of the Annual Report is
incorporated in this document by reference.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The “Financial Overview” and “Financial Review” Sections which are set forth on pages 36
through 61 of the Annual Report which includes the information encompassed within “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” are incorporated in this
document by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Foreign Exchange Risk. We are exposed to foreign exchange risk because we have revenues and
expenses denominated in foreign currencies, including Euro, British Pound, Mexican Peso, Canadian
Dollar, Japanese Yen and Chinese Renminbi. These currencies 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 rate for each reporting period. Net exchange gains or losses
resulting from the translation of assets and liabilities of our foreign
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operations, net of tax, are
accumulated in a separate section of shareholders’ equity titled “accumulated other comprehensive
income.” The amount of other comprehensive loss for the year ended December 31, 2005 was $9.7
million. The amount of other comprehensive income for the years ended December 31, 2004 and 2003
was $7.1 million and $7.3 million, respectively. Currently, we do not use financial instruments to
hedge our exposure to exchange rate changes.
The carrying value of the assets of our foreign operations in Europe, Mexico, Canada, Japan
and China was approximately (in U.S. dollars) $131.9 million, $5.7 million, $457,000, $13.0 million
and $37.0 million, respectively, at December 31, 2005.
Interest Rate Risk. We are also exposed to interest rate risk associated with the investing
of available cash and any outstanding balance on the long-term line of credit we have with a
banking affiliate of Synovus. We invest available cash in conservative short-term instruments and
are primarily subject to changes in the prime rate.
On June 30, 2003, we obtained a $45.0 million long-term line of credit from a banking
affiliate of Synovus. The line is an automatic draw-down facility. The interest rate for the line
of credit is the London Interbank Offered Rate (LIBOR) plus 150 basis points. In addition, there
is a charge of 15 basis points on any funds unused. The line of credit is unsecured debt and
includes covenants requiring us to maintain certain minimum financial ratios. At December 31,
2005, we did not have an outstanding balance on the line of credit and were in compliance with all
covenants. As the LIBOR rate changes, we will be subject to interest rate risk.
Concentration of credit risk. We work to maintain a large and diverse customer base across
various industries to minimize the credit risk of any one customer to our accounts receivable
amounts. In addition, we perform ongoing credit evaluations of our customers’ and suppliers’
financial condition.
Concentration of client base. A significant amount of our revenues are derived from long-term
contracts with large clients, including certain major customers. Processing contracts with large
clients, representing a significant portion of our total revenues, generally provide for
discounts on certain services based on the size and activity of clients’ portfolios. Therefore,
electronic payment and merchant services processing revenues and the related margins are influenced
by the client mix relative to the size of client card portfolios, as well as the number and
activity of individual cardholder accounts processed for each client. Consolidation among
financial institutions has resulted in an increasingly concentrated client base, which results in a
changing client mix toward larger clients.
We have two major customers that account for a large portion of our revenues, which subjects
us to credit risk. See Note 17 of Notes to Consolidated Financial Statements on pages 85 through
89 of the Annual Report which is incorporated in this document by reference for a description of
major customers. In addition to our two major customers, we have other large clients representing
a significant portion of our total revenues. The loss of any one of our large clients could have a
material adverse effect on our financial position, results of operations and cash flows.
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Concentration of suppliers. We utilize several large and diverse suppliers across various
industries to minimize our reliance on any one supplier. However, we do rely on a relatively few
major suppliers for a significant portion of our licensed computer software and hardware needs.
The relationship with these particular vendors is well established. These particular vendors are
large, well-known and respected entities in their industry.
Item 8. Financial Statements and Supplementary Data
The “Quarterly Financial Data, Stock Price, Dividend Information” Section, which is set forth
on page 95, and the “Consolidated Balance Sheets, Consolidated Statements of Income, Consolidated
Statements of Cash Flows, Consolidated Statements of Shareholders’ Equity and Comprehensive Income,
Notes to Consolidated Financial Statements, Report of Independent Registered Public Accounting Firm
(on consolidated financial statements), Management’s Report on Internal Control Over Financial
Reporting and Report of Independent Registered Public Accounting Firm (on management’s assessment
of internal controls)” Sections, which are set forth on pages 62 through 94 of the Annual Report
are incorporated in this document by reference.
Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. We have evaluated the effectiveness of the
design and operation of our disclosure controls and procedures as of the end of the period covered
by this Annual Report as required by Rule 13a-15 of the Securities Exchange Act of 1934, as amended. This evaluation was carried out under the supervision and with
the participation of our management, including our chief executive officer and chief financial
officer. Based on this evaluation, the chief executive officer and chief financial officer have
concluded that our disclosure controls and procedures are effective in timely alerting them to
material information relating to us (including our consolidated subsidiaries) required to be
included in our periodic SEC filings.
Management’s Report on Internal Control Over Financial Reporting and Report of Independent
Registered Public Accounting Firm. “Management’s Report on Internal Control Over Financial
Reporting,” which is set forth on page 93 of the Annual Report, and “Report of Independent
Registered Public Accounting Firm (on management’s assessment of internal controls),” which is set
forth on page 94 of the Annual Report, are incorporated in this document by reference.
Changes in Internal Control Over Financial Reporting. No change in our internal control over
financial reporting occurred during the fourth fiscal quarter covered by this Annual Report that
materially affected, or is reasonably likely to materially affect, our internal control over
financial reporting.
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Item 9B. Other Information
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information included under the following captions in our Proxy Statement is incorporated in
this document by reference:
| • | “PROPOSALS TO BE VOTED ON — PROPOSAL 1: ELECTION OF DIRECTORS”; | ||
| • | “EXECUTIVE OFFICERS”; | ||
| • | “SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE”; and | ||
| • | “CORPORATE GOVERNANCE AND BOARD MATTERS — Committees of the Board.” |
We have a Code of Business Conduct and Ethics that applies to all directors, officers and
employees, including our principal executive officer, our principal financial officer and our
controller. You can find our Code of Business Conduct and Ethics in the Corporate Governance
section of our website at www.tsys.com/ir/governance. We will post any amendments to the Code of
Business Conduct and Ethics and any waivers that are required to be disclosed by the
rules of either the SEC or the NYSE in the Corporate Governance section of our website.
Because our common stock is listed on the NYSE, our chief executive officer is required to
make, and he has made, an annual certification to the NYSE stating that he was not aware of any
violation by us of the corporate governance listing standards of the NYSE. Our chief executive
officer made his annual certification to that effect to the NYSE as of May 12, 2005. In addition,
we have filed, as exhibits to this Annual Report, the certifications of our chief executive officer
and chief financial officer required under Section 302 of the Sarbanes-Oxley Act of 2002.
Item 11. Executive Compensation
Information included under the following captions in our Proxy Statement is incorporated in
this document by reference:
| • | “DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES”; | ||
| • | “EXECUTIVE COMPENSATION — Summary Compensation Table; Stock Option Exercises and Grants; and Change in Control Arrangements”; and | ||
| • | “COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.” |
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information pertaining to equity compensation plans is contained in Note 13 of Notes to
Consolidated Financial Statements on pages 80 through 83 of the Annual Report and is incorporated
in this document by reference.
Information included under the following captions in our Proxy Statement is incorporated in
this document by reference:
| • | “STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS”; | ||
| • | “RELATIONSHIPS BETWEEN TSYS, SYNOVUS, CB&T AND CERTAIN OF SYNOVUS’ SUBSIDIARIES — Beneficial Ownership of TSYS Stock by CB&T”; and | ||
| • | “RELATIONSHIPS BETWEEN TSYS, SYNOVUS, CB&T AND CERTAIN OF SYNOVUS’ SUBSIDIARIES — Synovus Stock Ownership of Directors and Management.” |
Item 13. Certain Relationships and Related Transactions
Information included under the following captions in our Proxy Statement is incorporated in
this document by reference:
| • | “CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS”; | ||
| • | “RELATIONSHIPS BETWEEN TSYS, SYNOVUS, CB&T AND CERTAIN OF SYNOVUS’ SUBSIDIARIES — Beneficial Ownership of TSYS Stock by CB&T”; | ||
| • | “RELATIONSHIPS BETWEEN TSYS, SYNOVUS, CB&T AND CERTAIN OF SYNOVUS’ SUBSIDIARIES — Interlocking Directorates of TSYS, Synovus and CB&T”; and | ||
| • | “RELATIONSHIPS BETWEEN TSYS, SYNOVUS, CB&T, AND CERTAIN OF SYNOVUS’ SUBSIDIARIES — Electronic Payment Processing Services Provided to CB&T and Certain of Synovus’ Subsidiaries; Other Agreements Between TSYS, Synovus, CB&T and Certain of Synovus’ Subsidiaries.” |
See also Note 2 of Notes to Consolidated Financial Statements on pages 73 through
75 of the Annual Report which is incorporated in this document by reference.
Item 14. Principal Accountant Fees and Services
Information included under the following captions in our Proxy Statement is incorporated in
this document by reference:
| • | “AUDIT COMMITTEE REPORT — KPMG LLP Fees and Services” (excluding the information under the main caption “AUDIT COMMITTEE REPORT”); and | ||
| • | “AUDIT COMMITTEE REPORT — Policy on Audit Committee Pre-Approval.” |
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) 1. Financial Statements
The following consolidated financial statements of TSYS are incorporated in this document by
reference from pages 62 through 94 of the Annual Report.
Consolidated Balance Sheets — December 31, 2005 and 2004.
Consolidated Statements of Income — Years Ended December 31, 2005, 2004 and 2003.
Consolidated Statements of Cash Flows — Years Ended December 31, 2005, 2004 and
2003.
Consolidated Statements of Shareholders’ Equity and Comprehensive Income — Years
Ended December 31, 2005, 2004 and 2003.
Notes to Consolidated Financial Statements.
Report of Independent Registered Public Accounting Firm (on consolidated
financial statements).
Management’s Report on Internal Control Over Financial Reporting.
Report of Independent Registered Public Accounting Firm (on management’s
assessment of internal controls).
2. Financial Statement Schedules
The following report of independent registered public accounting firm and consolidated
financial statement schedule of TSYS are included:
Report of Independent Registered Public Accounting Firm.
Schedule II — Valuation and Qualifying Accounts — Years Ended
December 31, 2005, 2004 and 2003.
All other schedules are omitted because they are inapplicable or the required
information is included in the consolidated financial statements and notes thereto.
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3. Exhibits
The following exhibits are filed herewith or are incorporated to other documents
previously filed with the SEC. Exhibits 10.1 through 10.28 pertain to executive compensation plans
and arrangements. With the exception of those portions of the Annual Report and Proxy Statement
that are expressly incorporated by reference in this Form 10-K, such documents are not to be deemed
filed as part of this Form 10-K.
| Exhibit | ||
| Number | Description | |
3.1
|
Articles of Incorporation of TSYS, as amended, incorporated by reference to Exhibit 4.1 of TSYS’ Registration Statement on Form S-8 filed with the SEC on April 18, 1997 (File No. 333-25401). | |
3.2
|
Bylaws of TSYS, as amended, incorporated by reference to Exhibit 3.1 of TSYS’ Current Report on Form 8-K dated October 19, 2004, as filed with the SEC on October 19, 2004. | |
| 10. EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS | ||
10.1
|
Director Stock Purchase Plan of TSYS, incorporated by reference to Exhibit 10.1 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 1999, as filed with the SEC on March 16, 2000. | |
10.2
|
Total System Services, Inc. 2002 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.2 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 2001, as filed with the SEC on March 19, 2002. | |
10.3
|
Synovus Financial Corp. 2002 Long-Term Incentive Plan in which executive officers of TSYS participate, incorporated by reference to Exhibit 10.3 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 2001, as filed with the SEC on March 19, 2002. | |
10.4
|
Synovus Financial Corp./Total System Services, Inc. Deferred Compensation Plan, incorporated by reference to Exhibit 10.4 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 2001, as filed with the SEC on March 19, 2002. | |
10.5
|
Amendment Number One to Synovus Financial Corp./Total System Services, Inc. Deferred Compensation Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated July 8, 2005, as filed with the SEC on July 12, 2005. | |
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| Exhibit | ||
| Number | Description | |
10.6
|
Total System Services, Inc. 1992 Long-Term Incentive Plan, which was renamed the Total System Services, Inc. 2000 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.5 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 1992, as filed with the SEC on March 18, 1993. | |
10.7
|
Total System Services, Inc. Directors’ Deferred Compensation Plan, incorporated by reference to Exhibit 10.6 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 2001, as filed with the SEC on March 19, 2002. | |
10.8
|
Wage Continuation Agreement of TSYS, incorporated by reference to Exhibit 10.7 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 1992, as filed with the SEC on March 18, 1993. | |
10.9
|
Incentive Bonus Plan of Synovus Financial Corp. in which executive officers of TSYS participate, incorporated by reference to Exhibit 10.8 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 1992, as filed with the SEC on March 18, 1993. | |
10.10
|
Agreement in Connection With Personal Use of Company Aircraft. | |
10.11
|
Split Dollar Insurance Agreement of TSYS, incorporated by reference to Exhibit 10.10 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 1993, as filed with the SEC on March 22, 1994. | |
10.12
|
Synovus Financial Corp. 1994 Long-Term Incentive Plan in which executive officers of TSYS participate, incorporated by reference to Exhibit 10.11 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 1994, as filed with the SEC on March 9, 1995. | |
10.13
|
Synovus Financial Corp. Executive Bonus Plan in which executive officers of TSYS participate, incorporated by reference to Exhibit 10.12 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 1995, as filed with the SEC on March 19, 1996. | |
10.14
|
Change of Control Agreements for executive officers of TSYS, incorporated by reference to Exhibit 10.2 of TSYS’ Current Report on Form 8-K dated January 18, 2005, as filed with the SEC on January 20, 2005. |
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| Exhibit | ||
| Number | Description | |
10.15
|
Stock Option Agreement of Samuel A. Nunn, incorporated by reference to Exhibit 10.14 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 1996, as filed with the SEC on March 20, 1997. | |
10.16
|
Synovus Financial Corp. Deferred Stock Option Plan in which executive officers of TSYS participate, incorporated by reference to Exhibit 10.15 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 2001, as filed with the SEC on March 19, 2002. | |
10.17
|
Synovus Financial Corp. 2000 Long-Term Incentive Plan in which executive officers of TSYS participate, incorporated by reference to Exhibit 10.16 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 1999, as filed with the SEC on March 16, 2000. | |
10.18
|
Split Dollar Insurance Agreement and related Executive Benefit Substitution Agreement of Synovus Financial Corp. in which executive officers of TSYS participate, incorporated by reference to Exhibit 10.19 of TSYS’ Annual Report on Form 10-K for the fiscal year ended December 31, 2001, as filed with the SEC on March 19, 2002. | |
10.19
|
Form of Stock Option Agreement for the Total System Services, Inc. 1992 (renamed 2000) and 2002 Long-Term Incentive Plans, incorporated by reference to Exhibit 10.1 of TSYS’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, as filed with the SEC on November 8, 2004. | |
10.20
|
Form of Stock Option Agreement for the: (i) Synovus Financial Corp. 1994 Long-Term Incentive Plan; (ii) Synovus Financial Corp. 2000 Long-Term Incentive Plan; and (iii) Synovus Financial Corp. 2002 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.2 of TSYS’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, as filed with the SEC on November 8, 2004. | |
10.21
|
Summary of Board of Directors Compensation, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated January 18, 2005, as filed with the SEC on January 20, 2005. |
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| Exhibit | ||
| Number | Description | |
10.22
|
Form of Restricted Stock Award Agreement for the TSYS 2002 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated January 20, 2005, as filed with the SEC on January 25, 2005. | |
10.23
|
Form of Performance-Based Restricted Stock Award Agreement for the TSYS 2002 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.2 of TSYS’ Current Report on Form 8-K dated January 20, 2005, as filed with the SEC on January 25, 2005. | |
10.24
|
Form of Non-Employee Director Restricted Stock Award Agreement for the TSYS 2002 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated February 1, 2005, as filed with the SEC on February 3, 2005. | |
10.25
|
Form of Stock Option Agreement for the Total System Services, Inc. 2002 Long-Term Incentive Plan for grants made subsequent to January 17, 2006, incorporated by reference to Exhibit 10.1 of TSYS’ Current Report on Form 8-K dated January 17, 2006, as filed with the SEC on January 17, 2006. | |
10.26
|
Form of Restricted Stock Award Agreement for the Total System Services, Inc. 2002 Long-Term Incentive Plan for grants made subsequent to January 17, 2006, incorporated by reference to Exhibit 10.2 of TSYS’ Current Report on Form 8-K dated January 17, 2006, as filed with the SEC on January 17, 2006. | |
10.27
|
Form of Stock Option Agreement for the Synovus Financial Corp. 2002 Long-Term Incentive Plan for grants made subsequent to January 17, 2006, incorporated by reference to Exhibit 10.3 of TSYS’ Current Report on Form 8-K dated January 17, 2006, as filed with the SEC on January 17, 2006. | |
10.28
|
Form of Restricted Stock Award Agreement for the Synovus Financial Corp. 2002 Long-Term Incentive Plan for grants made subsequent to January 17, 2006, incorporated by reference to Exhibit 10.4 of TSYS’ Current Report on Form 8-K dated January 17, 2006, as filed with the SEC on January 17, 2006. | |
13.1
|
Certain specified pages of TSYS’ 2005 Annual Report to Shareholders which are incorporated herein by reference. | |
21.1
|
Subsidiaries of Total System Services, Inc. | |
23.1
|
Consent of Independent Registered Public Accounting Firm. |
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| Exhibit | ||
| Number | Description | |
24.1
|
Powers of Attorney contained on the signature pages of this 2005 Annual Report on Form 10-K and incorporated herein by reference. | |
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
99.1
|
Annual Report on Form 11-K for the Total System Services, Inc. Employee Stock Purchase Plan for the year ended December 31, 2005 (to be filed as an amendment hereto within 120 days of the end of the period covered by this report.) | |
99.2
|
Annual Report on Form 11-K for the Total System Services, Inc. Director Stock Purchase Plan for the year ended December 31, 2005 (to be filed as an amendment hereto within 120 days of the end of the period covered by this report.) |
20
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Report of Independent Registered Public Accounting Firm
The Board of Directors
Total System Services, Inc.:
Total System Services, Inc.:
Under date of February 28, 2006, we reported on the consolidated balance sheets of Total System
Services, Inc. and subsidiaries as of December 31, 2005 and 2004, and the related consolidated
statements of income, shareholders’ equity and comprehensive income, and cash flows for each of the
years in the three-year period ended December 31, 2005, as contained in the 2005 annual report to
shareholders. These consolidated financial statements and our report thereon are incorporated by
reference in the annual report on Form 10-K for the year ended December 31, 2005. In connection
with our audits of the aforementioned consolidated financial statements, we also audited the
related consolidated financial statement schedule as listed in the accompanying index. This
financial statement schedule is the responsibility of the Company’s management. Our responsibility
is to express an opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly, in all material respects, the
information set forth therein.
Atlanta, Georgia
February 28, 2006
February 28, 2006
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TOTAL SYSTEM SERVICES, INC.
Schedule II
Valuation and Qualifying Accounts
(in thousands)
Schedule II
Valuation and Qualifying Accounts
(in thousands)
| Additions | ||||||||||||||||
| Changes in | ||||||||||||||||
| allowances, charges to | ||||||||||||||||
| Balance at | expenses and changes | Balance at | ||||||||||||||
| beginning | to other accounts-- | Deductions-- | end | |||||||||||||
| of period | describe | describe | of period | |||||||||||||
Year ended December 31, 2003: |
||||||||||||||||
Provision for doubtful accounts and billing adjustments |
$ | 8,017 | 2,690 | (1) | (897 | )(3) | $ | 9,810 | ||||||||
| $ | 8,017 | 2,690 | (897 | ) | $ | 9,810 | ||||||||||
Transaction processing accruals |
$ | 5,347 | 3,450 | (2) | (3,706 | )(3) | $ | 5,091 | ||||||||
| $ | 5,347 | 3,450 | (3,706 | ) | $ | 5,091 | ||||||||||
Year ended December 31, 2004: |
||||||||||||||||
Provision for doubtful accounts and billing adjustments |
$ | 9,810 | (2,450 | )(1) | (593 | )(3) | $ | 6,767 | ||||||||
| $ | 9,810 | (2,450 | ) | (593 | ) | $ | 6,767 | |||||||||
Transaction processing accruals |
$ | 5,091 | 9,878 | (2) | (5,685 | )(3) | $ | 9,284 | ||||||||
| $ | 5,091 | 9,878 | (5,685 | ) | $ | 9,284 | ||||||||||
Year ended December 31, 2005: |
||||||||||||||||
Provision for doubtful accounts and billing adjustments |
$ | 6,767 | 8,860 | (1),(4) | (3,013 | )(3) | $ | 12,614 | ||||||||
| $ | 6,767 | 8,860 | (3,013 | ) | $ | 12,614 | ||||||||||
Transaction processing accruals |
$ | 9,284 | 8,525 | (2),(5) | (8,356 | )(3) | $ | 9,453 | ||||||||
| $ | 9,284 | 8,525 | (8,356 | ) | $ | 9,453 | ||||||||||
| (1) | Amount reflected includes charges to (recoveries of) bad debt expense which are classified in other operating expenses and the charges for billing adjustments which are recorded against revenues. | |
| (2) | Amount reflected is the change in transaction processing accruals reflected in other operating 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 accruals reflect actual billing adjustments and processing errors charged against the allowances. | |
| (4) | Includes $4.3 million of doubtful accounts and billing adjustments on March 1, 2005 related to consolidating the financial results of Vital Processing Services, L.L.C. | |
| (5) | Includes $1.1 million of transaction processing accruals on March 1, 2005 related to consolidating the financial results of Vital Processing Services, L.L.C. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, Total System Services, Inc. has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
| TOTAL SYSTEM SERVICES, INC. (Registrant) |
||||
| February 28, 2006 | By: | /s/Philip W. Tomlinson | ||
| Philip W. Tomlinson, | ||||
| Principal Executive Officer and Chairman of the Board |
||||
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints James H. Blanchard, Philip W. Tomlinson and M. Troy Woods and each of them, his true and
lawful attorney(s)-in-fact and agent(s), with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, to sign any or all amendments to
this report and to file the same, with all exhibits and schedules thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto said
attorney(s)-in-fact and agent(s) full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all that said
attorney(s)-in-fact and agent(s), or their substitute(s), may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, this report has been signed by the following persons in the capacities and on the dates
indicated.
/s/ James H. Blanchard
|
Date: February 28, 2006 | |||
Director and Chairman of the |
||||
Executive Committee |
||||
/s/ Philip W. Tomlinson
|
Date: February 28, 2006 | |||
Principal Executive Officer |
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and Chairman of the Board |
Table of Contents
/s/ M. Troy Woods
|
Date: February 28, 2006 | |||
President and Director |
||||
/s/ James B. Lipham
|
Date: February 28, 2006 | |||
Senior Executive Vice President, Treasurer |
||||
and Principal Financial Officer |
||||
/s/ Dorenda K. Weaver
|
Date: February 28, 2006 | |||
Chief Accounting Officer |
||||
/s/ Richard Y. Bradley
|
Date: February 28, 2006 | |||
Director |
||||
/s/ Kriss Cloninger III
|
Date: February 28, 2006 | |||
Director |
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/s/ G. Wayne Clough
|
Date: February 28, 2006 | |||
Director |
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/s/ Walter W. Driver, Jr.
|
Date: February 28, 2006 | |||
Director |
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| Date: ______ ___, 2006 | ||||
Director |
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| Date: ______ ___, 2006 | ||||
Director |
Table of Contents
/s/ John P. Illges, III
|
Date: February 28, 2006 | |||
Director |
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/s/ Alfred W. Jones III
|
Date: February 28, 2006 | |||
Director |
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| Date: ______ ___, 2006 | ||||
Director |
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/s/ H. Lynn Page
|
Date: February 28, 2006 | |||
Director |
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| Date: ______ ___, 2006 | ||||
Director |
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/s/ John T. Turner
|
Date: February 28, 2006 | |||
Director |
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/s/ Richard W. Ussery
|
Date: February 28, 2006 | |||
Director |
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/s/ James D. Yancey
|
Date: February 28, 2006 | |||
Director |
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| Date: ______ ___, 2006 | ||||
Director |